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Gas at $12 Per Gallon? This Guy’s Full of Crap!
By JLP | May 21, 2008
From an article I found on Drudge Report comes this hogwash:
“[T]he 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 per gallon,” Hirsch said. “And then, after that, when oil – world oil production goes into decline, we’re going to talk about rationing. 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.”
I’m starting to think that these forecasters are making money by scaring the crap out of people. I realize that supply and demand play a role in all this but I still think that markets are being manipulated by all this talk.
I must say, it’s a scary thought. At $12 per gallon, it would cost me $215 to fill up our Rendezvous.
Topics: Cars |
May 21st, 2008 at 6:37 pm
And how is $12/gal bad?
May 21st, 2008 at 6:59 pm
“And how is $12/gal bad?”
Seriously?
May 21st, 2008 at 7:44 pm
Seriously?
Nothing if you like riding horses.
May 21st, 2008 at 7:59 pm
Well I would think we would see $12 a gallon in 20 years. Short term prices are high, but I don’t think it will last.
May 21st, 2008 at 8:34 pm
Must be an investor in oil. I have noticed that some say stuff to get values to rise.
May 21st, 2008 at 8:40 pm
While it is certainly possible that gas could get that expensive, the reality of the matter is that governments around the globe, OPEC, and anyone else connected to the oil/gas industry wouldn’t let it happen. At least not in any short amount of time.
A rapid increase of 200-300% in the span of even a few years would bring the global economy to a halt. It is easy to conclude that the high prices only affect those who fill up their gas guzzling vehicles, but the world runs on oil and gas far beyond that of Joe Six-Pack driving to and from work.
With so much at stake, even if the price of crude begins to get out of control, measures would be taken to ease the the pain at the pump. Sure, prices would increase, but it won’t be as drastic as this guy is predicting.
Plus, he is saying that $4/gal is going to be thought of as the “good ol’ days.” Really? What a crock of crap. I remember filling up for 95 cents or less a gallon just 12-15 years ago. And look where we are now. $4 a gallon is a far cry from those good ol’ days. That is a 4x increase in a little over a decade, yet people are still driving their cars and plugging along, regardless of how bad the news makes it seem.
May 21st, 2008 at 9:45 pm
Welcome to peak oil.
$4 is cheap. Start adjusting now or it will be worse later.
May 21st, 2008 at 10:07 pm
MBH,
I think peak oil is either a myth or is way overblown.
May 21st, 2008 at 11:03 pm
Petrol just hit $6AUS a gallon ($1.60AUS a litre)here in Australia yesterday, I don’t know what you guys are complaining about really.
Considering our dollar is almost at parity with the greenback these days, you’re not doing it tough at all.
May 21st, 2008 at 11:29 pm
hmm.. jeremy … us crude oil was about $40 per barrel 3 years ag0 now it is floating at 120-30 per barrel. That’s a 300% increase but the global economy hasn’t halted, perhaps slowed abit, but halted, not really.
May 22nd, 2008 at 12:50 am
Well Boone Pickens did say oil would hit $150/barrel this summer. It hit around $134 today. But $12/gallon of gas is a bit extreme. I have to go now…the sky is falling.
May 22nd, 2008 at 12:59 am
I highly doubt the price of gasoline will hit 12 bucks a gallon as quickly as this clown is predicting. They wont let that happen. Now, the environmental wacko’s would LOVE to see this happen but the oil big wigs wont. Not if they actually want to SELL any of it. @ 12 bucks a gallon in a very short time they would be effectively sealing they’re own doom. This oil deal is simply nothing more than a bubble, just like the tech stock mess and housing/credit crunch mess before. The same speculators that blew up tech stocks, and slammed the housing/credit markets in to the side of a mountain now are seeing a big opportunity in oil and other commodities, and doing the same thing here once again. The biggest difference I see in this time around is with THIS bubble is the effect to the economy and consumer is the reverse of the last two, the negative side is being seen as the bubble inflates and relief will come once the bubble bursts unlike the tech disaster and housing/credit “train wreck”. The price is only going to go so high before the market will no longer support the artificial ballooning of the prices and all it takes is the Fed to start cranking up interest rates, and the environmental wackos to allow more drilling in ANWR, off our coasts and in the Rockies. Once these two things happen, the price of oil will probably free fall. The news media is also helping push this disaster along with the rest of the hype of the economic “doom” we are in. Most of the problems in this economy right now are being fueled by fear from what people keep seeing on the news. Once this commodity mess cools off and people relax a little, and begin to feel a little more confident, The economy will begin to boom again. The sad thing about this deal is most of it is being politically driven trying to influence the outcome of the presidental election at the end of this year. Scare the hell out of the people, promise to fix all thier problems and reap the rewards come November.
May 22nd, 2008 at 5:43 am
Some still reads the drudge report???
No one can forecast this stuff exactly, but given the current fundamentals, $12/gal seems unlikely in the immediate future.
May 22nd, 2008 at 8:21 am
Chad, if we do start opening up fields in Rockies and such, that will still takes years to gain anything from that, the industry moves slow. Also, the oil companies are still happy right now, and OPEC can still have too much control. If we start drilling they cut shipments, prices stay the same. I agree that there is alot of media hype that is inflating things, but I don’t think it will ever go back down very much, that is not the way prices works for this. I am hopeful that we can see what you say, just skeptical.
May 22nd, 2008 at 8:26 am
Do a search for “Peak Oil” and read then read the book “The Long Emergency”.
The century of progress based on oil is pretty much over.
May 22nd, 2008 at 8:27 am
Do a search for “Peak Oil” and then read the book “The Long Emergency”.
The century of progress based on oil is pretty much over.
May 22nd, 2008 at 9:06 am
As oil production continues to decrease from a shortage of oil, more expensive technologies needed to reach what is available, and lakc of investment by oil countries, supply won’t be able to meet demand. Although $12/gal may not happen, you can’t expect oil to be around forever.
May 22nd, 2008 at 9:19 am
Maybe people should look at this objectively. Feel free to point out if I have assumed incorrectly or if you can think of other things to add to the list.
And no, I don’t specifically invest in oil.
Bad things:
-We will destroy ever national reserve trying to get more oil.
-Economy will have a rough ride switching to something like hydrogen (for turbine/int comb) or H20 for fuel cells.
-Oil countries now have no income, prepare for war.
Good things:
-Alternative fuels (renewable) will become economically feasible w/o gov’t subsidies.
New industry
-Global warming from Fossil Fuels…gone.
-We won’t be paying middle east countries massive amts of money. (see bad #3)
May 22nd, 2008 at 11:12 am
Kevin Phillips has a good book out now called Bad Money where he discusses amoung other things how oil is responsible for the rise of the US as the preemminent world power and how its decline will also signal our decline. It isn’t a doomsday book, but rather a look at why we won’t be as powerful and dominant as we’ve been in the past half century or so.
May 22nd, 2008 at 12:36 pm
There’s no way it will ever reach $12 - $15 a gallon. What an alarmist! Demand for gas would drop off well before it got that high, driving the price back down.
May 22nd, 2008 at 12:51 pm
I’m in England on business, and gas here is about 1.2 Pounds per liter, which works out to about $9.00 per gallon. Of course, it’s been expensive over here for years, although the latest increase amounted to about 60 cents per gallon over the course of less than two weeks. It may take a while for the US to get there, but we could see similar prices.
May 22nd, 2008 at 1:38 pm
It’s only a matter of time. How much time is the question.
May 22nd, 2008 at 1:54 pm
I don’t understand why people think he’s full of crap. In 1998, the average price of gasoline at the pump was about $1.00. So, in the past ten years, the price has quadrupled. Why is it unrealistic to assume that the price will quadruple again over the next ten years?
… And before you say that the price will drop again because demand will drop, consider what people would have thought if you’d predicted that gasoline would be $4.00 per gallon in 1998. I bet they’d have said, “No way! Demand would drop and the price would go back down!”
The problem is that we’re not the only consumers of oil. China’s demand is increasing significantly year over year. Even the American our demand drops, the price can stay high because demand is high in other parts of the world.
May 22nd, 2008 at 2:04 pm
To: All
Re: Gas prices, a retrospective
I was on active duty in the US Navy back in the early 1970’s. The ship I was on, a minesweeper, was based in Perth Amboy, New Jersey. I commuted from Cranbury. Gas was $.30/gal, yup, 30 cents.
Just had to share this.
Yours,
Bozo
May 22nd, 2008 at 2:46 pm
I am so sick of hearing what gas is in Europe. For one thing in England they don’t drive nearly as far as we do in the US. The other thing is unlike most of the US they have very good public transportation and their cities are closer together. Living in Michigan we have absolutely zero public transportation and have to drive quite a bit to get to work, etc. I would like someone to compare what someone in England pays in gas per week and what an American pays for gas per week. That would be the real comparison.
May 22nd, 2008 at 2:50 pm
Kevin,
That’s a good point.
We’re awfully spread out here in the US.
May 22nd, 2008 at 4:09 pm
“The other thing is unlike most of the US they have very good public transportation “.
One reason they have a good transportation system is BECAUSE of high energy costs. You’re sorta putting the cart before the horse.
I personally think our country would be much better off today if gas was always the equivelent of $10/Gallon.
May 22nd, 2008 at 4:51 pm
Give Pelosi, Feinstein, Durbin, Leahy a chance to nationalize big oil - then you will see excess profits evaporate, gas go to 15/gl , our living standard go to equal that of third world countries, and all worries about global warming will be over.
Long live Marx and Lenin
May 22nd, 2008 at 6:04 pm
He is correct, the only uncertainty is when. It will take some time to reach that, and the price could well dip between now and then, but even so costs already approach that in Europe. It is alarmist, but some people need to be shaken out of their complacency. Oil isn’t cheap, but it will seem so retrospect.
May 22nd, 2008 at 7:27 pm
we need to invest in different fuel types- ethanol for starters, Brazil did this during a gas crisis and now they have ethanol that is made from sugarcane. second, hydrogen is the future, quit complaining, when gas is $12, which it will be someday, we will drive hydrogen fuel cell cars-cheap fuel, expensive to build.
May 22nd, 2008 at 8:12 pm
Well, I remember when gas was .19 cents a gallon, back then I would have said that $4.00 a gallon was crap. How about $25 a gallon? W and his buddies in Texas are laughing all the way to the bank!
May 22nd, 2008 at 8:17 pm
The price of gas certainly is not ever going to go down. The only way to go is up and with the dollar sliding everday, gas is going to be a lot more expensive in the future than it is now.
May 22nd, 2008 at 8:36 pm
Rohrman,
Why must you turn this into a political issue?
Explain to me HOW EXACTLY the Bush administration is responsible for the price of oil.
If I remember correctly, it’s the Democrats that don’t want us to drill in the U.S.
May 22nd, 2008 at 8:43 pm
I know the gas price comparison of the UK to USA isn’t apples to apples, but what people fail to consider is the cost of this public transportation. It is no different than living in NYC or any other major metropolitan area with public transportation.
For instance, from what I recall, a monthly subway/bus pass in NYC is somewhere around 80-90 dollars. In London, depending on what zones you’re traveling from on the tube, you’re looking at somewhere around 10-30 BP per week (20-60 USD). Please correct me if I’m wrong, but I haven’t been to NYC or London in a few years, so I don’t know if things have changed.
But just as a comparison, I commute around 300 miles in my car each week. Even at $4/gal and my current MPG, I spend around 40-45 dollars a week for fuel. That is a bit more than what I’d pay for a monthly pass on the NYC subway, and possibly less than to get to and from work on London mass transit.
But, the best part is, my property taxes are almost nothing, I have a splendid view of a lake, and a nice lawn and garden that I couldn’t dream of having for the same cost as a similar place in a suburb of a major metro area.
So sure, living in NYC, London, LA, or any other major metro area, you may not need to drive a lot, or even need a car, but you’re going to more than pay for it in both the cost of public transportation, and obviously the cost of living itself.
It all evens out. If you are forced to drive a lot because you live far from your work in a city, chances are the extra you’re paying in gas would be offset equally, if not more by the costs associated with living closer to work. It is all a matter of balance and what you value. Some people dig living right in the heart of the action and pay a high price in terms of rent and constant use of public transportation, whereas others value the more secluded residence while spending more money driving to and from that location for work and entertainment. Pick your poison, because either way, you’re probably overspending on something for your decision.
May 22nd, 2008 at 11:58 pm
I think he’s right. It’s not a matter of if we hit prices that high, it’s a matter of when.
I also think if you were to graph prices on a chart, you’d be able to see the start of an exponential curve upward. Meaning that I think it’ll rise faster than we think.
I also think that it’s an excuse to say that Europe doesn’t have the distances we do in the US, hence we need cars whereas they are able to manage getting by on public transportation. We simply need to get over that mindset. We need to wake up and realize that we must come up with workable public transportation solutions to seriously curtail our dependence on cars. The better and faster we do that, the longer we’ll be able to have cars at all.
I for one, am not willing to see some absolutely beautiful Colorado wilderness (my state) or other wilderness destroyed just so a bunch of selfish Americans can keep driving gas-guzzling cars like its a birthright. Because that’s the sort of recovery operations we’re starting to face — ones that are destructive to beautiful places, not just some barren patch of the plains or desert.
I already put my money where my mouth is. I consume only a single tank (11.5 gallons) of gas a month, by limiting my driving. My city (Denver) has excellent public transportation and I make use of it on a daily basis to reduce my consumption of gasoline.
May 23rd, 2008 at 12:06 am
DB,
Although you may have access to public transportation, a lot of people do not. It would be extremely difficult for me and my wife to get our family of five to all the places they need to be by using public transportation.
I’m not making excuses for people but our entire infastructure is built on cheap energy prices. Yes, people have gone overboard with their giant SUVs and massive pickup trucks, but for the most part people are trying to make good choices.
I think it is great what you are doing but I think it is unrealistic to expect everyone else to do the same until all cities have adequate transportation.
I’m hoping it won’t ever get to that point.
May 23rd, 2008 at 11:00 am
Ignoring the political side, the whole idea of expanding oil drilling doesn’t make much sense. It takes more than a decade from deciding you want to search for oil to start getting oil out of the ground (usually takes about 15 years). So if we say yes to more drilling, it doesn’t solve our current problem, it just keeps people hoping that they can hold on to oil as an energy source for longer. This doesn’t even include the other indirect effects of futher oil exploration and use.
I’m sure new energy sources for vehicles will continue to come up. However, there is a growing focus on changing how we develop the land, and this will probably have a bigger impact in the long run. (To add to the alarmists, there are folks, The Atlantic Magazine, who say that modern suburbs nto near town centers will be the next slums by 2025, and there may be a 40% surplus of housing.)
May 23rd, 2008 at 4:58 pm
I would keep driving until oil hit about $15 …
Over $8 / gallon, the highways would be a dream - no traffic, quick commutes. Just about heaven.
Public transit in that scenario would be a nightmare: people crowding the buses and subways like rats. People would probably start sharing rides en masse too. We might also have a small problem with riots in major cities and a shut-down of commerce in general. An interesting future.
May 23rd, 2008 at 5:03 pm
The Top is Near.
1) Airlines cutting back on Flights, and less people traveling via Air. (Airlines use a HUGE amount of Fuel) - Anyone remember after 9/11 when the Airlines were not able to fly, Gas could be found at many stations for .75cents a Gallon.
2) My SUV to Car Ratio - (ok just general observation during Lunch time) - I used to see 5 SUV’s/VAN’s for every car during Lunch. Now I see 3 Cars for Every SUV. People are making Changes.
3) Despite Experts stating that we are still driving this Weekend, I am seeing that People are not driving far, and that they have changed their Plans. North Carolina Coastal Communities normally have many New Yorkers down at this time. According to Friends who work the Restaurants there in NC, they are at best 20% of normal.
All of these things add up to change, and while it will take a while to be reflected in the price of oil, it will happen. The Technicals on the chart already show overbought conditions, and a Topping in the chart parterns.
This is only a short term thing right now, but we still need to get off Oil, and make a move to Energy independence. Solar, Wind and Hybrids really need to researched and moved forward. Electric Vehicles that have the same range as a normal car are needed. I truly believe until we can resolve the Energy Equation that we will not be moving forward as a Country.
Also, our Government has done little to nothing to try to resolve this problem. We really need to vote all the current Congressmen and Women out of office, and get people in there who are not Power Hungry. Our Government no longer cares about the people. Just about Power for themselves.
May 26th, 2008 at 11:51 am
Here in Europe (Austria) we are paying around 9$ per gallon and the prices here are actually cheaper than for example in Germany. So its not that far away from the 12$ per gallon and guess what. We are still living
May 26th, 2008 at 6:36 pm
Don’t any of you ever step back and look at the whole picture ? Why does Europe have high priced gas ? Because of taxes. Their gas costs the same as ours, but they get taxed a lot more. Why does Europe have such a well developed public transportation system ? 1) Because they have so many people crammed together, they have no choice. 2) Because they have such tiny little streets in so many of their towns and cities, they have no choice. 3) Because they tax their gasoline and income so much, they have the money to pay for it. 4) Because they are so used to being told what to do or think or how to act, they go along with whatever they are told.
Why do we have gas going up so much ? Because we are willing to pay for it. Until we are not willing to pay the cost, all prices always go up on everything. Until we individually decide not to buy something, but to tell the seller “no thanks” and walk….we will pay more. We have nobody to blame but ourselves if we are gouged. I can’t stand big business, and I equally despise socialism, but I blame only myself for my actions. I found a job where we live at work and my wife drives less than a mile to her job. We could make a lot more by driving to bigger cities, but we made a choice to live with less and have less obligations. The quality of our family life has increased immensely, our time together is longer and better, and we don’t buy much gas. The government and the gas companies stay out of our pockets.
Call me “the Happy Republican in California”.
June 16th, 2008 at 3:24 am
Now lets think about this. According to http://en.wikipedia.org/wiki/Petroleum, the per capita energy consumption, oil equivalent (barrel/person/year) is:
United States 68.81
European Union 29.70
Japan 42.01
Switzerland 34.64
France 32.43
Germany 32.31
United Kingdom 30.18
Now, I have lived many years in each of these countries and feel that the standard of living is VERY similar in all of them.
Can anybody come up with a GOOD explanation why the US “needs” twice as much oil than others? Remember, this is per capita.
If the US would use the same amount as others, it would be energy independent
rg
June 16th, 2008 at 12:01 pm
RG,
I believe all those other countries are A LOT smaller than the U.S., which would make a difference in fuel consumption.
Our infrastucture has been built upon cheap fuel. Our cities are more spread out. Love or hate it, that’s just the way it is.