James Schlesinger famously said that Americans have two modes when it comes to oil: complacency and panic. This week, it seems, we're having both at the same time.
Today the national retail average for gasoline is $3.07 per gallon, which is higher than it's been since 2008. But instead of freaking out about that, the media has been focusing on the possibility of $5 gasoline in 2012, a claim made by former Shell President John Hofmeister. Hofmeister's point (he heads a non-profit called Citizens for Affordable Energy) is that the problem is that we're "essentially frittering at the edges of renewable energy, stifling production in hydrocarbon energy," leading to "blackouts, brownouts, gas lines, rationing."
When Platts printed Mr. Hofmeister's predictions the day after Christmas, he became an instant media sensation. Even Platts claimed to be surprised by the ruckus, since Mr. Hofmeister had predicted the same many times before, and it would imply that the price of crude reaches $180 a barrel, which even the boldest analysts think is too high.
Why are we panicking about unlikely $5 gasoline? Perhaps because it's more comfortable to think about something that probably won't happen rather than preparing to be clobbered by $3.25-$3.75 gasoline between now and May. By then, OPIS analyst Tom Kloza estimates we'll be spending $38-$44 billion a month on gasoline. That's about twice as much as we spent on gas in the month of December 2009. I mean, that's about $20 billion more!