In The Long Emergency, James Howard Kunstler argues that "peak oil" will soon lead to apocalyptically high energy prices that will destroy the suburbs and put Wal-Mart out of business. "Finally!" says one anti-auto group, cheerfully.

Kunstler's peak-oil theory may be no more than wishful thinking. His case critically depends on four strong assumptions:

1. We are running out of oil;
   
2. There are no substitutes for oil;
   
3. Higher prices will lead people to drive less; and
   
4. Less driving will force people to return to the cities.

If any one of these assumptions is wrong, Kunstler's argument falls apart. A paper I have written questions all four assumptions.

1. While extraction costs may moderately increase fuel prices, the world has sufficient known reserves to last for many decades.
2. Substitutes include solar, nuclear, and coal, but the first "substitute" will be the use of more fuel-efficient cars.
3. Americans will respond to sustained higher fuel costs more by cutting back on other transport costs, such as by keeping their cars a little longer or buying less luxurious cars, than by driving less.
4. To the extent that people do drive less, they could actually accelerate the suburbanization and exurbanization trends that the New Urbanists oppose.

Government policies based on a presumption of peak oil are likely to do far more harm than good to our cities and our economy. For more information, see Does Peak Oil Spell Death for the Suburbs?