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) --These are desperate times for Big Oil.

Fracking (which involves shooting water and sand into a wellhead, at high pressure, fracturing the surrounding rock) brings enormous profits, but anyone can frack.

The price of natural gas

has rolled over. The price of oil seems poised to follow.

If the oil industry lobbyists were smart, they would start funding international environmental groups, in order to limit the growing supply. Fracking opens up enormous new fields that were previously untapped, like North Dakota's Bakken field. And it's giving new life to old fields, like Texas' Permian Basin.

Now, what happens when fracking goes international? What happens when the Russians start fracking, when the Mexicans figure out how to do it, when the Saudis do it? Oilpatch margins face a big squeeze.

Maybe we can deal with that. Standard Oil, the Texas Railroad Commission, and OPEC were all, in their way, efforts to manage supply against demand, and to maintain prices. Something like these mechanisms could come back for non-OPEC countries, like the U.S.

But here is the nightmare. What would really put a permanent thumb down on oil prices, creating a new era of energy abundance? Renewable energy. The sun shines, the wind blows, the tides roll, the crops grow and we live on a molten rock. It's the pressure of that rock that turned dinosaur bones into gas and oil in the first place -- what if we could speed up the process?

We can. We are. Solar energy already costs less than what comes from the electrical grid in many places, and that reach will only grow because solar's costs are declining. But it's still hard to put the Sun in your gas tank, no matter what the old Sunoco ads said.

Thus, ethanol. Gasoline is structurally similar to alcohol, diesel fuel similar to cooking oil. The simplest way to produce alcohol and cooking oil is with food crops. The sugar mountain the U.S. Department of Agriculture is trying to work off, can be put into our gas tanks.

Brazil does it

. Apparently there is a sugar surplus; the government may buy up 400,000 tons of it to keep supply low -- and prices high, reports say.

Competition, of course, works both ways. Last year's bad harvest means higher ethanol prices, and less supply, just as higher requirements for ethanol kick-in. The Renewable Identification Numbers, or RINs, needed to stay ahead of this law have become a target of speculation, raising prices at the pump, and causing refiners to consider more exports to get around the law. There is a big push for the elimination of RINs and all ethanol subsidies.

But will that really have any effect on the price? There are lots of ways to keep prices high, if you don't face competition from other sources. We saw it this past winter, when refinery "outages" and an early move to summer fuels caused gas prices to spike in February. There are lots of places to manipulate the petroleum market -- oil, refining, delivery -- and there is, as yet, no incentive to lower prices.

Competition lowers prices. Technology creates competition, and ethanol is a hotbed of technology right now. Non-food ethanol, or cellulosic alcohol, will be price-competitive with food ethanol by 2016, according to a

Bloomberg study

, and prices aren't going up from there.

The key to making cellulosic alcohol, or any other biofeedstock, competitive in the market is a catalyst, something that can turn the carbon compounds found in nature into something a refinery can use.



is testing one such catalyst right now in Mississippi, using pine pellets.


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continues to work on catalysts for producing isobutanol from corn.

New catalysts, and catalyst research, are driving the ethanol business forward. The response by the oil industry is an increased focus on strangling biofuels in their crib,

as reported in Scientific American.

The difference between citizen activists and professionals, after all, is that the professionals are relentless.

But here's the thing. New supplies are coming. New supplies of oil, of gas and of ever-cheaper biofuels. New supplies of solar power and new ways to make that power useful. It's the big story of the decade and we're still missing it.

At the time of publication, the author owned no stock in companies mentioned here.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.