My expectation is that we'll mostly move away from fossil fuel for energy, except for certain applications where high energy density is necessary such as aviation. We'll still need petroleum products because absolutely everything is made from them. Reduced demand should reduce the price as well, making the more difficult ways to extract oil unprofitable.
That said, I don't even know if we'll hit peak oil in my lifetime. There's a direct correlation between GDP and oil consumption, and if the world is going to get more populous and wealthy, then we're going to consume more oil. I can't see the world using less oil 40 years from now.
I just don't see graphs like this happening, with peak oil in a decade.
