Betting on Natural Gas, Part II: Investing Ideas

Just as important as deciding to go long natural gas is how that view is translated into an investing strategy. The value chain of the natural gas industry, shown below (Source: Wikinvest), provides a good overview. There are numerous investment opportunities throughout the value chain that can be capitalized upon.

Betting on the actual spot price:

1. Buying natural gas futures outright – If you have access to the futures market, are experienced enough to understand its intricacies and have enough capital, then take a dip in natural gas futures. The December futures are already trading at a 14% premium to the November futures, on the hopes of a cold winter pulling up demand. Inexperienced investors should probably stay away from the futures market.

2. Buying ETFs that hold natural gas futures – The biggest and most liquid one of these is the United States Natural Gas Fund (UNG). Many authors on Seeking Alpha have mentioned how UNG has been doomed by the contango in the natural gas market. UNG just finished selling its holdings of front-month contracts and rolled into December contracts this week. The premium on the December futures mentioned above means that UNG always sells low and buys high during rolls. For that reason, I would not recommend UNG. The Claymore Natural Gas ETF (GAS) on the TSX holds futures of Alberta natural gas, unlike the UNG which holds NYMEX futures. As it turns out, the contango on NYMEX futures is steeper than that on Alberta natural gas, helping GAS reduce its rolling costs. If you’re really sure of your bets, consider HNU, a 2x long natural gas ETF trading on the TSX.

3. Buying natural gas royalty trusts – To avoid the costly contango issues, take a look at royalty trusts like Hugoton Royalty Trust (HGT) which pay monthly dividends based on the basis of the price of natural gas. However, many of these trusts behave in sync with the general stock market, which takes away from a pure play in natural gas.

Betting on the producers and movers:

1. Buying the gas explorers, drillers – The most popular of these being Chesapeake Energy (CHK). The stocks of the producers however are likely to be affected by the general market conditions as well, as opposed to just the natural gas price. Another well-established company is Devon Energy (DVN) and like CHK, it is involved in both oil and gas markets. It is rare to find established companies which focus only on natural gas exploration. Internationally, Gazprom owns roughly 75% of Russia’s and Eastern Europe’s natural gas reserves.

2. Buying the gas movers – Gas that is produced needs to be moved to where it’s needed. Natural gas is transported mainly through pipelines and some major players in this industry are NiSource (NI) - owner of the largest natural gas pipeline in the US, Northwest Natural Gas (NWN), Nicor (GAS) and Piedmont Natural Gas (PNY). All of them sport some very healthy dividend yields as well and have relatively solid balance sheets. A huge company involved in both producing and transporting gas is Encana (ECA). ECA is has a very stable revenue base thanks to a large portion of its business being regulated and it provides one of the best avenues to benefit from increases in natural gas.

3. Buying a sector ETF – If you’re looking to invest in this sector but with diversification, look at a sector ETF like the First Trust ISE-Reverse Natural Gas Index fund (FCG) that replicates an index invested in natural gas exploration and production companies. It is one of the only ETFs that provides an opportunity to invest in a range of natural gas companies while having a reasonable expense ratio of 0.82%.

The best options for taking a long position towards natural gas, in my opinion, are either through getting direct exposure by investing in a commodity tracking ETF or investing in the gas movers which have the scale and size to provide a stable stream of dividend income while also standing to benefit from rising natural gas prices.

Disclosure: Long GAS on the TSE.

Comments

[redbaron:]

While I can't claim any particular expertise on the subject, we are long COP, XTO, HGT, and a few others as well. We think that one should try to have some income from these investments, while waiting for the strategy to work out.

Natural gas has to be part of our country's overall energy policy, or so we think, because, 1) we have so much of it, 2), it burns clean, 3) we don't have to import it. We need to be doing more working toward adapting this fuel for transportation uses. We are also long CLNE, but that of course does not generate any income.

Oct 23 09:05 AM

[Shishir Nigam:]

COP also is another very good option. It has a wide base of operations and a solid balance sheet. Though in recent weeks, I feel it has gone up too quickly and might be due for some correction.

I agree with your view redbaron, there are numerous sites that have been discovered in the US there could be shale gas and opportunities to utilize new drilling technologies. There is definitely a possibility of the US becoming fully self-reliant through the use of that new production, provided enough investments are made into it.

For more analysis, head to my blog: youngandinvested.com


On Oct 23 09:05 AM redbaron wrote:

> While I can't claim any particular expertise on the subject, we are
> long COP, XTO, HGT, and a few others as well. We think that one should
> try to have some income from these investments, while waiting for
> the strategy to work out.
>
> Natural gas has to be part of our country's overall energy policy,
> or so we think, because, 1) we have so much of it, 2), it burns clean,
> 3) we don't have to import it. We need to be doing more working toward
> adapting this fuel for transportation uses. We are also long CLNE,
> but that of course does not generate any income.

Oct 23 10:42 AM

[doublebogey:]

You kind of missed the boat. Mid stream MLP's are in for a very long and steady bull market in appreciation and distribution increases as nat gas usage increases regardless of the price of the gas itself. Perhaps you are not aware they exist? Another reason to buy them as you have a lot of company.

Oct 23 11:51 AM

[Mad Hedge F...:]

wwt I received another scratchy, crackling cell phone call from my drilling buddy in the Texas natural gas fields today. You could almost hear the dust on the line. The doubling of prices in the last month is totally bogus, and is nothing more than a short covering rally ahead of the seasonally strong run up to winter. Storage facilities are completely full, and while the production cutbacks have been substantial, they are still not enough. Some companies, like Chesapeake (CHK), are even suicidally boosting production in a desperate attempt to offset falling prices with jacked up volumes, at everyone else’s expense. This is all setting up a fabulous short selling opportunity, possible in early December, once the winter draws are priced in. There is still a huge risk that production will overwhelm storage as more new unconventional shale and tight gas deposits are brought on line, leading to another collapse in prices. A retest of the September lows is a gimme, and the $1 handle is still a possibility. So those of you who were nimble enough to bite a hunk out of the recent pop in CH4, better use any strength to cash in positions. I’d love to get more out of my friend, but I don’t think my aged, arthritic back could take another three hours driving down washboard roads in a beat up pickup truck with no springs.

Oct 23 11:59 AM

[Alamo:]

Continuing our reliance on foreign national oil companies is absurd in view of the fact that we presently have proven reserves of natural gas to offset our "crude mania".

There appears to be overwhelming support in congress to transition this nation to one using compressed natural gas (CNG) in the national transportation sector although that body has been woefully slow to act. Quite possibly, at the end of the healthcare debate congress will get behind the CNG fueled transition issue.

Keeping the present 250 billion dollars currently being "exported" each year here in our economy has to be a powerful economic stimulous plan.

With 60 million homes in the US already served with natural gas and an increased availability of the home re-fueling units (Phill units) America could be driving on CNG relatively soon. Presently, those Phill compressors are too expensive to find widespread use, but I could see a situation where economy of manufacturing scale could make them more reasonably priced as well as more efficient. That potential 60 million market base should be a strong motivator.

Additional pertinent details on the positives of natural gas use in America can be found at :
America's New Natural Gas.com website

Oct 23 12:33 PM

[Shishir Nigam:]

Hi doublebogey,

What you refer to as MLP's, I had refered to as royalty trusts. In hindsight, MLPs would have been a better description for what I was talking about. Thanks for bringing it up.


On Oct 23 11:51 AM doublebogey wrote:

> You kind of missed the boat. Mid stream MLP's are in for a very long
> and steady bull market in appreciation and distribution increases
> as nat gas usage increases regardless of the price of the gas itself.
> Perhaps you are not aware they exist? Another reason to buy them
> as you have a lot of company.

Oct 23 01:47 PM

[Plan B Econ...:]

Eventually natural gas will trade up with oil. High oil prices will encourage a demand shift to nat gas. It could take a while, but one day we might be driving nat gas powered cars.

And the oil producers are sounding more pessimistic on the amount of oil out there.
www.planbeconomics.com.../

Oct 23 02:10 PM

[Manohar Men...:]

I have bought PEYUF.PK about 12% dividend , PVX 12% dividend& ERF 10% dividend & are good. They are all gas & oil drillers. Economy is up in other parts of world. GUYS AMERICA is not everything. This year we will buy 10 million autos vs 12 million for China & 2 million for India. Brazil, Russia, Mexico are all up. China just reported 7.3% up in economy & they say that they will be up 8% by year's end. So is India will be up 7%. Don't think that we have very large economy (It looks because dollar is still a base currency). We are paying 2400$ to 100, 000 $/day to attorneys that has propped economy to 13 trillion$. Otherwise it would only go to about 2-3 trillion if that much.
Because our policeman is paid 46000/year vs 4000 in China. Does he catch thieves 11 times that of China?
Does the attorney fights the lawsuits 100 times faster than China the tomorrow's SUPER POWER? No but our judges are cahuts with them & so are lawmakers. Because they get the cut also they own law firms.(Conflict of interest).

Oct 23 02:13 PM

[Analyste de...:]

There's no reason you can't drive a natgas-powered car TODAY, if you live in many metro USA areas.
gas2.org/2008/04/29/na.../
www.weststart.net/ccm/...
www.afdc.energy.gov/af.../

Oct 23 04:01 PM

[JohnDough454:]

CNG for transportation would be a major structural mistake for the USA. While we do have quite a bit of gas, shifting a large portion of autos to CNG means driving heating bills through the roof for much of America when supplies get tight. Just compare the amount of total energy coming from gas to the amount heading into the personal transportation market and apply Econ 101.

www.eia.doe.gov/emeu/a...

Cut out the middle step. Just go straight to electric cars such that we get transportation from the cheapest electrical supply be it wind, coal or whatever. And use less. That's the quickest way to cut cost and imports.

This current gas glut is similar to those in past decades. Drilling will fade a bit, the rapid decline in gas production will then bring us into balance generating the next price wave up. Playing futures or ETFs is ridiculous for the average investor. You simply don't have the same level of information to compete with Morgan Stanley or GS in the futures market. Better to buy their stocks than to just hand them money in futures.

Energy ETFs on futures get killed on the month to month rolls. Executing those rolls without getting a big haircut is a nightmare -- and I've watched it being done from 3 feet away back when these funds were tiny compared to what they have to deal with now.

Chesapeake has balance sheet problems. Way too leverage. Buy a better company if you just must speculate on NG.

Oct 23 07:13 PM

[bartpr:]

cap and trade is coming. utilities will find it cost effective to use ng . some are already in process. see business week oct 19 for the details. remember that ng has half the co2 emissions of coal. it is readily available and utilities can install the necessary combusters

also, be appraised that the epa has a ruling from the supreme court that co2 is a pollutant and emissions can be controlled. ng is the most cost effective way to reduce emissions at this point.

Oct 23 07:57 PM

[Jett:]

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It is the largest oil and gas producer in the US and one of the largest refiners.

BP also has a global network of around 22,000 service stations.

Vercipia Biofuels, our joint venture with Verenium, is progressing the development of one of the US's first

commercial-scale cellulosic ethanol facilities, which will produce 36 million gallons of ethanol per year from

energy grasses.


In partnership with DuPont, BP is developing the advanced biofuel biobutanol and constructing a technology demonstration facility in the UK.

Also in the UK, in partnership with British Sugar and DuPont, BP is constructing a 110 million gallon per year wheat-to-ethanol facility

Oct 24 09:05 AM

[tizod:]

What I would like to know is who is a BIG user of gas as part of their COGS? I would want to buy a stock where the drop in gas price will boost the bottom line. I would want a company that has had some financial strain, using this to assume they did not hedge a large portion of the gas price. I really have no idea who someone like this might be, but a name that comes to mind is Calpine (they may have other issues, so no recommendation). CPN is mostly nat gas production. They were in bad financial straights not long ago. I have no idea how to find out how "hedged" they are.

Anyone research companies that will see a boost to earnings off a low nat gas price?

Oct 24 09:41 AM

[Giulio Negr...:]

High oil prices will encourage a demand shift to nat gas. One day we will driving nat gas powered cars.

Oct 24 10:21 AM

[weiwentg:]

Under movers, there are also the pipeline MLPs. My favorites right now are Energy Transfer Partners and its GP (ETP and ETE) and Enterprise GP Holdings (EPE).

Oct 24 10:32 AM

[La Marque:]

Royalty trusts are Canadian; MLPs are American. Tax consequences should be taken into consideration when buying these.

An ETN such as AMJ or CEFs such as FMO or TYG are yielding about 8%.

Oct 24 10:47 AM

[oldmanlake:]

LNG or CNG is the bridge to the future for transportation in this nation --- whether the eco-nazis realize it or not...... and they may not allow this to be employed in their blind push for electric vehicles.... this same bunch, while pushing electric everything, is simultaneously fighting anything nuclear...... so WTH?

Oct 24 11:23 AM

[bradiop:]

I'm surprised in mentioned gas pipeline Co's there was no mention of EPD and KMP, both of which I thought were bigger than the one mentioned.

Agree on general theme and good article.
brad

Oct 24 11:34 AM

[Sandyk:]

Domestic producers of oil use natural gas to power production equipment; their costs are lower when gas prices are lower. Fast food companies are heavy users of natural gas. Fertilizer companies use natural gas as a feedstock.


On Oct 24 09:41 AM tizod wrote:

> What I would like to know is who is a BIG user of gas as part of
> their COGS? I would want to buy a stock where the drop in gas price
> will boost the bottom line. I would want a company that has had some
> financial strain, using this to assume they did not hedge a large
> portion of the gas price. I really have no idea who someone like
> this might be, but a name that comes to mind is Calpine (they may
> have other issues, so no recommendation). CPN is mostly nat gas production.
> They were in bad financial straights not long ago. I have no idea
> how to find out how "hedged" they are.
>
> Anyone research companies that will see a boost to earnings off a
> low nat gas price?

Oct 24 11:59 AM

[Shishir Nigam:]

tizod,

You point out a good strategy that would have been effective when the natural gas prices were still DROPPING, since the utilities/companies that you mention would be benefiting from lower costs.

But we could well have seen the seasonal lows in natural gas prices - take a look at Part I of this article for my logic for being long: youngandinvested.com/f.../. As a result, many of the benefits to these companies may already have been realized in terms of lower costs.

For more analysis, check out my blog: youngandinvested.com


On Oct 24 09:41 AM tizod wrote:

> What I would like to know is who is a BIG user of gas as part of
> their COGS? I would want to buy a stock where the drop in gas price
> will boost the bottom line. I would want a company that has had some
> financial strain, using this to assume they did not hedge a large
> portion of the gas price. I really have no idea who someone like
> this might be, but a name that comes to mind is Calpine (they may
> have other issues, so no recommendation). CPN is mostly nat gas production.
> They were in bad financial straights not long ago. I have no idea
> how to find out how "hedged" they are.
>
> Anyone research companies that will see a boost to earnings off a
> low nat gas price?

Oct 24 12:14 PM

[Shishir Nigam:]

oldmanlake,

LNG might well be the future of natural gas usage and that would greatly expand the markets which have access to any one local natural gas source. Once that happens, natural gas would behave a lot more like oil, affected by global demand rather than just local demand.

However, when I say future, I don't mean anytime soon. I mentioned in Part I of this article (youngandinvested.com/f.../) that at present, there are only 8 LNG terminals in the US. LNG requires major investment in ports to provide access to LNG tankers and in liquefaction and gasification plants on both ends of the transport route. As such, unless and until there is major investment in the infrastructure required for LNG, it continue to be just a "possibility".

For more analysis, check out my blog: youngandinvested.com


On Oct 24 11:23 AM oldmanlake wrote:

> LNG or CNG is the bridge to the future for transportation in this
> nation --- whether the eco-nazis realize it or not...... and they
> may not allow this to be employed in their blind push for electric
> vehicles.... this same bunch, while pushing electric everything,
> is simultaneously fighting anything nuclear...... so WTH?

Oct 24 12:21 PM

[Shishir Nigam:]

bradiop,

Agreed, EPD and KMP are also two very good players in the pipeline industry to look at. I chose to mention slightly smaller-mid scale pipeline companies for their growth potential.

To see the largest players in the NG "production" area, this graphic is very helpful: www.wikinvest.com/imag...

For more analysis, check out my blog: youngandinvested.com

On Oct 24 11:34 AM bradiop wrote:

> I'm surprised in mentioned gas pipeline Co's there was no mention
> of EPD and KMP, both of which I thought were bigger than the one
> mentioned.
>
> Agree on general theme and good article.
> brad

Oct 24 12:24 PM

[Shishir Nigam:]

Something I'd love to hear some thoughts on: The Claymore Natural Gas ETF on the TSE (GAS.TO) has quite consistently outperformed the United States Natural Gas Fund (UNG). Check: finance.yahoo.com/echa...;range=5d;compare=gas....

I wonder why that has been the case. GAS.TO tracks the Alberta natural gas, while UNG tracks the Henry Hub natural gas. I speculate the under-performance of UNG has to do with its monthly rolls. UNG should have finished its rolling into Dec futures on Oct 19th and at that time, the premium between Dec and Nov NYMEX futures was around 19%. At the same time, the premium between Dec and Nov Alberta NG futures was around 11%.

Could that be an explanation?

For more analysis, check out my blog: youngandinvested.com

Oct 24 12:33 PM

[anarchist:]

Yes, we all agree that NG SHOULD be the mainstay of US energy policy-but it isn't and its not going to be anytime soon. I like President Obama but I am unhappy with Bush-lite Treasury and Energy Secretary choices. Michael Fitzsimmons has outlined the problems with our lack of an energy policy many times here at SA and I could not add to his articles (and frustration). I hold Natural Gas related stocks, MLPs and Royalty Trust because I like the dividends and feel they are relatively safe but I know they could crash as well as have price appreciation because of the numerous factors including politics so I hedge for now.

Oct 24 01:15 PM

[jarco:]

If the NG to be imported as LNG was provided gratus, it would cost more to liquify, transport, and reverse process than domestic gas in todays pipelines. The only rationale for LNG is to balance geographic availability.

Oct 24 02:04 PM

[jg1945:]

nice informative article.

Oct 24 02:12 PM

[income hunter:]

NAT is already becoming the transportation fuel of choice. 18 wheelers serving the port of LA are all natural gas. In southern California, all the UPS trucks, post office, busses, and most municipal vehicles. Here in Atlanta, all the busses and natural gas companies service trucks are. The next step is for all municipal vehicles that return to the same lot to be fueled daily are candidates. Then less than truck load truck lines. 8 or 10 company terminals would cover most of their service areas. Then a new tax based on the miles you drive, not the gas you buy. New gas deposits found in the Rockies, the Bakken, and Louisiana. Change coming.

Oct 24 04:47 PM

[Shishir Nigam:]

income hunter,

Thanks for your comment. The kind of change you mention is happening all across countries. The 3-wheeler taxis and public buses in all major big Indian cities now run on CNG and just that change alone has caused a marked improvement in the air quality in these cities.

As I mentioned in Part I of this article (youngandinvested.com/f...), Obama has launched $300 million worth of projects to bring alternative fueled vehicles onto the road, some of which involve natural gas powered truck fleets.

For more analysis, check out my blog: youngandinvested.com
On Oct 24 04:47 PM income hunter wrote:

> NAT is already becoming the transportation fuel of choice. 18 wheelers
> serving the port of LA are all natural gas. In southern California,
> all the UPS trucks, post office, busses, and most municipal vehicles.
> Here in Atlanta, all the busses and natural gas companies service
> trucks are. The next step is for all municipal vehicles that return
> to the same lot to be fueled daily are candidates. Then less than
> truck load truck lines. 8 or 10 company terminals would cover most
> of their service areas. Then a new tax based on the miles you drive,
> not the gas you buy. New gas deposits found in the Rockies, the Bakken,
> and Louisiana. Change coming.

Oct 25 12:50 AM

[Khargosh:]

Shishir Nigam:
Thanks for your thought provoking article, though it is geared to American investors. Can you give any input for investing in Indian gas industry? I do have investment in Petronet LNG (which is a distributor and has come up with good Q2 results), Gas Authority of India, and of course, Reliance Industries. We have also Indraprastha Gas which distributes gas in Delhi, Saw Pipes and similar companies that undertake pipeline work. These are all fully valued already (or so it seems to me). I am looking for something relatively undiscovered and I cannot find any. Please help if possible.

Oct 25 04:39 AM

[MexCom:]

Winter if off to a warm start. Global warming makes the long term seasonal increasing trend less than past history. The contract spread is a seasonal price variation not as much as market increase in energy prices in general.

We are facing a global oil glut. Prices are about to fall sharply, IMHO. This comes from more production from Iraq, better relations with Iran and a continuing weak economy dampening demand. US drivers are switching to more fuel efficient vehicles. Oil exploration is at a peak with new reserves coming on line. This all points to lower prices and at the margin could fall to $15/barrel - the cost of lifting it out of the ground. The price would then stabilize to the cost of production.

We have had oil price booms and busts before. This is the down side of a price boom. Watch it continue to decline.

I see that you are long Nat. gas and want other to buy futures. If you truly want to make a fortune from future price increases you would want to keep the price low to buy more but instead you entice other to buy. Do you want to unload your position in the near future?

If you are an analyst, the other side of the trade could be more enticing. The profits could be just as great if not more to short these futures.

Oct 25 07:13 AM

[Dollar Pimp:]

Great article. One point: Encana would be better categorized with the explorers than the movers. They have vast land holdings (ie. shale plays) and specialize in unconventional NG which requires more advanced extraction technologies. Also of note, Encana is in the process of spinning off their oil business (new company Cenovus) making it more of a pure play on NG moving forward.

Oct 25 12:06 PM

[rrdaniel:]

How about GAZ ?
Is it any good ?

Oct 25 01:35 PM

[Shishir Nigam:]

MexCom,

I truly wish that I had the convincing power to move the natural gas price through an article of mine. I highly that doubt that the 30-40 odd people commenting on this article would have any effect on the price of natural gas even if all of them became fully convinced to be long after reading.

My intention is only to present my own arguments in an effort to gather the feedback of readers and hopefully make us all more informed investors in the process.

Thanks for your comment.

For more analysis, check out my blog: youngandinvested.com


On Oct 25 07:13 AM MexCom wrote:

> Winter if off to a warm start. Global warming makes the long term
> seasonal increasing trend less than past history. The contract spread
> is a seasonal price variation not as much as market increase in energy
> prices in general.
>
> We are facing a global oil glut. Prices are about to fall sharply,
> IMHO. This comes from more production from Iraq, better relations
> with Iran and a continuing weak economy dampening demand. US drivers
> are switching to more fuel efficient vehicles. Oil exploration is
> at a peak with new reserves coming on line. This all points to lower
> prices and at the margin could fall to $15/barrel - the cost of lifting
> it out of the ground. The price would then stabilize to the cost
> of production.
>
> We have had oil price booms and busts before. This is the down side
> of a price boom. Watch it continue to decline.
>
> I see that you are long Nat. gas and want other to buy futures. If
> you truly want to make a fortune from future price increases you
> would want to keep the price low to buy more but instead you entice
> other to buy. Do you want to unload your position in the near future?
>
>
> If you are an analyst, the other side of the trade could be more
> enticing. The profits could be just as great if not more to short
> these futures.

Oct 25 04:13 PM

[megdoot555:]

The idea that refueling has reached an equilibrium on the minds of the rich and poor has contributed to the enhancement of our mental outlook with respect to

Oct 25 05:06 PM

[prairiedog555:]

When I bet football I look for an edge, ideas that have generally worked in the past (bet home team underdog on monday night) so too with Nat Gas you buy (bet) in sept-oct and sell in Dec. always good for 10-20%.
I went light this year because I am aware of the overcapacity and that prices should be low, but it worked anyway. Kind of like the "summer driving" boost in oil every year.
Stocks-football not so different. Think about it. 10% of us do good and the rest get screwed by the house ie Goldman Sachs (evil Vaders)

Oct 26 05:51 AM

[Meltdownman:]

A trillion dollar bailout to the banks could have been better spent on building more nuclear plants in this country. One hundred new nukes would have jump started this country on a new era of fighting global warming, restarted the auto industry with electric hybrids, gotten good paying manufacturing jobs back and gotten us off of using oil.

It is unfortunate that there isn't a single company that manufactures reactor vessels in this country. It now done overseas (e.g. Hitachi Heavy Industries). This country was the leader in nuclear and we are now the laggards.

Standardized nuclear designs, reprocessing of spent fuel, and opening up the waste depository have already been developed (look at France and the Swedes). Cost reductions can be greatly improved by:

1) New designs (that need to be standardized)
2) Improve the effectiveness of maintenance by reducing the complexity in plant design
3) Utilizing the natural laws of physics to improve the margin to safety

It is inevitable that carbon based fuels will need to be eliminated or at least used where higher efficiencies are in existence. As an example, natural gas should be used in heating homes where furnaces burn it at efficiency rates of over 90% and not at gas turbine generating plants where cycle efficiencies are less than half that and transmission line losses come into play.

Renewable resources are still limited in what they can do. One document that I read showed that wind turbines can theoretically be utilized to power about 6% of this nation's energy needs at any given time due to nature's limitations.

Photo cells have their limitations with the use of heavy metals and limited power output (i.e. efficiencies). In addition, we don't need another source polluting our eco systems when people throw these panels out en mass like we do now with something as simple as the lithium batteries.

Underwater turbines placed along the longest coast line of any country in the world could make a larger difference due to the constant movement of our ocean's predictable currents. Thus the carbon footprint could be reduced further. However, no one is taking this natural resource into consideration due to lack of funding. Some studies and prototypes are being done in Scotland.

Fusion reactors would be the ultimate panacea of energy production. The power of the sun has been a proven form of energy for millions of years. However, to try and pry those trillions of dollars that we foolishly spent on bailing out the inefficient and greedy banking industry took away the chance to a restart a "Manhattan Style Project" to jump -start this promising industry.

The Meltdownman

Oct 26 08:40 AM

[User 305291:]

Has anyone looked at the diversity of STO?

Oct 28 05:20 PM

[ironaddict:]

NO, a Lawyer does not fight the lawsuits 100 times faster than China, but a higher priced Lawyer usually means you have a very good lawyer, that can make the outcome of your case much more in you favor. A very good example is the O.J. case with his dream team of lawyers. Do you think O.J. would have got the same outcome if he used a Public Defender? I had to hire a lawyer for $50K, and he kept me out of prison. SInce the U.S. is going more and more toward Socalism, we might as well go all the way, and make a pay limit that Lawyers can make since lawyers have to take a State Bar test, they technically work for the State. Since Dems want public health care, and want everyone to have health care, every one in America should have access to a good lawyer, and Lawyers should be paid the same as teachers in our Public school system.


On Oct 23 02:13 PM Manohar Menghani wrote:

> I have bought PEYUF.PK about 12% dividend , PVX 12% dividend&
> ERF 10% dividend & are good. They are all gas & oil drillers.
> Economy is up in other parts of world. GUYS AMERICA is not everything.
> This year we will buy 10 million autos vs 12 million for China &
> 2 million for India. Brazil, Russia, Mexico are all up. China just
> reported 7.3% up in economy & they say that they will be up 8%
> by year

Oct 29 10:56 AM

[info19:]

by way of dislosure:
I took every last penny I got and put it into natural gas - target - about 3 years?

Oct 30 12:46 AM

[shopski:]

MLP prices really don't correlate with gas prices do they? I like MLPs for their strong cash flow and dividend - but they generally aren't correlated to commodity prices. Also, watch out for interest rate risk in MLPs (similar to bond interest rate risk).


On Oct 23 11:51 AM doublebogey wrote:

> You kind of missed the boat. Mid stream MLP's are in for a very
> long and steady bull market in appreciation and distribution increases
> as nat gas usage increases regardless of the price of the gas itself.
> Perhaps you are not aware they exist? Another reason to buy them
> as you have a lot of company.

Nov 04 12:50 PM

[Empower Inv...:]

Great article! New Natural Gas well production decreases dramatically after the first year. As the new mines from 2008 and early 2009 begin to taper off and production falls, as cheap natural gas prices and cold winter weather helps to deplete some of the stored supply, I am bullish on Natural Gas. Also, due to increased Natural Gas exports to Europe, and with consideration to the falling dollar and rising price Crude Oil, I am very bullish on Natural Gas into next year.

Nov 05 02:53 PM

[Crude Oil T...:]

One of the best post I have seen in a while. This market is headed lower and winter demand can't stop it. We have never seen a glut like this in all of our trading years and look to retest the 2.40 area.


On Oct 23 11:59 AM Mad Hedge Fund Trader wrote:

> wwt I received another scratchy, crackling cell phone call from my
> drilling buddy in the Texas natural gas fields today. You could almost
> hear the dust on the line. The doubling of prices in the last month
> is totally bogus, and is nothing more than a short covering rally
> ahead of the seasonally strong run up to winter. Storage facilities
> are completely full, and while the production cutbacks have been
> substantial, they are still not enough. Some companies, like Chesapeake
> (CHK), are even suicidally boosting production in a desperate attempt
> to offset falling prices with jacked up volumes, at everyone else’s
> expense. This is all setting up a fabulous short selling opportunity,
> possible in early December, once the winter draws are priced in.
> There is still a huge risk that production will overwhelm storage
> as more new unconventional shale and tight gas deposits are brought
> on line, leading to another collapse in prices. A retest of the September
> lows is a gimme, and the $1 handle is still a possibility. So those
> of you who were nimble enough to bite a hunk out of the recent pop
> in CH4, better use any strength to cash in positions. I’d love to
> get more out of my friend, but I don’t think my aged, arthritic back
> could take another three hours driving down washboard roads in a
> beat up pickup truck with no springs.

Nov 11 03:32 PM

[irasil:]

Any ideas on who the suppliers are to natrual gas equipement e.g. pipes, pumps...etc

Nov 16 09:14 AM