However, despite improved technology and high prices, proved reserves in the developed countries are being depleted because additions to these reserves have not kept pace with production. *** The production, demand, and price outlook for oil beyond the current market turbulence will doubtless continue to reflect longer-term concerns. Much will depend on the response of demand to price over the longer run.
If history is any guide, should higher prices persist, energy use over time will continue to decline relative to GDP. In the wake of sharply higher prices, the oil intensity of the U.S. economy, as I pointed out earlier, has been reduced by about half since the early 1970s. Much of that displacement was achieved by 1985.