>>673675Unless of course the price mechanism lags for a couple of reasons:
1. Oil output doesn't descend slowly but in a few large lurches.
The reason for this outcome is the fact that as we suck out the oil from these deposits we do so in a steady amount (if it's OPEC it is an amount fixed by the consortium). As the amount of oil decreases water and other materials are pumped in in order to keep the amount extracted from decreasing.
This means that an oil field can run dry abruptly.
2. If the above occurs, or the decrease in oil is relatively swift we may not have the infrastructure developed in order to handle such a vast change in our energy supply.
If we ran out of oil in the next few months the price mechanism wouldn't be enough to head off economic disaster.
The simplistic ideal of supply and demand is all fine and dandy in theory, but economics is far too complicated for this to be an easy, natural, gradual, and price-oriented transition.