$2 Per Gallon Gasoline IS Possible

in Energy, Gasoline, Inflation

I will even state that 50 cent per litre gasoline in Canada is entirely possible.

How can I make this outlandish a statement? First a lot of Canada’s gasoline price is actually TAX so we only really need to cut the price of Gasoline in half to reach this lofty goal, but that is not the only reason.

Let me secondly tell you a quick story about my days at Nortel. When I started working there in the mid-80’s we have Vision 2000, where our goal was to be the Number 1 Telecommunications company in the World by the year 2000. Surprisingly Nortel reached that goal, however, by that time, it no longer mattered, because the Internet and Data networks had changed the world so much, no one was buying that much Telecomm equipment any more. We kind of ended up like being “The Smartest Man in the WWE” ™, who cares?

This is where my $2 per gallon and 50 cent per litre argument is actually based, in the next 20 years or so, there will either be technological breakthroughs and changes so drastic that the price of Gasoline (and Oil in general) will no longer matter any more, or, we will be completely f*cked, it’s that simple. The way that Gasoline prices and Oil prices are being manipulated and the fact that it is a dwindling resource (depending on the model you look at), something must change in 20 years, or the world economy will fall over (as opposed to this year’s version of the great economic implosion).

My guess (and hope), is that thanks to technology in general, computers in specific, that model will take over in terms of the use of energy and gasoline, and there will be a dramatic drop in the demand for Oil and Gasoline thus driving the price through the floor. This sudden dramatic drop will not do Canada any favors, so hopefully we won’t be the Gas Can for North America by then (but I suspect we will be).

The major thing stopping the widespread use of electric power for cars and transport is Battery and the ability to store energy (and how long it takes to recharge the batteries). Each year there are new(er) ideas coming forward, which hopefully will cause a version of Moore’s Law for battery lifetime (doubling capacity every  two years) or something close to that, and once that happens, gasoline will no longer be as important.

Am I completely off my nut? Maybe, I have been wrong before (remember Bill Gates saying, “Who could need more than 640K of memory in a computer”), but my guess is something will change and the ludicrous promise of Gasoline at $2 per gallon is possible, but maybe not in the next few years, and by that time, no one will care!

Any nay sayers

 

{ 1 comment }

  • Bankruptcy Ben August 24, 2011, 6:54 PM

    I don’t see any technological advances on the horizon that will significantly alter the equation on personal transport.

    Reply

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