Some of that price stability is the result of increased efficiency—the potentially vast reserve of unused oil. The U.S. and other developed countries have maintained economic growth while reducing the amount of oil (and other energy) required for that growth, although some of this apparent efficiency has come from outsourcing energy-intensive economic activity, such as steel production. "We have about halved oil intensity since 1981," Smil argues. "We could halve it again, so we could do with so much less oil—why should we panic about producing less, even if that were the case?"
If King and Murray are correct about 2005 marking the end of easily extracted oil, however, then Smil's additional halving of demand, plus conservation and a rapid deployment of alternative energy, would be required to avoid even more economically painful oil price shocks in the future. As it is, the U.S. spent more than $490 billion on gasoline in 2011—$100 billion more than in 2010, even though the number of miles driven was similar, according to data from the New America Foundation.
An easy-oil plateau is not good news for the climate, either. Harder to extract oil means increased burning of dirtier oil like that from the tar sands—or even dirtier coal. In fact, there are trillions more barrels of carbon-intensive fuel out there in the form of huge coal fields, such as the one currently being brought into production in Mongolia. "There will still be enough CO2 produced to result in significant climate warming," Murray notes.
Even with large supplies of coal and natural gas, the world faces a potential energy shortfall, one reason that the U.S. Department of Energy suggested in a 2005 report (pdf) that a "crash program" to cope with any decline in oil supplies be instituted. The report argued this program should start 20 years before peak global production to avoid "extreme economic hardship." That's because it will take decades for any kind of energy transition to occur, as evidenced by past shifts such as from wood to coal or coal to oil.
In fact, King and Murray argue that global economic growth itself may be impossible without a concurrent growth in energy supply (that is, more abundant fossil fuels, to date). "We need to decouple economic growth from fossil-fuel dependence," King adds. "This is not happening due to industrial, infrastructural, political and human behavioral inertia. We are stuck in our ways."