Arnold Kling  

Entrepreneurs, Government, and Energy

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The Times (London) reports on a start-up that is using genetically altered bacteria to produce oil,

“Our plan is to have a demonstration-scale plant operational by 2010 and, in parallel, we’ll be working on the design and construction of a commercial-scale facility to open in 2011,” says [senior director Greg] Pal, adding that if LS9 used Brazilian sugar cane as its feedstock, its fuel would probably cost about $50 a barrel.

The entrepreneurs are trying to solve our energy problems. What is government doing? Putting a tariff on Brazilian sugar cane, among other things.

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COMMENTS (3 to date)
John V writes:

that's awesome. Thanks. blogged.

Adam Ricketson writes:

What's government doing? How about funding the basic science research that makes rapid technological advances possible? How about funding the training of the scientists?

If you are looking for a "free market" success story, don't look at high technology--90% of the ride is central planning (NSF, NIH, etc). I'm not saying that government involvement was necessary, but it was there in fact.

brian writes:

Very cool. The best part about it: "The company claims that this “Oil 2.0” will not only be renewable but also carbon negative – meaning that the carbon it emits will be less than that sucked from the atmosphere by the raw materials from which it is made." If this is true, then we can stop global warming without having to lose much of our GDP, and we can stop mucking around in the Middle East for oil.

Let's all hope that this goes well and develops further. The article said that a factory about the size of Chicago would be required to meet America's demand for oil. Hopefully they will figure out how to make it more efficient.

Regarding Arnold's point about government, isn't this result exactly the point of gas and carbon taxes? The standard argument for such policies it that they spur innovation and encourage entrepreneurs to develop alternatives like this one.

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