I tend to agree with arraya, especially in the long run.
I think the current price of oil is a little overdone, due in part to the dollar devaluation & easy money. If the world economies stall and/or the dollar rallies, oil should come off in the near term.
Long term though we run into declining supply and increased demand. The supply side can’t be remedied without major price increases, and even then the supply is still finite, so it just buys time. On the demand side, the world economies would have to peak or stagnant in order to curb demand, including a halt to emerging market infrastructure buildout & middle class consumption (which seems highly unlikely if oil prices moderate or decrease). Also, a concerted effort to use oil more efficiently, especially to power transportatnon, would need to occur. Ironically, transitioning everyone from gas guzzling vehicles to high mpg ones will require even more oil in order to extract the resources and build the new vehicles.
In my opinion, the only viable long term solution is to transition on a very large scale to renewable energy, primarily solar, using hydrogen as a carrier for high powered applications (liberated via renewable sources). I think the current oil “crisis” may actually be of great benefit if the US realizes that we need to build out this infrastructure now. In the intermediate term we will have to rely on coal, natgas, & nuclear until a truly renewable energy base is acquired. Of course all of this takes decades, and if we don’t start now, the pain will only get worse…
