The average price of a gallon of gas in the U.S. is now just shy of $4. Throughout Europe, drivers are paying upwards of $8 to $10 a gallon. With the rising price of crude oil futures, and the subsequent rise in prices for many other commodities, everyone should be feeling the squeeze.

Everyone is feeling it, that is, except for Big Oil. Major oil companies are posting windfall profits: Royal Dutch Shell and BP reported 25 percent and 63 percent net income increases, respectively, for the first three months of 2008. Exxon reported a record-setting $40.6 billion in net income for 2007. There is a rising fear that oil companies are simply passing the bill of higher crude prices onto consumers.

Congress appears to share these concerns. The Senate Judiciary Committee has called on executives of five major U.S. oil companies to provide some answers. “The people we represent are hurting, while your companies are profiting,” said Committee Chairman Sen. Patrick Leahy (D-Vt.). “We need to get some balance.”

These executives fired back, saying that their corporations are being targeted as scapegoats and that the effects of supply and demand are contributing to the rising price of fuel. Moreover, they reasoned that the high cost of development in the oil industry requires they make high profit margins today to prepare for expensive investments tomorrow. The oil execs also placed some of the blame back on Congress by arguing that bans on drilling in regions like the Arctic National Wildlife Refuge in Alaska are curtailing supply potential.

So where do we go from here — especially when publications like The Economist hint at the potential of $200-a-barrel oil.

Business Week suggests that Americans, and the world in general, will adapt. People will alter their habits to drive less. That's already happening, according to the New York Times, which reports that Americans are already taking fewer road trips and seeking out public transportation more than ever before.

Photo: Rob McDougall (flickr)

Access to cheap energy underpins modern societies. Finding enough to fuel industrialized economies and pull developing countries out of poverty without overheating the climate is a central challenge of the 21st century. — Michael Wines, New York Times

Sub-Saharan Africa is perilously close to an energy crisis.

Massive drought across Kenya and Ethiopia has slowed hydropower production to a trickle. Rickety electrical infrastructure in South Africa and elsewhere has led to huge rolling blackouts expected to go on for years in some regions, according to the International Herald Tribune. The World Bank says Africa's "lack of reliable power has already begun to hamper the region's development." The worst-hit African economies have seen economic growth slow by more than two percent.

Energy shortages impact a broad array of activities in these countries. In Uganda, for instance, power shortages are causing gas stations to run low on diesel. The environment suffers as well. For the 80 percent of sub-Saharan Africans who lack electricity, Inter Press Service News Agency says:

The destruction of natural vegetation could lead to desertification when there are no water catchment systems to feed rivers and streams. And when there is no water, the population in such an area suffers in many ways. They cannot plant crops and their animals die.

Solutions to the energy crisis still seem far off. India and China have begun funding new power generating facilities — in one instance providing Zambia's energy producer, Zesco, with $1.2 billion for upgrades and new capacity creation. But the sheer size of the problem suggests a multinational approach. "The best answer, most experts consulted agree, would be for nations to cooperate on regional power solutions," the New York Times reports. "One or two large regional plants, they say, could supply power more cheaply and efficiently than dozens of smaller ones."