High oil prices and the end of globalization really?

Or a missed opportunity for Mexico and Venezuela

…The world of oil can be divided into two basic camps: the oil pessimists who adhere to the peak oil theory, and the oil optimists who think that given the right economic incentives, human ingenuity and technology, we would be able to find more of the “black gold”.

Jeff Rubin, a Canadian economist “guru” and for 20 years the chief economist of the Canadian Imperial Bank of Commerce, has written a fascinating book about what the world may look like in the era of peak oil and three digit oil prices ( Why Your World is About to Get a Whole Lot Smaller: Oil and the End of Globalization, by Jeff Rubin, Random House Canada ) Rumors are that the book cost Mr. Rubin his job at the bank. I do not know, but I am not surprised to see the bank unhappy with their chief economist moving from forecasting interest rates or GDP growth to futurology.

Rubin’s premise follows that of Dr. Colin Campbell, by whom you can find extensive reading and analysis at the Association of the Study of Peak Oil, http://www.peakoil.net/ , which suggests that “global oil production will soon be in the backside of the Hubbert curve…daily production would soon peak, plateau and then begin its irreversible decline”[1]. The Hubbert curve is the bell shaped curve the famous American Geologist King Hubbert referred to when describing the life of an oil reservoir.

Rubin puts oil at the center of the economy, and according to him it is thanks to cheap oil that modern globalization was possible. His compelling example, at the beginning of his book, is the story of a salmon caught in the Northern Atlantic sent to a port in Norway to be frozen and shipped to Rotterdam where it is then shipped to China to be processed then frozen again and repackaged to be shipped to a market in North America and put on display as “fresh fish”. All the drivers of globalization, including some of the modern strategies of management such as just in time inventories and outsourcing have been possible because of cheap oil.

Petroleum World