BrianGarst.com

A mandate passed in 1994, in which Al Gore provided a celebrated tie-breaking vote, and over a decade’s worth of subsidies has not succeeded in replacing oil with ethanol. But where government has failed, the market appears to be succeeding:

Scientists find bugs that eat waste and excrete petrol

Unbelievably, this is not science fiction. Mr Pal holds up a small beaker of bug excretion that could, theoretically, be poured into the tank of the giant Lexus SUV next to us. Not that Mr Pal is willing to risk it just yet. He gives it a month before the first vehicle is filled up on what he calls “renewable petroleum”. After that, he grins, “it’s a brave new world”.

Mr Pal is a senior director of LS9, one of several companies in or near Silicon Valley that have spurned traditional high-tech activities such as software and networking and embarked instead on an extraordinary race to make $140-a-barrel oil (£70) from Saudi Arabia obsolete. “All of us here – everyone in this company and in this industry, are aware of the urgency,” Mr Pal says.

What is most remarkable about what they are doing is that instead of trying to reengineer the global economy – as is required, for example, for the use of hydrogen fuel – they are trying to make a product that is interchangeable with oil. The company claims that this “Oil 2.0” will not only be renewable but also carbon negative – meaning that the carbon it emits will be less than that sucked from the atmosphere by the raw materials from which it is made.

Actually what’s really most remarkable about what they are doing is the fact that they are doing it without government.  At least, statists must find that remarkable.

Who knows whether this can be applied on a large enough scale to be useful, and the article goes on to describe the difficulties. But what strikes me is the fact that no government official could have ever directed this. You cannot centrally plan this kind of innovation. Indeed, government efforts to direct resources distort the normal market behavior by giving incentives to focus on areas that may or may not be productive. Conversely, that leaves less resources for other areas.

Contrast: When markets are left alone they produce bugs that crap oil. When government directs action we get a worldwide food crisis.