It’s as common a scene as you’ll see anywhere. But looked at in a different way, the denizens of Dufferin (and places like it around the world) aren’t just walking around a mall: they’re walking through a big puddle of oil. That’s because all those signs, bags, wrapping and products are derived from hydrocarbons. Gasoline-powered cars will get most everyone and their stuff home. And oil-fired ships, trains and trucks got the stuff here.

The Chimerica trade route that expanded rapidly in the late ’80s and ’90s flooded North America with cheaply produced Asian goods. That helped preserve middle-class lifestyles through an era of stagnant wages, and in many ways became the backbone of North America’s economy. But the whole enterprise really works well only when crude is priced at US$25 a barrel. Now that oil is about to move into a new and permanently higher price range, as a result of shortages and a shift to less-efficient production, the lines of trade are about to break down. That is going to throw the Canadian economy first into crisis and then, after a period of adjustment, into a new post-carbon future.

Or so says Jeff Rubin, the brash and controversial (some would say over-opinionated) former chief economist for CIBC World Markets, as he sits in the Dufferin Mall food court, digging through a box of fries. As he chats about his new book, Why Your World Is About to Get a Whole Lot Smaller (Random House, $29.95), Rubin predicts the consumer paradise Canadians have known over the past several years is about to break down — and in a rather messy fashion.

Another round of triple-digit oil prices, Rubin warns, will see a relocalization of manufacturing to Hamilton from Guangdong. Western access to cheap Asian labour will decline as energy prices rise — and that’s going to increase the price of basic goods, like food, by as much as 40%. Also in Rubin’s crystal ball: $7-a-gallon gasoline in the United States, along with a crash in the greenback that will make driving so expensive that many poorer Americans will realize they can no longer afford it. One-fifth of all cars on the road will be gone in a decade.

Rubin doesn’t flinch as he sets forth his vision: “I think the economy of the future is going to be more like the ’60s or the ’70s. Because of cheap oil, we got used to plentiful blueberries in Canada in the winter. But in the ’60s, the only blueberries you would have got were canned or frozen. We’re going to go back to that to some extent. For the people in this mall, it’s going to be a big change.”

It’s a frightening scenario, especially for anyone who kind of likes things the way they are. Do we really have to prepare ourselves for a world without easily available fresh sushi (at least if you live far from the ocean), with less travel, fewer consumer choices, smaller energy footprints, reduced lifestyles — an overall contraction of civilization?

In its hydrocarbon-inspired horror, this call is classic Jeff Rubin. During his time as chief economist at CIBC, he developed a reputation for controversial predictions, some of which brought howls of derision from the Canadian commentariat. Nowadays, you don’t have to go too far to find Rubin bashers, especially after he flubbed a call on the direction of the TSX. (In October 2008, he said it would reach 12,000 by the end of 2009 — he was forced to reissue a new forecast of 9,000 this spring.) And when Rubin predicted in 2008 that oil would go to US$200, that was it — the naysayers quickly piled on.

Rubin is no shrinking violet, though. Rather than retreat, he has upped the ante on his peak-oil-based crusade. He quit his job at CIBC to promote his book. And he is now getting ready to go on tour to bring his message to Canadians. Yes, you’re about to see a whole lot more of Jeff Rubin.

His words are either a prescient warning or he’s gone totally Kurtz, à la Marlon Brando in Apocalypse Now. Whichever way we’re headed, we should know soon: Rubin’s latest call, that oil will be back in triple-digit territory in 2010, is just one year away from confirmation.

Sitting in the food court, watching the mall traffic pass, Rubin continues to make his way through his fries. “This is great. I can’t believe they still have these,” he says, indulging in a moment of wry nostalgia. He doesn’t spend a lot of time in mall food courts. That’s clear.

The jury is still out on the second part — West Texas Intermediate recently traded at about $60, up from just $35 a few months ago — but Rubin’s ideas seem to be moving into the mainstream. Raymond James, a Houston-based brokerage, released a report in early May suggesting global oil production is now on the downside of Hubbert’s curve. Even Cambridge Energy Research Associates, a mainstream oil forecasting service that has been the biggest anti-peak voice, now admits oil production may eventually hit an “undulating plateau.”

If Rubin is right, the world is now going to see the other side of the massive expansion of petroleum supply that over the past 150 years moved us from horses, coal-powered trains and ships to cars, air travel and plastic. As the amount of free-flowing oil begins to decrease, a reversal in that expansion will occur. And other sources of energy simply will not be able to make up the difference.

Think of it this way. An onshore oil well in Saudi Arabia in the peak of the oil discovery age — such as Ghawar, the world’s largest, discovered in 1948 — would have delivered an energy return on energy invested (EROEI) of 100 to 1. That is, for every unit of energy you put into this energy source, you got back 100 units. By stark contrast, nuclear power plants deliver an EROEI of just 10 to 1. Even worse, traditional oilsands production yields an EROEI of 3 to 1. And so, as the amount of free-flowing light sweet crude decreases, we are increasingly going to move toward more expensive, lower-return fuels. The result will be more resources devoted to primary energy production, which means less free energy for all of the extras — like, say, a radically overbuilt consumer economy that underpins current mall culture.

But there is hope. “The challenge now is growing GDP from that 86 million barrels [a day],” says Rubin. “Peak oil could mean peak GDP. But it doesn’t have to if we can de-link economic growth from oil.” Manufacturing, he thinks, will move back to Hamilton and Cleveland and the Ruhr; China and America will grow more distant as global trade networks decay. “Your new mantra is: Distance is money,” says Rubin. “The entrepreneurs who will do well are those who can pull together local manufacturing networks.” He sees people going back to modes of thought and action that were washed away by cheap oil. We’ll repair things rather than throw them away, and that will be good. “We’ll see the end of the single globalconsumer,” Rubin says. “I expect that we’ll see local tastes and preferences re-emerge.”

So it’s not going to be a complete disaster. Canada will get through this, says Rubin — unlike some of the more radical doomers who expect a fascist leader to be elected in the States in the years ahead as the middle-class is wiped out (à la Germany in the ’30s). “People respond to a crisis,” he says. “I think we’ll be OK.”

So get set. If Jeff Rubin says something is coming, you better listen. Love him or hate him.

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