Chaos theory is finding a pattern in seemingly random events. Energy is in a state of chaos. Consider the following; President Obama shuts down the Keystone Pipeline, mostly to win over James Hansen (not our James Hansen). Conservatives rant about the Bakken Reserve as our salvation. However, no one is doing the math. Optimistic estimates on the North Dakota oil are about 24 billion barrels recoverable, U.S. consumption is 7 billion barrels per year, North Dakota gives us three years.
The keystone pipeline gives us access to the two trillion barrels in Canada (Clive Mather of Canadian Shell). Everyone seems to call this oil a domestic source. Isn't Canada a whole different country? Further debate centers on Canada selling this oil to China if we don't approve the pipeline. Isn't oil a commodity that is bought and sold on a global market? Those Canadians will sell their oil to everyone and anyone, just as we will be shortly exporting gasoline.
And what about that Marcellus Shale? A big bunch of truly domestic natural gas hanging out in Pennsylvania, originally projected as a 100 year supply, recently revised to 20 years. The main missionary has been T Boone Pickens. The Pickens plan is to get 8.5 million 18 wheelers converted to compressed natural gas. I think his plan is gaining traction. Look for Mr. Pickens to start asking for tax incentives (subsidies).
In spite of all this recent good news about fossil fuels, look for prices to go up. Those Chinese that are now joining the middle class have the nerve to want a car. It won't matter how much supply we have, global markets will ramp up until prices are way high and everything is gone. Long before this, we should be developing renewable energy. Renewable energy will likely come from basic research in our national labs. The people at JBEI (jbei.org) are using synthetic biology to turn switch grass into liquid fuel. So far the marriage of engineering and biology is rocky. The people at Berkley Livermore are working on a dramatically improved lithium battery. A new miracle material called "graphene" may be a game changer.
In the category of clean abundant energy (not renewable), how about thorium? (google this word) The people in India think they might develop thorium reactors. If they succeed Idaho will become the Saudi Arabia of thorium. No time to talk of synthetic biology applied to Solar Cells, or break-throughs in wind, geothermal, and conservation. Plainly a lot of chaos is happening.
The pattern in this chaos is our free enterprise system. The fittest will survive. A national energy policy that picks winners would be a mistake. The chaos is healthy. We don't need a department of energy to manage the chaos and make bad loans. Take this money and give it to our national labs. Funding for them is critical.