With crude oil again approaching $90 a barrel and a gallon of gasoline costing more than $3.00 in the metropolitan area, New Yorkers may well ask how the persistence of higher energy prices will affect the economy — and what, if anything, can be done to bring prices down.

If prices stay at these levels, then in 2008 Americans will pay about 1% of Gross Domestic Product, or $130 billion more for oil than they paid in 2007, and $180 billion more than they paid in 2006.

These are significant increases, about the size of the economic stimulus package being debated in Congress. Put it another way: if we could get oil prices down to 2006 or 2007 levels, we wouldn’t need a stimulus package.

The good news is that the American economy is less dependent on energy than it was in the past. The bad news is that increased supplies of oil don’t seem to be coming on the market anytime soon, and President Bush’s new budget proposals, released Monday, don’t provide solutions.

But higher prices, while acting as a tax on consumers, have less effect on economic growth than in prior decades. Americans, both on the highways and in industry, use energy more efficiently than it did at the time of the oil shocks of 1973-1974 and 1979. The fast-growing information industry of the 1990s helped to reduce energy consumption as a percentage of the GDP because the new sector used little energy but added significantly to total output of goods and services.

From 1974 to 1985, Americans spent more than 10% of the GDP buying energy, with a peak of 14% in 1981. Then, beginning in 1986, Americans’ spending on energy declined to 8% of the GDP. During the 1990s that ratio fell even further, reaching 6% in 1998.

Energy as a percent of the GDP didn’t start rising significantly until real prices of energy began rising in 2003. Our new energy efficiency makes America less vulnerable, but not wholly invulnerable.

Our decreased dependence on energy will help us better get through the unfolding period of oil supply problems, which the president of the Energy Policy Research Foundation, Inc., Lucian Pugliaresi, describes in a noteworthy paper forthcoming next month, as “a series of unfortunate events.”

These events include the wars in Iraq and Sudan, civil strife in Nigeria, strikes in Venezuela, re-nationalization of Russia’s oil companies, nationalization of producers in Argentina and Bolivia, restrictions on foreign investment in Kazakhstan, and higher royalties in Canada.

Closer to home, America has failed to initiate exploration in the Arctic National Wildlife Refuge, where the Alaska pipeline is already set up to transport oil south to the port in Valdez and then to the lower 48 states. Even today, some want to call the polar bear an endangered species to prevent exploration in Alaska’s northwest Chukchi Sea.

In an illuminating chart, Mr. Pugliaresi shows that in contrast to earlier forecasts of increases in output, markets now expect production of crude oil to be lower by between 2.5 million to 4 million barrels a day between 2005 and 2010. It is this loss of supply, juxtaposed to rising global consumption that has driven crude to $90 and higher this winter.

This global shift affects not only production today, but expectations of future prices. “It is our view that major price shifts in crude oil prices since the early 1970s can be explained in part (perhaps largely) by major shifts in expectations on future output,” Mr. Pugliaresi writes.

So, after signing alternative energy mandates into law last December, what are our politicians doing about this? Not enough.

President Bush’s 2009 budget, released on Monday, recommends spending $687 million on electricity from nuclear power. The funds would primarily be used to help the regulatory approval process and develop technologies to reduce and dispose of waste.

Nuclear power could generate clean electricity that could substitute for coal, if regulatory and liability problems could be worked out. But until plug-in cars become widely available, atomic fission cannot be harnessed to propel vehicles, which account for about 24% of American energy consumption.

So far companies have not been willing to go through red tape, public anxiety, and risks of lawsuits to build nuclear plants. No new power plant has been ordered since 1978, and the last one finished was in 1996.

The president’s other energy proposals are either counterproductive, or mere window-dressing. He proposes to double the Strategic Petroleum Reserve — buy more oil at high prices and take it off the market, which would raise prices, not lower them. He wants $648 million for clean coal technologies and $400 million for research into clean technologies for developing countries to help alleviate global warming.

If we don’t want to live with $90 oil and $3.25 gasoline, we need to focus on expanding oil exploration and production, both domestic and overseas, and building more refineries, so that hurricanes and refinery fires don’t drive up gasoline prices.

Congress would do well to consider not alternative energy but an alternative stimulus package: reforming our energy policy to put more money in consumers’ pockets.

Ms. Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute. She can be reached at dfr@hudson.org.