Previously I mentioned that I expected oil prices to spike in the 2014/2015 timeframe, resulting in a Fall 2015 market crash, a resultant economic downturn, and ultimately war by 2020 including occupation of Saudi Arabia.
[EDIT 1/17/15: Oil prices are very much down right now, but we are setup for a spike in prices once demand improves or if the geopolitical situation deteriorates. The low oil prices are temporary, see my post here. The economic crisis is pushed off until 2016, but it's still coming.]
I still believe this very strongly. America has and will continue to be on a quest for ultimate supremacy. This article by Le Monde diplomatique in 2002 continues to be an accurate statement of what drives American foreign policy.
Forget the praise about the Bakken oil fields. The production of these wells diminish significantly within the first few months requiring ever more drilling to maintain overall production. Shale oil is a little bump that will not last long. Global net exports continue their trend of decline since their peak in 2005. 2015 and the years following will bring clarity on this reality to America.
The economic downturn following the Fall 2015 crash may be slight at first, but America will feel its full misery by 2017. The limits of oil production will grip the world. The market for new gasoline-only vehicles will dry up, and only the most efficient gasoline-only vehicles will be desired used. The transition from tractor trailers to rail for long-range land freight will intensify to the point of putting many over-the-road freight operators out of business. But this is not enough to pull America back into prosperity. Capitalist prosperity requires growth and debt which require high EROEI energy sources.
The government will not sit idly by and let America descend into social chaos and irrelevance. It will take America to war. The current (2013) required cuts to defense will likely be made in manpower rather than technology. When the resource wars (which will be known as something more appealing) start later this century, all that will be required to restart the juggernaut of American might is a common enemy and an effective enlistment drive. And maybe a draft.
War spending will invigorate the American economy, and our total and complete victory in that war will reorient the global economy and politics in America's favor, and to the favor of her significant allies. This will be at the cost of much of the third world and our enemies, who will be left to deal with post-peak oil reality in all its stark desperation, while America and friends take the spoils.
But Americans are going to have to deal with difficult times between 2015-2020. Here is how to prepare:
1. Get out of debt. No or slow growth means debt becomes unsustainable, unless you are the government (and I am not being funny here, the government can actually handle debt in this situation).
2. Get fossil fuels out of your life, electrify everything. Once oil gets crazy, so will natural gas. We are talking home appliances, heating, vehicles, everything. We are also talking installing solar if possible. The government will subsidize electricity consumption if it becomes necessary in the economy.
3. Go green. Make your home and your life the greenest you know. This is the same reasoning as number 2.
4. Make yourself an irresistible part of the labor market. Get the degree. Get the certifications. Get all the experience your current opportunities allow you. You will need this edge when the economy is down.
5. Save, save, save. Unless you are too big to fail, you are your own bailout fund.
6. Inflation proof your life. Stop renting and buy a house. Stagflation will be the name of the game, post-2015. Get your expenses fixed as much as possible.
You have until mid-2015 to get ready. Take advantage of the halfway-decent current economy (2013) to position yourself for the years ahead.