Oil futures prices have dropped 16% since the beginning of the year, causing pure joy in the stock market. Investors have responded to the fall by pushing the Dow Jones to record territory, interpreting the decline as a boon to the consumer and to the economy. Is the celebration premature?

In the short run, there is no doubt that lower outlays for energy will mean that Americans will have more money to spend elsewhere. Falling gasoline prices bode well for the auto and travel industries, and a decline in the cost of heating a home means more money at the end of the day for the Gap, Apple, or Home Depot.

In the long run, though, the drop in energy prices could well undercut a move toward energy conservation, now finally under way across the land. It could also stymie the nascent but building momentum toward developing alternative energy sources.

This would be a very real blow to the country’s security. If you doubt that, please turn to last week’s front-page photos of the love fest between Venezuela’s Hugo Chavez and Iran’s Mahmoud Admadinejad. These are, unfortunately, the kind of people, along with Russia’s Vladimir Putin, who are in control of much of the world’s energy resources. Guess what? They are not friends of America.

It is time for the government to step in and ensure the continuation of America’s efforts to reduce oil imports by instituting a floor price for oil. For once, our leaders should adopt a long-term view and take advantage of the weakness of today’s oil market by guaranteeing that investors in alternative energy sources and in conservation will not be burned by the ups and downs of the marketplace.

Though normally we support free market forces, we see the energy markets as being not the least bit free; they are largely at the mercy of a bunch of volatile and hostile governments. Today, the American government has a precious opportunity. Our economy has rolled merrily along these last several years, in spite of a huge leap in oil prices. This hike in energy costs has been absorbed by the consumer, who has managed to overcome the hit to disposable income.

In other words, this is the moment to institute tax policies that would establish a floor under oil prices, because there would be little negative impact from maintaining the status quo. Much more damaging to the economy would be a windfall from a sudden drop in oil, which would likely be reversed in the next year or two.

Most important, though, would be the message sent to those who are working on alternative energy development, undertaking substantial conservation efforts, or for that matter exploring for domestic oil and gas. Most such investments take several years to bear fruit. In the past, such programs have been constrained by uncertainty over OPEC policies and oil price movements. The government needs to assure investors that projects viable at today’s energy prices would make decent returns, regardless of future oil price fluctuations. We have, after all, seen this movie before.

After OPEC asserted itself for the first time by raising oil prices aggressively in the 1970s, America and other countries around the world engaged in a decade-long ramp up of domestic oil and gas exploration, as well as early investments in alternatives and conservation. The result was a drop in the demand for OPEC oil and a falloff in prices. Lower prices, in turn, led to a reduction of the number of drilling rigs operating in America and in more exotic ventures into new technologies for extracting oil from tar sands, shale, and other high-cost sources.

Today, these efforts have been renewed. There is excitement about hybrid cars and tar sands and ethanol, and the American oil exploration industry is energized as well. As important, we see an evolving and potent partnership between environmentalists and energy conservationists. Americans are slowly coming to believe that global warming is a danger, and that many measures can reduce the output of greenhouse gases, while also saving energy.

In his State of the Union address last year, President Bush outlined numerous initiatives that were forecast to reduce our oil imports by 75% within 20 years. He talked, for example, of the government spending $44 million to develop wind energy, $148 million for solar development, and $150 million for investment in ethanol technologies.

In the world of energy, these are piddling amounts. Much more important is that the retail giant Wal-Mart has committed to designing stores using less energy, adding hybrids to its truck fleet, and pushing sales of light bulbs that last between 8 and 12 times longer but also generate 70% less heat. An experimental store in McKinney, Texas, is burning used cooking oil from its deli and used motor oil from its lube shop in special furnaces to heat the building. Now that is meaningful.

More important, too, is the success of United Parcel Service’s “green fleet” of trucks fueled by hyrdrogen fuel cells, LNG, and electricity. The fleet has now racked up more than 100 million miles. So is the $300 million Chevron has spent in each of the past three years on renewable energy, including geothermal. So is the commitment by General Electric to improve its energy efficiency by 30% by the end of 2012.

Corporate initiatives like these are winning favor not just from energy conservation fans, but also from environmentalists. Typically, they are also producing profits. A drop in oil prices is not likely to dissuade those concerned about the melting polar ice cap, but the enthusiasm of corporations for such investments could wane if the returns dissipate.

At the margin, at least, efforts to conserve and to develop new technologies could allow the country to chip away at our reliance on foreign oil. Given the countries that benefit from that dependence, there is no doubt that the country’s security is at stake.

Surely this is more important than confiscating lip gloss at the airport.

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