Gas $7 Per Gallon in Four Years

[metta]

Time to buy a bike: Gasoline prices in North America will soar over the next four years to $7.00, causing a massive jolt to the continent's manufacturing base not seen since the oil shocks of the 1970s, a leading economist is warning. Jeff Rubin of CIBC World Markets was laughed at three years ago when he predicted $ 100 per barrel oil, and now thinks it will climb to $225 in four years. (Houston Chronicle quotes him as saying gas will cost $10 per gallon) From the National Post:

"Stripping out natural gas liquids, oil production has not grown for over two years, which certainly goes a long way to explaining why oil prices have doubled over that period," Rubin said. "It is increasingly clear that the outlook for oil supply signals a period of unprecedented scarcity."

Rubin predicts hybrids will go "from marketing and PR fluff to the core of car production." People will move closer to where they work. "I think there will be fewer people on the road in North America in five years than there is right now."

http://www.treehugger.com/files/2008/04/gas-7-per-gallon.php

National Post
http://www.financialpost.com/story.html?id=469426


I drive a toyota prius now. In a little less than three years, the plug in hybrids are scheduled to be available. The plug in prius hybrid is estimated to get over 100mpg. Getting that car, I would still end up ahead of the price increases.


But for you people driving consumer cars that get 20 mpg and less...

Price of goods are going to skyrocket though, including food if the price of gas increases as estimated. Importing will be a lot more because of fuel costs. Locally made and grown products will hopefully do better then. Maybe we will see an increase of small scale manufacturing in the US.

For people that live in the boonies, they may want to consder moving closer into the city or plan for the increase of fuel costs.

 

[Riverrick]

I tend to think this is true. Its going to hurt our economy badly.

Time to look for a Prius.

But what do I do about my long distance relationship???

 

[metta]

I tend to think this is true. Its going to hurt our economy badly.

Time to look for a Prius.

But what do I do about my long distance relationship???

share your bed....more spooning!!!

 

[GL]

~sigh~

and i just paid off my car. now if only they would make hybrids that looked cool!

 

[Spiff]

At the accelerating rate it has been rising within the past couple years, it will exceed $7.00 easily. And since the U.S. occupation in Iraq and the Middle East in general will continue, especially if McCain is elected, oil prices will continue to increase.

 

[alley]

If it were safe to ride a bike where I live, I would.

But I've been having trouble finding a basket for my handlebars that's big enough for a golden retriever.

Hell---you should have the dog pulling the damn bike. Mush....mush...

 

[Croynan]

I tend to think this is true. Its going to hurt our economy badly.

Time to look for a Prius.

But what do I do about my long distance relationship???

well could it be that time is nearing about moving the relationship closer.?

eM.

 

[Golliwog]

I tend to think this is true. Its going to hurt our economy badly.

Time to look for a Prius.

But what do I do about my long distance relationship???

Simple, Rick. I have a big bed, and you are most cordially invited anytime. It really isn't THAT far(excoriates myself, sighing "shameless tart.")

 

[Spellbound]

Fuck it, I'm walking.


But actually, even if you don't own a car, you'll still get effected. Prices for all goods will go up, so you'll end up paying more for the basics. Food, clothes etc.

Unless you live on a farm and make your own clothes. idk...


I'm getting worried.

 

[Joshua_me]

Truth be told, I feel like a fucking idiot for buying a Lexus.

It was a status symbol, I admit it. I had made a little money and I wanted to show it off... Not that I could afford it outright, of course. I mean, it's a $60,000 car.

So, technically, my bank owns it and I'm locked into the payments for the next three years.

All this wouldn't be all that bad, except for the fact that it only runs on premium gas, and gets about 14 miles a gallon.

Stupid

...Stupid

.......Stupid


My next car will be a Hybrid

 

[eddielee]

I don't know what people will do when gas hits $7.00 per gallon. While I was filling my tank yesterday, I gazed in shock at how fast the numbers on the pump were spinning. Gas used to be a minor purchase, but now it's a major purchase. I've cut back on driving considerably.

 

[metta]

Consumers Shifting to Inferior Goods
From the NY Times: Recession Diet Just One Way to Tighten Belt

Spending data and interviews around the country show that middle- and working-class consumers are starting to switch from name brands to cheaper alternatives, to eat in instead of dining out and to fly at unusual hours to shave dollars off airfares.
...
Wal-Mart Stores reports stronger-than-usual sales of peanut butter and spaghetti, while restaurants like Domino’s Pizza and Ruby Tuesday have suffered a falloff in orders, suggesting that many Americans are sticking to low-cost home-cooked meals.​

This is classic behavior in tough economic times. In economics, "inferior goods" doesn't refer to the quality of the goods, instead it refers to goods where demand changes inversely with income. As incomes rise, people buy less of the inferior good. But as incomes fall, they buy more.

The excerpt above describes people buying more spaghetti to cook at home (inferior good), and ordering less Pizza (a "normal good"). And on beer:

Sales of inexpensive domestic beers, like Keystone Light, are up; sales of higher-price imports, like Corona Extra, are down ...​

I expect to see more generic brands (inferior good) soon on the grocery shelves!

I'm sure this trend will continue as prices of gas increase and push up other prices.



I have a friend that has another friend that has been studying in depth the financial markets, peak oil, etc. and he believes that the world financial markets will eventually collapse from the damage done by Bush administration. He believes that things have just gone too far, including not preparing for peak oil, the build up of federal debt, the mess with the mortgage/real estate industry, the continuous rise of health care costs, the lack of savings of Americans, etc. I can't say that I agree with him but this guy is not a dumb guy. He has spent the last couple of years studying it and what has happened so far are all things that he said would happen. He is actually preparing for it by making himself self sufficient. It sounds crazy to me...kind of like those people that prepared for 2000. But I don't feel comfortable totally discounting what he is saying considering how he has been right so far. I do hope he is wrong. I have not seen the data he has seen. But it does make me curious in at least looking at it.

 

[Tim8NL]

Pff, you're lucky with $7/gallon. I'm paying about $9,10/gallon here...

 

[AsianDream]

Get Real – In Europe gasoline has been taxed by governments so much they’ve been paying more than $7 a gallon for years – and still most of the time it’s cheaper for them to drive to work than use public transport.

Gasoline prices in the USA need to be around $20 a gallon before consumers will respond by switching to alternative transport – but this will probably happen in the next few years

 

[radioian]

A agree with the above post. We have the most expensive fuel IN THE WORLD here in the UK--almost £5 a gallon for petrol, more for diesel, and its going up all the time..........thats about $9 or so.......................

Time to buy a small (nothing above 2 litre) engined car, all you Americans, --Hyundai XG 2.0 , or something like that--plenty big enough, and 150 bhp--thats enough--and keep it on the road for 250,000 miles or more. Most good makes are capable of this sort of mileage today.

 

[radioian]

Or something like a Ford Focus, with a 2.0 that gives you 40 mpg round town

 

[AsianDream]

A agree with the above post. We have the most expensive fuel IN THE WORLD here in the UK--almost £5 a gallon for petrol, more for diesel, and its going up all the time..........thats about $9 or so.......................

Time to buy a small (nothing above 2 litre) engined car, all you Americans, --Hyundai XG 2.0 , or something like that--plenty big enough, and 150 bhp--thats enough--and keep it on the road for 250,000 miles or more. Most good makes are capable of this sort of mileage today.

I agree - the US are too addicted to "gas guzzlers" - maybe a dose of reality will make them see sense - they probably need $10 a gallon now to make them act sensibly rather than only $7 in four years time

 

[star-warrior]

I was commenting in gentry's thread a few days ago that

At the current US$ exchange rates, that's almost exactly £324 stirling in the UK.

I was filling up my car today with petrol at £1.069, so that would get me only 303 liters, or 80 US gallons here in the UK. I bet you're glad you don't drive over here...

BTW, I put in £40 of petrol, and got 37.42 liters, which is just less than 10 US gallons. At the current exchange rate (1 GBP = 1.98301 USD / 1 USD = 0.504285 GBP) that's US$79.32 for less than 10 gallons of unleaded petrol.

I've got the receipt here

at 3.785 litres per US gallon, that makes at the above exchange rate

1 US gallon equivalent = US$ 8.0236


Now! not in a silly 4 years time.

 

[dj415]

This is all manufactured BS. Yes, sure, peak oil and all of that. As for the cost of petrol? Hedge funds are diving our current inflation.

What saps we public are!

 

[Zeremonie]

Have bus pass, will travel.

I've gotten to the point that I basically only drive on the weekends a little bit. My car is very very very old but still manages to get about mid 20s mpg around town, but heavens that is expensive now.

I'm also amazed at the number of people who insist upon driving who really cannot afford it ... they can barely pay for basic necessities but that insist upon driving.

Also, in my area bus travel is on the rise:
http://blog.seattlepi.nwsource.com/seattletraffic/archives/130150.asp
^ I do wonder if the gas prices are finally motivating people to get out of their cars. I've heard that studies say that the cost of parking a car in a downtown area will drive more people out of their cars than the cost of gasoline. When you start having to pay a bare minimum of $15 a day to park a car in an urban center, it's time to bus it, imho.