One answer to political gridlock over fuel susbidies is, of course, to not to need them. The rapid developments in nanotech and biotech (or nanobiotech) will help in that regard -- that and the increasing price of oil. From the German consultancy Helmut Kaiser:

In some countries the costs for biofuel are today lower than traditional oil and that’s only the beginning of a new development for many countries to be oil-free in the next 30 years. Nanobiotechnology will improve the biomass production by shaping molecules to design “energyplants” and optimize the biotechnology process. Nanotechnology and converging biotechnology increase the energy potential in the plants used for biofuel more than 60 percent.

The critical counterpart to rising capability on the nanobiotech side is the price of oil. For many countries where the price of oil and derivative products -- such as gasoline -- have been much higher than in the US, the benefits of the alternative biofuels are increasingly clear. You can see the evidence in the efforts that India is putting into biodiesel, for example. In the US, we face something of a double whammy. We’ve had extremely low oil prices for two decades. Aside from encouraging massive use of oil, it also discouraged focused development of alternatives.

Another result is the lack of policy urgency surrounding alternatives and renewable fuels. Just as armies tend to plan to fight the last war, politicians tend to prioritize based on prior conditions. There seem to be two ways around that sort of institutional roadblock, at least as far as renewable fuels and sustainable mobility is concerned. (Geopilotics -- that’s a different issue.) One is inspired, focused and clear leadership. The other is breakthroughs in the market (R&D and deployment). At this point, I’m betting on the latter.