* There are workable alternative fuels.
* Some of these alternative fuels are renewable.
* The cost increases and problems associated with these alternative fuels are not something to worry about.
As an example of an alternative fuel, I would point to ethanol as derived from corn. Ethanol can be used to run conventional automobile engines, and engines specifically designed for it would run quite well.
Since ethanol is made from corn or other crops, it is clearly a renewable resource. In fact, its use would make our farmers ecstatic. And while pollution problems would not cease, they would be greatly diminished; just imagine a hypothetical ethanol tanker spill! It's probable no cleanup crews would even show up; it would all just evaporate.
Why don't we use ethanol as a fuel now? Obviously, because petroleum is cheaper. Less obviously, petroleum is cheaper because of the cost of using ethanol! At the time of the embargo, prices rose until it began to look as though ethanol would be an economically feasible alternative -- then the petroleum prices stopped rising, and dropped just enough to put the thoughts of ethanol aside. This was no accident; it was precisely the intention. A basic tenet of economics is "charge what the market will bear". In the case of gasoline, the market will bear slightly less than the cost of using alternative fuels such as ethanol, and no more. Petroleum companies will endeavor to keep the price of gasoline just under the cost of ethanol as long as they can.
The upshot, of course, is that once they no longer can sell gasoline at that price because it has become harder to pump, ethanol will always be an option at only slightly higher cost. If gasoline prices were to rise significantly due to shortages, the transition to ethanol would be quick indeed -- which will keep the cost of gasoline within reason long enough for a general phase-out. As the demand drops, the supply will be more than adequate, and prices will stabilize.
Military/National Defense impacts
Back to the 1973 Oil Embargo
Back to Petroleum: a limited resource
Back to the introduction
Return to Kirby Palm's home page.
Of course, if you have questions or comments, you are welcome to send e-mail to me at palmk@nettally.com.