NPR Reports -
Prepare to fork over $5 for a gallon of gasoline by 2012, former Shell Oil president John Hofmeister says. That’s nearly $2 more than the current average price of $3.05 per gallon, according to the Department of Energy.
American demand for gasoline has returned to pre-recession levels, while demand from Asian countries has increased beyond levels in 2007 and 2008, says Hofmeister, author of Why We Hate the Oil Companies: Straight Talk From an Energy Insider.
“There’s a psychology of oil pricing based on fear — fear of shortage, fear of lack of supply,” he tells NPR’s Jacki Lyden. The Obama administration sent a shock to the world trading marketplace when it said the U.S. is not going to pursue more off-shore drilling at a time when the world needs more crude oil.
Drivers’ sticker shock will be only one of the consequences of a gas price jump driven by higher crude oil prices. “The higher cost of fuel touches everything in our lives,” Hofmeister says. “We have all kinds of crude oil applications in everyday life, from the Chapstick to the lipstick, to the fuel in our gas tanks.”
Hofmeister advocates for a more pragmatic approach to meeting U.S. energy needs. “I’m not proposing we drill 20 million barrels a day [domestically],” he says. “I’m proposing we produce 10 million barrels a day — 3 million more than today, equal to what we used to produce 35 years ago. The oil is there. There’s plenty of it if we would give ourselves permission as a people to go make it happen.”
Alternative energy sources are the future, he says, but in the short-term, “we really have no choice — with the 250 million cars on the road today — but to put gasoline and diesel into those cars.” Unless you ride a scooter, then you’re still in pretty good shape. ;)