What indicators would need to change before 'it made sense'?
As the price of oil goes up (assuming a lack of viable alternates) people are going to care less and less about the environment. We already have CFC posters who don't care about the environment, as long as there's cheap gas.
All over the world, people are willing to ruin the ecology instead of reduce their quality of life. Now, it might even make sense for those at the edge of desperation, but we're likely to do it too.
To paraphrase a point JerichoHill has made, repeatedly, in economics when the price of a good goes up, people develop ways to do without it, ways to produces it more efficiently, and substitutes that can be used in it's place. When you act to drive down the price of something that you
know is going to be in short supply in the long run, you interfere with the market mechanism which accomplishes that.
Europe and Japan are feeling less of a crunch from oil price increases for 2 reason: 1 the collapse of the value of the US dollar hurts us more than them, and 2 they have had very high fuel taxes for a long time because they knew this was coming and reacted rationally to reduce their consumption. In effect, they use less and they substitute for it (their cars are smaller and the average number of miles driven per person is less because they walk and take public transit more). So in effect, they are being hurt less because they pushed the market mechanism forward instead of holding it back.
So we really are better off in the long run the more rapidly we push our way out of high oil use now.
The price of oil is going to fluctuate over time, and it will spend some time lower than it is now. But it is still a finite resource experiencing growing demand.
That ends one way.
And the more prepared we are for that ending, the better off we will be.
As for when to drill? Probably after the Mid East no longer has the ability to raise production.
