Late to the party here but a few points:
(1) There are multiple energy markets that are currently only tangentially linked.
(2) There are muliple environmental, cost, supply and safety concerns.
Supply
Let's look at the supply issue first. There is no doubt that the supply of fossil fuels is finite. There is no doubt that demand for fossil fuels is poised to increase rapidly as nations like China industrialize. There is no doubt that a limited supply and an inceased demand will increase fossil fuel energy prices in the long run. Technology is going to make more fossil fuels available as prices increase making more expensive to exploit resources more attractive, but the long term trend is still fossil fuel prices going up.
You can argue over whether it will take ten years, twenty years, forty years or eighty years to get there, but an economy that relies on fossil fuels is unsustainable in the long term.
There is also not serious dispute about the fact that the most scarce of the fossil fuels is petroleum, and that the second most scarce of the fossil fuels in natural gas (in both cases relative to current use), while coal, and the non-renewable non-fossil fuel of uranium, are less scarce than natural gas given current useage patterns.
It should also be obvious that our oil supply is highly subject to geopolitical risk. Choosing to exploit oil fields in Alaska may put off the day of reckoning a few years, but the key point is that most of the reserves of oil in the world lie outside the United States in places like the Middle East, Nigeria and Venezula which are not politically stable. (Lots of the world's uranium resources are also located in regions where political stability is lacking).
Multiple Markets
The transporation fuel market, which relies almost exclusively upon petroleum products as an energy source right now, is almost entirely separate from the other demands on our energy supply (i.e. electricity, industrial use, residential and commercial use).
The Non-Transportation Market
The fact that a variety of fuels can be used in the non-transporation market has let to price competition and lots of options to address that part of the energy market. Electricity can be produced using current technology with hydroelectric power, wind power, solar power, coal, natural gas, petroleum, biofuels and waste products, geothermal power, etc.
Petroleum is the least used fuel for heating buildings like homes and businesses in the nation. Industrial users are actively trying to reduce their petroleum use due to environmental and cost concerns. Very little electricity is produced with petroleum and much of that is in isolated areas like Hawaii and rural Alaska where there is no cheap way to transport coal or natural gas and there are insufficient local hydroelectric resources.
Natural gas is primarily used for water heating and heating buildings. It is a versatile fuel which can be used in modified vehicles for transporation, which can be used to generate peak demand electricity (it is expensive as a base electricity fuel), and can be used in industrial use. But, leaving oil for natural gas puts pressure on the natural gas supply (and those of you who heat your homes with gas know that those prices do from time to time go through the roof). Natural gas is the least polluting fossil fuel and can be clean and efficient even in small scale applications (like a home water heater).
There are rooms for significant conservation measures in the non-transportation sector. Better insulated houses and more efficient water heating systems can greatly reduce demand for energy in those areas and the market is likely to make this happen as prices for natural gas (or the main alternative electricity) rise.
There is really no danger of "running out" of energy for the non-transporation section in the near term. Even we knew for a fact that all natural gas supplies would be gone in ten years (and no one is claiming that they will be), electricity could replace every major use of natural gas with no technological advances and fairly modest infrastructure costs as almost all buildings are already wired for electricity. Natural gas is preferred over electricity simply because it is less expensive (outside uses like cooking and artificial fireplaces with are a tiny fraction of the total natural gas consumption of the nation and would still persist even if natural gas prices went up ten fold or a hundred fold).
In the non-transportation sector, thus, environmental, cost and safety concerns are predominant. The main environmental issue in the non-transportation section is that coal fired electricity plants cause significant air pollution and that the mining (mostly strip mining) to burning process for coal also generates significant solid waste and has significant environmental impacts.
Basically, then, anything that is more environmentally attractive than coal is a good idea if it can be done at a manageable cost and with greater or equal safety. Nuclear fission meets this test (particularly with breeder reactors). Wind power meets this test. Photovoltaic power is close to meeting this test for summer daytime peak useage in the sunbelt (i.e. to power air conditioning). Hydroelectric power meets this test but has already been heavily exploited, and geothermal power availability is highly localized. Conservation schemes also abound. Better insultation is the most basic, and solar power is quite efficient at reducing the need to heat water with other fuels (water heating and not photovoltaic applications are the main current commercial use of solar power now). Co-generation plants that use heat directly as well as generating electricity for steam plants in urban or industrial areas are highly efficient. This list is not exhaustive.
In short, the non-transportation section is not in a crisis, and has numerous possible solutions that modest policy nudges to encourage could easily put on a fast track. A simple "carbon tax" on fossil fuel emissions, for example, could easily create the incentive to encourage change while funding research into conservation and alternative sources without unduly tinkering with market mechanisms in this sector.
The Transportation Market
The real problem is in the transportation area. The options for reducing pollution are fewer (and the pollution from this type of energy use is significant), the likelihood of supply being a problem is greater (not actually running out, but seeing prices rise, particularly as China and other developing nations increase their demand while supplies don't get dramatically greater), and the amount of effort needed to adapt to new technologies is greater.
Air
Air transportation will simply have to get more expensive. There is no good alternative for powering a jet to petroleum products, this is a very small part of the total demand (probably under 1%), and this is the highest value petroleum use in the transportation section.
Of course, as air transportation gets mor expensive, passenger rail becomes more attractive for medium distance, budget conscious passengers, indirectly reducing demand in this section.
Rail
One of the best ways energy use in the transportation sector can be reduced is with increased use of rail. Freight rail already is fully converted to diesel-electric hybrid power systems of the type just beggining to appear in passenger cars like the Prius. They are many times less polluting and more fuel efficient and less costly than moving freight by truck with no new technology at all. Shifting more long haul freight to rail, with trucks making deliveries locally, to and from the train station, could dramatically reduce transportation sourced air pollution and petroleum demands.
It does require a new business model and technology, with a focus on containerizing cargo. It would also benefit from modest efforts to increase the speed of freight rail -- not to the 190 mph of the TGV in France for passenger rail, but another 5-10 mph above current norms. Mostly though, it would require much more efficient technology to move containers carried by rail off trains and onto trucks (and visa versa). But, this is a far easier task than creating a hydrogen economy, developing viable fusion power, or a host of other far more commonly discussed sexier energy conservation proposals. Simply removing the government subsidies that favor road over rail (users bear only about 40% of the cost of the road system through gas and other transportatio related taxes, with the rest coming from general revenue taxes mostly at the state and local level) and penalizing trucks that fail to meet the same emissions standards of other parts of the energy use economy would go a long way towards securing this switch.
We also need to look more intelligently at passenger rail to see where it makes sense and where it does not. Passenger rail at an average of about 35 mph over vast rural areas of the interior United States, which is mostly what Amtrack does outside the Northeast Corridor, is idiotic and exists only due to massive per passenger government subsidies. This is better terminated to allow intercity buses (which still beat cars in environmental and safety respects) become more economically viable.
But, passenger rail at 90-190 mph at medium intercity distances (i.e. before the speed advantages of air travel become overwhelming) in high density corridors between urbanized areas (e.g. the California coast, the Northeast Corridor, the Front Range of Colorado, the major cities of Texas, the major cities of Ohio) can make lots of sense. Also, because high speed rail systems are typically in urban areas close to power plants and operate on fixed routes, electricity is often a good energy source for them so the burden on the petroleum supply can be alleviated and shifted to the less crisis prone non-transportation energy sector. The rest of the developed world (Western Europe and Japan) makes wide use of high speed rail in these conditions.
As long as we don't try to use passenger rail to connect small towns in Nebraska, as we do now, it can be a good part of the solution.
Roads
In the near term future, hybrid drives are the best way to reduce petroleum consumption for cars and trucks. They work well at scales from subcompacts to big rigs (keep in mind that our nation's train system already has used this technology for decades, and it has also been tested in Hummer's and SUVs, as well as the more familiar Toyota Prius). It has all the performance of a conventional vehicle, is less polluting, is more fuel efficient, requires no new infrastructure and has a modest price differential which is partially simply a function of economies of scale.
A near complete conversion to hybrid technology could reduce petroleum consmption by 20-30%.
The easiest way to boost hybrid drive technology would be to shift funding for the road system from general taxes to gasoline taxes, which might incease gas prices by 50 cents to $1 a gallon, which creates an incentive of something on the order of $250 per mile per gallon of fuel efficiency improvement, enough to make hybrid drive technology look good.
Along with hybrid drive technology, we also need to look at ways to make diesel engines cleaner burning (e.g. by removing sulfur so we can use more emissions cleaning technology at the tailpipe) so that this more fuel efficient fuel source can leverage the benefits associated with hybrid drive.
A hybrid drive diesel is even more fuel efficient than a hybrid drive gasoline engine, but produces more of certain kinds of pollutants due to a dearth of regulation of those pollution sources so far. Modest emissions regulations for diesel could make this a real good option for reducing petroleum dependency.
In the longer term, we need to think about reducing the sprawl that makes universal use of cars and trucks to do anything necessary, through better land use, and we need to look at wider use of fully electric cars.
Fully electric cars are already viable for intra-city use. They also perform just like a regular car. But, they have shorter range and take a long time to recharge (even though a plug in your garage or at your workplace parking spot is all that is required). This makes them unattractive for anyone who every makes long range trips, as most people buy vehicles for peak use (hence the trend of single individuals driving to work in huge SUVs).
The peak use purchase syndrome for both SUVs and as a discouraging trend for electric cars can be addressed by making the rental car market work better and reducing subsidies and regulatory biases in favor of big, polluting vehicles. Why own an SUV or full cab pickup you only use the full abilities of, when it is quick and easy to rent one for the weekened, at a fraction of the price. A little nudge and attitude adjustment here could have a big impact. For example, why not sell smaller cars and sedans bundled with a voucher for ten days of year of SUV or pickup rentals?
The technological barrier for fully electric cars is batteries. The rest of the technology is proven, works great, and explains why hybrid cars provide an advantage even now. But, batteries are expensive, have lots of toxic elements, and don't have a high enough energy density, among other problems.
R&D efforts towards better batteries should be one of the biggest priorites in the nation, far ahead of nuclear fusion (which even if discovered would only solve a crisis we don't have), other other long shot efforts. It doesn't take a scientific revolution. Improvements of degree make electric cars and trucks more and more attractive. And, once you have viable electric cars and trucks (even if you need petroleum for rural areas, just as we use it in those areas for electricity generation now) that can get widespread use in urban areas, we have largely solved the problems associated with petroleum and can address the source energy pollution problem with the variety of non-transportation section options discussed above.
