The most expensive cities to buy gas in the U.S.

Some hope rising oil prices might increase acceptance of corn-based ethanol as an alternative, green energy source, but the ethanol market has its own problems.

This year, $7 billion was spend in federal biofuel subsidies, resulting in a 20 percent increase in acres of corn planted. Investors, looking for a fast buck, have in turn produced far more corn for ethanol production than there is blending capacity or consumer demand.

A flooded market has made it more cost effective for ethanol producers to hold on to their supply than to sell it. Some factories in North America and Australia have shut down completely as a result. It's a market in disarray.

"Initially, [the subsidies] looked like a pure handout, but now it looks like its suckered investors into losing a lot of money," says Michael Liebreich, CEO of New Energy Finance, a London-based analyst firm. "Right now oil could be at $120 [per barrel] and it wouldn't make any difference ... the speed that the private equity industry poured money into the industry is beyond its profitability."

The national price average for for E-85 — an ethanol gasoline mix — is $2.478 a gallon, according to the American Automotive Association, but when that figure is adjusted for energy generated by volume, E-85 costs $3.261 per gallon. Based on figures from the Energy Information Administration, E-85 generates about 25 percent fewer BTUs (energy unit) than does gasoline and, at its adjusted price, costs about 16 cents more per gallon.

There are, at present, about 4.4 million flex-fuel cars on American roadways and less than 1 percent of American service stations offer E-85.

Unless huge oil fields are discovered in America, the solution to lower gas costs, experts say, lies in efficiency of consumption. From a city planning perspective, step one is reducing congestion. In its 2007 "Urban Mobility Study," the Texas Transportation Institute (TTI) estimates that drivers in the nation's 437 urban areas wasted 2.9 billion gallons of fuel last year due to traffic delays.

Expanding roadways and building better transit systems relieves congestion, but both are costly. Some say improving traffic efficiency can be a much cheaper way to lessen congestion. Two ways to do this: systems such as service patrols, which comb heavily trafficked areas and help stranded motorists and ramp monitoring systems, which involves the installation of traffic lights on entrance ramps that regulate the frequency with which cars enter a freeway or highway.

"There's room for us to expand upon our management of the system," says David Schrank, co-author of the TTI study. "We can make our operations much more efficient through things like service patrols or ramp metering ... very few areas that are managing 100 percent of their system, and there's room to improve on their management by going beyond the freeway to the arterial streets."

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