Future Gas Ever More Expensive

Jan. 17, 2007: CNN Money—Auto Industry Experts See Soaring Gas Prices

Summary: "U.S. auto executives are bracing for gas prices to more than double over the next decade and for sharply higher U.S. fuel economy standards—a step the industry has long resisted, according to an academic survey released Tuesday.

Gas prices will average slightly more than $4 a gallon by 2015 and just over $5 a gallon by 2020, according to the survey conducted by the University of Michigan Transportation Research Institute (UMTRI)."

If you’ve been considering an upgrade from gas hog to hybrid, now may be a good time. Ever since the Katrina-sparked gas price surge in 2005, SUVs have been tough to dump and the most fuel-efficient hybrids hard to find.

Gas prices have relaxed to around $2.25, causing amnesiacs to be seduced by SUV commercials’ promise of long sightlines and leathery legroom. A few market surveys have found that people are willing once again to look at the trucks and SUVs they eschewed while prices topped $3.00 a gallon.

However, world oil supply is still shaky. Forces are more apt than not to merge on the side of rising crude prices: the right weather in the wrong place, a little sabotage somewhere else, and political plotting in another corner of the world are all possible ingredients of the next gas crisis.

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  • Jerry

    Bob Lutz says making auto makers make smaller cars is like making clothing manufacturers make smaller clothes to stop obesity.

    NO BOB!! its like telling your kids that they can’t eat at McDonalds everyday

  • Tom

    Agree with Jerry.. that was a bad analogy by Lutz.. I want to see american companies succeed. But, comments like that one from Lutz, at a time when GM is trying to shed their gas guzzler image, is not his smartest move.

  • Indigo

    I think we could see $3-$4 gasoline a lot sooner than 2015. All it would take is the Stupid Cowboy (Bush) picking a fight with Iran, or another Gulf Coast Cat-5 storm.

  • Charles

    Note to American automobile manufactures:

    Please offer me a nice fuel efficient car. I know at least Ford can do it. The new Volvo S40/V50 looks like a nice car. The Mazda 3 is a nice fuel efficient car. I have read many stories that the new European Focus is a very nice car. Why is the current US Focus a cheap little car (Disclosure: I own a 2004 Focus PZEV wagon).

    If you are at a loss as to what to do with the Mercury brand I have a suggestion. Import the European Focus and a version of the Mazda 5 and let Mercury sell something a little bit funky. If you want my next car to be a Ford product, all you have to do is make a hybrid Mazda 5 for under 30K.

    One more note. When the Taurus came out it was ahead of Camry and Accord. Over time Toyota and Honda kept investing in their mid-sized cars, Ford did not. In the end the Taurus died a slow death, and Ford invested large sums of cash to develop the Fusion. Would it have been cheaper to just keep investing in continual improvement of the Taurus? Now Ford is doing the same thing to the Focus. When it came out it out performed the Civic and Corolla (not in quality, but in handling and other important measures). Now over time the Civic is ahead of the Focus and the Corolla is getting close.

  • jake

    Yes! This article is great. 🙂 :grin 😉 :zzz :p

  • RichardT

    It is good that the automakers are finally acknowleging that higher prices are permanent, but their estimates seem a bit ‘optimistic’ to say the least. The average price of gasoline has risen 250% since January 1st, 2000 (when I began keeping weekly records of gas prices in my home town). If the rate of price increase (about 20% a year) continues, world oil extraction remains flat, and demand from China and India continues to rise, $5.00 per gallon average is no more than five years away AT MOST – presuming no hurricanes or successful terrorist attacks on oil facilities during this time.

    If you’re wanting to take advantage of ‘price amnesia’ to trade in for a hybrid, the time is here.

  • noflash

    Gas is less than $2/gallon in Omaha this week.

    As people turn to more FE vehicles, supply will increase. That will lessen the increase in the price of oil for the future.