In 1956, M. King Hubbert, a US geoscientist working for fossil fuel giant Shell, projected — based on statistical modeling of known oil reserves at the time — that global crude oil production would peak around the year 2000, before diminishing and eventually stopping altogether. 

It was a shock to petroleum producers at a time when oil was the fuel driving a booming global economy. Many people were worried. There was talk of economic disaster, a global financial crisis and even a full-on apocalypse.

But Hubbert's prediction didn't quite come true. Production from easily accessible oil reserves did reach a peak in the early 21st century. But fossil fuel businesses have managed to produce more oil nearly every year, hitting a high of 96.4 million barrels per day in 2023 — thanks in part to new technologies. 

One of those is hydraulic fracturing, also called fracking. This process involves injecting water and chemicals into rock, which creates tons of tiny cracks that allow oil and gas to escape. Fracking took off in the United States in the early 2000s, and the country now produces more oil per year than any other nation in the world.

Although we have more oil available to us than ever before, the term peak oil has stuck around. But its definition has shifted, with industry observers increasingly referring to "peak extraction" instead.

"About 15 to 20 years back, there was a concern that the oil supply was going to peak. We're going to run out of oil," Atul Arya, chief energy strategist at US credit rating agency S&P Global, told DW. "Now, the concern is somewhat different, which is that we're going to hit a peak or a plateau in demand."

Renewable energy starts overtaking oil, gas

Demand for renewables is beginning to outpace traditional fuel sources. In 2023, the global increase in green energy capacity — power from solar, wind and other renewables — hit a new record, marking the fastest growth rate in the past two decades, according to the International Energy Agency (IEA). Much of that was down to explosive growth in the solar panel industry, especially in China.

Since 2000, renewables have grown from 19% to more than 30% of the global electricity mix, said energy think tank Ember in a May 2024 report, which predicted that fossil fuel power generation would likely peak this year.

"This is a critical turning point: Last century's outdated technologies can no longer compete with the exponential innovations and declining cost curves in renewable energy and storage," said Christiana Figueres, former head of UN climate negotiations, in the Ember report.

Investment in renewables is trending upward, with green electricity costs falling and electric vehicle sales steadily growing each year. Experts have predicted EVs will make up between half and two-thirds of all car sales by 2030.

The IEA's 2024 World Energy Investment reportshowed funding for clean technologies — which surpassed fossil fuel investment for the first time in 2023 — was set to hit $2 trillion (€1.8 trillion) this year, with slightly over $1 trillion going toward coal, gas and oil. 

Beginning of the end for fossil fuels?

To have any hope of curbing emissions and keeping global heating to a minimum, climate experts have said we must stop exploiting fossil fuels — the sooner, the better. A 2015 study published in the journal Nature estimated that between 2010 and 2050 a third of the world's oil reserves, half of gas reserves and more than 80% of raw coal reserves needed to stay in the ground to keep warming under 2 degrees Celsius (3.6 degrees Fahrenheit).

And the financial bottom line may end up making the case for some industry players to stop drilling. In October 2024, the IEA said the "clean energy momentum remains strong enough to bring a peak in demand for each of the fossil fuels by 2030," even in a scenario with minimal climate action. After 2030, the IEA report suggested it would be much harder to justify costly new fossil fuel projects. 

In its World Energy Outlook report, the IEA said climate targets won't be the only driver of a rise in clean energy, highlighting motivators such as cost and "intense competition for leadership in clean energy sectors that are major sources of innovation, economic growth and employment." 

And indeed, some investors — including major pension funds in the US and Europe — have started turning away from fossil fuels, due in part to public pressure to meet climate targets but also because of increased financial risk. 

Oil companies still banking on fossil fuels

But Faye Holder, head of special projects at climate think tank Influence Map, worked on a report investigating oil companies' communication and claims on renewable targets, and said the data "suggested that all companies, except maybe BP, were increasing oil production.”

State-owned oil companies are also betting on fossil fuels earnings, even though projects approved now may never be profitable. It takes years for new sites to build up infrastructure and get ready for drilling. As renewables get cheaper, in financial terms these fossil fuel projects might become stranded assets — something that was invested in but became obsolete.

"This disconnect is alarming for shareholders," said Mark van Baal, founder of the Amsterdam-based shareholder advocacy group Follow This, in a statement on October 16. "Oil majors are ignoring the IEA's scenarios and jeopardizing shareholder value by clinging to outdated fossil fuel expansion strategies."

According to Mike Coffin, who leads the oil, gas and mining research team at New York-based think tank Carbon Tracker, "for some countries, 30 to 40% of the entire fiscal budget could be at risk as the transition unfolds or oil prices fall. So that's going to have a massive impact on the economies of these countries, and crucially on the living standards in these countries."

And that impact could also hit individual citizens directly. Despite some notable exceptions, many pension funds around the world are still invested in oil and gas. If these companies fail, millions of people could be plunged into financial insecurity in their old age.

"All of that is going to help us move away from oil," said Arya at S&P. "But it's not going to be overnight." 

According to all projections, the world will need fossil fuels for some time. They're used to provide backup power when wind and solar aren't running, and some industries, including shipping, aviation, and the production of cement, steel and chemicals will be hard to decarbonize. We'll also need to find more efficient ways to transport and store renewable energy before we can stop burning oil, coal and gas for good.

"The world does not need to choose between ensuring reliable energy supplies and addressing the climate crisis," wrote Executive Director Fatih Birol in the IEA's October report. "Clean electricity is the future."

Martin Kuebler contributed to this report.

Edited by: Anke Rasper and Jennifer Collins

Correction, November 25, 2024: An earlier version of this article included an outdated map on the largest reserves of coal, oil and gas. That has now been updated.