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January 16, 2022

The end of oil?

By Gordon Powers, Sympatico / MSN Finance

The study of "peak oil" - the point at which half the total oil known to have existed has gone up in smoke, beyond which supplies steadily dwindle - was once the sport of squinty-eyed academics. It wasn’t taken seriously by business or consumers, mainly because oil has always been cheap and plentiful.

Well, we know where that got us. Now, thanks to China’s second great leap, global warming and recent record oil prices, the debate has shifted from if to when. If consumption grows at even a modest pace low, then, according to U.S. Department of Energy estimates, we may reach the turning point as early as 2035.

For an interesting overview of what reduced supplies might mean, have a look at Anita McGahan’s thoughtful piece in Rotman, the Rotman School of Management’s quarterly magazine. McGahan, a visiting professor at Harvard, highlights how the transition away from oil carries fundamental political, economic and social implications that travel far beyond rising prices at the pump. 

What does all this mean for Canada’s energy patch? Right now it’s suffering through a trifecta of problems – lagging energy demand, tight credit conditions, and increasing costs – but most analysts agree that this can’t continue. Take a longer-term view and the case for higher multiples on Canadian energy stocks starts to look pretty attractive.



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

James HaversJames Havers

James is the senior editor of MSN Money living in Toronto. He has worked for the Nikkei Shimbun (Tokyo),,, Canadian Business and other publications. Havers turned to journalism after teaching overseas.

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...