Jeff Rubin was the chief economist at CIBC World Markets for 20 years, and one of the first to point to the economic consequences of peak oil. Since this book, he has written on the end of growth and the death of the petroleum economy, so I’m guessing he isn’t on Harper’s Christmas list, but I could be wrong. The first three chapters are the strongest: supply is shrinking with peak oil, and we have to work harder to get it out; the energy exchange rate is getting worse. Demand is shifting because oil exporters are consuming more and subsidizing their own consumers. Ethanol is a very bad deal (a head fake) and increased efficiency leads to the rebound effect of greater use, as British economist W.S. Jevons discovered of coal in 1865. All this suggests we have to get off the roads, but we don’t have the public transit infrastructure, so we have a lot of reinvestment to do. Meanwhile, developing countries like China and India are rapidly motorizing, further squeezing supply. It wasn’t the housing crisis, but the oil price hikes that led to the financial crisis. The bottom line is that high oil prices will force us to go local, but this has benefits: local food, jobs, culture, and new distinctions in a global world. But what about the commercial peace? Will local economies, less interdependent, make going to war easier in the future?
(also posted on Amazon)
David Last, 25 October 2013