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Today's Wall Street Journal features a front-page article which lays it all out:
Energy Watchdog Warns Of Oil-Production Crunch
The world's premier energy monitor is preparing a sharp downward revision of its oil-supply forecast, a shift that reflects deepening pessimism over whether oil companies can keep abreast of booming demand.
The Paris-based International Energy Agency is in the middle of its first attempt to comprehensively assess the condition of the world's top 400 oil fields. Its findings won't be released until November, but the bottom line is already clear: Future crude supplies could be far tighter than previously thought.
To translate this to the words of Chief Engineer Scott of Star Trek fame: "She's givin' it all she's got, captain!"
I'm expecting $8/gallon gas by the end of the decade. This just shows how unbelievably dumb the Clinton/McCain gas tax holiday is: It guts transportation spending, and doesn't make a lick of difference in the price of gas. It might be, what 4% of the current price?
6 comments:
The opposition (heh heh - I just love that fact) has copied that dumb populist policy here - they want to cut the excise on petrol by 5c per litre. Petrol is about $1.50 a litre here. Bad policy. The cynical side of me says they are looking for an excuse to drill in Alaska.
A brilliant, handsome, clever, wise and far-seeing conservator/scientist for the Nature Conservancy once told me that the only thing that will cure the world of its addiction to petroleum would be high gas prices. We are not a responsible enough species to work this through short of a crisis.
This will hurt a lot of people. But probably it is an essential step to go through.
I agree about the tax holiday.
$8 by the end of the decade? Sooner than that, I bet, at least for us. The Can $ is nearly at par with the greenback. I filled up the other day for $1.43/litre (which translates to $5.41/gallon). We've seen gas go up nearly a dollar since last year and they're predicting a further rise as summer gets kicking. I don't know or understand much about the policy aspect of things. I'm just trying to figure out how to use the car less.
Kelly
It seems to me that the way to change people's behavior is to make the convenience of something, no longer convenient.
Trucks and SUVs are no longer the most popular vehicles on the road now because they are just too expensive to fuel. All of a sudden the convenience of all that extra space in the car is just not worth having to pay for it at the pump.
At the dealership the other day, one dealer mentioned to us that GM has stopped truck production, and that they can't get rid of the trucks at auction. Those big decked-out vehicles that everyone wanted 5 years ago are being way undersold now--- and no one is buying new.
The same concept, I hope, will be applied to conservation of energy. The way to get people to stop using non-renewables is to make them so expensive that they become precious, or obsolete.
--- Trase
I was actually on board with the high gas prices and excited about the prospects for the future. I already know people that switched to one car per couple and took up walking and biking as modes of transportation instead of just leisure activities.
Upon reflecting on this with a friend, I realized that the positive effects I've seen are only positive for the middle and upper classes. The rich buy cars with better mileage, the middle class become more economic about their fuel consumption and the poor suffer. How do we make gas prices affordable for those who have to rely on it, and still encourage people to consume less?
I'm sure you don't have an answer, but if anyone does, it's you.
MJ asks:
"How do we make gas prices affordable for those who have to rely on it, and still encourage people to consume less?"
My answer is that we don't make gas prices affordable. This is the LAW of supply and demand. Unless we nuke a billion people, we can't make it affordable again, and we shouldn't.
There is a serious disconnect when people talk about reducing our use of non-renewables out of one side of their mouth and talk about drilling for more oil out the other. But they're politicians, they can't help it.
The long-term solution is to find other ways to power our vehicles. There are no short-term solutions except to economize.
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