Baltimore, MD--Another day, another 13.5 million barrels. The problem, however, is that our foreign oil imports from areas like the Middle East are about to start drying up. But the U.S. is already preparing for this by looking to the rich bitumen in Canada.

Lately I've noticed that peak oil has become a force in nearly everything I talk about. And quite frankly, I'm not surprised. The startling fact is that people are still either unaware or ignoring the enormous effect peak oil will have on them.

I'm not referring to some future apocalypse we need to think about for our children . . .

No. I'm talking about our daily lives within the next five years. By then, we'll look back at today and say, "Ah . . . the good old days when a barrel of oil only cost $69."

Let's take a quick look at why we need to start worrying . . .

Our world is run on fossil fuels. In fact, try to imagine one facet of our society that isn't in some way connected to oil. Sure, they're out there, but I bet it would take you a long time to find something that doesn't utilize fossil fuels in some way.

The peaking of global oil production is going to have disastrous effects on us. But I received an interesting email this morning, pointing towards BP's latest claim that the world has enough oil to last 40 years.

There's a catch to everything, though, and this report is no exception. In fact, when you look closely at this report, the situation gets bleaker.

First off, we need to look at the entire claim by BP. They say the world has enough oil to last 40 years--at current consumption rates. Anyone who honestly believes that global oil demand will remain flat is fooling himself.

And it's those consumption rates that we should be concerned about. Over thirty percent of the world's oil comes out of the Middle East. According to the BP report, we see that oil production grew a dismal 0.7% during 2006 (I'd like to note that Saudi Arabia, which produces 13% of the world's oil, experienced a decline of more than 2%).

In that same time, Middle East consumption grew 3.5%. The higher demand from the major oil producing countries means there will be less oil available for export.

But we don't need a BP report to confirm we're on the verge of peak oil. Just look around the world and you'll see governments scrambling to protect themselves from it.

China imported almost 12% more oil so far in 2007 compared to last year. They're currently building more oil tankers to lower the use of foreign shipping.

Venezuela and Russia have been ripping oil and gas resources right out of companies' hands--whether it means imposing ridiculously harsh environmental regulations or simply saying, "Don't let the door hit your ass on the way out."

And do we even need to mention Iran?

They're willing to risk World War III just for the right to generate electricity using nuclear power.

Even the U.S. is making plans to fight peak oil . . .

Bombing or Bitumen?

My readers are well aware of the massive potential in Canadian oil sands. I'll recap quickly for our newer crowd.

Oil sands are actually a combination of water, sand and deposits of bitumen--a thick, heavy substance from which we can extract oil.

And buried underneath Canadian soil are over 175 billion barrels of oil! Years ago, the process of extracting this oil wasn't economical due to cheap oil prices. But cheap oil is a thing of the past.

Today, with oil more than triple its 2002 price, these oil sands are looking much more attractive.

Last year the U.S. told Canada we want imports to rise to five million barrels of oil per day--a 500% jump!

And recently we've seen more indications that oil sands are about to shoot through the roof. So far in 2007, the record gas prices have prompted several developments. Some are laughable, like the notion of prosecuting OPEC members for high oil prices.

Others, however, are profitable. By 2009, TransCanada expects to have a massive pipeline built from Canada to the U.S. that can move 435,000 barrels of crude per day.

Then there's the new refinery planned in Elk Point, SD. This would mark the first U.S. facility to be built in over thirty years! And it just so happens that this refinery would be within 40 miles of the new pipeline.

But I'll save the best news for next week, when I'll show you exactly why oil sands will be more valuable to us than Saudi oil. Here's a hint . . .

We can put the blame on a peak of a different color.

Until next time,

Keith Kohl