America is in a special predicament due to a set of unfortunate choices we made as a society in the twentieth century. Perhaps the worst was to let our towns and cities rot away and to replace them with suburbia, which had the additional side effect of trashing a lot of the best farmland in America. Suburbia will come to be regarded as the greatest misallocation of resources in the history of the world. It has a tragic destiny. The psychology of previous investment suggests that we will defend our drive-in utopia long after it has become a terrible liability.We are lucky that we can even buy gas at $3.50/gallon. If markets are disrupted (by outside suppliers or foolish intervention by our government), we may see no gas at all or black market gas. Now extend that scenario to other energy sources.
The circumstances of the Long Emergency will require us to downscale and re-scale virtually everything we do and how we do it, from the kind of communities we physically inhabit to the way we grow our food to the way we work and trade the products of our work. Our lives will become profoundly and intensely local. Daily life will be far less about mobility and much more about staying where you are.
Some regions of the country will do better than others in the Long Emergency. The Southwest will suffer in proportion to the degree that it prospered during the cheap-oil blowout of the late twentieth century. I predict that Sunbelt states like Arizona and Nevada will become significantly depopulated, since the region will be short of water as well as gasoline and natural gas. Imagine Phoenix without cheap air conditioning.
Bottom Line: The best thing we can have are deep and robust markets in energy. That means no subsidies and normalized taxes (e.g., on carbon or per unit of energy). On the international scene, we want to keep Iran, Russia, Angola and other dodgy places in the market (not necessarily with US companies or weapons). Given those two conditions, we will be able to adjust to the long emergency using market forces and innovation (BEST CASE). Anything less, and we get gratuitous pain.