Expert predicts gas to go to $12-15 per gallon

[Arroyo]

$4 PER GALLON TOO HIGH? TRY $12-15 PER GALLON

If you think $4 a gallon gas is too much to pay, brace yourself. A couple of expert sources say $12-15 per gallon is more than just possible.

"The prices that we're paying at the pump today are, I think, going to be 'the good old days,' because others who watch this very closely forecast that we're going to be hitting $12 and $15 a gallon, and then, after that, when world oil production goes into decline, we're going to talk about rationing," Robert Hirsch, Management Information Services Senior Energy Advisor, said on CNBC's "Squawk Box." "In other words, not only are we going to be paying high prices and have considerable economic problems, but in addition to that, we're not going to be able to get the fuel when we want it."

Hirsch argued that the maximum in world oil production has already been hit. "The idea is that [world oil production] would hit a sharp peak and then drop off, and what's happened is, we've hit a plateau in world oil production, and that plateau has been ongoing since about the middle of 2004," he said. Those who argue that new technology and new types of energy will solve the problem aren't on solid ground, Hirsch suggested. "There's no single thing that's going to solve this problem, because it's as massive as one can possibly imagine.,"

Hirsch later told the Business & Media Institute that the $12-$15 a gallon wasn’t his prediction, but that he was citing Charles T. Maxwell, described as the “Dean of Oil Analysts” and the senior energy analyst at Weeden & Company, says Jeff Poor of BMI. "Still, Hirsch admitted the high price was inevitable in his view," reports Poor.

“I don’t attempt to predict oil prices because it’s been impossible in the past,” Hirsch said to Poor in an e-mail. “We’re into a new era now, and over the next roughly five years the trend will be up significantly. However, there may be dips and bumps that no one can forecast; I wouldn’t be at all surprised. To me the multi-year upswing is inevitable.”

LA Car.com - The Cars and Culture of Southern California Magazine & Directory - BACK SEAT DRIVING - MAY 2008

[Ailu]

When I was a teenager (many moons ago) I remember asking my teacher in high school, if we were using that much oil, what was the world going to do when it ran out? He laughed and said that's not even a possibility. It would take thousands upon thousands of years to run out of oil, and by then, technology would make the need for it obsolete. I kept hearing that same mantra on news shows as well, through the years. But I just could never wrap my head around the supposed logic.

Interestingly, I once met an old mountain man who told me he supposed the oil in the ground was a lubricant for the tectonic plates of the earth, and that pumping all that oil out was the equivalent of running an automobile without oil. The engine would shudder and overheat. He said if that's indeed so, we're likely to see an increase in earthquakes and/or volcano eruptions in the coming years. I always found that thought fascinating.

[PriusSport]

The price of oil right now is artificially high due to overspeculation in oil futures. That has been pretty well documented recently. Energy prices will not be allowed to go much higher before the government steps in, as they are about to do re: oil futures.
There is no way oil will get too much higher, as it will just price itself out of the energy business.

[daniel]

Best-case scenario: Price of gas goes up, and President X puts us on a crash program to build alternative-energy infrastructure, and by the time gas hits around $10 a gallon the alternatives are abundant enough to meet the need. Petroleum continues to be ever more expensive, but it's used exclusively as a feedstock for the chemical industry, where the high value of the products justifies the cost of producing the oil.

Worst-case scenario: President Y continues business as usual, and when the price of energy becomes unsupportable, our entire economic and industrial system collapses. There's chaos in the streets, rioting, food supplies run out, open warfare, and 97% of the population starves to death. The other 3% dies more slowly from disease caused by the lack of clean water as the water treatment plants cease functioning.

Middle ground: President Z addresses the energy crisis by building lots of nuclear power plants which supply electricity for local transportation and produce synthetic fuels for applications where electricity does not work. The good times of cheap energy are over, standard of living slips to about what it was before WW I, but the economy and industry limp along for a generation, until all those nuclear plants are old enough and decrepit enough that they start to melt down and cover the Earth with radioactivity and 99.9% of the population dies and the remaining 1% evolve back into cockroaches.

[Note: My first draft of this named the candidates I associated with each of the above scenarios. But in order to avoid a political digression and deportation of this thread to FHOPol, I have deleted references to specific candidates. Please, lets keep this thread about energy, and not about which candidates might push which policies.]

[eagle33199]

Originally Posted by PriusSport

There is no way oil will get too much higher, as it will just price itself out of the energy business.

And at what price point will that be? At what price point will people start biking 30 miles to work every day? Revert to horse-drawn carriages? Stop flying cross country/internationally and instead spending days driving or taking a boat? At what price point to the hundreds of millions of cars in the US suddenly, magically disappear or turn into EV's?

You can't "price out of the business" when you are the one and only existing solution. For a great many Americans, driving to work is their only option - they live too far from their jobs and our mass transportation is too crappy and underfunded for anything else. They may complain about the cost of gas, but in the end they'll spend $10 or 15$ a gallon in order to get to work and make $10 an hour for 8 hours a day... after all, they'll still come out ahead at the end of the day. And they really don't have a choice.

Instead, what we'll most likely see is a rather interesting housing market in the near term. Prices in the suburbs will continue to drop as gas prices increase, while prices in the cities will soar to untold heights. But in the end the apartments in the cities are only so big...

[daniel]

What could conceivably happen (worst-case scenario) is that energy becomes so expensive that transportation in all its forms (commuting to work, bringing goods and services to market, etc.) eats up so much of the budget of middle-class households that the economy collapses.

But if the cost of energy rises slowly enough, we might have time to invest in alternative energy sources. And if we get a government that is not totally psychotic we could abandon our efforts to be the world's master and divert the considerable cost of a bloated military into the conversion to sustainable energy.

Imagine what we could accomplish if all of the engineers and scientists presently working on developing and building ever-more destructive weapons, and all the money invested in that quest, were to be applied instead to sustainable energy! And if we then used the labor power of our soldiers and the money now wasted supplying them with equipment, to build the necessary infrastructure to run our industry and our cars and trucks without destroying the climate.

I don't see any politician on the horizon likely to do that, so my only hope is that the house of cards does not collapse until I die of natural causes. But the younger you are, the harder it is to cling to such a cynical hope.

[PriusSport]

Originally Posted by eagle33199

And at what price point will that be? At what price point will people start biking 30 miles to work every day? Revert to horse-drawn carriages? Stop flying cross country/internationally and instead spending days driving or taking a boat? At what price point to the hundreds of millions of cars in the US suddenly, magically disappear or turn into EV's?

It has already started. And it's going full blast right now. Just wait a year or two. No need for horses. It's the 21st century. The technology is there, or will be there shortly--or we won't survive.

[Scummer]

I actually enjoy riding the 30 miles by bicycle to work But then, I'm most likely in the minority.

[Fibb222]

Originally Posted by Scummer

I actually enjoy riding the 30 miles by bicycle to work But then, I'm most likely in the minority.

I like my 38 km bicycle commute too but I cheat with one of these Electric bike, electric power bikes, electric bike kit & electric bike motor hub manufacturer - BionX

[daniel]

People who bicycle long distances are healthier. Healthier people enjoy life more. Unfortunately, bicycling is a skill I never learned as a child, and therefore cannot do it safely in traffic. If this were a civilized nation, we'd have bicycle paths throughout our cities, entirely separate from car roads, so that anybody could bicycle anywhere within the distance their fitness level allowed. If I didn't have to share the road with cars driven by people talking on cell phones, I'd get a trike. (That is, a human-powered trike. My Xebra is a trike, but that's a horse of another color.) A friend of mine has a trike. But he only uses it for exercise, on a recreational trail, not for transportation. With the maniacs on our streets, it would be suicide to ride it on the street.