Because the price of gasoline (but especially oil) underlies the price of everything else. It is hugely important to the economy as a whole. The price of donuts however, are not.

Andrew

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Ethanol is a fabulous solution to our energy dilemma because it will provide more fuel for us to drive around and look for food.

-- Unknown

That may be true of any given oil field, but the numbers we're talking here are global aggregates. There is likely a plateau on these global aggregate production figures, even though most actual fields will not have a post-peak 'plateau'.

No one trusts the OPEC reserve numbers. They are a joke.

But you are ignoring Canadian Tar Sands (and other such heavy oil productions). Canada's Tar Sands is equal to Suadi's reserves. This will keep the game going for quite a while. Oil will not just 'run out' - production levels will drop off over time. The drop of production from one field can be offset by the ramping up of these various heavy oil production operations will will contribute to maintaining the production plateau (or mitigating the downward slope).

Oil isn't running out immediately - CHEAP oil is running out. That's the key point of peak oil theory.

How can you say none exist? That's pure speculation.

Nuclear fusion, for example, would be a massive solution as it could take care of our electricity generation needs.

No, I'm not convinced either. Indeed, such reliance upon technological solutions is arguably what caused us to be in the predicament in the first place, so I'd be a bit cautious with my optimism here.

My only point with that comment was to point out that the skyrocking price of oil is what will drive the alternatives - if an alternative exists, oil at $200 a barrel - or $300 per barrel - is what will make it viable.

You're likely to see that price within 3-5 years from now on the outside (or most conservative projections). Double that again in under 10 years from now. That's the kind of trends we're talking about here.

And of course, given that a majority of electricity in the USA is generated from burning fossil fuels, you can be sure that electricity rates will keep up a similar pace of increase.

And airlines, plastics, and pharmaceuticals and agriculture (to name just a few of the biggest industries totally dependent on, and sensitive to, the price of oil).

As I noted in reply to drgoodtrips' comment along the same lines - in past periods of rapid rises in energy costs saw a commesurate fall in average real wages in the USA. It is estimated that the oil price shocks of the early 1970's caused at least a 1-2 percent drag on GDP per year. You aren't going to see rising wages when GDP is flat or falling.

Indeed, as energy prices rise faster and faster, your real wages are likely to fall, rather than rise. This will compound the proportional cost effect of the rising price of energy.

And I can still afford to fill up my Explorer...

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Obama's New "57 State Patriotic Pin":




Sayeth John Drake - 10/13/08: "OK, you're right, I admit to LYING"

I don't foresee this happening. There is only so high that gasoline can go before alternative forms of energy become viable source of portable energy. The price doubling ever few years means in 20 years the price would be somewhere between 20 and 80 times its original price. Unless gasoline becomes obsolete this seems incomprehensible to me. I would expect the upper limit on gas prices to be somewhere around 5 times what they are today. Presumably at some point before this other technologies would take over.

Is this a good thing?

glad to see no one has thrown ethanol out there as an alternative because it doesn’t add up.......it squeezes other commodities and resources...

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No individual can plan his own existence in their view.

So the state planners must arrogate to themselves the right to manipulate any sector of the economic system if the good of “society” or the “general welfare” is paramount.

Ipso- if the rights of the individual get in the way, the rights of the individual must be sublimated.

The Road to Serfdom
FA Hayek (interpretation)


Mortgage Backed Security survivor

Even without looking at the at the price effects it doesn't do that well. The ratio of energy required to produce ethanol to the energy generated is ridiculously high.

I heard, from a reputable source, that there is a decent business case for using sugar cane as a biofuel. He asserts that ag subsidies and tariffs have prevented it from becoming a suitable alternative to conventional fuel.

I pay 3.50 a gallon ..I get 12 miles to the gallon ( unless someone pisses me off, then I have to smoke them, the supercharger kicks and well, you know the rest)..wow should I start a pity party? I make my own bed...and I pay for it.

__________________
No individual can plan his own existence in their view.

So the state planners must arrogate to themselves the right to manipulate any sector of the economic system if the good of “society” or the “general welfare” is paramount.

Ipso- if the rights of the individual get in the way, the rights of the individual must be sublimated.

The Road to Serfdom
FA Hayek (interpretation)


Mortgage Backed Security survivor

12 miles per gallon ... do you drive a 747? How much du you drive? ... they will probably name a street in Riad after you or so.

lol..check my photo ulpoad on this site ..miranda hates me..lol....I have a place to got to , i am on hosue of saud wall as the king of consumption....

__________________
No individual can plan his own existence in their view.

So the state planners must arrogate to themselves the right to manipulate any sector of the economic system if the good of “society” or the “general welfare” is paramount.

Ipso- if the rights of the individual get in the way, the rights of the individual must be sublimated.

The Road to Serfdom
FA Hayek (interpretation)


Mortgage Backed Security survivor

I seem to live in the ultimate catch-22 on this issue. Currently the price at the pump in my community is $5 a gallon. This is scheduled to raise in the near future. To what amount I dont know.
I live in Alaska where there is plenty of oil. It is the transportation of that petroleum that causes the high cost, due to the lack of infastructure.
Also our current situation requires diesel for heating our homes. The price is equally high. Where 7 years ago, it would cost $100 a month to heat my home, now it is $500 a month. That is a signifigant increase.
Also, I drive a full sized pickup. This is the ultimate catch-22. I need the pickup to haul a boat. The boat allows me to catch all of the salmon, and hunt any game I need for the year. If one were to buy all of thier meat from the grocery store without subsidising it with wild food caught. It would be very cost prohibitive.
All of this expense comes to the consumer in rural Alaska. Meanwhile, the high oil prices mean a boon for the Alaska state government who make a substantial amount of money from it. The high price of oil means I dont have a state income tax and a higher Permanent Fund Dividend.

How much do you get from the government in gasoline profits? Don't they cut you guys a cheque every year or something like that?

I live in Alberta - we were given a cheque of $400 CAD for the oil profits a year or so ago, it seemed to be a one time thing though....

Andrew

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Ethanol is a fabulous solution to our energy dilemma because it will provide more fuel for us to drive around and look for food.

-- Unknown

Where in Alberta are you?

I'be been to the oil sands up near Ft. McMurray. That's some pretty impressive shit...

__________________
Obama's New "57 State Patriotic Pin":




Sayeth John Drake - 10/13/08: "OK, you're right, I admit to LYING"

This year it is roughly $1,600. Not to bad, the highest has been $1954. It comes to every man woman and child qualifying in the state. Qualifications is that someone in simply a resident of the state for the previous calendar year.
To call it the government isnt quite fair. The Alaska Permanent Fund Corporation is its own corporation. %25 of resource revenue generated in the state goes to the fund. That is then invested in various ways, and a percentage of the interest only is paid to Alaskans. So it doesnt come at the expense of state government. It is totally aside, as set aside by Alaska constitution. There was talk of establishing something similar in Iraq. But that seems to be low on the priority level at this point.
What it boils down to is this. The resources of Alaska belong to its residents. This is dictated by its constitution. So when a resource extraction endeavour occurs, %25 of its value to the state are set aside to its residents. The rest falls to operating state government.