This from Energy and CapitalUnfortunately, as I discussed in my...

This from Energy and Capital

Unfortunately, as I discussed in my article last week, when the prices of oil and natural gas are as low as they are now, it no longer pays some companies to continue to produce it. The ones operating at the margin of profitability—the ones working the most difficult and marginal resources, with the highest cost structures—are simply getting priced out, laying down their rigs and cutting back on their expansion plans.

The contraction of new oil and gas development due to low commodity prices and difficulty in obtaining credit is setting us up for an "air pocket" in energy supply. When we hit that air pocket, somewhere around 2010, it will create an especially fearsome spike in oil prices.