What a gas

The average price for a gallon of regular gasoline nationwide was “only” up one cent over the weekend according to AAA. That puts it at $2.61⁴. Extra averages $2.77⁴ and premium $2.87⁵. Premium is averaging over $3 in California, Hawaii and Illinois.

I can remember buying a dollar’s worth — and someone else pumped it.

Peter Maass had an informative article in Sunday’s New York Times Magazine — The Breaking Point. A few observations and factoids excerpted from Maass:

• Unlike the 1973 crisis, when the embargo by the Arab members of the Organization of Petroleum Exporting Countries created an artificial shortfall, today’s shortage, or near-shortage, is real. If demand surges even more, or if a producer goes offline because of unrest or terrorism, there may suddenly not be enough oil to go around.

• The consequences of an actual shortfall of supply would be immense. If consumption begins to exceed production by even a small amount, the price of a barrel of oil could soar to triple-digit levels. This, in turn, could bring on a global recession, a result of exorbitant prices for transport fuels and for products that rely on petrochemicals — which is to say, almost every product on the market. The impact on the American way of life would be profound: cars cannot be propelled by roof-borne windmills. The suburban and exurban lifestyles, hinged to two-car families and constant trips to work, school and Wal-Mart, might become unaffordable or, if gas rationing is imposed, impossible.

• The eventual and painful shift to different sources of energy — the start of the post-oil age — does not begin when the last drop of oil is sucked from under the Arabian desert. It begins when producers are unable to continue increasing their output to meet rising demand. Crunch time comes long before the last drop.

• “The problem is that you go from 79 million barrels a day in 2002 to 82.5 in 2003 to 84.5 in 2004. You’re leaping by two million to three million a year, and if you have to cover declines, that’s another four to five million.” In other words, if demand and depletion patterns continue, every year the world will need to open enough fields or wells to pump an additional six to eight million barrels a day — at least two million new barrels a day to meet the rising demand and at least four million to compensate for the declining production of existing fields. “That’s like a whole new Saudi Arabia every couple of years,” Husseini said. “It can’t be done indefinitely. It’s not sustainable.”

It’s an interesting article that, while fearing the worst, does a lot to explain both sides; that is, that there’s plenty of oil or that we’ll be freezing in the dark soon.