Dave Pursell is a managing director and head of macro research at Tudor Pickering Holt and Company, a Houston-based energy investment and merchant-banking firm. Pursell spent eight years at S.A. Holditch and Associates (now part of Schlumberger) and did a stint for Arco Alaska, where he helped manage field engineering and operations. Pursell holds B.S. and M.S. degrees in petroleum engineering from Texas A&M University. He exchanged e-mails with Robert Bryce in early December.

ET: We recently talked on the phone about peak oil. Where do you see the peak oil crowd as having their facts wrong?

DP: I am not sure when oil production is going to peak, but since Colonel Drake discovered oil, everyone who has called the top of oil production has been wrong. The initial peak oil theory developed by M. King Hubbert, used to accurately predict the peak in U.S. Lower 48 onshore oil production, is reserve-based…one has to know the reserve picture to make a peak oil projection. I find it interesting that many peakoilers have also been very vocal about the lack of solid global reserve data.

ET: You’ve said that natural gas provides a good comparison for what you think will happen with the oil market. Why?

DP: It may surprise people to know that United States natural gas demand has not grown in the past six years, even though there has been significant growth in the gas-fired power generation. U.S. gas production and Canadian imports effectively hit a plateau in 2000, at the same time many were predicting significant demand growth driven by the power sector. Because supply was not growing, natural gas prices (and not demand) grew as increasing gas prices acted to moderate demand growth. The market worked.

ET: While we are talking about gas, given the non-existent growth in U.S. demand for natural gas, do you expect prices to stay flat? Is there any good news for the domestic natural gas market?

DP: We expect more onshore gas production in 2008 and, believe it or not, flat Gulf of Mexico production. The GOM has been in decline since 2001! LNG is also likely to grow in 2008 and 2009. But there is good news. Canadian production is poised to decline in 2008 due to several recent tax changes. Also, as long as the U.S. economy grows, the U.S. power sector will consume more and more natural gas. Finally, we expect natural gas will be treated favorably (compared to coal and oil) when carbon tax legislation is eventually passed, probably after the 2008 presidential elections.

ET: Last February, your firm did a report on the growth of the global LNG market. Are you still bullish on the growth of LNG? And what’s your take on the prospects for marine compressed natural gas (CNG)?

ET: Which sectors of the energy business are most attractive to you now? Which equities do you like?