Anti-Dismal has a pointer to an article about why we are coping with scarce oil, but struggle with water shortages.
But why is there such a contrast? The answer is of course markets. We have them for oil but not, by and large, for water.
This is of course true. We pay the same whether we use no water or lots. Since our rates are so obscenely high, our family tries to get value for money by watering the lawn and having long showers.
Environmentalists haven't even acknowledged that the market for oil can cope with changes in supply and demand. Even with oil at $140 (perhaps especially with oil at that price) environmentalists bleated on that the world was running out of oil. Surely they could acknowledge that at some price, there is plenty of oil. For example, at $1000 a barrel we would all be walking and oil would be viewed only in the museums. Conversely, at that price all the dodgy oil countries would presumably be invaded and their hopeless state-owned oil companies replaced with efficient ones, thus massively increasing oil output, and reducing the price down to $10.
Now that oil is falling below $100 (currently $96), the urgent desperation of companies to massively increase their oil production where possible has presumably subsided a bit, although it will still be important. Were oil to fall to $60 a barrel, then many of the schemes cooked up in the past few years may actually close down.
Anti-Dismal: you need to get out of the university and into schools! It is scary for me to see how much children know about conservation, and how little about economics.