Justin, what makes you think we are seeing a peak right now?
But I wonder what fuel will be used 100 years from now.
Adjusted for inflation, even today's gas price is about the same as it was 20-25 years ago.
True enough, today's price is around what it was 25 years ago adjusted for inflation. But the price 25 years ago was also a high point. Gas prices since then have been lower in real terms up until the last couple of years. The nominal price of gas was lower during almost all of the 1980's and 1990's than it was at the peak price in 1981 (or even the average for all of 1981).
I could be wrong, but I don't understand why gas was "worth" around a buck or so a gallon for 20 years, and all of a sudden it is now worth triple that price. I know the inputs are much more expensive and refinery capacity hasn't been growing. But higher prices encourage increased production. This means more supply, pushing down the equilibrium price (demand being constant or increasing slower than the supply increase). That's how it works in the long run anyway. Of course in the long run, we'll be dead.
Anyway, I have gas at $2.25 in my budget in my spreadsheet for long term prices (in 2006 dollars). It is an extremely small expense in my budget so I'm not really worried about it. Just my 0.02 gallon's worth!
But higher prices encourage increased production. This means more supply, pushing down the equilibrium price (demand being constant or increasing slower than the supply increase). That's how it works in the long run anyway. Of course in the long run, we'll be dead.
True enough, today's price is around what it was 25 years ago adjusted for inflation. But the price 25 years ago was also a high point. Gas prices since then have been lower in real terms up until the last couple of years. The nominal price of gas was lower during almost all of the 1980's and 1990's than it was at the peak price in 1981 (or even the average for all of 1981).
I could be wrong, but I don't understand why gas was "worth" around a buck or so a gallon for 20 years, and all of a sudden it is now worth triple that price. I know the inputs are much more expensive and refinery capacity hasn't been growing. But higher prices encourage increased production. This means more supply, pushing down the equilibrium price (demand being constant or increasing slower than the supply increase). That's how it works in the long run anyway. Of course in the long run, we'll be dead.
Anyway, I have gas at $2.25 in my budget in my spreadsheet for long term prices (in 2006 dollars). It is an extremely small expense in my budget so I'm not really worried about it. Just my 0.02 gallon's worth!
That's why the feds and the states should each add some more taxes to a gallon of gas.....give it back to the poor and middle class through a tax break...keep us motivated to use less gas...I want to get weaned off of OPEC oil...Here's my prediction: at some point oil producers will get concerned about the development of alternative fuel vehicles, and drop prices substantially.
I just bought an Atomic Blue Honda CivicI'm pretty sure nuclear will be there.