Though he’s no longer running one of the largest companies in the world, former President of Shell Oil John Hofmeister warns that the outlook for gas prices in the coming decade is not looking good:

"I’m predicting a worse outcome over the next two years, which takes us to 2012 with higher gasoline prices, uncertainty as to the future of hydrocarbons, more regulation on the hydrocarbon industry based upon who the administration is today…

And what I fear the most is that by 2012 prices are so high that we have a backlash from the electorate and we go into reverse and we go back to a hydrocarbon only type of a future, maybe with some nuclear, instead of moving on in the 21st century.

I’m predicting, based upon the moratorium in the Gulf of Mexico, up to a million barrels a day of US production gone because of the politics of freezing drilling in the Gulf.

The headline is the moratorium is lifted, the reality is you can’t get a permit… I’m expecting no new drilling for two more years at least.

If we stay on our current course, within a decade, within ten years, we’re into energy shortages in this country big time. Black outs, brown outs, gas lines, rationing - that’s my projection based upon the current inability to make decisions.

When the American consumers are short, or when prices are so high - $5 a gallon for gasoline by 2012 - I believe that’s going to happen - that’s going to set a new tone, it’s going to be panic time on the part of the politicians, they’re going to suddenly get some kind of a sense we better do something."

The scary thing is that Mr. Hofmeister is basing his $5 per gallon gasoline prediction on supply/demand issues, not even taking into account the unfettered digital creation of dollars by the Federal Reserve.

"If we’ve learned anything in the past few years, it should be that government is totally incapable of taking the necessary steps to prevent a problem before it happens. We saw it in the housing crisis in 2007/2008 and we’re seeing it now in the state budget crisis. Meredith Whitney explained it best in a recent 60 Minutes interview when she was asked why government wasn’t taking action to mitigate the state budget crisis, “because they don’t pay attention until they have to.”

If Mr. Hofmeister is correct about supply tightening over the next couple of years, we’ll begin to see global oil shortages. This is not only going to raise the price of gas, but everything else dependent on oil, which is, well, just about everything else - manufacturing, transportation, food, you name it.

Watch John Hofmeister discuss oil shortages and the coming energy crisis: