I'm a new user who's read around this topic a little. I thought I would present a scenario which seems possible to me, in the hope that those of you more experienced on this topic can point out the logical holes. I imagine a lot of this has been suggested before, please forgive me for not having read the entire forum history!
G8: Lets hope that our world leaders aren't apocalypse nuts. If the projected scenarios of peak oil become enough of a current reality to prompt political action, the slippery slope to a nuclear war over oil is an obvious risk. I would hope that the power heads of the G8 would try to avoid this at all costs, and declare a collective 'War on Waste' or something similar, taking aggressive state driven action to avoid the risk of disastrous consequences of energy shortage, in the same way that governments globally have jumped onto the 'war on terror' bandwagon. I'm not an economist, but economy is a human invention, it is supposed to be a tool of humanity so perhaps it would have to be reshaped to encourage survival rather than consumption, cohesion rather than competition. I reckon the G8/UN/IMF/World bank etc. collective could change the rules of the 'free' market considerably if it was in their interests.
Possible avenues for action:
'War on Waste': It's always a bone of contention how wasteful our society is, there are huge amounts of ways we could save on energy. Rising prices of petroleum would discourage such frivolous use of personal transport, rising electricity prices would encourage people to turn lights of etc etc etc. Hopefully the cost increases would be enough to encourage sufficient conservation to prevent an energy freefall, if not, state action to ensure conservation may be necessary.
Power: As much as we rely on oil, surely an excessive price per barrel would cause an explosion of activity in renewable energy development. I'm not saying we're going to 'invent our way out', simply that we could work our way out of it by building loads of renewable energy power stations. Nuclear could provide for the electricity, and we could isolate an area of the planet for radioactive waste so we only ruin a little bit of it. Wind farms, biofuel, wave farms, etc. The argument that 'oil is needed for all of these' evades me a little, surely it's just manpower and the relevant materials that are needed, the manpower coming from:
Employment: If our very survival became an issue, luxury would be put on the back burner. People currently employed in tourism, fashion, cosmetics, luxury vehicles and other industires non-essential for survival could be retrained and given a role within the new infrastructure of a survival-based rather than consumer-based society.
Food: Luxury food items would become irrelevant if food becomes harder to obtain. Due to the increased price of food we wouldnt be able to eat so extravagantly. The scale of this could vary greatly, from the abolition of ready meals to the economically forced adoption of vegetarianism, using the fertile land to grow plants and obtain the maximum food energy available from the land. In an even more extreme case food could be distributed centrally in a WWII style 'rationing'. More fertile land would then be available for efficient food production and also biofuel production.
For me, too many of the counter arguments I read involve the assumptions that our way of life will, somhow, continue unabated. Perhaps its my 'critical flaw axion' but I've always assumed its a given that the human population explosion combined with the sort of consumerism we've had since thatcher and reagan is totally unsustainable in the long term. Perhaps the end of the oil era will be a naturally forced transition to a more sustainable way of life. I do not doubt that it will cause major difficulties and probably a great deal of suffering, especially in countries without the infrastructure to enact changes like those suggested, but at no point in human history has there ever been a time without mass suffering. Peak oil may be just another phase of this epic struggle, and the environmentally forced end to the consumerist way of life.
A realistic theory or not? Don't pull any punches now, I can take it!