What do you expect the price of gas to be in 2020?

Hello, I was wondering if anybody has been tracking global oil supply and has thought about its impact on future oil prices. So, here I'm asking about its proxy.

What do you think the *average* price of gasoline will be in 2020 in terms of $/US-gallon and 2010 US dollars in the United States? That is, you don't have to try calculate uncertain future inflation.

For reference, the average US price is now something like $2.80 where oil is at ~ $80/barrel.

Barring technological breakthroughs, such as converting sunlight or some other form energy to cheaply create gasoline or some other liquid fuel, I think gasoline's limit will be the price of the next available substitute. I'm absolutely clueless of what the price of that is, but I'm thinking somewhere in the $5-9 would seem likely with price spikes above $10 quite possible. $5 is where electric cars seem to start to make financial sense for the majority with current prices - however, I don't know how electric's price would be influenced by huge demand as the supply capacity might not be great enough. If electric is made cheaper, which seems promising, then I suppose that "next best substitute" price may lower.

However, if technological breakthroughs occur, then I'm guessing people would enjoy cheap liquid fuels and/or whatever cheaper alternatives, like perhaps an EESTOR capacitor or something else. If that's the case, then the price of liquid fuels would converge to the price of production in 2020 which would probably be $70/$80 per barrel which corresponds roughly to $3-4 / gallon. However, if the market supply is concentrated by a relative few, they could possibly control the oil price through oil supply control assuming there's some need for oil somewhere

you need to specify what price. the current commodity price is $2.32 from yesterday's close.

the british are paying $8/gallon right now, because of road and state taxes. similar in europe. in venezuela it is 25 cents a gallon.

i think your assumption that fuel will be priced according to cost of replacement fuel is misleading. those countries which control their own oil can effectively determine whatever the price is. there is not an international law against monopoly pricing like there is in the US.

once saudi production drops or they restrict exports, there will not be a limit.

russian production has already dropped, mexico is dropping at 20%/yr and i don't think the canajuns are gonna bulldoze over their entire north woods for oil sands production just to make the US fatter than they are.

if the US was to institute road and use taxes to get it up to $10-15/gallon now then the impact of shortages in the future might be mitigated by people making decisions now on how they consume oil, but if there is no change and the politicians continue to push more drilling for the last of our available oil, we could easily see a spike to $20/gallon in the commodity markets.

all imho

dnmun said:

i think your assumption that fuel will be priced according to cost of replacement fuel is misleading.

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Well, it's simple really - If demand outstrips supply, which it's projected to do, than it's not a matter of "priced according to the cost of replacement fuel", but rather the price of gasoline will rise until it's comparable to its substitute and then people would start to consume the other substitute. If gasoline were to become significantly more significant than the substitute, people would rush to the substitute and gasoline's demand would decrease until the price is roughly equivalent to the substitute.

However, as I already mentioned, if control becomes more concentrated, than the increased market power may influence those prices. I.e., Saudia Arabia.

My fantasy is $15+ per US gallon, but I don't think that's really realistic. And, yes, my common sense also conflicts with my fantasy - Cheap fuel means more goods to me due to lessened transport costs, so I would like cheaper fuel. But, at the same time, it'd be nice to see these unreasonably heavy personal transportational gas hogs become economically extinct.

there is no substitute, this is it and when its gone, the ride is over.

but long before it is gone, it will be impossible to obtain. markets do not operate like you think they do. a monopoly is a monopoly is a monopoly.

i don't think the canajuns are gonna bulldoze over their entire north woods for oil sands production just to make the US fatter than they are.

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Sure we will! :wink:

...and West Virginia will stop bulldozing their mountains away for coal?
http://earthobservatory.nasa.gov/Features/MountaintopRemoval/

dnmun said:

there is no substitute

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Sure there is!
http://www.theglobeandmail.com/repo...eureka-moment-for-coal-to-gas/article1502823/

Researchers at the University of Texas at Arlington (UTA) announced last month that they have developed a clean way to turn the cheapest kind of coal - lignite, common in Texas - into synthetic crude. "We go from that [lignite coal] to this really nice liquid," Brian Dennis, a member of the research team, said in describing the synthetic crude that can be refined into gasoline.

Assuming that these Texas folk are correct, this advance in technology could represent a historic moment in energy production - for Canada as well as for the United States. Canada has huge reserves of lignite coal in Manitoba, Alberta and Saskatchewan (which already gets 70 per cent of its electricity from this common coal) - not to mention in Nova Scotia.

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If all goes well, most of North America will all be bulldozed! Yay!

loCk

Yay, cheap oil will last!

However, there's peak coal on the horizon: http://en.wikipedia.org/wiki/Peak_coal

If more of the coal is converted to gasoline to feed transportation needs, that would simply hasten peak coal meaning we will have run out of cheap fossil fuels, despite coal possibly extending "peak fossil fuels" by another decade or several. Still, it would buy time for transitioning assuming research into alternatives is active.

Ah yes, but the OP only asked about (North American?) gas prices in 2020... I'll predict less than $1... and only 49 States left with Texas completely removed from the face of the earth. :lol:

With the devaluation of the dollar and a non oil directed Global Economy better rething those tiny fuel cost. I picked well above $20 and beyond.

It will be starting the gradual rise in the summer of 2012 ---mark it down in your diary kids