In 2008 Americans saw gas hit $4 a gallon and they changed. That year, according to the U.S Department of Transportation, Americans drove 100 billion fewer miles than the year before.

Chris Steiner, a senior writer at "Forbes", said in an interview Wednesday that $4 is just the beginning. According to Steiner, an Evanston resident, prices will reach $6 to $8 within the next decade.

His first book, “$20 per gallon; How the inevitable rise in the price of gasoline will change our lives for the better”, became a New York Times bestseller in August. In the book he examines how each incremental rise in the price of gasoline will change the fabric of American life forever.

Q:How did this book come about?

A: It came about in the late spring of 2008 when gasoline was $4 across most of the country, and it had been going up for nine months very aggressively and it seemed like it was never going to stop. I thought, what if I wrote a book about, hypothetically, what life would be like at higher and higher and higher gas prices. What paradigms would fall and at what gas prices?   

You argue $6 per gallon is the price when many of those paradigms begin to shift. Why $6?

I think that amount is seminal for Americans because we have never been there before. I think at $4 people changed their behaviors and will again, but it is at $6 where we won’t be able to go back. We will have to change how we live our lives. I think $6 will be a warning horn for a lot of people.

What starts to change at $6, $8, and $10 a gallon?

The obvious thing is the kind of cars we drive. If we get to $6, the future of the SUV and cars that get 20 miles per gallon or less is over. You are going to see everyone flocking to Prius-type cars, I mean we saw this last summer when there was a three-month wait for a Prius. You couldn’t sell your SUV for 20 cents on the dollar, and when gas prices go up you will see those effects exacerbated.

Also, sushi won’t be as prevalent or affordable. You wont see $500 flights to Europe. Wal-Mart, unless it evolves into a more localized company, will be in danger of failing. Exurbs that don't restructure themselves with some sense of density and economic gravity to give people a reason to live there beyond cheap four-bedroom homes will go extinct.

When do you see these high prices taking effect?

A person much smarter than me once said, 'You can tell people what is going to happen in the future, just don’t tell them when and you will never be wrong.' I say that because honestly no one really knows. I’m confident that we will see prices like $6 or $8 a gallon in the next decade. But at $12 or $14 there are a lot of wildcards that come into play, the government being one and people’s attitudes at $6 and $8 being another. Also, how far do we want to take the oil paradigm?

You never know what is going to happen as far as new technologies coming along to get more oil out of the ground. Now, I think we have used at least half the oil in the world right now but we are very good at pumping oil. So will we ever see $14 or $16 a gallon? That could be 20 to 30 years in the future. But prices of $6 or $8 a gallon is a reality, and I think something we will see in this generation.

Why is it inevitable that gas prices will go up?

You have to consider that right now there are 1 billion people living middle-class American style lives. By 2040 there will be 3 billion. 3 billion. They are going to want to consume and use energy just like us. And those people have just as much right to the oil as we do because remember almost all the oil is not in America. So we’re going to be competing with 200 percent more people for that finite resource.

We are basically at peak oil right now, which means that on a daily basis we produce less oil than we did at the peak. The peak at this point was 2005, when we produced around 87 million barrels a day. Right now we produce around 82 million. As we make more discoveries of new oil fields we still haven’t found a giant Saudi Arabian style field that would suggest we would be able to produce 100 million barrels a day.

It’s Economics 101, supply is going to remain flat or go down, and demand is going to go up. The price has to go up. In addition to that, certainly in the next decade, you are going to see some sort of extra price placed on carbon, which of course will affect gas.

Why will this make our lives better?

It is going to take higher prices at the pump to wake people up to this energy crunch that we are approaching. Now, I don’t think all the changes will be for the better. I think there will be a lot of pain. If we woke up tomorrow and gas was $12 a gallon it would be a disaster. But I think the price changes will come in slowly over the years and enable us to make the types of energy efficiency changes that we will need to make and that we should be making right now.

Higher gas prices will lessen our dependence on foreign energy. There will be fewer people dying on our roads, 16,000 lives saved at $6 per gallon according to David Grabowski, a professor for health care policy at Harvard.

Also, local, healthier food will be more prevalent in our grocers. We will have much better mass transportation. It will spur the true advent of an American high-speed rail system.

Overall, higher gas prices will result in a cavalcade of innovation that will dwarf the dot.com deluge of the late 1990s. There are any number of technologies waiting for a crack in the armor of conventional energy so that they may be brought to market affordably. This will be their time.

http://news.medill.northwestern.edu/