The energy industry has experienced some of the biggest changes in its entire history over the past decade – and the phrase “peak oil” proves that very point.

“Peak oil” used to refer to peak oil supply: a theoretical point in the future when we’d hit the maximum rate of production, and after which reserves would slowly start running dry. Some doomsayers (probably fans of the 1995 Kevin Costner movie Waterworld) even predicted miles-long queues at gas pumps, spiraling inflation, and global oil-based conflict…

Fast forward to today, and “peak oil” is used in precisely the opposite sense: referring to peak oil demand. And that’s because two major trends have completely transformed the energy industry in the meantime.

First, the shale revolution in the US – which saw the country become the largest oil producer in the world – unlocked a massive amount of oil that experts previously thought was too expensive to extract. That helped reassure people the planet wasn’t going to run out any time soon.

Second, the cost of renewable energy plummeted thanks to greater innovation and scale, helping reduce the world’s reliance on traditional fossil fuels to meet its energy needs. Even electric vehicles (EVs) have begun to go mainstream as prices come down and regulators enforce cleaner air standards, displacing the need for gasoline – the single biggest use of oil.️

Today, the consensus is that it’s a matter of when – and not if – renewable energy and EVs overtake traditional fossil fuels and petroleum-powered vehicles. Somewhere around that point or soon afterward, oil demand will start to fall. And that’s when we’ll have reached that historic milestone: “peak oil” Mark II.

So does that mean traditional energy producers are destined for the scrap heap – and unworthy of your hard-earned bucks’ investment? Not necessarily. For starters, no one – not even so-called energy experts – really knows when oil demand will peak. It could be within the next decade, or it could be in 40 years’ time. Until then, oil and gas producers could still churn out healthy profits and distribute them to their shareholders. What’s more, energy “supermajors” – massive companies who cover the entire “value chain” – are no fools: pivoting their businesses towards cleaner energy sources such as natural gas or renewables may see them not only survive but thrive.

Another reason not to shun the energy sector is its breadth: there are investable companies specializing in all points of the value chain that you can target depending on your view. For example, if you think we’re imminently headed for a massive supply glut that’ll cause oil prices to fall, you might want to invest in refineries that convert crude oil into usable end products: they’d benefit from the lower cost of their raw material.

This is probably a good time to explain the four key parts of that energy value chain. The upstream industry looks for reserves and extracts oil and gas once they’re found, while the downstream industry converts them into usable products such as fuel, plastic, and petrochemicals. The midstream industry, meanwhile, links the two together, storing and transporting oil and gas across networks of pipelines railroads, trucks, and ships. It also transports finished products to end-users: the gas, for example, that heats people’s homes. And finally, there’s the oilfield services industry: providing equipment and services that help upstream companies explore for and extract oil and gas.

It’s important to note from the outset that energy is essentially a commodity industry. There may be different grades of crude oil, sure, but they’re largely interchangeable, and natural gas is pretty much the same worldwide. The same goes for the end products produced downstream: gasoline at the pump is pretty much the same wherever you are (well, except Brunei).

The most important things you need to understand when investing in any commodity industry are typically supply, demand, and anything else determining that commodity’s price. And that’s exactly what we’re going to do across the remainder of this Pack. We’ll go over the biggest supply and demand trends impacting the industry globally – discuss how oil and gas prices are determined in the short run and over the long term – and conclude by laying out the different ways you can invest in the oil and gas industry.

A brief note before we begin: we’re a forward-thinking lot – and we care about the future of our planet. You, our readers, asked us for a Pack on oil and gas; and here it is. Plus, as mentioned, the energy giants of the past are likely to number among the energy giants of the future – and it’d be wrong to ignore that. Disclaimer out of the way, let’s get cracking.

The takeaway: The energy industry includes upstream, midstream, downstream, and oilfield services branches. And while it’s undergoing some profound changes, it’s still an investment worth considering.