The Government Role in Shale Gas Innovation

Writing in the Washington Post over the weekend, Michael Shellenberger and Ted Nordhaus explore the government's role in the technological innovations that have led to the shale gas revolution:

Whatever one thinks about shale gas today — we worry about its environmental consequences — there’s no denying the extraordinary economic return on taxpayer investments. Shale gas is likely to allow the United States to go from net gas importer to a net gas exporter over the next decade.

While details vary, the story is basically the same for nuclear power, natural gas turbines, solar panels, and wind turbines — pretty much every significant energy technology since World War II. That’s because the private sector alone cannot sustain the kind of long-term investments necessary for big technological breakthroughs in the midst of volatile energy markets and short-term pressure to produce profits.

No doubt, government energy innovation investments could be made more efficiently and effectively. But it would be a mistake to imagine that we’d be better off without them.

The details of government innovation policy matter a great deal of course, as such policies can lead to success or failure. And the consequences of innovation are often themselves disruptive and may require actions in response.

Any effective approach to innovation will move beyond the simplistic debates that spring up over whether the government or the private sector is the source of all that is good and the other is the source of all that is evil. Both have important roles to play.

Comments welcomed on this post on the the details of the S/N op-ed, technology of shale gas and specific innovation policies. But please take generalized arguments for or against government or the private sector elsewhere, Thanks!

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