Today, for the first time ever, I filled up my tank with regular gasoline and I paid more than 4 dollars per gallon. Filling my tank took over 70 dollars. I remember it was not too long ago that I was stunned when I broke the 60 dollar barrier.
When I first drove in America in 1977, a gallon of gas cost 62 cents. I drove a huge, V-8 powered 1973 Ford LTD that got 10 miles to the gallon. I liked that car. It cost me over 10 dollars to fill it up, and I remember how that hurt.
I predict that we’re not far away from needing 100 dollars to fill up a car.
Yes, the oil companies are making record profits, and did so during the hard years of 2007, 2008 and 2009. They are raking it in while they can, because they know the gravy train is coming to an end. The International Energy Agency announced in 2006 that the world had hit “Peak Oil” meaning that oil production worldwide had hit the maximum. Going forward from Peak Oil, it will be harder and more expensive to extract and deliver oil, and new supplies will lag behind new demand.
There is a lot of controversy about the Peak Oil theory. People argue that the Peak Oil crowd does not know what they are talking about. So, for a moment, let’s put aside all studies and all science, and especially all American politics.
It took about 500 million years to make all the oil in the world. Oil is basically the end-result of millions of years of sunshine (solar energy) being trapped in organic material, mostly plants. The earth is not making any more of the stuff at an appreciable rate. About a hundred years ago we started using it up by burning it and as ingredients for manufacturing, and we have made a measurable dent in our supply. If you trust the doom-sayers, we have about 20 years of oil left at the current consumption. Some say 20 to 50 years. Wild and crazy optimists say 100 years. But it’s limited, very limited, and we will run out.
The question is not if Peak Oil is real. The only question we may ask is if it really happened in 2006, or if it’s still off in the future, perhaps in 2016 or 2026.
However: We. Will. Run. Out. Of. Oil.
Only when a gallon of gas costs 10 or 20 dollars will we start realizing that we had better figure out what to do. Because we won’t be able to pump gas into our trucks, trains, planes and automobiles anymore. Or, heaven forbid, into our tanks.
We will then yearn for the good old days of gas at 4 dollars.