By now it's a familiar story: Turmoil in the Middle East leads to a rapid rise in U.S. oil prices, hurting consumers at the pump and causing an economic shock that's hard to shake.
At the tail end of 1973 and into 1974 the economy was stunned by rising prices triggered by OPEC's (Organization of the Petroleum Exporting Countries) embargo to protest U.S. support of Israel in the Arab-Israeli War. In 1979 another oil crisis occurred in the wake of the Iranian Revolution, when protests plugged Iranian oil exports. The so-called Peak Oil Crisis of 2007-08 owes more to increasing demand and stagnant worldwide production than any disruption in the Middle East, but our overreliance on the crude led to a similar economic impact.
Now we have the Energy Department saying that, thanks to rising oil prices caused by unrest in Libya and other oil-producing countries, the average American household will pay at least $700 more for gas in 2011 than last year. While that's not a deadly blow for most people, it does hurt in a time when tens of millions are either unemployed or underemployed and rising fuel prices are sure to lead to a spike in costs for food and other commodities.
Confronting the problem by tapping the U.S. Strategic Petroleum Reserve isn't going to drive down prices for any period of time – according to the U.S. Energy Information Administration the reserve contains enough oil to replace just half our nation's daily imports for about five-and-a-half-months.
So, in light of what we've seen over the past 40 years or so, what is there to do?
While it may be too late to help us weather this current storm, we need to take a genuine whack at weaning ourselves off what has proven time and again to be a very unreliable, and steadily dwindling, source of energy.
Alternative energy analysts say current oil price hikes along with increasing public awareness about the environmental effects of fossil fuel consumption are creating some traction for the solar, wind and biofuel industry. President Obama has thrown his weight behind alternatives as well, asking for 80 percent of U.S. energy to come from “green” sources by 2035.
True, alternative energies like wind and solar aren't perfect, they're expensive and often inefficient for the common consumer. As the recent tragedy in Japan makes clear, nuclear energy still has room for developments in safety, though much improved from the days of Chernoble. But these cleaner (and homegrown) energy sources could be immediately improved upon by taking at least some of an estimated $35 billion in annual taxpayer subsidies from the American oil and gas industry and giving it to companies that are working toward a sustainable future.
Alternative energies have been around for years, but now is the time to get serious about making them viable, and now is the time to start building a transportation infrastructure that gives us more transportation options.
Otherwise we may be stuck in neutral the next time an oil field falls in the Middle East.
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