Investments in
limited locations, cheap fossil fuels
last quarter century have, with few excep-
wiped them from the market.8 8
tions, been disappointing, as a historical
subsidized renew-
review shows.
able technologies
Hydropower predated fossil fuels on the
As fossil-fuel prices began their ascent in
have, with few
world stage as noted by the Worldwatch
1973, a solar-energy boom began in the
Institute,8 9 and hydroelectric construction
United States and abroad. By the mid-1970s
exceptions, been
peaked during the New Deal in the United
more than a hundred companies, many
disappointing.
States. Continuous geothermal production
responding to government subsidies and
dates from 1913 and became a mature indus-
preferences, had entered the business of con-
try prior to the 1970s.9 0 Biopower is the
verting the sun's energy into electricity or
youngest member of the renewable family,
substituting it for electricity altogether.
having emerged in systemic fashion during
Some of the biggest names in the energy
and immediately after the 1970s energy crisis.
business--Exxon, Shell, Mobil, ARCO, and
Amoco--were among the entrants. More
Subsidized Renewables:
than a dozen other large oil companies had
A Legacy of Falling Short
patents or were conducting research in the
Shell, the world's second largest energy
field. Other companies, such as General
company, has announced an expansion
Electric, General Motors, Owens-Illinois,
into biopower, solar, and possibly wind on
Texas Instruments, and Grumman, entered
the assumption that fossil fuels will become
the solar collector heating and cooling mar-
scarcer in the "next few decades."9 1 British
ket or the photovoltaics market, or both. The
Petroleum is increasing its long-standing
head of Royal Dutch Shell's solar subsidiary
investment in solar energy on the premise
declared in late 1980, "The solar electric mar-
that man-made global warming is a poten-
ket could explode."9 6
tially major social problem.9 2 Enron Corp.
Declining energy prices in the 1980s set
entered into solar energy in 1995 and wind
back an industry that, like synthetic fuels
energy in 1997 to complement its focus on
(discussed below), never approached eco-
the cleanest burning of the fossil fuels, nat-
nomic viability even when fossil-fuel prices
ural gas.9 3
were at their peak. While the use of solar
power in niche markets and some remote
To environmentalists critical of fossil
applications remained viable, central-sta-
fuels, this burst of interest on the part of
tion electricity generation was another
some of the world's prominent energy com-
story. Few, if any, major solar companies
panies signals the beginning of the end of the
showed a profit in the 1980s, although
fossil-fuel era. Yet these ventures are very
some survived. Fortune in 1979 stated, "It
modest compared with overall corporate
has proved harder than the pioneer imag-
investment in energy9 4 and are inspired as
ined to overcome the inherent difficulties
much by transient government subsidies and
of harnessing an energy form that is stu-
public relations as by underlying economics.
pendous in the aggregate, but dilutes in any
To put the issue in perspective, the highly
given setting."9 7 The verdict was the same
publicized $500 million that Shell has com-
mitted to spend over five years on interna-
more than a decade later. The liquidation in
tional renewable projects is half as much as
December 1991 of Luz International, previ-
the company's far less publicized budget to
ously the world's leading solar power devel-
develop three previously located deepwater
opment firm, marked the end of an era.
Gulf of Mexico oil and gas fields.9 5
The wind power boom started a few years
later than the solar boom, but the results
Unconventional energy sources have
were the same. First-generation technology
long mesmerized both government and--to
was very expensive, and unintended environ-
a lesser but still real extent--private investors.
mental consequences affecting land and
Investments in these technologies in the
17