"The trucking industry uses 10-15% of our fuel, and while some of that demand will be destroyed in the nearterm with $3, $4, $5/gallon oil... that percentage will never go much farther below where it is now."

Not only that, but the fraction will increase. Heavy trucks are close to as efficient as they can get. Cars and SUVs have a long way to go and could double their efficiency without causing too much pain. 'Just in time' delivery and the horrible state of the railroads means that they aren't going to be meaningful competition for all but the cheapest, bulkiest goods.

"Our cities will never be able to take care of themselves on food grown within city limits, on rain that fell within city limits. It will never have a reasonable quality of life living on the microprocessors, cars, furniture, and razorblades that are [probably not] manufactured within city limits."

I'm sure a localized economy will have some shipping being done, and even a small amount of very specialized intercontinental shipping.

Most things will probably be done on a regional level (NYC, Long Island, SW Connecticut, and NE New Jersey would constitute a region). You get most of the efficiencies of scale while incurrung tiny transport costs. A market of 20 or 30 million people could certainly support a razor blade factory, a car factory (though, in my opinion, we should ditch the car), and multiple furniture factories processing local wood (which we have adequate amounts of around NYC, though it would have to be used sparingly for structural uses and not exported).

High-end microprocessors and circuits are a good example of something that is best made in only a few locations in the world. The capital equipment is massive (billions of US$) and the products are tiny (a few grams, plus a few more for adequate packaging - assuming the chips are shipped to local assembly plants to be made into circuit boards and then electronic goods).

Just moving to regional shipping instead of halfway around the world will save about 90% of the shipping energy (200 miles by truck vs. 2,000 miles by truck + 10,000 miles by ship).

Heavy trucks are far from as efficient as they could get - they are as efficient as it is painless to make them, without sacrificing safety, much money, easy access for repairs, and modularity. I could easily see a long, sealed, aerodynamically optimized road train driven entirely using an accumulator (either electric or hydraulic) doing 8 containers at once cross-country for twice the fuel cost that one currently uses. If we desired it to be so, and our highways had the room, it would be so. Anything you can do to make a train perform at high speed with less drag, you can do to a truck and cut its drag, if you want to. Especially given that we have honeycombed metal/composite materials that can function quite well compared to corrugated steel at a tenth the weight and 10x the cost.

Re: Rail - it is passenger rail that is deformed in this country. Our lightly regulated, lowspeed, privately owned freight rail industry is considered the most prolific in the world. But the country grew up around the interstates - all commercial, residential, and even much of our industrial space hasn't taken rail into account when considering where to build for at least half a century. As a result, the ability of rail to serve it is limited.