Life behind the plow after Starbucks

Brace yourself for record-high gas prices. We’re already paying almost a buck a litre as we reel through the worst recession since the Great Depression.

So just how fast and how high will prices soar when the recession ends and economic engines start firing again in China, India, North America and Europe?

We’re not just going to get hit on the demand side. There are some big questions about supply. We’re depleting oil reserves faster than we’re finding new sources. All the easy oil’s been had and we’re going to pay far more to find and refine future reserves. And then we have oil producers cannibalizing more exports for their own internal consumption. In the Middle East, around a third of a million barrels of oil are burned to generate electricity. And more than a million barrels a day could soon be needed to run desalination plants as the region faces a peak water problem.

Welcome to the end of cheap oil and the return of a much smaller world, says author and former Canadian Imperial Bank of Commerce chief economist Jeff Rubin.

The Hamilton Spectator