That is true. Oil production doesn't even need to drop off very fast to produce drastic effects. The reason peak oil is taken so seriously is because of inelast

That is true. Oil production doesn't even need to drop off very fast to produce drastic effects. The reason peak oil is taken so seriously is because of inelastic demand. Regardless of the cost of oil, we consume it in roughly equal amounts. This means that a small drop off in the production of oil could lead to incredibly high prices. The reason that is bad is the same reason that demand for oil is inelastic. The cost of not consuming oil is very high.