All of the Above.(NEWS)(reduction in oil prices)

Byline: Kevin A. Wilson

AT THIS WRITING, OIL PRICES are at less than $100 a barrel, and some experts predict they'll drop to less than $90. It was $138 not long ago. The facile and foolish interpretation is that this news means we've returned to "normal.

It is good news, in the short term, for you and me at the pump, but only a consequence of slowed economic activity.

As you run closer to the edges of the supply-demand equation, prices become more volatilethat is, they respond more dramatically to shifts in demand. One day, the world's economies are booming and screaming for fuel to keep their engines running. A few days later, banks collapse and we have more oil than we need. For now.

Such price swingsthough short-livedinfluence the perceived viability of alternatives. If oil is $140 a barrel and rising, the math works out for alternatives such as biofuels or hybrid technology. Oil slips back to $90, and keeping the transportation fleet on gasoline for as long as possible seems to make more sense.

The key here for policymakers and auto engineers alike is to recognize that prices aren't fixed and thatsince we now run at the edge of where supply meets demandsuch price volatility is the new norm.

In that context, wise ...