The short version of it all,

Petroleum fuel has powered us for a long time as a one stop shop for energy.

That has to change.
Biofuels will not replace all our energy requirements. Not even close. If we let the farmers grow everything it might replace 20%. (there are some interesting algee experiments going on) that could increase this number very significantly.

Electric cars are another solution. Large cities should create laws that strongly encourage the purchase of electric vehicles for people who drive the appropriate distances and penalties for those who drive larger vehicles.

I propose this solution,
We create a way (I can think of many practical ones), to identify the type of vehicle you are driving when you pull into a gas station. The larger the vehicle you are driving, the more you pay for fuel. Those with hybrids get a big discount.

Problem solved.

Within 5 years, anyone who doesnt absolutly need a big vehicle wont be driving one.