Readers continue to write sensibly about subjects related to energy. Most comments in the past rendition of the Energy Mailbag address the pros and cons of using ethanol as a gasoline substitute, a subject that'll be with us for years to come. But I've also received Foolish missives on other energy topics.

For instance, one of my recent Fool pieces, "Are We Headed for a Wall?" dealt with oil consumption and production. With predictions that by 2030, global demand will reach the equivalent of 115 million-120 million barrels of crude per day, but the world may not be able to produce more than 100 million barrels a day. The result likely will be disruptions and confrontations on a global scale. The term for this shortfall is "peak oil," and for too long it's been considered a concern of the lunatic fringe.

Internet loons
Lou responded to the piece -- which was based in part on a Wall Street Journal article -- by observing:

I find it perversely fascinating how for some time now all companies and others have been making statements that were perfectly in line with the predictions of basic peak oil theory -- we use the easy, cheap oil first, and as demand grows and those fields begin to peak, we increasingly turn to the more expensive fields in places like 27,000 feet below the surface of the Atlantic Ocean, etc. But they never use the term 'peak oil' and risk sounding like one of the Internet loons.

The piece also inspired this from Larry:

I noticed your article on Motley Fool. I'd urge you to look into the solar companies as possible investments. Rising prices will make solar very practical. Not so much the home solar roof, which still has a way to go, but large-scale plants in the desert.

I agree with Larry about the potential of solar. But, like ethanol, it's only one solution among many for the problem of insufficient oil supplies.

Mike rang in with:

As Pink Floyd sang on 'The Wall,' we don't need no education! And that apparently is the position of the U.S. government on the energy issue. As your article says, there are many smart individuals in the oil industry who believe that the supply/demand equation for oil will be very strained (to say the least) much sooner than most people out there realize, especially our Congress.

Not a bad idea
To my admitted bias toward the oil services group in the face of rising crude prices, Henry asked, "Why skip over the Canadian royalty trusts that are paying dividends of 10% to 16%? It would seem that this is a future double play?" Whether or not Henry's right about the double play angle, yields in that range admittedly render the royalty trusts from north of the border interesting.

Wendell wrote in with a big-picture concern:

Thank you for starting this service. This energy sector is of great interest to me. I would like to know your thoughts on mid-$90s oil related to the current U.S. and world markets. It seems that one used to see drops in the market with upward moves in the price of oil. As of late, all I hear talk of is the credit problems related to U.S. markets and some effect on world markets.

It's my belief, Wendell, that crude price increases have joined forces with the now infamous credit crunch to create the sort of perfect storm that's resulted in the market's recent volatility. And while slippage in the U.S. economy could result in lower crude prices, I'm not one who believes that mid-$90s oil is likely to be a temporary blip.

Opportunity in a pullback
Finally, Brian wrote:

The bulk of my investments are in an S&P index. ... There are a lot of energy stocks in those funds,including Transocean (NYSE:RIG). ... I have a small position in Valero (NYSE:VLO). In your opinion, are there any energy companies worth doubling down on, or should I concentrate on other areas in my individual stocks. They make up 4%-5% of my portfolio, and the available dollars are limited.

The answer is complicated, Brian. Energy was the top-performing sector in 2007 -- but that strength could make 2008 somewhat challenging for the group. As such, the way I'll likely approach energy as we enter the New Year will be to watch for pullbacks in companies I consider solid, such as Schlumberger (NYSE:SLB), Halliburton (NYSE:HAL), Baker Hughes (NYSE:BHI), or Diamond Offshore (NYSE:DO). Given what I consider to be a solid retrenchment, I'll slowly initiate or add to positions in those names.

Please keep your communications coming, Fools. As I noted to Brian, the energy sector will be quite challenging during 2008, so for that reason, the more information we share on the group, the better off we'll all be.

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Fool contributor David Lee Smith owns nary a share in any of the companies mentioned. He does welcome your questions and comments. The Fool has an energetic disclosure policy.