Don't Like Oil? 'What Else Do You Have?'

I'll be one of the 92 million people who travel more than 50 miles this holiday season (although not much more than 50 in my case), according to AAA. Perhaps that's part of the reason that oil has topped $90 per barrel and gasoline prices have eclipsed $3 per gallon.

And oil may be headed to $100 per barrel in the very near future. That will cause people to cut back, right? People won't stand for $100 per barrel oil again, will they?

Well, the Saudi Arabian oil minister Ali al-Naimi was asked that very question. Would consumers and producers accept $100 per barrel of oil. He answered it with another question: "What else do you have?"

It's a great - if chilling - question. In the face of high oil prices, what other options do we have? If we're honest, we'd have to answer, "not much." Ethanol is approaching ten percent of the gasoline supply but is limited from future growth by a blend wall. It will be a while before electric or natural gas cars make a significant dent.

The potential impacts are far greater than the ability to buy fewer Christmas presents. Rising oil prices are accompanied by rising concern that they will choke off the economic recovery. As the Wall Street Journal notes: "If the trend [of higher oil prices] persists—some forecasters believe the oil price will exceed $100 a barrel next year—the resulting hit to everyone from U.S. consumers to energy-hungry Asian manufacturers could create an unwelcome drag at a delicate time for the global economy."

That brings us back to the question: What else do we have? Don't you think it's time we have something else?