Waking up on a cold, crisp November morning is a refreshing experience. I always find six o'clock in the morning to be calm. Enjoying those first few minutes of peace will help you prepare for the chaos of the day. And I knew this was going to be one of those days.

In no time at all I'm rushing down the stairs and satisfying that aching caffeine fix with a steaming pot of coffee. During the next five minutes, it's a cup of coffee while catching up on the morning news.

Then it hits me, the one thing that can ruin my serene morning.

Watching the news can be depressing enough, but then I realize I have to buy gas before heading to work. So feeling a little less than chipper, I slowly make my way to the closet. Yet rather than grabbing my coat, I quickly pick up the object underneath it, my Louisville Slugger baseball bat.

Ten minutes later, my car is idling a couple of hundred feet away from the gas station, yet I'm oddly optimistic, thinking to myself, "The line ain't too bad today," over the din of The Stones' "Sympathy for the Devil." It's true, too. I'm usually far behind my current position.

After another forty-five minute wait (and never-ending honking) I finally crawl into the gas station, just five cars away. Suddenly there is an uproar as the attendant comes out with a gigantic sign reading "We have no more gas today. Please come by next week when our order comes in."

So much for getting there early.

The sign's effect is immediate: disgruntled customers begin driving forward with a variety of obscenities. And this is the reason for the Slugger. I notice a few brawls have started as I make my way through the crowd to get home. Luckily, I have no need to fight.

I have a home office.

Okay, by now you've gathered this was just an adventure in fiction, another dreary, apocalyptic vision of life during the inevitable energy crisis. A majority of my readers would even argue that this kind of scene isn't too far away.

But here's the thing, my friends, this is happening now!

This week, a man was killed outside a gas station in China over a dispute about line-hopping. If the massive lines for fuel in China and a man dying over diesel aren't enough to convince you of China's soaring consumption, I don't know what will.

Perhaps bringing a Slugger with you to fill up over there wouldn't be such a rash decision.

Fighting for Oil

Today's the day of our salvation, right?

I'm referring, of course, to the day when OPEC opens up its taps by a whole 500,000 barrels per day. Yet on the eve of this deliverance from supply shortages, I received a phone call last night at midnight. It was one of my colleagues screaming into the receiver, "DUDE, it just hit $96.24 a barrel!"

Even in my zombie-like state I knew he was referring to oil. Apparently some friends had decided to celebrate $100 oil a bit early. I'll get to why we'll be celebrating $100 oil in a minute.

Naturally, we're going to have to wait a few months before the production increase has any effect on oil prices (assuming, of course, it does have an effect). The truth is that there's a growing amount of skepticism over the world's production capacity. Although I'd like to see us pumping 98 million barrels of oil a day in the next eight years, I'll admit there's some compelling evidence we won't even make it to 88 million barrels a day.

Maturing fields, aging equipment and increasing production costs are just a few reasons why my outlook remains grim. Some traders are even starting to buy oil contracts for 1,000 barrels at $125 a barrel.

Over the summer, I've told my readers (several times, actually) that there's been a lot of shady dealings concerning OPEC's oil reserves. I apologize to the wishful thinkers out there, but when several countries double their oil reserves practically overnight, I can't help but call their bluff.

And now, it's biting them right in the ass.

In a recent interview, Sadad al-Husseini, a former executive at Saudi Aramco, put these reserves into question. He said the reserves were "not delineated, not accessible and not available for production." He argued (and I agree wholeheartedly) that production has hardly increased in spite of rising crude oil prices.

Investing in the Future Oil Crunch

I know I'm skeptical about global oil supplies. So why celebrate the prospect of paying two or three times more to fill up my gas tank?

Here's what I see . . .

Whether or not you feel our oil addiction is dragging us down, the reality is that that addiction is not going away soon. Eighty-six million barrels a day is a lot of oil. And over the next few decades, there's going to be a substantial amount of money pouring into oil and natural gas. This will add up to trillions of dollars being spent over the next twenty years. My question to you is this: Why should we sit around and watch other people make a killing in the market?

Believe me, watching other people get rich is frustrating. I don't plan on that happening to me. It's up to you whether you want to feel that way. If you're interested in taking a peek at what I'm talking about, please feel free to click here.

Until next time,

Keith Kohl

"Energy stocks... The only way a human is going to make any money."

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So now people are not driving so much. New Jersey Transit trains are running full on routes once thought unprofitable. Gradually, refined petroleum consumption is slowing its rate of increase in Asia. After the Olympics, China will really cut back hard and liquidate its investments in U.S. securities, and pay down its debt which is now 120% of China's GDP. Bush rescinded executive level restriction on drilling. The Crude price plunged. The public will now pressure Congress. More petroleum is being developed in Brazil and offshore India. Iraq's oil is coming to market. Unsold Iranian oil is held offshore in tankers.

We now have the tax on oil. Pol's would not dare do it. But at $100/barrel it is here. Consumption will now begin to wane. A mild/ moderate recession is nearly unavoidable. Luckily for all the BTU guzzlers, Iraq's proven reserves increased by 100 BILLION, and there daily output last month was up 200,000 barrels per day. Perhaps Cheney WAS right.
Happy guzzling. Peter Brown

Short term profits can be made from investing in the right type of oil stocks. Long term profits can be had from investing in whichever alternative energy source becomes the dominant fuel. The fuel of heavy industry, transportation, jet aviation and agriculture is diesel fuel ( kerosene for jets ). If you want to make money today, invest in oil. If you want to eat tomorrow, invest in biodiesel. The most promising source of biodiesel is from growing algae. See the October issue of National Geographic for a no-nonsense evaluation of ethanol vs biodiesel. When oil becomes too scarce and expensive for farmers to plant and harvest their crops, we are doomed. Your short term oil profits will not matter if there is no food to buy. We probably have less than ten years to make the switch to biodiesel happen.

Solar wind and wave power will help generate electricity but no farmer drives an electric tractor.

Keith:

God bless your youth, as I'm sure you're a relatively young guy as judging from the text of your article.

The long gas line you fantasized yourself in and, apparently a Chinese reality, is by no means a 21st century phenomenon.

In fact, it's a very real part of the early 1970s U.S. experience. I was just out of college then, with a new job in suburban Chicago. Long gas lines (EXACTLY as you've described in today's article)were the norm. Most of my experiences in this regard, fortunately, are long blotted from my memory.

However, for whatever reason, I distinctly remember a bone-chilling, sub-zero F-degree February Saturday morning, standing in line for God knows how long (Sidebar: The "F" stands for farenheit, not for ... ah, er ... well, you know).

In those days, it was called "The Energy Crisis", and rightly so.

Regards,
Jim

Cary, North Carolina

where does Isarel gets it oil and electric power?????

Regulate the petroleum industry and put Bush and Chaney in jail. While we,re waiting for that to happen, park your car and let the petroleum companies suck air. And before that happens it might help to boycott Exxon.

seems the $100 oil ceiling will be crashed any day now. when that happens we will be looking at $200 as the next doomsday ceiling, and that price may well be. as for now get ready for $5 a gallon gas,by summer 08.

Brevity is beter than writing a diary style letter.
We are looking for information...digging for information.

AMERICAN ENERGY WASTE is EVERYWHERE !
Energy waste in America is horrendous and FIXABLE !
(1) We over heat and over cool our homes, businesses, offices, schools, churches, etc...
(2) 10's of millions of outdoor lights burn during the day.
(3) Most Americans do not minimize their driving.
(4) Over packaging is the norm. Recycling is inadequate . Our landfills are busier than ever.
(5) Road construction in America is the ultimate contradiction.

The ONLY way to reduce energy waste and over demand is by using the economics of taxing energy, in lieu of Federal Income Tax. UNTIL the price of gas is $6 to $8 per gallon, hedonistic America will not significantly reduce its over consumption and energy waste. Federal Gas Tax should be $4 to $6 per gallon and 'offset' by making Federal Income Tax begin at $60k.
ONLY with a tangible/dollar reward will America care to conserve.

In the mean time, the USA continues to 'give away' its economic and political wealth to the Islamic Middle East via OPEC, so we can continue our energy waste. Know that the Islamic dominated OPEC cartel is glad to allow supply and demand market forces to drive energy prices to $8/gallon. The Islamics, who want to annihilate us, will likely succeed; using our American 'gas money' to buy the weapons needed to do so.

China, India, and other 'developing countries' are just beginning to compete for the world's remaining energy supply. Geopolitical unrest is directly related to global competition for energy and natural resources. If global demand for energy is not dramatically reduced, World war is inevitable.

Ford and General Motors are headed for bankruptcy, which will leave 100,000,000 Americans unemployed, ruin our economy, and lead to anarchy. America can no longer continue to 'do business as usual'. Ford and GM need to transition to the lucrative business of building solar and wind 'energy producers' for the world's 6.7 BILLION people reason$. The world cannot continue to support all the automakers. We are running out of petroleum. Wake up !
Mass transit must reward those who reduce their driving and thereby become FREE, SAFE, CLEAN, and CONVENIENT. Only then, will significant numbers of people use it.

The ONLY workable means by which America can implement intelligent sustainable energy conservation, is by using the economic incentive of TAXING ENERGY - NOT INCOME!