[Peakoil] Jim Kunstler 1 May

[Keith Thomas]

I have pasted below this week's bulletin from Jim Kunstler, author of 
The Long Emergency. In his wry, healthily cynical style, he provides 
commonsense and optimism in a succinct nugget every Monday. You'll find 
it here:  http://www.kunstler.com/mags_diary17.html

May 1 , 2006
       I try to avoid the term "peak oil" because it has cultish 
overtones, and this is a serious socioeconomic issue, not a belief 
system. But it seems to me that what we are seeing now in financial and 
commodity markets, and in the greater economic system itself, is 
exactly what we ought to expect of peak oil conditions: peak activity.
       After all, peak is the point where the world is producing the 
most oil it will ever produce, even while it is also the inflection 
point where big trouble is apt to begin. And this massive quantity of 
oil induces a massive amount of work, land development, industrial 
activity, commercial production, and motor transport. So we shouldn't 
be surprised that there is a lot happening, that houses and highways 
are still being built, that TVs are pouring out of the Chinese 
factories, commuters are still whizzing around the DC Beltway, that 
obese children still have plenty of microwavable melted cheese pockets 
to zap for their exhausting sessions with Grand Theft Auto.
        But in the peak oil situation the world is like a banquet just 
before the tablecloth is pulled out from under it. There is plenty on 
the table, but it is about to be overturned, spilled, lost, and broken. 
There's more oil available then ever before, but also so many people at 
the banquet table clamoring for it that there is barely enough to go 
around, and the people may knock some things over trying to get it.
       A correspondent in Texas writes: "On a four week running average 
basis, total US petroleum imports (crude + products) have been falling 
since 24 February, until last week, when we finally showed an increase 
of 1.3 percent, after bidding the price of oil up by about 20 percent. 
IMO, we bid the price up enough to (temporarily) increase our imports.  
We will see what subsequent weeks show, but I think that we are in the 
early stages of a bidding war for remaining net export capacity.  The 
interesting question is what countries may not be importing because 
they can't afford the oil."
       A substantial amount of total house sales are made up of new 
suburban McHouses built in places at the furthest extreme distance from 
employment centers -- because that's where the remaining cheap land is 
after sixty-odd years of suburban development. How many prospective 
house-buyers will close on those things with gasoline over $3 a gallon? 
Probably fewer than are required to sell them all. And more McHouses 
will be coming on the market in any case because they are products of a 
planning and permitting process that takes years for things to finally 
get built. Once the house-selling racket, and its associated mortgage 
racket, stop grinding along, the machinery of the US economy has to 
seize up. The financial sector, which used to be an appendage of the 
economy, but has become an end in itself, has to implode when the 
stream of rebundled securitized mortgage debt stops flowing into it.
       When tablecloths are pulled out from under banquet tables, it is 
hard to say how the platters, bowls, and ewers will tumble and fall, 
but we can bet that few if any of them will land right-side up, 
unspilled. One also has to wonder how the other people at the table are 
going to behave when things come tumbling down.
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Keith Thomas
www.evfit.com
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