Scary Stuff

The stickiness of gas prices above $4/gallon and the proximity of the July4 holiday and peak driving season has sparked a plethora of nonsense from the usual suspects. The clowns in Washington are advocating a policy of drill,drill drill, offering that as a way to gain energy independence. After all, there is so much untapped oil right here in the USA. Combine that lunacy with the usual media blowhards that are hammering "speculators" and the Saudi's and pretty soon it's easy to miss an important story. I found the EIA Net Export #'s inside of a post by Westexas, on TheOildrum.com. Take a look. ( click on chart for sharper image)






Here's the deal. What we are seeing is a net decline in exports over the past couple years. I'm sure the circumstances are different in each particular country, ranging from more domestic use ( maybe Iran and Venezuela) to depletion ala Norway and Mexico. It's interesting that Russia is at the top of the list as far as net positive goes. I see a big comeback for the Russian bear. What is not getting factored into any mainstream conversation is that this decline in net exports might not be a one off event. There is a school of thought that says that as many of these export countries see more and more oil revenue, their societies will grow economically and they will end up using more and more of their crude oil production domestically. If that ends up being the case we here in the US are really up the creek.

The Long Emergency-- American Style

In his book The Long Emergency, James Howard Kunstler paints a picture of what he sees as our societal future post peak-oil. One of his themes is the potential unravelling of the social structure as the have-nots are priced out the gasoline market and now truly face a future on the economic fringes. He believes mob violence is a possibility.

It's funny but because Kunstler offers this vision he is sometimes criticized as an alarmist and a wacko. Well, it was with interest that I read this story this morning in the NY Times Rural U.S. Takes Worst Hit as Gas Tops $4 Average :

"Here in the Mississippi Delta, some farm workers are borrowing money from their bosses so they can fill their tanks and get to work. Some are switching jobs for shorter commutes.
People are giving up meat so they can buy fuel. Gasoline theft is rising. And drivers are running out of gas more often, leaving their cars by the side of the road until they can scrape together gas money.
The disparity between rural America and the rest of the country is a matter of simple home economics. Nationwide, Americans are now spending about 4 percent of their take-home income on gasoline. By contrast, in some counties in the Mississippi Delta, that figure has surpassed 13 percent.
As a result, gasoline expenses are rivaling what families spend on food and housing."

I don't want to be unsympathetic to the economic pain being felt right now, but this is happening at $4 a gallon. What's the story at $5 or $6?