Business-as-usual energy policies since the 1974 Arab oil embargo led to $100-per-barrel oil. The business-as-usual energy budget proposed by this administration won’t alleviate the economic strain of filling up at the pump. And what’s worse, it ignores the big threat our oil dependence poses now and in coming decades.

The dangerous truth is that America is losing economic influence and diplomatic leverage. The reason: Since 1973, we have relied upon oil for 98 percent of energy used for transportation. And we’ve upped our dependence on foreign oil and gas from 30 percent in 1974 to 60 percent today. The United States is the world’s No. 1 importer of oil. China is No. 2. More than ever, Americans are at the mercy of world events.

It is a dangerous myth that “Big Oil” companies set the price of gas. Governments account for 98 percent of the world’s top 10 “owners” of oil reserves and pump 78 percent of world production — making Americans reliant upon decisions by regimes and leaders of oil producing countries, including Saudi Arabia, the United Arab Emirates, Kuwait, Iran, Venezuela, Russia and Nigeria. Because of Darfur, the United States bars trade with Sudan. Meanwhile, China is the No. 1 purchaser of oil from Sudan’s government and the No. 1 purchaser of U.S. Treasury debt. America’s vulnerability is increasing.

Another dangerous myth is that domestic oil production could reverse these trends. America has 2 percent of world reserves. U.S. oil production peaked in 1970 at 10 million barrels per day. Now it’s half that because of the phenomenon of “peak oil” first identified by American oil geologist M. King Hubbert in 1956. Oil production in every oil field reaches a maximum or peak and then declines. The administration has commissioned and systematically ignored four separate reports all concluding global peak oil is inevitable and poses risks for devastating consequences, including higher oil prices.

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Similarly, two congressional studies by the Government Accountability Office have called for radical changes to conserve oil and to diversify energy sources by developing advanced energy technologies.

Since the fall of 2004, oil prices have increased three times to around $100 per barrel. Why? To paraphrase James Carville, it’s the economic law of supply and demand, stupid. The International Energy Agency and our own Energy Information Administration have both documented virtually stagnant world oil production over the last 30 months.

Peak oil can be anticipated, but not predicted. The most dramatic example of it is Mexico’s Cantarell oil field. Formerly the world’s No. 2 field, Cantarell peaked without warning in 2005. It has declined more than 40 percent in two years. Meanwhile, demand for oil has increased, largely from China, India and other developing countries.

Last year, I joined with bipartisan colleagues in the House and the Senate to establish a new agency modeled on the undeniable success of the Defense Advanced Research Projects Agency. Responding to these alarming warnings, Congress authorized the administration to spend $300 million to create an Advanced Research Projects Agency (ARPA-E) to accelerate the development of energy technologies from our national energy labs and entrepreneurs into the marketplace. We need alternatives. Even those holding optimistic views of energy reserves admit supplies won’t keep up with demand.

The most recent is Fatih Birol, the chief economist of the International Energy Agency. In a Sunday article in London’s The Independent, he wrote: “We are on the brink of a new energy order. Over the next few decades, our reserves of oil will start to run out and it is imperative that governments in both producing and consuming nations prepare now for that time. ... The really important thing is that even though we are not yet running out of oil, we are running out of time.”

“Big Oil” executives also have shared similar views. That is why I sat in disbelief when the president’s director of the Office of Science and Technology Policy, John Marburger III, told the House Science and Technology Committee, “As just one example of … prioritization, the budget does not request funding for [ARPA-E.]” Not one penny. Why? “The administration believes very strongly that the basic research programs at the Department of Energy Office of Science are a higher-leverage investment and in greater need of funding than new DOE programs.”

As a scientist and engineer with 20 years of experience on research and development programs for the Defense Department and 15 years serving in Congress, I think a business-as-usual energy budget is not what we need. The least our federal government can and should do this year to avert a devastating liquid fuels shortage is to establish and robustly fund ARPA-E.

Roscoe G. Bartlett, a Republican, represents the 6th District of Maryland in the U.S. House of Representatives.