Gasoline prices will continue to fall. The trucking industry, which accounts for 1/3 of all US oil consumption, can be converted to run on natural gas, and Obama has signed legislation to support this. Natural gas can also be converted into oil very profitably at the current price ratio with GTL technology, and Shell and SASOL competing to build these facilities in the US. Additionally, the price of solar panels has dropped by 75% in the last three years. Solar is now competitive with daytime electricity rates, and it will continue to get cheaper. But putting solar panels on roofs is just the tip of the iceberg. By mid-century, most of our power will come from space. Space-based solar panels are much more efficient as the sunlight is 5.5 times stronger in space, and the panels always operate at 100% with no night. The power will get beamed to earth in the form of microwaves. Private enterprise will lower the cost of space launch enough to undercut other methods of power generation. Much to the environmentalist's delight, oil is on its way out.
I recently read "Private Empire" (
http://www.amazon.co.uk/Private-Empire-ExxonMobil-American-Power/dp/1846146593/ref=sr_1_1?ie=UTF8&qid=1341579850&sr=8-1 ), which despite the name turned out to be a rather level-headed read. Among other interesting tidbits, it outlines Exxon's recent studies into the future of energy, namely, whether they should be looking at alternative energy sources seriously or not. Their conclusion was that everything that could threaten the status quo of fossil fuels as the main source of energy (overwhelmingly by the way, check out some stats for global energy production...) requires several near-miraculous discoveries in the near term.
Now, Exxon isn't exactly unbiased, but still, solar is so small now that even assuming yearly growth rates in the double digits, the industry will be hard pressed to gain more than a few percent of total global energy production within the next few decades, as energy consumption is projected to grow as well...
As for gas prices currently, the news outlets here say it's simply because of the global economic fubar. Consumption is down.
That Exxon report is from 2005 looking ahead to 2030, and they are way off on their estimates for the growth of solar. The report appears biased, as they estimate the growth of alternative energy at 10% when solar was 25-40% in the years leading up to the report, and it would not be so optimistic if written after the radical 75% decline in solar prices in the last 3 years, which caused the exponential growth curve to accelerate. Solar has grown at an average of 59% since 2001, 110% in the last 3 years, and 193% in 2011. Exxon engineers considered a breakthrough in solar to be unlikely in the next two decades, and they were wrong.
You are right that solar is currently tiny though. Global energy consumption is 132,000 TWH, while solar is 55.7 TWH, .04% of the total. This is because it has only recently become financially viable. But a 38 year time span out to 2050 along with continued technology advances and price decreases will change that. Keep in mind that one decade of 50% growth means 58 times more solar power. A decade of 50% growth followed by a decade of 20% growth followed by two decades of 10% growth would grow solar up to the current global consumption using current technology by 2050, but that is just a back-of-the-envelope mental exercise. Now imagine how fast oil will die when we can launch the panels into space and run them 24/7 with 5.5x stronger sunlight.
http://ftalphaville.ft.com/blog/2012/06/18/1048871/the-exponential-growth-in-solar-consumption/
