More Words, Deeper Hole

You can price the maximum cost that oil is likely to reach by looking at the cost of synthesizing it directly from air, water and some source of energy. BOTECs put the energy cost of assembling a barrel of oil from raw materials at around $70.00 [1] or about 50% higher than the present price of oil. Obviously we're unlikely to be able to turn electricity into oil with 100% efficiency but on the other hand, there are shortcuts we can take to avoid making oil from the most basic raw materials. It seems to me reasonable to expect prices to be stable at no more than twice the present cost. Oh, sure, short term shoartages may cause temporary price surges but I don't expect that to last.

How much of the price of gasoline is taxes? Perhaps if the economic effect of high energy costs is undesirable, the tax on gasoline could be relaxed a little, to be replaced by (something comic and highly repressive: fill this in later).


1: The problem is that the Saudis can produce a barrel of oil for much, much less than %70.00.