So, how are you getting ready for $200 oil (or more)?

With the usual 2-3 year gap on reality we've become increasingly used to when reading blogs, the corporate media is finally noticing that something is going on in the oil world. And, despite a lot of distraction about speculators or oil company profits, they are increasingly talking about the reality of booming demand outside of the West, and stagnant production.

Talk about $200 oil is no longer just the realm of doomers, survivalists or other assorted "unserious" people. So what are you doing to adapt to that?

Pemex Says April Oil Output Drop Biggest in 12 Years

Petroleos Mexicanos, the state-owned oil company, said April crude production fell the most in more than 12 years as output at its largest field declined faster than the company forecast. Crude oil production fell 13 percent to 2.767 million barrels a day in April, Mexico City-based Pemex, as the company is known, said today on its Web site. Output a year earlier was 3.182 million barrels a day.

(...)

Output at Cantarell, Pemex's biggest field, fell 33 percent to 1.07 million barrels a day, according to the Energy Ministry. That was the lowest output since March 1996 at the field, which peaked at 2.192 million barrels a day in December 2003 and once accounted for about 60 percent of the company's output.

The company forecast output at Cantarell would fall 15 percent annually until 2012.

Exports fell 14 percent to 1.439 million barrels a day. Pemex, the third-largest supplier of crude to the U.S., has said it will cut exports as output falls so that it can refine more of its own oil.

A number of experts are now saying that Mexico will no longer export oil by 2011. While the US will still be able to find oil on the global market, it will make supplies a tiny bit riskier, and it might create an interesting economic and political situation South of the border if the government's main cash cow disappears.

$100-plus oil will be here for years as China motors ahead

China has 1.3bn people, four times more than America. At the moment, each American uses 10 times more oil than each Chinese - which is why, for now, the US remains the world's biggest crude consumer.

But as China's industrialisation continues, and its vast workforce becomes richer, demand for cars and household appliances will accelerate. Over the last decade, Chinese car ownership has grown at double-digit rates every single year. But there are still only 20 cars per 1,000 people in China, compared with 950 in the US. So the scope for higher car ownership is huge.

That's the most frequently used argument - and it certainly carries weight. We know we will never have enough oil to pwoer China our way; they're doing everything to get there as quickly as possible. something will break. But what?

Growing demand in producing countries pushes up the price

Soaring demand for crude in oil-producing countries such as Saudi Arabia, Russia and Mexico is helping to propel global crude prices to record highs.

Global demand is expected to rise to 86.8 million barrels a day this year, up from 85.8 million barrels last year, according to the International Energy Agency (IEA). Although demand from OECD member countries, such as the UK and the US, fell by 0.5 per cent in 2007 and is expected to weaken again this year, this is being more than offset by surging demand from developing countries.

The growing thirst for oil in China and India is well known. However, this global surge in demand is being led by oil producers that are emerging as significant consumers, too, undermining their capacity to export when global supplies are tightening.

And if it were only China... the most worrying trend for us is not the increased competition from other importers, it's the domestic use by the right-now very prosperous oil producing countries themselves, which directly reduces their ability to export additional volumes. These countries will always satisfy their own demand first - and will usually subsidize it, thus ensuring that demand is not constraiend by world prices:

Despite expense, oil-producing countries keep subsidies in place

BEIJING: China, India and other nations that subsidize gasoline and diesel prices may be even less willing to raise prices than they were six months ago, aiding crude's ascent toward $130 even as demand deteriorates elsewhere.

While Indonesia appears set to raise prices this month, the world's fastest-growing oil users show little inclination to reduce their subsidy programs and allow fuel prices to rise, as fighting inflation has become their top priority.

That is bad news for oil consumers in the rest of the world, who face record crude costs partly as a result of demand growing unchecked in countries where pump prices have barely risen since mid-2006 - when crude was about $70 a barrel.

That strong demand from a big list of countries is matched, beyond the spectacular Mexican example, by a general inability of oil pridcuers to pump out more:

Oil: A global crisis

Dr Salameh, director of the UK-based Oil Market Consultancy Service, and an authority on Iraq's oil, said it is the only one of the world's biggest producing countries with enough reserves substantially to increase its flow.

Production in eight of the others – the US, Canada, Iran, Indonesia, Russia, Britain, Norway and Mexico – has peaked, he says, while China and Saudia Arabia, the remaining two, are nearing the point at of decline.

In that same article, David Strahan describes the price scenarios he sees:

Oil price collapses

Fuel subsidies could suddenly be scrapped, dousing demand. Cost pressures have forced Malaysia, Indonesia and Taiwan to cut them, but China is hardly strapped for cash. Opec producers are under no pressure to abolish subsidies; as the oil price rises they get richer. Prospect: very unlikely.

Peace could break out in Iraq, the long-disputed oil law agreed, and international oil companies start work on the world's largest collection of untapped oil fields. Prospect: vanishingly unlikely.

Oil price stabilises or moderates

Deep recession in the West might cut oil consumption enough to offset growth in the developing world and Opec, or even engulf them too, softening prices. Prospect: unlikely in the short term.

Oil price soars

Russian oil output has gone into decline; Saudi Arabia has shelved plans to expand production capacity, and advisers to the Nigerian government predict its output will fall by 30 per cent by 2015. More news like this, expect oil at $200 a barrel. Prospect: likely.

Big oil producers will increasingly divert exports for home consumption. Opec, Russian and Mexican exports expected to fall, pushing oil to $200 by 2012. Prospect: highly likely.

So, a lot of people are now saying that there are very good reasons to explain why oil prices are rising. In fact, they will rise until the West, which is the main place where price exerts any influence on consumption, reduces its consumption significantly.

What will you do to get there?

Energy fears looming, new survivalists prepare

BUSKIRK, N.Y. -- A few years ago, Kathleen Breault was just another suburban grandma, driving countless hours every week, stopping for lunch at McDonald's, buying clothes at the mall, watching TV in the evenings.

That was before Breault heard an author talk about the bleak future of the world's oil supply. Now, she's preparing for the world as we know it to disappear.

Breault cut her driving time in half. She switched to a diet of locally grown foods near her upstate New York home and lost 70 pounds. She sliced up her credit cards, banished her television and swore off plane travel. She began relying on a wood-burning stove.

What will you do?