An extradordinary albeit expected landmark was reached in the oil markets today -- $100 per barrel oil. As one analyst quipped, it could go higher given constrained supply (new violence in oil-rich Nigeria was singled out by analysts as the culprit) and galloping demand as one-third of humanity (China and India) industrializes.
Oddly, the reaction from President Bush was a commitment to scour the U.S. for more supply. Drilling more holes makes little sense when the U.S. has less than three percent of global reserves. The President realizes this on some level, as demonstrated by his term for our thirst for this scarce resource: An oil addiction, he called it.
Instead of desperately hunting for another fix, we need a clean break.
We took a step in that direction with the policy reforms in last year's energy bill, which will boost fuel economy performance of cars and trucks and spur the production of biofuel alternatives.
But when faced with a 21-million-barrel-a-day habit here at home and nearly a thousand-barrel-a-second habit globally, it's wise to keep taking steps.
That's why we need more policy reform, and soon, to make more efficient use of this resource and to shift to cleaner substitutes such as next-generation biofuels and electricity generated using renewable energy for use in plug-in hybrid-electric cars.