Infinite: What you are saying is very politically incorrect on TOD.

"Oh, I see it's taken us 3 years since we became PO-aware(or at least acknowledged that prices are high) to shift our fleet to hybrids, looks like our costs are the same as before and our problems are sol.... wait, you're saying gas is gonna cost 20% MORE next year? and the year after that? and the year after that? WTF? How can you expect me to work in these circumstances? May as well go out of business."

See: that conversation repeated time after time after time, and then tell me that major economic problems aren't inevitable. In 1929, we'd concentrated too much wealth at the top of the ladder, and let the poor produce too much that they couldn't themselves buy on their income. Is that anywhere near as serious as a 5% decline rate in the product by which we built our landscape around?

The trillions of dollars that need to be written off by the time oil consumption is reduced to a half or a third of its current level by simple geographic obsolescence will of course affect our economy in a major way if it occurs over even a decade or two. A gradual elimination of all North American imports amidst dollar superinflation, a continued third-world economic awakening, and domino-effect oil nationalism (as the peak is made apparent) seems to be entirely possible, though certainly not assured.

The reality of PO is a sustained decline rate in world supply. If that decline rate is 1 or 2%, we could probably manage with a mere acceleration of our current initiatives, like the much-lauded economic growth following the oil shocks. Relying mostly on imports makes our economy vulnerable to huge geopolitical positive feedback in the decline rate if it's anything over that, however.

And only 69% of consumption is transportation of all types: Slashing every SUV tire in the country can't really offset a significant decline rate for long.

I agree to a point, but in this spoiled society if high prices alone are used as rationing tools there will be social unrest. If/when civil order breaks down it will not be pleasant for anyone.

We are not truly dependent on oil for survival.

False statement, ergo conclusions drawn therefrom are incorrect. Planetary population was near peak capacity before WWII and global starvation was a concern then. Since then the "green revolution" has allowed population to exceed that 1.5 billion cap and it is entirely dependent on fossil hydrocarbons for fuel, fertilizer, pesticides, etc.

Remove the fossil fuel subsidy and you kill approximately 5 billion human beings.

Now, you will argue that we have enough fossil fuels to feed the planet for a long time and this is true but at what standard of living? Further, you dismiss the move to alternative energy sources, alternatively powered transportation, etc., with a single sentence when in reality all of that represents tens of trillions of dollars of investment. So you are going to just write off all that decades of investment to support 6+ billion people with a wave of the hand and expect no repercussions whatsoever?

Sir, your post smacks of naivety that is laughable were the implications not so horrible.

The costs of moving to alternatives will be gigantic and will disrupt global civilization. Further, some societies will choose to not accept this at first and instead will decide to maneuver for what they perceive is "theirs", even as the US has already begun to do in the Middle East. It's already obvious that China and Russia are taking different but obviously energy related approaches to world affairs. India and Europe are showing these signs too. And if circumstances warrant, they will go to war over oil. In case you forget, the US entry into WWII was precipitated by the world's leading oil producer at that time (the US) placing an embargo on Japan, which then tried to secure alternative fuel supplies via military action. Note also that after the embargo by Saudi Arabia in 1973 that subsequently, Carter enunciated the "Carter Doctrine" which states that free access to fossil fuel supplies in the Middle East is a vital interest to the US. In case you don't speak diplomatic gobbledygook that means that the US has told the entire world that it can and will go to war if Middle Eastern oil supplies are threatened. (That's what a declaration of vital interest means. That's why Japan's reaction was so poorly taken by the world - because they had not declared the oil and rubber of Southeast Asia to be vital national interests to Japan yet they then attacked.)

In short, your post is absurd because it overlooks the ecological impacts of overshoot human population, the dependency of that population on fossil fuels, the global infrastructure investment that is centered around fossil fuels, and the historical documented behavior of homo sapiens when confronted with threats to that fossil fuel supply. You are the one that extols the economy, sir, yet in the next breath you ignore the tens of trillions of dollars of existing investment in the fossil fuel based infrastructure as if it will magically be replaced at the drop of a hat if anything threatens the fossil fuel supply.

Your contradicting assumptions are breathtaking. You have apparently ignored Stuart's documentation that it will take at least a decade and a half to turn over the entire fleet of vehicles and that is only if everyone recognizes and accepts the proposition that oil is in decline. Stuart's other work has shown that housing investment will take the better part of a century to turn over or have to be written off as lost investment. Do you even grasp the scope of the depression we are discussing by writing off the transportation and suburban housing infrastructure in almost its entirety? It seems not.

You, sir, are the one that looks silly.