For decades, the promise of alternative energy has remained just that — a promise. Technological hurdles, daunting research and production costs, and the countervailing force of an energy policy that lavishes perks on oil and gas companies but pays scant attention to other options have combined to keep the alternative-energy industry a fringe movement.
But with the specter of $4-a-gallon gasoline infuriating voters, politicians are seriously questioning the wisdom of depending so heavily on fossil fuels from faraway lands. Add to that environmental concerns, which have prompted many states to enact stringent clean-fuel requirements, and suddenly, if not spectacularly, a cautious optimism about renewable energy seems to be taking hold.
All bets are off, of course, if oil prices drop. But regardless of which way the market goes, the nascent alternative-fuels industry faces another challenge. As technology editor John Goff points out in "Power Source," lack of financial discipline is a major concern. Unless the CFOs at these companies can control costs and work with government to promote greater adoption, wind, solar, ethanol, and other clean fuels will never be widely embraced. It's a tall order, but if more-frequent and more-intense cycles of oppressive oil pricing become the norm, there will be plenty of incentive to make alternative energy work.
Beyond incentives there is also pressure. Some 83 percent of Americans say they want politicians to pay more attention to global warming in the next elections. And last month, 27 institutional investors called on the Securities and Exchange Commission to require public companies to disclose the financial risks posed by climate change. If alternative energy doesn't pan out, it won't be just that industry that suffers.