Renew;
We might wake up one morning and notice long queues at the
petrol pumps. There will have been an announcement by the petrol
companies that they are experiencing delays in shipping deliveries.

Picture this, you are a screen jockey buying oil destined for
Australian refineries. The phone rings and it is your boss and he says
"Hold off buying until London, or New York, has placed their orders".
What are you going to do ?

Anyone who thinks that or something like it will not happen when the
demand strts touching the supply had better think again.
When that happens we will be running on a 40% supply.

Charger, I agree with you that there will be a series of 'increases and declines' as you call it. I think that we have started on a cycle of oil price increases -> triggers recession -> falling demand for oil -> falling oil prices (and investment in oil/gas industry) -> economic recovery -> increased oil demand ( and stagnant or declining supply) -> higher prices.

The only way to break out of this cycle is to reduce our dependence on oil. Unfortunately this will be a long and drawn out process, made even more difficult by the wild swings in the price of oil. Volatilty essentialy makes any 'scarcity signal' very difficult to identify. And I guess that is why I have little confidence that 'the market' will fix this problem. Or let me re-phrase, the market will fix the problem, but the 'fix' won't be in our best interest.

Leckos; I agree with your dismal picture.
The cycles will go ahead in the world but may be reduced here if the
government could be made to admit that there is a problem and be ready
to introduce a rationing system set to a supply of say 40% of our
current consumption.
Any extra that they manage to scrounge from around the world could be
allocated to food production and similar uses.

However you have to first get politicians to be able to say "Peak Oil".
At present there would seem to be an embargo on those words as the
only ones that have used them are Barnaby Joyce, the previous
Sustainability minister in Queensland and the greens (some of them).

I don't think think they will acknowledge peak oil until we have
mile long petrol queues at service stations.
The last thing the government will do is use those words and rationing
before the next election.

There is Federal Legislation that comes into effect if there is a
shortage of fuel. The Minister takes control of all fuel supplies
and can delegate control to others.
From my reading of it would be unworkable as a permanent system.
The problem is it is intended to cope with short term shortages and
does not introduce a system to allocate some fuel to everybody.
It is basically a squeeky wheel (if you pardon the pun) arrangement.

Well, Hajnal Ban is my local councillor. She used to be on the old Beaudesertshire Council, and was then elected to represent Northern Beaudesertshire (Veresdale/Cedar Vale/Cedar Grove/Jimboomba environs), when we merged with Logan. Dave Cockburn was my local councillor before that. At that time, I managed to get Andrew McNamara to give a presentstion on Peak Oil to the old Beaudesert Shire Council (thanks Andrew, much appreciated), with the "Help" of Dave Cockburn (though procuring his "Help" was more like pulling teeth). Anyway, Hajnal was great. She borrowed my book "Powerdown" (Richard Heinberg), and my DVD, "Imposed by Nature." When she dropped them back round to my place, she discussed the material in great detail, and was suitabley blown away by it. She also has close political ties with Barnaby Joyce:

http://www.news.com.au/couriermail/story/0,23739,22732180-5013650,00.html

And of course, it was also Barnaby Joyce that questioned Dr. Samsam Bhakhtairi on peak oil in 2006:

http://www.energybulletin.net/node/18506