[This is an EXCERPT: read the whole article here. -Ed.]

"The world is now facing an oil crisis few predicted and even fewer are prepared for. It's impossible to understate how crucial cheap oil has become to our way of life. It's shaped how we get our food, what we buy, where we live, how we work, and the way we play. Cheap oil opened up the world to millions of travellers via discount airlines, allowed thousands to buy their first homes in sprawling suburbs, and enabled consumers to get their hands on ever cheaper goods, shipped just in time, from around the globe. Now economists say all of that is at risk. Exactly how the end of cheap oil will change our lives is still far from clear. But change them it will, in profound and dramatic ways. If the price of oil continues to climb to US$200 a barrel, it won't just be that people will have to drive a little bit less or skip the family trip to Disneyland. Across the board the cost of living will explode, not just for luxuries but basic necessities as well."

"Cathy Hay at MJ Ervin & Associates, a Calgary firm that tracks gasoline prices, believes $1.60 gas could be the tipping point at which people dramatically cut back. ... [T]here are signs the sudden rise in oil prices has already had a profound impact on real estate prices in the U.S. Last month Joe Cortright, an economist in Oregon, published a report for the Chicago-based organization CEOs For Cities that looked at downtown versus suburban housing markets. He found far-flung neighbourhoods had both greater price declines and higher foreclosure

rates than those closer to a city's core. What's more, he concluded the current housing crisis is about more than subprime mortgages. Years of rising gasoline prices have simply made suburban living too expensive. 'The collapse of the housing bubble, punctured by the gas price spike, marks a watershed point for the nation's suburbs,' Cortright wrote. 'As the more severe decline in housing prices on the urban fringe over the past year illustrates, $3 a gallon gas has made low density development a false economy across the nation.'"

"Last week, the International Energy Agency said it will re-examine the oil supply in 400 major oil fields around the world — a sobering acknowledgment that there may be even less oil than once thought. Even industry insiders are waking to the idea that the world is nearing the supply wall. Last year, former U.S. energy secretary James Schlesinger declared, 'the battle is over, the peakists have won.' Peak oil theory isn't about the world running out of oil — that won't happen anytime soon. It simply describes the point at which the supply of oil can no longer keep up with the world's growing demand, which these days is coming more and more from the fast-growing economies of China and India. When supplies run short oil prices don't just go up, they skyrocket. A 2005 U.S. government report concluded that a four per cent shortfall would result in a 177 per cent increase in oil prices. It is possible that new reserves, like Alberta's tar sands, will help temper that jump in prices. But there's no avoiding the fact that the world has entered a whole new realm."

"Unfortunately, failing to act in a timely way is precisely what we seem to be doing. 'You can't replace hundreds of millions of private automobiles throughout the U.S. overnight. You can't even do it in five years,' says Daniel Lerch, author of Post Carbon Cities. Public policy — from decisions to invest in multi-billion-dollar freeway projects to airport expansions — remains stubbornly rooted in the idea that oil will be available and affordable far into the future, says Lerch."

Photo credit: Redvers