Right now the price of oil is hovering around $60 per barrel and using common averages in the oil market that should translate to pump prices between $2.30 and $2.40 per gallon. Rice University Professor and Associate Director of Rice's Energy Program Amy Meyers Jaffe says the spike is caused in part by fear in the market.
Jaffe says the Houston area evacuation used up as much gas as two Labor Day holiday weekends. There was a feeling of panic among American consumers about the availability of gas. This plays into what Jaffe calls the trendy cycle of prophesying the end of the oil era.
Jaffe acknowledges oil is a finite resource and it will run out eventually. But she believes the technology is in place to develop cheaper, more efficient fuel alternatives when the oil fields really do run dry.
Jaffe says other countries have access to huge resources of natural gas. There is also cheap technology to liquefy coal into fuel. But she says there are more pressing concerns than the world running out of oil. The real oil shortages could be felt if the Middle East fails to stabilize, if Russia's government reduces production or if OPEC countries move further away from democracy.