Lord Richard Branson just made a exciting announcement: Virgin Atlantic plans to test a jet plane running on biofuels early next year. Frankly, this matters more than developments that we've seen in the vehicles market, where companies like GM are hyping the potential for ethanol-powered flex-fuel vehicles.

Why? Because aviation is a tougher nut to crack in terms of substitutes for petroleum-derived fuels. For starters, due to the lower energy content of ethanol as a contender, the range of a plane would take a hit. There are also other problems with ethanol-aviation compatibility. For a good overview of the challenges, check out this article.

But we need to figure this out, and bravo for Lord Branson for stepping up to the plate.

Unfortunately, while he is looking to next-generation clean fuels, the Pentagon is investigating the possibility of liquefying coal.

The contrast is remarkable. Liquefying coal relies on technology invented in Germany in the 1920s. It is tired technology from yesteryear. And if you want to bust our carbon dioxide pollution budget, saving oil by using coal for fuel instead is surely it.

In a world where we need our planes to join our cars on a low-carb(on) diet, to paraphrase former President Reagan, in this case government isn't the solution -- it's the problem. The Pentagon should change course, working with Lord Branson and other entrepreneurs to move the country forward to a clean future.