Hi, Steve

Thanks for your latest (and very thorough) response.

Re your location, I think you once mentioned that you live in SE Asia… Philippines??
Or am I wrong on that?

1. Contracts vs spot market
I don’t think that we should discount the value of contracts. Sure, they can and are broken, but rarely without a range of consequences (if only a simple loss of trust).
Concern has recently been expressed by the Brits re their NG supply: France and other countries have contracts with Norway, while the UK prefers to shop around.
Both the mainland Europeans and the Brits view Norway as a preferred, trustworthy supplier, but British citizens worry that their gov’t has not signed contracts, and in a supply pinch (they’ve had several) they will be the last served.
As they should be….

2. China
I agree with everything you say… the economic symbiosis and China’s naval limitations (though that seems to be changing… you will know much more about those details than I)
I even (reluctantly) agree with your point in the post-script.
From a practical oil-supply perspective, you are certainly correct.
From a moral stand-point, less so, but so far we have not really explored that aspect.

3. Cold War thinking
I agree again… with a global market for oil, there is little to be gained by interfering with “anyone else’s” supply.

4. Fuel emergencies
Again, I agree with most of your points… as I said in that ASPO-Denver video, there will always be some oil available to some people at some price.

But I’m not so sure that I agree with your argument that micro-planning keeps emergency managers happy.
Almost every emergency planner that I’ve spoken with (in your country and mine) agrees that a fuel emergency could be a whopper of a problem, and that current plans are inadequate.
But they also say that they are strained to the limit with paperwork, exercises and training sessions, much of which (recently) centered around pandemics (SARS and H1N1)… no time to examine something which seems fairly predictable at some point and for which we remain quite unprepared.
Every planner that I have met strikes me as sincere and is aware of the vulnerabilities, and they know that they will be the first ones criticized if the response at their level is revealed to be ill-conceived or negligently under-prepared for.
I do not envy them.

But returning to my example of farmers…you are right about low-income consumers dropping out of the market.
That is precisely the point: we will have movie stars and NBA hot-shots who can still drive Hummers, but thousands of farmers will struggle to put diesel in their John Deere to produce food.
North America still has to be fed, but how will that be done if the price of diesel is beyond the reach of most farmers?

We really do need an effective plan for this one, and the micro aspects (esp. re essential services like food) need to be considered and sensibly addressed... well in advance.