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The Arizona Republic


New Manhattan Project? Waste of energy

July 30, 2006

By Max Schulz

An idea gaining currency these days is that the United States needs a new Manhattan Project to solve our nation’s energy problems. U.S. Sen. Charles Schumer, D-N.Y., is just the latest to propose a massive federal government effort to develop alternatives to petroleum and cut U.S. dependence on fossil fuels. He suggested it pursue these goals with the urgency of the World War II era project that rushed to develop the atomic bomb.

A number of other prominent voices claim the Manhattan Project provides a good template for dealing with our energy problems. The New York Times’ Thomas Friedman routinely cites the need for a Manhattan Project on energy. So have Bill Clinton’s political strategist, Dick Morris, and Frank Gaffney of the Set America Free coalition. Various editorial pages around the country have made similar calls for a concerted federal effort to deliver energy independence.

They might as well be calling for a new federal Department of Alchemy to turn lead into gold. The idea of a Manhattan Project for energy is a bad one and provides the wrong way of looking at our energy supply challenges and their attendant geopolitical concerns. advertisement

This modern Manhattan Project mind-set says that if only we were to get serious and devote enough resources, we could invent an alternative to oil and solve the 21st-century energy problems our country faces. By “we,” proponents actually mean the federal government. And by “resources,” they mean your tax dollars.

It won’t work. The chief reason is that the type of challenges we face today are so wholly different from the type faced during World War II. The original Manhattan Project brought together the Free World’s most brilliant minds to invent the atomic bomb. They were in a race against time; the Nazis were working toward the same goal. Money was no object. With the fate of civilization at stake, the cost to develop the Bomb was of minimal concern. Simply, the Manhattan Project’s challenge was technological, not economic.

Our present energy challenges have it the other way around. This problem is not technological. We already have all sorts of alternatives to crude oil, gasoline and the internal-combustion engine. These include (but are not limited to) synthetic fuels, hydrogen and ethanol. The problem with these alternative technologies and fuels is that they aren’t economical.

The United States consumes about 20 million barrels of oil per day. We don’t use that much oil because government policies mandate it but because market efficiencies do. Despite the high price of oil and rising costs at the gasoline pump, no alternative does as good a job as at good a price in terms of moving our cars, trucks, boats and airplanes.

A present day Manhattan Project for energy would have to focus on making any of the variety of alternatives that already exist cost-effective. While that may sound reasonable enough in theory, keep in mind that the government has actually tried this several times before and failed.

President Nixon invoked the Manhattan Project in 1973 when launching a program to achieve energy self-sufficiency by 1980. In 1980, with the nation even further from energy independence than in 1973, the Carter administration set up the Synthetic Fuels Corp. This blew through $20 billion in five years with nothing to show before Congress and the Reagan administration killed the program.

Another Carter-era invention, the U.S. Department of Energy, lives on, annually spending billions of taxpayer dollars on basic energy and science research. Despite this torrent of federal spending, no real energy breakthroughs have emerged from the DOE in its quarter-century of existence. Given this track record, why would anyone think a new government agency is going to do any better?

It is almost certain the marketplace will do a better job than government in dealing with concerns about rising prices and American petroleum consumption. It already has. Witness the explosion in consumer interest in hybrid gas-electric vehicles. A number of factors are spearheading this automotive revolution, from market forces like higher pump prices to profound technological advances in microprocessing. Within a decade the hybrid revolution will fundamentally change how we drive and have real implications for America’s oil use. This revolutionary change is being driven by consumers and producers. The federal government has nothing to do with it.

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