We have been used to relatively cheap oil in the past which has meant little incentive to conserve it or find alternatives. Now that it's hit record price levels suddenly the benefits of using it efficiently and developing alternatives become apparent.
If the price settles at a relatively high but not exorbitant level rather than crashing back to $40/barrel, the benefits of conservation, finding alternative energy sources and exploiting the harder to reach reserves will still be there.
We may be better off with $80/barrel oil than $40 in the long term.
The American greenies may have to give a bit of ground and allow drilling in previously off limit areas. If it's them or $6/gal petrol, ways will be found to get around them.
India may want a 300 million strong middle class, whether it actually gets it is a different matter. However there will be no stopping the Chinese, their consumption will grow and grow.
The South Africans successfully made fuel from coal, out of necessity not because it was cheaper. Google "SASOL" for the story. All with 1970s/80s technology, think how much better it could be done today.
Those who can adapt to a new environment survive, those who can't or won't , perish. Imagine what Concorde would cost to run at todays fuel prices and how much a LHR - JFK ticket would cost vs a modern fuel effecient twin such as the B777 or A330.