An opportunity squandered -- on two fronts

Did the U.S.'s third energy crisis have to occur? The answer is an unqualified no. Twenty years ago the nation had the chance to gradually transition away from disproportionate dependence on oil for transportation and away from natural gas/coal for electric power generation, and it had two successful, affordable models to follow: France (electric power) and Brazil (alternate fuels).

• France: More than 40 years ago, natural-resource-poor France decided it would not be vulnerable to other nations' natural resources for electricity, so it began an ambitious nuclear energy campaign. Today, France has 59 nuclear power plants, and it's a net-exporter of electric power. The United States has always cited nuclear waste processing as a barrier to nuclear power, but France has had in place an active nuclear reprocessing program at COGEMA La Hague and Tricastin for decades.

• Brazil: Likewise, Brazil made a concerted effort to increase alternate fuel production, and today ethanol from sugar cane accounts for about 18-20% of the nation's transport fuel market. The U.S. has an ethanol program, as well, but it's derived from corn, which reduces the corn available for food production, and sometimes displaces other crops. Energy analysts also disagree as to how much energy corn-based-ethanol saves, with some arguing it takes more energy to produce it than the energy it creates. Is the U.S. climate suitable for miles of sugar cane fields? No, but the point here is that other renewable energy sources could and should have been developed over the past two decades -- something that would have reduced the U.S.'s dependence on oil and other fossil fuels.

CAFE 'light'

The above constitute two major U.S. energy supply missteps. A policy error on the transportation demand side -- failure for more than 20 years to increase the CAFE -- the federal Corporate Average Fuel Economy standard, has compounded the energy supply errors. Had the U.S. Congress increased the 1990-set 27-mile-per-gallon CAFE sooner, oil/fuel consumption would have been considerably lower than current levels.

But the nation was lax regarding CAFE increases, and that fact, combined with the two supply mistakes, has left the U.S. in a decidedly disadvantageous energy state. It now faces the specter of $4 per gallon gasoline (at minimum), along with rising natural gas and coal prices, with each increase continuing to erode U.S. disposable income. It's not a landscape for robust U.S. economic growth.

2008 and beyond

Both major party probable nominees, Democrat U.S. Sen. Barack Obama, D-Illinois, and Republican U.S. Sen. John McCain, R-Arizona, have proposed major changes to U.S. energy policy for the next administration and decade, with cleaner, renewable energy sources and increased energy efficiency as center pieces.

The United States has its work cut out for it. It must craft a long-term policy that powerful interests -- primarily oil, but also the farm lobby, among others -- are likely to oppose, while also providing some short-term relief for individuals and businesses already burdened by sky-high energy prices. Even as recently as five years ago, a gradualist approach over 10 years would have eased energy source transition costs -- particularly significant today, given the U.S.'s current laundry list of concerns (Iraq War, War on Terror, health care reform, education, infrastructure needs, and housing sector/mortgage assistance, among others). However, given oil's likely, resumed ascent -- next year, if not this year -- that gradualist luxury no longer exists.

All of which suggests that a new energy policy won't be an enviable task for the new U.S. president, Democrat or Republican.