At these prices they are drilling world wide, it takes time to drill and develop wells. the demand is skyrocketing..200 million new drivers in China alone coming! India, Russian,Latin America the Middle East millions and millions more.
65,000 miles of NEW expressways to be built in China alone. All this with oil that will be slow and hard to get. Most of it will be sour crude hard to process and use.

If just 10% of the billions and billions of Chinese and people in India own a car it will be a disaster for the world, and they will.

$20 a gallon gas will be cheap soon.

At the risk of this becoming Petroleum Production News, please be aware that there are a lot of wells that only start pumping when the price of oil gets high enough. In that way the oil supply can increase without drilling.

I don't know if it will turn out to actually work, but I've seen reports of using bacteria to make gasoline with a break-even price of $4 per gallon. There are many technologies in development, and higher prices will only help them come to fruition.

Personally, I don't think the sky is falling.

What's important to railway preservation today is that recent surveys have shown that breaking point for most people in the present economy is $3.25 per gallon. Above that price, most people reduce their driving. The higher it goes above $3.25, the greater the reduction. Long term, that pain point will vary, but that's where it is today.

-Mark

In Connecticut this week (highest gas prices in New England) gasoline is now over $4.00 a gallon and diesel fuel is up over $4.50. The price of everything delivered by truck, rail, and marine transportation is going to be going steadily upwards due to transportation costs. That includes the price of coal, delivered by rail and by truck.

Automobile traffic locally is down very significantly, expecially late at night and early in the morning.

In several of the local groups the people tell me volunteerism is down sharply as the members who have to travel long distances are not coming in any more.

Feature this: Your favorite historical society tells you they need help to haul gear out to their annual meeting at the "other end" of the railroad. If it is a thousand miles away, and your vehicle gets 20 miles per gallon, you are looking at 100 gallons of fuel for a round trip that may cost $6 a gallon by this summer. That's $600 for fuel, plus three or four nights of motel at $100 each, approaching a thousand bucks total already and you still haven't bought a cheeseburger yet.

PC

I've been following the oil problem for years, and in my opinion this is serious, and isn't going away. I'll avoid making this Petroleum Production News, other than to note the readers here may want to do an internet search on the subject of "peak oil." Short essentials:

Good news: oil won't run out as such.

Bad news: it'll cost too much to use it the way we do now.

Proof: why would anybody bother drilling in the ocean if there was plenty of oil on land?

Side effect: oil is in a global commodity market, a semi-generic product supplied by a lot of countries and companies, and bid on by everyone. Basically, our own oil goes into the market, and everyone bids on it; we wind up bidding against China or whoever for our own oil, even if it never leaves the country. It doesn't help matters that we use 25% of all the oil in the world, and something like 54% of what we use is for motor fuel alone.

Sounds like we can use more trains.

Which brings us to the real subject of RyPN:

If we are coming to a point where there isn't enough oil to go around for the way things are, what are the odds that some of our heritage railroads will have new work to do? Not all will have regular freight customers and functional passenger service, but some will--indeed, some do. Examples include the Strasburg Rail Road with its freight service (sometimes behind steam at that!), and a trolley line--Fox River, I think, feel free to correct this--that also handles freight on an irregular basis. The proposed electric trolley road with freight service to Notre Dame would also be a natural fit in this world.

In other cases, our heritage roads may need to establish an intercity or commuter rail connection; Grand Canyon Scenic already does this with Amtrak, and other roads that could capitalize on this could include the Western Maryland Scenic, and perhaps the East Broad Top. There are likely others.

In a few cases, some roads may find themselves in commuter service; this is proposed for a portion of a road in California.

Finally, recalling Amtrak's experience with various steam engines in ferry moves over the years, most famously with the 4449 during the Bicentennial, I can imagine Amtrak (or whatever a successor agency or body might be) sponsoring a heritage operation. This could be as a traditional excursion program, or it could be as a seasonal expansion of service on a route or portion of a route that has a strong tourist or leisure travel demand. I imagine this as a steam operation, naturally (personal prejudice showing through!), but it could also be something along the lines of the California Zephyr recreations of a year or so ago. I think some British operations have been along these lines (and of course, I admit to being subject to correction); I've been told the Settle & Carlisle line was at least partially saved by steam operations that held down regular passenger schedules, but charged a supplemental "steam premium" fare.

Finally, I will say our roads can serve a useful function in showing that train travel isn't the horrible thing some rail opponents have made it out to be; I've personally been accused of being a Communist for suggesting a rail transit line instead of a 4-lane road option, the argument I used at the time simply being to avoid the mistakes that eventually lead to building a road out at a major city near here to 12 lanes, with traffic that still didn't move (I should know; I've been on that road, and had plenty of time to count the 12 lanes).

I turn the forum back to you--and only ask that you don't laugh too much. . .

Thanks for the information J3a.
I think it's time to share some information with the list. This video will show you how serious this will be in the coming years.
http://www.youtube.com/watch?v=rPS1y81b1Bw Good Luck to us!

In my mind, we're sitting on huge supplies of methanol, which would drasticly cut gas prices. Sadly, thanks to the BP oil spill, I don't expect the EPA allowing anyone to try and drill for methanol at a level that would hugely cut gas prices, and with Obama's completly inconsistent stance on many things, such as Libya, I wouldn't be suprised if foreign companies came and drilled for our oil. Sadly, we can thank Mr. Obama for just that, seeing our government has just given brazil the rights to drill in our side of the gulf, but I digress. Like my brother says (and I quote) "We're saving our oil so that when the rest of the supply is gone, we get rich".

(O.O)

Incredible............ someone actually thinks that there are huge reserves of methyl ALCOHOL underground waiting to be tapped......................

[walks away muttering to himself.....]

For Pennsylvania Trolley Museum's first special event of the season, attendance was quite good. We had just over 500 visitors on Saturday 4/23. As this was primarily an event aimed at kids ("Bunny Trolley") it's a safe bet that our draw was not from any point of great distance. This would appear to bode well for the concept of local patronage, at least this far into the season. Our local gas price is today $3.85 and I certainly haven't noticed any perceptable decline in traffic. Whether we can sustain last year's significant gain in attendance remains to be seen.

High gas prices are going to have a larger effect than just reducing driving. They are going to reduce spending for all things. The criteria for reducing driving will not be whether the trip is long or short. It will be whether the trip is necessary or not.

Gas prices are rising for the following reasons:

1) Anticipated shortages due to instability in the Mid East.

2) Rising demand in the third world as it industrializes.

3) Rising demand in the U.S. and other western countries.

4) The commodity inflation being caused by the U.S. fed QE2 monetary policy.

5) The Obama Administration’s anti-fossil fuel agenda.

And the country's ANTI-passenger rail congress, and state governments! When we had good passenger rail we EXPORTED OIL.

Well, Mass seems to be on the good side of passenger rail. I think that the problem lies in the house when it comes to passenger rail. It's just the way politics roll.

Supply and demand. Petroleum demand is an exponential curve. Petroleum production is very well established to be a bell curve. Draw each curve and you see they fit very nicely together, up until a point, and then you're in trouble! LOL! But notice how much oil remains under the bell curve at that point.

Countries like Canada and Venezuela, which are net exporters of oil, may ban exports. This drives down their domestic prices a lot, while driving up world prices a little for lack of their exports. That is called the "Export Land Model". That is not an option available to America, since we import far more than we could possibly produce. Think through the laws of supply and demand, and you see that as long as your country is a net importer, you are stuck paying the world market price for every barrel of your oil. If we "drill baby drill", it all equalizes with the world market, and our production (large for us, but minimal by comparison to global production) moves the price of oil only a few pennies, and other countries benefit more than we do. It's a no-win proposition, that's why it's not being done. Even the Bush administration could smell the coffee on that one, of course they ought, being in the oil business.

Bio-gasoline is a lost cause, but bio-diesel is not. We "married" distillate fuels 100 years ago because distillate engines were easier to make than diesels. Nobody cared about the extreme energy cost of distilling fuel. Those economics are reversed now, and one more thing.

After a bit of sorting out the tech, true hybrid electrics (Chevy Volt) will take over the world. "S"UVs first, as they have the most to gain. (GM was correct on that one.) As primarily electric beasts, performance will be a matter of motor and inverter sizing. No one will care whether the cruise-pack is gas, diesel or turbine; they'll care only for $/kwh. In any case your first 40 miles will be midnight nuclear, at 1-3 cents a mile. They'll have onboard 120-240V inverters (as the 2005 Silverado hybrid does) to eliminate Honda generators at the jobsite, and also...

In the energy economy, the currency will shift from petroleum to electricity. And the game changer will be that EVERYONE will be in the power-supply business. Via home peaking, and home generation. Right now power is centrally generated and load is absolutely inflexible (short of rolling blackouts). Home peaking is simple: You have interruptible large loads, like a water heater, A/C unit or EV battery charger. For pay, you allow the power company to remotely cycle them to shed load. Instead of paying peaking plants to be spun up. Home generation is solar panels responding to silicon economics: getting cheaper and more efficient every year. The next quantum leap is actually a packaging issue: make the solar panels the roof itself, so it averts the cost of normal "keep the water out" roof. You may also see home energy storage (buy midnight nuclear at 6 cents a KWH, resell afternoon peak-power at 30) via those hybrid battery packs.

Where does that put us? The current transportation picture was shaped by the currency of energy being petroleum. If it's electricity, what happens to transport? Which modes win? Not aviation, lol!

You can work out for yourselves where rail fits into that, but "quite a lot of places" is the answer. If you're a museum, you can do exhibits like crazy on that stuff.

I think that most people who don’t think domestic drilling would help simply don’t want us to drill. If this country announced a plan to ramp up domestic production in order to deal with this pricing crisis, the price of oil on the world market would begin to fall by the end of the day.

It does not matter that it would take several years to ramp up production. The world market would anticipate new supply, and our competition would ramp up their production to lower the world price in order to discourage us from going after our own oil and competing with them. Yesterday, the president said there was no magic bullet. But indeed there is a magic bullet, and it is the words the president could speak to change course in his energy policy. If that is not a magic bullet, I don’t know what is.

The problem with trying to predict this stuff is that it seems like you can spin it any way you want.

High Gas Prices will mean?

1) Less visitors, since it's more expensive to get there, so folks won't come as far.
2) More visitors, since the local population will be staying close to home (Staycation) since air fare and travel costs are higher.
3) The same, since the effect of item 1 will cancel the effect of out item 2.

I would guess that a good debater could make a convincing argument for any of those.

I suspect the results will be somewhat random and unprectable, but will also be influenced by how large of a "local" clientel your operation has (i.e. Strasburg is in a bit more advantageous spot than the Nevada Northern.)

How much advertising the railroad does, and where they target it to will also have a big impact.

Yes and gas might suddenly come down fast in response to a dramatic collapse in consumption brought about by this current price spike.