Baltimore, MD--There are over a trillion barrels of oil estimated to be underneath the Canadian soil, which will be the solution to our racing demand for crude oil. And standing out of the crowd is one place.

You would be surprised if I told you how many people in the U.S. have absolutely no idea where we get our oil.

When I took an informal poll yesterday, not even one person was able to tell me which countries send us the most crude oil. Let's face it, the U.S. is an oil guzzling behemoth, consuming over a quarter of global production.

Nearly everyone thought it was Saudi Arabia. I know the Saudis are the most logical choice.

But as you can see below, they're not the right one:

Not a single person even put Canada on their list!

Out of the nearly two million barrels of crude our neighbor to the north ships us daily, over half comes directly from oil sands. I've mentioned before that this production could increase fivefold over the next decade.

And there's a few things we can expect to happen over the next few years.

For starters, we know that natural gas prices will keep rising. I'll give you one guess where we get practically all of our natural gas imports. So how can we be so sure the price is going to rise?

There are two major reasons.

The first is that Canadian natural gas production peaked years ago. So the amount of gas available to export to the U.S. will continue to decline.

Secondly, the increase in oil sands production means they're going to use a lot more natural gas to extract the oil. Remember, it takes roughly 1,200 cubic feet of gas to produce one barrel of oil.

I recall getting some questions as to why they're even messing with oil sands. I believe a few of you put it this way: "If it takes so much natural gas to extract the oil, why are they bothering with it in the first place?"

Although the process uses 1,200 cubic feet of gas, that one barrel of oil yields the same amount of energy as 6,000 cubic feet of gas.

Last time, I was concerned about the consequences of oil prices dropping significantly over the winter. However unlikely that may be, there's always a chance it could happen.

One of you made an excellent point to me yesterday. In fact, I'm kind of surprised I didn't mention it. Chalk it up to forgetfulness or however else you want to put it.

Basically, our friend felt that if the production coming on line over the next few years can keep pace with global demand, lower oil prices could be in our near future.

But it's what he said next that really made me smile, " . . . a possible lower oil price in the near term will set up truly outstanding investment opportunities."

He hit the nail right on the head.

At lower prices, many unconventional oil companies (producing oil sands, oil shale, etc.) are going to become sorely undervalued. That's when we can, as our friend puts it, "back up the truck to some real bargains."

On the Road

It's only about four in the morning here in Baltimore. I can't sleep. Yesterday I got into a conversation with my editor about the numerous oil plays in the Athabasca Basin. And there's one shining beacon that stands out--Fort McMurray.

I can't sit around any longer, or wait for the next available flight. In a few minutes I'm going to leave for Fort McMurray, and I refuse to come back until I find the next oil sands blockbuster.

So I'll leave you with a few (slightly modified, for the occasion) immortal words from Jake and Elwood Blues . . .

"It's 2,600 miles to Fort McMurray, we got a full tank of gas, half a pack of cigarettes, it's dark, and we're wearing sunglasses."

"Hit it."

Until next time,

Keith Kohl