AS ANY DRIVER can attest, prices at the gasoline pump have risen sharply, shooting up nearly 17 cents a gallon over the last two weeks to an average cost of about $4 per gallon of regular unleaded. This is 63 cents a gallon higher than at this time last year.

The obvious villain in all of this is “Big Oil” with its alleged ability to gouge consumers and achieve unconscionable “windfall” profits. Oil industry executives have already been dragged before Congress to testify about the situation and predictable calls for punishment, e.g., a “windfall profits tax,” have begun to proliferate. Both Democratic candidates for president, Senators Barack Obama and Hillary Clinton, have endorsed such a measure.

The attack on Big Oil is a witches’ brew of old-fashion demagoguery, economic ignorance and an apparent lack of historical perspective. To the degree that this attack is successful in punishing the oil and gas industry, it will ensure that Americans will be worse off in the future.

First, the demagoguery: There is no such entity as Big Oil. The idea that large American oil companies are able to manipulate oil or gasoline prices is nonsense. Only 6 percent of world oil reserves are held by investor-owned oil companies while nearly 80 percent are owned by the national oil companies of foreign governments. While investor-owned companies have attempted to improve their global competitiveness in the face of such circumstances through mergers and acquisitions, the fact is that concentration in the oil and gas industry remains low to moderate.

Those who would punish oil companies for rising gasoline prices apparently slept through their introductory economics classes. Had they remained awake, they would know that the price of a good is set by the interaction of supply and demand. The historical record indicates that crude oil prices explain 97 percent of the variation in the pre-tax price of gasoline, according to the American Petroleum Institute.

Crude oil prices have reached record levels because of the undeniable fact that world demand has been outstripping supply for some time, thanks mainly to the rapid growth of China and India. Meanwhile, production is curtailed by the cartel-like behavior of foreign national oil companies, abetted by U.S. polices that prevent the exploitation of the substantial oil and gas reserves that lie beneath U.S. territory and territorial waters.

High crude oil prices are exacerbated by a number of domestic factors that keep upward pressure on gasoline prices. These factors include higher operating costs, the proliferation of grades of gasoline, recovery from low and negative rates of return on investment in the 1990s, hurricanes and regulatory uncertainty. To take just one factor, between 1990 and 2006, the proliferation of “boutique fuels” made U.S. refining more complex and reduced the ability of the market to mitigate temporary geographic shortages. And of course, federal, state and local taxes have combined to raise the price of gasoline as well.

The historical ignorance of those who would punish Big Oil is illustrated by the impact of one of today’s big ideas for fixing things: the windfall-profits tax. Congress enacted such a measure in 1980 to raise revenue and to make sure oil companies did not benefit from the removal of domestic price controls during a period of relatively high prices for crude oil. Not only did this confiscatory tax fall far short of the predicted revenues for the treasury, it reduced industry revenues by $79 billion — money that might have been invested in the search for and production of new oil and gas.

The Congressional Research Service estimates that the windfall-profits tax reduced domestic oil output by up to 1.26 billion barrels between 1980 and 1986. Imposing new taxes on the oil industry at a time when greater oil and gas production would benefit Americans would be déjà vu all over again.

The claim that oil profits are extraordinarily high is simply false. As is the case with any commodity, market conditions can lead to higher than normal profits during a given period, but these are usually offset over time by lower profits. So it is with the oil and gas industry. Over time, oil industry profits have remained generally in line with those of other sectors of the U.S. economy.

So what is to be done? To start with, we should reverse current policies that discourage the production of domestic oil and natural gas. That means expanding access to non-park federal lands in the West, Alaska, and under the waters off our coasts. These areas hold an estimated 635 trillion cubic feet of recoverable natural gas — enough to meet the needs of the 60 million American homes fueled by natural gas for over a century — and an estimated 112 billion barrels of recoverable oil — enough to produce gasoline for 60 million cars and fuel oil for 25 million homes for 60 years.

We should also reverse our rejection of nuclear power and exploit domestic and Canadian sources of energy — e.g., recovering oil from shale, converting coal into liquid fuels, and exploiting the vast deposits of unconventional natural gas available domestically.

If Ronald Reagan’s deregulation of domestic crude oil prices at the beginning of his first term is any guide, the impact of increasing domestic energy supplies would lead to a world-wide increase in output, reducing oil prices.

Mackubin Thomas Owens is a professor of national security affairs at the Naval War College and editor of Orbis, the quarterly journal of the Foreign Policy Research Institute.