What happens if (more like when) oil hits, say $1000.00 a barrel, meaning gas will be somewhere’s around $10-12. a gallon. Most working stiffs won’t be able to afford it, yet there’s nobody with any clout who can/will prevent it. The cost of gas also increases just about everything else with it, directly or indirectly (food, clothes, travel, etc.) Yes, we have the ethanol, but all that means is the cost of gas will slowly shift to corn production. Most people will argue that they can’t (in a lot of cases, just really WON’T) give up driving , and boycotting gas for a day nationally won’t accomplish anything; people will just put a run on gas the day before. We’ve been handed the “America must become energy self-sufficient” line ever since Nixon (or possible even earlier) but nothing’s come down the way to replace the good old gas guzzling car. So, what’s the solution?
IANAE(conomist), but as for a semi-educated guess:
I think there’s an imaginary line at which the average American will consider a gallon of gas cost-prohibitive. I don’t know what that line is - $6 per gallon, maybe? $8? Anyway, once the price of gas crosses that line, things are going to start happening. We’re going to start buying hybrids, electric vehicles, etc. We’re going to demand that our politicians start funding exploration into renewable energy. Etc. Nothing will happen overnight, of course, but over the course of a decade or so we’ll lessen our demand for oil, the price will become more manageable, and by that time we won’t need it as much anwyay.
Until we cross that line, we’re just going to keep bending over and taking it.
But that’s just my semi-educated guess.
As long as talk about energy revolves around finding more of it to feed upon itself, with scant attention paid to true energy conservation and serious alternative energy platforms, we all remain on the treadmill and never get anywhere (notwithstanding airplanes and treadmills). At the same time, there are different (and multiple) oil pricepoints affecting every industry, service and individual on a daily basis already.
It’s here. It’s now. There is no going back. The solution is everyone – individually and collectively – must change. Of course, Americans being the selfish lot they are, will be dragged kicking and screaming into something that could be accomplished in less time and at less cost if we admitted it and went from there.
We have some considerable pain about to hit and no one wants to call it out the emperor has no clothes. Well, America has no clothes. Anything more is probably GD material and not GQ.
Moved to Great Debates.
Squarebubble1 Please try to put your threads in the correct forum. General Questions is for questions which hopefully have a factual answer, but without opinions and without too much debate.
samclem GQ moderator
I think we’ll have a problem on our hands long before oil reaches $1K per barrel, as gas prices at that level would likely be somewhere in the $30 per gallon range, not the prices you outlined.
Long before it got to $1000/bbl, there would be huge economic incentives to switch to something else. There would be a period of a few years where people would watch their oil consumption like mad, until alternatives appeared in the marketplace. You’d see an overhaul of the infrastructure in less than a decade.
Oil will never be $1000/bbl. It would stop being economical to burn it long before then. How high the price could go depends on how elastic the demand is.
You could make gasoline from coal for only a little more than what we’re paying now; so that pretty much sets a ceiling to how expensive fossil fuels can get. It’s only because the price hasn’t been high for long enough to be worth the investment cost that it hasn’t been done already.
Great, lets solve the problem of limited fossil fuel with a different fossil fuel. I really don’t think this is a viable long term solution. Conservation is Key.
Behold how business works.
Why haven’t we switched to not-gas?
Because it’s not cost-effective yet. Gas, expensive as it’s getting, is still cheaper for Western nations as a society. Why? Because cost isn’t simply a matter of oil, but also one of infrastructure. New industries, which have starting costs, new pumping infrastructure, transportation infrastructure, etc.- these all cost.
When gas passes that point, we’ll switch. That’s the answer to the OP’s question. That’s also how business works. And businesses are preparing for the switch, because whomever judges the switching point correctly and is prepared to take advantage will make a serious killing.
Oil will never reach $1000/Barrel as Sam and Bob said (HeyHomie as well). Long before that happens alternatives that are marginal or cost prohibitive today will become viable. Once oil crosses a certain threshold The Market (A.K.A. the people and businesses that buy stuff or use transport) will switch to something else.
What that might be I couldn’t say at this point. Long before $1000.00/Barrel battery technology becomes cost effective for mass use. Hydrogen also becomes viable long before that level (including the massive cost of upgrading or changing the infrastructure). My guess is mass solar also becomes viable long before that.
Take your pick.
Exactly. The person or company that comes up with the next generation of fuel/transport technology is going to be richer than god (for a while until everyone else jumps on the bandwagon). Companies have a HUGE incentive to be the one who comes up with whatever that next generation technology is…and to develop, market and sell it to basically everyone on the planet.
Allow market forces to figure out what will be the best new alternative. As you pointed out people won’t be able to afford $10-12/gallon…so before it reaches that people will start to switch to something new ON THEIR OWN for cost/economic reasons.
-XT
Which is where coal gains potential viability as a “transition” fuel source.
BTW, wouldn’t it be like $30-$40/gal at $1000/Barrel?
-XT
We’re getting perilously close to US$10 / gallon over here.
Where’s “here?”
Fuel is around $1.50/litre here already, which is not exactly cheap and is already giving people teeth-chills whenever they fill their car.
By the time it gets to $10/litre I think we’re either going to see a radical shift to hybrid fuel, LPG, or horses…
Currencies not tied to the US$ aren’t experiencing the same degree of price escalation…
Can we at least admit that much?
In addition to liquid coal, there are also oil sands, and it’s estimated that the total amount of oil contained therein worldwide exceeds the amount of liquid oil by quite a bit. In short we will never run out of oil, nor see prices driven up as severely as the OP imagines.
Conservation is not the key. Conservation only delays the time when we run out, and not for very long, as population and demand continue to increase.
Assuming that gas from coal is feasible, it would at least give us a few more generations to retool.
Quartz is English, I believe, or anyway definitely from the British Isles.
$10 a gallon–ouch! I suppose it’s not too bad if you live in one of the big cities and can use mass transit, but I imagine out in the country the people are just as dependent on motor transport as we are in the U.S.
That’s assuming there is anything to which they can switch, and continue to live their lives as they did in the cheap-oil age. Which might not be true. Just because humanity direly needs a certain new technology does not mean it is physically possible.