The idea that we should cut federal taxes on gas for the summer is an appallingly cynical, politically motivated panacea only two candidates for President could cook up. Do they really think Americans won’t recognize this for what it is: A cheesy handout to warm up voters?

Read Tom Friedman on this:

“The McCain-Clinton gas holiday proposal is a perfect example of what energy expert Peter Schwartz of Global Business Network describes as the true American energy policy today: “Maximize demand, minimize supply and buy the rest from the people who hate us the most.”

Few Americans know it, but for almost a year now, Congress has been bickering over whether and how to renew the investment tax credit to stimulate investment in solar energy and the production tax credit to encourage investment in wind energy. The bickering has been so poisonous that when Congress passed the 2007 energy bill last December, it failed to extend any stimulus for wind and solar energy production. Oil and gas kept all their credits, but those for wind and solar have been left to expire this December. I am not making this up. At a time when we should be throwing everything into clean power innovation, we are squabbling over pennies.”

Business Week reports that the X-Prize people are planning to offer $100mm in prizes to alternative energy inventors and entrepreneurs. If only they would exclude ethanol…

With oil hitting the $120/barrel mark today and local gas prices here in Rochester hovering around the $4 level, Dan Dorfman of the NY Post is predicting prices reaching $7-10 gallon by next year based on a move of oil prices over the $200 level.

A number of things reinforce this beyond those things he covers in his op-ed piece. First, much of the world’s oil production takes place in extremely unstable geopolitical regions. Exxon Mobil has shut down its 800,000 barrel a day Nigerian sources due to strikes. A UK union strike has shut down a BP oil pipeline that supplies one quarter of that country’s oil. Oil production in Iraq is corrupt and undependable due to the war, Iraqi incompetence and the US failure to modernize and repair war damaged facilities. Venezuala’s Chavez sees oil as a weapon to advance his nutty authoritarian agenda. And on and on.

Demand worldwide has skyrocketed and this will only increase. It appears that we have reached the tipping point on oil energy costs. A doubling of fuel prices means a doubling of the cost of virtually everything else except wages. And there is no going back.

“The idea is to capture the sun’s heat. Heat, unlike electric current, is something that industry knows how to store cost-effectively. For example, a coffee thermos and a laptop computer’s battery store about the same amount of energy, said John S. O’Donnell, executive vice president of a company in the solar thermal business, Ausra. The thermos costs about $5 and the laptop battery $150, he said, and “that’s why solar thermal is going to be the dominant form.”

As oil prices skyrocket and technology makes breakthroughs, our ability to generate clean, sustainable energy becomes more and more viable. However the big roadblock to technologies like solar and wind is that they do not run 24/7 like water or nuclear, meaning they are an undependable source unless we can find ways to store the energy during those cloudy, windless days and dark nights. Battery tech has been a major stumbling point because of costs and inefficiency (much of the energy is lost during storage). As the above quote from today’s excellent NYTimes coverage of storage challenges notes, there are entirely new ways to look at storage that, in turn, have made new energy sources viable. One example is the focusing of solar heat by a field of hi-tech mirrors onto a tower full of water and heavy salts. During the day this heat powers steam turbines, during the night the stored heat in the tower keeps those turbines turning.

Read the article- it is easy to be a doomsayer during this rapidly expanding crisis but there are truly great things coming out of this scenario, great in the long term.