Boondoggles are, almost by definition, unnecessary, aren't they? But what if this is the case of a necessary boondoggle, a seemingly foolish undertaking that still makes some sense?

We're used to hearing that the free markets are rational and provide the best allocation of resources, but that viewpoint often overlooks the lavish and foolish ways that government initiatives can make good things happen.

• The Erie Canal
• Land grants to the transcontinental railroads
• The Interstate Highway system
• Airports and air traffic control
• TVA

There was no way of knowing if these things would pan out as hoped. And there was certainly no way that free market investors would finance these things. The risks were too high and market signals, if any, were far too slow.

With oil prices setting new highs on a daily basis (up 8% this week alone) the market is signaling a critical supply squeeze. But is it enough of a signal to avert serious problems ahead?

As China, India, and other developing economies continue their furious rates of growth, we can expect competition for scarce supplies to grow increasingly fierce. The 2005 "Hirsch Report" — a report by SAIC, Inc., for the Department of Energy — found that to mitigate the full impacts of peak oil, the U.S. would have to begin serious planning and start transitioning away from petroleum 20 years before the peak. According to this report, if a peak happens within the next 10 years, we will suffer extreme disruptions to our economy because we have not, as a nation, begun to seriously plan for the transition.ii

And how are the free markets responding to these furious price signals?

Generally speaking, they’re backpedaling just as furiously as they seek to repair the damage to their balance sheets caused by the ongoing credit crisis. Just today, for instance, Citi offered up for sale some 20% of its assets (about $500 billion worth)! Did they do so because they were bored with managing this stuff or is it because they need to shore up their balance sheet even more, since more losses loom on the horizon? There are limits to how much preferred stock you can offer. If Citi is any indication, the private financial market still has a lot of pain to endure. Which means they will have little capital to lend.

We need serious money being thrown at the growing energy crunch. Only government has the wherewithal to do it now. We need the government to become boondoggle central in the effort to transition to a post-oil future. Because when the “No gas today” signs crop up at service stations and the lights flicker out for hours and days at a time, you can be sure that folks won’t bitch about all the money government wasted on alternative energy boondoggles. No, they’ll wail and gnash their teeth because government didn’t.

Revrick: We need serious money being thrown at the growing energy crunch. Only government has the wherewithal to do it now. We need the government to become boondoggle central in the effort to transition to a post-oil future. Because when the “No gas today” signs crop up at service stations and the lights flicker out for hours and days at a time, you can be sure that folks won’t bitch about all the money government wasted on alternative energy boondoggles. No, they’ll wail and gnash their teeth because government didn’t.

LeRoy: According to a recent issue of 'New Scientist', we are spending less today on energy R&D than we were in 1979. We have needed to be devoting more resources to this for the past thirty years. Now, we may be too late, as (in my opinion) we are much closer to peak oil than twenty years. We have been unable to convince the public of this, because they have been bamboozled by the folks claiming that we have an infinite supply of oil out there, if only the environmentalist wackos would let us get at it.

The government projects you cite (the Erie Canal, TVA, the Interstate Highway system, etc.) are all examples of public goods, which is indeed a responsibility of government. Even Adam Smith understood this, though he did not call them 'public goods', which is more modern terminology. It is widely recognized that scientific research in general is a public good. We have been underfunding it for at least the last thirty years; it may very well be that it has NEVER gotten the level of attention it deserves.

Probably the energy source which is the deadliest will be the one which is used the most in the few years we have left:

COAL!!!!!!!!!

The products of combustion of all other fossil fuels are water and carbon dioxide. The product of combustion of coal, after it has been "cleaned" is just carbon dioxide. Thus, for net energy produced, it adds the most carbon dioxide to the environment. It therefore makes the greatest contribution to global warming of any energy sources we might use. Unfortunately, it is available in many places on Earth, and its use is climbing at an accelerating pace. The coal industry, headed by what must be the planet's most cold-blooded and evil people, spews forth endless propoganda, and probably payoffs, to keep the public from understanding the depth of this problem. In the US, the mantra they unceasingly trumpet is "clean coal". They mention, in passing, that sequestering carbon dioxide has still not been achieved, except in unscalable demonstration quantities. However, they want everybody to believe that it is no more difficult than finding a place to store water. Carbon dioxide is a gas at ordinary temperatures and pressures. It takes a lot of container to hold a little bit of that gas. Compressing it to a liquid takes more energy than can be extracted by burning the coal from which it is derived. Using it do enhance oil production by pumping it into depleted oil deposits can use up very little of it - think of the difference in density of oil and carbon dioxide and you realize that, without a negative energy balance, the space from which the oil is forced accomodates very little carbon dioxide.

Coal is deadly, in the sense that using it will kill us! That seems to me like a sufficient reason to not use it.