A few days ago I saw an interesting comment about alternative fuels that re-cast the issue for me.
Namely: they're a distraction. By focusing on the "greenness" of the fuel for cars, be it gas, ethanol, hydrogen, CNG, electricity...we ignore the problem of operation space and storage space (not to mention, the inefficiency, energy-wise, of moving 2 tons of metal just to move one person.) As population grows, we don't have space for everyone to bop around by themselves in their car, nor do we have the space to put them when they're not in use. Bloomberg figured this out a couple of years ago, for example, and hence his strong push of cycle infrastructure in NYC, to great result.
Sure, more cars = not a problem in the middle of Nebraska. But in any metropolitan area, traffic is an enormous burden, and we cannot just throw more pavement at the problem. It's well known that adding lanes doesn't add capacity. We also don't have room for all these cars to park, at least not without paving every square inch in sight.
We need to get people out of their cars. That means higher gas taxes (which haven't been adjusted in decades), car-sharing systems, legal protection for pedestrians and cyclists, and infrastructure spending on pedestrian walkways, cycleways, usable long distance/regional/local public transit (and ending the insistence that public transit pay for itself, something "private" road/infrastructure users aren't expected to do). For example: it is *idiotic* that you cannot take luggage or a bicycle with you on the entire Amtrak northeast corridor.
Funding alternative fuels is fine, but don't do it if you won't fund alternative transportation infrastructure as well. Imagine what $2BN (what Obama wants to spend on "alternative fuels") can buy in terms of cycling and pedestrian infrastructure.