A crisis was brewing and Congress responded decisively and effectively. Not to the energy crisis, but to the fact that their constituents were going to give them an earful for going on 5 week recess without doing anything on energy strategy.
It was ingenious really. Because it was proposed the day before the summer break, no action need be taken on it. Congress can tell their constituents "we're working on it" without actually doing anything. The plan includes declarations that cars will be more efficient in 20 years, some new offshore drilling, grants for alternative energy research (which have a long history of producing nothing), carbon capture proposals, so we'll have more "toxic waste" to dispose of, "support" for nuclear energy and other feel good measures.
The plan was so weak that immediately after the press conference, crude went from down 36 cents to up $4. The impression that I, and obviously the oil market got was clearly that Congress is still absolutely clueless about the need for more energy supply in this country and that their primary interest is in getting re-elected.
A serious approach to alternative energy would not be to throw more research grants at it, but to actually purchase it. McCain's 300 million dollar battery contest idea is actually a good idea; reward results, not proposals. Simply declaring that cars will run on alternate fuels with no plan for getting there is useless. A better idea would be to mandate alternative fuel cars within the federal government's fleet and within new construction on federal buildings. The technology exists right now. There are several companies ready to manufacture thin film photovoltaics, urbine turbines, fuel from algae. All many of them need is commitments from customers.
If it were only an economic issue I'd say no government action is the best action, but we are funding our enemies war against us. Developing new sources of energy is a matter of national security and the need is immediate. The Gang of 10 proposal today and its widespread bi-partisan support shows that without a doubt, our government still doesn't get it. Don't subsidize. Don't tax. Don't regulate. Just buy it!