Rick,
I agree with this, except that if political risk issues are not addressed, even sustained high prices may not generate the necessary investment. Unfortunately there is very little anyone can do to mitigate political risks in Venezuela, Nigeria, Iraq, Iran, Russia, etc. No matter how high prices go, private capital will be reluctant to invest if they see a high probability of expropriation, harassment, major security threats, or government collapse. "Difficult oil" could refer to areas where extraction is expensive and technologically challenging or to areas where the investment climate is too risky to attract the money necessary to exploit reserves. The second problem may be more severe than the first.
I'm aware of the distinction... however, much of the public discourse around the "peak oil" construct does really does take this apocalyptic vein, suggesting a rapid post-peak production decline that essentially equates to "oil running out". One popular and superficially analytical website (theoildrum.com) insists that June 2008 was "the peak" and projects an extremely abrupt and continuous decline in production thereafter. That's ridiculous of course, but people believe it, and as you suggest, perception is a large part of the problem.
I'm with you and Fisher here, I also see no causal link.
This sums up my complaint with the "peak oil" construct: we have absolutely no way of knowing whether any given peak is "the peak" or simply "a peak", which renders the discussion extremely abstract. We also have no way of knowing, at any given point, whether we are approaching an apparent peak. I'd rather look at the problem as a function of production declines (you can't have a peak without a decline), whether transient or permanent, and the problems, both practical and perception-based, associated with declines.
Just as an example, the June 2008 peak is not generating any particular trouble because it is understood by all but the hysterics to be price-related, not supply-related, and because it came at a time of moderating prices and demand. A production decline at a time of escalating demand and prices would presumably have very different consequences.
Re rationing... I suspect that there's a plan or two, probably quite detailed, buried deep in the bowels of DC. Of course no politician wants to discuss such a scenario openly: the political risk is large and there is no political gain in raising the subject.
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