WASHINGTON, May 30 (UPI) -- For Americans experiencing sticker shock at the gas pumps, the major question is when oil prices will drop. A year ago oil cost $62 a barrel, while at the beginning of the Bush presidency it cost $20. What happened?

The brief answer to the above question is that in the short term things will only get worse, due to a perfect storm of tapped-out capacity, lack of significant new developments coming online, speculation, inclement weather and terrorism.

The free market so relentlessly touted inside the Beltway is hitting global energy consumers with a vengeance. The prime directive of Capitalist Economics 101 is price and demand -- the greater demand for a limited item, the price rises.

The nasty little secret about production is that despite record-high prices global oil production is essentially flat, despite fiscal incentives to pump more. U.S. Department of Energy statistics for 2007 recorded a 2.5 percent decline in petroleum production, even as prices increased 57 percent, with global production of approximately 83 million barrels per day matching consumer rates.

The good news is that there are massive new fields. The bad news is that they will take years to develop and come online. Kazakhstan's offshore Kashagan Caspian field is the largest oil field discovered in the last 30 years, with potential reserves estimated to be as high as 70 billion barrels. Initial production is estimated in 2011 at the earliest.