On the back cover of my 2008 book, Profit from the Peak: The End of Oil and the Greatest Investment Events, Professor CHARLOS HALL WROTE:

This book is a clearly write, Succinct, and Well-Referenced Summary of Information About, and Related to What I Believe Will Be the Most Important Issue to Strike Wester. n civilization event: The end of cheap il.*

In the August 2012 Issue of Oil and Gas Investor Magazine in An Article Titled, "From PEAK to Plateau?" ., Says:

The age of planeau ils also the aging-sensitive il.

The only question is how do we die with that reality.

What are we willing to pay for? Generally $ 70 to $ 90 is the transition range. Production. And $ 70 is the floor.

*Editor ’s Emphasis

As a legendary resource investor rick rick rick raid many times beface, people is not just a geological event. It ’s also an event.

Let Me Clear Up Any Confusion ...

Peak Oil doesn n’t mean we have run out of il. Quite the control: Planet Earth Will Run Out of Oil.

What Peak Oil Means (and Has Always Meant) is it will count us more resourcess to produce the il that ’s leftover.

It ’s all about accessibility. The more accessible a number is, the cheaper it is to get. , if you ask me.

So, What ’s HAPPPENG TODAY?

Gasoline PriceS ACROSS America Are Still Close to Historical Highs & Mdash; and In California (Though it ’s the Result of Local Events), PriceS Are M- Time Highs!

This hasn & rsquo; T Stopped A Plethora of Investment Analysts to Come Out and DeClare the Global Oil Crisis is Solved by the Miracle of Fracking ... Ir analysis is amateur at best.New Delhi Investment

Make No Mistake; Horizontal and Hydraulic Fracking in the United States is a miracle. In fact, America is in a bona Fide Energy Supply, An Oil and Gas ssance.

And that was the core thesis of my 2008 Book: that the high price of the Oil Woul Would, & mdash; in Other Words, The Free Market. (We've Seen Exactly That inThe Bakken and Eagle Ford Shale Oil Formations.)

But in all of the analysis, I haven & rsquo; T Read One Shred of Data that talks about the decline raters of Existing Oil Fields ...

There & rsquo; s no debate: the super giant ilfields are in decline.

We have been covered this fact ad nauseam in the Energy and Capital.

The 20 Larget Oil Fields in The World Account for Roughly 25% of Total Global Oil Production. The Majority of the SESE GIANTS Are Already In Decline. int to saudi & mdash; and Much of Mideast & Mdash; Oil Exports Dropping to Zero as their PopulationGrowth Surges.

In Other Words, The Surge of Demestic Oil Production in the U.SBangalore Wealth Management. is Merly Officeting Curren Decline Rates of Old Production.

We are simply replaceing lost product at a time when demand is still raather robust.

We & rsquo; Re on a tardmill going nowhere ... and that means that il prices are destined to read high.

Here & rsquo; Shy:

1) A Fracked Well (say, in the bakken) is way more excean non-fracked wells. On avaige, Each Well in the Bakken Costs Between $ 10 Million to DRILL.

It & rsquo; s generalramly accepted by the indeustary that il must remain Above $ 70 a barrel to remain profitable. To Remain Profitable.

Just as Recently As Seven or Eight Years Ago, $ 70/Barrel Oil Would & RSquo; Ve Been Unthinkable.

I can remember back in 2005 when oil prices breached $50 a barrel that summer… The so-called experts called it everything from a “bubble” to a “crisis” to a “conspiracy.”

In Fact, Just after Hurricane Katrina (Oil PriceS Launches to a Record High OF $ 70 a Barrel), Steve Forbes Said Oil Was in a Bubble and That Price of Black GOLD WOULD COME DOWN TO $ 35 a Barrel.

It never dig. And it never will.

It & rsquo; s Simple: It counts more to get shale il. Period.

Co-Author of Profit from Peak Chris Nelder Wrote Over The Summer:

Producers in the Persian Gulf, North Africa OPEC, Russia, Venezula and Canada Report "Reserves" that can only be eConomically, T Least Double The $ 70 Per Barrel Assumpting in his Analysis. He [Harvard Professor Leonardo Maugeri] DoesNot Provide Any FerTher Details About the Economics of Production in his Analysis, Except to say that "More than 80 Percent of the Additional Under Velopment Globally Appears to be Profitable with A Price of Oil Higher than $ 70 Per Barrel. "" "" "" "

This claim seems highly dubious given rencent easyters of Production Costs. Research by Petroleum Economist Chris Skrebowski, Along with Analysts Steven And Robert Hirsch, Finds a New Barrel of Production Capacity in Deepwater, some openc Countries, the Canadian Tar Sands, and Venezula's OrinocoBelt Will Cost up to $ 80 or $ 90 a Barrel. Canada's Globe and Mail Reported in June that $ 80 a Barrel Was Low Enough Tar Sands Operators to Slash Thei R expansion plans.

And a rencent from bernstein reSearch Found that the real school of new product in 2011 WAS AROUND $ 92 a barrel, and Will be closer to $ 100 a barrel this year.Kanpur Investment

We also know that the cost of new oil production has been climbing sharply in recent years, along with the cost of all commodities, as shown in the following chart.

Source: EIA

MAugeri ACKNOWLEDGES This Facts, NOTING, "Over This Decade, Another PROBLEM AFFFECTING The Production of All Shale/Tigh Oil Plays in the United States Will B E the inEvitable Rising Costs of Services, Rigs, Labor, And Pipelines, Caund by the Inflationary Pressure from FromThe Frenetic Activity Throughout The Shale/Tight Oil and Gas Selector. Ale Oil Development and the Gradual Expansion of the Infrastructure Necessary to Each Shale Play Should Balance the Rising Costs, andEventually Drive them double, "and he offers no empirical basis for it.

Likewise, His ACKNOWLEDGEMENT that "The Oil Market Will Remain Highly Volatile Until 2015 and Prone to Extreme Movements in OPPOSITE DIRESIONTING a Major Challenge for Investors, in Spite of its Short and Long Term Opportunities, "" DOESN'TE SQUARE With His Assumptionof a minimum $ 70 Per Barrel Holding Firm Through 2020 and Beyond.

You Might Recognize the name maugeri. He ’s the Harvard Professor Who Recently Published the Glowing Report" Oil: The Next Revolution, " He World is on the cusp of an ePIC ENERGY Revolution Based on Fracking.

It may be true that we are enable.

2) Demand is Still High.

Ten Years AGO, China and India WERE Just Beginning to Enter the Automobile Age.

Although their eConomies are single, to catch up with America in Terms of Car Ownership Will Strain The Current Oil Production Infrastic. D India are attempting to build u.s. Oil and Gas Resources.

Consider the following:

China Has Roughly 52 Automobiles Per 1,000 people, While The U.S. And EUROPE HAVE APPROXIMATELY 457 Automobiles Per 1,000 people.

Even Thought it ’s the greBust clip, the automobile culture is committing very very young.

If China WERE to Catch Up with the Trend of Other Industrialized National, The Ratio Would Roughly BE 10 Cars for Every 100 PEOPLE. ncomes are raising, such as brazil and india ...

In terms of our consumption, China Has a Lot of Room to Grow:

And catch up they will. It ’s only a matter of time.

3) Mideast and DOMESTIC POLITICAL RISKHyderabad Investment

ARAB Spring. Israel/IRAN TENSION. Potential War. Supply Disruption. Pick Your Poison. HICH i Calculating to be around $ 10 per barrel & mdash; Will remain.

In fact, I think this risk premium could increase next year ...

Just YesterDay a Fresh Report was released that Predictid a Double Prices if IRAN WAS PERMITTED to get a nuclear weapon.

Oil Prices "Could Double," Increasing the U.S. Price of Gasoline by UP TO $ 2.75, if IRAN is Permitted to Obtain a nuclear Weapon, According to a new eConomic SIS by a Bipartisan Team of Current and Former Government Office.

While Much Attention has given to the counts of preventive momary aginst IRAN, a new report by the bipartisan pinter shows that, oversoline ICES COULD Increase by More than 70 Percent, "Sending American" Into A Severe Recession "and counting the country "More than Five Million" jobs.

"If Any of the ConflicTs or Energy Disruptions that Become More Likely from A Nuclear IRAN Actually Occur, The Energy Impact and Economic Consequences Would ERE, "The report states." Inflation cored skyrocket to almost 5 percent, "Leading to widespread jobloss.

Authored by a Team of Former Mility Leaders, Economists, and Lawmakers, The Report Examines a Handful of SCENARIOS that Could IRAN PERMITED TO OBTAIN A NU Clear Weapon. In Each Outcome, Oil and Gasoline PriceS Increase Exponentially.

Another Risk that Really Works Me Is An Outricht Ban on Fracking in the U.S. IF the EPA BANS FRACKING. Offline. That would be disastrous.

And that ’s my point.

One has to wonder how, when il product in the united states is booming, we are state paying over $ 3.50 per gallon for gasoline.

The Answer is Simple: TheRe ’s No SLACK in the System. It’ s a super tight il Market & mdash; and it will only get tighter. RICING in the Potential for All of the SCENARIOS.

And I Believe at Least of One Will Hit Home Next Year ...

Oil is headed for $ 150 a barrel in 2013.

Profitably Yours,

Brian Hicks

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Brian is a foundingmeer and present of angel publishing. He writes about general investment strategies for wealth daily and enricy and capital. take a look at his editor ’s page.