This article is one of a series of articles, offering energy advice to President Obama and his administration.

The incoming Obama administration has promised a much-needed change in the direction of US energy policy (or non-policy, as some see the current situation).  However, some of those changes appear to be campaign gimmicks or aimed at satisfying special interests rather than solving our various problems.  (The heavy-for-light crude swap in the Strategic Petroleum Reserve proposed in the Obama-Biden energy proposal appears to be one such gimmick.)

For much too long, US energy legislation (I hesitate to call it policy, because it lacks the coherence to justify the label) has been aimed at short-term patches on problems which have only gotten worse.  CAFE regulations have barely held fuel economy steady, while low fuel prices caused consumption to skyrocket.  "Free trade" allowed cheap oil imports to kill movement toward efficiency and substitutes.  The auto industry lobbied against fuel taxes to promote its short-term interest in selling profitable trucks, with the long-term result that all 3 US automakers will go bankrupt in the next year if nothing is done.

We've had change before, but the results put us where we are now.  It's time for the right change. 

The below post/letter is very important to me, as it brings together much of what I have worked on the past few years. We are at a major crossroads in the history of our nation and our world - the juncture where financial capital no longer can function as an effective marker for real capital. The crisis we face is the product of our own success - therefore it is highly unlikely to be fixed with the same policies and thinking that steered us to the present precipice. There are dozens if not hundreds of salient aspects of our supply and demand situation, each with its own cheerleaders, opponents and unaware. Unless one casts a wide boundary net, myopic focus on any particular issue runs the risk of creating more long term harm than good. In this letter, I attempt to highlight our situation's most critical components, not claiming other issues are unimportant, but that the following principles likely trump/supercede the others:

1) It is energy, not money, that powers our economies. Money is only a marker for real capital.

2) All energy is not equal- each energy investment entails different input costs, and has different output quality, often not recognized by the market system, nor by many environmentalists. We are at peak oil globally and are likely approaching the net energy cliff (oil and gas) for the USA

3)The highest odds for arriving at a better energy future lie in exploration of, understanding of, and ultimate jettisoning of our cultural addiction/habituation to conspicuous consumption. Ends and then means.

Barack Obama has said that energy is going to be one of his top priorities. I believe he is completely sincere about this and that energy will get a lot of attention early on in his administration. I believe he is committed to moving the U.S. toward energy independence and a greener energy future. However, one can recognize energy as an important priority, yet sharply differ on the policy direction that is needed. For instance, some may have energy as a high priority because they feel that gasoline is too expensive. Their priority may be to keep gasoline prices low so people's budgets aren't adversely impacted by their fuel bills. Some can see energy as a top priority, and yet promote solutions like suing OPEC for more oil.

On the other hand, someone else may see energy as a top priority, but think low gasoline prices are not the solution, but instead a big part of the problem. This is the nature of my disagreement with some aspects of Obama's energy plans: We broadly agree on the big picture, but differ on how to get there. And since I recently heard him say “I may not agree, but I will listen”, here is my attempt to highlight what I feel are the flaws in his energy proposals.

With gas topping $4 per gallon and oil prices seemingly reaching new highs every week, more pain at the pump is certain in the foreseeable future, and energy policy is rightfully claiming its place as a major topic of the 2008 election. Indeed, John McCain gave a major campaign speech earlier this week in Houston specifically on energy (the full transcript can be found here) and addresses the issue again this week in Santa Barbara. It is worth looking in more detail at how he describes the current situation, and what he is proposing.