Gas prices are not what they were over the summer, but in just a few years they are not expected to ebb and flow as they have in the past, or so says energy industry expert Steve Andrews.
Andrews the co-founder of the Association for the Study of Peak Oil, projects that by as soon as 2015, every country in the world will start producing less and less oil, and as consumer demand grows, the prices of not only fuel, but every consumer product, will skyrocket.
“Between 2004 and 2007 the aggregate supply of the world’s oil began to flatten,” Andrews said at an energy seminar Wednesday at Fort Collins’ Drake Center.
And because nearly every facet of modern life is dependent on the oil industry — even wind turbines are built by machines that use gasoline — the list of items that will become more expensive grows long.
Andrews said the U.S. can expect higher prices for “gas, asphalt, firefighter suits, diesel fuel, wind generators, electricity, coal, natural gas and food.”
The negative impacts are immediately looming, but Andrews told the crowd of about 70 Fort Collins residents that he doesn’t expect any easy solutions, especially in the short time before world oil production peaks.
“Substitute fuels can’t scale up in a timely fashion,” Andrews said, and in a country whose population thinks in a “one person per car mode,” people have to start conserving energy.
He said the popular version of alternative fuel, ethanol, is not a good substitute for oil because the net energy from producing ethanol is inefficient when compared to oil.
“You take a car that runs at 12 miles per gallon, and you pay $150 to switch to E-85 so you can run on 11 miles per gallon,” he said.
Total world consumption oil is 84 to 85 million barrels a day while the U.S. uses a quarter of that.
But Zach Shelton, a sophomore biochemical sciences major, said the biggest factor in his decision between driving and walking to class every day is price.
“I would probably stop driving to campus if gas went above three dollars a gallon,” Shelton said. “I would just start taking the bus.”
Chian Jones, a PhD graduate student in economics, shares a similar point of view.
She expressed a rise in gas prices may be due to a variety of factors, but one specific factor is demand speculation.
Jones said the surge in gas prices during the summer of 2008 gave Organization of Petroleum Exporting Countries a boost in confidence — OPEC, she said, now understands how much people are willing to pay for gas. She said the result is an artificial reduction in supply, which will drive up the price of oil.
According to Jones, this speculation price spiral becomes a “self-fulfilling prophecy.” The more people expect prices to rise, the more oil industry officials will allow them to rise.
Andrew’s said the end of oil production is a long way off, but it’s sure to slow very quickly.
“Oil will not run out,” he said. “It will just be extracted at an increasingly slower rate.”
Staff writer Ryan Sheine can be reached at firstname.lastname@example.org.