With gas surging to a record $3.40 a gallon today in the United States and oil marching ever upward (a record $115.54 a barrel overnight) you might as well start planning on at least $4 for this summer, as analysts have warned. California drivers are already paying nearly that.

And don’t be surprised if it just keeps climbing through the summer and again next year. There is no good reason to think gas will ever be cheap again. Rather, you’re starting to hear talk of $5/gallon (here, here, here). Remember when you used to put $5 of gas in your car and it’d get you through the weekend?

Sure, a gas-tax-free summer might shave a few pennies off the price, but you can kiss $2/gallon gas goodbye for ever. Global oil production simply can’t increase dramatically in the future because the amount of oil in the ground is limited and most of the big deposits are known. One study suggests the peak in production will occur this year. Let’s hope that’s off by a decade. It’s still coming.

Meantime, demand will continue to rise in China and India. In economic terms, these supply and demand projections form a classic X, and while pundits argue about ‘em, the only question is whether the two lines have already intersected or whether they will cross real soon. Thereafter, solar, hydrogen and Fred Flintstone’s feet will all start looking real good.

A little math: Let’s say your car averages 25 miles per gallon and you drive a quite typical 15,000 miles a year. At $5/gallon, your gas bill would be $3,000. Drive a Ford Expedition? Double that. Ouch. This is going to change some ways of life.

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This entry was posted on Thursday, April 17th, 2008 at 3:24 pm and is filed under Society. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.