Scary!!!
Gasoline prices in North America will soar over the next four years to $2.25 a liter, causing a massive jolt to the continent’s manufacturing base not seen since the oil shocks of the 1970s, a leading economist is warning.Jeffrey Rubin, chief economist and strategist with Canadian Imperial Bank of Commerce, forecasts in a new report titled The Age of Scarcity that Canadians and Americans should brace for $2.25-a-liter gasoline, or about $7 a gallon, by 2012. That’s nearly double the current nationwide average price for regular unleaded gas of $1.23. The price will top a record $1.40 this summer as it starts its climb, Mr. Rubin said. national post
Over a relatively short period gas is going to go up in price….perhaps. (The last time someone said this was the 90’s and oil cratered but, no matter.) Were I a green and deeply concerned about cow farts and CO2 (more about cow farts but, hey, who cares) I would be delighted. The market would be solving global warming by pricing oil beyond the reach of the average suburbanite. How cool is that? Instead of driving their great honking SUV’s for two hours to get to work they will have no choice but to take the bus.
Not owning a car and being a great fan of the bus I think this is all grand. Suburban property will become slums. James Kunstler will be vindicated. At any second suburban wives will be forced by circumstance to break up the asphalt on their driveways and plant gardens to feed their families. How cool is that.
Save that it will not actually happen. Back in the 72 “oil crisis” I was sitting with a brilliant – and not unattractive woman who later went on to become an Assistant Deputy Minister of Finance. Po faced she told me that “Energy demand is price inelastic”.
Now you really have to have drunk the econ/eco kool-aid to believe that. But she did. When I said “compact car” she scoffed. When I said public transit she laughed. As to supply and demand she was under the table. Even the polar case where oil went to $500.00 a barrel left her sanguine as to the fact that Canadians would drive the same number of miles at the same rate of fuel consumption as they had when oil was $60.00.
Now, if you believe that – I mean really believe that – I have a handful of magic beans I am aching to get rid of for the right price.
April 25th, 2008 at 11:38 pm
Not owning a car and being a great fan of the bus I think this is all grand.
Jay Currie, eco-poster boy :)
Nothing will change in the short term except perhaps automobile purchasing—which new car is purchased to replace the 5 year old one in the garage.
I’m not convinced that oil prices will stay this high. I think it’s more likely that it’s a local peak in a general upward trend.
One way or another, people will adapt to higher oil prices and slowish infrastructure changes will happen.
Things as simple as corner grocery stores, letting the kids walk to school again, more and smaller schools, businesses in the suburbs and a host of other adaptions will arrive long before suburban asphalt is replaced by vegetable plots.
People in a free(ish) market are enormously creative when it comes to adaptation. These are all good things for us fart counters.
April 26th, 2008 at 6:16 am
Wait a minute, didn’t the CIBC just get hammered in the subprime meltdown? Are they not the worst performing of the major Canadian banks? This guy obviously knows what he’s talking about, doesn’t he?
April 26th, 2008 at 10:13 am
> “Things as simple as corner grocery stores, letting the kids walk to school again, more and smaller schools, businesses in the suburbs and a host of other adaptions”
Rod Dreher will be pleased!
April 27th, 2008 at 2:51 am
Must be nice to live near all these conveniences…if you have to walk less than 10km to town I guess you can afford to be smug about commodity gouging.
April 27th, 2008 at 5:14 am
WL, indeed. However, when you don’t have a car you have a few other tricks. Live near bus routes. Have a taxi budget.
There is no question that people living in rural environments need their cars and trucks. Unfortunately, as long as we build cities and suburbs without regard to walking and other means of transportation, we will all be competing for an increasingly expensive resource. And the higher gas prices will disproportionately hit rural people who have no choice but to drive long distances.
It is as much a mindset as anything.
April 27th, 2008 at 8:57 am
“Energy demand is price inelastic”.
Now you really have to have drunk the econ/eco kool-aid to believe that.
Sorry, who’s kool-aid is that? The eco crowd don’t believe it, do they? They think higher oil prices will bring on Utopia. I kinda agree, except it will be a poor Utopia, which means an unhappy Utopia, which is sort of contradictory. No real economist would believe it. The only people I can imagine believing are those right-wing pro-suburb you occasionally come across.
WLM Redux:
Must be nice to live near all these conveniences…if you have to walk less than 10km to town I guess you can afford to be smug about commodity gouging.
Give it 20 years or so and neighbourhoods will change. If you need a grocery store 500 meters from your house, you’ll get it. The size and location of your house may have to change though.
April 27th, 2008 at 9:34 pm
Jay, when did you become an advocate of “needs based” legislating or social justifications?
That is a distinctly Marxist concept….from those according to their means to those according to their needs.
Rural living has benefits and set backs but there should be no grand arbiter of commodity use or lifestyles who decides who “needs” what…if so let’s just get rid of this democratic crap that stands in the way of efficient technocracies.