The aftermath of Hurricane Katrina is terrifying. Approximately 60 percent of New Orleans is under water, and some 10,000 people may have died in the city alone. Experts estimate that more than $150 billion will have to be spent on recovery and relief. Officials fear that as many as 250,000 people (out of 485,000 in the year 2000) will leave the Big Easy for good. There seems to be no end to these astounding numbers.

Politicians and pundits in Washington continue playing the “blame game.” Despite ongoing news coverage of the cataclysm, few seem to be sure about Katrina’s overall impact on the U.S. and world economies.

Historically, natural disasters have impacted the economies of rich countries only mildly, because they were followed by increased reconstruction spending and decreased unemployment rates. The damage and temporary economic halt used to be made up by latter investment booms.

If that is the case, America’s healthy growing economy should not be in any danger. However, according to some analysts, this time could be different. Katrina’s damaging effects on the region’s energy infrastructure may have long-term repercussions. Because of this hurricane, perhaps up to one tenth of America’s oil producing capacity is gone, according to The Economist. The oil installations are sophisticated in nature and it takes time for them to be rebuilt.

Immediately after the disaster struck the South, prices of oil jumped to a nominal record of $70.85 a barrel, but soon fell to around $65. This reflects the fact that world markets were oversupplied with crude when the storm hit.

Nevertheless, global petrol production is still stretched thin, which means there is no bumper to protect the world oil economy from a future blow.

America’s National Commission on Energy Policy, a group of energy experts and politicians from both parties, performed a simulation, which included the likely results of a natural disaster and a supply disruption amounting to 4 percent of global oil supply. Based on the exercise, they predict that under such a scenario, world petrol prices could rise from their assumed baseline of $60 a barrel, to over $160. They did not contemplate any massive al-Qaeda attacks on crucial oil infrastructure.

These facts do not point to any definitive future course of events. Still, Americans would be wise to act preemptively in order to soften the impact of a possible future economic downturn. Already, U.S. gas prices have hovered around the $3 a gallon level for a while now. Lets remember that not so long ago they fluctuated around the $2 a gallon level. Petrol is an economically-inelastic good in the short term, which means consumers are not likely to quickly alter their spending behavior based on gas price changes.

Philip Verleger, an economist affiliated with the Institute for International Economics, a think-tank, believes oil would have to be twice as expensive in order to reduce American petrol consumption by just 5 percent. Resulting spending cuts on gas, heating fuels and electricity could, in effect, be followed by a recession.

A lot can be done before these dark scenarios actually come into being. Fuel economy standards are at a 20-year low. President Bush would be wise to correct this and improve the efficiency of the cars driving on American roads. It would be good to see more compact-sized automobiles and less pickup trucks. The law should be specific about these regulations, so people are actually forced into being more economic on a daily basis.

So far, environmental legislation was more of a set of guidelines, rather than actual rules. Hurricane Katrina reminded everyone how unsafe it is to heavily rely on inefficient government. Hope remains that Americans, having learned this bitter lesson, will alter their consumption behavior so as to endure future misfortunes.

Wisniewski is a senior economics and Spanish major and a columnist for The Spectator.