Last week, the price of oil futures reached $49.40 a barrel–the highest in 21 years of trading on the New York Mercantile Exchange. Oil prices are already up 50 percent this year, and some experts–notably energy consultant Daniel Yergin–believe there’s a good chance that oil could reach a steady level of $50 a barrel in the next two months.

The surge in prices has several causes, including political instability in Venezuela and Russia, turmoil in Nigeria, global market speculation and increased Chinese demand. But, in the short term, it is the “fear factor”–the insecurity and instability created by the Bush Administration’s Middle East policies, notably the invasion of Iraq–that has raised costs between $8 and $15 a barrel.

It is increasingly clear that the high cost of the war can be seen not just in the number of deaths, and the ballooning federal budget deficits but also in the record oil and gas prices. In a speech in Smithville, Missouri earlier this month, John Kerry squarely blamed the Bush team’s wars and failed policies for oil prices hitting new highs.

If prices stay at these levels for three to six months, some economists believe the risk of recession grows dramatically. (And at $50 a barrel, oil would be about 70 percent above the average price of $29 a barrel that has prevailed since 2000.) In that case, the oil shock of 2004 may well affect the outcome of both the US election and the global economic recovery.

While it’s hard to find a silver lining–what with a slowing economy, lost jobs and hard hit consumers–the situation may act as a brake on a possible US (or Israeli) preemptive strike against Iran. Such an “October Surprise” would be designed to display Bush’s toughness in dealing with prospective nuclear threats, while diverting attention from the debacle in Iraq. But most nonproliferation and energy experts argue that a strike would be counterproductive, further destabilizing the region. And though chaos may be what Ariel Sharon wants, as well as the diehard neocons (what with Iraq such a disaster), cooler heads in the Administration worry about a strike increasing oil prices to $60 a barrel–perhaps the one thing that could ensure Bush’s defeat in November.

High oil prices also act as a wake-up call–reminding us that oil is a finite resource and that we are fast approaching the point of peak production, after which global output will fall. It is a moment to launch what Kerry and leading progressive and environmental groups are calling for an “<a href=" http://www.apolloalliance.org/ Apollo Project” to invest in energy independence. This call is good politics and good policy. In a recent poll, 86 percent of Americans placed a priority on reducing dependence on Middle East oil, with 63 percent believing that investment in a combination of renewable power, efficient technology and conservation is the answer to improving security.

But change will not come while there’s another “fear factor” on our increasingly polluted horizon–a president who sits idly by while oil shock threatens our future. “If oil prices were Olympic events, George Bush would win medals,” Senator Chuck Schumer said last week. He’s fiddling while Rome is burning.” Bush has compiled the worst environmental record in modern times, while allowing our laws, regulations and policies to be crafted and corrupted by oil and gas lobbyists, polluters and indicted CEOs.

Let’s rid ourselves of the Bush “fear factor”–and then fight hard to craft a sane energy policy. It’s one of the most urgent challenges facing this country and the world.