Geology never trumps the law of supply and demand. This law never promised any level of production - it only says that supply and demand are always in balance.

Yes, and in the long-run we're all dead too. Thanks for your helpful economic lesson.

Supply and demand always balance? Wow. Did you also know E=MC^2 too? Your point is trivial. What's important is what equilibrium markets fall into.

Noting that 'supply and demand' always balance may be 'technically' correct in econo-speak, but that's cold comfort to individuals who will, in the future, likely face ever higer prices for a resource that is in ever shorter supply. Society at large is under the mistaken impression that absolute scarcity can be overcome simply with higer prices. Somehow the magic of the market will produce affordable alternatives all by itself. That this is not the case, as the record on Texas depletion aptly demonstrates, will come as a very rude shock to people who have been sold a bill of goods on how markets operate. That Texas has not once produced more than its 70s peak despite massive investment and never-before-seen prices is, quite simply, terrifying and the implications staggering.

The only exception is when a product is rationed, as oil was in the US during the seventies and has been in China until recently. In this case, product disappear from the shelves (or pumps) and cannot be obtained by the non-priveledged at any legal price, thus bringing into being an illegal black market. China is now in the process of allowing prices to rise to world levels, which acted to ration liquid fuels, thus allowing demand/supply to increase.

No, you misunderstand what occured. What happend is that hoarded, untraceable, blackmarket supply has come out into the open. No additional 'real' supply has necessarily been created, it has merely come out of hiding as legal trading became more profitable than illegal trading. Overall 'real' supply only increases in this case if the shift from illegal to legal trading frees up productive resources that can then be allocated to the production of the good in question.  
 

geology never trumps the law of supply and demand. This law never promised any level of production - it only says that supply and demand are always in balance.
The notion that the "law" of supply and demand is a law like a law of nature is a joke.  That supply always equals demand, is what a philosopher would call an analytic statement, and doesn't really tell us anything about the nature of reality at all.

"when a product is rationed... , [it will] disappear from the shelves (or pumps) and cannot be obtained by the non-priveledged at any legal price."
Of course when a product that is in short supply is NOT rationed, it can ONLY be obtained by the wealthy at a high price.

So, explain again how this works in an open boat in the Pacific with 15 people having 1 gallon of water to share? Demand will equal supply?? This is an extreme example to make the point, of course, but not really that off base. Demand = supply is a meaningless statement in the real world.