Calgary Herald:

Consumers shouldn’t get too comfortable with cheap gasoline, because the planet is running out of oil and prices will go "sky high" — as high as $20 per litre — as petroleum reserves dwindle in the coming years.

That’s the view of Jim Buckee, the British oilman who was CEO of Calgary-based Talisman Energy Inc., one of Canada’s largest energy producers, from 1993 to 2007.

Black oil has peaked," he said in telephone interview this week. "The biggest oilfields in the world have been producing for 50 years and they’re all getting tired."

He says no giant oilfield, capable of replacing those in Saudi Arabia, Iraq or Kuwait that produce more than half-a-million barrels a day, has been discovered and developed since the 1970s.

That fact, coupled with rising demand means "we’re going to need a new Saudi Arabia" to sustain existing reserves into the future.

He calls the current recession a mere "hiccup" on the road to much higher energy prices.

Once it’s over, in 18 months or so, he says the pressure on oil supply and demand will "snap back higher, and stronger than before."

My comment: That is certainly my view also. I expect the old highs in oil to be crushed simply because these abnormally low prices have severely curtailed reinvestment in capacity and yet depletion continues unabated. I think we will make even more money the next time up as there will be fewer companies to invest in during the next cycle.

John Polomny
The Real Deal