"The former president of Shell Oil, John Hofmeister, says Americans could be paying $5 for a gallon of gasoline by 2012.
In an interview with Platt's Energy Week television, Hofmeister predicted gasoline prices will spike as the global demand for oil increases.
"I'm predicting actually the worst outcome over the next two years which takes us to 2012 with higher gasoline prices," he said.
Tom Kloza, chief oil analyst with Oil Price Information Service says Americans will see gasoline prices hit the $5 a gallon mark in the next decade, but not by 2012.
"That wolf is out there and it's going to be at the door...I agree with him that we'll see those numbers at some point this decade but not yet." Kloza said.
"The demand is still sluggish enough in some of the mature economies."
I just checked; oil is at $91.22 a barrel. In 2008 it hit $147 and the price of a gallon of gas in July of that year was $4.11. By December it had fallen to $1.61 a gallon because the high cost of energy, specifically oil, was the trigger that set off the economic collapse we are still in today.
We're much weaker now so we won't be able to withstand $4.11 a gallon gas. We'll shut down someplace before that. But the increase in demand for oil that is in part driving this inflation in price isn't coming from America but from Asia. And the other thing that's driving it is the collapse of the dollar which certainly won't be strengthened if we suffer further economic failure. So it's entirely conceivable that when we falter this time we won't see prices fall as they did the last.
I believe energy will play the role of trigger yet again as our economy tips into depression, probably sometime this year. Who knows, maybe we'll be able to push it out a bit farther but collapse is coming. The only question is where, besides America, will it occur? I tend to think that if we go everyone else will go with us but I really don't know and neither does anyone else.
So get ready and pray for wisdom and protection. I don't know what will happen this year and I hope to be surprised by growth, jobs and more good times but I'm not holding my breath. I'd rather prepare for the worst and get the best than just close my eyes to reality.