Biofuels Incentives Needed to Leverage Environmental Benefits of High Oil Prices

Oil Turmoil: Pricey Fuel's Impact
Will Pricey Fuel Prompt Greener Energy Habits?
by Elizabeth Shogren
Listen Now [4 min 15 sec]
from NPR:"All Things Considered":

(Washington, DC) ... "High oil prices are going to make people use less oil, pure and simple," says Billy Pizer, an economist at the Washington think tank Resources for the Future. "People are going to buy more efficient cars. You already see the effects in terms of sales of big Hummers and large SUVs."

But Richard Newell, an economics professor at Duke University, sees it differently. "From an environmental perspective, increasing oil prices might seem like a good thing, but it's not that simple," Newell says.

Newell worries that high oil prices will lead to the use of fuel sources that produce even greater amounts of pollution.

"For example, you can make liquid fuels from coal, which is an amazing technological feet," Newell says. "But the resulting amount of carbon dioxide, which is associated with global warming, is almost twice that from a barrel of oil."

Oil shale and tar sands are other sources of liquid fuel that are harder on the environment than petroleum. High oil prices already have sparked a boom in Canada's tar sands business.

Newell says getting businesses to develop cleaner types of fuel depends on government providing incentives for the environmentally friendly technology, and regulating higher-polluting fuel sources.

"The market's oriented to supplying the cheapest energy, not the lowest-polluting energy," Newell says.

Read More>>