It's going to become very unprofitable for American producers to produce.
But, when things "collapse", they tend to recover quickly. (everything requires oil)
Personally, I'd rather have $4 gas and a booming domestic drilling program than $2 gas and a small domestic drilling program.
Not so quickly sometimes.
For over 20 years the Permian Basin looked like a ghost town, and the rig count was negligible.
Major oil companies based in Denver crashed in the 80's, and subsequent job loss, and housing glut it caused spilled over onto the entire Denver area and recessed the economy there until about Y2k.
