Comments | valuesystem: $10 Gasoline & Rising Inflation, The Trend of the Future

valuesystem

$10 Gasoline & Rising Inflation, The Trend of the Future

Mar 01, 2008 17:00

$10 Gasoline & Rising Inflation, The Trend of the Future
by Aaron Wissner
March 1, 2008While it sounds incredible, $10 per gallon gasoline is what we should expect only seven years from now. That is, if everything goes extremely well, between now and then ( Read more... )

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Comments 4

dtbrookes March 6 2008, 20:07:54 UTC

Hmm, $10/gal gasoline in 7 years? That's a brave prediction Mr. Wissner :) Other possible scenarios are a) a heroic drilling/oil recovery effort funded by the high price of oil which may actually result in a decent rise in production over the next 5 years. What happens after that will, of course, be more catastrophic because it means the drop in oil production will be much steeper (oil is a finite resource after all...). b) a slow recession in the OECD countries, combined with third world demand destruction might keep oil oscillating in the $100 - $200 per barrel range for a good long time and take the trend off the current straight line you show in your semi-log plots. I give both those scenarios (or a combination of the two) about the same chance as your $10 per gallon in seven years scenario. I realize you're making that prediction based on things keeping on going just like they are now. Just wanted to suggest some alternatives.

valuesystem March 13 2008, 01:57:54 UTC

I don't know that I would call it a prediction as much as an expectation. Just as I expect to live to see the weekend, I also expect that gasoline prices will rise to $10 within 7 years. Note, that is constant dollars, and inflation may accelerate the price increase. Apparently, the TV business news has been awash with concerned CEO's who don't quite understand what is going on with prices. Definitely NOT peak oil aware ( ... )

dtbrookes March 13 2008, 15:07:41 UTC

Yes, well, I meant an heroic drilling effort on existing wells. There's no hope of filling the gaps with new discoveries as far as I can tell. Kinda what Saudi Arabia seems to be doing now: punching lots of new holes into their existing oil fields.

Nice video. I see you posted it to youtube, but did you make it too?

valuesystem March 13 2008, 19:45:49 UTC

Yes, I did make that one.

I took Economics 101 Macro about a year ago at the local college. By the end of the class, I really was sharp on supply and demand curves, so I made the video just then.

Unfortunately, I have a hard time keeping that sort of thing in my head very long, so I doubt I could make the same video today. Good thing I have the full PowerPoint (a lot more slides) and the video done, otherwise I might not be able to recapture that degree of understanding on the supply/demand/elasticity.