Believe it or not, there may be one compelling reason why we'd rather not crawl out too quickly from the economic crevasse into which we've fallen. Remember less than a year ago when crude was flirting with $150 a barrel? A sudden solution to our mounting economic difficulties in the face of declining oil production just might slingshot prices higher than we'd like to have them.

Crude slide has its negatives
Let's look for a minute at some of the effects that the slide from $147 a barrel in July to around $50 today has had. The good news, of course, is that you've been able to pull up to the pump and fill up Ol' Nellie for a pittance compared to what it would have cost a year ago. $4.00-a-gallon gasoline has fallen less to than $2.00, as crude oil has plunged by two-thirds.

However, there's another effect to all this, one that hasn't received major attention from the mainstream media, but is certain to nab us in our hindquarters once the economy begins to strengthen -- which optimists are predicting could occur later this year. That effect involves the reduction in spending for the search for oil and gas by the exploration and production companies.

As such, millions of barrels a day likely are already being lost to the world's supply. That probably seems inconsequential, with constant reports of declining energy demand in the developed nations. But add a little oomph to the global economy, and the results could be quite different.

A continuing trend
Even before the pullback in spending for energy projects, most of the majors' annual production was declining. ConocoPhillips (NYSE:COP), for instance, whose largest shareholder is none other than Warren Buffett's Berkshire Hathaway (NYSE:BRK-A), replaced less than a third of its production last year (although management assures investors that the actual number is closer to 80% due to uncounted North American reserves). Beyond that, annual production at such other members of the Big Oil contingent as Royal Dutch Shell (NYSE:RDS-A) and BP (NYSE:BP) have been on a multi-year slide.

This is all concerning enough in the abstract, but another key may be the changes that are occurring in several of the world's significant producing nations. Let's take a quick tour of just three of the areas where crude production was once up, but now shows signs of flagging.

  • Canada: While the United States consumes about 20 million barrels of oil a day, about two million barrels come from Canada, which makes that nation the U.S.'s largest supplier. The difficulty with Canada's production is that the crude oil is salvaged from gooey sands in Alberta that are economically pretty much feasible only with oil prices of $65, or even $85-$100 a barrel for future projects. And with crude sitting in the vicinity of $50, the future of oil-sands projects have been put on hold as companies have slashed their capital expenditures.
  • Russia: The Putin regime was built on the nation's energy infrastructure. While Russia isn't a Saudi Arabia or an Iraq as it relates to proven reserves, its 60 billion barrels aren't paltry. At the same time, its production has been pushed hard enough that only the Saudis exceed its daily output. But the nation's wells have been mistreated and stocked with substandard equipment, and so production is descending. That being the case, I'd be surprised if Russia's tired old wells recover their former verve anytime soon.
  • Mexico: Our neighbors to the south have capitalized on one of the world's largest entrapments of oil, the Cantarell field. But now Cantarell, like a lot of older fields is tiring, and its daily output is declining. As a result, the country is now in the early stages of enlisting the aid of international oil companies in an effort to raise production -- or at least to slow its decline. Thus far the likes of Chevron (NYSE:CVX), Petrobras (NYSE:PBR), and Spain's Repsol (NYSE:REP) have displayed interest. But I suspect it'll be a difficult task to reverse Mexico's slide.

Good and bad effects
The key is that the world's leaders are working feverishly to achieve a cure for the world's economic maladies. And when the turnaround does occur, we likely will be socked by oil -- and possibly even natural gas -- shortages that now are probably the farthest thing from most folks' minds.

Given all this, my strong suggestion is that Foolish investors conduct a careful portfolio check to ascertain that there is strong representation from both the producer and services sides of the energy sector. The result could be attractive profits, perhaps far sooner than you might have expected.

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