Here's a sobering statistic: According to a report published by the U.S. Geological Survey, in 2000, 27 billion barrels of oil were consumed throughout the world, yet just 3 billion barrels were replaced through new discoveries. At the current rate, by 2020 or so the demand for oil will exceed the available supply. The USGS terms this "the Big Rollover."
You think the price of gasoline is high now? As the man said, you ain't seen nothin' yet.
I'm no economist, but the concept of supply and demand is not too difficult to understand. Simply put, the more we need of something, and the less of that something that is available, the higher will be the price.
Back in the 1960s, when I purchased my first car, gasoline was 25 cents a gallon because there was more than enough oil to meet the demand. Now we are consuming every drop that is produced, and gasoline is more than $2 a gallon. Can you imagine how quickly the price will rise when there is not enough to go around? This is no Chicken Little story. The sky will be falling.
Here is one of those rare situations in which reasonably certain knowledge exists with respect to a future event. That being the case, immediate action can be taken to manage the effects. Right? Well, unless this is one of those highly classified projects buried deep in the black hole that is the federal budget, I don't think this is happening. So, here's my idea: Raise the price of gasoline even further. First, let me don my Kevlar vest and then I'll explain.
This increase should come from a new tax levied on each gallon of gasoline and other refinery products. The resulting funds would be used to finance serious research on alternative energy technologies. We are going to run out of oil, and all fossil fuels for that matter. We'd better have a replacement ready when the time comes.
Another reason for raising the price would be so the cost reflects the true economic value of this most precious commodity. I know this flies in the face of laissez-faire capitalism, but it is better to make the adjustment now than wait for a nasty spike, such as the one that occurred in 1973, when the price quadrupled.
Any funds not used for research could be held in trust and used in the future as an offset to increases in the market prices. Look, I don't like paying $2.40 or more for a gallon of gas. Nobody does. But I'd rather plan for, say, a 50-cent increase a gallon every year for the next 16 years, than wait until 2020 and watch the price quadruple to $10 a gallon or more overnight.
I'm not expert enough to figure out alternative energy sources, but I'm willing to pay for someone who is. We can pay now or we can pay later. One thing is certain: We will pay.