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2 SPEAKING
FREELY Alternative energy: It's not for
everybody By Michael G
Gallagher
Speaking Freely is an Asia
Times Online feature that allows guest writers to
have their say. Please click hereif you are interested in
contributing.
Before I go any
further, I'd like to say one thing right up front.
I think alternative energy is a grand idea. I have
fantasies about my country's deserts (I'm
American) being covered by massive solar farms,
and my nation's long and beautiful coastlines sprouting
windmills by the thousands. I
have science-fiction visions of millions of
zero-emissions vehicles clogging America's roads
in gloriously carbon-free traffic jams.
But the embrace of clean energy by some
could mean economic depression for others. After
all, what are all the countries whose economies
depend on fossil-fuel exports going to do when
technological advances and the threat of climate
change eventually make their main source of export
income obsolete?
And whether alternative
energy's big day arrives next year, five years
from now, or even 15 years from now, it will
arrive. In the US state of Utah, Ford Motor Co
engineers recently put through its paces the
hydrogen-fuel-cell-powered Fusion 999 sports car.
During one recent test run, the concept car hit
close to 350 km/h.
The big US industrial
firm Dupont has signed a deal worth up to US$100
million with the US government to develop solar
cells with a conversion efficiency of 50%. And in
Asia, the member countries of the Association of
Southeast Asian Nations have agreed to make
renewable fuels 10% of their energy mix by 2010.
President Hugo Chavez of Venezuela has big
plans for his country's oil reserves: not only
does he want to build an extensive social safety
net for his nation's 27 million people, he wants
to use Venezuela's oil wealth to mount a credible
challenge to US influence in Latin America.
But Hugo Chavez's rosy view of his
country's prospects could be easily be darkened by
any sudden drop in the price of oil. Exports make
up 35% of his nation's $109 billion gross domestic
product (GDP), with oil sales providing 82% of
that total.
Of Iran's 2005 GDP of $193
billion, $56 billion comes from exports. Ninety
percent of the export revenue flowing into
Tehran's coffers comes from oil. For Iraq, riven
by violence since the fall of Saddam Hussein in
2003, oil made up 99.5% of its 2005 export
revenues of $24 billion.
Very few
oil-exporting countries produce any other products
that come even close to filling the gap in their
financial ledgers that a big drop off in oil
revenues would create. Manufactured goods make up
only 1.5% of Nigeria's export mix. Iran's export
position is only slightly less marginal; 6.7% of
its exports come from manufactures.
Algeria's and Iraq's export positions are
even worse, with 1% Algeria's and a truly pathetic
0.2% of Iraq's export cash coming from
manufactured goods. All the rest comes from fuel
exports.
And the vast majority of
oil-producing states don't have the independent
scientific and technological base necessary for
them to develop the high-value manufactured goods
they would need to trade with the developed world
for advanced energy technologies. Many
oil-producing states could find themselves in a
desperate trap: they would be trying to import
alternative technology by selling oil that would
be declining in value just at the time they would
need maximum revenues to make the switch to the
new energy technologies.
Iraq before the
1991 Gulf War had developed an extensive research
and development (R&D) capability, but the
thousands of Iraqi scientists and engineers
working for Saddam Hussein's regime were employed
in weapons research, not in developing products
that could substitute for Iraq's oil revenue.
Present-day Iran is also working hard to
develop a large, independent R&D capability,
but as with Saddam's Iraq, that capability is
devoted to making weapons, and to anything that
can reduce Tehran's overwhelming dependence on oil
exports. As for Hugo Chavez' Venezuela, there are
no high-tech firms springing up along the banks of
the Orinoco River waiting to take up the economic
slack when the price of oil inevitably drops
because of technological advancement.
Russia is another major oil-producing
country that could find its finances stressed with
the widespread introduction of new energy
technologies. With a GDP of nearly $800 billion,
Russia is in the middle of an oil-driven economic
boom. Eighty percent of Russia's export money
comes from oil.
Unlike most other energy
exporters, however, Russia does have a big
manufacturing sector. In 2005, 23.2% of the
country's export revenues came from manufactured
goods. Unfortunately, a big slice of that money
came from weapons sales. Russia sold $6.5 billion
worth of weapons in 2006. But no matter how
lucrative
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