So says an analyst at Goldman Sachs who is known to be right about such things. Arjun N. Murti “argues that the world’s seemingly unquenchable thirst for oil means prices will keep rising from here and stay above $100 into 2011.” However, Mr. Murti, like myself, thinks this is a good thing as it might finally, forcibly, make Americans think twice about their McMansions and their giant SUV’s. The party cannot go on forever, and this might just be the 1 o’clock last call that we have been waiting for.
If oil were to hit $200 per barrel, we can expect gas prices to be $6.00 per gallon at the pump. For my wife and I, in our current car, being careful how we drive, it would cost us approximately $220-$240 per month in gas to drive 1000 miles. If you have a less efficient car, multiple cars in your household, a very long commute or kids you have to drive around to extra-curricular activities every day, your gasoline bill could top out at over $1,000 a month. And while we can afford it at today’s prices, do I want to? Do you want to? I can honestly say that I do want to have to afford it if it means that Detroit is forced to increase the MPG standards themselves (in order to sell any cars) instead of waiting for Congress to increase the standards by 2020. 2020 guys? I think that will be way too little, way too late. 12 years from now; hmm, gas has gone up $1.00 in the last 8 months, so in 12 years a gallon outta be…yea, I don’t want to think about it either.
Between President Bush demanding that the Saudi’s pump more oil for us (um, where does he get off demanding anything from anyone?) and them stating emphatically “NO”, our reluctance to drastically increase the MPG standards in this country to at least match most other “first-world” countries, and our measly investment in alternative energies, it is bound to be an interesting couple of years coming our way. Nothing like waiting until the last minute to see the end of the track, right?
Personally, I am heading for the hills with my bicycle and some toothpaste. 😉
Image from the NY Times article
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