A very interesting interview with the James Howard Kunstler, who believes we have reached peak oil

From The Business Insider:

Question: Now take out your crystal ball. What is the most likely scenario you see playing out in global energy supplies over the next few decades?

JHK: I see the USA getting blind-sided by events. We import nearly three-quarters of the oil we use and much of it comes from very dodgy places. The ideas derived from Jeff Brown's Export Land Theory tell us that oil export rates are certain to go down very steeply and soon. Before long, exporting nations will have to ask themselves whether they ought to keep some of their oil around for their own people.

In the meantime, China is very busy spending its foreign exchange reserves on "favored customer" oil contracts, more or less cornering a lot of the market. I think that will lead to conflict between them and us. We may even invoke the Monroe Doctrine over Chinese oil purchases out of Canada.

Question: What question didn’t we ask, but should have? What’s your answer?

JHK: Will China dominate the world further into the 21st Century? 

A lot of people think so. I'm not so sure about that. They have problems that are orders of magnitude greater than ours with population overshoot, dwindling fresh water, industrial pollution, relatively little oil of their own, and legitimacy of governance. They've become net food importers.

We look at them and their recent accomplishments in awe -- and they've come a long way from the point thirty years ago when most Chinese lived like it was the twelfth century. But they came to the industrial fiesta very late. They are making some rather dumb choices -- like, trying to get their whole new middle class in cars on freeways, putting up thousands of skyscrapers. Their banking system is possibly more corrupt and dysfunctional than ours -- since it's run by the state, with very poor accountability for lending. As a Baby Boomer, I well remember China's psychotic break of the 1960s, when the country went cuckoo under the elderly, ailing, paranoid Mao Tse-Tung -- which is to say, they're capable of flipping out on the grand scale under stress. They are reaching out these days in a resource grab using their accumulated foreign exchange reserves. At some future time -- say, if the global banking system implodes, and their forex reserves lose value -- I wonder if they will reach out militarily for resources, and how the world might react.

In any case, I take issue with the Tom Friedman notion that the world has become permanently flat. The world is going to get rounder and bigger again. We'll discover -- surprise! -- that the global economy was a set of transient economic relations that obtained only because of a half century of cheap energy and relative peace between the big nations. Ahead now, I think you'll see the big nations shrink back into their own corners of the world. I'm not saying we'll see no international trade, but it will be nothing like the conveyer belt from China to WalMart that we've known the last few decades. And the prospects for conflict are very very high.