Alternative Energy and The Future of Oil Companies

The Future of “Oil” Companies

Our national goal of switching from fossil fuels to renewable energy has maintained a high level of support.  Achieving price parity between alternative energy and fossil fuels is vital to the objective of energy transformation.

We can wait for the price of alternative energy to reach parity with fossil fuel sometime in the future, as more technologies are proven viable, but it’s an unreliable time horizon.  Due to the pace of global warming, as well as the national security concerns of relying on fossil fuels, we may not have the time to bet on the market. 

There’s been a hodgepodge of speculation on what was behind the slow but persistent rise in gas prices, ebbing and flowing towards higher equilibriums; with prices rising beyond $5 a gallon (before ISIS started flooding the market).  The so called experts have offered numerous explanations for that trend, but none of their responses seem to have any consistency. 

Tracing this trend back, evidence appears that the fuel price inflation we witnessed was initiated with the blessing of the Bush Administration.  It was concurrent with the “secret” meeting Dick Cheney arranged with the oil companies at the White House; being secret one is compelled to look at what followed.   Subsequent to this secret meeting President Bush gave his “addicted to oil” speech and within weeks the oil industry began a PR campaign touting their newfound interest in renewable energy, rebranding themselves “Energy Companies.” The price of fuel started trending upward until recent world events. 

Before anyone gets their dander up over this assertion, let’s look at the benefits behind the alleged deed.  The most expedient method to achieve an energy security objective is to unilaterally raise the price of fuel at the pump.  In this way we quickly move fossil fuels towards parity with the emerging alternative energy technologies, while at the same time amassing the capital necessary to invest in the new technologies. 

Looking at the problem from a “free market” perspective this is the correct way of achieving the objective and it can be argued it is also good public policy.  Higher fuel prices will mitigate the demand for the polluting, non- renewable energy and speed up the transformation to solar, wind and other more benign sources. 

If it’s not through the unilateral action by the oil industry to achieve price parity with alternative energy, what is the mechanism?  One of the options offered by congress is adding a fuel tax to raise the price of fuel.  Raising taxes in an effort to achieve energy transformation is shaky as the government has proven to be a poor manager of our common wealth, often diverting revenue toward unintended uses.  On the other hand taxing may be the lesser of the two evils, as simply tolerating oil companies making windfall profits, regardless of the means by which it is achieved, would be inequitable and dangerous.  The vast amount of capital potentially generated by oil companies will consolidate their power as energy companies, allowing them to control the energy market, including alternative energy; even retarding progress toward renewable energy. 

So if taxing fuel or allowing the oil industry to amass windfall profits is not acceptable solutions, what is?   I suggest a third way, through collaboration.  I propose consumers partner with the “energy companies” in support of a national goal toward alternative energy transformation. 

How will this “partnering” work?  In exchange for granting the energy companies the right to raise fuel prices, the consumers will receive Loyalty Reward Points toward owning stock in the energy companies.  Every time a consumer buys product, energy points will accumulate on a rewards card, when sufficient points accumulate to purchase stock it will automatically be placed in the consumers account at the current stock price.  This non-bidding approach to stock distribution will provide the “Energy Companies” some certainty in the expansion of their stock. 

If this rational energy transition method is applied, it has the potential to bring all affected parties into a synergistic interrelationship and would expeditiously stimulate innovation toward alternative energy conversion.  There is a huge potential for creating jobs in renewable energy production and infrastructure.  To release this potential we need to incentivize the effort toward renewable transformation in a way that is equitable to all parties by sharing the benefits from a shared investment. 

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