America Can’t Afford to Develop Alternative Energy

America Can’t Afford to Develop Alternative Energy

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Remember the EV1? General Motors brought this sleek electric car to market some 15 years ago. It spent more than $1 billion developing the EV1 and ended up selling about 1,000 of them in southern California.

That GM spent roughly $1 million on each EV1 that rolled off the showroom floor wasn’t publicly discussed by the company’s leadership in Detroit, or, for that matter, by government bureaucrats who encouraged development of a car that nobody wanted.

After the government bailout of GM a couple of years ago, you would think America had learned its lesson as to the destructive costs of forcing alternative energies onto a market that has little demand for them. Yet President Obama is repeating the same tired call for America to develop alternative energy vehicles and programs – even as his administration racks up a 2011 federal budget deficit of as much as $1.5 trillion.

Detroit is hoping its latest generation of electric cars like the Chevrolet Volt will turn a profit this time around. Make no mistake: The EV1 was ahead of time and the technology that goes into America’s latest alternative-fuel cars is second to none. But developing such technology is prohibitively costly for the American companies that do it.

President Obama would do well to visit Masdar City the next time he swings through the Middle East. Masdar, in Abu Dhabi, is the world’s first completely sustainable community. It uses the latest clean, renewable construction materials as well as solar and wind technologies that power the entire city. And it was created by a group that knows a thing or two about energy: the oil sheikhs of the United Arab Emirates

America shouldn't be concentrating on developing alternative energies. Countries like the U.A.E. and Saudi Arabia can afford to absorb the trial-and-error process of new technologies a lot more easily. The billions of dollars that the U.A.E.’s ruling Al Nahyan family has spent building and marketing Masdar, a high-tech city that includes an M.I.T. graduate campus, make development of the EV1 car look like child’s play.

The emirate of Abu Dhabi, the capital of the U.A.E. in which Masdar was built, is home to nearly 10 percent of the crude oil reserves on the planet. Every time the price of a barrel shoots toward $100, as it is now, the sheikhs can throw more money at renewable energy programs and finding technologies that consumers will actually want to buy someday.

Plus, these oil-rich countries have an incentive to explore alternative energy options: All they really know is how to export energy. It’s the substance rather than the form that matters to them. They don’t care what kind of energy they’re dealing in. If it’s clean, renewable, and can help the U.A.E. diversify away from its sole-source fossil fuel economy, that’s even better for them. For America to do any of this, by comparison, is a big waste of time and money.

And if you happen to be one of the 1,000 owners of an EV1 electric car, maybe you can sell it on eBay to a Middle Eastern sheikh who can afford the electricity to keep it going.