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January 15, 2010
By
Marin Katusa, Senior Energy Strategist,
Casey’s Energy Report
Over
the next year or two, you will likely find yourself paying a
LOT more at the gas pump. Big changes are taking place in
the oil industry. With increased global demand and declining
supply, easy oil is not so easy anymore.
Everything is about to get more expensive. From gasoline to
anti-freeze, life jackets to golf balls, and eye glasses to
fertilizer. There are very few things in the modern world
that aren't made from oil, made by machines dependant on
oil, or shipped by vehicles powered by oil.
The
implications, at first glance, appear to be the opposite of
good news. In fact, it's enough to strike panic in the
hearts and wallets of the average consumer.
And
that's exactly why the International Energy Agency just
released its annual World Energy Outlook, clearly rejecting
the possibility that crude output is now in terminal
decline. Their attitude seems to be, what you don't know
won't hurt you. For now that is.
The
truth however, is beginning to surface, and from an
investor's perspective, the truth can mean money in the
bank. Right now, the IEA's claim that oil production will be
ramped up from its current level of 85 million barrels per
day to 105 million barrel per day by 2030 is receiving harsh
criticism.
The
Guardian reports,
"The world is
much closer to running out of oil than official estimates
admit."
This
comes from a whistleblower inside the International Energy
Agency who states the fear of
triggering panic buying has caused them to intentionally
underplay the inevitable shortage.
Kjell
Aleklett,
professor of physics at the
Uppsala University in Sweden, and co-author of a
new report 'The Peak
of the Oil Age', states "oil
production is more
likely to be 75m barrels a day by
2030 than the
'unrealistic' 105m used by the IEA."
According to Professor Aleklett's research, they are making
a dangerous and unjustified assumption. One that is
dependent upon the oil industry's ability to ramp up
production to levels never before achieved. |
Are
you beginning to see the opportunity here?
Whistleblowers and
scientists are not the only ones disputing the IEA's report.
The folks who pump oil aren't buying its rosy scenario
either.
·
Total SA, the French oil
giant, that is making its move into the Alberta oil sands,
doesn't accept the IEA's optimistic claims. The company runs
on the belief that oil production won't surpass 95 million
barrels.
·
Former chief executive
officer of Canada's Talisman Energy, Jim Buckee, agrees the
IEA prediction is nonsense.
·
Sadad al Husseini, energy
consultant and the former exploration and production chief
of the world's largest oil company, Saudi Aramco, recently
said, "Oil supplies have reached a capacity plateau and will
not meet a growth in demand over the next decade."
The Globe and Mail recently joined the
debate stating, "New [oil] fields, generally smaller, are
less productive than old ones - note the virtual freefall in
production rates from the North Sea fields, which reached
peak output in 2000. Another reason [for the decline] is
development pace, or lack thereof. The yet-to-be-developed
reserves in the WEO report cover 1,874 fields of various
sizes that would have to come into production in the next 20
years."
That works out to almost eight new fields
being brought to production each month. A realistic target?
Only time will tell. Even if the oil exists, the next
question becomes one of money, and where it will come from
in order to keep this pace of development on target.
When you add in professor Aleklett's
conclusion that production will shrink to 75 million barrels
per day by 2030 — almost one-third less than the IEA's
figure and 10 million barrels less than current production,
it's easy to see why investors need to take notice.
Shrinking supply and
ever-growing global demand are creating the perfect storm
for oil prices.
The current price of
crude could be the bargain of the century. Understand this
and every increase at the pump will give you reason to
smile.
If you're looking for the
best way to capitalize on the end of cheap oil, there's no
better time to sign up for my advisory service,
Casey's Energy Report.
Subscribers have been
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you have the opportunity to learn which stocks I believe
will profit from the looming oil shortage. For more
information click
here.
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