What’s the best fuel for interstellar travel? The answer is anti-matter. Insanely difficult and expensive to produce and manage. But the advantage is that you get 100% conversion of mass into energy as you burn it. All the costs take place in the stationary manufacturing plants. There is no shortage of stationary energy. What there is a shortage of is energy for transport.
A similar situation is energy for mobile devices (PDAs, laptops, mobile phones). Here we see that energy carriers can justify being expensive if they can be light and compact. These are exactly the requirements for energy carriers for transport.
At the moment the world depends on oil which combines the qualities of energy source and energy carrier. Once we get beyond that we can perceive a world where there is a lot of cheap energy from Nuclear Power (assuming that something turns up from all the thought that is going into manufacturing nuclear power plants that are of shippable size). For transport we will then convert that to an energy carrier. Given the massive investment a fair amount of that will be done by producing diesel, and that will mostly be done by converting inconvenient natural sources like Alberta tar sands and numerous sources of very heavy oil. Eventually, hopefully soonish, it will be possible to make fuel from thin air using algae and this will be competitive if the carbon price is high enough. However while all that is going on we’ll also be seeing a transition to other energy carriers for transport.
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