$15 gas is coming. Maybe not for a few years, but within a decade isn't out of the question.
This CNBC interview included commentary from Robert Hirsch of Management Information Services and lead author on Peaking of World Oil Production: Impacts, Mitigation, and Risk Management, commonly known as the Hirsch Report.
Hirsch says in the interview that once oil production goes into decline we'll see rising gas prices such that $4 gas will be the “good ol' days.” First gas at “$12 and $15 per gallon” and then rationing, meaning that we won't always be able to buy at these high prices “when we want it.”
This isn't hogwash. The Hirsch Report was written on request of the US Department of Energy. Dr. Hirsch isn't just peddling fear for the sake of newsletter subscriptions. The report made specific recommendations to adapt to what will certainly happen. Whether we take the advice is up to us. We haven't so far.
As JLP mentioned, filling up his Rendezvous with $12 gas would cost over two hundred bucks. How much would it cost you to fill up your tank with $12 gas? With $15 gas? How often do you have to do this?
How would you have to adjust to cope with $15 gas as the status quo?
How about finding out this way: Pay $15 per gallon for gas now. On your next fill-up, take the difference between what you pay and $15 and put that money in a strong piggy bank that you won't be easily tempted to touch. (Or just quadruple the cost of your gas, meaning you would save triple your gas receipts. That's close enough.) This will simulate the jolt your bank account will experience, and will result in adjustments in how you drive, what vehicle you own, how much you drive, or possibly where you live and where you work if you really take it seriously. If you want to be even more realistic, tack on a “oil tax” of 40% on your food.
Or at the very least, go back over your pump receipts for the past month and see how much more you would have paid had gas been $15 per gallon. As a very rough estimate I went back to Quicken and added up our gas receipts for a month. It was $378. If I quadruple this amount, it's an extra $1134 per month that we'd be paying on gas.
Wouldn't it be nice to start socking away that kind of money now rather than wait until you can't?
I think that your idea is a good one but I am also looking into alternative ways to fuel my car which will save me a lot more money. I currently have a hybrid car and that has halved my fuel bill.
I'm currently going through a tank of gas about every 3-4 weeks at about $50. Quadrupling the price probably would not have much effect on my driving habits.
But I will probably get a more fuel-efficient vehicle as my next car. My Hyundai Elantra gets decent fuel economy on the highway, but I'm doing mostly city driving these days, and a hybrid would be much better for that. Unfortunately the Elantra's only five years old and still under warranty, so it's not quite ready for the scrap heap.
Quadrupling definitely affect my driving. It may be better look into fuel efficient cars in future days. You are right in saying socking away the money…
What about buying oil stocks now, so that if gas does get up to $12 or $15, you'll likely have at least double or tripled your money that way?
I shudder to think of gasoline quadrupling. We're already paying an arm and a leg. Found you through the 154th Carnival of Personal Finance.
you are insane
hahaha just kidding, clever idea though… makes you really think about the impact
you are insane
hahaha just kidding, clever idea though… makes you really think about the impact
There is an outfit called MyGasDiscount.info, I joined them (it doesn’t cost anything to join) and then when I fill up, I keep the receipt and mail it in to get a 50% rebate on the amount I spent for gas. However, there is
an upper limit that you can do each month I think it is $200 or something like that — but believe me an extra couple of hundred bucks a month gives my family our weekly trip to the movies again… or you can always buy more gas.. LOL. Here’s the link http://www.mygasdiscount.info