Environmentalists support a major phase‐down of fossil fuels (with the near‐term exception of natural gas) and substitution of favored “nonpolluting” energies to conserve depletable resources and protect the environment. Yet energy megatrends contradict those concerns. Fossil‐fuel resources are becoming more abundant, not scarcer, and promise to continue expanding as technology improves, world markets liberalize, and investment capital expands. The conversion of fossil fuels to energy is becoming increasingly efficient and environmentally sustainable in market settings around the world. Fossil fuels are poised to increase their market share if environmentalists succeed in politically constraining hydropower and nuclear power.
Artificial reliance on unconventional energies is problematic outside niche applications. Politically favored renewable energies for generating electricity are expensive and supply constrained and introduce their own environmental issues. Alternative vehicular technologies are, at best, decades away from mass commercialization. Meanwhile, natural gas and reformulated gasoline are setting a torrid competitive pace in the electricity and transportation markets, respectively.
The greatest threat to sustainable energy for the 21st century is the global warming scare. Climate‐related pressure to artificially constrain use of fossil fuels is likely to subside in the short run as a result of political constraints and lose its “scientific” urging over the longer term. Yet an entrenched energy intelligentsia, career bureaucrats, revenue‐seeking politicians, and some Kyoto‐aligned corporations support an interventionist national energy strategy based on incorrect assumptions. A “reality check” of the increasing sustainability of conventional energy, and a better appreciation of the circumscribed role of backstop technologies, can reestablish the market momentum in energy policy and propel energy entrepreneurship for the new millennium.