Two other major factors are changing the supply equation. The first is the continued boom in natural gas from shale, which is pushing down prices and leading to calls to export gas. This has been apparent for about two years, but there is still significant potential for growth. The second is the astounding technological development in biofuels that will allow non-food feedstocks to replace petroleum products as gasoline or jet fuel.



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Fundamental changes in American demand for energy are also happening. Oil passed ‘peak oil demand’ sometime around 2006. The agreement finalized last November between the Automakers and the Administration that will double automobile fuel economy standards to 55 MPG combined with structuralchanges in the U.S. economy will ensure that oil demand doesn’t go back up. Outside of oil, we are seeing electricity demand move away from coal in exchange for natural gas.However, even though it may feel good to say that we’re on track to be a net exporter of energy, it has not had the benefits we were promised. Our consumers are still stuck paying the global price for oil – set by the whims of speculators and the most recent threat of war in Iran. Our energy supply is still insecure, economically unstable, and environmentallyunsustainable.We need a program to invest in long-term research and development into clean, secure sources of energy. It must include much-needed investments in energy efficiency, as well as continued development of wind and solar power. However, that will only get us so far: we need an energy source that can provide always-on baseload power without harmful emissions. That research program should focus on next generation nuclear power, including cleaner, safer fission power plants along with a long-term program to develop fusion – the holy grail of energy production. With sustained investment, American leadership in these sectors could create a new global industry.Unfortunately, the politics of energy remain as fraught and divisive as they were when the report was released then. Clean energy has become an even greater political football than it was last year. The spike in oil prices has brought out the most short-term instincts in politicians. The department of Energy’s budget focuses only on short-term energy, while sacrificing long-term research on basic energy science: the areas that willprovide real breakthroughs.America did not create its energy problems overnight; finding solutions to these problems requires concerted, long-term research and development.