Seeking Alpha
Profile| Send Message|
( followers)  

Earlier this year I dove right into natural gas as an alternative to diesel for medium to heavy transport in the United States. "Natural Gas And Commerical Transportation: The Hatching Egg", "U.S. Federal Law, Exports And Subsidies: Natural Gas And The Commerical Trucking Industry" and "Natural Gas And Commerical Transportation: States Act While Feds Mull". If you are unfamiliar with this topic, these articles and comments provide a solid primer for the concepts surrounding natural gas as it relates to medium or heavy transportation. As time went on, I continued to try to frame this idea to weigh investments and the likelihood that natural gas will find legs in transportation. This article summarizes some of my research and views of this far reaching topic.

Introduction

What is the U.S. going to do with natural gas? Whether we intentionally frack for it or it comes as a byproduct of fracking for oil, what do we do? We have a 50% reduction in rig count over the last two years and yet a steadily increasing supply of natural gas.

(click to enlarge)

Source: U.S. Energy Information Administration, based on Drilling info, and Baker Hughes
Note: Natural gas production includes volumes that after being produced may be vented, flared, reinjected, separated, or otherwise processed; this is also known as produced natural gas or gross withdrawals.

Horizontal fracking for oil is producing more natural gas. Do we burn it off as ND has been doing? Do we drill wells but not use them (as Pennsylvania and others are doing)? What is Oklahoma and Texas going to do with their excess supply? Sell it to industry? Export it? What about as other states come on line? California is passing legislation in preparation of trying to tap their fields said to have real potential. A spat of landowner royalty suits and as well as money spent on processing and infrastructure (for example Pennsylvania) may soon change old practices, but this just adds more natural gas to an already well supplied market with natural gas being notoriously hard to store (storage is still pretty primitive: salt caverns, drained oil reservoirs, aquifers and pipelines, though factor in the capped wells waiting to be used - look at the Pennsylvania article above with this in mind and consider the stockpile of volume and storage capacity being built up by producer states with this practice). So what do we do with this resource we are growing?

(click to enlarge)

(click to enlarge)

Horizontal fracking and advances in well design, multiple wells per pad drilling multiple times into multiple levels of shale, well spacing, mapping technology and finishing techniques has changed the U.S energy landscape almost overnight, relatively speaking. In 5 years, many big businesses have shifted goals from importing to exporting natural gas. U.S. oil and gas companies are having their infrastructure tested, trying to move oil or gas from productive shale zones to refineries. The lack of infrastructure and hub pricing (hub vs. oil index is discussed in the previous articles) has lead to a surge in the use of trains (and a pat on Warren Buffett's back for buying into this early) to transport oil as well as a focus on new natural gas pipelines and liquefaction plants for natural gas. It has also led to the realization by OPEC countries and their allies that U.S. shale production and technology will have an impact on their bottom line (finally a hot topic in WSJ) and the oil market in general.

Believe what you may, but one way or another, this technology is changing the national and international energy landscape and how it is analyzed. It is not going to stop (though more regulation is a sure thing) and it is beginning to have a profound impact on the U.S. economy. Like the commodities grown directly above it, natural gas and oil are products that translate almost directly into currency; ones we did not have 5 years ago. Currency used to import these products to the U.S. is now being distributed internally (think about the materials, rigs, employees, infrastructure and companies all earning paychecks they would not otherwise earn); this is a lot of currency. Just look into North Dakota or other producer states if you question this logic.

Step back 5 years ago: it appeared that natural gas, which fracking is well suited for, would make companies a lot of money. In fact, there was such a surge in finance and production that the price of natural gas plummeted. Subsequently, finance left, natural gas production was curtailed, wells were drilled and capped and prices rebounded to seesaw just below the $4.00 per thousand cubic feet range.

Where did the finance companies go? The same place the drilling companies went. Oil. When compared to natural gas, oil had greater returns so many companies shifted their priorities and drill rigs with great success to fracking oil and that brings us to today. If you look at this chart and focus on states that have large shale formations that carry oil, the increase in oil production over the last 4 years is astounding. Equally astounding is the reality that the price of oil is actually decreasing in United States: an impossible thought 5 years ago. A December 6, 2013 WSJ article supports this reality. The gap in sweet crude prices is no accident. We need more infrastructure within and away from shale fields: something to keep in mind when watching stocks (MDU Resources, a dividend producer in North Dakota for instance (NYSE:MDU)).

(click to enlarge)EIS shale plays 2011

Where does this leave natural gas and the burgeoning industry surrounding using it as fuel? Companies still drill for it at the $4.00 range as well as drill and cap for future use. It comes as a byproduct of oil fracking. I have heard concern that natural gas to diesel plants will level the field, but with uncertain oil prices and the high cost of these plants, this possibility is a future problem in the U.S., or at least Shell (NYSE:RDS.A) isn't willing to commit to a 20 billion bet. The answer to this question requires us to consider what other industries are doing with natural gas to see where demand is going.

Natural Gas: Use It For Power Generation or Industry

It is old news that power generation plants have been using natural gas instead of coal, especially when natural gas prices went into the $2 range. It is common knowledge in the power generation business that the price of coal will always act as a damper on the price of natural gas over the long term (environmental issues and alternative energy projects (wind, solar etc) coming on line aside). Generally speaking, the minute natural gas gets too expensive, power companies switch back to coal if they can, and visa versa. In looking for a couple of quick graphs from the U.S. Energy Information Administration ("EIA") website to include in this article, I found this interesting article just published on December 4, 2013.

Natural gas use for power generation falls as industrial sector's use continues to rise:

(click to enlarge)

Source: U.S. Energy Information Administration, Natural Gas Monthly and Short-Term Energy Outlook (STEO)
Note: October 2013 and November 2013 consumption volumes represent preliminary STEO estimates.

It appears, based on EIA statistics, that the use of natural gas is growing for industrial purposes and shrinking (relatively speaking) for power production at present price points.

What does this mean? In the long run, we can expect that should natural gas drop in price again, however unlikely it is for industry to allow this to happen again, power production is there to consume it (it takes a couple of quarters of lag time but you get the idea). The inverse however, also makes sense: as power uses less natural gas at today's prices or higher (and as solar, wind and others make further inroads), industry is happy to use it. The number of chemical companies considering U.S. facilities is remarkable. The price gap between U.S. natural gas prices and prices abroad is strong motivation. U.S. may have issues, but we are a relatively stable economy, based on a rule of law with limited corruption and this is the kind of stable environment that businesses want (no threat of civil unrest or nationalization on the horizon). Further emission regulations may change this chart (with regulations tending to be hard on coal for now), but this reflects today's market. Are prices stable? I leave that up to the reader to decide but I am comfortable with saying they are stable for now.

The production and consumption at present prices is sliding in power production but industrial use is making up the difference. Given the price gap between U.S. hub pricing and oil indexed pricing, there is no reason this should change absent a wild card. In essence, when factoring industrial use (and future use?), this graph shows a balance towards a stable demand, though I cannot help but reiterate, this is a notoriously fickle and hard to store commodity we are talking about here. I do not have any fortune telling abilities, just a strong interest and desire to understand.

Natural Gas: Use it for Transportation

Since my previous articles, the federal government continues to be unable to find a consensus on whether to support natural gas as a fuel for transport or draft a larger energy plan (However, to my great relief, they did find the time to determine what do we do with the loose change collected at airport security). See Loose Change Act.

Tongue and cheek aside, all the proposed legislation supporting natural gas for transportation, in the senate or house of representatives continues to sit in various committees. It appears that the legislation and support is generally coming out of the core states that produce natural gas and/or would benefit from its use either financially or environmentally; around 15 or so. I believe building support is possible but right now, ideas and proposals are going into committees but nothing is coming out of the other end, so to speak. Can this change? Any time. Only those in the closed door meetings know.

However, interestingly enough, The House of Representatives recently managed to pass the "Natural Gas Permitting Reform Act" (H.R. 1900) 252 to 165 that in essence requires the Federal Energy Regulatory Commission (FERC) to approve or disapprove new gas lines in a timely manner (1 year), as well as gives 90 days after the a Federal Energy Regulatory Commission ruling for any other agencies to issue their rulings (if they fail to meet this deadline, it is considered an approval).

Over the years, the speed of the U.S. federal bureaucracy has not been increasing, or shrinking for that matter, and unfortunately funded projects cannot move at federal bureaucratic speed, so this is a welcome relief IF it passes the Senate. Given both camps of concerned businesses (chemical and smelter companies vs. export companies and fuel companies) as well as producer and consumer states will benefit from this, I think chances are good this law will find the votes. That being said, this does not solve the natural gas transportation dilemma: demand and infrastructure.

Interestingly enough, the solution to this problem has been coming from one obvious source and one not so obvious. The obvious source and reason for this article is investment. Clean Energy Fuel Corp (NASDAQ:CLNE), Royal Dutch Shell (NYSE:RDS.B), ENN Group Co LTD, one of China's largest private companies and others have been building out CNG and LNG fueling stations as quickly as they can. They see a economically viable alternative transportation fuel for medium to heavy transport, that uses and is predicted to use a lot of fuel on the horizon and want to be part of the adoption and therefore profit. CLNE, who most stands to directly benefit from this, continues to lose money as it spends money on infrastructure, however it also continues to lock down contracts for stations and supply agreements while continuing to sell more gas. Will it find the inflection point fast enough? Just might. Wish I knew. All I can say is the stock is for sale.

(click to enlarge)

The not so obvious source is state action. While the federal government ruminates, the states who will benefit from production or have air quality issues, or both, have been passing legislation to subsidize infrastructure as well as the private and public purchase of vehicles. The rate of passage is such that this government website cannot keep up with it but a quick search on "CNG" or "natural gas" on govtrack (an amazing resource in its beta stages for state data) will give you a more up to date idea of how serious states are.

There is no reason this should stop ... why should it? Money previously spent on debt to import oil from out of state or out of country is now being spent on tax breaks and other incentives to create a viable local state export (natural gas and/or oil products), with associated jobs to produce and money from sales entering the public and state coffers (thereby justifying this state action). Some citizens always find complaint, and the great environmental debate will rage on (clean, cleaner, cleanest), but the creation of middle class blue collar jobs while knocking down U.S. debt is a pleasant change that bodes well for elections in state.

I would also note that not only has this legislation been useful for driving infrastructure and vehicle purchases, but it is also forming the necessary regulatory framework to monitor and maintain the safety of these vehicles as well as fracking (regulation on well casings, disclosure of chemicals used, tightening of liability for error perhaps ... et cetera) which should sit well with all people but the political extreme. It is easy to forget the power states still have.

Natural Gas: Use It For Export

One commenter on the previous articles cut right to it and predicted export would find support before transportation did. He looks to be right.

On the export front, the "Export LNG for American Allies Act of 2013" (H.R. 580) has been steadily gaining co-sponsors (56 to date) while in committee, and this combined with FERC approval of four export terminals (conditionally) seems to paint a strong picture for export and Cheniere Energy (NYSEMKT:LNG) whose stock has seen significant appreciation on this and recent news of long term LNG export agreements. That being said, the same businesses that oppose natural gas as a fuel for transportation (chemical companies and smelting companies who like natural gas as a cheap feedstock) have formed a coalition called "America's Energy Advantage" (Dow Chemical (NYSE:DOW), Alcoa (NYSE:AA) and Nucor Corp (NYSE:NUE)) to oppose further approval of the significant number of proposed export terminals vs. existing terminals that have suddenly come into existence since the "fracking revolution".

(click to enlarge)

(click to enlarge)

Will all of these facilities be approved and/or built? Not likely. FERC is not the only relevant government agency. Energy export and volume still falls under the purview of U.S. national security and its associated rule, law, international trade law and agreements. A massive export market at the expense of national pricing and the big businesses that rely on it simply will not be allowed for a variety of reasons. That being said, a steady increase in exports reflecting a steady increase in demand that will find supply with a slow increase in prices likely.

The tension between the U.S. Hub Pricing system and the older International Oil Index System will continue to support a price gap between U.S. natural gas prices and international prices (though change is inevitable). Absent federal bureaucratic problems or a breakdown of global gas prices or worse, as long as the demand grows (and there is no reason to believe it will not as their is a lot of businesses with plans for it) it seems inevitable that some of the U.S. gas production will find its way to the export market as these facilities and infrastructure comes on line.

A recent report supports the conclusion that, "[l]iquefied natural gas exports are unlikely to have a large impact on domestic prices." Titled "New Dynamics of the U.S. Natural Gas Market", Bipartisan Policy Center, May 20, 2013. This is very similar to EIA's conclusions, "Slower increases in export levels lead to more gradual price increases but eventually produce higher average prices, especially during the decade between 2025 and 2035." Titled "Effect of Increase Natural Gas Exports on Domestic Energy Markets", EIA, pg. 8, January 2012. I read both of these reports to say the same thing common sense would dictate: responsible export will slowly produce a gradual and arguable economically feasible increase in natural gas prices.

The first Cheniere project is said to be coming on line around 2016 and others will follow suit so the impact of export will take time. This project will now have a total rate of 1.8 Bcf/D for a period of 20 years. The EIA is forecasting a total natural gas production rate of 70.3 Bcf/d in 2013 so we are looking at an export volume of about 2.3%.

So conditionally approved export volumes will have some impact on price, but given the time to prepare for it (remember the Pennsylvania capped wells mentioned earlier as well as efforts to capture natural gas as a byproduct of fracking for oil which will find its way into the system as well as infrastructure buildup) and industry boardrooms acting in concert, it appears the government is acting sensibly in this area. Again, this is where passage of the "Natural Gas Permitting Reform Act" mentioned above would help immensely.

We also export gas by pipeline to Mexico and this has reached record highs of around 1.7 Bcf/d.

U.S. natural gas exports to Mexico reach record high in 2012:

(click to enlarge)

Source: U.S. Energy Information Administration, based on Office of Fossil Energy.

Again, this seems (2.42%) a rational percentage of total national production. The Kinder Morgan Group and other Pipeline companies have been making a lot of money on this less known fact. It appears for the present, this will not change (and may even grow), however, it is important to note that Mexico intends to privatize its state oil and gas monopoly PEMEX. As this article points out, it is not the privatization that is of real interest, rather it is the willingness of Mexico to form financial partnerships with outside international companies to exploit the resources it has shut off for roughly a 100 years.

Allowing outside companies and their technology to help would eventually affect U.S. export margins, but there is a lot of ifs between this idea and actual production, so I would put this information in the interesting data category, but not the lose sleep one. To get an idea of volume, read this article, "As U.S. Gas Production Soars, Sellers Look South to Mexico".

Lastly, let's not forget Canada. Note this is in MMcf in dollars, not Bcf/d. I included Mexico for ease of comparison as I didn't feel like doing the math.

What Does This All Mean?

The question for all of us interested in natural gas for transportation is whether the price gap between oil and natural gas will stay sufficiently strong to justify companies switching to natural gas (EPA and environmental issues aside - cost and tax issues that don't factor into fuel price, but sure factor for natural gas when considering the bottom line profit equation). The biggest concern for many of us is whether natural gas will sharply increase while oil will sharply decrease. Much of this data would seem to indicate that over a 5 year time natural gas will either stay or go up in price a bit - if you believe the EIA and future traders.

If you believe today's numbers and future trader numbers, oil will go down in price to a degree as well (there is a link in the conclusion section that leads me to believe the many who say Saudi Arabia will never let oil drop below $85 a barrel). That being said: will there still be a sufficient price gap (in addition to regulatory pressure) to justify adopting natural gas for transportation?

A strong clue comes from an excerpt I found in the July 24, 2012 Committee on Energy and Natural Resources, US Senate. Pg 40 of the transcript. The answers of Dave McCurdy, President and CEO of the American Gas Association are summarized here:

The natural gas commodity price accounts for a small fraction of the price of compressed natural gas (CNG) the consumer sees at the fueling station. The majority of the pump price at a station operated by a regulated utility reflects fixed costs related to transportation, distribution, and compression of the natural gas; maintenance fees; a regulated rate of return; and state and federal taxes. This pricing structure means that even if the commodity price of natural gas were to increase significantly, the price of fueling a natural gas vehicle would not change considerably.

At current commodity prices, the natural gas commodity contributes about $0.32 for each gasoline gallon equivalent (GGE) of CNG sold. The current national average cost of CNG is about $2.00 per gge, meaning that the natural gas commodity price accounts for only 16 percent of the price at the CNG pump. In contrast, the commodity price of oil contributes 60 to 80 percent of the pump price of gasoline and diesel.

To put this in context, if the commodity price of natural gas were to double overnight from $2.00 to $4.00 per mmBtu, leaving all fixed costs the same, the new CNG pump price would only increase from $2.00 to $2.32.

The Energy Information Agency (EIA) projects natural gas commodity prices (Henry Hub price per mmBtu) to increase to $7.37 in 2035. EIA meanwhile projects petroleum prices to be $145 per barrel by the same year. At these levels, CNG will retain a significant cost advantage over petroleum-derived fuels.

This quote sheds light on this question. Environmental and air quality regulations aside (again, relevant and bode very well for natural gas), it appears there is more room to justify buying natural gas vehicles with the idea that the investment would pay itself off in a reasonable amount of time, even if oil goes down in price and natural gas goes up in price. Of course the contrarians will point out that return on investment would take longer if oil drops in value and natural gas increases in value, and therefore, it is not as attractive.

My point is should this happen, investing in natural gas vehicles may become a less attractive investment, but far from a bad one. Natural gas vehicles are often spoken of in terms of "payback on investment", but not the "profit" after payback of investment. I am going to go out on a limb here and state something that has been bothering me for a while.

Many knowledgeable folks will tell you that a properly designed or converted natural gas engines will last longer than its diesel counterpart. I finally found a relatively unbiased link to support the reason for this IF an engine is made or converted properly (slapping a natural gas fueling system onto a gas or oil vehicle without changing the chambers (cylinders, valves etc) where it is burned is NOT a proper conversion). Natural gas engines burn a higher octane fuel (120 octane rating). Cleaner burning fuel keeps oil cleaner which reduces engine wear and increases engine life. If natural gas engines last longer, they have a longer use cycle than the industry standard statistics that are historically relied on and this means a longer period of profit after the payback on investment generally offered in natural gas engine argument. Almost every document I have seen uses the old industry standards of longevity based on diesel engines.

Environmental issues and state subsidies aside (again, significant pluses for natural gas), perhaps this is why UPS, with the production of 12L Cummins/Westport CNG engine coming on line this year, took such a leap. Companies of this size don't stay around based on windfalls, they stay afloat by making calculated decisions that move them percentage point by percentage point ahead of their competitors. UPS is not the only adopter of NG engines, there are other freight companies with dedicated routes, who are taking advantage of their proximity to fueling stations and state subsidies (with capped period of times they will stay in place - generally 5 years) to make a move.

Also, any medium weight transportation company with local routes and an overnight centralized location (garbage trucks, city metro buses, school buses) have been buying a lot of CNG engines. Seattle's local waste management company currently sells CNG to the public for $1.94 a gge with diesel averaging $3.78 and Washington is not close to a producer state nor are these wholesale rates. At minimum, it might be fair to say that no competitive business wants to be tied to one type of fuel in today's market.

Lastly, let's not forget that oil production, even with the new surge in U.S. production, still predominately comes from a lot of "unstable" countries. Assuring a steady domestic fuel supply (or at least hedging some of a truck fleet) for medium to heavy truck fleets that is not subject to the price fluctuations of civil unrest, war or politics (or at least not as much) is not a bad idea.

CONCLUSION

At present prices, natural gas is finding greater use and plans for use in the industrial sector, less use in the power production sector, plans for greater use in the export sector and budding use in the transportation sector. Horizontal fracking has opened up a whole new reservoir of natural gas for United States and the world to consume that can compete with oil. Every quarter we are advancing technology, techniques and well drilling speed (if want to know something about this, read some of Michael Filloon's Seeking Alpha articles to get an idea) for oil shale plays that can mostly be applied to gas. I think the argument about how much natural gas the United States can produce is for the most part a red herring (I have read 20 years, I have read 50 years, I have read 100 years - when you think about how they are estimating this and the variables involved, you realize this is all rough speculation at best).

The short answer is we have enough natural gas to fuel change on the export front, chemical feedstock and smelting front and transportation front. For how long? As long as price and environmental factors makes it profitable. Be that 20 years, be that 50 years, we have enough to justify and profit from change and establish two forms of cost effective energy for the future. We made the mistake of overproducing natural gas 3 years ago and curtailed production, but natural gas is still there; old capped wells and new wells are waiting. Too much production will drive prices down (gas companies are not likely to do this again - twice is foolish), too much demand, prices go up sharply. Planning and easing into this process is the best practice and it appears things are happening slow enough to work. It does appear natural gas as a transportation fuel has a nice sweet safe spot to grow and produce a windfall between now and when export and chemical production starts to really pick up (2014-2020?).

Keep in mind, as we continue to produce more oil and increase efficiencies, the price of oil will continue to go down and this will act as a natural constraint on supply (though global demand is said to be increasing).

(click to enlarge)

As price goes down, we need to realize that some oil fields will no longer be productive and oil producing countries will curtail production (I have seen the $85 a barrel cut off price for Saudi Arabia enough times to give it weight as well as higher numbers for other fields ($95)). As oil prices decrease, oil profits decrease. Will the price points work out for natural gas and transportation? CLNE joined forces with GE Capitol (NYSE:GE) to offer a concrete contract option. It seems possible for the first time in U.S. history, this nation will have the option to use two fuel sources that can compete for market shares in industry, export and transportation.

Stock Thoughts

Westport (NASDAQ:WPRT) and CLNE will stand to benefit from transportation adopting natural gas as an alternative fuel to diesel. Will investors' patience and interest last long enough for this to happen? Perhaps, if they understand upfront that these stocks are long plays and if neither company spreads itself too thin. WPRT, whose price has dropped considerably of late, is interesting if only because it seems to be morphing from a new medium and heavy truck engine and fueling system play, to a transportation play as it spreads itself out to include natural gas engine conversions, train engines, LNG tenders for trains, LNG fuel tanks, CNG light truck engines and ship engines.

My previous articles, comments and others on Seeking Alpha have gone over WPRT and CLNE in detail. It is worth noting that the sooner companies take advantage of the subsidies and price gap between natural gas and oil, the more likely they are to gain a competitive advantage and profit as time will slowly close the price points between these two forms of energy and many state subsidies have time caps. It is also worth noting that one of CLNE's subsidiaries recently closed a deal for about 176 million to ship natural gas compressors to China. It doesn't hurt to have a product that the Chinese want. WPRT also has a partnership with Weichai (though there is a lot of debate as to how profitable it will be in the long run).

Why is China interested in natural gas? The main issue is said to be environmental but I can't help but think China's vision is broader than this. Having another option to oil (and beholden to OPEC - an issue the U.S. has struggled with for 40 years) as part of a national energy plan is wise. Perhaps the U.S. should consider or is considering this as well. Many other countries have formed national energy plans: it would seem to make a lot of sense for the U.S. to do so.

Another stock I own and have played is Chart Industries (NASDAQ:GTLS) for a pick and shovel company. Not only has GTLS been selling natural gas liquefaction and gasification units nationally, but also internationally to China. They have an interesting assortment of products (I like their Orca delivery systems a lot and so does China) and interests. It recently purchased a production facility in China, has other contracts to ship product to China, landed a contract to build 20 LNG national stations among other things. I recommend doing your due diligence on this company as its stock is highly volatile as it just missed earnings, however, it is situated in a sweet spot if natural gas infrastructure continues to grow.

I have also grown fond of General Electric, despite its diversification in other areas, at it is moves into the oil and gas fracking and production industry. U.S. companies need big players in this field who provide comprehensive answers with the financial clout to make them happen. It, and others, have designed some very cool engines to use natural gas produced locally to power fracking that makes a lot of sense. Why pay for it when you produce it as a byproduct?

Apache recently completed two fracking jobs solely with natural gas at significant fuel savings and this technology has all the symptoms of blossoming. GE Capitol has also loaned CLNE money to build their micro-LNG plants (with recent news indicating they intend to put one in Florida - who also happens to have a massive state movement to use natural gas for transportation, new piplines and the beginning of plans to frack).

Other companies of interest include the Kinder Morgan Companies for pipe export to Mexico (a lot of articles dive into this trifecta, KMP, KMI, KMR) as well as Cheniere Energy for ship driven exports. Do your research on both, Kinder Morgan has gotten some bad press (I don't buy it but we all see things differently) and Cheniere is well positioned to export (news of their export agreements is simple to find), but its finances are to put it mildly, complicated. There are many other companies worth mentioning but space and time is limited.

I write these articles to learn and exchange information: they are not a substitute for your own diligence. I hope others come to find this sector as fascinating as I do and you enjoyed reading this article as much as I enjoyed writing it.

Source: U.S. Shale Gas: Who Gets The Pie?

Additional disclosure: I may purchase stock in GE soon depending on price. This is not a substitution for your own due diligence in this field. This area of the market is in flux.