Editors' pick: Originally published Nov. 15.

Imagine a world of 50% annual inflation, resource wars that span the globe and energy prices skyrocketing as oil reaches $200 a barrel.

This is what the "peak oil" theory predicted. And it shaped the opinions of scientists, policymakers and the general population for decades.

Recent history has shown, however, that the peak oil theory is dead wrong. It seems like the future will be shaped by the very opposite: peak demand.

Peak oil first gained popularity through a paper by U.S. geologist M. King Hubbert in 1956. Hubbert anticipated that U.S. oil production would max out in the 1970s before declining. Global oil production would last until the year 2000 before falling away.

Hubbert's theories were based on trends found in individual oil wells and oil fields. He noticed that oil obtained from these wells rose, peaked and depleted in the shape of a bell curve. He extended that same principle to global petroleum reserves.

When U.S. oil production did indeed peak in the early 1970s, "Hubbert's peak" won broad popularity. Petroleum consumers all over the world started to panic. The consequences of peak oil would be huge: skyrocketing gasoline prices, rampant inflation and fear that the world would be dominated by the biggest oil-producing countries.

Proponents of peak oil thought that the world's oil production had hit its maximum and was on terminal decline. Their fear was that soon there would be no more oil to take out of the ground. They felt that this end of oil could happen within 30 to 50 years.

While supply dwindled away, demand for energy would only grow as the world's population expanded. This would cause oil-poor nations' economies to crash while oil-rich countries would become increasingly powerful. Energy demand and petroleum prices would rise to unsustainable levels.

Fearing a future with less oil and higher energy prices, governments and entrepreneurs soon began research on renewable, alternative energy sources.

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But peak oil is no longer a threat. Those who planned for a future based on this theory, including investors, governments and energy companies, must face a new reality. The global economy will be dictated by falling oil demand, not falling oil production.

Bucking the Trend

The end of peak oil began in 2009, when something unexpected happened. Oil production stopped declining and started going up. The climb started slowly, but then it accelerated.

U.S. oil production was no longer following the anticipated bell curve. From 2008 to 2015, U.S. oil production exploded from 5 million barrels a day to 8 million barrels a day (which is not far behind the peak in 1970).

Why the sudden change? Because new technologies had arrived, and they turned the energy industry on its head.

New methods now allow oil producers to get oil and gas out of previously inaccessible places. For example, hydraulic fracturing (or "fracking") has permanently changed the oil and gas industry. Chemically treated water and sand are pumped into shale rock formations, fracturing the ground and releasing immense amounts of previously unusable fossil fuels into a nearby well.

According to the Energy Information Administration, more than half of all oil output in the U.S. now comes from fracking. Fracking in the U.S. is one of the main reasons why American oil production has escalated so quickly and why there's a global oil glut.

Because of the high cost of fracking, oil production falls quickly when oil prices drop to less than $50 per barrel. In spite of this, fracking production in the U.S. has been surprisingly resilient in the face of low crude prices -- mainly because new fracking technology continues to get more efficient.

Other countries are now starting to adopt fracking as well. The U.S. is not the only country with shale oil formations. According to some estimates, Europe has more recoverable shale gas than America. And as Russia, China and other countries continue to expand their petroleum technologies, there are bound to be more sources of oil.

Peak Demand Has Replaced Peak Oil

Peak oil is going the way of the dinosaurs. Meanwhile, a new view of our energy future has taken over: peak demand.

The Organization of Petroleum Exporting Countries recently forecast that oil demand could peak within the next 15 years, especially if this year's Paris climate agreement targets are fully implemented.

A recent report by the World Energy Council also noted that growth in global energy demand is predicted to slow down until it peaks before 2030, then decline. This group of energy companies, public sector organizations and academics has outlined a "fundamentally new world of the energy industry," calling it the "grand transition."

The report also explains that the green revolution has just begun to gain traction. Solar and wind energy is expected to continue its "phenomenal" growth. In 2014, they accounted for 4% of all power generation, but could supply as much as 39% by 2060. Nuclear and hydroelectric power will also grow significantly. Coal and oil eventually will be displaced.

Another killer of oil demand will be electric vehicles. Improving technology (particularly battery technology) will reduce the costs and increase the popularity of EVs. It's possible that EVs could outnumber petroleum vehicles by 2030.

The report states that fossil fuels -- including coal, natural gas and oil -- could decrease to 50% of all energy production. The overall use of hydrocarbons as fuel will likely peak within 30 years, although each fossil fuel could see differing futures.

Natural gas will likely grow at a steady rate. Oil will still take the lion's share of fossil fuel use (at over 60% of the mix) because of its role in transportation.

Peak demand has a large effect on oil companies and their investors. There has been more discussion of "stranded assets" (oil and gas reserves that might remain untouched because of uneconomical returns).

Oil companies may be faced with large writedowns in the near future, as the price of extraction causes in-ground assets to stay there. If that happens, shares in many oil companies may become poor investments.

But the bigger problem of peak demand and stranded assets may be the geopolitical impact, according to the WEC report. Peak demand could destabilize entire countries, especially because a good portion of the world's oil & gas reserves are owned by governments. Countries such as Saudi Arabia, Russia and Iran could be in big trouble if their economic lifeblood runs dry.

Saudi Arabia has already started to act. The Saudi government declared its intentions to diversify its oil-based economy earlier this year. Crown Prince bin Salman has even said, "Within 20 years, we will be an economy or state that doesn't depend mainly on oil."

Russia has so far refused to show any signs of diversifying its oil-centric economy. Russia could be in terminal trouble with peak demand.

So what can you do? It may be too early to sell your oil stocks. But, be aware that the global economy is changing. Although the global economy has been influenced by fossil fuel demand for a long time, it's transitioning to a world where falling oil demand and new energy technology are the name of the game.

Kim Iskyan is the founder of Truewealth Publishing, an independent investment research company based in Singapore. Click here to sign up to receive the Truewealth Asian Investment Daily in your inbox every day, for free.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.