Will Pricey Fuel Prompt Greener Energy Habits?

With oil soaring above $90 a barrel, you'd think environmentalists would be jumping for joy. After all, high prices might prompt people to drive less, or trade in their SUVs for smaller cars with better mileage.

Phyllist Cuttino, who directs the Pew Campaign for Fuel Efficiency, is hoping Congress will respond to high oil prices with tougher regulations on fuel efficiency.

When it costs $80 or $100 to fill up the tank, Cuttino says, "You know that making your car go farther on a gallon of gas is going to be good for you as a consumer and good for the country, right?"

Almost everybody agrees on that. But will high oil prices lead to the goal of greater efficiency and a cleaner environment?

"High oil price, I think, are going to be unambiguously good for the environment," says Billy Pizer, an economist at the Washington think tank Resources for the Future.

"High oil prices are going to make people use less oil, pure and simple," Pizer says. "People are going to buy more efficient cars. You already see the effects in terms of sales of big Hummers and large SUVs."

But Richard Newell, an economics professor at Duke University, sees it differently. "From an environmental perspective, increasing oil prices might seem like a good thing, but it's not that simple," Newell says.

Newell worries that high oil prices will lead to the use of fuel sources that produce even greater amounts of pollution.

"For example, you can make liquid fuels from coal, which is an amazing technological feet," Newell says. "But the resulting amount of carbon dioxide, which is associated with global warming, is almost twice that from a barrel of oil."

Oil shale and tar sands are other sources of liquid fuel that are harder on the environment than petroleum. High oil prices already have sparked a boom in Canada's tar sands business.

Newell says getting businesses to develop cleaner types of fuel depends on government providing incentives for the environmentally friendly technology, and regulating higher-polluting fuel sources.

"The market's oriented to supplying the cheapest energy, not the lowest-polluting energy," Newell says.

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