High gas prices in the U.S. have everyone frothing at the mouth over foreign oil dependence. But Europe is in just as big a bind, whether the habit of choice is Russian gas or Middle Eastern oil. In this week's List, FP looks at who's hooked on what, and how some countries are charting a path to energy independence. Are there lessons there for the U.S.? Let's just say we should do not as the Spanish do. The Swedes, on the other hand...

At yesterdays’ FP event, Sen. Richard Lugar and Tom Friedman both mentioned several ways in which the US government can embrace alternative energy sources, not only for their impact on oil dependency, but also for their potential marketability in the years ahead. “Since everyone’s going to want these products, someone’s going to invent them, and it might as well be Americans,” the argument goes. 

One good step in that direction is the passage by the House this week of a bill designating the “H-Prize.” Similar to the Ansari X Prize, given last year to the developer of the first privately funded rocket program to send a man into space, the H-Prize will provide cash rewards for advances in hydrogen vehicle technology. At $4 million, the grand prize may be a drop in the bucket, but it will still provide incentives for smaller developers and venture capitalists to push forward new technology. The X-prize was won by a small start-up backed by Paul Allen, who may not have been as willing to invest or compete if there wasn’t the prospect of massive publicity at the end of the line. Both Washington and the Big-3 auto makers have been criticized for being slow to capitalize on alternative-fueled cars. Broadening the field to encourage innovation may be the best strategy for pushing forward alternative-fuel technology. 

[hat tip: MarginalRevolution]

Up now on ForeignPolicy.com we have a great interview with Amy Jaffe on energy. She's one of those rare analysts who's really good at breaking things down for non-experts. And since she's in Houston with the Baker Institute, she actually talks to energy industry executives. All that adds up to valuable insight. Read the whole thing. I found her thought on U.S. offshore drilling to be particularly interesting:

Politicians and the media are all pointing to Brazil as a success story. But Brazil is going to be energy independent not because they have a small but successful ethanol program. They are going to be energy independent because they had a massive offshore drilling program which has more than doubled their oil production from 650,000 barrels a day in 1990 to 1.6 million barrels a day now. So when we consider drilling in the United States, we have to ask ourselves; “What are people afraid of? Why don't they want this drilling?” Brazil has a tourist industry that is focused on beaches too. U.S. reserves we are talking about are so far away from the beach that you wouldn’t be able to see the offshore platforms. 

MIT researchers are working on some new technology that could increase the amount of oil recoverable from any given reservoir...and maybe double world oil output. Oil resides in small spaces in porous rock, not in underground "pools," so usually about two thirds of the oil remains trapped in the rock.

To a certain extent, getting more oil out of existing fields is a question of economics. Oil, which resides underground in porous rock, can be forced out by injecting water, steam, or carbon dioxide, but these methods bring added costs that limit their use. If oil prices stay consistently high, these methods will be employed more than they are now, Sears says.

But significantly increasing oil recovery will require new technologies. At the top of the list are better oil field imaging techniques, says Nafi Toksöz, an EAPS professor at MIT. Improved imaging can help oil companies find and tap areas in an oil field that have become surrounded by water, and so cut off from oil wells, he says. It can also improve the effectiveness of existing methods such as using water or steam to extract oil.

As I go about trying to fully understand the energy predicament we're in, I make a point of checking in regularly with The Energy Blog authored by James Fraser, an engineer with experience in the world of energy. Yesterday he posted his program to mitigate oil consumption (pdf). His main points:

1. Encourage the production of plug-in vehicles, using advanced batteries, as soon as possible
2. Increase CAFE standards by 1 mpg/yr for 10 years beginning in 2009. This would encourage the building of efficient hybrids and plug-in vehicles.
3. Eliminate tax rebates for hybrid vehicles that do not accrue cost of fuel savings in 75,000 miles
4. Increase the production of ethanol to about double of the present goals primarily by developing cellulosic ethanol production capability.
5. Initiate programs aimed at making more aerodynamic vehicles from lightweight composites which would reduce fuel consumption significantly
6. Increased research aimed at producing larger quantities of less costly biodiesel.

Oily Discharge

$2.94 in Manassas, Virginia. $3.79 in Needles, California. $2.99 in Omaha, Nebraska. It's all about the price of gas -- now and in November. That's because there's an inverse relationship (scroll down) between the price of gas and politicians' approval ratings. The OPEC embargo in 1973 sank Nixon's approval rating from the mid-30s to below 30%. The oil shock in the spring of 1979 cost Jimmy Carter 12 points in a matter of weeks. As gas prices rose in October of 1990, George H.W. Bush's approval rating went from 74% to 53%.

The Bush-Bolten-Rove strategy: act outraged. The Dean-Pelosi-Reid strategy ... um, is there one? Note to Dems: Read NYT op-ed first, LA Times piece second, then call Daniel Yergin and arrange private briefing.

Otherwise, Jay Cost's prediction in the Wall Street Journal today could become reality.

Iraq

Rummy and Condi have the courtesy to pop in for a visit.

Bigger news is that Armed Services Chairman John Warner is deciding whether to call a hearing on Rumsfeld and his disgruntled retirees. Yesterday, retired Marine Corps Lt. Gen. (and FP author) Paul Van Riper became the eighth retired general to call for Rummy's resignation.

If I was the president, I would have relieved him three years ago."

David Ignatius tells us what to think of Jawad al-Maliki. The Kurds quietly position themselves for independence. Oh, and here's some stuff on the Zarqawi video.

Iran

Khamenei talks tuff. Condi fires back. Enough said.

Elsewhere

Maoist rebels promise to continue blockade of Nepal's capital. Sri Lankan forces strike Tamil Tigers, in response to suicide attack on army headquarters. Remembering Chernobyl.

And ... flash ... in radical, creative move to help save his presidency, Bush hires a guy from dad's administration!

The Nigeria links this morning were meant to underscore the possibility that turmoil in Nigeria could send oil prices soaring. The post prompted a very welcome email from my friend Elisha Sulai, a former Foreign Policy researcher from Nigeria, who is now a grad student in London. He offers these insights: 

Yesterday I attended an event on Nigeria at the Royal Institute of International Affairs. What I heard from the "experts" was clearly in line with what you've blogged on. The debate on the proposed constitutional amendment to let Obasanjo run again will start after Easter. For the amendment to pass it needs two-thirds of the Senate, two-thirds of the House of Reps and 24 of 36 states. The question now is: what if the Senate and the House approve and 24 states refuse? Will the "third termers" back down?

It doesn't have the same ring as "addicted to oil," but it's true. As energy industry insider Michael Economides argues on ForeignPolicy.com, America consumes a lot of natural gas and we're growing increasingly dependent on foreign sources of it. And when the gas market gets global enough, he says, we'll see a natural gas cartel. (As if OPEC weren't enough to deal with).

I checked out what our own Energy Information Administration had to say about it, and it confirms (pdf): "With U.S. natural gas production declining, imports of natural gas rise to meet increasing domestic consumption."

Unlike the market for oil, which is truly global, today natural gas is mostly regional because it's difficult to transport. But it's becoming more global as more countries build the infrastructure they need to export and import liquified natural gas (LNG). The BP map to the left shows the major gas trade movements of 2005 (click to enlarge). In the coming years, many more pipelines and LNG routes will be added to this map. Which means a supply disruption in say, Russia, Qatar, or Iran will drive up the cost of gas worldwide -- just like with oil today.