We're running out of oil - FAST!
... and it’s creating a world of opportunities for investors.
At Casey Research, we’ve long believed that a crisis in oil supplies would come sooner than anyone in government would admit.
Finally, the U.S. Department of Energy agrees with us. The DOE admits that, for the first time ever, we have crossed a critical oil threshold: worldwide, we now consume more oil than we can produce.
The DOE numbers show that we’ll run short of oil sooner than anyone thought. And they leave no doubt that the era of cheap oil is drawing to a close.
Every year the Department of Energy publishes its International Energy Outlook for the purpose of forecasting energy supplies 20 years into the future. In the 2009 edition, the numbers paint a bleak picture for the future of cheap energy.
According to the U.S. Department of Energy’s own estimates, 2009 was the last year the world ever produced more oil than it consumed.
- By the end of 2010, there will be a shortfall of 5.3 million barrels a day – a shortfall equal to the daily production of Iraq and Kuwait combined.
- By 2015, a shortfall of 7.7 million barrels a day, equal to all the oil produced in South America.
- By 2020, a shortfall of 8.2 million barrels a day, equal to 80% of the oil produced in the U.S.
- And by 2030, a shortfall of 11.5 million barrels a day — more than all the oil produced in Saudi Arabia.
We all knew this was coming
It’s no surprise to anyone that there is a limit to world oil resources, and that demand would exceed supply sooner or later. What’s surprising is that the DOE admits that we’ve arrived at this critical threshold DECADES earlier than it had anticipated.The 2004 edition of the Department of Energy’s International Energy Outlook made the sunny prediction that “[we] expect conventional oil to peak closer to the middle than to the beginning of the 21st century.”
In keeping that optimism, in 2005 the DOE predicted that world oil production would reach 122.2 million barrels a day by 2025. In 2009, that estimate was downgraded to 101.1 million barrels a day.
That’s 21 million barrels a day less than what was predicted just four years earlier.
It’s not that the Department of Energy has intentionally overestimated production. It’s simply that there’s not nearly as much accessible oil as they once thought there was.
Of course, the hunt for new oil reserves continues. BP has found what they believe may be 3 billion barrels in the Gulf of Mexico, for instance. But due to the extreme depth of this discovery (over five miles beneath the surface) and the uncertainty whether it can be economically recovered, industry experts predict that it will be at least 10 years before these reserves come on line — if they ever do.
The myth of “unconventional” oil
Liquid oil is often described as “conventional” (think oil wells) and “unconventional” (think tar sand, oil shales, and heavy oil). The former is the low-hanging fruit of the oil world; the latter, of course, is much more problematic to harvest.There is a school of thought that the trillions of barrels of oil in the shale and tar sands of Canada, for instance, will supply us with oil for many decades.
In its 2009 report, the Department of Energy projects a near tripling of unconventional oil production over the next 20 years, from 5 million barrels a day in 2010 to 13.4 million in 2030. This production estimate is wildly optimistic.
Furthermore, production of unconventional liquids tends to have far greater environmental impact than conventional liquids. Resistance from an environmental standpoint will be intense.
This is not to say that unconventional liquids won’t play a role in bridging the supply gap. But 13.4 million barrels a day by 2030 — three times the current unconventional production — can’t be called a likely scenario.
So the shortfall of production is almost certain to be considerably worse than the Department of Energy now indicates.
According to Fatih Berol, chief economist at the International Energy Agency in Paris, “…a serious supply-demand problem will emerge in 2010.”
And it’s only going to continue to get worse.
Opportunity knocks
Energy is fundamental to every sector of the global economy. And as we’ve recently experienced, the price of energy is profoundly affected by political, economic, and environmental issues — as well as supply.Naturally, as supply diminishes, the price of oil is going to go up — way up — as will most other sources of energy as demand for alternative fuel rises. One certain result will be fundamental turmoil throughout the energy sector.
Even now, before the shortfalls in oil have begun to hit home, the industry is undergoing tremendous change. Coal production is being curtailed. Disruptive government subsidies for green energy sources are now flowing. Carbon caps are the darling of the day. The scramble for alternative energy sources is heading into high gear.
As a result of the rising price of oil and the feverish search for alternatives, every corner of the energy industry will be in turmoil. Rapid swings in energy prices and stock values will be the rule.
But it won’t all be driven by simple supply and demand: Wall Street darlings will fall in favor and out again; government will bestow subsidies on one market today and a different one next month; and genuine technological advances will move the winners ahead and leave the others behind.
Tremendous opportunity for wealth-building will exist in all that turbulence. Companies will rise, and others will fall. Fortunes will be made, while others will be lost. And investment opportunities will be abundant.
Energy opportunities
Energy is poised to be one of the most promising sectors of the next decade, but it will also be a difficult sector to navigate. If you are to profit from energy, you will need some expert advice along the way — an expert in the industry who will share his experience and tremendous insider knowledge with you.That person is Marin Katusa, the chief investment strategist of Casey Research's Energy Division. He’s also the editor of Casey’s Energy Opportunities — a monthly newsletter that will help you navigate the coming energy storm.
And make a lot of money along the way.
Marin is a very interesting guy who grew up in the immigrant neighborhood of East Vancouver, Canada. A math prodigy, he was teaching advanced mathematics at a university in Canada at 23. By his late 20s, he quit teaching to invest full time. Along the way, he’s been a hedge fund manager and a major shareholder and director of Canada’s next copper mine, Copper Mountain.
In heading up Casey’s Energy Division, Marin spends no less than 300 days a year traveling on behalf of his research, seeking out the best of the best for his stock recommendations. He’s driven, he’s smart, he’s well connected, and he’s willing to share with you what he knows in Casey’s Energy Opportunities.
Casey’s Energy Opportunities covers energy from all sources:
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It will give you an overview of what’s currently happening in each of these industries, and what the future holds for them.
Most important, Casey’s Energy Opportunities will tell you who the winners are likely to be, and why. So you’ll get specific, actionable advice about what to buy, and for how much.
How successful has Marin been in making stock picks? Well, since October 2008, he’s made 19 picks, and he’s had 19 winners. 100% accuracy. These include:
- Nevada Geothermal: up 196% in just 8 months
- Uranium Energy Corp.: up 758% in 14 months
- Arco Energy: up 129% in 4 month
- Reservoir Capital Corp.: up 283% in 15 months
- Denison Mining Corp.: up 117% in 10 months
- Black Pearl: up 118% in 15 months
- UR Energy: up 145% in 14 months
- Cirrus Energy Corp.: up 177% in under 12 months
*Gains as of 1/15/10
What’s Marin’s secret? 300 days of traveling means a lot of boots-on-the-ground hard work, rigorous examination of the numbers, and a lot of time speaking with the key players and visiting their properties. Backing up Marin is a team of expert researchers and specialists in every arena of the energy industry.
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You can discover his next recommendation in the current issue of Casey’s Energy Opportunities. Along with that recommendation, you’ll receive detailed information about the company and why he thinks it’s going to be a winner.
You’ll get 12 issues, including Marin's carefully researched picks, for just $39 a year — just over $3 for each issue. And your subscription is completely WITHOUT RISK. If for some reason — any reason — you decide Casey’s Energy Opportunities is not for you, you may cancel any time in the first 90 days for a complete refund.
Don’t miss out on the incredible opportunities in energy. And don’t miss out on the wisdom and advice of Marin Katusa. Start your subscription to Casey’s Energy Opportunities before one more opportunity passes you by.
