Solving America's energy challenges obviously means overcoming a phalanx of obstacles. But the most pressing might be the most basic: understanding how energy markets actually work.

Politicians on the campaign trail clearly, um, struggle with this. Witness their simultaneous enthusiasm for gasoline-tax holidays and calls for a tough cap on greenhouse-gas emissions (which would mean higher energy prices).

O'Reilly: 'They can charge whatever they want to charge, correct?' Last Wednesday, Fox News' "The O'Reilly Factor" set out to determine why oil and gasoline prices are high (as well as what will happen to Hannah Montana). The show called John D'Agostino, the youngest vice president of the New York Mercantile Exchange and an oil-market guru in his own right. Full disclosure: Fox News, like the Wall Street Journal, is owned by News Corp.

The video segment is not available on the website. But the transcript of the interview is an enlightening window into the extent of populist outrage at Big Oil:

BILL O'REILLY: OK, now look, in my town out on Long Island, gasoline has gone up 75 cents a gallon in about a month, a month and a half. Why now? Why this point in time? JOHN D'AGOSTINO, FORMER VP OF NYMEX: Well, a couple of things. One is crude oil has been high and stayed high. O'REILLY: Now, who's driving that? Is that the greedy sheiks and Hugo Chavez? D'AGOSTINO: No, no, no, I don't know about that. What we know for a fact is that we have a weak dollar. We have global demand that's staying put, no matter how much the price has gone up. O'REILLY: We had that last year. The demands have gone up globally since last -- but let's -- wait a minute. Let's walk through it so everybody understands what we're talking about. OPEC sets the price for a barrel of oil. And they keep raising it and raising it and raising it. Dick Cheney went over there and tried to say, "Hey, give us a break." They gave Cheney the middle digit. All right? So they can -- they can charge whatever they want to charge, correct? D'AGOSTINO: Well, OPEC sets the supply for what they can produce. The price of oil is actually set in exchange at trades in New York and in London, as well. O'REILLY: Is there a guy who says $121 a barrel? D'AGOSTINO: No. There's a huge market. It's filled with hedgers. It's filled with speculators. It's filled with moms and dads, average Americans. It's a big market that sets this price. O'REILLY: Somebody has to put the $125 a barrel on the barrel. Who does it? D'AGOSTINO: They're taking it from this market. They're just like... O'REILLY: Who is "they"? D'AGOSTINO: The producers. They're looking at this, just like when you decide how much a share of IBM is worth. You look at the settlement price in the New York Stock Exchange. O'REILLY: The CEO of Shell or the CEO of ExxonMobil say, "We're going to pay $125 a barrel." Is that what they say? I thought it was the sheiks and Hugo Chavez saying, "We're going to charge you $125 a barrel." D'AGOSTINO: No. They're all looking to the exchanges or the free markets to set that price point. The free markets right now are saying the price of crude oil is about 120 bucks a barrel. It's been going up. It continues to go up.