You’ve heard it said that the world is flat – that today, all economics is global. Time to rethink that in light of the global energy crisis. The world is being rerounded, its horizons shrinking. Localism is the new globalism.

Cheap, abundant and accessible fossil fuels allowed us to create a world in which we are relatively unconstrained by geography. That era is passing into history, and it is not likely this process can be reversed.

There is simply not enough oil being extracted quickly or inexpensively enough to meet global demand – nor, in all likelihood, will there be again. This is called peak oil. Last week, economic analysts said Americans have never before spent a greater part of their income on energy costs. The sooner we come to terms with this reality, the sooner we can begin taking serious steps to adapt.

By this fall, chances are John McCain and Barack Obama will be talking more about energy than any other issue. They’ll have to. That would be a real change from now.

Peak oil is a far more urgent crisis than climate change, yet its economic and social effects are not even on the candidates’ agendas. Every petroleum-dependent aspect of our economy, from the far-flung distribution systems for consumer goods to the daily commute, will be difficult to sustain. The only question is how soon it will happen and how traumatic the transition will be.

National, state and local politicians would be smart to approach it with a series of policy proposals based on the concept of relocalization. It’s the idea that in a world of costly energy, most economic and social activity will, of necessity, be local.

A comprehensive domestic energy policy should be geared toward helping regions, cities and neighborhoods depend as little as possible on petroleum. That could mean:

¢ Dramatically changing zoning restrictions to permit small retailing in residential areas, making it possible for people to walk or bike to do their shopping. Refuse to approve new housing developments unless they are designed for pedestrian accessibility to retail areas.

¢ Through regulation and tax-code changes, encouraging the development of local farming, so population centers can better afford to feed themselves. Similarly, discouraging the use of arable land for development.

¢ Government investing in expanding broadband infrastructure to make high-speed Internet access more accessible and affordable. A recent study by the Information Technology and Innovation Foundation found ranked the United States 15th out of 30 industrialized countries in terms of broadband performance. Offering tax incentives to companies that use the Internet to decentralize their workforce to homes and neighborhood clusters.

Beyond localism, a far-thinking federal energy policy would consider expanding the national rail system as an increasingly cost-effective alternative to air travel. More broadly, federal and state governments also could accelerate energy-smart consumer behavior by offering substantive tax incentives for purchasing solar panels or film, constructing energy-efficient housing or retrofitting existing housing.

When presidential candidates talk about “energy independence,” they’re telling a half-truth. Yes, the United States is far too dependent on foreign oil. But at our current consumption rate, all proven U.S. reserves, and the estimated reserves in the Arctic, would supply the nation for only a few years. The notion that we will ever be truly energy independent is science fiction.

But we can be more energy secure by learning to live and work in ways that reduce our reliance on oil. “The American way of life is not up for negotiation,” Vice President Dick Cheney once said. Oil, however, is a finite resource. And the law of supply and demand is not up for repeal.

No question, it’s going to be tough to change. We have no choice, and we have little time. It took the 20th century to build a way of life wholly dependent on cheap and available petroleum. The ground is rapidly giving way beneath our feet. The head of the Russian petro giant Gazprom said last week that he foresees demand driving oil to $250 a barrel by next year.

Our nation is living through a paradigm shift. Ordinary citizens are not waiting for official action and are already working on ideas at the grass roots (www.relocalize.net). We still need imaginative politicians who get what’s happening and who can lead, rather than be led by events they scarcely understand.