Whither the speculators? They were this summer's front–page news, the subject of congressional hearings, editorials and nightly newscasts. The claimed culprits of oil's price rise, everyone fell over themselves to be tougher on them.

Alas, nothing disappears as fast as a perceived invalidation of the law of supply and demand. Eventually the two reconcile into accepted parameters, and nothing is less newsworthy than the conventional.

However, it is worth recalling this summer's episode for the next time supply and demand are forgotten.

News by its very nature is unpredictable. Too bad many journalists don’t seem to understand that fact.

Ever since gasoline prices began a wild ride in 2004, the media have been obsessed with predicting future energy prices. Gasoline, we were told, would hit $5 a gallon. Or $6, or $7. Or maybe even $12 or $15.

The predictions were consistently wrong. ABC, NBC and CBS, who can seldom get current events correct, are even worse guessing future news. In fact, for most of 2008, network news stories that predicted oil or gas prices were wrong nearly two–thirds of the time (63 percent).

Two–thirds? You’d be better off flipping a coin or even counting on an NFL referee. Not one network report had guessed that gas would drop to $1.66, the current national average.

We're concerned about the dropping price of oil. Sure, it's great for consumers. We, too, like seeing change after we fill our tank with gas. Most experts think the price will continue to decline and some are speculating that a barrel of oil will drop to less than $25 and gas at the pump may go below a dollar a gallon.

The problem is inexpensive oil will not help this country kick its addiction. The fact is high fuel prices help society heal, moving to healthier energy choices.

Remember the 1970s? That era's energy crisis stirred all sorts of interest in renewable power, synthetic fuels and other alternatives. But when oil fell from its record high, those new alternatives disappeared. We cannot afford to replay that particular episode.

HOUSTON, (AP) ––Only four months after peaking at an unheard of $4.11 a gallon, the national average price for gasoline tumbled below $2 Friday, its lowest point in more than three years. Yet the global economic contrast between then and now could not be more stark.

Will we eventually look back to the good old days of $4 gasoline? Probably, since there's no sign that supplies will match demand over the long run.

For now, we are enjoying the falling prices. A $25 fill–up (or close) is a relief compared with what became regular $45–plus charges this summer. Paying less also makes it easier to plan for smart, long–term efficiencies, such as carefully driving an older car while waiting for more efficient vehicles, commuting by transit and including transportation alternatives into choices about where we live, work and play.

According to Reuters, "Gasoline is now about … about $1.33 less than it was at a record peak in July."

A dollar thirty–three cheaper?

Wait. I thought gasoline prices (and the underlying price of a barrel of oil) was the precursor of housing prices collapsing. People had to choose between filling the tank of their Humvee or paying their mortgage and, as the old saying goes, "You can sleep in your car, but you can't drive your house" a fill–up at the neighborhood Exxon won out.

Americans thirsty for a drop of good economic news have found something they can top off their tanks with: cheaper gas.

When LewRockwell.com published my article, “The Coming Collapse of Oil Prices” back in May, crude oil was selling for roughly $135 per barrel. Almost every oil pundit was then predicting that prices would soar even higher. I strongly suggested, however, that prices would likely fall sharply, probably into the $80 dollar range. Well, since then the price of crude oil has declined sharply and (absent some new Mid–east war) they are likely headed even lower in the weeks and months ahead.

My thesis about the near–term direction of oil prices was that declining world demand (due to near recessions in several national economies) and generous profits associated with oil production would inevitably lead to sharply falling prices. The long 150–year history of oil prices is that short–run increases in price are (almost) ALWAYS followed by just as dramatic reductions in price. This scenario has played out in the late 19th century, during and after World War 1, World War 2, and most dramatically after the price hikes of late 1970’s and early 1990’s. Oil prices first increase sharply, then the tumble.

Why does the price of gas increase immediately when a hurricane threatens supplies, even though the gas at the pump has already been paid for? Why does the price of gas in Seattle increase immediately when a hurricane threatens New Orleans or Houston? A popular explanation for rising gas prices is that it happens because unscrupulous, hard–hearted merchants see disasters as opportunities to take advantage of people in their time of need. It’s an emotionally attractive explanation that fuels popular outrage and inspires laws against “price gouging.” It’s also an explanation that is completely wrong. We can save ourselves a lot of angst, many of the pains associated with disaster recovery, and a lot of money in law enforcement resources by understanding why gas prices rise in the midst of disaster and by repealing laws against “price gouging.”

Evil people don’t cause high prices. Supply and demand cause high prices. In the face of an impending disaster, consumers want more gas at any given price, which means that the demand curve has shifted. At the same time, disasters like hurricanes usually mean that the amount of gas merchants are willing to sell at any given price will fall. This is due in part to the fact that they will have their own disaster–related problems to deal with. Also, if energy infrastructure is harmed it means that the cost of acquiring fuel will rise. An increase in demand coupled with a reduction in supply means an increase in price.

HOUSTON –– Oil companies were warning motorists Sunday that they would not be able to produce adequate supplies of gasoline in the days ahead because so many of their refineries are still not operating in the aftermath of Hurricane Ike. As a result, prices at the pump began soaring again.

Fears of supply shortages and actual fuel–production disruptions resulting from Ike's lashing of vital energy infrastructure led to pump–price disparities of as much as $1 a gallon in some states, and even on some blocks.

HOUSTON –– Even before Hurricane Ike smashed into the Gulf Coast, it had already made an economic landfall, sending wholesale gasoline prices soaring Friday and straining the nation's fuel supply chain.

Why is consumer sentiment so low? As Democrats cater to dissatisfied voters with redistributive policy proposals, there may be an alternative explanation. Director of Economic Policy Studies Kevin Hassett discusses the relationship between high gas prices and the sour sentiment among American consumers. This analysis suggests that the Presidential candidate who can wield an effective plan to subdue gas prices may the one ahead in November.

During the past several years in which gasoline prices were steadily rising I have run across a few obscure articles, mostly produced by economists, that claimed the actual price of gas is now lower than it was back in the 1970s when we had the nuisance of all those long lines at gas stations. I am no expert at this stuff, but I have noticed something that seems to lend credence to the economists’ claim: There are innumerable huge SUVs, minivans and similar gas guzzlers still all over the road in my neighborhood and throughout the country.

While the posted prices are, of course, huge compared to what they used to be, it appears, from what these economists tell us, that the actual percentage of people’s income spent on gas is less now than it used to be some 30 years ago. And given how many folks are hanging on to their gas guzzlers, it looks like the economists are right.

WACO, Texas – About this time eight years ago, Democratic presidential candidate Al Gore warned that dipping into the nation's Strategic Petroleum Reserve as a way to lower gasoline and heating oil prices would be foolhardy.

With only weeks to go before the election, Gore did an about–face and called for a raid on the nation's crude oil reserves established as a backup for national emergencies.

In another instance, Gore called for higher taxes on gasoline as a way to make alternative energy sources more economically competitive.

As the election neared, Gore flip–flopped.

In both instances, Gore was right the first time and wrong when he changed positions in an effort to please voters whom politicians routinely treat like children.

A Washington–based anti–tax advocacy videotaped supporters of Barack Obama’s presidential campaign who support $10 per gallon gas during a protest stand–off Tuesday.

Ed Frank, vice president of public affairs for Americans for Prosperity, spoke to Obama supporters during an event organized on Capitol Hill by liberally–leaning MoveOn.org. According to an email MoveOn emailed to supporters the event was designed to “highlight the GOP’s extensive ties to Big Oil.”

While high gas prices have become a major issue, another fuel cost hit to family budgets is around the corner: skyrocketing bills for home energy.

According to the federal Energy Information Administration, prices for gas and home heating oil are nearing $5 a gallon in some places, up nearly 70 percent in the last year.

Utility bills already have risen 30 percent in the past five years on average nationally, and utilities are raising rates further in many parts of the country in response to higher fuel costs. Puget Sound Energy has made a regulatory filing to charge higher rates for electricity and natural gas.

Ben–Gurion University historian Benny Morris caused quite a stir with his July 18 New York Times Op–Ed contribution. Morris believes Israel will "almost surely attack Iran's nuclear sites in the next four to seven months." He sees himself as a centrist, reflecting a broad consensus "shared by most Israelis across the political spectrum." If a conventional attack fails, as Morris thinks likely, "A ratcheting up of the Iranian–Israeli conflict to a nuclear level will most likely follow."

Given the above credible Iran war threat, a new conceptual approach I have labeled Peak Price Oil is needed. A possible Israeli conventional or nuclear strike/response would function as a trigger event for Peak Price Oil. Present estimates of oil/gas prices in the event of an attack on Iran are: $200–$400 per barrel of oil, and $12–$16 per gallon of gasoline. Another possible trigger event for Peak Price Oil would be a successful terrorist strike on the Abqaiq refinery in Saudi Arabia, crippling oil supplies for several years.

Gas prices may have retreated from their recent peak, but they are still outrageously high. More worrisome, current gas affordability levels (perhaps un–affordability level is more apt) may be just the beginning. Gas prices may soon set new record highs, and it will not be due to China, India, or even OPEC. Instead, as Walt Kelly once famously paraphrased, "We have met the enemy and he is us".

The greatest risk to affordable gas prices in the future is the global warming policies being discussed by policy makers. To see the relationship between ever–higher gas prices and global warming policies all we need is a basic understanding of economics and then simply “connect the facts”.

WASHINGTON – High gas prices are threatening an almost sacred American tradition – driving around aimlessly, cruising, if you will.

Driving around aimlessly is such a part of our culture that it has its own signature film, "American Graffiti," in which a group of teen–agers spend the night driving aimlessly around Modesto, Calif.

There is even a female version of driving around aimlessly, "Thelma & Louise," in which two women drive distractedly and aimlessly toward Mexico. The trip ends badly, but as any small–town kid who spends summer evenings driving up and down Main Street could tell you, it's not the destination, it's the journey.