I usually throw out the best and worst option automatically in debates like this and try to think somewhere in between. I am of the belief that tech is always improving (not enough to completely replace oil right now, mind you) and that when the price of oil goes up, people are going to do less driving and flying. I know that isn't the only way oil is used but it's a huge percentage. Industrial first-world nations are extremely wasteful with the stuff, and eventually they'll have to either stop wasting it or go broke, and nobody likes being broke. As they say, necessity is the mother of invention.
Basically, I think conservation will be kind of a pain in the ass to work with but we will be able to keep up our current standards of living, more or less.