Bruce; you are not going to wake up one morning and hear that all the oil has gone.
That is a silly proposition and no one is making that statement.
You are more likely to see a service station with a sign that says

"No petrol till 12 noon".

It will creep up on us over a period of some years if we are lucky.
Aime;
The governments do seem to be aware of peak oil, but not with an urgency.
The state government has an order in for new busses, 500 I believe.
They normally scrap or sell the old ones, but this time they are
mothballing them; I wonder why ?
Also why is Peter Costello giving away $2000 to convert your car to gas ?

I believe they are aware, but realise it would be political suicide
to get up and say they are going to do a lot of inconvenient things.

Where they let us down is in not making it a non political problem.
By the way they can tax sunlight. The only difference between radio
frequencies and sunlight is it is a different frequency and they charged
the mobile phone companies billions for a small band of frequencies.

The one thing that might prevent a slow onset is if the overseas
priciples of our oil companies block the local branches from buying
oil on the market until they get what they want.
This would have a sudden and dramatic effect.
That is why we need the Transition Protocol being adopted by the UN.

Someone mentioned the electric car from India.
In the UK they are concerned about the result of crash testing and
are reviewing the cars safety.

Someday cheap supplies of oil and coal will be used up. Will this be a catastrophe? A lot depends on the speed of depletion. Shall we be able to adapt? Biological adaptation seems to take a long time to work its way through a population. But, other adaptations occur more quickly. Horse drawn carts to automobiles took just a few decades. Whale oil to petroleum took just a few years. I think the alarmists need to factor in our societies capacities to adapt to new situations. Maybe there will be a 20-30 years transition from our present energy sources to new ones. I think Bruce has spoken a lot of sense.

Bruce has faith in the markets. I'll let the Federal Senate peak oil enquiry answer the charge that the markets will solve it once the price is right.

"3.147 The committee does not agree with this, for several reasons:

Given the huge investment needed to adapt the economy to a less oil-dependent future, and the long lead times involved, it is possible that price signals resulting from increased scarcity of oil will occur too late to spur alternative developments in a timely way in the quantities required.

Government initiative is needed to promote investments which are regarded as socially desirable, but which have a longer payback period than private actors are used to.
There are high barriers to entry for alternative fuels in that the refuelling network must be in place. Arguably government initiative is needed to promote change - as government has accepted with its current initiatives to promote alternative fuels.[118]

Some responses on the demand management side require policy choices on very long lived public infrastructure. The consequences of decisions made now on how to develop road and rail networks for the sake of fuel efficiency will be with us in 50 years. The shape of new urban development, which has a dominating effect on the amount of car use, is effectively permanent. These decisions are made by government, and they should have a longer time horizon than private economic agents usually consider."

.... and later....

"The committee agrees that government initiative will be essential to move towards a less oil-dependent future."

http://www.aph.gov.au/Senate/committee/rrat_ctte/oil_supply/report/c03.htm

The committee also decided no alternative fuel could replace oil and that we basically have to redesign our cities, and that city planning is a government legislative and planning exercise. Leaving this to the marketplace is like running around a cliff-top with a blindfold on.

Also, on electric cars....

one has to run a complete inventory on all the ingredients of the electric car battery to see how viable such a system is. New Scientist recently ran an article how many rarer metals essential for electronics and computing applications are running down, and how these rarer elements relate to the EV is a matter of important consideration. Hafnium, telenium, and many other rarer metals were estimated to not peak, but RUN OUT over the next decade or 2.

There are many reasons for heading into New Urbanism as described on Catalyst after they screened "Crude". Basically, when a Senate inquiry decides we need energy efficient cities not just energy efficient cars, you know something's up.

http://www.aph.gov.au/Senate/committee/rrat_ctte/oil_supply/report/c08.htm

"8.96 When government considers the range of policies needed to reduce oil dependence, and the level of government intervention or support that they deserve, the costs and benefits of demand side measures versus supply side measures should be compared. A litre of oil saved through a fuel efficiency measure, or by turning a car trip into a bicycle trip, is just as real as a litre of oil found by new exploration or produced in a coal to liquids plant.

8.97 It should be remembered that measures to reduce demand for oil-fuelled transport also have other benefits - reducing greenhouse gas emissions; promoting the environmental and social benefits of less car-dependent cities - which the alternative fuels do not have, or have to a lesser degree. In the cost/benefit comparison these extra benefits should count to the credit of the demand management measures."

But can they stand up and announce the end of the oil age? Just watch what happens to the stock market if they did. The politicians know about peak oil, but are imprisoned by the silly fragile, "market confidence" based system they have allowed to become our new masters.

I can't resist another short comment on this thread. I have just just read that Senate enquiry report (in February 2007, referred to by another contributor - thanks) into Australia's fuel supply. This was a remarkably sober and sound all-parties report. The committee was chaired by none other than Bill Heffernan. Its deputy chair was Rachel Siewert of the Greens. Remarkably, the committee agreed on all its major findings and recommendations. There were no minority reports or individual chapters.

OK, maybe Heff wanted to push biofuels (and I see no discussion in the report of how growing biofuels production around the world will reduce food supply to poor people, as it is already doing in Brazil -where your continued access to cheaper fuel may be starving some poor kids to death).

But still, it is a remarkably sane and balanced bipartisan Senate report.

So why isn't the Howard government taking any notice of it?

In the UK the government has just published its White Paper on Energy. In 342 pages the only mention of peak oil and gas is in regard to those that have occurred in the North Sea. Having been once a net exporter of oil and gas, our peaks in production have put us in the mercy of external events. Rather than tighten our energy belts we are to continue with road and airport expansion and carbon trading in which we improve industrial efficiencies in India will allow "business-as-usual" without guilt.

When a global peak in the production of oil or gas or coal or uranium is likely to occur is not up for discussion. Today in PM's Questions Tony Blair fended off any suggestions that expanding air travel should be restrained.

The White Paper is another "dodgy dossier" similar in its objective to the one which got us into Iraq, but as a device to herald a nuclear "renaissance". Nuclear power is accorded a low carbon nature it does not deserve so that it can benefit from carbon credits to fill its viability gap. It is a desperate measure to maintain economic growth while appearing to alleviate climate change.

It is likely to be overtaken by events, as has happened to the Iraq project.