It pains my pocketbook to say this, but America needs $4-a-gallon gasoline.

That includes Michigan's auto industry.

As I write this, oil is trading around $120 a barrel, down nearly $27 from its July 11 peak. AAA Michigan said Monday that state gasoline prices dropped 22 cents a gallon in the previous week.

OPEC President Chakib Khelil said Tuesday that the price of oil could drop to $70 a barrel because of falling U.S. demand and a strengthening American dollar.Great news, right? Not really.

Yes, plunging crude oil and gasoline prices would be a boon to motorists. Lower oil prices would likely lead to falling food prices and aid auto suppliers, especially those who produce parts from petroleum-based plastics.

But many experts say the price break likely is temporary. Rising worldwide demand for oil likely will boost gas prices in the long term, maybe well above $4 a gallon.

Bumpy ride

Planning executives at Detroit's automakers must be pulling their hair out over wildly fluctuating oil prices.

When $140-a-barrel oil destroyed sales of full-size pickups and SUVs in May and June, General Motors Corp. and Ford Motor Co. took radical steps to shift production away from trucks to cars.

GM's future car-laden product plan is based on oil prices rising to as high as $150 a barrel by next year. But what if oil falls to $70 a barrel and gasoline drops to about $2 a gallon?

Demand for big SUVs could again rise, forcing automakers to reallocate billions of dollars they just shifted to development of new cars back to trucks. That is not exactly helpful to bottom lines already bleeding red ink.

A reprieve in oil prices also would hurt efforts to develop alternative energies that make us less dependent on foreign oil and reduce harmful greenhouse gases. That has happened before.

Steve Pueppke, director of Michigan State University's Office of Biobased Technologies, says alternative energy research spawned by the oil shocks in the 1970s dried up when oil prices later fell.

Michigan and the rest of the country need gasoline to stay at $4 a gallon, even if the price of oil drops rapidly in the coming months.

Raise fuel taxes

State and federal governments should create a floor of $4 gas by raising fuel taxes.

Increased tax revenues should be used to fund alternative-energy research, provide relief to low-income families struggling with high gas prices, and rebuild crumbling bridges and highways.

One of every four of the nation's bridges is in need of repair or replacement at a cost of $140 billion, according to a report released Monday by the American Association of State Highway and Transportation Officials.

We can pay now to break our addiction to oil or pay later, when the cost will be much higher.

-- Contact Rick Haglund at rhaglund@boothmichigan.com