Ethanol: The SDI of Energy Policy?

Cruising Free Republic today I came across a link to this NYT article detailing Saudi plans to "temper" the price of oil. This is hot on the heels of the President's State of the Union address which highlighted a renewed US resolve to find alternative fuel solutions, the most promising of which is ethanol. I've also noticed a lot more stories about the increased production of ethanol in the last two years. The problem is, ethanol, for all its promise, is still a long away from being a viable alternative. Some of the very real and potential problems are reviewed in this editorial that appeared in the WSJ this weekend.

The story about the Saudis interest in moderating prices combined with all the hoopla over ethanol got me thinking--could ethanol be the Star Wars Defense Initiative of energy policy? For decades the Soviets relied on their ballistic missiles to keep the US in check. Reagan said the US was going to make them obsolete with SDI. The fact that SDI had yet to be proven a viable defense system, was irrelevant. The Soviets knew if anyone could pull it off, the US could. They also knew if Reagan said he was going to do something, they had to take it seriously. I also bet we let enough intel "slip" into their hands that they had to believe we were working in earnest. We all know how the story ends. The Soviets bankrupted themselves in an effort to keep up.

For decades the Saudi's and other totalitarian regimes have relied on their oil reserves to influence US and European policy in their favor. And up until the last decade or so, the US hasn't shown a ton of resolve to find alternatives to oil. But with so much government money being thrown at ethanol, I can't help but see a parallel to SDI. We may not have perfercted the use of ethanol just yet, but we can grow enough corn to keep trying until we do. I think the Saudi's see this and might be hedging their bets a little.

I'm not saying we should abandon alternative fuel research even if they drop the price per barrel to $1.05. Just as we shouldn't abandon development of technology that will make ballistic missiles obsolete. Any technological advance (or bluff) is worth the price if in addition to making life better, it puts despotic regimes out of business.