Is $8 Per Gallon on the Way?

[marmar]

from AlterNet's PEEK:



Is $8 Per Gallon on the Way?

Posted by Matt Stoller, Open Left at 3:28 PM on May 22, 2008.

As gas prices climb higher and higher, everyone feels the pinch.




Atrios makes the point: "$4 gas is annoying. $8 gas, if it happens, will be... different."


The Wall Street Journal has a piece out on the International Energy Agency substantially dropping its forecasts of global oil reserves. Joe Romm, an energy expert at the Center for American Progress, points to this study by the Bush Department of Energy on peak oil, in 2005, which says the following.

The world has never faced a problem like this. Without massive mitigation more than a decade before the fact, the problem will be pervasive and will not be temporary. Previous energy transitions (wood to coal and coal to oil) were gradual and evolutionary; oil peaking will be abrupt and revolutionary.

The public sort of gets the problem, without any explanation from elites or the press. Survey USA did a poll on gas prices, and found that 80% of respondents think that gas will rise to $5 a gallon before it drops to $3 a gallon. The good news is that only 34% of Americans say they have no mass transit options, while 15% say that mass transit is a convenient option. So there's lots of substituting away from driving with current infrastructure in place, and that's not even considering carpools and auto-centered ways to save energy. But the problem is not simply energy-related, and much of the peak oil doomsday pronouncers are allowing the real villains to get off scot-free. Here's the Cunning Realist, who has been pointing out the least-notices aspect of the story.

Last week, several indicators showed Fed-created liquidity at its highest level ever. Consequences: a new bout of dollar weakness, gold up about $70 in the past few weeks (are we "running out" of that too?) and of course oil at $130. And, most important for policymakers during an election year, a surging stock market (until Tuesday). While the Fed was doing its best imitation of Arthur Burns in '72, Bernanke, Paulson, and even Greenspan (not spending his days in a Venice gambling hall, apparently) all claimed that the worst of the credit crisis may be over. So why do the extraordinary measures continue? This madness is ripping the guts out of entire segments of society: wage earners, prudent savers, Social Security recipients and fixed-income retirees, independent truckers, mom and pop restaurants and retailers, the rural poor, long-distance middle class commuters -- basically anyone who doesn't own an oil well, corn field, or sit in front of a half-dozen trading screens in midtown Manhattan.

I was at an event put on by the New America foundation two nights ago with Senator Dick Durbin around globalization. Most of his speech focused on the link between globalization and carbon pricing. I asked him a question about economic statistics, considering that the real rate of inflation as per Kevin Phillips is between 6-9%, not the paltry 2% put out by various government agencies, and that unemployment is also goosed by not including prison populations and long-term unemployed. Durbin relayed a story about his winning campaign, in 1982, when he could wait until new unemployment numbers came out and issue a press release attacking his opponent. Today, he says, unemployment means nothing, the only statistic that matters to consumers is gas prices. And then he said he was praying that prices would come down.

It would probably be better if Congress did some real oversight on the Fed, peak oil, and gas prices.


http://www.alternet.org/blogs/peek/86225/

[DJ13]

1. I love how these "experts" throw around numbers ......

......but never stop to think through what their predictions would do to the economy.

They're shortsighted, just like the speculators who only think about increasing their personal profit without a care that their actions are doing real damage to the country they are citizens of.

[lakeguy]

6. we could stop and think about the fact that oil production

is not going to increase any more and is, in fact, decreasing. with increasing demand, suppliers can choose their own prices and some will go without. this is already happening in poorer countries.

what is short sighted is not preparing for a world without oil. we had our chance and passed on it. is it too late now? probably. but blaming the people who are making predictions is wrong. look in the mirror and ask why you still live in a country that seriously lags begind most other countries in the use of alternatives.

$8 gas is not a prediction, it is a gaurantee. so is $10 gas and $20 gas. when that happens is up to you and I, not big oil.

[margotb822]

21. Which is why we need alternative energy now

We can't leave it up to the oil companies. They're making too much money to actually care about alternative energy. But, the neo-cons are going to do the best they can to ensure that the profits from alternative energy stay with their cronies!

[1]

11. i agree with you...

what if it's $100?

what if it's $1,000,000?

yeah?

what if?

stfu and tell me your solution, mister "what if" fear monger...

[Mojorabbit]

15. I am not the person you are referencing

but I read the energy report years ago that stated we would need at least a decade to prepare and of course we haven't.
I think people will get creative in finding alternate means of getting around, that locally a mish mash of public transportation will be cobbled together, that the govt will ramp up biofuels. It won't be enough. I think the airlines will go kaput. Food prices will rise as the cost to ship it rises. Eventually part of a community's food will have to be grown locally. I think there will be a mishmash of ways to produce electricity but we won't have the coverage we do now.
I think we will drill everywhere there is even a hope of oil.
I think the military will have dibs on most of it.
It will be messy and I am not looking forward to the upheaval. Life will be interesting in the next few decades.

[jonestonesusa]

2. Thanks for the article - amazing and distirbing

We have a mountain to climb to deal with both the transportation and financial aspects of shrinking oil supplies. I hope we can all be grownups and deal with this.

[earth mom]

3. No-$10 gas is on the way.

:grr:

:argh:

:mad:

[opihimoimoi]

4. At some point...consumption will level off...resulting in some degree of stabilization

My feelings...it should be $5.00 to 6.50 range....Many many peeps will not be driving....only the rich and nearly rich....most non essential driving will drop...

[heidler1]

17. I agree and expect riots big time when it becomes obvious.

The best of the bad choices IMO is to lower the highway speed limit to 55 mph so as to remove the thrill factor from driving. If all within city driving was slowed to 35 or less small electric cars would be safe. The truth is people want a no pain fix and there isn't any.

[opihimoimoi]

19. Its time to pay the piper of wasting gas all these yerars......Heads Up, Backs to the Wall, we gatta

think our way forward outta this mess before its too late...

I don see them Pubs coming up with viable solutions....at all....

Jus wait till our crew gets in there...things will be brighter.....

[Arctic Dave]

5. It is more then just the doubling of gas.

I would guess that for every dollar rise in gas, the consumer will lose $3 dollars of purchasing power (Higher cost due to transportation of all the commodities that we use). $8.00 a gallon is the destruction of the US plain and simple. The US is at the cliff right now, I would say one more dollar and it all goes over.

[Double T]

7. YES, as our ENTIRE ECONOMY is on the way OUT!

The cheney secret energy policy formulated with the help from the criminals at enron results in exactly what has happened; bush/cheney taking care of their buddies in BIG OIL and ENERGY.

[Aviation Pro]

8. The goddamn problem is....

...the fact that these scumbags are making this a self-fulfilling prophecy. There is no demand that is being unmet, there is no shortage, there is only the greed of speculation driving up the prices of oil and gas.

[mach2]

9. How are the pundits more responsible for it than the consumers who buy the stuff?

I blame myself too...hell, I paid over 5 for jet-A last night. :eyes:

[Subdivisions]

20. "There is no demand that is being unmet," Oh, really?

Tell that to all those people in poorer nations that have been priced out of the oil market. I guess you'd find plenty of gas in Zimbabwe, Sudan, Darfur, Egypt,Nigeria, Haiti, Cuba, and a handful of other countries?

Sure, we don't have shortages here -- yet.

[lib2DaBone]

10. When will consumption level off?

I agree. I think $8 gas is not impossible.. it's probable. Saw a news item on the local 6 o'clock news. They interviewed some lady in the Sam's Club parking lot. Se was driving a big SUV. She said that $5 gas... "wasn't really a problem for her." I fell out of my chair! I quit driving when gas was $2.50. I wonder where these people are working that $5 gas is no problem? I want to know where she works so I can go there and apply.. I want a job like that!

[rdenney]

12. Fact: Diesel fuel is 5.00 per gallon right now!

[doc03]

13. Here we go again the Congress is having hearings

again, the Democrats blame the oil companies the Republicans blame environmentalists. NOTHING EVER GETS DONE!

[whistle]

14. Is $300 per barrel oil on the horizon and if yes what conditions will trigger it?

...The collusion and price manipulation will end when Bush/Cheney leave but the oil company monopoly will try to defend its control of supply and pricing to maximize profits

[ladjf]

16. I'm no expert. But, I don't think gasoline will reach $8 per gal.

Why? Because the parallel rise in diesel fuel cost for trucking and the airlines would put them out
of business. That is not acceptable to anyone including the oil cartels.

The threat of totally wrecking the U.S. economy simply for short term profit would cause those who control the price of oil to bring the prices back down to a barely sustainable level.

As militant as the U.S. already is, there is no doubt that the American Govt. would not hesitate to
"nationalize" middle East oil in any manner necessary to make it happen. Such a situation would please the right-winger, Republicans very much. They would feel justified in invading whoever they thought had enough oil.

Short of military action, the U.S. Govt. could decide to subsidize the airline and trucking with rebates on fuel. That could work for short term.

The real answer is to start an all out crash program to develop adequate supplies of energy from alternate sources. If we could replace as much as 15 to 20% of the oil demand the oil prices would plummet, the monopoly would have been broken, problem solved.

Wind technology is already on a cost par with coal fired generation. T.B.Pickens is investing 2 billion in will become the worlds largest wind farm. He's not doing that for his health. He is a money making machine and an oilman to boot.

Geothermal sources are rich with possibilities and are already in use in many parts of the world.

Solar generation is currently more expensive than conventional methods , but not that far off. Solar prices are dropping steadily.

Tidal and wave generation initiatives are happening worldwide.

There are plans to harness the current power of the Gulf Stream off the coast of Florida.

[rhett o rick]

18. You were warned, don't anger Cheney and the oil giants. Gas prices are what they say they are. nm