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Back To The Future On Energy

Shortly after taking office, President Obama gutted a $1.2 billion Bush administration R&D program designed to bring hydrogen-fueled cars to market.

President Bush said in 2003 the project would "make our air significantly cleaner and our country much less dependent on foreign sources of energy." An Energy Department advisory panel reported last year that the technology wasn't a "distant dream," and that Japan, Korea, China and the EU were "aggressively" investing in hydrogen cars with plans to commercialize them in 2015.

But Obama decided instead to invest billions of dollars in electric cars — a technology that dates back more than 150 years but has yet to succeed commercially.

The episode stands in stark contrast to the president's depiction of his energy policies as ones that "invest in stuff that's new" and "stop subsidizing stuff that's old.

In fact, several of Obama's energy priorities are very "old stuff," much of it predating the gasoline engine, and little finding much commercial success despite massive public investments.

A little history: Electric cars. The first electric cars actually predate those powered by gasoline. In fact, it wasn't until the early 1900s that gas-powered cars came to dominate, as their advantages over battery-powered engines became increasingly obvious. Since then, car makers have repeatedly tried and failed to produce commercially successful electric cars. Even today, they're struggling. Nissan (OTCPK:NSANY) has sold just over 1,700 of its all-electric Leaf cars so far this year and General Motors (NYSE:GM - News) suspended production of its plug-in hybrid Chevrolet Volt, despite a very generous $7,500 per-car tax credit.

Advanced batteries. Battery technology, too, is "old stuff," invented by Alessandro Volta in 1800. Batteries have improved greatly, but still have serious limitations. And Obama's heavy investment in advanced batteries has produced decidedly mixed results. One company, Ener1, sought bankruptcy protection after getting $118 million in federal grants. Ener1 exited bankruptcy last week.

High-speed rail. The first passenger train ran between Swansea and Mumbles in England in March 1807. More than 200 years later, passenger rail in the U.S. has failed, except in a few areas, to be commercially viable. Amtrak still gets $1.5 billion in annual taxpayer subsidies. And Obama's vision of high-speed rail lines across the country is turning out to be a hugely expensive proposition. The cost of California's high-speed line between San Francisco and Anaheim, for example, is now pegged at $98 billion — more than double the original estimate, and won't be finished for 20 years.

Wind energy. Charles Brush built the first wind generator in the U.S. in 1888. Twenty years later, there were 72 in operation in the country. By the 1930s they were common on farms. But wind power continues to be far more expensive than other sources of energy — up to 290% more expensive than natural gas powered plants, according to the Energy Information Administration. It can also be less reliable — with winds tending to diminish on hot days when electricity demand spikes, for example.

Solar power. Discovery of the photovoltaic effect dates back to 1839. William J. Bailley invented the first solar collector in 1908, and Bell Labs scientists built the first solar cell able to power everyday electrical equipment in 1954. But after decades of research and development, solar power continues to cost far more than traditional plants, according to the EIA. Like wind, solar power is erratic. And it requires vast tracts of land. The Ivanpah solar plant in California requires 5.5 square miles to set up 392 megawatts worth of generating capacity. A natural gas plant in the same state can produce almost twice that on just 25 acres.

Because of these limitations, the EIA estimates that solar and wind will, combined, account for less than 3% of U.S. energy production as far out as 2035.

Still, could recent advances in these very old technologies, with increased government support, overcome these rather unimpressive historical results

Obama says that they've "never been more promising.

Robert Bryce, an energy expert at the Manhattan Institute, is far more cautious. "For all the money thrown at these alternatives and all the claims about how they will displace hydrocarbons, that's unlikely to happen for decades," he said.