Kotkin is spot on with much of that. You can feel it very acutely in NYC already.

Jebediah

The notion that urban and suburban dwellers will relocate to small villages in agricultural regions is unrealistic. In the ensuing Peak Oil generated global economic depression, the value of urban residential properties will plummet. Increasing unemployment will slow new house sales and accelerate mortgage and property tax foreclosures. With more and more urban homes up for sale, their prices will decline sharply.

And, as the price of urban property declines in value, rural property will increase in comparative value. Indeed, in the last few years, the prices of agricultural land have increased. Soon, to move to a rural area most urban home owners will have to sell at a low price and buy a rural property for a higher price. The financial loss in selling and buying property will stifle the relocation to rural regions for most people.

At the same time, the cost of building new homes in rural areas will increase with the increasing cost of oil and natural gas. Building materials (asphalt and fiberglass shingles, cement, plastic and aluminum siding, fiberglass insulation, glass, lumber, and bricks) are either made from oil or they are manufactured with the energy of oil, natural gas, and coal. All building materials and construction workers are transported using oil (diesel and gasoline).

Electricity that is used in the manufacture and construction of houses will also become more expensive. Coal (which is transported with diesel) and natural gas (which uses oil in exploration, drilling operations, and transport of workers) provide the energy for electric power generation. Thus coal and natural gas costs, as well as the cost of electricity, will increase with the increasing price of oil.

Similarly, the construction of residential water (wells and pumps) and sanitation systems (septic systems or outhouses in rural areas) will cost more and more as the price of oil increases.

Local governments would have to construct schools and some roads in rural areas with expanding populations in an era of declining local government revenues (due to declining property values and property taxes). Local governments would have to raise taxes for new infrastructure at a time when citizens will vociferously oppose tax increases.

In colder regions of the world, including most of Europe and the U.S., urban to rural relocation means people moving close to wood supplies for home heating, but many agricultural areas lack significant forest land.

Inertia and procrastination are powerful forces in determining human behavior. It is basic human nature to deal with non-routine problems when they become obvious, not before. Very few people will study the Peak Oil future carefully to determine how it will impact them. Denial is encouraged by pervasive public, media, government, and business ignorance of Peak Oil impacts. Indeed, those who become vocal about Peak Oil face ridicule by the vast majority of the ignorant.

The combination of these obstacles means that only those who have ample resources and knowledge of Peak Oil impacts will be able to relocate, if they act sooner rather than later. Relocation will thus resemble a trickle of the affluent, rather than a mass movement.

As the Peak Oil economic depression undermines the value of investments and urban property, most people will be stuck where they are. When the highways fail, the movement of people from urban to rural areas will cease. That time is years away, not decades.

Studies by scientific organizations and independent analysts indicate that global crude oil production will now begin to decline, from 74 million barrels per day to 60 million barrels per day by 2015. During the same time demand will increase 14%. This is equivalent to a 33% drop in 7 years. The price of oil will skyrocket like never before.

No one can reverse this trend, nor can we conserve our way out of this catastrophe. Because the demand for oil is so high, it will always exceed the level of production; thus oil depletion will proceed at the same rate until all recoverable oil is extracted.

Alternatives energies will not fill the gap. And most alternatives yield electric power, but we need liquid fuels for tractors/combines, 18 wheel trucks, trains, ships, and mining equipment. The proponents of the electric economy, the hydrogen economy, or an algal biodiesel economy ignore the obvious. There is little capital, time, energy, or public will for such trillion dollar infrastructure makeovers. The belief in alternative energies is so strong that most scientists avoid examining obvious questions – does the development of alternative energies consume more energy than they provide, and do alternative energies consume liquid fuels and give us electric power, which is not what we need?

The U.S. government provides no studies to advise the Congress and president on what to do with this catastrophe. Congress and the president are so inept they don’t even know that they should commission the National Academy of Sciences to study the energy crisis and the advise the nation on how to plan for Peak Oil impacts. The NAS is the only objective body that can develop policy with the best scientists from many fields to work together cooperatively to develop sound policy recommendations. And the NAS is the only authoritative source for making such policy recommendations to the nation. Thus Congress and the president grope around in the dark, relying on energy company lobbyists and well meaning “sages” who offer some plan to save the nation, but who know little about energy policy and Peak Oil impacts. FEMA has no Peak Oil risk management plans. Contingency planning for Peak Oil is an oxymoron.

We are facing the collapse of the highways that depend on diesel trucks for maintenance of bridges, cleaning culverts to avoid road washouts, snow plowing, roadbed and surface repair. When the highways fail, so will the power grid, as highways carry the parts, transformers, steel for pylons, and high tension cables, all from far away. With the highways out, there will be no food coming in from “outside,” and without the power grid virtually nothing works, including home heating, pumping of gasoline and diesel, airports, communications, and automated systems.

After the last power black out, the people living in rural areas will find that surviving will become increasing difficult without all of the goods from the “outside” (food, canning jars, fencing, roofing, hay, straw, seed, animal feed, plastic tarps, fertilizer, clothes, fabric, medicine, hardware, saws, wood stoves, etc.). The survivors will be the very few who live in areas with good rain and soil and who prepared intelligently for a life without oil.

References and links here: http://survivingpeakoil.blogspot.com/2008/09/surviving-peak-oil-obstacles-to.html

There is actually a bit of a precedent for this: FDR’s New Deal caused a boom in Washington because of all of the new workers of the federal government. At the same time, a lot of the rest of the country was at the low point of the depression. Of course, the previous administration has also created a boom of its own in Washington by outsourcing a huge part of the government to private companies, who do the same work as the earlier public servants, but for several times the cost.

Jebediah

All this is bad news for much of America, but it should mean great business for many residents of greater Washington. Sudden interest in District pied-a-terres among investment bankers, venture capitalists, energy potentates and their hired help could do a lot to restore the battered condominium market. Office buildings in the District and surrounding environs can now expect a new rush of tenants, both from the private sector and the soon-to-be expanding federal bureaucracies.

The transfer of cultural power to Washington will also accelerate. After all, Washington is more than ever where the action is. Media outlets have already been shifting out of New York and other cities – the Atlantic Monthly moved from Boston to Washington in recent years, and USA Today, National Public Radio and XM Radio are headquartered in or near the capital. A city that, according to one 19th-century account, had a cuisine consisting largely of “hog and hominy grits” now boasts world-class restaurants, draws top-line chefs to its food scene and will continue to develop into a serious epicurean center. The area already ranks third in film and television production, largely because of a thriving news and documentary business, as embodied in National Geographic, the Public Broadcasting Service and the Discovery Channel.

Over time, those of us in the provinces may grow to resent all this, seeing in Washington’s ascendancy something obtrusive, oppressive and contrary to the national ethos. But don’t expect Washingtonians to care much. They’ll be too busy running the country, when not chortling all the way to the bank.

Joel Kotkin, newgeograpy.com