Peak oil is back and it will unleash seismic change. As The Wall Street Journal reports, global production of petroleum peaked in the first quarter of last year which means oil prices will soon be back up in the triple digits. And when that happens, it's likely to squash any hope of recovery. Goldman Sachs is already predicting a big rise in heating oil prices.

Analyst Jeff Rubin warns that peak oil is likely to transform our lives. "Eventually, he says, the transportation costs of importing products from far-off countries will erase other advantages, such as low-cost labour. It will become, he argues, 'the largest barrier to global trade'. This will lead to more dense communities, less driving, and a reliance on what we produce locally. World trade will revert back to the patterns we saw in the 1970s, when tariffs slowed the global movement of goods and trading was more regional. Economic growth will come to a crawl and inflation will rise. Look no further than the current recession for proof, he says."

He tells the Globe and Mail , it will affect all sorts of choices, from what car we drive to where we choose to go for vacation to which jobs will be more vulnerable.

If Rubin is right, the world is likely to get a lot smaller and constrained.