Breaking the $2-a-gallon gasoline price barrier was unpleasant, and your lightened wallet may be eliciting visions of Nixon-era rationing and fill-up lines beyond the horizon, but geologists and economists think the industry and the economy will be just fine. Gas is cheap, they say, when you consider the rising costs of everything else.
But another consensus has emerged among the experts: This might be a good time to panic anyway.

The problem isn’t that gasoline prices are too high but that prices over the past decade have been far too low, this reasoning goes. Americans have forgotten how to conserve and the energy industry, always hungry for profits, spent those years neglecting its refineries and distribution systems and all but ignoring the frightening reality that the planet may actually be running out of oil.

The consequence is a growing imbalance between the world’s increasing thirst for fuel and the oil industry’s increasing difficulty providing it — a problem that could lead to economic mayhem, price swings, gas shortages and pump lines that make the 1970s seem like a comparative utopia. This new crisis could strike in 30 years or five years or even three months, depending on whom you believe. And this time, 1970s-era answers like a 55-mph speed limit or a trans-Alaska pipeline won’t be any help.

So while you’re fretting over your broken budgets and the horrors of a $40 top-off, some industry analysts think you should also give thanks that America’s commuter society is finally getting a decent jolt of gas-price hysteria.

”Trust me, this $2-a-gallon price will be a blessing,” said Matthew R. Simmons, a Texas banker who specializes in the petroleum industry. ”We should be worried about energy in this country, and maybe this will get people focused.”

Gasoline is stirred into the social and economic mix like no other product in American society, and from taxi drivers and tour bus operators to driving schools and police departments, the dizzying run-up in prices the last six months has had a stinging effect on profit margins and daily life.

The reasons for the latest rise in gas prices can be attributed to an amalgam of factors such as terrorism jitters, political instability in the Middle East and Venezuela, restricted oil supplies and emergent economies in China and India. The war in Iraq — as well as overestimates of the amount of oil that Iraq would be producing by now — has made the situation worse.

The cumulative result is an increased price for crude oil, which accounts for roughly 42 percent of the cost of gasoline. The price or a barrel of crude eased briefly last week when Saudi Arabia announced plans to make more oil available to the market, but only after reaching an all-time high of nearly $42.

Combine that increase in the price of raw product with higher taxes and costly blending requirements imposed by various governments and the result is a rash of 2s popping up on gas station signs across the country. The price increase is frustrating for consumers and a hindrance to the recovery of the nation’s economy, analysts say — and it’s also a perfectly natural and expected consequence of the free market.

”There’s no question that this is a real burden on consumers, especially low-income consumers, and it’s been a real drag on this economy. It has slowed growth by almost a percentage point,” said John C. Felmy, chief economist for the American Petroleum Institute, a trade group of North American companies in the oil and gas industry.

”But there’s no shortage or crisis happening here. These are market fluctuations that the economy has been able to absorb. We’re seeing very little evidence of a decline in demand.”

But if anything is in short supply in the energy industry today it is contentment. With turmoil in the Middle East and runaway demand in developing countries like China, many analysts think the industry’s supply/demand balance is more fragile than ever. Combine the political factors with the geological uncertainty — some say calamity — surrounding the world’s estimated supply of untapped oil, and many experts think petroleum’s brief history above ground is on the cusp of its darkest era.

Even nonscientists know that the world’s oil is limited.

Thirty years ago ”we were willing to drive small cars, we were willing to keep houses colder. We were willing to live like Europeans and cut our consumption,” said Paul Roberts, the author of ”The End of Oil.” But after the Persian Gulf War in 1991, ”there was a sense that the oil crisis is over, and prices were low and Americans began to consume energy at a rapid clip,” Roberts added. People bought bigger homes to heat and light, and more cars, including gas-guzzling minivans and sport utility vehicles. ”Culturally, people were tired of small cars and tired of cold houses,” he said.
Today Roberts is part of growing chorus of specialists who think that petroleum’s geological dead-end is approaching much sooner than mankind can handle. Plenty of analysts, including Felmy, still give the Earth about 100 more years of oil supply. But many others now expect oil production to peak in their lifetimes.

One of the strongest warnings comes from Kenneth S. Deffeyes, a geologist and Princeton University professor who has calculated that the world’s oil production will peak around Thanksgiving Day in 2005. After that, he predicts, production will begin a perilous and precipitous decline, as wells dry up and oil producers scour the globe for the last of its diminishing supply.
Robert Little and Lorraine Mirabella are reporters for The Baltimore Sun, a Tribune Publishing newspaper.