Lately I've found myself discussing peak oil with a variety of individuals. And last night was no exception. I used to think the only people interested in peak oil were geologists and oil execs.

I was wrong.

It turns out that the smoky environment of a bar was better than Exxon's boardroom.

After a long day of looking at oilfield depletion rates around the world, I needed a drink. And in the famous words of Henry Louis Mencken, never drink while the sun is shining. Wait until it's dark. By that time you're near enough to bed to recover quickly. And never drink alone.

Who am I to argue?

The sun had already set as I made my way into a nearby watering hole named Jack's. For me, a bar just isn't a bar unless the smoke is thick and the beer is cheap. And the best part is knowing the bartender has your drink already waiting for you. Jack's is my version of "Cheers." Everybody knows your name.

After about an hour or so of making small talk with the guy next to me, I noticed something unusual. The television above the bar wasn't playing sports. We were watching the news. There was some blurb on the local station about how oil prices were expected to rise again next week.

Having researched oilfield depletion for nine hours that day, I couldn't help striking up a conversation on the subject.

"So I see oil is staying up pretty high," I remarked offhandedly.

"Like it matters to us, besides higher gas. Not like we can do anything about it," came the gruff reply from the guy next to me.

Okay, I do have a confession. I absolutely love it when people get negative about oil (or any source of energy, for that matter). It gives me a chance to show them the truth.

Instead of trying to preach about what peak oil means to our world, I wanted this guy to know he could do something with these higher oil prices.

To be honest, I wanted him to realize the millions of dollars he could make from oil.

"You do understand how easy it is to make a fortune on oil, don't you?" I said.

"What, like waste my money on some big shot oil company? They already take enough out for gas."

"Actually, even if those big companies are the only ones left in a few years, what if I gave you a way to milk them for all they're worth, and make a few million in the process?" I replied.

"I'm listening." That was all I needed to hear.

Barrels of Cash

If one thing has become clear over the two years, it's that oil prices will continue to rise.

I'm not even talking about the geopolitical strife that hangs over the Middle East. You can forget about hurricanes and terrorists disrupting the flow of oil. What I want you to focus on is the fact that our future oil demand will not be met.

Conventional oilfields around the world are depleting at staggering rates. And the newer fields that are just coming into production have a major problem. They are much smaller. Production from these new fields can't match the decline rates in the ones that have peaked.

And if there's one thing I've been trying to show my readers, it's that we already know how we're going to meet our future oil demand.

High oil prices will stimulate the development of newer oil sources. On Tuesday, we saw the U.S. make a move to develop our own oil resources on the outer continental shelf over the next five years. Next week we'll look at the finalized plans from the Department of the Interior.

But there's a significant problem. Take oil sands, for example. The cost of developing Canadian oil sands is rising. This means that only the major oil companies can afford to get in on the action. Smaller companies won't be able to drum up enough capital to get their projects rolling.

The same is true for oil shales and deep-water drilling. The potential of these two sources is huge. Yet only a few companies are attempting to develop the oil-rich shales in Utah. The process involves heating the shales underground for easier oil extraction.

This was the point of view of my friend at Jack's. He sees these big oil companies as the only investment opportunities. But I wanted him to see the bigger picture.

"What you need to realize is that these big oil companies are ripe for the picking. They need to get their trucks from somewhere, right? Drilling rigs don't just fall out of the sky."

He perked up at the suggestion. "That might be true . . ."

"It's more than true," I interjected quickly, "there are hundreds of other companies milking every last dime out of the Exxons of the world. Right now, drilling companies are making record amounts of money by charging an arm and a leg for the use of their offshore rigs."

I could see the wheels turning in his head. As much as I wanted to stay and keep talking to my new friend, the bartender looked at me in irritation. Last call was over a half an hour ago, and my pitcher was half full.

But I didn't want to leave the guy empty-handed. I wrote down a place he could go to start making some money from those higher oil prices--The Pure Energy Report.

Even if he doesn't have nine hours a day to analyze the oil industry, I do.

Until next time,

Keith Kohl