It is probably going to be a bit painful for a while. But just think of all the benefits of having, for example, petrol at $5 a litre.

People would use their cars less, and public transport more. The increased use of public transport would provide the revenue needed to expand it. The roads would be less congested, which - in the cities at least - would mean that fuel consumption would decrease, per kilometer travelled. The air would be cleaner, road deaths would plummet. There would be a significant demand for more fuel-efficient vehicles, which will reduce their cost of production.

Food would become more expensive to import and to transport, which will provide a boost to local production, and the increased cost will provide investment capital for dams, water recycling plants and other infrastructure projects.

So what if we have less cash available for big-screen TVs, McMansions and gas guzzling SUVs? Not necessarily, in my view, a bad thing.

And that's just what immediately comes to mind. In fact, it might be a good thing for the next government to tax the price up to that five dollar level, just so that we can adapt more quickly.

Come on people. Think positively. All this doom-and-gloom is for losers.

Pericles, I entirely agree that *if* the price gradient is smooth and gradual, and we start to make adjustments today, the consequences - for most of the population - will be largely positive. However, lower-middle-class outer suburbians seem unlikely to be able to escape the negative consequences.

What concerns me most is an incident or series of incidents that cause a sudden shock to the oil price, as occurred in '73 and '79. The more and more oil we import vs produce domestically, the more vulnerable we are to such an incident, and given that virtually all the oil-exporting parts of the world have some amount of associated political instability, the probability of such an event is too high for comfort.

Pericles you must never have been on public transport to say that! Have you tried getting a seat on a train or bus in rush hour? Imagine what $5 a litre would do to rush hour on public transport! It would implode! It will take decades for state governments to get their act together and construct a half decent public transport system.

Due to the immigration burden that we have to lug around the public transport system is getting worse and worse. More and more people with still the same service!

Does anybody know when we will get peak LNG?

err...WHAT's that ? "food prices rising 3 fold" ? hmmmmm *Looks around at his 6 acres of currently unused land* (with an evil glint in the eye) :)

There used to be a joke during one of the famines.. the 'starving person' who was hungry reached out and snatched a fly and scoffed it down, the next fly which came along was snatched not by the starving person, but by the opportunistic individual next to him who then said "Anyone wanna buy a fly"?

On transport.. *cough*... clearly the author has never trudged home on Melbournes Monash freeway in peek hour. CONGESTION is verrrry much the issue there. I often ponder how many of the drivers using the Monash are in heavy duty therapy just to get them through the next day let alone the next few weeks.

THE REAL ISSUE is neither congestion nor oil prices in my view..its responsible stewardship of the planet. Most of what we do in life is done with some kind of guidelines we agree to, but that's mostly in the areas close to home and to our immediate families.
'Far AWay' things like oil.... we tend to take for granted, including the ethics and morality of the drilling companies.

Once we become dependant on it... including the exploration/extraction ethics/morality... we are hooked.. so much of our lifestyle is structured on the basis of those things.

The Apostle Paul says:

I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want.

If we could make this real in all our lives, perhaps we would treat the planet better ?

BUT HOW ?

Paul answers.....

"I can do everything through him who gives me strength."(Phil 4:12-13)

Alienation from God, results in abuse of the planet by many and support (passive or active) by others. Reconciliation to our Creator would be a good start in fixing our problems

As it happens EasyTimes, I take public transport every day, and am a regular user of both trains and buses. And yes, I also have a car.

But my point was in part, that normality is simply a matter of what you get used to. There is little reason that we could not adapt to a lifestyle in which oil and oil products were luxuries. It's just that we don't want to think about it, because it isn't as convenient as that which we enjoy at the moment.

wizofaus points out that:

>>lower-middle-class outer suburbians seem unlikely to be able to escape the negative consequences<<

Again, that is chicken-and-egg thinking.

If companies found that their staff could not get to work because they lived to far from the city, they would decentralize pretty quickly. There are surprisingly few tasks these days that are location-dependent.

Unfortunately, humans being humans, there does need to be an external stimulus to get us to understand the need for change, and at the moment we are letting the oil price do the work for us. Which will be relatively slow and probably cause more overall pain compared with the short sharp shock I have in mind.

The reason oil prices are high is because that is the price dictated by supply and demand. Every month that goes by it becomes clearer that the world has passed Peak Oil and production is now over 1 million barrels per day lower than it was in July 2006. That is bad enough, but an analysis of oil exports is truly alarming.

Exports from the top 16 oil exporting nations was 40.445m barrels per day in September 2005. This August just passed exports were 37.907m barrels per day, some 2½m barrels per day lower than Peak Oil Exports. The trend is set to accelerate and is determined by two factors: 1) Flat or declining production in the oil exporting countries; and 2) Exponential growth in consumption in oil exporting countries where prices are invariably heavily subsidized. In fact, if these trends are maintained there won't be any oil for export in 6 years. Of course the trends will not be maintained. Much higher prices will change the dynamics in several ways.

Food prices have only just started to go up. Air travel will become the preserve of the rich again and they will be happy to sit in economy class seats. We are going to have to get used to European style gas prices.

Sure, the rest of the rest of the world will get drilled for oil, but it won't make much difference. 10 bn barrels sound like a lot of oil. Maybe there is even 20 bn barrels out there - that is not the issue. It is the flow that counts, and that will not amount to enough to make much of a difference. Anyway the faster you pump it the faster its gone. Say goodbye to your SUV's everybody. Time to go to check out that Toyota Yaris!

Looks like technologies like http://www.globalfinest.com/tech will be sought after