As oil becomes more expensive to produce, the price will rise. As it does, alternatives to oil, which were too expensive before, now can compete with oil, and you will see more development in those areas. This is exactly what we saw with the last surge in gas prices, in a short term way. People stopped buying gas-guzzlers and Prius sales took off, for example. It has settled down somewhat, now that gas is back closer to where it was, but that will not last.
I'm not especially worried about peak oil.
The Rev