Most of the increase in the price of oil has been really just the decline of the Dollar,
The dollar has lost like 20% over the past 2 years. Oil has gone up 200%. Most elasticity studies put it a 15-20%, that means 1% supply/demand change causes price change of 15-20%. Imagine 4-8% yearly. You don’t have that much time to react before you have major economic dislocation.
What driven oil up over the past year or so is declining net exports and increasing demand in china. If you look at it graphically it really works out. Yeah, you have the war premium, currency and a little amplification from speculation, But the majority was fundamentally driven.
The issue is time scales, how fast can you get alternatives out. We have no proven scalable alternative so far. Just a few on paper that have problems associated with them. Hybrid really does not count, efficiency just causes more consumption see Jevons paradox. Plug ins have their own inherent problems and we have a few years for them.
IMO, we are going into a deflationary period a money is being sucked out of the economy. This is what is driving it down, job and HELOC losses, etc,,. Kind of a forced conservation program. At the same time, turning off all the signals for “market” based solutions. Once we go sub $100 it looks pretty grim, yet depletion marches on.
By next year we will be more concerned with economy and oil won’t be an issue, yet it still will be the biggest one.
At this point in the game without massive gov intervention there isn’t much there. I just can’t imagine the bottom half of the population will be in a position in the next few years to buy plug in.