Five Dollars Per Gallon Of Gasoline Predicted But Could Be Avoided

Today, the former president of Shell Oil, John Hofmeister, says Americans could be paying $5 for a gallon of gasoline by 2012.  He added the caveat: “I’m predicting actually the worst outcome over the next two years which takes us to 2012 with higher gasoline prices.” 

This prediction has, understandably garnered a lot of press.  In response, some “experts” concur with this prediction, though, perhaps, within the decade, but not within two years.  They say that the price of oil, currently at $92 per barrel, would need to rise to $180 per barrel in order to drive gasoline to $5 dollars per gallon.  Other “experts” are predicting much higher gasoline prices within a relatively short period of time.

The politicization of energy has done a disservice to our economy and our ability to meet ever increasing demand, especially with huge demand in the transportation sectors of China and India.  Compounding this issue are restrictions on drilling in Alaska and off-shore prevent us from providing for our own oil needs.

Author Antoine de Saint-Exupery said, “As for the future, your task is not to foresee it, but to enable it.” During the Carter Administration energy crisis, that produced long lines at the gas stations, some of us were quietly going about finding solutions for future fuel demand in the automotive sector.  As a graduate student, I was able to produce synthetic crude on par with the Middle-Eastern sweet crudes from oil shale.  At the time, we produced synthetic crude at around $30 per barrel, which could be easily refined.  The whole process was performed in-situ (in place) with no strip mining or large “cookers” to heat the shale in order to extract oil, thus the environmental impact was miniscule.  Despite our research findings, the fact that conventionally produced oil was selling at around $25 per barrel at the time, our research ended up on a shelf at the university library gathering dust.

The oil shale deposits of Utah, Wyoming, and Colorado contain enough oil to rival the oil of Saudi Arabia, Iran, Iraq, Venezuela, Nigeria, Kuwait, Libya, Angola, Algeria, Indonesia, Qatar and the United Arab Emirates combined.  Environmentalists and the US government have put up hurdles to prevent development of these deposits since then.  Nevertheless, technology has improved in the 30 years since my research and, once again, several companies, including Exxon and Chevron, are applying in-situ techniques to extract oil with minimal environmental impact.

Oil Shale isn’t the only domestic energy source available to us.  Tar sands in Utah, alone, contain 32 billion barrels of oil.  Technology for the recovery of oil from these deposits has been in commercial use for many years in Canada.  Environmental improvements over this technology are also available.  In addition, the conversion of biomass (from agricultural and forest waste) is possible via processes such as the “hybrid hydrogen-carbon,” or H2CAR process, proposed by Purdue University engineers, which totally eliminates carbon dioxide as a byproduct, and has the potential of meeting the fuel needs of the entire U.S. transportation sector.  As well, microbial engineering processes have been developed to process biomass into “drop in” fuels, which require no refining. 

We have only spoken of ways to replace imported oil with domestic substitutes.  Significant alternative technologies to address the transportation sector needs have been developed.  For example, developments in the areas of hydrogen-driven engines, vehicles using electrical storage technologies such as ultra-capacitors, and compressed air engines are in prototype status as we speak. These technologies will be included in a future white paper.

Suffice it to say, we can affect the dire prediction of Mr. Hofmeister.  Academic, John M. Richardson Jr., said, “When it comes to the future, there are three kinds of people: those who let it happen, those who make it happen, and those who wonder what happened.”  We need to be among those who make it happen.  The others should buy walking shoes.