Two years ago in this blog, I wrote a futuristic column  from April 20, 2009. The title of the column was “Remember When Gas Was Cheap?” At that time I predicted that the price of oil in early 2008 would reach $125 and that in April 2009 it would be $137.
In January of 2007 I was invited on the “First Business” syndicated business program to discuss the price of oil for the remainder of the year. At the time the price was $53 a barrel. I basically told the flabbergasted reporter that I thought the price of oil would most definitely cross $80 a barrel and would approach, but not reach the $100 a barrel price. The counterbalancing view was some “oil industry expert” who said the price range for the year would be $50-70 a barrel. Of course we know what happened.

Last fall I wrote a column predicting that the trading range for the price of oil would be $80-125 for the next two years. I now want to revise that forecast. When I made that prediction, the price has recently crossed $80, charting new territory. While obviously not surprised, I did let all the disbelief I had been subjected to in my predictions to give me a sense of caution. Since $80 was the new high, and I was saying that it would be the price floor for the foreseeable future I thought it would be a correct floor. I did say in that column that …

The magnitude of the energy crisis we now face in the U.S. cannot be overstated.  It is not just about cutting the emission of greenhouse gases, the increasing price of petroleum or the fact that we are dependent for oil on countries that only hold us in high regard as customers.  It is about the fact that our entire physical landscape and a large part of our social and economic interactions are predicated on the assumption of cheap petroleum, an assumption that is no longer valid.

Petroleum will continue to rise in price as I have consistently predicted in this column.  We are most likely going through peak oil and when we accept responsibility for contributing to global warming we realize that all fossil fuels and the burning of them has incredibly dire unintended consequences.  In addition we are a debtor nation with a crumbling and in need of repair infrastructure.  Where is this leading us?

I have long been a fan of James Howard Kunstler’s book “The Long Emergency” and have recommended it to many people. [In addition his blog is one I recommend in conversation and have recommended on my links page since the inception of Evolution Shift.]  This best selling book details in a persuasive manner the coming deconstruction of American society due to the converging crises mentioned above.  Having read this non-fiction book from a novelist, it was no surprise to find that Kunstler was writing a novel about ‘post long emergency’ America.  It is called “World Made …

Regular readers of this column know that I have long predicted that oil would reach and then exceed the $100 price barrier.  In fact, when this barrier was first breached the first few days of January, readers congratulated me on the veracity of my prediction.  Yesterday was the first time that a barrel of oil actually closed over $100.  This drove the stock market down, made economic prognosticators nervous and created headlines across the country. 

Six months ago I predicted that the trading range for a barrel of oil will be $80 – 125 for the foreseeable future.  The current global marketplace is such that it is hard to imagine the price dipping below $80 but there are a lot of scenarios that could ultimately drive it above $125.   The actual trigger for the recent price increase is an explosion in a Texas refinery that processes 70,000 barrels a day, which is less that one half of one percent of the daily U.S. consumption of 20 million barrels a day. That is how tight the oil market is.  There is little or no excess refining capacity in the world.

Demand is and will consistently outstrip supply in the oil market.  Any perceived fall off in U.S. consumption due to an economic slow down will be more than offset by the increased demand from China and India and other developing countries.  This will be a constant for the foreseeable future.  When one layers on top of that supply/demand tension such things as …

High speed trains must, and will become an essential component of the U.S. transportation system during the next 20 years. This seems to be obvious, but is something that the (lack of) leadership in Washington D.C. has yet to seriously consider. A combination of lack of vision, deeply entrenched vested interests, a troubled Amtrak system and a ‘not invented here’ mindset has combined to allow the U.S. to be woefully behind the curve when it comes to both rail transport and an intelligent, integrated national transportation system.

Flying has become an extremely unpleasant and unreliable travel experience. In addition it is a large contributor to greenhouse gas emissions into the atmosphere. Predicated on cheap oil, high prices and customer service, the airline business must now operate in an environment of expensive oil, low prices and a general lack of quality customer service not to mention cancellations and poor on-time performance. At the other end of the transportation spectrum, automobile travel is undergoing change due to increasing price of gasoline. Gasoline prices consistently over $3 means that in addition to looking for a high MPG when buying a new car, people will think twice before making a long road trip and will increasingly find that commuting by car is adversely affecting the household budget.

In Europe and Japan, high speed trains have been a way of life for decades. Comfortable, fast, environmentally sound and connecting the central city centers, high speed trains have become the backbone of convenient transportation. …