Are You Ready for $5 Gas?

You should be. It seems all but inevitable. Maybe this summer, maybe not, though the farther out on the horizon you look the greater the likelihood. Our refineries are overstretched, not to mention frequently blowing up. There is a secular bull market in oil and supply is peaking. No coincidence, I'm sure. We've picked all the low hanging fruit and new energy sources will be increasingly difficult to exploit i.e. more expensive.

Hurricane in the gulf? $5 Gas.

Add to that, a weakening dollar and geopolitical concerns. The world's oil reserves are primarily in unstable regions. Think Venezuela or Nigeria. Iran and it's proximity to the Strait of Hormuz, through which 20% of the world's oil passes. Consider too that we face increased competition for resources due to growth around the world. There are an awful lot of Chinese buying their first cars. Chavez doesn't like our foreign policy so he'll sell his oil to China.

Bad news for GM. It's time to start planning for a future with higher gas prices. This country is going to need more public transportation. We're going to need to figure out how to grow and manufacture more goods locally instead of shipping in them in from across the globe.