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gallon is just plain un-American. We pioneered the spare family car and the SUV. Driving is our manifest destiny, and we do more of it than anyone else. Gas should be cheaper just ask any politician holding a press conference at a gas station. And it will be, just as soon as their energy program is adopted, by executive decree.

I'm here to pop that bubble, and I don't mean the energy bubble. I haven't seen one of those yet. When demand for a commodity rises steadily along with the price while the supply remains the same year after year, that's not a bubble that's a market signal. And when many of the suppliers of that same scarce commodity sell for 10 times earnings, that's got to be the cheapest bubble in history.

A reader recently questioned my forecasting credentials after I admitted to owning just one car for an entire nuclear family. We've since acquired a second set of wheels, attached to a tiny used hybrid. I believe I'm now fully qualified to advise against holding one's breath for the gas-tax holiday, the windfall profit tax or the long threatened downfall of Exxon Mobil. Though it beats hyperventilating at the pump.

The energy spike isn't like the dot-com bubble; it's not going to dissipate in a couple of years, leaving nothing but ruined portfolios in its wake. Energy is among the world's most widely traded resources and demand for it is rising mostly in faraway places where the retail price of fuel is fixed. That means energy prices and demand interact with considerable lags. And the effect of the recent price increases has been countered by rapid income growth in the developing world. Those upwardly mobile consumers aren't getting back on the bus.

Recent academic work that's looked at the historical relationship between income and car ownership around the world shows that China, India and some of the other most crowded countries in the developing world are just now entering the $3,000-to-$10,000 annual income range, a sweet spot in which car ownership tends to increase twice as fast as income. China's fleet is expected to grow at an annual growth rate of 11% to 390 million vehicles by 2030, from just 20 million six years ago. India's is forecast to increase at 8% annually over the same span.

Not coincidentally, Indian refineries are processing 9% more crude than they did a year ago, while China's consumption is expected to rise more than 5%, for a cumulative increase of 19% in three years. Meanwhile, the developed world will use less crude in 2008 than in 2005. The marginal energy consumer is not the soccer mom who's about to ditch the minivan for a compact. It's Asian factories that are among the world's least energy-efficient and a burgeoning middle class in South Asia, Latin America and the Middle East, all places where incomes are still keeping up with the rising cost of living.

They're already paying almost $6 per gallon in India, where rationed cooking fuels are cheap but gasoline is heavily taxed by the states. And since that retail price is fixed, consumers haven't been squeezed like they've been in the U.S. Europeans have cut back only slightly on gas that goes for more than $8 a gallon. In contrast, Saudi Arabia is bribing its underemployed young men with $1.25-a-gallon, or less than it costs to get the crude out of the ground. Other Mideast producers also offer lavish subsidies, fueling domestic demand and cutting the available exports accordingly.

Meanwhile, global production isn't keeping up. In fact, it's in gentle decline outside of OPEC as Russian, British and Mexican wells start to dry up. Oil prices have been climbing for five years now, and the constantly promised new supply that might cool off this market keeps slipping over the horizon. Inventories don't lie. Speculators don't burn crude. Everybody but Saudi Arabia is pumping everything they can, and even the Saudis only have enough slack for a couple of years' worth of demand growth, on present trends. It's hard to see how energy will get much cheaper without a deep recession in Asia. And Asia doesn't seem to be headed there.

Taxing the oil companies more or forcing them to invest more in alternative energy won't change that, just like drilling for crude off the Florida coast will not turn us into the next Kuwait. And the less practical the political debate the easier it is to be an oil bull. Energy populism at home and repression abroad are the oil speculator's best friends.

We can't do much about Hugo Chavez or Iran's nuclear ambitions. (Really, Dick, we can't.) But our own leaders haven't helped. Sen. Barack Obama (D., Ill.), the only presidential candidate sensible enough to reject a gas-tax holiday, is also a big proponent of alternative energy, green-collar jobs and all that jazz. He doesn't seem to get that high oil prices are the best incentive possible for the development of alternatives. Anyone who's watched solar stocks burn up the ticker tape would have to wonder why this booming industry requires more government help.

On the other hand, any time President Bush is asked about gas prices, he talks of the dire need for new refineries. Now, I've seen one, smelled one and think it would look terrible in my backyard. Moreover, refining stocks are in the tank as a result of slumping margins, hardly the sign of a refinery shortage. Crude and capital prices being what they are, most refiners are no longer looking to expand.

The other thing every good Republican must say is that we need to drill for more domestic oil. Actually, "we" don't, since foreign oil's just as cheap and often cheaper, and since we already finance a big Navy to ensure that it gets here. For U.S. drillers, on the other hand, more wells at home means less haggling over profit-sharing with capricious foreign rulers. Barred from Iran and Venezuela, they're desperate to drill at home, where the dollar's cheap.

The American Energy Production Act, proposed last week by Pete Domenici, the GOP senator from Exxon oops, make that New Mexico promises to tap into "up to 24 billion barrels" of the good stuff on and around U.S. shores, so anywhere from 1 to 24,000,000,000 additional barrels, "enough oil to keep America running for five years with no foreign imports." The Republican sponsors don't say what would happen after the five years are up: That's three elections from now, after all. And to further keep those pesky imports at bay, they expand the very list of oil industry tax breaks Democrats want to cut. In other words, never mind.

No candidate has offered a tax break for companies willing to transfer their "knowledge workers" to the home office, not just part-time or for this year, but for good. No candidate has spoken out against the tariff on cheap Brazilian ethanol: Iowa is a swing state, still. As long as politicians talk of windfall profits and Arctic drilling as potential solutions, as long as conservation means turning off the lights rather than telecommuting, the near-term outlook for oil looks great. In the longer run, I fear we will discover exactly how high a price the world can bear. Here's hoping we never get there.

Footnote:
"Vehicle Ownership and Income Growth, Worldwide: 1960-2030." Joyce Dargay, Dermot Gately and Martin Sommer

Also See:

• Springtime Has Bulls Feeling Smug

• Profiting at the Pump

• Earth Is a Hot Commodity