Gas Prices Going to $10+

[Jimmydreams]

The big argument in my mind is that someday most of our oil is going to be gone...and whoever did not prepare is going to be in a world of hurt. Right now the US is certainly not prepared, but an event that pushed gas to $10 would be a painful but productive kick in the pants.

Well stated. I agree 100%.

 

[OrientExpress]

You could probably find all the gas you want at $10 a gallon, plus a bit cheaper for black market gas coupons. I believe the gas ration during WWII was around 4 gallons a week also.

There were also plans by Nixon to ration gas during the 71 oil crisis - but it never went into action.

I think the most likely result of Peak Oil in gas rationing.

In California, there was rationing during the 71 oil crisis. You could buy all you wanted, but only on odd or even days, depending on the last digit of your license plate. That is also when the infamous 55 speed limit was imposed.

 

[Herm]

In California, there was rationing during the 71 oil crisis. You could buy all you wanted, but only on odd or even days, depending on the last digit of your license plate.

not the same as coupons for subsidized gasoline.

 

[OrientExpress]

In California, there was rationing during the 71 oil crisis. You could buy all you wanted, but only on odd or even days, depending on the last digit of your license plate.

not the same as coupons for subsidized gasoline.

True, but there are many different mechanisms for rationing. This is the one that was used in the 70s.

 

[Luft]

Ahhh yes... I remember when the speed limit dropped from 70 mph to 55 mph. Now that I'm about to get an EV, I would kind of like the speed limit to be reduced again.

It would save gas and I could travel 55 mph on the freeways without fearing too much road rage! :lol:

You could probably find all the gas you want at $10 a gallon, plus a bit cheaper for black market gas coupons. I believe the gas ration during WWII was around 4 gallons a week also.

There were also plans by Nixon to ration gas during the 71 oil crisis - but it never went into action.

I think the most likely result of Peak Oil in gas rationing.

In California, there was rationing during the 71 oil crisis. You could buy all you wanted, but only on odd or even days, depending on the last digit of your license plate. That is also when the infamous 55 speed limit was imposed.

 

[Train]

In California, there was rationing during the 71 oil crisis. You could buy all you wanted, but only on odd or even days, depending on the last digit of your license plate. That is also when the infamous 55 speed limit was imposed.

That speed limit started being implemented in about 1974 in response to the 1973 crisis.

 

[IBELEAF]

The way I see it if we wake up tomorrow with the gas price at $10, most of us will be selling Leaf's to pay for other necessities in life and take a bus...

 

[Herm]

The way I see it if we wake up tomorrow with the gas price at $10, most of us will be selling Leaf's to pay for other necessities in life and take a bus...

Good point, and you would get top dollar.

 

[Luft]

Well, we may want to sell but if there are mostly/only sellers and no buyers...

The way I see it if we wake up tomorrow with the gas price at $10, most of us will be selling Leaf's to pay for other necessities in life and take a bus...

 

[adric22]

Ahhh yes... I remember when the speed limit dropped from 70 mph to 55 mph. Now that I'm about to get an EV, I would kind of like the speed limit to be reduced again.

Actually, I've wondered about that. What if they said EV drivers could drive 70, but gas cars could drive 55. That would go a lot further to pushing EV sales than things like HOV access would.

 

[LTLFTcomposite]

Save the drama for your mama. A disruption/reduction in supply would be countered by rising prices that would reduce demand and provide incentive for new supply to the point where the market is again in balance. Government intervention would exacerbate the problem not help matters. You'd likely see a SPR release but good luck with rationing... it barely worked with the greatest generation and would be chaos with the current population.

 

[Herm]

You would finally find "demand destruction" in the US, with probably permanent death of large SUVs and pickups.. owners of large boats would be stuck with paying lots of money or driving ancient pickups.

I would like to see a mandate for some CTL or GTL methanol mixed into the gas supply, it will be hard since organic ethanol producers would complain and you might have trouble increasing alcohol mixes past 10% in gasoline. California used to have a large fleet using M10 or M85 years ago. It should be an option at the pump since methanol is sold for $0.50 to $0.80 per gallon.

 

[Luft]

The "free market" isn't a cure all. In the United States a sudden rise in gas prices doesn't really mean that people will realistically be able to reduce consumption enough to force the prices down. There is a minimum amount of driving that people must do to survive. Go to work for example.

A slow rise and people can adjust a quick one and they are S.O.L.

Save the drama for your mama. A disruption/reduction in supply would be countered by rising prices that would reduce demand and provide incentive for new supply to the point where the market is again in balance. Government intervention would exacerbate the problem not help matters. You'd likely see a SPR release but good luck with rationing... it barely worked with the greatest generation and would be chaos with the current population.

 

[AndyH]

The "free market" isn't a cure all. In the United States a sudden rise in gas prices doesn't really mean that people will realistically be able to reduce consumption enough to force the prices down. There is a minimum amount of driving that people must do to survive. Go to work for example.

A slow rise and people can adjust a quick one and they are S.O.L.

Save the drama for your mama. A disruption/reduction in supply would be countered by rising prices that would reduce demand and provide incentive for new supply to the point where the market is again in balance. Government intervention would exacerbate the problem not help matters. You'd likely see a SPR release but good luck with rationing... it barely worked with the greatest generation and would be chaos with the current population.

Exactly. The 'free market' is a myth anyway - and all vehicles sold in the US get zero miles per myth.

LTLFT appears to be giving an econ textbook answer. But the econ text I have ignores at least as many externalities and 'side effects' (like the price of bread and milk) as LTLFT's appears to.

My vote is that a fairly rapid jump to $10 gasoline would bring this country to its knees faster than the LAST jump that triggered the recession we're still trying to pull out of.

 

[evnow]

A disruption/reduction in supply would be countered by rising prices that would reduce demand and provide incentive for new supply to the point where the market is again in balance.

When are you going to graduate from eco 101 ?

For eg., how long will it take to achieve this balance ? What will the new price be ? What will people do in the meantime ?

 

[LTLFTcomposite]

The "free market" isn't a cure all.

Not only is it a cure, it is the only cure.

But the econ text I have ignores at least as many externalities and 'side effects' (like the price of bread and milk) as LTLFT's appears to.

Bread and milk??? OMG, think of the children!!!

 

[LTLFTcomposite]

When are you going to graduate from eco 101 ?

When is your mother going to graduate from eco 101 ? (ask a condescending question, get a condescending answer)

how long will it take to achieve this balance ?

These days markets react in milliseconds. Changing the price at retail gas stations takes longer, but may happen multiple times a day.

What will the new price be ?

Whatever buyers are willing to pay and sellers are willing to accept.

What will people do in the meantime ?

Probably the same thing they always do: whine. The evening news will be flush with those "man standing at the gas pump filling his SUV while the dials spin at warp speed blaming everyone but himself" interviews. Beyond that what people do isn't any of my business.

What's always overlooked in these chicken little scenarios is that the sellers need to sell the product just as much if not more than the buyers need to buy it. Also that demand is just as fragile as supply, all it takes is a little demand destruction to make supply back up and knock the legs out from under the price.

 

[Herm]

Probably the same thing they always do: whine. The evening news will be flush with those "man standing at the gas pump filling his SUV while the dials spin at warp speed blaming everyone but himself" interviews. Beyond that what people do isn't any of my business.

People will adapt, I'm sure you will see a lot less traffic on the hwys and lots of SUVs doing 55mph. Suddenly no more worries about getting rammed from the back. You would be surprised the mpg you get out of a modern F150 once you slow down to 45mph, the darn things have the aerodynamics of barn doors. The affluent and public employees among us will be able to drive faster

I'm sure visionary politicians, like Obama, will try to protect low income people that need to buy gas.

You will see lots of demand destruction, followed by price drops.. there is little storage capacity in the industry for crude or refined gasoline.. most of it gets used as soon as practical after its produced. Refineries, always marginal operations, will be economically devastated.

 

[AndyH]

But the econ text I have ignores at least as many externalities and 'side effects' (like the price of bread and milk) as LTLFT's appears to.

Bread and milk??? OMG, think of the children!!!

Because you're some type of non-human you don't have to eat, right? You already know this, but here goes anyway: You're typing on a keyboard made from oil, on a computer made from oil, communicating on a network built from and powered by oil. You consume food planted with, fertilized with, harvested with, packaged in, and distributed with oil. The house you live in was built from oil. The water system, sewer system, and electrical system on which your house depends was built by and would fail in the absence of oil. Your vehicle has seven gallons of crude in each tire. Your Florida mosquitoes - now carrying dengue fever thanks to climate destabilization - are sprayed with oil.

Get it? It's about much more than a sarcastic comment about 'the children.'

 

[AndyH]

People will adapt, I'm sure you will see a lot less traffic on the hwys and lots of SUVs doing 55mph. Suddenly no more worries about getting rammed from the back. You would be surprised the mpg you get out of a modern F150 once you slow down to 45mph, the darn things have the aerodynamics of barn doors. The affluent and public employees among us will be able to drive faster

Doggone it, Herm - I was starting to wave my "HERM" flag, but the wind dropped off when I hit the 'public employee' dig.

I'm sure visionary politicians, like Obama, will try to protect low income people that need to buy gas.

Not likely as he continues his slide to the right.

You will see lots of demand destruction, followed by price drops.. there is little storage capacity in the industry for crude or refined gasoline.. most of it gets used as soon as practical after its produced. Refineries, always marginal operations, will be economically devastated.

Realism?! Nice!

And what keeps the house of cards from coming down once the cancer of economic devastation makes landfall?