Oil, like other commodities, is priced based on a contunuous auction, demand measured against supply. (The picture is from a primer on peak oil, courtesy Energybulletin.net.)

Supply has become inelastic. Not just the oil, but its refining. No one is building new refineries (not in this country). When supply gets really tight we actually import gasoline.

The problem is that demand has also become inelastic. I'm talking to you, mister. No one seems willing to make a change, to reduce their demand for oil, gas, and electricity. Back in the 1970s people switched to smaller cars, they didn't drive as much, they even boosted the thermostat. Now, nothing. We get in our SUVs, we take the freeway 40 miles to work and back, we drive all over hell-and-gone for various reasons (kids, shopping, etc.) and we usually leave the A/C on high while we're gone.

So we have an episode of the BBC's show Cash in the Attic.

I've got a lovely barrel of oil, how much shall I say? 50? 55? 60? 65?

Unless and until people drop out of the bidding the price goes up.

That's what is happening.

Until you drop out, until you take some affirmative action to drop your personal use of oil, of gas, and of electricity, there is nowhere for the price to go but up.

There are a lot of things you can do that don't cost money. You can car-pool to work, and to soccer practices. You can combine shopping into a single trip. You can raise the thermostat. You can walk somewhere, and have your kids bike somewhere.

If your neighborhood isn't amenable to such things, if there are no sidewalks and everyone has to go out onto a 4 lane highway to get anywhere, then you can get involved in local politics. That doesn't cost much money either. You can demand small changes, like sidewalks, and bigger changes, like bike cut-throughs between cul de sacs so the kids don't have to go 5 miles to see their friends in the next yard.

Then there are things you can do that actually cost money. Insulation works. Better windows are good for the economy. Trade in that SUV for a Scion. (That's not minem but it looks a lot like it.)

Every step you take in this direction will have a powerful effect on your personal bottom line. Some will even cause you to lose weight and feel better. Others will boost the economy. Most will improve the environment. And all will cut demand for oil and gas, which can fall in price as fast as it went up, because once it's available it has to sell, at some price.

The solutions to our energy, our environment, and our personal problems may be identical. Get off your rear end.