Citigroup Inc. (C), Exxon Mobil Corporation (XOM): The Shocking Implications Of The Rebuke Of Peak Oil Theory

And Clean Energy Fuels Corp (NASDAQ:CLNE) continues to lead the way in developing the refueling infrastructure needed to support natural gas vehicles. The T. Boone Pickens-backed company already has more than 300 natural gas refueling stations across the U.S., of which roughly 80% are equipped to refuel passenger cars and light-duty trucks running on compressed natural gas.

Questions to consider
It certainly appears that trucks and heavy-duty vehicles are making impressive progress in transitioning to natural gas. But I wonder if people are overestimating how quickly U.S. consumers will switch over to natural-gas-powered cars. Despite major incentives, such as high gasoline prices and dirt cheap natural gas prices over the past couple of years, adoption so far has been minimal.

Even if natural-gas-powered passenger vehicles make significant inroads over the next several years, will it be enough to offset rising oil demand from China, India, and other major emerging markets? I’m not sure.

At any rate, the pace of these developments hinges on a few unknowns. How quickly will gas-powered trucks, consumer vehicles, locomotives, and shipping vessels catch on? Where are natural gas prices headed and how will they affect the pace of adoption for these vehicles?

How long will the U.S. shale boom last? Have we underestimated decline rates for shale gas wells? What initiatives will governments take to support the development of more fuel-efficient vehicles and/or reduce subsidies provided to oil companies? And lastly, where are marginal crude oil production costs headed given the trajectory of global demand growth?

I don’t have the answers to these questions, nor does anybody else.

But what I can tell you is that, over the long term, you’re more likely to see better returns by investing in some of the above-mentioned companies – especially those that are first movers in their respective fields and are supported by disciplined yet visionary management teams – than you are by investing in a crystal ball.

The article The Shocking Implications of the Rebuke of Peak Oil Theory originally appeared on Fool.com and is written by Arjun Sreekumar.

Fool contributor Arjun Sreekumar has no position in any stocks mentioned. The Motley Fool recommends Clean Energy Fuels, Cummins, Waste Management, and Westport Innovations (NASDAQ:WPRT). The Motley Fool owns shares of Citigroup Inc (NYSE:C) , Cummins, Waste Management, and Westport Innovations.

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