The pendulum shift away from fossil fuels will not be gentle, gradual, or smooth. The laws of the market dictate this. The shift, when it occurs, will be as swift and painful as the shift in advertising money away from traditional media towards Internet media, such as in the form of paid search and placements in social networks. Once the tipping point is reached, expect a big impact to occur in only a few years - a decade at most.
The investment class is already busy at work, shifting their money from the old energy economy to the new energy economy. Silicon Valley, amongst other wealth centers of the world, is abuzz with vigorous investment in green tech. As always, it is the public dupe who will be left holding. It is so tempting. Towards the end of the fossil fuel boom, things will look altogether too alluring for those who arrive late to the party. Supply will be historically low, and demand will be historically high. Stock prices will be rallied higher, for their one final dying act.
This is part of the ruse. Expect the hollow stocks to be primped and primed, so that the capital of the wealthy can take flight, and so that the average fools may be reamed. Expect it to play out just as the current housing bust and banking subprime meltdown. It will be the most hapless of the hapless who will lose, as they buy the sloppy seconds from the shrewd investor elite, right at the peak of value, and right on the cusp of impending worthlessness.
Many will be caught holding. It will be so tempting, the way it is presented and sold. As oil becomes scarce, as gas too becomes scarce and more desperately in demand, so their prices will rise - and for a period the old energy establishment will see a windfall of riches and soaring profits. But, who would wish to be caught holding, were they to know the ingenious maneuverings of the informed inner circle of our society?
There is much debate and speculation on the subject of peak oil. What investors care about, however, is growth. At the point at which old energy reaches peak growth, and at which point the growth of new energy eclipses that of the old, at that point will the pendulum swing, and at that point will the losses begin. Likely, many will lose through indirect manners, as their retirement funds of various flavors invariably direct their money towards the sink, as ultimately these funds are in cahoots with the very same gravitational centers of wealth that re-align towards the new loci of growth, and as they so trade their entrenched positions that were on the verge of becoming unfavorable, with more favorable ones to tap their roots to.
Who would wish to be caught holding investments in the corporate equivalent of the walking dead? Who would wish to be caught holding, indeed?