The cart may well be before the horse as you say but US gasoline inventories have slid to dangerous levels. A hurricane anywhere in the gulf that causes refineries to shutdown simply as a safety precaution could well lead to shortages. Letting our gasoline inventories get close to critical levels is a national problem not a industry issue.

I'm not happy with the current situation and it has nothing to do with prices if we have a hurricane this summer I suspect I'll not be alone in this sentiment.

This is the problem.
http://tonto.eia.doe.gov/oog/info/twip/gtstusm.gif

The west coast is the only place we seem to have decent gasoline stocks so we should be importing gasoline like mad.
Considering a 1%+ demand increase each year and the refinery problems we are having we should have already seen record breaking imports of gasoline. Instead we seem to have embarked on a grand experiment to discover exactly what our minimum operating levels are before we see widespread shortages. But hey I live on the west coast and we get our gasoline from Korea so its not my problem. We at least are not playing the same game.

And finally I am in agreement at least initially for the US I don't see sudden shortages. Later on I disagree mainly since I can't see us going forever without upheaval a world of ever increasing energy costs will not be a nice one.

As far as Kunstler a simple observation once living hours from work and commuting is not perceived as efficient then the value of the far flung suburbs will decrease all thats needed is a trend downwards to stall and reverse suburban expansion people will not buy a deprecating asset. I know for a fact that at least in my field Americans will no longer move too silicon valley to work if they have families and a lot of the senior programmers are leaving and working remotely like a lot of the American employees that work for silicon valley companies. The only people left are either rich executives or H1B's/immigrants living in crappy apartments and condo's with illegal migrant workers. At each economic downturn the immigrants scatter and the H1B's go home.

This goes into the general problem that prices are set at the margin slow squeeze concepts although nice tend to ignore this at some point the situation changes. Silicon Valley has changed into a overpriced slum unless your rich.

Hello OcE,

Thanks for your comments. I've asked previously and still wonder:

1) re: "There is still a lot of wasteful demand out there that can be trimmed."

- Where do you see this? Could you explain a little further?

- Can it "be trimmed" without altering (presumably in a negative fashion) the economy that relies upon it?

2) re: "... beyond increasing prices."

How do you expect the price increase to effect the economy?

3) re: "Ditto countries that import that cannot compete with us for the marginal bbl."

So, those countries (as entire countries) can "be trimmed"?

What does this look like?

And...what about say, China, deciding to simply purchase contracts, rather than bid for or "pay for" barrels?

And...how does the "we wish to pay up for..." come into it? does this rely on a "healthy dollar"? Or what?

What about US debt?

4) "...suddenly one day"

What about Memmsl's idea concerning the probability of shortages?

5) "As prices rise..."

What about Deffeys' (and others') argument that we will see, not a gradual rise, nor a "slow strangulation", rather increasing volatility in price?

6) And then, of course, the "finale" of a question:

re: "...we'll shift demand to other energy sources..."

And use those energy sources to...

--devour the last fish in the sea?
--in other words, introduce other non-energy resources, which are nonetheless critical in the spot they occupy?
Example, water supply.

7) And may as well ask you about Venezeuala:
re: "...with their enormous export capacity mostly aimed at us, decides to supply other nations for less money instead."

What do you see as the deciding factors on the part of Venz. - either way?

What do you see as "pre-emptive" actions US can take, if any?