As this image from the New York Times shows, increasing oil prices has a direct effect on demand, at least where the United States is concerned. This news couldn't be better for the environmental leftist, but they still aren't happy and want the government to do more, to subsidize alternative energy research.
What they don't get, is that subsidies led to our foreign oil dependence in the first place, and subsidies won't free us. As long as the government is paying Big Oil to drill overseas, they're going to do so.
These subsidies are keeping prices artificially low. This is bad, because its preventing the free market from doing its thing; investing in alternative energies. How can the left complain about prices to be lower, and expect us to also invest in alternative energies?
They now want to impose a windfall tax against oil companies, and use this money to decrease the price of gas. Yes, apparently, the 15% per gallon of gas the government already makes on each purchase isn't enough. They need to take more Big Oil profits, which could have been invested in greener technologies, to make gas cheaper, which further increases our dependency on foreign oil.
Then, instead of letting these companies invest in their own research and development for green technologies (which there is a huge demand for, by the way) they want government to subsidize energy even more, by promoting the development on green tech and imposing more restrictions on fossil fuels.
This is a great mismanagement of funds and an abuse of power by the government. Fossil Fuel technology was invented and perfected by market forces, and green technology will be done in the same way. Its just a matter of how badly the government will screw it up before we get there.
The graphs from the NY Times should be telling us something. The free market works; demand is decreasing when prices rise and supply drops off. If we want cheap gas, we can open up our domestic supply and if we want alternative energy, we have to stop interfering with market forces.