"But the real cause is a profound shift in the global energy system that has been 25 years in the making: The world's thirst for oil has grown faster than the industry's ability to slake it. As recently as the late 1990s there were gluts. Now there is virtually no spare oil left.

Many big forces combined to create the crunch: the Organization of Petroleum Exporting Countries' obsession with avoiding market crashes, Big Oil's emphasis on profits over finding oil, China's new oil addiction, America's old one, and the new role of investors in energy markets. Behind it were decisions by individuals around the world, including a Saudi minister, a British oil baron and a Beijing yuppie.

The outcome of the energy law is only the most recent example of how American leaders, both Republican and Democrats, have failed to ease the country's oil dependence. The oil shock of the 1970s led Congress to set auto-efficiency standards. But low energy prices later sapped political will in both parties to keep up the conservation effort.

Mr. Lundquist notes that the law does include some policies his task force proposed, such as giving utilities more incentives to invest in coal-fired and nuclear-power plants. Perhaps in a decade, those measures will give the U.S. more energy alternatives. But he thinks America is still dodging the tough calls it needs to make on fueling its future.

Sen. Bingaman agrees: "The big challenges remain unaddressed."

"Welcome to the U.S.-China relationship helpline. Here are the Six Steps for your recovery program. If you work your way through each of these steps, you will not only better come to grips with your problem, you may at the same time repair the U.S.-Chinese codependent relationship before it unsettles the 21st century.

STEP NUMBER ONE: The first step is admitting that we as Americans -- and our government -- have grown dependent on rock-bottom prices, low interest rates and excessive debt. These cloud our instincts. Then accept Chinese behavior supports these addictions.

We and China have entered a classic state of codependence. We need China to finance our spending and borrowing habits because we don't save. China saves too much and can't stop throwing money at us. China hopes it can maintain the unfair trade advantage of its below-market currency rates because we're so hooked on its goods and financing. That, in turn, will allow it to keep 1.3 billion people happy while becoming a global power.

To visualize the problem this Christmas season as you shop online or are drawn to Wal-Mart or Target by discounts, imagine Santa Claus taking wing in a reindeer-drawn rickshaw from Guandong Province. More often than not, it is Chinese manufacturers that stand behind our bargains.

Surprised at how low sticker prices have remained for last couple of years though oil costs have more than doubled since 2001? Thank the Chinese for their low-cost labor. Alan Greenspan and his gang at the Fed have quadrupled interest rates with twelve successive increases over the past 18 months to 4% from 1%, yet the Chinese have helped to ensure inflation remains in check.

Have you bought a home in the past couple of years, refinanced one, or taken out a second mortgage to fund other purchases? If so, you might want to send a Christmas card to the amiable Chinese ambassador and thank his country for financing America's profligate borrowing.

The business world generously calls it a vendor-finance relationship. Think of Motorola providing a below-market-rate loan to Turkey's telephone company to buy its handsets. The vendor, Motorola, increases sales, earns interest on the loan and acquires an interest in the customer. Any M.B.A., however, knows the risk profile of a company increases if this game is overplayed.

What's happening between China and the U.S. is vendor finance on a sovereign level and a massive scale. Americans purchase consumer goods from the Chinese, who buy U.S. Treasurys with the revenue. That in turn sustains low U.S. interest rates, which feeds more U.S. consumer demand, and the circle continues.

A less generous way to understand the relationship than vendor-client is dealer-junkie.

STEP NUMBER TWO: The second step is to take responsibility for our addiction. Put more bluntly, we shouldn't blame the Chinese for our problems.

STEP NUMBER THREE: As the U.S. admits the unhealthy nature of this codependence, so must China.

What China has done is create huge and dangerous imbalances in its own economy through an overemphasis on export market growth at the expense of internal development. The bias against imports has been an indirect tax on the Chinese people. (China also angers its neighbors by undercutting their markets with its undervalued currency.)

China's huge increase of foreign-currency reserves to more than $770 billion by September also creates pressures that can only be eased through inflation or appreciation of its currency. Most Chinese exporters can weather some appreciation but others already carrying bad debts could be pushed into bankruptcy. Deputy Minister of Environment Pan Yue, in Germany's Der Spiegel magazine, warned of a "political crisis" if uncontrolled economic growth continues.

STEP NUMBER FOUR: Recognize your larger responsibilities to the "family" – the global economy. The whole world has come to rely too much on the American willingness to buy and the Chinese readiness to pay for it. World economic growth remains strong, but the situation is more precarious than it seems. It could change overnight if something spooks the American consumer or throws off the Chinese juggernaut -- political turmoil, avian flu, environmental disaster, a Taiwan crisis.

STEP NUMBER FIVE: Fix the relationship. Too little thought at the highest levels has gone into dealing with the serious mistrust that makes our codependence all the more fragile in what could be the 21st century's most important relationship – that between the world's greatest power and its greatest emerging power.

Many in the U.S. suspect China's ultimate purpose is to reduce American global influence and, through its artificially low exchange rate and military spending, destroy America's competitive position. China suspects that the U.S. wishes to counter its economic rise and is tightening its ties to Japan and India because it doesn't want a competing power.

And finally, STEP NUMBER SIX:

Pray to a higher power that nothing disrupts this fragile relationship while you're repairing it. We must realize as Americans that, though it may take some years, the dealer can always find another customer while the junkie is left in withdrawal. The danger for China is that it loses its best customer if the U.S., responding to Beijing's refusal to allow its currency to rise, goes "cold turkey" – slapping steep tariffs on Chinese goods and risking the consequences."

"The ranks of domiciled U.S. producers are being greatly thinned out (witness the -2.353 million drop in U.S. domiciled production workers since 2000, and the weak growth in U.S. industrial capacity since the year 2000), and the rising core crude prices and core intermediate prices are increasingly being absorbed by the profit margins; productivity gains; and real wages of overseas producers, suppliers, middlemen and workers.

At the end of the global economy's supply chain sits the U.S. consumer, burdened by: already high first, second, etc., mortgage payments; rising home equity payments; and rising property taxes. Other factors include a gasoline price that has more than doubled from the 1990s decade average of $1.12 per gallon price; and modest growth in wages and salaries, especially in "real disposable terms."

The bottom line: With China's national goal of 'full employment,' and not "the widest company profit margins," Chinese domiciled producers' profit margins and Chinese workers' real wages are absorbing the rise in core crude and core intermediate prices; those pipeline pricing increases are failing to be "passed through" to the U.S. end-using consumer.

The end result: Until Chinese aggregate demand "catches up" to Chinese aggregate supply (may be in 15 years), we continue to look for benign core U.S. PCE (personal consumption expenditure) deflator inflation.

Since publishing "Twilight in the Desert: the Coming Saudi Oil Shock and the World Economy" this past summer, and touching off one of the great debates of the early 21st century, energy banker Simmons has been squarely in the spotlight. Simmons argues that Saudi oil fields, contrary to reports, have been in decline for some time, and he views skeptically Saudi claims that it can adequately boost supply to meet accelerating demand. Simmons, who has headed the Houston-based energy investment banking firm Simmons & Co. International for 30 years, is no stranger to bold calls and controversy.