Much of 2008 so far has been spent lamenting world oil prices at new record highs, over $140 US per barrel. The result has been gasoline priced at $4.00 per gallon in the United States and $1.30 per litre in Canada. There are few dissenters when one says that Americans and Canadians have to lower their dependence on gasoline-fuelled automotive transport.

The U.S. driving public’s dependence on gasoline has economy-inhibiting aspects in three ways: (1) an increasingly prohibitive cost factor; (2) an enormous and unmovable foreign trade deficit due to foreign sourcing of the oil and natural gas shortfall; and (3) carbon monoxide emissions that are polluting the atmosphere and falling short of goals to clean up the environment (and that will eventually lead to some form of carbon tax).

Canada’s position on oil and gas is a little trickier, given that massive investments in the Oil Sands of Alberta and offshore Newfoundland are driving those provincial economies to heights of prosperity never seen before. Nevertheless, the environmental issue, and particularly Canada’s commitment to Kyoto Accord provisions (and target reduction levels) mean that progress has to be made in reducing carbon emissions.

Substituting fuels from biomass (e.g., ethanol from corn or sugar cane) for gasoline in car engines is one answer. This provides a cleaner emissions solution, but it is increasingly coming under scrutiny for its possible effect on food prices. With agricultural prices rising alarmingly around the world, some pundits are arguing that acreage taken away from crops and diverted to biofuels is one of the culprits. There are longer-term technological means to resolve this problem − for example, through genetically modifying biofuel crops to grow on land that would not otherwise by used for food production.

Most “futurists” seem to be leaning towards a leap forward in battery technology as the best and most likely way to break out of the dependence on gasoline. Presidential candidate John McCain is even offering a $300 million monetary award for such a discovery as part of his election platform. Hydrogen fuel-cell and lithium-ion batteries in hybrid cars are two of the new technologies that seem most likely to achieve success over the longer term.

However, while switching to electric-powered vehicles will cut down on carbon emissions, it will require greater electric power generating capacity to be employed in recharging. Water falls and dammed water in rivers are two hydroelectric means to turn turbines in generators and produce electricity in ways that are both clean and renewable.

Several of Canada’s provinces still have hydroelectric generating potential in northern rivers. These are being looked at and advanced as quickly as possible, signaling a new era in mega electric power projects across the country. In the U.S., all available hydroelectric potential has already been harnessed.

Tidal flows can also turn the wheels to generate electricity. This is being looked at and experimented with in coastal bays and major rivers. Many of the other alternative systems for power generation− wind farms, solar, mirror farms and geothermal − involve new technology. Others will require next generation improvements to existing methodologies. These will be outlined tomorrow.

Alex Carrick

Find Canadian construction-related economic articles in Canadian Construction Market News and in the Economic Outlook section of Daily Commercial News.

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