Consumers only recently got used to seeing the $3 mark at the pump. This year they have been surprised to see prices breaching the $4 a gallon mark just for regular and some drivers have grudgingly acknowledged that $5 is a possibility in the near future. But what if gas just keeps going up and up and up? What if it hits $12 a gallon and there are severe gas shortages? That's a likely possiblity according to Robert Hirsch, the Senior Energy Advisor for Management Information Services. Hirsch made his frightening prediction on CNBC's Squawk Box.
"[T]he prices that we're paying at the pump today are, I think, going to be 'the good old days,' because others who watch this very closely forecast that we're going to be hitting $12 and $15 per gallon," Hirsch said. "And then, after that, when oil - world oil production goes into decline, we're going to talk about rationing. In other words, not only are we going to be paying high prices and have considerable economic problems, but in addition to that, we're not going to be able to get the fuel when we want it."
Hirsch told the Business & Media Institute the $12-$15 a gallon wasn't his prediction, but that he was citing Charles T. Maxwell, described as the "Dean of Oil Analysts" and the senior energy analyst at Weeden & Co. Still, Hirsch admitted the high price was inevitable in his view.
"I don't attempt to predict oil prices because it's been impossible in the past," Hirsch said in an e-mail. "We're into a new era now, and over the next roughly five years the trend will be up significantly. However, there may be dips and bumps that no one can forecast; I wouldn't be at all surprised. To me the multi-year upswing is inevitable."
At those kind of prices the way the U.S. runs its cities and highways would not be feasible. An alternative fuel would be needed or new means of transporting people to and from work, grocery stores and shopping malls would be needed.
