We cannot drill our way out of this oil crisis. Since 2000, oil companies working in the U.S. have doubled the number of wells drilled per year.
Although increased drilling has added new oil to the nation's supply, it has not done so fast enough to offset the terminal decline of existing fields.
We are going to have to import more of our oil. Period.
Posted: Wed May 14, 2008 10:15 pm Post subject: $2, $3, $5, $7, and $10 gasoline price comparisons- shocking
I dug up this excellent post up from a few years ago and wanted to repost it here. The US could be approaching $5 gallon gasoline quite soon. Maybe within 6 months. Basically, large gas guzzlers will be practically extinct at $10 per gallon.
$5 gasoline:
-2005 Dodge Ram 1500 Pickup 2WD V10
average mpg 10
$10,000 per year fuel cost
$833 per month fuel cost
Yikes!
Quote:
Here are some startling gasoline price figures I came up with doing calculations from this site: Economy
I have calculated some different vehicles and some varying gas prices. Then added them together. All vehicles were calculated at driving 20,000 miles per year and 45% highway/55% city driving, which I feel is average for many American suburbanite drivers.
gas at $2 per gallon/ 87 octane
-2005 Dodge Ram 1500 Pickup 2WD V10 average mpg 10 $3,330 per year fuel cost $276 per month fuel cost
-2003 Honda Insight hybrid average mpg 64 $469 per year fuel cost $39 per month fuel cost
-2005 Ford Explorer 4WD average mpg 16 $2,500 per year fuel cost $208 per month fuel cost
-1992 Chevrolet 2WD Suburban average mpg 14 $2,857 per year fuel cost $238 per month fuel cost
-1988 Honda Civic CRX HF average mpg 53 $755 per year fuel cost $63 per month fuel cost
-1997 Chevrolet Malibu average mpg 23 $1739 per year fuel cost $145 per month fuel cost
-2002 Toyota Corolla average mpg 34 $1,176 per year fuel cost $98 per month fuel cost
gas at $3 per gallon/ 87 octane
-2005 Dodge Ram 1500 Pickup 2WD V10 average mpg 10 $6,000 per year fuel cost $500 per month fuel cost
-2003 Honda Insight hybrid average mpg 64 $938 per year fuel cost $78 per month fuel cost
-2005 Ford Explorer 4WD average mpg 16 $3,750 per year fuel cost $313 per month fuel cost
-1992 Chevrolet 2WD Suburban average mpg 14 $4,286 per year fuel cost $357 per month fuel cost
-1988 Honda Civic CRX HF average mpg 53 $1132 per year fuel cost $94 per month fuel cost
-1997 Chevrolet Malibu average mpg 23 $2609 per year fuel cost $217 per month fuel cost
-2002 Toyota Corolla average mpg 34 $1,765 per year fuel cost $147 per month fuel cost
gas at $5 per gallon/ 87 octane
-2005 Dodge Ram 1500 Pickup 2WD V10 average mpg 10 $10,000 per year fuel cost $833 per month fuel cost
-2003 Honda Insight hybrid average mpg 64 $1,563 per year fuel cost $130 per month fuel cost
-2005 Ford Explorer 4WD average mpg 16 $6,250 per year fuel cost $521 per month fuel cost
-1992 Chevrolet 2WD Suburban average mpg 14 $7,143 per year fuel cost $595 per month fuel cost
-1988 Honda Civic CRX HF average mpg 53 $1887 per year fuel cost $157 per month fuel cost
-1997 Chevrolet Malibu average mpg 23 $4348 per year fuel cost $362 per month fuel cost
-2002 Toyota Corolla average mpg 34 $2,941 per year fuel cost $245 per month fuel cost
gas at $7 per gallon/ 87 octane
-2005 Dodge Ram 1500 Pickup 2WD V10 average mpg 10 $14,000 per year fuel cost $1,167 per month fuel cost
-2003 Honda Insight hybrid average mpg 64 $2,188 per year fuel cost $182 per month fuel cost
-2005 Ford Explorer 4WD average mpg 16 $8,750 per year fuel cost $729 per month fuel cost
-1992 Chevrolet 2WD Suburban average mpg 14 $10,000 per year fuel cost $833 per month fuel cost
-1988 Honda Civic CRX HF average mpg 53 $2,642 per year fuel cost $220 per month fuel cost
-1997 Chevrolet Malibu average mpg 23 $6,087 per year fuel cost $507 per month fuel cost
-2002 Toyota Corolla average mpg 34 $4,118 per year fuel cost $343 per month fuel cost
gas at $10 per gallon/ 87 octane
-2005 Dodge Ram 1500 Pickup 2WD V10 average mpg 10 $20,000 per year fuel cost $1,667 per month fuel cost
-2003 Honda Insight hybrid average mpg 64 $3,125 per year fuel cost $260 per month fuel cost
-2005 Ford Explorer 4WD average mpg 16 $12,500 per year fuel cost $1,042 per month fuel cost
-1992 Chevrolet 2WD Suburban average mpg 14 $14,286 per year fuel cost $1,191 per month fuel cost
-1988 Honda Civic CRX HF average mpg 53 $3,774 per year fuel cost $315 per month fuel cost
-1997 Chevrolet Malibu average mpg 23 $8,696 per year fuel cost $725 per month fuel cost
-2002 Toyota Corolla average mpg 34 $5,882 per year fuel cost $490 per month fuel cost
I think we can all see how devastating rises in gasoline prices will be for the average American driver. And not to mention most drivers are also making monthly payments on their vehicles.
Also, many American families own 2 SUV's or pick-up trucks for their daily commutes. :Shocked:
I have come up with 20,000 miles per year average due to the fact that many Americans commute from the suburbs 60+ miles one way to work:
120 miles round trip.
500 miles per week.
2,000 miles per month.
24,000 miles per year.
Posted: Wed May 14, 2008 10:41 pm Post subject: Re: $2, $3, $5, $7, and $10 gasoline price comparisons- shoc
IanC wrote:
Don't you thing people will ditch the SUVs long before the $10 mark? By that time, there will be serious decline in demand...maybe.
Welcome to the site!
-Ian
Portland, OR.
Thanks!
Yes, I do think the SUV's will be ditched by then. The chart is just for reference. I think around $7 per gallon there will be very few guzzling trucks and SUV's on the road in the US. Regarding demand, it will hit the ceiling and then demand will drop due to high prices. But once demand drops, so do prices. Then, of course demand rises again after that. A continuous cycle, but never permanent demand destruction. I am guessing that each demand drop will only be temporary until rising again.
Joined: Sep 19, 2007 Posts: 887 Location: Land of the Tongva tribe
Posted: Wed May 14, 2008 10:52 pm Post subject: Re: $2, $3, $5, $7, and $10 gasoline price comparisons- shoc
IanC wrote:
Don't you thing people will ditch the SUVs long before the $10 mark? By that time, there will be serious decline in demand...maybe.
I think most automobiles will be ditched by that time but not because of choice. No telling what food will cost by then.
joeltrout _________________ ENERGY is the basis of our industrial civilization and sustains our standard of living. It is the foundation stone of our national wealth. A nation starved of energy.....will be a nation of starving people.
Posted: Wed May 14, 2008 11:07 pm Post subject: Re: $2, $3, $5, $7, and $10 gasoline price comparisons- shoc
Caine wrote:
IanC wrote:
Don't you thing people will ditch the SUVs long before the $10 mark? By that time, there will be serious decline in demand...maybe.
Welcome to the site!
-Ian
Portland, OR.
Thanks!
Yes, I do think the SUV's will be ditched by then. The chart is just for reference. I think around $7 per gallon there will be very few guzzling trucks and SUV's on the road in the US. Regarding demand, it will hit the ceiling and then demand will drop due to high prices. But once demand drops, so do prices. Then, of course demand rises again after that. A continuous cycle, but never permanent demand destruction. I am guessing that each demand drop will only be temporary until rising again.
We are all in serious trouble because (and sometimes I find this hard to believe) the occasional truck actually does haul stuff we need. I know that is hard to believe as mostly what you see in the back bed are empties and garbage bags. Oh and the kid's trike. _________________ ree rah rip ram. sunofabitch godamn. hidey didey christ almighty. rah rah crap
Posted: Wed May 14, 2008 11:28 pm Post subject: Re: $2, $3, $5, $7, and $10 gasoline price comparisons- shoc
I will still drive my SUV even at $10/gallon. I will just drive it a whole lot less. I have already figured out that I can get all my essentials done on four gallons per week
Posted: Thu May 15, 2008 1:14 am Post subject: Re: $2, $3, $5, $7, and $10 gasoline price comparisons- shoc
one_more_day wrote:
I will still drive my SUV even at $10/gallon. I will just drive it a whole lot less. I have already figured out that I can get all my essentials done on four gallons per week
It's kind of a philosophical question along the lines of "if a tree falls in the forest does it make a sound", but is it worth owning a gas guzzler if the only way to afford it is to barely ever drive it? What use is it other than a trophy for the driveway? Meanwhile you have to insure it and register it and all that jazz.
Posted: Thu May 15, 2008 7:48 am Post subject: Re: $2, $3, $5, $7, and $10 gasoline price comparisons- shoc
Most people are hearing about the great deals for purchasing SUV’s going on at the moment. Nice little perks like $.99 gasoline for one year. Some people can’t see past the one year mark (or their just stupid…yep) and think that gasoline prices will go down, or that this run up is temporary. I’ve seen many new cars on the road, mostly SUV’s, no doubt because of the great incentives. Too bad these people put their ego before reality, trying to look flashy in their new SUV. Give’em a year so and they’ll be slapped back to reality. Owned by debt and a hunk of steel sucking their savings (or lack there of) dry.
Posted: Thu May 15, 2008 8:10 am Post subject: Re: $2, $3, $5, $7, and $10 gasoline price comparisons- shoc
I want to go back to the original post. Why is the assumption that the vehicle is driven 20.000 miles/year? That corresponds to 20.000x1.6 km=32.200 km.
Is 20.000 miles/yr a common or average distance driven in the USA? In Sweden the assumption in cost estimates is 15.000km/year, which is the average, and just half of the distance in the example made here.
I really would like to know how far the average US car or SUV is driven per year.
Posted: Thu May 15, 2008 8:16 am Post subject: Re: $2, $3, $5, $7, and $10 gasoline price comparisons- shoc
FSENX is Fidelity Select Energy mutual fund. Any schmoe can invest in this fund with as little as $2500.
If you had done this in March of 2005, when nationwide retail price of gas was $2.00 for the last time, and the price of this fund was $39, you would have made $1771 in price appreciation (the price is now about $6, plus collected some dividends along the way, or about $450 per year. At a more reasonable 10,000 miles per year, and 20+ miles per gallon (500 gallons per year) you would have roughly offset the value of the extra gas up until last November, when the price was last $3.
To offset the additional 70 cents or so, you would have to have made a bigger investment, of course. At $5000, you would have more than offset any price increase in that length of time.
If you were driving the Dodge Ram at the time, at 10 mpg, you could have offset the price of energy by an $11,000 investment. Since last November, this guy is only up about 2% or so, so you might have been better off in FSESX or FSNGX, both of which have done fine since then, despite the market gyrations, but that is beside the point.
But what I am saying is that if you had been really smart, back in March of 05, after having read PO.com for a year, seeing the crap that was about to happen, you would have sold your SUV, bought an econobox, and invested the difference into one of these energy-derived mutual funds, and basically offset the increased cost of fuel for this whole time.
If you were really smart, you would not have been driving the Dodge Ram in the first place, but some economical, paid for car that gets 28 mpg, is cheap to insure, and you can do 90% of the work on yourself, and you would have made the same investment, thus allowing you to fatten up.
This also points out that the fatcats that had $11K in their pockets in 2005 are not nearly as affected by all of this as the guy we were reading about in Alabama the other day trying to work for $7 an hour and paying $280 per month in gas. This should not be a surprise to the populists among us.
Warning: This post is for entertainment purposes only, and not to be construed as investment advice. Never take investment advice from anyone with a job. Do not take investment advice from some guy on the internet without fully investigating it and understanding the risks. I do not work for Fidelity or any other mutual fund company.
Also, anything that happens in the future is subject to the "new rules", whatever they may be, and may not resemble anything that happened in the past.
But, you have to think about this a little bit strategically. The frequent viewers of PO.com have a really valuable view into the future on all of this, if they will see it for what it is.
Last edited by pup55 on Thu May 15, 2008 8:41 am; edited 1 time in total
Joined: Mar 07, 2007 Posts: 229 Location: Houston, TX
Posted: Thu May 15, 2008 8:31 am Post subject: Re: $2, $3, $5, $7, and $10 gasoline price comparisons- shoc
I wonder what one should do, if he really believes that gas will hit $10/gl one day?
Buy energy stocks
Sell the SUV
Buy the smallest car possible
Buy a small apartment very close to where you work
Start traveling the world as much as you can NOW
Do not keep investments in USD
Posted: Thu May 15, 2008 9:20 am Post subject: Re: $2, $3, $5, $7, and $10 gasoline price comparisons- shoc
nocar wrote:
I want to go back to the original post. Why is the assumption that the vehicle is driven 20.000 miles/year? That corresponds to 20.000x1.6 km=32.200 km.
Is 20.000 miles/yr a common or average distance driven in the USA? In Sweden the assumption in cost estimates is 15.000km/year, which is the average, and just half of the distance in the example made here.
I really would like to know how far the average US car or SUV is driven per year.
nocar
Hi nocar. I believe that the average mileage in the US every year is around 15,000 miles. But I'm just guessing. 20,000+ miles per year is very common in the US because so many people commute from their homes in the suburbs to their jobs in the city. I have personally known many people who were driving 180+ miles per day round trip to and from work. This equals at least 43,000 miles per year just going to work.
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I think around $7 per gallon there will be very few guzzling trucks and SUV's on the road in the US. Regarding demand, it will hit the ceiling and then demand will drop due to high prices. But once demand drops, so do prices. Then, of course demand rises again after that. A continuous cycle, but never permanent demand destruction. I am guessing that each demand drop will only be temporary until rising again.
ree rah rip ram. sunofabitch godamn. hidey didey christ almighty. rah rah crap 
, plus collected some dividends along the way, or about $450 per year. At a more reasonable 10,000 miles per year, and 20+ miles per gallon (500 gallons per year) you would have roughly offset the value of the extra gas up until last November, when the price was last $3.
