13
Book review: Profit from the Peak
Topics: books
Most of us are more than familiar with pain at the pump. However, few investors take the time to learn what is actually driving energy prices.
Profit from the Peak: The End of Oil and the Greatest Investment Event of the Century by Brian Hicks and Chris Nelder is a great place to start the learning process. Profit from the Peak lays out the case not just for peak oil, but also future limitations in natural gas, coal, nuclear energy, and biofuels. Hicks and Nelder marshall a vast amount of factual evidence to demonstrate that our energy future cannot rely on oil alone.
The premise that the days of cheap, easily-drillable oil are behind us has already been cogently set forth by many others from King Hubbert to Matthew Simmons (whose Twilight in the Desert I also recommend). But Hicks and Nelder go further, analyzing the impact of a growing population on these trends and potential mitigation approaches from alternative energy to conservation to social trends like relocalization. They also identify companies focusing on each of the energy strategies they discuss.
Hicks and Nelder state that their goal was to comprehensively describe the energy landscape. That part of the book succeeds overwhelmingly. They put each energy technology in perspective, identifying the pros and cons, and realistically assessing the extent to which each can lessen our dependence on oil.
The investing part of the book is less impressive, and at times appears to be little more than an afterthought. Following each of the sections on existing and emerging technologies, Hicks and Nelder cover a handful of pure plays with a couple of sentences per stock. But this kind of facile analysis really amounts to little more than a list. Personally, I would have preferred if the authors went a bit further on the limb and actually identified which of the hundred or so companies mentioned they believed to be the best long-term investments.
My advice: buy the book, read it, and use it as a starting point for your energy investments.