A former president of Shell Oil has predicted that Americans will be paying $5 for a gallon of gasoline by 2012. He blames growing global demand for oil, tighter supplies and inadequate responses by the U.S. government.
John Hofmeister made his comments during a taped interview Dec. 1, and it aired last weekend on Platts Energy Week television (www.plattsenergyweektv.com) an independent, all-energy news and talk show...
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The scary thing is that Mr. Hofmeister is basing his $5 per gallon gasoline prediction on supply/demand issues, not even taking into account the unfettered digital creation of dollars by the Federal Reserve.
If we've learned anything in the past few years, it should be that government is totally incapable of taking the necessary steps to prevent a problem before it happens. We saw it in the housing crisis in 2007/2008 and we're seeing it now in the state budget crisis. Meredith Whitney explained it best in a recent 60 Minutes interview when she was asked why government wasn't taking action to mitigate the state budget crisis, "because they don't pay attention until they have to."
If Mr. Hofmeister is correct about supply tightening over the next couple of years, we'll begin to see global oil shortages. This is not only going to raise the price of gas, but everything else dependent on oil, which is, well, just about everything else - manufacturing, transportation, food, you name it.
