WASHINGTON – The American people are up in arms, rightly so, about the ever-increasing cost of gasoline in this country. In these tough economic times most people find themselves worrying more about how they will make it to the next fill-up. According to CNNMoney.com, the price of gas nationwide now stands above $4 per gallon. Americans should not expect that to change any time in the near future.

      In light of these facts we could all benefit from a bit of perspective. Oil prices are now well above $100 per barrel worldwide. Gasoline prices are now well above $4.00 per gallon here in the United States. However, both gas and oil are still very “cheap” when compared to any other commodity on this planet.

      Oil is quite literally the most important resource on the planet. It has been the deciding factor in international military and diplomatic policy making for more than 100 years. The First World War was decided by oil. The Second World War was fought for oil. Most of the jockeying between the U.S. and the USSR during the Cold War was centered on gaining access to oil-rich partners.

      Professor David Painter of Georgetown University, a former Rhodes Scholar, has spent a career working on the politics of oil. His research shows that contrary to the opinion of most Americans – that oil is “too expensive” – petroleum resources are actually kept at depressed prices. The U.S. government encourages its oil-rich allies to over-produce; keeping prices low enough that the average American is still willing to mindlessly purchase gasoline and look the other way in the face of alternative energy sources.

      A year ago gasoline was $3 per gallon; two years ago it was $2 per gallon. According to classical market principles, the steady increase in price over the last two years should have been met with a decrease in consumption – achieving the so-called Market Equilibrium. This could not be further from the truth in the United States or anywhere else in the world.

      When the price of gas goes up Americans collectively groan about their newfound hardship and then continue about their lives as if nothing had changed. Oil and gasoline are still “cheap” enough that alternatives are unthinkable to most Americans. At the same time, our economy and infrastructure have been crafted in the past century specifically toward an oil addiction. This was fine in the 1950s when the U.S. produced all of its own oil, but it is a huge problem today when our money flows to Canada, Mexico, Venezuela, West Africa and Saudi Arabia.

      This coming summer gasoline prices will likely increase perhaps as much as 10 percent. Oil prices will see a similar increase in cost – the American people will not stop buying oil and gas. We are happy to complain about prices and the windfall profits raked in by foreign nationalized oil companies and our own energy titans. Unfortunately, we are unwilling to do anything about it. The sting from high prices is much more of a nuisance to the average American than it is a real problem.

      In 2012 many voters will undoubtedly choose the candidate that promises them cheaper energy, and cheaper oil – the calling card of all Republican candidates at the moment. Unfortunately, the last thing America needs right now is cheap oil. What we need is to consume less of it. Regardless of what some conservative politicians might say, the United States will never again meet its oil demand with domestic consumption – doing so would break the fundamental laws of mathematics.

      That fact that Americans cringe at the thought of $4 per gallon gas shows just how little we have done to avoid it. There are no high-speed trains, the urban mass transit system is in disrepair, and travel between our far-flung population centers requires huge energy investment. Rather than wasting our energy scrambling for a way to make oil cheaper and more available, we need to act immediately to find its replacement. Every other developed country in the world has already taken this step – in Europe gasoline costs $10 per gallon or more as a direct result of government taxation meant to encourage use of alternatives.  

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