The $4/gallon your paying at the pump isn't due to a nefarious conspiracy of

• oil companies
• OPEC sheiks
• environmentalists
• SUV drivers

It's just a harbinger of what's to come. Ken Deffeyes, retired Princeton Geology prof, crunched some numbers and came up with a lollapalooza of a graph. <link> I guess I can kiss all thought of retirement goodbye.

The greatest infrastructure advance will be public transportation.

Or those souped up wheelchairs and skate boards.

Glad I just bought me some new walking shoes.

The one potential silver lining is that escalating petroleum prices could just be the cure for America's obesity problem, as the issue of food surplus fades into nonexistence...

The rest of the world, most of it anyway, has been paying these kinds of prices for gas for decades. When I lived in Paris in 92, the franc was 5-6 to the dollar. Filling up a tank for my Trooper, one of about three in Paris at the time btw, cost about 70 bucks or about a buck a liter. We complained but we lived through it. We took the metro a lot and did not drive needlessly. We need higher prices to get us to rethink our entire economy and structure. Urban planning to date has ignored transportation. We think building up is bad, out is good. Freeways are filled with cars with one person. We rail against Amtrak and then buy Europasses on vacation because its so neat and cool. Americans are basically spoiled rotten. This will wake us up sooner or later.

Back to the Horses and rikshaws--!

KuanShihYin:

The greatest infrastructure advance will be public transportation.

Or those souped up wheelchairs and skate boards.

Back to the Horses and rikshaws--!

"Peak oil" has been reached a number of times before now. It's a fairly relative concept, even a reversible one. No question, cheap, easy-to-produce petroleum is a thing of the past. But more expensive petroleum won't necessarily cause the sky to fall. Europe has been living with fuel prices about double ours for many years, and they haven't collapsed yet. (Of course, they aren't run by a Daddy's Boy president, either.) Higher oil prices drive all sorts of other investments, hence other opportunities. Volatility will cause damage, but it won't make California to fall into the ocean.

The present chaos is not as much an oil crisis as it is a dollar crisis. All those dollars per barrel are worth less every day to the sellers. Therefore, they have no incentive to expand production. On the contrary. Scarcity will drive up price, while their real value sits in the ground like money in the bank. If/when world oil markets reorganize around a more reliable currency, there will still be upward pressure on prices, but the kind of wild volatility you see now will moderate. The American Way of Life® will prove to be not only negotiable, but better off for it.

"Balrog" sounds like the name of some sort of energy conglomerate.

Fritz,

Hubbert in 1956 predicted that US oil production would peak in 1970 (he nailed that) and that world oil production would peak around 2000. Last year, despite record profits and stepped up drilling activity, ExxonMobil's actual production fell 10%! Europeans are quite happy oil is priced in dollars since the increase for them has been far more moderate. If oil producing nations abandon the dollar, we might see a run on our currency...not a happy scenario.

I don't expect California to fall into the ocean, but I do see a much poorer American Way of Life in our future. The facts underground are what's driving the upward pressure on prices.

As for higher prices driving new investments, the worldwide credit crunch has vaporized several trillion dollars of the capital that would help make it so. In fact, it may be no coincidence whatsoever that credit markets are seizing up as oil prices soar. The whole principle of debt creation is based on the assumption of an ever-expanding economy.

We should be so lucky

Oxen probably have a promising future as well.

When the Soviet Union collapsed, Cuba lost its cheap oil supply. The average Cuban lost 20 pounds during the 90's.

The big problem is how tight the market for diesel/home heating oil is... most American's don't realize how much our agriculture (and by our I mean the energy intensive methods used to feed five out of every six people on this planet) depends on diesel and cheap petrochemicals. The tractors and combines and irrigation pumps and fertilizers and pesticides and trucking demand a steady supply of this stuff. US inventories of diesel/home heating oil are dropping now when they should be rising to prepare for next winter. We may grumble about the prices, but we'll freak when shortages hit.

Kind of like William F Buckley dropping 'rodomontade' in a sentence on his TV show Firing Line.

Maybe a bump for a couple of years, but only a bump nonetheless. Americans manage to adapt in particularly creative ways. You'll see.