Chris Steiner: Priming For $20/Gallon Gas

July 10, 2009

Author and Forbes magazine writer says top-dollar gas prices will dramatically change every aspect of life as we know it.
  • How China will drive up gas prices
  • What's behind the death (and rebirth) of globalization
  • Why Wal-Mart is doomed to extinction


As you're filling up your tank this weekend, it'll be hard not to think about the cost. Back when gas was $4/gallon, many of us made seemingly radical changes to our lifestyle, cutting back how much we went out to eat, riding the subway more, even moving closer to work.

But $4 gas was only the tip of the iceberg, says Chris Steiner, author of the new book "$20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better" (Hachette Book Group, June 2009). According to Steiner, a staff writer at Forbes magazine, gas prices could top $20 per gallon soon - dramatically changing every aspect of life as we know it.

Recently, HAI's associate editor Lara Crigger sat down with Steiner to discuss why the Chinese will drive up gas prices, what's behind the death (and rebirth) of globalization, and why Wal-Mart is doomed to extinction.


Lara Crigger, associate editor, (Crigger): So tell us a little about "$20 Per Gallon."

Chris Steiner, author, "$20 Per Gallon" (Steiner): Simply put, the book is a thought experiment on what life would be like at higher gas prices. The chapters of the book are arranged by increasingly higher prices - Chapter $4, Chapter $6 and so on, up to Chapter $20 - and they address changes that happen at each level. Some changes happen gradually; it's not like you hit $12/gallon and boom, the suburbs disappear. But I pick critical inflection points for each event and describe what the future would be like as the price of oil marches up. 

Crigger: In your book, you pinpoint the rising middle class in emerging markets, like China and India, as a key factor in higher gas prices (something Hal Sirkin also said when we interviewed him a few weeks ago). How do these new consumers affect gas prices?

Steiner: It's pretty simple: Right now, between the U.S., Europe and select parts of Asia, South America and Africa, there are about a billion people living what we would consider an "American lifestyle." By 2050, you're talking about 3 billion people living that lifestyle. China's middle class will actually be the largest by 2025; India's will be 10 times its current size.

Those people will need oil or some other form of energy. So even if American demand remained flat - or went down - you'd still see this giant mass of people joining our ranks, adding to demand.

For example: The U.S. has 750 cars for every thousand people. China has four. Even if China got to half of what we have, you're talking an additional two Americas worth of cars entering the world market.

Crigger: But as oil prices rise, won't that dampen these consumers' ability to keep purchasing oil, thus reducing this increasing demand somewhat?

Steiner: Certainly as the price goes up, I think you're going to have some demand destruction. That's something that's going to balance out over time.

But that being said, the changes the book forecasts are going to happen no matter what. Whether it happens at $20/gallon or $12, these things must happen in order for humankind to advance and stay on its current vector. Maybe we'll never see $20/gallon, per se, but the changes we portray - those are most certainly going to happen.

Crigger: Wouldn't the kind of higher gas prices you're talking about wreak havoc on our current commodities markets?

Steiner: I wouldn't call it havoc. We're not going to $10 overnight; it's going to be gradual, not this anarchy that some people have projected, like the pump just turns off. It will be a gradual whittling of supply that will give us a chance to adjust. It will give our cities a chance to morph and our country a chance to change how it lives life day to day.


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