Daniel Yergin in his book about the oil business called “The Prize” discusses at length the “boom and bust” nature of the oil business. That “boom and bust” cycle has been there ever since Col. Drake stuck oil in Titusville. Check out this link:
EIA - Short-Term Energy Outlook - Real Petroleum Prices
In particular see the top graph entitled “Real Gasoline Pump Price: Annual Average 1919-2009.” That will give you a ninety-year overview of the cyclical nature of gas prices with all the local/short-term noise filtered out.
We see a peak in real gas prices in the middle of the Great Depression followed by a thirty-five year decline. It kicked up again in the late 70s then declined again for another couple decades. Now we have another peak and it certainly looks like another sustained decline is in the cards. If you slice off the late 70s peaks the long term real price has been declining at a very steady rate for nearly seventy years.
Of course, this long-term decline is the major factor militating against alternative energy sources. The wise old head says “Don’t panic. Ride out the peak. The price will drop off again.”
We hear about “peak oil,” but that sounds a lot like that little slogan we hear before every economic bubble bursts: “But it’s different this time.” But it never really is different.
Fischer-Tropsch process synthetic fuels are not competitive when the price of crude drops under $80/bbl. Algal biofuel (if perfected) will need the price of crude to be about $50 or more to be competitive.
Environmental regulations make investment in US energy infrastructure a slow and costly thing. Given that regulatory straitjacket and the long-term decline in the real price of fuels, alternatives are always at a disadvantage.