Crude awakening: the U.S. finally faces the cost of its addiction to foreign oil.

• Author: Smith, Patricia
• Position: NATIONAL

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Tim Chou used to drive a 1996 Nissan Quest. But this summer, as the price of gas skyrocketed past $4 a gallon, the 19-year-old engineering student at the University of Illinois was forced to give up his S.U.V.

"My parents decided to donate my car to charity because they didn't want to pay for the insurance and gas anymore," Chou says.

The soaring price of oil--nearing $150 a barrel--is inflicting pain at the pump and beyond as Americans begin to see the real cost of their gas-guzzling cars, suburban sprawl, and big houses that use lots of energy to heat and cool.

Some habits are already starting to change. Officials report more use of H.O.V. lanes for carpoolers and increased ridership on mass transit. Even the summertime ritual of teenagers cruising has been affected.

"I used to drive around and hang out here with my friends five nights a week last summer, but I just can't afford to buy gas anymore," says Elliot Lee, 19, of East Dundee, Ill.

And people are rethinking the benefits of far-flung suburbs: "Living closer in, in a smaller space, where you don't have that commute--it's definitely something we talk about," says Phil Boyle of Elizabeth, Colo., who drives an hour to his job in Denver. "Before it was, 'We spend too much time driving.' Now, it's, 'We spend too much time and money driving.'"

BURGERS & IPODS

While the prices at the pump are what people, and the media, are focusing on, the reality is that oil prices have a much broader impact. The cost of energy is built into the price of everything we buy. When Abercrombie or McDonald's pays more to get their jeans or burgers into stores, at some point they're likely pass the additional cost on to you. And because plastic is made out of petroleum products, it costs Coke and Apple a lot more to make their soda bottles and iPods.

All this is leaving consumers with less money to spend on everything else--from houses to restaurants and vacations--which is hurting an already sluggish U.S. economy, and sending the stock market into a steep fall.

WHY THE SPIKE?

Particularly hard-hit is the U.S. auto industry. In recent years, Detroit has focused on producing gas-guzzling S.U.V.'s, which were hot sellers until it started to cost $100 to fill their tanks. At the same time, foreign carmakers, who have years of experience selling smaller, fuel-efficient cars, are now better positioned to sell their vehicles. And with fuel one of their biggest costs, airlines are also taking...