Tomorrow's Energy, Today's Discount

The International Thermonculear Experimental Reactor consortium (USA, EU, Japan, South Korea, Canada) have agreed to build in France. This is a big step towards having clean, non-nuclear-waste-producing fusion power. The reactor is not expected to be used for consumer electricity until 2050.

The process is extremely complex and extremely costly (NYTimes throws out the number $10 billion), and we can assume that much of the science needed to successfully run this sucker will be developed between now and 2050. Hopefully, $10 billion will be enough to squeeze some serious innovations out of the world's scientists, one of whom was quoted in the NYTimes article:

The machine is very complicated.

Indeed. But will it do anything about our $60-a-barrel oil in the intervening decades? Actually, yes. Oil is pumped in most major producers at rates set strictly by national governments with long-range views (monarchies don't live on four-year cycles). If they see higher oil prices to the end of the horizon, they have an incentive to keep the taps tight, making the most of their resources. Fusion, fuel-cell, nuclear, and other alternative fuels, however, are a threat to oil producers - not a threat today, but a future threat. Lowering the estimated cost of oil in 2050, lowers the actual cost today by decreasing the incentive for producers to hoard their crude. Does ITER mean I'll be able to spend $1.25 a gallon on my Fourth of July roadtrip this weekend? No, but it might mean that next year's gas prices remain at $2.10, and aren't $2.60 or $3.10. And that's probably good for all of us.