Kunstler's predictions in BusinessWeek

kunstler oil graphic business weekAuthor James Howard Kunstler looks at the trends we’ve been discussing for the last week — home prices in suburbs with long commutes depreciating — as well as some that we haven’t talked much about, like escalating food prices and the debilitating effect that high fuel prices are having on airline and retail industries, and sees dire circumstances on the horizon.

From BusinessWeek:

Why is suburbia now threatened?

Cheap oil is what made suburbia possible. But we’ll run into problems with spot shortages. As we get into trouble with these supplies, our economy will suffer. Major instabilities in the system will present themselves much sooner than we are led to believe. And by that I mean the way we produce food, the way we conduct commerce, and the way we move around.

When will all that happen?

The rise and fall of oil production is asymmetrical. In other words, it’ll be a steeper, rockier tumble down than the steady increase going up. My own sense of things is that we will be in very serious trouble inside of five years.

As the above chart from BusinessWeek illustrates, global oil production appears to have plateaued — whether or not we have reached “Peak Oil” is certainly up for debate — and refineries are running at max capacity, pumping full speed ahead. But supply isn’t increasing. What does that mean for the next 20 years of development in America?

Whether Kunstler’s picture of America becomes the future or not, rising fuel prices and the corresponding effect on the suburban housing market are certainly reinforcing the urgency of continued investment in smartly-located, accessible places that can hold their value as gas gets more expensive.

What do you think?