The late, great economist and author of The Ultimate Resource 2, which I highly recommend (who’s the ultimate resource? we are; people ? and the more, the merrier), famously observed (emphasis added):

England was full of alarm in the l600’s at an impending shortage of energy due to the deforestation of the country for firewood. People feared a scarcity of fuel for both heating and for the iron industry. This impending scarcity led to the development of coal.

Then in the mid-l800’s the English came to worry about an impending coal crisis. The great English economist, Jevons, calculated that a shortage of coal would bring England’s industry to a standstill by l900; he carefully assessed that oil could never make a decisive difference. Triggered by the impending scarcity of coal (and of whale oil, whose story comes next) ingenious profit-minded people developed oil into a more desirable fuel than coal ever was. And in l990 we find England exporting both coal and oil.

Another element in the story: Because of increased demand due to population growth and increased income, the price of whale oil for lamps jumped in the l840’s, and the U.S. Civil War pushed it even higher, leading to a whale oil “crisis.” This provided incentive for enterprising people to discover and produce substitutes. First came oil from rapeseed, olives, linseed, and camphene oil from pine trees. Then inventors learned how to get coal oil from coal. Other ingenious persons produced kerosene from the rock oil that seeped to the surface, a product so desirable that its price then rose from $.75 a gallon to $2.00. This high price stimulated enterprisers to focus on the supply of oil, and finally Edwin L. Drake brought in his famous well in Titusville, Pennsylvania. Learning how to refine the oil took a while. But in a few years there were hundreds of small refiners in the U.S., and soon the bottom fell out of the whale oil market, the price falling from $2.50 or more at its peak around l866 to well below a dollar. And in 1993 we see Great Britain exporting both coal and oil.

Now ? why do I bring up Simon at this moment? Does it have anything to do with the current uproar over gas prices? Well, yes, in combination with this:

Prototype car runs 100 miles on four ounces of water as fuel

While his unique electrolysis process ? working simply with water and electricity ? was originally designed to work in welding factories as a replacement for acetylene torches, a whole new application has come to light from Denny Klein, who recently filed a patent on his solution. He has converted his 1994 Ford Escort to run either as a water-gas hybrid, or on water alone.

While the tip of the welder is cool to the touch, the water-powered torch can burn through charcoal and get tungsten to “light up like a sparkler.” But when it comes to powering a vehicle, this prototype could drive for 100 miles on only four ounces of water. Technically, the car isn’t running on water, because the H20 is converted to HHO gas. This is said to provide the “atomic power of hydrogen”, while maintaining the “chemical stability of water.”

He has already attracted the attention of an unnamed American automaker, and Klein has been invited to the Washington to demonstrate his technology, with word that he is now working on a water-gasoline hybrid Hummer for US military.

I honestly don’t know if there’s anything to that, but that is exactly the sort of innovation from people being free enough to tinker and specialize in their own interests ? and having also the market-signaled financial incentives to do so ? that brings about these great, life-saving and quality-of-life-enhancing innovations that make us the ultimate resource.

Not to mention, but it’s way friggin’ cool.