An Everlasting Bull Market in Energy

Keith Kohl

Written By Keith Kohl

Posted September 24, 2011

“Oil is not the future!”

At one point or another, every energy investor has faced this outburst.

It’s the first thing shouted by one side of the energy fence to the other… and to a certain extent, it’s true.

To this day, I haven’t met a single person who believes crude oil will last forever, the precise reason it is considered a finite source of energy.

The problem has never been completely running out of oil…

But those last barrels of oil will be so incredibly expensive to find and drill that we will have long transitioned (we can only hope) to another, cheaper source of energy.

The Everlasting Bull Market in Energy

This future, however, is much more distant than we might believe. And the latest International Outlook released by the EIA last Monday has reiterated that fact more than ever.

There’s no question about it: Energy is truly an everlasting bull market.

Next year, the world’s population is expected to exceed seven billion. Further down the road, you can just ask one of the ten billion humans that will be around in 2050.

Of course, our energy picture will not have changed much.

The fact is we’re staring down the barrel of a fossil-fuel-filled future, as you can see in the EIA’s latest outlook to 2035:

EIA 2035 energy picture

The EIA expects global demand for crude oil to climb to 112 million barrels per day.

For the sake of argument, we’ll assume that global production will be able to even reach that amount (we’ll tackle that issue next week). By then, we will be wishing that oil prices were under $200 per barrel.

There’s a rub in all of this. The oil we are producing today, let alone in 2035, isn’t the cheap stuff we’ve been accustomed to in the past…

Consider how far conventional production will have declined over the next twenty-three years.

Naturally, the EIA is fully aware of this, too. According to the report, production from unconventional sources grows dramatically, accounting for more than 12% of the world’s liquid supply by 2035.

In fact, every sector is dominated by the three major fossil fuels. And even though the numbers have changed slightly, the outlook hasn’t…

My colleague Nick Hodge hit the nail on the head yesterday with an article showing you why China’s hunger for energy will be insatiable.

They won’t be alone; you can count on that much. And it’s this upcoming battle to lock down future energy security that will all but guarantee an everlasting bull market in energy.

Tomorrow’s energy profits won’t come from the same companies that have been supplying the world’s energy in the past. Unfortunately, they’re being squeezed out by the National Oil Companies that control nearly all of the world’s oil reserves.

And if you’re the type of person constantly on the lookout for a better way to put your money to work, here are some of the best investment stories to cross my desk this week…

$267 Billion and Counting: They Just Got Away with History’s Greatest Oil Theft
It was a simple geological twist of fate that stole as much as $267 billion in oil revenue right out of Saudi Arabia’s hands. And perhaps the most profitable part of this story is that these barrels are still untapped! 

Revolutionizing Nuclear Technology: Side-Stepping the Nuclear Crisis
In the wake of Japan’s nuclear crisis, a small group of rogue MIT scientists have hatched a plan that’s about to kick-start the nuclear renaissance, thanks entirely to one major breakthrough…

Rare Earths Will Be Hot for Years to Come: Bush’s 2007 Energy Law Sparks a Rally in, ahem, Light Bulbs
There’s a household product you use every single day that has increased more in value this year than gold. And in the weeks and months to come, I expect speculators to buy up all the available supply in attempt to sell them to you at much higher prices. Learn how to play this growing supply/demand story to your benefit.

Natural Gas Outlook: The Secret Behind the Kitimat Connection
Your natural gas investments are about to become much more valuable. Those of us who have been paying attention all along are already reaping the benefits.

Is It Really Possible to Ignore the Fed?: No Avoiding the (Golden) Elephant in the Room
A tech stock to short now, another to short soon, and more gold calls.

One of Five Places Left for Oil: U.S. Sells Out to French
How oil has beaten gold for the past 14 years… why U.S. companies are selling out to the French… and why one of the last five unexplored oil spots on earth is heating up… plus Cove Energy up 35% this month.

Storm Computing: The Next Tech Boom: Cloud Computing was Big; Storm Computing is Going to Be Even Bigger
Computers, the Internet, Google, Facebook, and cloud computing have developed at progressively increasing speeds. Storm computing is next — and economic weakness will drive it faster than all the rest.

Massive Mine in Canada: This Could Meet America’s Needs Forever
Next Tuesday I will be visiting Fort McMurray in Alberta, Canada, and I’m taking two of our editors along for the ride. Each has his own interests in this trip… and promises to bring his readers a blockbuster opportunity.

Wall Street Protest Opportunities: How to Profit from Wall Street Protesters
Editor Jeff Siegel offers his take on the Wall Street protests and new opportunities during times of economic uncertainty.

Canadian Real Estate Bubble: Masks Massive New Chinese Mega-Trend
The Chinese are almost single-handedly pushing Vancouver real estate prices to extreme and unsustainable heights. The real tip for you is why they are doing it.

Investing Beyond Gold and Silver with Platinum: Atomic Number 78
Similar to gold, platinum is a soft, dense, ductile metal that is very resistant to corrosion. It is used to make everything from jewelry to the coating for jet engine fuel nozzles and other devices that must work reliably at high temperatures for long periods. And now it’s something you want to buy.

Global Resource Crunch: The Chinese are Coming
What China is teaching us is that the western economic model — the fossil-fuel-based, automobile-centered, throwaway economy — will not work for the world.

Enjoy your weekend,

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Keith Kohl
Editor, Energy and Capital

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