Some predictions of the future of Gasoline prices

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TimeHorse

TimeHorse

Well-known member
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Messages
999
$10.39±4.29 by mid 2025 if the current trend since December 2008 continues!

Note, though, that this calculation has a very large error on it. If we take the entire record of average U.S. price of Gasoline over the past 20 years, it's closer to $4.37±0.33, which given the price now wouldn't be half bad. Then again, if things hadn't spiked after 9/11, we might be paying $2.15±0.27, but now that seems like a pipe dream!

If the Saudi's hadn't injected all that extra petroleum into the system in mid 2008 to bring down the price, though, and things had continued to increase like they had been until the summer, 2008 high that is mentioned at the top of my blog, we might still be paying $9.03±1.16 by 2025.

It's all laid out here in my post: Where will Gasoline Prices be in 2025.
 
If the EV market starts getting major traction, you'll see the price of gasoline begin to fall. Big Oil wants to snuff out that market before it gets entrenched. We've seen that before. However, in the long term, the demand is increasing as the developing world demands oil and the supply is finite. Therefore the price will rise. It will cost more and more to extract oil in more costly locations just to meet demand.
 
ENIAC said:
However, in the long term, the demand is increasing as the developing world demands oil and the supply is finite. Therefore the price will rise.
Click to expand...
That upward pressure will surely be greater than any downward pressure from the small number of drivers who switch to EV's in the next few years. And someone switching from an SUV to a (conventional) Prius saves more gasoline than someone switching from a Prius to a Leaf. Still, the more people who switch the better - better for ICE drivers as well as for themselves. (Here, I don't use gasoline anymore; you can have mine.)

Earlier I posted (http://www.mynissanleaf.com/viewtopic.php?f=7&t=1684) a chart showing price projections based on past trends, with a link to the source DOE data. One plausible projection - the most pessimistic - supports Dave's contention that gas will hit $10. [Edit: Timehorse's blog posting has (independently) those projections plus others, plus discussion of rationale for possible trends.]
 
I think it is more likely that increased oil prices will trigger repeated recessions, such that the price bounces around like we saw in 2008-2009. The economy can't continue to function normally at greatly elevated oil prices.
 
In the past I could believe that big oil cared about EVs not gaining traction and may have envoked downward pricing pressure but oil is in a completely different place today.

If nothing changes oil consumption will increase 10% a year as 30 million new Chinese drivers hit the road e dry year for the next 15 years.
 
I don't see huge gasoline price increases, long-term and in constant dollars, as very likely.

As I posted below, There is a hydrocarbon fuel glut in America today (it's only conventional oil resources we're short of) that will limit future gas price increases.
.
http://www.mynissanleaf.com/viewtopic.php?f=7&t=2809&start=70

"Conventional" oil production will probably soon peak worldwide, if it hasn't already. But there are plenty of alternative hydrocarbon fuels. Coal, shale (both oil and natural gas bearing), and tar sands, that can be used to produce liquid fuels, diesel and gasoline.

Canadian tar sands are already a significant source of petroleum products, and formerly uneconomic shale formations have now been tapped to produce a natural gas glut in America. We are probably pretty close to the cost, somewhere between $100 and $200 a barrel oil, that will make widespread use of coal and oil shale practical sources of gas and diesel fuel.

So, I don't think gas prices are likely to average much higher than $3-$6 a gallon (inflation adjusted) long term, even though they probably will continue to spike and crash erratically as they have for the last 40 years.

The real problem is, unless we develop carbon sequestration, all these fuels will be even more polluting than conventional oil. Each year the CO2 pollution release in the production of a gallon of gas consumed in America rises as tar sands oil production increases.

The energy glut in North America may transform it, in the next few decades, into a net energy exporting region for the first time since the 1940's. Canada is looking to export natural gas to pricier Asian and European markets, and US coal producers are looking for cheaper routes to Asia.

"Those exports can't really take off, however, unless West Coast ports dramatically expand their deepwater loading capacity. That's why, for instance, Arch Coal has teamed up with an Australian company to propose a new port development in Longview, Wash., that would help funnel 5 million tons of coal a year to Asia."

http://www.latimes.com/news/opinion/com ... 8469.story
 
edatoakrun said:
I don't see huge gasoline price increases, long-term and in constant dollars, as very likely.

As I posted below, There is a hydrocarbon fuel glut in America today (it's only conventional oil resources we're short of) that will limit future gas price increases.
.
http://www.mynissanleaf.com/viewtopic.php?f=7&t=2809&start=70

"Conventional" oil production will probably soon peak worldwide, if it hasn't already. But there are plenty of alternative hydrocarbon fuels. Coal, shale (both oil and natural gas bearing), and tar sands, that can be used to produce liquid fuels, diesel and gasoline.

Canadian tar sands are already a significant source of petroleum products, and formerly uneconomic shale formations have now been tapped to produce a natural gas glut in America. We are probably pretty close to the cost, somewhere between $100 and $200 a barrel oil, that will make widespread use of coal and oil shale practical sources of gas and diesel fuel.

So, I don't think gas prices are likely to average much higher than $3-$6 a gallon (inflation adjusted) long term, even though they probably will continue to spike and crash erratically as they have for the last 40 years.

The real problem is, unless we develop carbon sequestration, all these fuels will be even more polluting than conventional oil. Each year the CO2 pollution release in the production of a gallon of gas consumed in America rises as tar sands oil production increases.

The energy glut in North America may transform it, in the next few decades, into a net energy exporting region for the first time since the 1940's. Canada is looking to export natural gas to pricier Asian and European markets, and US coal producers are looking for cheaper routes to Asia.

"Those exports can't really take off, however, unless West Coast ports dramatically expand their deepwater loading capacity. That's why, for instance, Arch Coal has teamed up with an Australian company to propose a new port development in Longview, Wash., that would help funnel 5 million tons of coal a year to Asia."

http://www.latimes.com/news/opinion/com ... 8469.story
Click to expand...



I agree with this as well. The only way gas will be more expensive is if the government has the spine to tax it the way they should. Anyone who travels to the UK or Europe knows what it costs to fill a small tank. We need to do this here if we are serious about getting off oil.
 
edatoakrun said:
Canadian tar sands are already a significant source of petroleum products, and formerly uneconomic shale formations have now been tapped to produce a natural gas glut in America. We are probably pretty close to the cost, somewhere between $100 and $200 a barrel oil, that will make widespread use of coal and oil shale practical sources of gas and diesel fuel.
Click to expand...
That number keeps going up. Fact is tar & shale can't be extracted in large enough numbers. If you go back and check "experts" claimed that shale was economical at $50 a barrel.
 
TimeHorse said:
It's all laid out here in my post: Where will Gasoline Prices be in 2025.
Click to expand...
I can't see the chart - but regression of any kind is unlikely to give any meaningful results as fundamentals have changed.

I posted "my prediction" sometime back.

gasprice.png
 
evnow said:
TimeHorse said:
It's all laid out here in my post: Where will Gasoline Prices be in 2025.
Click to expand...
I can't see the chart - but regression of any kind is unlikely to give any meaningful results as fundamentals have changed.

I posted "my prediction" sometime back.

gasprice.png
Click to expand...

Be patient; it takes time to load; it's a complex chart. And Regressions are only as good as the size and regularity of their data set, and the lack of data points or regularity is reflected in the standard error. As you can see, there is over $4 error on a prediction from the December 2008 low until now because it's a relatively wild period with very few samples. But if we take the 20 year set as a whole, we see only about $0.33 standard deviation which makes this curve the more likely, if all be it less dramatic.

But how do you read your chart? Is that dollars per year? So you're predicting spike and fall on more or less a decade level, with ever increasing steps of stability? Seems to be the 2008 jump was the unusual point in the history, that a general upward trend is the norm, but if the spike was just par for the course, the regression over all the data is probably pretty accurate, indicating about $6 per gallon by 2025, where as you predict just 4, and for us to remain stable at $3.50 until 2017. Very interesting; I look forward to seeing who's right academically since you are, and I hopefully will be by then, both driving EVs. :)
 
I totally agree with the regular "spike then crash" of oil prices in the near term. This is typical of the whipsaw game speculators try to create in any monopoly market. How else can you make money going up, and then make money going down? The pot has to be stirred! I don't think the future median trend line will be linear though. IMHO the overall price trend will curve up until alternatives (like EV's) truly impact oil profits. With the oil monopoly broken, oil will become defensive and accountable to genuinely weakened demand. Oil prices will crash and the trend will reverse! Prices will only recover to the point where REAL demand puts it. Speculators will already be off to the next thing they can game. Wild price swings will be over and easily kept in check by the wide availability of alternatives. Oil will eventually become a niche fuel for auto/bike collectors and motorsports events. Aviation/military will be biofuels and neither product will be cheap, cool or clean enough to pump into a minivan on it's way to Target.
 
Gas prices TODAY in the UK are 6 pounds per gallon.

At $1.60 per pound, that works out to $9.60 a gallon.

http://www.guardian.co.uk/business/2011/mar/09/petrol-prices-record-breaking-6-per-gallon

Last I checked, peak electricity was 0.10 pounds per kwh. Perhaps someone in the UK could comment.

In event, I would think PEV will have a fast uptake at $9.60 a gallon.
 
We've ALREADY got $10-$15 a gallon gasoline in the USA - it's just that a bit more than 2/3 of that is hidden.

We don't need to raise the price any higher, or pray for another revolt - we just need a proper accounting of what IS on the gas pump.

That's the really sad part.
 
TRONZ said:
I totally agree with the regular "spike then crash" of oil prices in the near term.
Click to expand...

I don't disagree with the spike-crash model. In fact, as I point out, when you take prices from 1990 to August 2008 and compare them to 1990 to 2011, the curves are nearly the same. This strikes me as a good indication that spike-crash-spike may indeed be the multi-year trend with the price overall increasing at a rate of…

$0.00029483917218 per day, or about 0.0295¢ per day, which represents about $0.108 per year. Of course, if someone told me, "what are you complaining about, gasoline only goes up about 11¢ per year?" I would not be happy as an EV enthusiast! But, that seems to be the facts and doesn't disagree that much with EV Now's predictions. I just think that the stable 90's and the unstable 00's represent a new phase in the price curve. But then, I'm no Raymond Kurtzweil. :)
 
TimeHorse said:
Be patient; it takes time to load; it's a complex chart. And Regressions are only as good as the size and regularity of their data set, and the lack of data points or regularity is reflected in the standard error. As you can see, there is over $4 error on a prediction from the December 2008 low until now because it's a relatively wild period with very few samples. But if we take the 20 year set as a whole, we see only about $0.33 standard deviation which makes this curve the more likely, if all be it less dramatic.
Click to expand...
Not loading still. May be it doesn't load in IE9 ?

My prediction is that the 2008 wild swing is the new norm. The market fundamentally changed in 2005 when the world production hit near peak. Past 5 years has seen little change in production through wild price fluctuations.

But how do you read your chart? Is that dollars per year? So you're predicting spike and fall on more or less a decade level, with ever increasing steps of stability? Seems to be the 2008 jump was the unusual point in the history, that a general upward trend is the norm, but if the spike was just par for the course, the regression over all the data is probably pretty accurate, indicating about $6 per gallon by 2025, where as you predict just 4, and for us to remain stable at $3.50 until 2017. Very interesting; I look forward to seeing who's right academically since you are, and I hopefully will be by then, both driving EVs. :)
Click to expand...
I kept the X axis deliberately vague. But I think it is closer to months than years. I expect swings every other year or so.

The challenge is to predict price in 2015. 2025 is so far off any prediction is just speculation.
 
TRONZ said:
Oil prices will crash and the trend will reverse! Prices will only recover to the point where REAL demand puts it.
Click to expand...
As soon as we stop millions of Chinese and Indians from becoming first time car owners, I think we can achieve this. Any idea how to do that ?
 
mwalsh said:
AmarilloLeaf said:
Gas prices TODAY in the UK are 6 pounds per gallon.

At $1.60 per pound, that works out to $9.60 a gallon.
Click to expand...

Just nitpicking, but did you take into account the larger Imperial gallon vs. the US gallon?
Click to expand...

No, I didn't. Thanks for pointing that out.

That drops the effective price to only $8.00 a gallon.
 

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