He then goes on to try to lay the blame for the high gas prices on Clinton, the Congress, Democrats – anyone but himself, or his henchman, Dick "Halliburton" Cheney.

Well, with all due respect, Mr. President, you do have a magic wand, and the reason oil prices are out of control and bouncing around like a Duncan yo-yo is because your energy plan sucks.

To fix the problem, Mr President, you have to first understand it. Prices are high for two reasons.

First, global demand has skyrocketed over the last couple of years. China’s oil use grew by an astounding 16% last year, and India’s was not far behind.

Second, there’s a growing suspicion among energy analysts that the world’s stock of oil reserves are limited, and likely to stay that way.

There’s a lot of reasons for this, but the most straightforward is this: For two decades now, we’ve been using more oil than we’ve been able to find. Bottom line, we’ve been looking for oil throughout the world, more intensively, with better technology, and finding less. And the few new fields we’ve been able to find have been getting smaller each year for the most part. Meanwhile, old fields such as Prudhoe Bay and the North Sea are drying up.

So what you’ve got is a situation straight out of Economics 101 – demand is exceeding supply, so prices are going up.

It gets worse.

Nearly 70% of the world’s proven reserves are controlled by OPEC, with most of that in the politically volatile – and vulnerable – Mid east.

It gets worse yet.

Most independent petroleum analysts believe we either have, of soon will, pass Hubbert’s peak, the point at which more than half the world’s oil has been used up. Hubbert’s peak is important because once we’ve passed it, it is impossible to increase production on a sustained basis, even though there’s lots of oil left.

So the facts of life for oil markets are that we’re not finding enough new oil to replace what we’re using, we’re at or near Hubbert’s peak and most of what’s left is in the Mid east. Compounding the shortage of oil reserves, is the fact that we don't have enough refineries to convert crude oil to gas, even if we could get enough.

Speculators looking at this situation are betting that prices will stay high in the future. According to The Economist, this kind of speculation currently adds as much as $15 dollars to the price of a barrel of oil. As with any commodity market, oil prices will bounce around, but over the long term, they'll go up, and speculative pressures will continue to artificially inflate prices.

Here’s where your magic wand comes in.

With one bold action, you can pop this speculative bubble and bring down the price of oil. Here’s how.

All you need to do is say, "Beginning in 2010, every new car manufactured or sold in America must get at least 100 miles per gallon." You’d send a signal to those driving up the price of gas with their speculative futures investments that said something like, "Whoa, there. This guy’s serious. We better back off."

Presto, a significant part of that $15 increase caused by betting on a business as usual future for oil dries up and blows away, and prices drop.

Your current energy policy sends quite a different signal. Your "drill more oil and go to war to get it" energy policy tells those speculating on oil futures, "We have no solution, we’re hooked on the stuff, gotta have it, can’t live without it, we’ll do anything to get it." Speculators know that with about 2% of global reserves and 25% of global demand, it doesn’t matter how many ANWR’s we destroy here in the USA, we’ll still be dependent on foreign oil. And we’ll have to compete with China, India and the rest of the world for a shrinking supply to get it.

With that kind of signal, it’s no wonder prices are up.

Can we make a 100 mpg car? Absolutely. Plug-in hybrids with better batteries and super capacitors – technology available today – can get a Prius-sized car to about 150 mpg right now, according to analysis by CalCars. In fact, if we had a fleet of plug-in hybrids, we could use cars to deliver energy to the grid during peak demand periods – the most expensive energy to generate, and that would help solve some of our other energy problems.

Imagine, a couple of hundred million cars using cheap off-peak electricity to charge there batteries during the night, then delivering energy back to the grid during the midday, when both demand and prices are highest. Parking lots could become De facto power plants. How many new electricity plants would that avoid?

There’s wrinkles to be worked out, of course. But with the right incentives, we could cut oil use and cut the amount of coal we use. And if we stopped burning so much coal, you wouldn’t even have to hide those pesky EPA reports on how badly the mercury from power plants effects our children’s health.

Now that’s an energy strategy we can live with, Mr. President.

And the beauty of a plug-in hybrid is that if you don’t have time to wait around for a recharge from the grid, you can just operate in normal hybrid mode the way today’s Prius does and still get 60 mpg ... not too shabby. So they’re always ready to go, and always ready to save energy.

Oh, and don’t be fooled by those unconventional reserves, like Canada’s Athabasca tar sands, or Venezuela’s Orinoco heavy oil deposits. Sure there’s lots of "oil" in them, and the costs of mining them has come down to the point where it’s economical to sell it in the global market. But there’s a dirty little secret no one’s talking about.

It takes almost as much energy to dig that stuff up and convert it to real crude oil as you get from burning it.

Back in the good old days, fields in west Texas returned 200 barrels worth of energy for every barrel of energy used to drill and refine it. Even in the world’s largest field, Saudi Arabia’s Ghawar, (which many experts believe is on the decline and is being propped up by aggressive and energy intensive water flooding) we get about 15 units of energy for every one we put into it. But tar sands use up about one barrel’s worth of energy for every two barrels of useful energy produced.

So what? Well, that means the amount of carbon dioxide generated for each barrel of oil we get goes through the roof. And carbon dioxide is a greenhouse gas which causes global warming.

The problem with unconventional reserves, Mr. President, is that we’ll increase the amount of greenhouse gasses we release at every step of the production process. We’ll release lots of it mining the bitumen from the ground, we release lots more of it when we change it from gunk to oil, and then we release more of it when we run our cars on it. If we try fueling our economy on that stuff, we’ll release enough greenhouse gasses that it’ll get so hot, even you’ll be reaching for the pen to sign Kyoto.

And hydrogen is great, Mr. President. But it’s decades away. Especially at the rates you’re funding it. That’s why the speculators don’t take it seriously. Plug-in hybrids, on the other hand, are here today.

Please, Mr. President, wave that wand. Make the price drop, rescue us from dependence upon Mideast oil, keep us from indirectly shipping hundred’s of millions of dollars each year to terrorists, give us a leg up on the fastest growing export technologies in the world, help cut that $600 billion plus annual current accounts deficit -- most of which comes from importing oil.

Sure Dick will be mad, but who knows? If you get GM off their dinosaur SUV kick, and onto plug-in hybrids, maybe the oil speculators will buy up GM bonds instead of oil futures and rescue them from junk bond status.

John Atcheson has written extensively on politics and policy and his writing has appeared in the Washington Post, The Baltimore Sun, The San Jose Mercury News, The Memphis Commercial Appeal and several other papers, as well as various wonk journals. He has over 30 years experience in government and with the nation's premier think tanks.

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