Priming the Pump for $20/Gal. Gas: Interview with Chris Steiner

By Lara Crigger

As you're filling up your tank this weekend, it'll be hard not to think about the cost. Back when gas was $4/gallon, many of us made seemingly radical changes to our lifestyle, cutting back how much we went out to eat, riding the subway more, even moving closer to work.

But $4 gas was only the tip of the iceberg, says Chris Steiner, author of the new book "$20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better" (Hachette Book Group, June 2009). According to Steiner, a staff writer at Forbes magazine, gas prices could top $20 per gallon soon - dramatically changing every aspect of life as we know it.

Recently, HAI's associate editor Lara Crigger sat down with Steiner to discuss why the Chinese will drive up gas prices, what's behind the death (and rebirth) of globalization, and why Wal-Mart is doomed to extinction.

Lara Crigger, associate editor, HardAssetsInvestor.com (Crigger): So tell us a little about "$20 Per Gallon."

Chris Steiner, author, "$20 Per Gallon" (Steiner): Simply put, the book is a thought experiment on what life would be like at higher gas prices. The chapters of the book are arranged by increasingly higher prices - Chapter $4, Chapter $6 and so on, up to Chapter $20 - and they address changes that happen at each level. Some changes happen gradually; it's not like you hit $12/gallon and boom, the suburbs disappear. But I pick critical inflection points for each event and describe what the future would be like as the price of oil marches up.

Crigger: In your book, you pinpoint the rising middle class in emerging markets, like China and India, as a key factor in higher gas prices (something Hal Sirkin also said when we interviewed him a few weeks ago). How do these new consumers affect gas prices?

Steiner: It's pretty simple: Right now, between the U.S., Europe and select parts of Asia, South America and Africa, there are about a billion people living what we would consider an "American lifestyle." By 2050, you're talking about 3 billion people living that lifestyle. China's middle class will actually be the largest by 2025; India's will be 10 times its current size.

Those people will need oil or some other form of energy. So even if American demand remained flat - or went down - you'd still see this giant mass of people joining our ranks, adding to demand.

For example: The U.S. has 750 cars for every thousand people. China has four. Even if China got to half of what we have, you're talking an additional two Americas worth of cars entering the world market.

Crigger: But as oil prices rise, won't that dampen these consumers' ability to keep purchasing oil, thus reducing this increasing demand somewhat?

Steiner: Certainly as the price goes up, I think you're going to have some demand destruction. That's something that's going to balance out over time.

But that being said, the changes the book forecasts are going to happen no matter what. Whether it happens at $20/gallon or $12, these things must happen in order for humankind to advance and stay on its current vector. Maybe we'll never see $20/gallon, per se, but the changes we portray - those are most certainly going to happen.

Crigger: Wouldn't the kind of higher gas prices you're talking about wreak havoc on our current commodities markets?

Steiner: I wouldn't call it havoc. We're not going to $10 overnight; it's going to be gradual, not this anarchy that some people have projected, like the pump just turns off. It will be a gradual whittling of supply that will give us a chance to adjust. It will give our cities a chance to morph and our country a chance to change how it lives life day to day.

Crigger: But it sounds like much higher gas prices would drastically change the ways our markets currently function. The Internet made it possible for a grower in Brazil or China to find and ship to buyers all over the world, but under a situation of $20/gallon gas, that ends.

Steiner: Certainly I think you'd see an ebbing in the effects of globalization, although I don't think globalization will go away totally. Still, as far as shipping iron ore from Minnesota to China, that's going to be a pretty tall order in the future.

I think this will just lead us to value our resources more, leading to more recycling, local materials, better designs. The free markets will prove their effectiveness here. There are levels of efficiency that we haven't yet reached.

Crigger: So the days of China importing insane quantities of commodities from all over the world will be over, right?

Steiner: They'll have to adapt. There are materials close to them: Russia's eastern flank is full of raw materials that haven't been fully exposed. China will still import materials, I'm sure, but things will get more expensive, and they'll just find ways to be more efficient.

Crigger: Won't the return to more localized economies devastate some of the emerging markets that export lots of commodities, like Brazil?

Steiner: Going strictly off oil prices, people strictly exporting cheap, bulky, raw materials certainly won't be helped. But eventually you'll see alternatives. At some point in the future, decades maybe, I think globalization will make a slight comeback, as new technologies allow us to transport things at lower cost again. Whether it's through biofuels or nuclear-powered ships or electric, whatever, there may be a breakthrough when that happens.

Crigger: Speaking of alternative energy, I'll ask the obvious question: How does $20/gallon gas impact renewable energy?

Steiner: I think the future of renewable energies is obviously very bright, and very much linked to the price of gas. Obviously everyone was feeling really good about these when gas was $4.50 across the country. Interest as far as venture capitalists has ebbed, but it'll pick up again. I think we all realize that the price of gas won't stay at $3 forever.

But as far as reaching critical mass, that takes time. It will take decades, not years, for things to change. Even if we put a million electric vehicles on the road every year, which is an insane amount, it would still take 100 years to replace our fleet. We're going to rely on oil for a long time to come.

Crigger: So even as alternative energy sources become viable, we'll still see these effects you talk about. Basically, the electric car can't stop the mass exodus from the suburbs.

Steiner: Yes. [Alternative energy] will be able to pick up some of the slack, but not all of it. For one, we can't get enough electric cars on the streets fast enough; and two, they're going to be expensive. You're not going to be able to pick up an electric car for $15,000. Maybe you will eventually, but not in the next decade. Besides, I think people will take the path of least resistance: Rather than cut back in all facets of their life to afford an electric car, they'll just move somewhere they can walk.

Some suburbs will remain quite tenable situations, certainly ones where there are lots of stores and they're close to trains and so on. But I think the far-out ones, where you're driving five miles to get milk - you don't even have sidewalks in half these places - these are the places I wouldn't want to own a house in the future.

Crigger: Do you think developed markets like the U.S. will remain the leaders in renewable energy development? Or will it fall to the emerging markets, which have this incredible new middle class demand?

Steiner: I think that remains to be seen. I certainly hope the United States takes the lead, but I think China now looks like they're putting their leg out first, as far as getting electric cars out and as a major part of their infrastructure. They're able to effect mass change slightly easier than we are, partly because of the structure of their government. But I don't know who's going to take the lead.

Crigger: As gas prices rise, you argue that the huge big-box retailers, like Wal-Mart, will die off. Why?

Steiner: Right now, Wal-Mart's (WMT) model is strictly untenable in a future with gas over $10 per gallon. They really depend on globalization; Wal-Mart has 6,000 suppliers, 80% of whom are in China. More than anyone else, Wal-Mart milks this globalized world and giant container ships; that's how they're able to offer so many things at so cheap a price. But when your economies get too localized, Wal-Mart really loses their advantage.

Crigger: So it's not that demand for cheap goods will dry up. It's that the cost of getting goods to consumers will shoot through the roof.

Steiner: Right. Wal-Mart is built on gasoline. Even after they bring in the goods from China, they have 7,000 trucks in the United States to crank these things to 150 different distribution centers, and then the trucks take them from these distribution centers to the different Wal-Marts. As the price of gas rises, they're going to lose their advantage.

Plus, most of these Wal-Marts are built not in walkable neighborhoods, but in the fringes of places. That's where Wal-Mart got cheap land, and that's where their clients are. But as the price of gas rises, we're going to live in smaller homes; we're going to live in walkable communities. Certainly some people will have giant houses; that's never going to go away. But most of us are not going to have McMansions anymore; we're not going to have room for lots of junk. What Wal-Mart sells is a lot of junk, and we won't need it.

Crigger: All this being said, in the book, you take an optimistic - even hopeful - tone, suggesting that rising gas prices could actually be a good thing in the long run.

Steiner: That's exactly the point of the book. Certainly there will be some changes that not everybody's going to like, but overall you're going to see a healthier America. We're going to use fewer resources because we'll be forced to, but that's going to result in a bevy of positive changes: more local food, less pollution, better mass transit, less obesity. It's amazing how many changes filter out from the price of gas. And that's not just me rubbing my chin and thinking that might happen; there's been a lot of academic work linking the price of gas to other effects in society. Higher gas prices will affect everything from the way people go out to eat, where they live, how much they walk, how much they use mass transport - everything.

Comments

[Davewmart:]

The future laid out here is one where change is pretty incremental resulting from a more or less smooth rise in petrol prices.
In fact, as supplies peak you get a saw-tooth effect, with sharp rises, most recently to $147/bbl. then a crash as it kills the economy.
The low prices result in too little exploration and development, making the next spike far worse.
Oil exploration has fallen 57% in Britain's North Sea.
We are in for a very rough ride.

Jul 10 04:37 PM

[FDNY RET:]

It's a what's it worth to you world. As soon as our latest press harvest of dollars enters circulation--presto $5 gas--but in .50 cent dollars.

What comes first?, monetary devaluation or tangible commodities value increase=inflation??.

Whatever turns the future route takes, a dashboard GPS won't assure your arrival and an awful lot of people on the fringes will be seriously hurt.

This monetary blizzard is going to typify economic clue-less-ness in our time, and be long taught as the Hallmark of leadership foolishness as inherent risk in a non sophisticated democracy.

Jul 10 04:58 PM

[enviro111:]

I haven't read the book, but I would like to read it.

It sounds like a reasonable futuristic book and laid out in an interesting format. No one has a crystal ball after all and can make perfect predictions.

I suspect the change in gasoline prices will not be smooth or painless - unless the government raises the prices $2/gal every year for the next ten years. I find this scenario unlikely.

The interview didn't talk of Peak Oil which I firmly believe is real and close at hand (CY 2010). Exportable oil will drop even faster than oil production. The oil producers will keep their own oil and export less and less. China and India will be pinched for oil. The USA will be hardest hit.

Currently, the USA uses about 20 million bbls per day and produces about 5 million bbls per day. This implies that we import about 15 million bbls per day. this varies according to season and recession/boom. Suppose that half of this were gradually removed from the USA and we had to get along on 12.5 million bbls per day??

Jul 10 05:00 PM

[scrambledyegs:]

Thomas Malthus and James Kunstler would probably agree that we are going to reach $20/gallon for gasoline in the near future. The problem with making predictions like this is that there a more variables involved than anyone can really take into consideration coupled with the fact that humans are very inventive and adaptable. New technologies can be deployed much faster today compared to 50 or 25 years ago; especially with the right amount of financial incentive.

Yes, things are going to change because they always do but I think people are still going to have cars (probably not gasoline powered) and lots of people will live in outer suburbs (maybe not in 5,000 s.f. mcmansions) and that by the time gasoline reaches $20/gallon it is not going to be the world's predominant transportation fuel.

Jul 10 06:26 PM

[whidbey:]

The time frame in this analysis is long range and by no means inevitable given the technology in the mill and the political machinations now working.

I think the author has overlooked the global inflationary effects that do what was suggested above where dollars are depreciated making goods less costly. Inflation adjusted 20/gal oil might well be 80/gal. We need to talk in real or nominal terms to avoid confusion.

What was not said is whether the US will drill for its oil before it becomes passe. Maybe teleporting is next?

Jul 10 06:54 PM

[John Bowman:]

"But most of us are not going to have McMansions anymore; we're not going to have room for lots of junk. What Wal-Mart sells is a lot of junk, and we won't need it."

Very funny...however, isn't that what our economy is based on? What will replace it?

Jul 10 08:20 PM

[User 357705:]

Nothing will replace it. That's the point.


On Jul 10 08:20 PM John Bowman wrote:

> "But most of us are not going to have McMansions anymore; we're not
> going to have room for lots of junk. What Wal-Mart sells is a lot
> of junk, and we won't need it."
>
> Very funny...however, isn't that what our economy is based on? What
> will replace it?

Jul 10 08:27 PM

[Robert.from.Ct:]

NO ONE CAN PREDICT THE FUTURE>>>>... THAT SIMPLE....Why write a book if you can predict the future?....because sheeple will buy your book and you can laugh all the way to the bank.....WAKE UP PEOPLE.......disclosur... PRPFX......the mutual fund that lets me sleep at night and is ready for ANY kind of market........its too dull for this crowd because most folks here are trying to predict the next hot stock or sector.....seems like alot of folks here have crystal balls.......Happy investing and Good Luck

Jul 10 08:30 PM

[TinyTim:]

Interesting article and comments, especially the prognosis for Walmart, which I agree with.

It's hard to imagine an exodus from the suburbs, even in an area with essentially no mass/public transportation. In my area, the first light rail was just finished after many battles. We are awaiting the results.

I think it's safe to say that development will be driven by transportation. The data has shown this for years with highways and trains. Interesting that the buzz today is about oil speculation and price volatility. Knowing the oil price is not necessarily monotonically increasing, the amount of volatility certainly seems to have a large impact on development of alternatives. Seems like what Milton Friedman used to say about interest rates,: it's more important for them to be predictable.

After reading this, it seems insane that they are about to spend $2.7B to build a 20 mile freeway near here.

Jul 10 09:53 PM

[dondon:]

Mexico in the next few years will import oil rather than export it to us because of declining fields. Canada, though, has vast reserves of oil sands that are both dirty and expensive to extract at today's prices. The US also has vast reserves locked away both onshore and off. Last year when oil hit $147 even those opposed to new drilling in the US gave way to the drill, baby, drill folks. With more diesel, hybrid, electric and even ethanol on the way, I feel the only way we get to $20gal by is through taxes.

Jul 10 09:55 PM

[QUINCE:]

Simplistic, to say the least. The author will make money selling the book at Target, Wal-Mart etc. I don't see the point in discussing this "Life after people" Discovery channel style here.

Jul 10 10:06 PM

[mesoclone:]

Whenever you see "alternative energy" given a big play, get suspicious. Most of what is called "alternative energy" is not practical, even at $20/gal gas. It is either too unreliable (solar, wind) or too low density (biomass, solar, wind). If gas rises much over $4/gal (2009 dollars), the political demand for cheaper energy will destroy the roadblocks to still abundant fossil fuels - natural gas, coal, coal gassification to produce gasoline, etc. It might even be enough to break the roadblocks in the US to nuclear power.

If we do see $20/gal any time in the next 10 years, it will be a complete economic catastrophe, as our infrastructure simply cannot adjust quickly enough and the consequence will be radically reduced economic activity.

Jul 11 12:40 AM

[cameroni:]

There is no question and no doubting that the nominal price of gas and oil will rise in the future. Whenever there is competition for a scarce and declining resource that is essential to the survival of societies the first outcome is price increases as opposing groups vie for a share of the resource. The second outcome is a war to end the competition.

There is insufficient oil reserves to power all the worlds demands in the future. There will be another great war because countries do not ever capitulate on their own survival.

Jul 11 12:59 AM

[Egg:]

$20 gallon gas and you're worried about Wal-Mart surviving?

Plssssss....

Wal-Mart would do just fine. People would only shop two days or so per month or so, but guess where they would be shopping for one-stop shopping? Worry more about Amazon. They'd go under with the shipping surplus charges alone. Target, gone. Kohl's, gone. Macy's, Penney's, Kroger's, all gone. Mom & Pop stores, stay gone.

Jul 11 01:22 AM

[sethmcs:]

At $100 per gallon we go back to hunting and gathering society.

Jul 11 01:35 AM

[Randie:]

It's an interesting concept, that at about $10/gallon for gas Walmart will cave. The book fails to consider the possibility that high mileage vehicles will neutralize high gas prices, some vehicles will be all electric. If the cost of new vehicles comes down, then surely the new electric vehicles will neutralize gas prices.

Really, what could happen is that land developers will realize this gas issue, and seekout to purchase properties near Walmarts & develop those properties with high density condo/apts. This is not been considered in the book. Walmart always has the upper hand when gas prices go up. This book is incorrect in its' assumptions.

Jul 11 02:02 AM

[Anthony B:]

"Really, what could happen is that land developers will realize this gas issue, and seekout to purchase properties near Walmarts & develop those properties with high density condo/apts." -- haha, that would be the day

I thought people considered where to live based on their work rather than their one-stop shopping destination. I guess when everyone's job is to shop...

Jul 11 02:40 AM

[MudEngineer:]

This talk about electric cars amazes me! You all act like electricity is free and endless. All electricity is generated from hydrocarbon energy from either oil, natural gas or coal; with the exception of nuclear power and a miniscule amounts of wind turbine generation and solar. It takes oil energy to build the electric cars, deliver them to the selling point and oil to build the recharging stations which do not yet exist. It takes oil to manufacture, deliver and erect the wind generators, solar panels and geothermal stations.

If you want to create lots of green, you had better get back to drilling for more oil and damn soon! Existing oil wells are now depleting at 9% per year, which is double that of only 3 years ago.


On Jul 11 02:02 AM Randie wrote:

> It's an interesting concept, that at about $10/gallon for gas Walmart
> will cave. The book fails to consider the possibility that high
> mileage vehicles will neutralize high gas prices, some vehicles will
> be all electric. If the cost of new vehicles comes down, then surely
> the new electric vehicles will neutralize gas prices.
>
> Really, what could happen is that land developers will realize this
> gas issue, and seekout to purchase properties near Walmarts &
> develop those properties with high density condo/apts. This is not
> been considered in the book. Walmart always has the upper hand when
> gas prices go up. This book is incorrect in its' assumptions.

Jul 11 02:40 AM

[johngonole:]

If markets remain free they will quickly adapt to the changing energy situation. Its not like walmarts competitors are in any different position. More expensive energy will result in advances in how we build our homes, cars, toys, TV's etc... Sources of energy will change. More people will work at home. Suberbs will survive. The adaptation in countries with walkable communities will gain a competitive advantage but who knows when the next cheap energy breakthrough might be made. Higher prices will spark innovation. High density cities suck really! Lower population would solve most of our ills.

On the other hand if government socialism tries to cure all of the the high energy cost ills beared by society....look out. Economies could be depressed world over for decades with high unemployment. For example free market economies would see population growth stop or even contract. Countries like China and emerging economies may find the cost of adaptation to be less. Still I think those with free markets will be able to adapt quickly and our lifestyles might not change that much. I could still live in the suberps but I might have to use a motorcycle to get to work. Free markets don't exist anywhere really much anymore. Even here in the US every baby born becomes the burden of the whole society. Free markets must be used to prevent overpopulations.

In fact high energy cost and over population go hand in hand. Artificial low energy prices (set by govts) results in too much population and/or energy shortages.

Jul 11 02:58 AM

[Davewmart:]

There seem to be some misconceptions about time-scales here.
To take them in no particular order, changing to a new energy source, wood to coal, coal to oil, has typically taken around 40 years.
Some are arguing that the pace of change is faster now.
Well, to introduce new supplies involves an immensely complicated supply chain, every bit of which is going to need new equipment.
We also have the renewables illusion to overcome.
Renewables can help, but their diffuse nature and intense use of resources like concrete, steel and neodynium mean that they can't do the whole job.
If you don't want to burn fossil fuels, that means nuclear, but the risks have been grossly exaggerated and costs inflated by absurd and conflicting regulation.
Running electric cars only takes a fraction as much energy as oil-burners, as they are much more efficient, and all the studies that have been done indicate that strain on the grid will be minimal.
The catch is though that the technology is immature, and even after fuller development will take an age to replace ICE cars, as the fleet is very large.
Broadly you are talking about severe shortages hitting in the 2015 timeframe, and rolling out measures on any scale taking at least another 10 years, in the 2025 plus time frame.
It comes down to a severe and long-lasting impact on people's lifestyles.
Of the large developed countries France due to it's high proportion of nuclear electricity is perhaps best placed to whether the storm.
The US seems likeliest to use a lot more natural gas.

Jul 11 03:09 AM

[Maxe Paul:]

Sounds like complete garbage to me for the foreseeable future, i certainly would not waste my gas money buying the book!

Oil is heading back to under $30 eventually, so $20 a gallon is laughable. It amazes me that people write entire books with such garbage predictions, my guess is he started (the book) when oil was $140 plus.

My prediction is that this will not be a best seller.

Jul 11 03:43 AM

[expat in China:]

I don't thinks so!

There is a world changing event coming and gasoline will be a thing of the past. search this "geely electic car" this is one of many developments not controlled by big oil.

it is coming faster than you can "oh shit Mohammad now what"

Jul 11 03:55 AM

[Mafeking:]

Yup, this time its different.

Jul 11 04:34 AM

[MJJP:]

If gas goes to $20 a gallon it won't be for long.In fact changes will have been made far sooner. I am sure the book is a good read but I would hardly call it non fiction. There is oil and there is gas but it will take more effort to get it out. Yes costs will rise but the 20 part is a stretch as the economy simply won't absorb it. It's an armageddon scenario. Alternate energy will start to make inroads and don't compare our lack of planning as a reflection for the rest of the world. We sit on enough natural gas right now to supply all our needs for 500 years. The rest of the world is a universe ahead of us on natural gas fueled cars.
Let me also address the opening statement in the article about how "many" of us changed our driving, stopped riding the subway(why) moved closer to work etc. WHERE? Get out during the day , people have stopped driving not because of gas prices($2.45 per gallon) they have stopped because they haven't anything to do. No jobs equals no money. Moved closer to work? Check out the real estate ads. They are packed . Most of the activity in the mortgage market is for refinance not new builds or resales.

Jul 11 06:44 AM

[TradingHelp...:]

Most predictions come true given enough time. It's isn't the price that matters, it's how quickly we get there. 3 years or 30 years. I remember 10 years ago the proliferation of "Dow 40,000" books and articles. I am not holding my breath for that one though one day it may come true.

Enjoyable article though, thanks.

Jul 11 08:00 AM

[john s. gordon:]

when i was in china i saw lots of 3-wheel bicycles with pickup truck bodies built into the rear. that's how we will get back & forth to the walmart.
> jack

Jul 11 08:21 AM

[john s. gordon:]

long before gasoline gets to 20 the chinese will be making it from coal (they have lots of coal & can import more). having a centrally planned economy they can do anything they want.
in 1980 we had a liquid transportation fuels from coal program in the u.s.a, it wa cancelled in 1981 for political reasons (the houston oil millionaires didn't want it).
> jack

Jul 11 08:24 AM

[perki's:]

The Walmart speculation is interesting.

However, the distribution model Walmart uses is quite fuel efficient. The goods are going to have to get from manufacturer to the consumer somehow, and Walmarts regional distribution model makes excellent use of rail transportation, full truckloads when on-truck etc.

Frankly, I am hard pressed to think of a more efficient model.

Note that Walmart's large truck fleet could likely be switched to other fuels ( Natural Gas?) in equipment replacement cycles, as fuel prices rise.

Jul 11 09:02 AM

[iggyDalrymple:]

WalMart will die? Don't think so. They're quite innovative. Been experimenting with neighborhood stores for years. If WalMart needs to tap the author's mind, they can buy his book or hire him as a greeter.

Jul 11 09:10 AM

[LaughingTrader:]

This sounds to me like another book written by a zealot. I'm finding that there are a lot of people who want to tell the rest of us how to live. They mock our choices of where we live, the homes and vehicles we buy, our family sizes, and our "consumerism". To justify these criticisms they are constantly spewing contrived/predictive books, movies and pseudo-documentaries. For some reason that I cannot fathom it really bothers them that people are living better, and longer, than they ever have in history. The human race is thriving as never before. Why does this upset them so?

As for the author's self-serving "predictions", I agree with another poster above who said nobody can predict the future. However, I will go out on a limb and suggest that the patterns evident in the past thousand years of human behavior is a pretty good predictor of the next 100 years. And those patterns include tremendous technological advancements in agriculture, transportation, energy and medicine. All of these advances improve the human condition and expand (or support the expansion of) the population of the planet. I am not one to bet against these trends continuing.

Will gas hit $20/gallon? Of course it will! And if $20/gallon does not allow us to continue to improve (nevermind maintain) our quality of life, or the quality of our children's lives, we will develop alternatives that do allow it. And I don't believe those alternatives include moving en masse back into crowded, crime-infested cities because that represents a step backwards. Instead, I believe we will develop new technologies that will allow the human race to further expand and flourish. They will allow us to live life on our terms in the manner WE choose. And in reaction to this, the zealots will cringe and rage and continue to try and scare us all into behaving the way they want us to behave. And so the cycle continues ...

Jul 11 09:15 AM

[Bob van der...:]

We could be paying $20 per gallon for gasoline by 2050 but we are also going to pay about that amount for a gallon of milk. There was an index tying the price of a Big Mac to a gallon of gas. How many Big Macs does it take to buy one gallon of regular gasolline in 2050? It would be interesting to wake up in the year 2050, like they do in the movie "Back to the Future", and find out how this all played out. I will not be around since I would be 108 by then.

But if you want one example of a country frozen in time, just look at Cuba today. Fifty years after their revolution installed a Communist dictatorship, they have not been able to sustain their economy under the repressive leadership of Fidel Castro. Their transportation is still being done the old fashioned way with horse and wagon hauling goods in from the fields.

Gasoline prices in Havana are about the same as they are in Miami, Florida. I lived in Florida from 1956 throught 1959 and remember paying 20 cents per gallon for gasoline at the Sinclair station in North Miami.

Prices can only be compared to other non-durable goods to obtain a relative value.

Jul 11 09:59 AM

[HeaditBefore:]

This was the same type of scare tactic used in the 70's to panic us all. They said then that we would be out of oil, new ice age, blah, blah, blah.... Free markets and businesses will innovate and adjust(if they are allowed to), the tide has temporarily shifted due to the economic crash and opened the door to these euphorian arguments. "Hoping" that Wal-Mart will crash because you don't have access to them in the city and have to pay whatever a business charges because you can only walk or ride a bus won't make it happen. (Ever compared downtown metro lunch prices to small town cafe? When you are trapped and have limiteed choices, prices go up!) Start understanding that there many good types of people and that where they live, shop or what they drive doesn't make them evil or wrong. These "climate change" arguments were all the same in the 70's and they are mainly for profit and power-grabs by Euphorians to try and make everyone live the way they chosen to. Very humorous how our world leaders recently decided to let the world climate change by only 2 degrees, how generous of them to control something they actually have no control over. I am sure the dinosaurs had the same type of summit just before the world froze and wiped them out. A little "live and let live" and a little less "my way or the highway" would benefit us all.

Jul 11 10:05 AM

[pftittl:]

T. Boone Pickens has correctly been pointing out our wealth of natural gas supplies, and I think some CNG vehicles will be in the mix, as well as hybrids and plug in electrics. If the free market is allowed to innovate and adapt, we will do just fine.

Jul 11 10:23 AM

[Ferdinand E...:]

Chris Steiner...Forbes...now I get it. There was an article in Forbes a few years ago with the title 'Really really cheap oil'. That was a spinoff of one of those absurdities originating a couple of inches above the eyebrows of the good Steve Forbes. I made a big thing out of its goofyness in one of my lectures.

Now it's gasoline at twenty dollars a gallon. Well Chris and Lara, I think that we'll see the Third World War - or something close to it - before we have to pay that kind of bread to get a gallon - a GALLON - of motor fuel.

Jul 11 10:26 AM

[jerrydd:]

This author is smoking some good stuff!

Not a chance of oil hitting @$20/gal in constant $ Why is RE is now the low cost energy source if the subsidies of oil,coal costs were in them.

At $5/gal the whole thing changes as it's cheaper to do even PV solar and an EV once EV's get into full production their cost will drop below ICE's as they are more simple, cheaper to build.

How do I know this? I build custom EV's and mine get 250 and 600mpg cost equivalent. And Lithium batteries now cost less than sealed lead batteries. Plus there are multiple other viable batteries that haven't been produced because no one is building EV's for them like Sodium, zinc/alum air, even lead can do 100 mile range.

As for RE I can build a 2kw wind generator for under $400 in parts or $4k including a grid tie inverter in mass production.

A solar thermal 3kw is only a 5hp steam engine, a 3kw alternator, 200sq' trough collector, condenser and an optional burner using any fuel like wood pellets, etc to produce heat and power as needed. No reason this should cost over $9k for a lifetime of power and heat.

These produced at these prices easily beat even coal much less oil once in real mass production and no new tech is needed. Just set up factories in any, every town over 250k people.

So please stop such bull saying oil will get so high. It won't even get high enough to do the Green River shale practical. It will drop down into the $45-50 range before recovering back to $150/bbl late next yr just as many EV's start hitting the market.

The future will be different as the smart will buy quality things that last 20-100 yrs and have homes so insulated that they barely need heating, cooling with 100mpg and EV cyclecars.

I'm building a Lovin's type all composite Hypercar though using medium tech composites, not CF and batteries, not a fool cell as a 2 seat EV sportwagon that can go 300 miles/charge on Lithium or 100 mile on lead batteries. Then with a 8hp DC generator can go unlimited range at over 100mpg with the lead batteries. This is all old tech, most 30-100 yrs old that can easily be produced for about $12k with a good profit.

So no there will be no $20/gal gasoline.

Jul 11 10:27 AM

[User 357705:]

How much cheaper that small town cafe is? Are you serious? Cheaper than one in a city? You must be looking only at the price on the menu. In a city you don't have to have a car to get to that cafe, its right around the corner. Factor in the expense of buying, owning, maintaining, fueling, insuring and driving that big pickup truck and your small town cafe meal is more than my great city restaurant meal. Much of the money I save not being a slave to the car, oil and insurance companies can be applied to a merchant that pays his employees a living wage. Small towns. Right!


On Jul 11 10:05 AM HeaditBefore wrote:

> This was the same type of scare tactic used in the 70's to panic
> us all. They said then that we would be out of oil, new ice age,
> blah, blah, blah.... Free markets and businesses will innovate and
> adjust(if they are allowed to), the tide has temporarily shifted
> due to the economic crash and opened the door to these euphorian
> arguments. "Hoping" that Wal-Mart will crash because you don't have
> access to them in the city and have to pay whatever a business charges
> because you can only walk or ride a bus won't make it happen. (Ever
> compared downtown metro lunch prices to small town cafe? When you
> are trapped and have limiteed choices, prices go up!) Start understanding
> that there many good types of people and that where they live, shop
> or what they drive doesn't make them evil or wrong. These "climate
> change" arguments were all the same in the 70's and they are mainly
> for profit and power-grabs by Euphorians to try and make everyone
> live the way they chosen to. Very humorous how our world leaders
> recently decided to let the world climate change by only 2 degrees,
> how generous of them to control something they actually have no control
> over. I am sure the dinosaurs had the same type of summit just before
> the world froze and wiped them out. A little "live and let live"
> and a little less "my way or the highway" would benefit us all.

Jul 11 10:31 AM

[The Greates...:]

BTW:

The best part about oil's plunge into the $40 and $50 barrel in about six months?

A de-facto tax cut for American motorists. Each $1 per barrel drop in oil increases U.S. GDP by $100 billion per year and every 1 cent decline in gasoline increases U.S. consumer disposable income by $600 million per year.
The last 20 years have been characterized by rising U.S. oil consumption, but now the U.S. Energy Information Agency. incorporating the most-recent changes in U.S. consumer behavior, says there will be no appreciable growth in U.S. oil consumption between now and 2030, with biofuels accounting for all of the growth in liquid fuels.

Jul 11 10:33 AM

[lotogo:]

Kudos to Mesoclone! More than fifty years of reading doomsday books has convinced me that they are invariably useful only for their entertainment value. There's a reason petroleum is in demand: It's efficient. A five gallon bucket of av fuel will blast a 150,000 pound aluminum cylinder a mile, at 30,000 feet. Try it with a windmill.
I think a couple years of rolling blackouts in the east and west coast power grids will transform the national attitude about energy, and the nuts will begin to be shouted down in the halls of congress instead of the opposite...as now. It's coming. And nuclear is a simple, obvious fix. Even the French mastered it...how embarrassing!

Jul 11 10:34 AM

[User 357705:]

There will be a war. Its the only way they can get out of the problems they caused with their heads intact.


On Jul 11 10:26 AM Ferdinand E. Banks wrote:

> Chris Steiner...Forbes...now I get it. There was an article in Forbes
> a few years ago with the title 'Really really cheap oil'. That was
> a spinoff of one of those absurdities originating a couple of inches
> above the eyebrows of the good Steve Forbes. I made a big thing
> out of its goofyness in one of my lectures.
>
> Now it's gasoline at twenty dollars a gallon. Well Chris and Lara,
> I think that we'll see the Third World War - or something close to
> it - before we have to pay that kind of bread to get a gallon -
> a GALLON - of motor fuel.

Jul 11 10:36 AM

[The Greates...:]

The cost of crude oil accounts for about 60-65% of the price of U.S. gasoline. For every $1 that oil rises, the price of U.S. regular unleaded rises about 2.4 cents a gallon.

Oil has fallen about $13 in roughly a month, from $73 to about $60 per barrel (and still falling) Thursday. That means the price of U.S. regular unleaded gasoline, which hit a high of $2.67 a month ago, should drop about 31 cents, give or take a few cents for regional variation.

Jul 11 10:41 AM

[goldbug101:]

Sounds like the runup to the beginning of WALL-E . . . .


On Jul 11 01:22 AM Egg wrote:

> $20 gallon gas and you're worried about Wal-Mart surviving?
>
> Plssssss....
>
> Wal-Mart would do just fine. People would only shop two days or so
> per month or so, but guess where they would be shopping for one-stop
> shopping? Worry more about Amazon. They'd go under with the shipping
> surplus charges alone. Target, gone. Kohl's, gone. Macy's, Penney's,
> Kroger's, all gone. Mom & Pop stores, stay gone.

Jul 11 10:48 AM

[MaxWeber:]

It looks like the market for futures might be beginning its adaptation to a new long run value of petroleum. Hopefully this also means that we won't be living under monopoly conditions for the energy market any longer...

Jul 11 11:13 AM

[bricki:]

Assuming gasoline does hit $20/gal in constant dollars the primary effect is that people will conserve energy, decrease demand by driving habit and vehicle choice changes..

The current US auto fleet mileage is under 20 mpg, but there are perfectly reasonable vehicles you can buy today that get 3x that mileage (VW TDI gets 58 mph). Already that puts you at the point where you can handle $15/gal without dislocation in lifestyle. The difference between $15 and $20 is not a game breaker under these conditions once you through additional optimization of consumption patterns into the mix. Like choosing jobs that are closer to home or mass transportation.

Electricity for home/industrial use is generated from a variety of sources; coal, nuclear, nat gas, hydro and oil. Only about 1% of that is oil fueled, Half is coal which isn't going to be in short supply any time in the next 8 centuries, 20% is nat gas which new reserves are found it seems every day, and 20% is nuclear. All this means is alternative powered vehicles would be a strong possibility at a $20/gal gasoline price point. An electric powered vehicle for short trips like grocery shopping, etc. could be popular. It also means people will still be able to have central air in their homes.

So all-in-all the predictions of doom and end of the American lifestyle at $20/gal are poppycock.

Jul 11 11:14 AM

[User 357705:]

The 'American' lifestyle has already come to an end for many. It will come to an end for you too. Its inevitable.

Jul 11 11:18 AM

[The Greates...:]

Oil between $35-$40 by December, the oil industry pricing has been on life support through out this Feb-July rally. The pure facts are clear, people are not buy anything that they do not need. The recovery is a long way off, like all the jobs that have been lost since July 08. Like the old saying goes, “It is time to pay the piper.” The bailouts that went to the too big to fail did nothing for the US economy, throwing good money after bad money never works. The worlds economy is too global for any amount of bailout to work, it is simply too large of a problem. The over all global economy is going to have to go through a trimming down effect, “cutting the fat” so to speak. And that is why America is losing 450,000 jobs a month today, adding to the 10,000,000 lost over the last year. Everything (everyone’s economy and business’s too) that proceeded the July $147 a barrel peak price was based on using way too much credit to get by on. When the bubble burst, so did the global economy. A lot of money was made up to that point, but where did that money go today? All the run up in the cost of crude did was leave the world with higher prices for every single thing manufactured, shipped, barter or sold today.

Jul 11 11:47 AM

[Rhett:]

Walmart sells junk?

45% of Walmart's business is groceries. Is that junk? And the inexpensive clothes, hardware, toiletries, drugs. Are these junk, too?

Of course not. You obviously outreach yourself.

Jul 11 12:09 PM

[Jonathan Rose:]

I would expect to see nuclear powered freighters and electric trains powered by wind farms and solar power plant which negates much of the argument that life will be irrevocably changed and we will de-globalize.

The internet and communication improvement has brought us too close together for that to be easily undone. Also expect to see significant developments in air travel using alternates to petroleum. Also expect to see sugar cane and corn values rise in the medium term to combat short petroleum supplies.

This is a very inflammatory book and topic hoping to sell off the back of recent oil price hikes. If you visit jonathanrosecompany.com you will see we predicted price reductions whilst this book was being written. The human species is very adaptive and creative and I for one have absolute faith that life and quality of life will not be impacted as severely as portrayed. England has had exorbitant gas prices for years due to government taxation.

Jul 11 12:39 PM

[User 357705:]

Nuclear freighters? Really? Currently freighters cost about $175 million to build using latest technology. With a reactor they'd cost closer to one billion. Shipping companies are going broke in a big way with current costs. Oh, you expect the gov't to pay the cost difference...

Jul 11 12:45 PM

[DONE_SONZ:]

Do an internet search using the words -peak oil- for free.Good info,however you decide to take it.

Jul 11 12:47 PM

[mkreisel:]

Isn't Lara Crigger the same person who wrote that "Pegasus Wireless" will make life difficult for Steve Jobs and Apple?

Pegasus Wireless now: www.google.com/finance...

Jul 11 02:23 PM

[5142152-337:]

Interesting concepts, but, OBAMA, who will have been crowned KING by that time and will have solved this energy crisis like he is solving all the rest of our worries. Yeah, right! You believe that don't you? My suggestion: Live your life to the fullest, and remain flexible (by working out), that way you will be able to bend over so you can kiss your ass goodbye!

Jul 11 02:27 PM

[pockyclips ...:]

Most of us will be glowing radioactive before $20/gal gas. We can't increase production, so we'll decrease demand.

Jul 11 03:28 PM

[jhartz:]

Don't be worried about Walmart going under. I forsee a time when large fleets of Chinese sailing junks ply the waters between the Chinese mainland and San Francisco. This fleet will carry four months of inventory for every Walmart in operation. Once off loaded in the harbor, another large fleet of freight rick-shaw vehicles will set off to make these deliveries. In the end, China will have found new employment opportunites for another twelve million of their citizens, not to mention the profits generated by these continuing sales to Walmart.

If you want to work on a HARD problem, then try to figure out how American shoppers will be able to come up with the wherewithal to purchase Walmart's offerings. Probably by opening up our borders to shoppers from Mexico and Canada.

Jul 11 05:12 PM

[nevket240:]

Not a very good book by the look of things. WalMart & others will simply adapt if their management is up to the task. $20 fuel is BS.
No economy could tolerate such a cost. The national transport system would grind to a halt long before that. Cost inflation would also be economically untenable. Me thinks he is a "Fear-Rider".
Like Gore, out for the $$$$$$
regards

Jul 11 12:09 PM Rhett wrote:

> Walmart sells junk?
>
> 45% of Walmart's business is groceries. Is that junk? And the inexpensive
> clothes, hardware, toiletries, drugs. Are these junk, too?
>
> Of course not. You obviously outreach yourself.

Jul 11 06:30 PM

[American in...:]

New energy infrastructure cannot be deployed quickly. The Russians are planning on spending $10 trillion dollars just to maintain their production levels over the next twenty years. Not an increase, just hold steady.

And look at the money thrown into solar cell research and still don't get more than 20% conversion efficiency.


On Jul 10 06:26 PM scrambledyegs wrote:

> Thomas Malthus and James Kunstler would probably agree that we are
> going to reach $20/gallon for gasoline in the near future. The problem
> with making predictions like this is that there a more variables
> involved than anyone can really take into consideration coupled with
> the fact that humans are very inventive and adaptable. New technologies
> can be deployed much faster today compared to 50 or 25 years ago;
> especially with the right amount of financial incentive.
>
> Yes, things are going to change because they always do but I think
> people are still going to have cars (probably not gasoline powered)
> and lots of people will live in outer suburbs (maybe not in 5,000
> s.f. mcmansions) and that by the time gasoline reaches $20/gallon
> it is not going to be the world's predominant transportation fuel.

Jul 11 06:46 PM

[Northstar10000:]

Walmart would be the only place left standing at 20 dollar gas. If that is suppose to kill walmart it will vaporize the competition. That would be the only place I could afford to shop at and the junk they sell will become the new high fashion. Welcome to Walmart....

Jul 11 07:00 PM

[nmelendez:]

Back in 1965 my father bought our home for 18,000.00 USD. He paid 85 a month for 20 years. Now before you jump he put down 5000 plus 1000 for closing costs. I used to buy cokes for a nickel. Candy was in pieces and you bought a piece for 2 pennies. Getting the pennies was another matter. No credit cards, no debit overdraft, no worries about stolen identities.
My point being in 2050 the minimum wage will probably be 45 to 50 per hour. So we have inflation, what's so great about this knowledge?

Jul 11 08:30 PM

[Mike McCurdy:]

"The problem with making predictions like this is that there a more variables involved than anyone can really take into consideration "

Exactly correct but this person is just trying to sell a book and you need a sensationalistic premise to do that.

Jul 11 08:45 PM

[fireofenergy:]

$20 bucks will only be ~10 in a few years, thanks to the bankers (inflation b4 anarchy), so that may not be so bad if gradual. The equivalent $20 gas will never come because renewables (and electric cars will) actually cost less than that. The bell curve of peak oil will be sharper than its mirror image, but not by so much that the whole of civilization must collapse. Solarfied deserts (without need for bulldozing) will contribute a major fraction of electric needs (and millions of jobs). In the end, people will finally wake up to thorium based closed cycle fission (if the need should arise since it, too, is unlimited).

Statements like "It would take a hundred years to replace the fleet with electric cars" are quite erroneous. Sure, it might take ten years (or more) just for the first million, but as exponentiation continues, robotic PV factories, oh I mean e-car factories, would be able to spit out hundreds of times that every year (considering planetary markets and production capability!).

Now, without adequate amounts of power, we'll succumb to (apparently) self fulfilling gloom doom. Now is the time to support whatever research is needed to make batteries cheaper (or such that they can last the lifetime of any project). Now is the time to push for at least 10,000 square miles of solarfied deserts (without paving them over) in America alone. Now is the time to figure out how to produce RE capital as humanity has already done with conventional robotic assembly items.
Btw, thorium based spits out 100 times less wastes AND its wastes halflife down to handleable levels in only 300 (not tens of thousands) of years as proven many decades ago at ORNL.

Without unlimited clean energy, Freedom will be lost!

Jul 11 09:50 PM

[Gary K:]

If I could just get my point across to the right people that could make a difference, this problem could be effectively solved ! I would really like to see the EPA-OBD II Annual Vehicle Emissions Inspection Law closely examined, and changed.As it stands right now, it is entirely possible for any Gasoline powered Vehicle, from 1996 to the present, to fail it's Emissions Inspection, for not emitting enough polluting Exhaust Emissions ! All such Vehicles have on board Oxygen [O2] Exhaust Sensors.These O2 Sensors are set up to detect a level of polluting Exhaust Emissions that would indicate that Gasoline is being consumed by an Engine at 14.7 parts of Air to 1 part of Fuel.If there is a low level of Oxygen, and a high level of Pollution, a Vehicle will fail it's Emissions Inspection, as well it should.But, Gasoline can be safely vaporized into a mixture that is 100 parts of Air to 1 part of Fuel.With this, even the largest SUV could easily get 50 + MPG, and emit a fraction of the Emissions of a conventional 14.7/1 Fuel System, with an increase in Power, and much longer Engine life.I'm not the first to figure this out.Far from it ! For proof, do a search on [the late] Tom Ogle, and Charles Nelson Pogue.Then, go to energy21.freeservers.c..., and scan down the page to just before the update.But, even if it is not to be believed that Fuel Vaporization is entirely possible, it's illegal to even attempt to do so, with any Vehicle, 13 years old, or newer.O2 Sensors are set up to detect that Fuel is being consumed at 14.7/1. A mixture of 100 / 1 will not emit enough Polluting Exhaust Emissions to register on O2 Sensors.When such a Vehicle is connected to an OBD II Emissions Inspection Analyzer, an O2 Sensor Failure Code will be generated, which will result in a failed Emissions Inspection.O2 Sensor Exemptions are permitted for Vehicles that have been legally converted to operate on Natural Gas, Propane, or Hydrogen, and are Registered as such.But not for vaporized Gasoline.Thus, it is entirely possible, under this EPA-OBD II Vehicle Emissions Inspection Law, for any Gasoline powered Vehicle, 13 years old, or newer, to fail it's Emissions Test, for not emitting enough polluting Exhaust Emissions ! As long as this insane 14.7/1 Law that only benefits Big Oil remains in effect, the only way to make Vehicles more "efficient" will be to make them lighter, and smaller.This has got to change ! I have asked the Question many times ; "Why is it illegal for any Gasoline powered Vehicle, 13 Years old, or newer, to emit too little polluting Exhaust Emissions"? So far, not one Big Oil Executive, Politician, or Concerned Environmentalist can, or will answer the Question.Those that have replied can't seem to come up with an Answer either.Can you ?

Jul 11 10:27 PM

[Suncatcher:]

Here's the near future:
Cars will run on compressed natural gas.
Electricity will be generated predominately by nuclear.
We will convert coal and oil shale into the needed carbon structure.
Solar and alternates will produce a greater amount of energy than presently but not the lions share.
We will all do with less.

Jul 12 12:46 AM

[curious cat:]

favorite movie of all time? three days of the condor. if you want to know what people will do, what governments have done and what is coming, watch this edge of your seat thriller. excellent performances, too. hey, you can download it and save yourself a trip and some gas.

Jul 12 02:41 AM

[Dean M:]

I think we already saw that $4/gal is the tipping point that will cause US drivers to decrease oil consumption by more than enough to offset the marginal increase in demand created in emerging markets. We could easily halve our fuel consumption in this country if we had to without gutting out our transportation infrastructure just through driving more fuel efficient cars and driving somewhat less particularly with the plug in hybrid technology just around the corner. I guess hype is more sexy than common sense.

Jul 12 09:59 AM

[Dean M:]

I guess government conspiracy movies are going to make a comeback


On Jul 12 02:41 AM curious cat wrote:

> favorite movie of all time? three days of the condor. if you
> want to know what people will do, what governments have done and
> what is coming, watch this edge of your seat thriller. excellent
> performances, too. hey, you can download it and save yourself
> a trip and some gas.

Jul 12 10:01 AM

[al-shaf:]

This article seems like a left-wing pipe dream... hoping for high gas prices (to save the planet...) and the demise of Walmart (the evil anti-union sweat shop). That's what the author appears to want, and he's put together a scenario where he thinks it will play out. Unlikely to happen, though.

Jul 12 10:34 AM

[LionCub:]

This is ridonculous to me. You say that gas will be $20 because the population is going to become 13bln? Did you really see that happening? There are several natural disasters and war like fights to come in future which will wipe out majority of population (am not talking about 2012 here). You are going to see that price at gas station, only when $ depreciates.

Jul 12 10:49 AM

[Mark123:]

by the time oil gets to 20/gal, cars & trucks wont be running on gasoline

Jul 12 12:02 PM

[Lara Crigger:]

No, I'm not.

On Jul 11 02:23 PM mkreisel wrote:

> Isn't Lara Crigger the same person who wrote that "Pegasus Wireless"
> will make life difficult for Steve Jobs and Apple?
>
> Pegasus Wireless now: www.google.com/finance...

Jul 12 05:48 PM

[Brad Johnson:]

This is a silly article, and unfortunately, too many people actually want energy prices to soar in order to enact their green agenda.

What's ironic is, if energy prices do soar to out of control prices where families can't afford to get to work or heat their home in the winter, the Al Gore crowd that put us in this mess will be the first that are tarred and feathered.

We already saw how public opinion swung dramatically in regards to offshore drilling, and that's when gas just got to $3.50 a gallon.

Jul 12 08:03 PM

[montyman:]

But don't forget what could be the biggest source of gasoline: COAL. This is how South Africa makes their gas. It is the most abundant fossil fuel by far.


On Jul 10 09:55 PM dondon wrote:

> Mexico in the next few years will import oil rather than export it
> to us because of declining fields. Canada, though, has vast reserves
> of oil sands that are both dirty and expensive to extract at today's
> prices. The US also has vast reserves locked away both onshore and
> off. Last year when oil hit $147 even those opposed to new drilling
> in the US gave way to the drill, baby, drill folks. With more diesel,
> hybrid, electric and even ethanol on the way, I feel the only way
> we get to $20gal by is through taxes.

Jul 13 01:30 AM

[punk_ash:]

If this, then that...

Go and visit India and you will get a feel of what it is to pay for expensive gas. A bank manager makes $1000 a month, yet Gas costs $6 a Gallon. A programmer makes between $1000 to $2000. They have been buying gas for decades and driving to work. They have small cars that go for 45 miles to a Gallon, 1.2 Liter engines, not 3 Liter engines.

Jul 13 02:12 AM

[punk_ash:]

Yes, that is what I was saying to someone a few days back. The only investment that I can think of anymore is in your health. I know of no asset that I think will hold value tomorrow than today.


On Jul 11 02:27 PM 5142152-337 wrote:

> Interesting concepts, but, OBAMA, who will have been crowned KING
> by that time and will have solved this energy crisis like he is solving
> all the rest of our worries. Yeah, right! You believe that don't
> you? My suggestion: Live your life to the fullest, and remain flexible
> (by working out), that way you will be able to bend over so you can
> kiss your ass goodbye!

Jul 13 02:17 AM

[Big Bubbette:]

Actually the US has oil shale reserves sufficient to meet the needs of the US for the next 250 years. Some of the trillions of bail-out should have been invested in trying to develop ways to extract this.

"It is believed that the shale deposits in the Green River region of Colorado, Utah and Wyoming are holding the equivalent of approximately 1.5 trillion to 1.8 trillion barrels of oil. Called �oil shale� or �shale oil,� according to scientists and petroleum companies, much of it cannot be recovered with current technology due to the costly processing involved and the depth of the deposits buried beneath the Rocky Mountains.

Still, if only half can be extracted, scientists believe the amount is nearly triple the oil reserves of Saudi Arabia."

www.americanfreepress....

Jul 13 12:37 PM

[Big Bubbette:]

Actually the US has oil shale reserves sufficient to meet the needs of the US for the next 250 years. Some of the trillions of bail-out should have been invested in trying to develop ways to extract this.

"It is believed that the shale deposits in the Green River region of Colorado, Utah and Wyoming are holding the equivalent of approximately 1.5 trillion to 1.8 trillion barrels of oil. Called �oil shale� or �shale oil,� according to scientists and petroleum companies, much of it cannot be recovered with current technology due to the costly processing involved and the depth of the deposits buried beneath the Rocky Mountains.

Still, if only half can be extracted, scientists believe the amount is nearly triple the oil reserves of Saudi Arabia."

www.americanfreepress....

Jul 13 12:37 PM

[Dirk McCoy:]

The key to predicting the future is knowing the present, which Steiner apparently is out of touch with. There are already electric cars for sale for well under $10,000, Wal-mart is already the most fuel-efficient distributor amongst major retailers, and telecommuting has been catching on at an increased pace even as fuel costs have plummeted.

Unfortunately, Steiner's worldview conforms to the Scarcity Paradigm crowd who want to scare us into turning over our freedom so they can keep us from using up all the world's precious resources- so enough of these books will sell to keep the publisher in the black on the project. What a shame.

Jul 13 06:53 PM

[Road Runner:]

This guy, Chris Steiner, is a crack-pot that is only looking to scare people to sell books. $20/gallon is ridicules and will not happen in the next 30 years. This is true even if the dollar collapses which I think is possible because the US is not investing in future productivity like many other countries, and countries are going to reduce their use of the dollar as a reserve currency in favor of a basket of other currencies.

First, the demand destruction in the US will be severe with gas at just $8/gallon. The US is very inefficient at using gasoline in cars. We saw a significant drop in demand with gasoline at just $4/gallon. Over $4/gallon gas, people will move to smaller vehicles, plug-in electric and plug-in hybrid electric vehicles in large numbers. You will see much greater use of highly efficient diesel engines (today get 40mpg city and 45 mpg highway) too, just like in Europe. And, you may see plug-in hybrid diesel electric vehicles too. This could be a full-sized hybrid diesel electric SUV that gets 40 mpg in the city while delivering great power. Thus, gasoline use, and thus oil use, will drop dramatically keeping prices from rising farther.

Second, like I’ve said before, the world is far from being past peak oil, but it is definitely past peak CHEAP oil. At just $100/barrel (about $3.40 gas), there is enough economic incentive to get oil from most known sources of oil, including the massive amount of oil in the Canadian oil sands. Oil at $150 (about $4.20/gallon gas), gives plenty of incentive to get oil from the massive reserves of oil in the western US oil shale.

Third, natural gas, as we have discovered in recent years, is very abundant in North America. When oil gets over $100/barrel, many vehicles, mostly corporate ones, will go to compressed natural gas as hybrids or non-hybrids. And, natural gas will be used more to generate electricity to power the new plug-in vehicles. It is 2 to 3 times more efficient to deliver energy to a vehicle via the electric grid than via liquid fuels.

I have a prediction for those of you who are looking for the next big bubble. It’s going to be oil. There is a lot of wrong conventional wisdom, promoted by exploitationists like this author, that oil will eventually go “to the moon”. It may start in that direction as demand temporarily (about 3 years) exceeds supply. But, when oil companies know that oil is going to remain expensive (above $100/barrel), they will start producing it from everywhere and the price will settle back down to under $150/barrel.

Jul 14 12:19 PM

[User 456704:]

There is no 'peak oil' or 'global warming'. There is oil sitting on barges around the world not being used. Trying to run up prices. Same with slaughtering the chickens and milk cows to reduce inventory..it's simply about money!

Jul 20 04:07 PM

[User 458104:]

Listen fat fochers,

We've gone "down" to 5$ per gallon gasoline. Our country is not imploding. Just don't buy too much shite from Wally World on credit.
We are just discovering credit cards here. When TSHTF Americans will adapt just like anyone, and thankfully lose some weight, start a garden, ride a bicycle. It's not that hard, and it is not to late to start conserving. Even if you don't buy the "global warming" why not just scale back? What really bugs me is why well off people in the US don't turn off the friggin lights ,or open the goddamn windows, just let the A/C run 24/7. It's not that hard, and you are not that busy.

Jul 22 06:55 AM

[NHInsider:]

Solar and wind not reliable? Tell that to the Europeans.
Germany and Japan are the world leaders in solar energy use, and I believe every region of the US except the Pacific northwest gets more hours of sun per year than either of them.

As long as we accept that the only workable energy model is one that relies upon large centralized production controlled by huge corporate interests, with energy distributed over large transmission systems also controlled by huge corporate interests, we will fail to capitalize on the myriad sources of energy we have at our doorsteps.

This isn't a technology problem, it's a political problem. We have the best governments (state and federal) that money can buy.


On Jul 11 12:40 AM mesoclone wrote:

> Whenever you see "alternative energy" given a big play, get suspicious.
> Most of what is called "alternative energy" is not practical, even
> at $20/gal gas. It is either too unreliable (solar, wind) or too
> low density (biomass, solar, wind). If gas rises much over $4/gal
> (2009 dollars), the political demand for cheaper energy will destroy
> the roadblocks to still abundant fossil fuels - natural gas, coal,
> coal gassification to produce gasoline, etc. It might even be enough
> to break the roadblocks in the US to nuclear power.
>
> If we do see $20/gal any time in the next 10 years, it will be a
> complete economic catastrophe, as our infrastructure simply cannot
> adjust quickly enough and the consequence will be radically reduced
> economic activity.

Jul 24 12:24 PM