Are you familiar with the concept of Peak Oil and the debate and controversy surrounding it?

M. King Hubbert, a Shell Oil geophysicist, first warned of Peak Oil in 1956. Simply stated, his research conclusion (broadly referred to as ‘Hubbert’s Peak’) is based on the fact that oil reserves in any geographic area are finite. Hubbert believed there would come a point (he estimated around 50 years from 1956) when world oil consumption would match (the ‘Oil Peak’) and thereafter exceed supply. As things have transpired, Peak Oil has become a hot topic of debate in recent years. Hubbert’s theory has also been applied to other natural resources.

Two books that we recommend are;

• Half Gone, Oil, Gas, Hot Air, and the Global Energy Crisis by Jeremy Leggett published in 2006. This book looks at worldwide oil depletion, its possible effect on global warming, and economic dependence on Middle East oil; and,

• Profit from the Peak: The End of Oil and the Greatest Investment Event of the Century by Brian Hicks and Chris Neider published last month. This book concludes that under a best case scenario the world has 30 years of oil left at current consumption levels, in circumstances where transition to alternate energy sources will afford serious investment opportunity. It also identifies companies by energy sector that the authors think ought to be considered by investors.

Both books are available on Amazon.com. We consider the first book a ‘must read’ for all investors, and the second well worth taking the time to read carefully. We believe all investors should familiarize themselves with the concept of Peak Oil and carefully consider its merits in the context of their investment portfolios.

The views expressed in this Post are those of the author. They are offered to readers for information and general guidance only. They are neither intended to, nor should be taken to, constitute economic or investment advice. See Legal Disclaimer.

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