Sooner or later we're going to run out of cheap oil. There's plenty of disagreement about when that's going to happen. Ingenious humans will do clever battle with oil fields to pull more out; that pattern has already repeated. Still...the US was the world's premiere oil supplier until the 1950s, when the Hubbert Peak was reached. Domestic oil production is significant, but has declined substantially. The energy profit in the US has dwindled substantially.
Oil currently supplies around 85% of the world's energy needs. That's far too high, and we need to be doing something about it. The reason we need to start now is that if we do, we'll be able to soften the blow when oil starts getting more expensive. Estimates on when oil prices will increase substantially range from 2007 to about 2020, which provides us with a rough time frame.
Energy itself is not a problem. Solar energy provides everything we could ever use; its most convenient manifestation is wind. Hydroelectric power is also derived from sunlight (water becomes vapor, is carried by wind to mountains, flows down mountains). Gravity provides tidal forces, which can be used to generate rather incredible amounts of energy.
The price of wind power has dropped dramatically in the last two decades; at the same time, the efficiency of the equipment has risen steadily. We can now seriously consider wind as a legitimate alternative to other sources on a cost basis. We're not quite there yet, but with increases in oil price we won't be that far off. A generator/tower/battery system that can easily power an entire home (or ranch, for that matter) costs about $13,000 these days. When compared to the cost of a house, this is a small cost. On certain power grids, you can even sell excess power back to the utility grid...under those situations the grid acts as your storage device. You push power back into the grid when you have too much. The grid can shift this power to where it's needed. When you don't have enough, you can pull.
Hydroelectric-capable watersheds in the US are largely exploited at this point, but are capable of delivering a pretty large amount of power. We do pay a price in environmental terms for this, but maybe that price is acceptable.
Tidal forces are particularly power, yielding an energy profit of at least 15 to 1 (for each unit of energy expended to collect, you yield back 15). Tidal is capital intensive, but incredibly clean and possesses almost unlimited capacity.
Since I'm Canadian, I'll point out that Canada's hydroelectric watershed is mostly untapped, and is capable of generating far more power than the population could ever use. Likewise, we could turn most of the northern parts of our provinces into giant wind generating farms and nobody would notice. The Bay of Fundy is the world's premiere site for tidal generation; with tides in excess of 50 feet every six hours (due to the Bay's length matching the resonant frequency of global tidal patterns) the amount of energy being generated by the bay on a continous basis could supply all energy we need on the continent, if we could collect and transmit it. So Canada is good. ;)
The thing is, let's say there's effectively no oil. We can create plenty of electricity, though. Farms will need to convert their machinery to use electric engines. In fact, just about everything is going to have to convert to be that way. Suburban sprawl is going to be more of a necessity, because homeowners will want to have their own generators. Each house might end up having two or three large generators, possibly generating around 10 kilowatts or more a day, feeding into a battery bank. This overcapacity can be used to charge up the family vehicles; we can anticipate improvements in battery technology that will greatly extend the range of electric vehicles.
We've seen market corrections at work over the past couple of years. The market corrects very harshly. Can we not use a little foresight here and soften this particular landing? Can we not use our government to guide technology development and infrastructure development in the right direction? If the economy must absorb the shock of increasing oil prices, we need to spread that shock out across the biggest stretch of time possible.
We also have a tremendous opportunity to become world leaders in all of these technologies. The long view depends on it.