As the dust settles on the implosion of oil prices, investors are left scratching their heads. What about declining worldwide production in existing fields? Those millions of Asian consumers within reach of an affording that first car? China's incredible growth? Peak Oil Theory? Gasoline at $10 a gallon?

Not so scarce after all

In addition to industry concerns that a recession could cause oil demand to decline, research suggests that supply may not be as constrained as we once thought. The influential Cambridge Energy Research Associates, for instance, recently reported that we may not reach peak oil production until 2030.

Exploration projects are finding oil in many new places, most of them offshore, in deepwater reservoirs miles below the seabed. The Brazilian oil giant Petrobras (NYSE:PBR) has discovered numerous fields along its coast, including the famed and massive Tupi field. Announcing the find in a speech, Brazilian president Luiz Inacio Lula da Silva declared, ''God is Brazilian." Petrobras CEO Sergio Gabrielli emphasized that the 5-billion-barrel Tupi was ''tiny'' in comparison to what he expects can be recovered in the larger surrounding area, the Santos Basin.

The Gulf of Mexico has its own rock stars -- literally. Chevron (NYSE:CVX) is close to beginning operations at the eyebrow-raisingly named Blind Faith Field and platform. BP (NYSE:BP) operates the Thunder Horse Field, an ultra-deepwater platform project in which ExxonMobil (NYSE:XOM) owns a 25% stake. Thunder Horse is the world's largest floating platform, poised to produce 250,000 barrels a day.

A seismic shift in mentality

Offshore production is increasing, and the industry may soon be asked to reconsider its basic assumptions about oil. Over the past few decades, a number of industry experts and geologists have conducted research suggesting that the origin of hydrocarbons may be abiogenic, not organic. Stated simply, the abiogenic oil theory posits that oil is not formed from plants and animals compressed for millions of years in sediment rock. Instead, oil is a primordial substance created before the formation of Earth, and found deep underground.

All quiet on the western front

The abiogenic theory raises questions about both "peak oil" and the conventional wisdom that petroleum is a "fossil fuel." The theory is not widely discussed in the West, though it has proponents dating back more than a century.

Deepwater wells are teeming with abiogenic potential. As early as 1995, a New York Times article quoted Dr. K. K. Bissada, a Texaco geochemist: "I think we pump oil out much faster than oil can come in. ... But from a long-term perspective, I believe that hydrocarbons are coming in from great depths and are filling the newer reservoirs at shallower depths.'' Stop and read that again.

Replenishing oil reservoirs makes perfect sense if we think of oil as akin to magma, which comes from deep in the Earth, rather than a substance created from dead ferns compressed for millions of years. Will oil turn out to be a near-infinite resource?

No matter what you believe about the origins of hydrocarbons -- personally, I'm an abiogenic proponent -- the good news for investors is that these new deepwater wells undoubtedly hold a substantial amount of oil. As exploration efforts intensify, we're finding oil in places once thought impossible, such as 25,000 feet below the seabed.

Oil's worst month in history

Last month's spectacular collapse in oil prices, the biggest monthly drop in history, is yet another chapter in the energy-price roller coaster. Fears of a global recession, margin calls, and flight to the dollar brought crude oil down from $99 per barrel to just less than $68, and the share prices of virtually every energy company have cratered alongside it.

But despite recent shocks, powerful dynamics still indicate that oil has been oversold and will trade higher over the long term:

Petroleum consumption from BRIC countries and the Middle East will inevitably rise, and supply will struggle to keep up.

Flight to the dollar may fade, especially as the United States and other countries like China spend billions of dollars on stimulus plans.

Drilling costs doubled from 1999-2004, and they'll only continue to increase as onshore wells dry up and production shifts to more expensive offshore sites like the aforementioned Tupi and Thunder Horse fields.

The Foolish bottom line

Energy remains a complex but promising industry. One smart way for Fools to play these trends is to check out energy service companies. Whether we see $50 or $150 oil, someone will have to get the stuff out of the ground. According to the just-published International Energy Agency's annual report, the world will need to spend more than $26 trillion by 2030 just to keep up with a projected 1.3% annualized growth in energy demand.

In short, service companies with the equipment, resources, and knowledge to handle increasingly complicated (and lucrative) logistics will make make lots of money.

So while traders are panicking, investors should be salivating. Shares of such deepwater oil services companies as Transocean (NYSE:RIG) and Diamond Offshore (NYSE:DO) now trade at prices close to half of what they were before 2008's ''Magnificent Margin Call.''

New players are also coming onto the scene, including everyone's favorite dry bulk shipper, DryShips (NASDAQ:DRYS) . CEO George Economou recently purchased the Norwegian driller Ocean Rig, which operates two deepwater drillers; four more are on order, expected to be delivered in 2010. Due to an industrywide sell-off, DryShips' stock has nonetheless been cut in half in just the past month.

Our Motley Fool Hidden Gems small-cap newsletter has picked out three promising energy services companies that we believe will continue to profit from these trends. You can see what they are by clicking here for a free 30-day guest pass to Hidden Gems.

Fool contributor Matt Hoffman believes Spinal Tap was the artistic pinnacle of rock music. He owns shares of Dryships. Petrobras is an Income Investorrecommendation. The Motley Fool is investors writing for investors.