I agree with you for the most part. Now that we have a government who is not putting pressure on OPEC to keep fuel prices down they are adjusting it to the market (or a raise). The truth is gas is worth $3.00 a gallon because that is what annalist say consumers will pay. In the free market that is what it ends up costing, but the educated consumer is going to reject this and you will see more diesels converted to vegetable oil/biodiesl and gasoline powered cars converted to natural gas.

Also, when the supply and demand curve adjusts those unwilling to pay the new $3.00 price do not fall off of the face of the earth or move to Canada. They simply adjust their spending habits. These spending habits increase the demand for alternative goods, thus creating a market and demand for newer non-fossil fuel powered technology.