There is no question in my mind but that oil will rise to at least $100 a barrel within the next year. It is easy to see a scenario of $125 a barrel price in the same time frame. The triple digit price of oil will become the norm. Recently it has been trading in the $80-90 range, and as it approached the upper end of that range the media began again covering the story with “sky is falling” concern about what this might mean for the economy. This reminded me of the comment that James Schlesinger, the first U.S. Secretary of Energy made about the country’s approach to energy: “We have only two modes — complacency and panic”.

At the beginning of this year, when oil was trading in the $50-60 price range, I was on a television program and predicted that the price would be up dramatically in 2007 and could easily top $80. That statement came not from any expertise about an ability to correctly predict commodity prices but from the fact that, as a futurist, I look at the long term, at overarching trends and patterns. The price of oil is on a long term up trend and will continue that way for years into the future.

Some historical perspective will be helpful. The price of oil from 1900 to the early 1970s was single digit. Then the OPEC oil embargo quickly quadrupled the price of oil. The price of oil hit a then all-time high of $41/barrel in 1981 (approximately $82/barrel in 2006 dollars) and for the ten year period 1974-1984 reordered the global energy landscape. The price did come down substantially in the mid-1980s and for the next 15 years fluctuated around $20 a barrel. That was still four times as much, on average, as it had been prior to 1973. The price of oil ran up to $30 a barrel from 1999-2001 and then settled down — for a very short time —to $20 in 2002. Since then it has quadrupled in price, a price increase in magnitude to that of the oil embargo of the early 1970s, albeit over a slightly longer time period.

The price of oil will fluctuate, most likely within a trading range of $80-125 over the next two years, but the long term trend will be ever upward. Any dips in the upward trend will be short lived. There are no major long term downward pressures on the price. There are a number of upward pressures on price long term. The explosive growth of the economies of China and India the two most populated countries in the world, is a strong force on the demand side. The popular response to the global warming threat has yet to produce significant reductions in energy demand globally. Of course the main long term upward pressure on the price of oil is that it is generally agreed that humanity has already consumed half of all the oil that exists and that the supply will run out sometime in this century. A consensus date is 2040-2050. Growing demand meets declining supply is the long term picture. Only the substantial replacement on a global level of oil with renewable energy will change this dynamic. That will not happen until 2020 at the very earliest, and then only if a global mobilization is launched soon.

This ever upward pressure on the price of oil will, in the years ahead, bring about significant disruption and alteration in the social and economic fabric of the U.S. It is not about inflation or that expenditures on other things will have to be cut back because of the increasing cost of filling up the family car. There will be inflation and there will be changing consumer spending habits, but that is just the beginning. The concepts of cities, suburbs, transportation and the work place will all need to be rethought and reengineered.

The internal combustion engine started to dominate the car industry 100 years ago. The explosive growth of suburbia began 60 years ago and the interstate system began 50 years ago. All of these developments were based upon a car culture that was fueled by very cheap oil. In other words, the entire landscape of the U.S. since WWII was in large part designed around the car and cheap gas. When oil is consistently over $100 a barrel and gasoline is over $5 a gallon, what will happen to the real estate value of distant suburbs? Will the concept of bedroom communities that are an hour or more car commute away from the workplace have a future? How about the heating bills for 5,000 square foot mansions? Small will become better, being closer to work, or working at home, will become desirable. What about intelligent, safe and fast public transportation? When will we realize that commuting by car is last century’s model and that a new model is needed this century for our society to thrive? When will we realize that high speed trains for trips between cities that are 300 miles or less apart is a far better option from a time, cost and greenhouse emissions point of view than either driving or flying in the ever more congested sky?

Long term, the upward price of oil is not just a pocketbook issue just as global warming is not just about the polar bears and the ice cap. We need to quickly find a middle ground between complacency and panic. If we remain complacent for too much longer, we will most certainly experience society wide panic attacks in the not too distant future.