I would bet we wind this fuel cost thing when we are paying the same as the EU (currently about $8 / gallon). Other alternatives will supplant petroleum eventually, just going to be sooner rather than later. Middle east is eating itself from the inside out. As other alternatives come on line, petroleum will permanently become less of an option here. However there is still a lot of the developing world to buy oil, but how much money do they have to do it with?
Once the crude oil starts to strangle itself due to overpricing, and reasonable alternatives DO start showing up, the developing countries are most likely to NOT continue development of industry and technology that revolves around and requires an obsolete and costly fuel for operation - just as many here and now are ditching traditional homes, cars and energy types as they make what alternative choices that ARE available? Developing countrie are JUST as likely to avoid the same reliance upon an eenergy source that is so unstable and expensive in cost!
In a way, oil producing countries, hand in hand with commodities investors who have vastly inflated the price of energy, have torpedoed the long term continued reliance of crude oil as the basis for world-wide energy. I look for a domino-effect of individuals, businesses and industrial users to begin conversion to alternative energy sources as they develop, leaving crude oil as a choice far further down the list compared to other sources.
Even if oil DOES drop significantly lower, those who ave been severely burned this time around are not likely to again put their hands in the fire, and the oil producers who likely are secretly welcoming these outlandish prices may well find they have cut their own throats by their cooperation and acceptance of actions of investors.
There may well be some, like airlines and railways, that will have to remain on traditional energy sources, but many others have greater flexibility, and will jump ship from fossil fuels as quickly as alternative sources develop - and developing industries won't even START down that path, if other alternatives are seen on the horizon.
How many here would willingly return to reliance upon fossil fuels, if a lower cost and more stable alternative was available - or how many industries, foreign or domestic - would produce items that rely upon them, if they could clearly see that fossil fuel costs were too unstable and expensive as compared to other developing sources?
None of this will happen overnight, and the real question is how we cope on the shorter term - 10-20 years - but I personally feel that regardless of HOW much crude oil remains, the reliance of crude oil as the basic source of energy is doomed, OPEC and similar producers have effectively shot themselves in the foot, and they had better enjoy their current flow of wealth, because it's very likely to come to an end...
