U.S.: A nation in search of a new, cheaper energy form

If there's one thing that could get the U.S. out of what appears to be a slow-GDP-growth track, it's a new, readily-available, cheaper energy form, due to the large role transportation plays in the U.S. economy, and the substantial reduction in costs that would result.

Further, although a more-environmentally friendly new energy form would be a double-win, the key element remains cost. Right now, the United States, and to a lesser extent, the world, is caught in the uncertain, point-of-transition stage between the 20th century's dominant energy form (oil), and an as-yet undetermined new energy form. We know that oil is not ideal, will likely decrease in supply at some point in the early 21st century, and -- if current trends hold -- is like to get considerably more expensive. To say the time is ripe for the appearance of a new, cheap energy form would be an understatement. But as we approach the end of 2009, an undisputed new star has not yet emerged.

But if one is discovered, as Gates predicts, the achievement would be consistent with capitalism's ability to renew and reinvent itself -- to innovate and deploy ingenuity in an hour of need. If one isn't, one can see how the U.S. economy, and much of the world (save oil producing states) would struggle to achieve adequate, sustainable GDP growth.

In the U.S.'s case, it will take 3 to 5 years for the economy to adjust to $4 or $5 per gallon gasoline, stemming from a period of enduring sky-high oil prices: Americans have to be convinced that cheap gasoline (and diesel) is a way of the past, then the manufacturing infrastructure has to adjust. As previous oil shocks have demonstrated, this takes about a half-decade. But if a new, cheaper energy form appears, the U.S. could largely bypass the GDP costs associated with another 'oil shock' and transition relatively quickly back to a high-GDP growth, low-energy-cost economy.