Profiting From Peak Oil

Yesterday a friend who teaches at the University of Kansas forwarded a 42-page email attachment to me, with the note, “This comes from a former MIT physics teacher with whom I have worked for years.”

When it landed in my inbox, I could only spare time enough to read the abstract. But that alone was more chilling than anything I’ve read in my life. This morning I woke up early and read the entire report, and I’ll give you a quick summary here.

The topic is Peak Oil, the theory that global oil production will peak somewhere between 2006 and 2010 and then decline “until all recoverable oil is completed within several decades.”

Combined with an increasing global appetite for oil, reduced oil imports and the inability of alternative energy sources to supply enough power, the result will be “high energy prices, inflation, unemployment, and irreversible economic depression.”

The lack of energy will mean the collapse of the trucking industry, with huge impacts on the transportation of food. Air travel will shrink dramatically. Trade-in values of gas-guzzling cars will plummet.

Maintenance of roads will suffer, as will maintenance of the electric grid, leading to widespread losses of water, sanitation, home heating, medical care and government services. The result: an abysmal quality of life and the death of millions. Chaos.

New Report is More Pessimistic

I wrote an issue of Cabot Wealth Advisory back in June 2007 focused on Peak Oil. I just went back and read it, and everything I wrote then still appears true. But this new report is more pessimistic than anything I found back then (far worse than the consequences of global warming) and it’s got me thinking.

First, is it true? Is it possible?

The authors appear totally independent, and they cite numerous government and scientific authorities.

So why is no one in the mainstream media talking about Peak Oil?

Because the oil and gas companies have so much power? Because politicians are notoriously shortsighted? Because no one with the star power of Al Gore has adopted Peak Oil as a pet cause?

I don’t know, and I’d be happy to read your thoughts.

Optimistic About the Future

In the meantime, I’m going to keep on reading and thinking and working and living, with the hope that human ingenuity, as it has so many times before, will help us find a way out of this morass.

And I’m going to keep on seeking out the best investment opportunities in this ever-changing world.

Conservation, no doubt, will be increasingly important in the future. The 100-mile-per-gallon car will be in great demand.

Alternative energy investments will attract growing amounts of money.

Solar cells, wind turbines, nuclear energy, biofuels, geothermal, hydrogen fuel cells and more will all race to fill the need for energy. Battery technology will continue to improve.

Sadly, the authors of this 42-page report have concluded that all these efforts will fall short. But I’m an optimist; my strong belief is that somewhere, sometime, somehow, scientists and engineers will help us pull through, and transition from the fossil fuel economy of the past 200 years to the new economy powered by either hydrogen or solar or some other unforeseen energy source.

And in the process, investors who are in the right place at the right time will profit handsomely.

I’ve written a lot about solar power in past issues of Cabot Wealth Advisory … and I expect to write more in the future.

But if you really want to get deeper into new energy investing, and earth-friendly investing, I recommend a subscription to Cabot Green Investor, where you’ll find expert guidance on the subject.

Remember Gushan Environmental (GU), the Chinese maker of biofuel products that I wrote about on March 31? Back then, it was trading at 13. Since then, it’s been up to 16 and back to 14. But the trend is still up, and it’s still attractive for investors with high risk-tolerance.

You can learn a lot more about the entire subject–and join those investors making profits in the sector–by taking a no-risk trial subscription to Cabot Green Investor.

To get started, simply click the link below.


Timothy Lutts

P.S. Right now, I see market strength in fossil-fuel energy stocks AND solar power stocks, and I think any diversified portfolio should hold both.

P.P.S. To read the full report on Peak Oil, go to


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