Renewable energy sources such as biomass are sometimes regarded as an alternative to ecologically harmful fossil fuels. Renewables are not inherently alternative energies for this purpose. For example, the Netherlands, once leader in use of palm oil as a biofuel, has suspended all subsidies for palm oil due to the scientific evidence that their use “may sometimes create more environmental harm than fossil fuels”. The Netherlands government and environmental groups are trying to trace the origins of imported palm oil, to certify which operations produce the oil in a responsible manner. Regarding biofuels from foodstuffs, the realization that converting the entire grain harvest of the US would only produce 16% of its auto fuel needs, and the decimation of Brazil’s CO2 absorbing tropical rain forests to make way for biofuel production has made it clear that placing energy markets in competition with food markets results in higher food prices and insignificant or negative impact on energy issues such as global warming or dependence on foreign energy. Recently, alternatives to such undesirable sustainable fuels are being sought, such as commercially viable sources of cellulosic ethanol.
Alternative energy also relies on the government to provide investment in new infrastructure. Upgrades to the national electrical grid, known as the SmartGrid, will ensure that huge wind farms in the mid-west, and and solar electric generation projects in the deserts, can distribute their power to the cities where it is most needed.
The switch to alternatives has also been slowed by the heavy capital investment required to increase production sometimes with a payback of decades. Oil prices have surged before, only to crash to levels that destroy the economics of alternatives. Even today, the very real prospect of a sharp drop in oil prices if not on the scale of the oil price crashes of the mid-80s and late 90s has limited investments in alternatives that can compete economically with $60 oil.
Today alternative energy demand is growing for many reasons. Prices of crude oil have fluctuated wildly in the past few years causing gasoline prices to triple to the $5 per gallon mark. This caused average Americans to think about energy in ways they hadn’t since the last “oil shock” in the 70′s, which caused shortages and rapid price increases. A spirit of nationalism combined with a cry for energy independence has boosted interest in local, renewable, alternative energy sources like solar and wind. Today, energy from the sun and wind holds a very small percentage of US energy output, but is now at a tipping point. Higher prices for crude oil and governmental incentives for alternatives are acceleratingwhich lower the to consumers and large utilities to adopt are , at prices competitive with energy from the grid, is attractive to many homeowners that can also see the value in renewable
