There are many traders who are bearish on natural gas and have been since talk began that we could use natural gas as an alternative to foreign oil. As a country, we use a large chunk of foreign oil. We are making oil-rich Middle Eastern countries such as Saudi Arabia, rich.
According to SetAmericaFree.org, by 2020 83% of oil in the world will be owned by Middle Eastern regimes. The Middle East will have huge amount of leverage over the world, that we can’t afford. They will be able to raise prices as often as they please and quite frankly, there is nothing we can really do. What’s the answer to this solution? Natural gas.
In 2009, the US exported 30.35 billion cu m of natural gas to the world. There is certainly room to grow as we have some of the largest natural gas reserves in the world. Betsey Spomer, VP of BG Group, says the US could turn into the “next Qatar”. Qatar is the largest exporter of LNG and the US could be taking over that role this decade.
The US has taken steps to begin this new role as largest LNG exporter in the world. Two liquidation plants have been built on existing import terminals (Cheniere Energy (LNG) and Freeport and Macquarie Group). This is a huge step as these two terminals could be in full production by 2015.
This also leads to another positive: low fuel prices. Instead of being held hostage by foreign oil, we can produce our own fuel and pay low prices. In the process we will be creating jobs and increasing economic growth. Two things that could certainly come in handy these days. The expansion of the natural gas industry in America would no doubt bring a new wave of economic prosperity to our nation. This is the source of growth that we need and the best part is we have huge reserves of natural gas throughout the US. Lets not forget that many countries are beginning to use more natural gas than ever before.
A great example is Russia. Russia doesn’t have as large a reserve as the US but they increased their usage this year and last. I believe more countries will be following suit in the coming years. Putting the US in a great position.
Regardless, whether or not you as optimistic as I, natural gas is due for a rebound from its two year slump. Natural gas will rebound in 2011.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.