The externalities of Mid-East military conflicts ($300 billion and 1,900 lives spent) need to be factored into the price of high-energy usage behavior before assuming you're seeing a true free-market response. This means the true cost of oil is much higher than $60/barrel, with the rest of the price being borne by everyone who supports the government through taxes and military service.
There is no true free market anyway, only the somewhat close approximation we have. Don't forget that ethanol is subsidized, so there are hidden costs there too.
But the answer to anything is rarely regulation, as we've seen in the past the unintended consequences of regulation. Airrbags mandatory -- oops, kids are dying. Fuel economy must go up -- oops people are dying because manufacturers cut weight in their cars to get better economy before the technology was there to make light, safe cars.
I would love to see the drafters of these regulations up on manslaughter charges for the unintended consequences of their regulations. Maybe that'll slow down new ones.