Higher fuel prices mean people drive a little bit less. (You start phasing out the unnecessary stuff, and encourage people to be a little more efficient about the trips they do make.) But that's the low-hanging fruit that doesn't really have a huge impact. People who are short on money already behave this way because even $2/gallon gas gets expensive. You can buy a couple of meals for what you pay to fill your tank one time.
And the "urban sprawl" you refer to is, IMO, a thing with just as many benefits as downsides. There's MUCH more to it than just worrying about logistics of how close to a job someone lives.
For example, look at the water shortage challenges happening in some places on the West Coast. That's basically a distribution issue caused by having too many people interested in trying to live all packed in to relatively small areas. Or look at some of the challenges with garbage in places like New York City. The people who decide they don't want to live in the "big city" help spread out the impact we have on our geography and natural resources. And as someone pointed out above - it has the effect of keeping housing prices down too. When you get a big concentration of people in one city, there's too much competition for housing and costs skyrocket for rent as well as home ownership.
There's nothing wrong with or unsustainable about the "American dream" as it traditionally existed. If you extend that to building a McMansion with a number of large rooms you rarely use but keep paying to heat and cool anyway -- that's a different situation. But for our family of 6, finding an older 2 story home with 4 bedrooms and a 2 car garage was exactly what we needed. This, in turn, allows my wife's mother to live with us instead of the popular theme today of pushing our elders off to some retirement community or nursing home to live out their remaining days