I don't think you realize how interconnected, and interchangeable all forms of energy are. Not being price competitive with oil means it costs more energy to make then it produces.

If something made more energy than it costs to make it (over 10 to 20 years), then it would be built. Why not build it? It's guaranteed profit.

But, in actuality there isn't anything like that. Every single form of energy is being tapped to the maximum possible. It's the nature of capitalism.

If the price of oil went up, the price of everything goes up. If the price of raw materials goes up, it costs more to build some alternate form of energy, so you get nowhere.

The idea that capitalism is either a natural or optimal system doesn't stand up to much serious scrutiny. If you're referring to "cost" in terms of energy cost then yes there is always some amount of energy which needs to be put in to get energy out, with the result being the net energy gain.

For other forms of energy, such as bio-fuels, the net energy gain is presently smaller but this does not invalidate these technologies. As the complexity of extracting oil increases its net energy gain will reach parity with other energy sources, and then begin to lag behind them. The economy - with all its foibles - will eventually back the winners out of pure necessity.