Falling Oil Prices Impact

Oil prices in my area are a few cents above $4. I am wondering what is the tipping point on people's behavior for driving. On the way up, it seemed to be $4.50, on the way down, will it be below $4? And how long will the lower prices last? And what impact will this have on driving habits in the US?

Near term possible changes to increase supply/decrease usage:

• China after the Olympic is rumored to remove oil subsidies, that should reduce usage.
• Warmer winter resulting in less fuel oil usage.
• US driving less.
• US willing to open national reserve (does wonders on the futures market).
• New pipelines for natural gas being laid.
• India/Pakistan/Indonesia find out they can no longer afford huge fuel subsidies and cut back.
• Iraq continues trend of less violence and increased output
• Continuing decrease in miles driven in US.
  

Near Term Possible Decreases to Supply

• Nigerian rebels
• Mexico continues lack of investment in oil
• Continued subsidies in China/Pakistan/India/Indonesia
• Continued inefficient ethanol subsidies in US and Europe
• Continued tariffs against Brazilian Ethanol in US
• Saudi Arabia can't increase production (nobody knows who is talking).
• Iran attacked by US or Israel (very possible, question is when. My guess after the election in Israel and the US, but before the US inauguration).
  
• Sanctions decrease Iranian oil
• Russian oil does not get investment needed to continue oil production, but is managed with short term focus (seems to be happening).

Longer Term:

• Technology increases ability to get oil from old fields
• Oil Shale
• Economical Bio Fuels that don't use corn.
• Oil from Algae
• Hybrids
• Electric Vehicles and plug ins
  
• Offshore drilling in the US
• Increased vehicle mileage requirements in the US
• WMD attack using a gas tanker with LNG
• Solar Technology
• Smart Grid
• Interstate DC Power Grid
• Solar Water Heaters in widespread usage
• Green Buildings (increased efficiency due to better design)
• Better battery technology
• Increased oil usage by India and China
  

Longer term I see a huge amount of hope. Of course if the price of oil crashes, a lot of this new technology, just like 30 years ago will be put back in the closet. My guess is it would take a crash down to $40 per barrel to kill a lot of investment in new technology, $50 per barrel seems to be the break even point currently on much of the new technology.