I presume that Alan Greenspan is a relatively well-informed observer.

Clearly, limited substitution possibilities across fuels have resulted in persistent cost differentials, but those very differentials inspire the technologies that, over time, reduce such limitations. A clear example is gas-to-liquids (GTL) technology, which converts natural gas to high-quality naphtha and to diesel fuel. Given the large-scale production facilities that are currently being contemplated (and some that have already begun construction), GTL is poised to become an increasingly important component of the world’s energy supply.

Greenspan gave a broad speech, so it is difficult to do it justice with a short excerpt.

Thanks to David Altig for the pointer.

For Discussion. What evidence suggests that Americans are reducing their demand for gasoline in response to higher prices?