Permanent Decline in Gas Prices?
While the price of gas at the pumps has been declining for a few weeks, there are no serious analysts in the oil industry or on Wall Street that predict this is anything more than a temporary lull. All these analysts predict that over the next few years, oil prices - and hence prices for gasoline - will continue to rise. The overall reasons for the price increase are structural. They are due to a swelling of the demand for a product with limited supply. Simple economic laws indicate that the gas price will continue to rise over the longterm.
The $8 Gas Price Prediction
One serious study predicted a price of $8 a gallon by 2010. But then, the study predicted that the price would hold steady and might even decline by a dollar or so. The reason is that most surveys predict that at $8/gallon, most Americans will have to change their fuel consumption habits. Until $8 a gallon, the high gas prices are just annoying to most people, once that line is crossed, certain habits become unsustainable.
Gas Price Prediction for the Auto Industry
At $8 per gallon, over ninety percent of cars sold will be hybrid or alternative fuel vehicles. These cars will be so much more efficient that people will spend less cash on gas, despite the higher prices. A hybrid car simply doesn't need as much gas as an SUV. So you may feel the pinch when you fill up, but when you are only filling up once a month, it will not affect you as much.
Prediction: Less Cars
Most Americans own cars. Most American families have two cars. Some even have three. This is in sharp contrast to the rest of the world where people either have one car or rely completely on mass transportation. Only people in major U.S. cities and those living below the poverty line currently do this in the United States. The bright side is the increased demand for public transportation will force governments to design the most efficient, most effective public transportation systems available.
Prediction: More Bikes
In Amsterdam, most people use bicycles for transportation. For a very low cost, you can rent a bike in one part of the city and return it in another. There are whole roads and traffic systems designed just for bikes. Having to rely on your own physical energy is the most efficient transportation system out there. As you travel around the world, more and more places are following Amsterdam's lead. Now, in many American cities, they are starting to experiment with bike rental programs.
Prediction: Getting Through the Gas Price Crisis
If you are feeling nervous about the rising price of gas, take comfort in the fact that there will be solutions. Too much depends on people being able to travel from one place to another. While the way we do things might change in five or ten years, people will still have the same basic needs. They will need to go from home to work to school to leisure activities. Just the way we go about and do these things will be different.