It really is quite pathetic.
When you take a step back and look at all the things we do in an effort to secure more oil and gas, you realize just how futile it all is.
We risk our lives, facilitate wars, foul up our environment, and spend the lion’s share of our treasure to fuel our cars and trucks — when really we should just embrace a modern alternative to the antiquated internal combustion engine.
But you and I both know that such a thing is not going to happen anytime soon… at least not at the level where we can expect any significant reduction in the demand for oil.
Today, oil’s around $100 a barrel. And no matter how much we squeeze from shale and stone, it’ll never come on fast enough and cheap enough to maintain that level.
I’m not saying you should expect to see $200 oil this year. But if you think oil’s ever going back below $80 a barrel for any significant amount of time, you’re going to be in for a rude awakening.
Of course, as an investor, I’m more than happy to capitalize on this reality.
Unstable oil-producing regions, the rapid increase in global demand, the rapid decline rates of shale production, and the overall rising costs of oil production in general make this oil and gas investor a very happy man. And you should be happy, too.
After all, as a reader of Energy and Capital, you’ve had dozens of opportunities to profit from both the domestic shale revolution and the basic fundamentals of supply and demand in global oil markets. And rest assured, there are plenty more to come.
A Short Revolution in Offshore Production
Every time I hear about some great new invention that’ll help us secure more oil and gas supplies, I just smile and nod my head.
It’s not because I don’t believe that new technology can enable the world to produce more oil. In fact, we’re always discovering new technologies that hold an enormous amount of promise.
But no matter how exciting these technologies always sound, we’ve yet to see anything that can bring on enough oil — fast enough — to quench the worldwide thirst for this stuff. In fact, just last week, we got another example of just how fruitless our attempts are.
On April 11, we got word that Royal Dutch Shell decided to abandon a new project that was designed to provide compression for a major Norwegian gas field — without the need for a platform.
The new technology was being hailed as a revolution in offshore production. But after costs skyrocketed and some engineers were still uncertain about the technology, operators of Norway’s second-biggest gas field were forced to accept that their dream of subsea compression would be deferred.
A Billion-Dollar Pipe Dream
According to Reuters, the field, which produces the equivalent of a fifth of Britain’s gas needs, will eventually lose its natural pressure, and subsea compression was seen as a cheaper alternative to building a platform.
Oh well. I’ll guess they’ll just have to chalk this up to another billion-dollar pipe dream initiative that’s gone belly-up. And I’m quite certain there will be more, too.
The truth is, any kind of offshore production — whether in the frigid waters of the Arctic or the temperate breezes of the Gulf — is only going to cost more and more as we move forward. In fact, the Norwegian Petroleum Directorate has estimated that the per-unit cost in Norway has already risen tenfold in the past ten years.
This does not bode well for those who think we can continue to rely on cheap oil and gas to power our world.
Yes, the shale revolution in the United States will certainly allow us to enjoy the benefits of increased domestic oil production and an influx of cheap natural gas. But it’s not going to last forever. And no matter how many new technologies the oil industry comes up with, they’ll never be enough to stop the inevitable.
It is for this reason I remain very bullish on U.S. oil production — particularly in the Petroplex, which Forbes recently noted was producing more oil than pipelines could actually handle.
The bottom line is that right now, the getting is good. And only a fool would ignore this opportunity.
Right now, I’m very focused on 16 Texas counties in the Petroplex. These, my friend, are the 16 hottest oil markets today.
My colleague Keith Kohl actually turned me on to these. And just a few weeks ago, I was in Texas conducting my own investigation.
After what I saw with my own eyes, I’m telling you right now, if you’re not staking your claim in the Petroplex, you must have no interest in making money. Quite frankly, this is nothing more than one of the easiest scores in the oil space I’ve ever seen.
If anything, just take a look at the map of the Petroplex in this investor prospectus.
I’m quite certain that in a matter of minutes, you’ll be placing your own buy orders for some Petroplex action, too.
To a new way of life and a new generation of wealth…
Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.
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