What oil price will radically change American life?

When does the price of oil change what Americans do?

I wrote in July of 2007 that a significant number of people would start to make different decisions at $5 a gallon. On the other hand I've read realtors claiming that the bubble popped when gas hit $3 a gallon, and people started worrying the cost of exurban commutes.

It's not just the absolute costs of course, it's the trend line. So if gas goes from $3 a gallon now to $5 a gallon in 2011, then people will react as much to the trend line as to the absolute value. If the price hits $5 a gallon in 2010 then the reaction will be even stronger.

On the other hand someone who does this sort of thing for a living things the price will have to hit $13 or so to force a "radical restructuring":

FuturePundit: Peak Oil By 2012?:

.... Energy analyst Charles T. Maxwell thinks gasoline prices in the US will need to more than triple to force Americans into a radical restructuring of how they live.

Maxwell said it will take $12 to $15 a gallon to get Americans to let go of what he called the “precious freedom of mobility.” As much as Maxwell laments the loss, he sees no other way for the U.S. to impose enough conservation to deal with the growing imbalance between oil demand and supply that he sees developing around 2010 and getting worse in 2012 or 2013, as the world hits a “peak” in conventional oil production...

I was thinking in terms of "start to change" when I picked $5 a gallon, radical change is a few steps beyond that.

Maxwell is elsewhere quoted as predicting "peak oil" in 2012-2013 resulting in a steady "rise starting in 2010, reaching $180 a barrel in 2015 and $300 a barrel in 2020". Since we're about $100 a barrel now, we wouldn't hit his "radical change" date until after 2025 or so.

I'd love to see an economist make some predictions here based on the historical record, though I have a hard time thinking of a precedent in an industrial economy outside of wartime.

As I've written previously our confusing situation may become clear within the next six months:

...If the price of oil is above $105 a barrel in August of 2008 then Peak Oil is on the sooner rather than later, and the world I grew up in is shuffling away -- sooner than I'd expected...

If we are at or above $105 in August I think we'll see a gradual and continuous change rather than a radical disruption. The price signals will be relatively clear with smooth trendlines.

This isn't, of course, good news for the survival of human civilization. Unless we put a very large carbon-tax-equivalent on coal, humanity will start burning massive amounts of coal to power our electric cars and to create various fuel products. Our carbon dioxide output will skyrocket -- even as our mobility and our gasoline consumption start to plateau. We'll push past the ancient maxima for CO2 and bake much of our habitat.

We need a technologic miracle, but in the meantime we need a carbon-tax-equivalent on coal.