I think it depends on what our economy does over the next year. If we continue to see a slowdown, gas could drop well under $2.50/gal., but if the markets stabilize any time before the election, I doubt it will go much below that.
The price of oil is inversely proportional to the fear that we might actually replace it as the universal transportation fuel.
At $2 per barrel extraction cost in Saudi Arabia, it could be dirt cheap, when we no longer need it.
It could happen soon, but I doubt if it could be totally replaced in less that ten years, anad it would take some serious commitments, which seem to be missing, because no one wants to jump on the wrong bandwagon, and have their hindparts handed to them on a platter.
The closer we get to eliminating the oil addiction the greater the incentive for OPEC to destroy the financial incentive to get the job done. When OPEC sees the end of their income stream expect the cartel to disintegrate into individual competitors for oil revenues, as they desperately search for customers.
It will begin with a significant breakthrough in powertrains using conventional engines. 80% increases in vehicle mileage can be achieved through powertrains that recover energy and using capacitive storage of 1000 horsepower seconds of energy storage will allow engines to operate at their highest efficiencies or not operate at all.
I believe the pathway is in hydraulic drives, with infinitely variable in wheel drive motors that operate independently. Accumulators storing hydraulic fluid will provide sufficient energy for a single 0-80 acceleration event, while allowing for engine on engine off regeneration of storage losses and recovery of close to 90% of any braking energy.
A prototype could be built within the next 8 months. If the efficiency reaches expectations, all the pieces of the puzzle are in place.
The first transitional phase after powertrain implementation will be natural gas as a fuel, then as batteries become capable of better range, it's possible the transition will continue to the electric car. It may also become a combination of both, with interchangeable systems for city and highway applications.