In my more purely optimistic moments, I come close to agreeing with Marshall Brain (founder of HowStuffWorks):

As oil gets more expensive, we will replace it with less-expensive technologies in a completely natural way. Therefore, peak oil will be a non-event.

But I can’t quite get there.

I share a great deal of faith in the power of markets, unlike some of my fellow-travelers, but this seems naive and flat-footed to me. Here’s why:

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  • Oil’s current market dominance in the transportation and agricultural sectors is not "completely natural." It’s propped up by innumerable subsidies, tax breaks, favorable trade deals, etc., etc. — all secured as a result of its unprecedented entanglement with the ruling class. It maybe that its unnatural market position has been propped up — or will be propped up — past the point when a "natural" transition will be possible.
  • Brain acknowledges that, in today’s market, "supply and demand for oil are almost perfectly balanced," and that any disruption on either side could cause a spike in the price of oil, but seems to brush that possibility off. Peak oil, though, will not happen in a vacuum. It will happen in a context wherein the U.S.’s general financial situation is execrable, with spiraling deficits and an aging population, propped up by Chinese bond purchases. The housing market could tank. The airline industry could go belly-up. Another terrorist attack could happen. China could bomb Taiwan. India could invade Pakistan. Point being, the oil market is not the only fragile system we rely on — lots of them are pretty fragile right now. A few disruptions could cause a mutually reinforcing cycle of … crap.
  • We live in a global marketplace. "Natural" market transitions involve winners and losers, and there’s no guarantee that we might not "naturally" lose out to, say, Japan, or China.

But regardless, let’s hope Brain is right.