The Amazing Reversal of the U.S. Oil Industry A few years ago, I
made the observation that the best thing that could happen to
mitigate against some of the potentially severe consequences of
peak oil was for oil prices to rise, and remain high in the
years before oil production peaked. That would have the effect
of encouraging conservation, as people adapted to a world in
which oil is no longer cheap. High oil prices would also
incentivize oil production, which would have the effect of
preventing steep declines in global oil production — which some
had predicted would lead to severe economic crisis or possibly
economic collapse. We have certainly seen both conservation and
increased oil production, but I have been really surprised by
some of the details of how it has happened. For example, as oil
prices raced to $100, consumption in the US and Europe declined
as I expected. But consumption in all developing regions
increased sharply — so much so that the net impact was for
global consumption to increase. (Rea