Paul Krugman recycles his work as an undergraduate RA for Bill Nordhaus:
Energy futures of the past: Whee! I’m getting some violent reactions to my suggestion that energy technology has been a disappointment. So I went back to the old Nordhaus Brookings Paper to see what the future used to look like.... [S]ynfuels were expected to be fairly cheap. Oil from shale was supposed to cost around $5 a barrel, which would be about $30 in today’s prices.... [H]ere’s the actual price of oil, in March 2008 dollars. Oil prices were at levels that “should” have justified synfuels for about a dozen years.
Now, to be fair, Athabasca tar sands are coming in now, and it’s claimed that they’re worth exploiting even at $50 a barrel.... But... alternatives to crude have proved much harder to produce than expected.
That doesn’t mean oil prices will always rise... the long-run price elasticity of demand for oil is much higher than the short run elasticity, because in the long run you can switch to less gas-guzzling cars and stuff. But my point remains: alternatives to conventional oil have consistently proved harder to work than people expected.