Pennsylvania: At the Forefront of Domestic Energy E&P

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Living in a small town in Western Pennsylvania, I am within 20 miles of several active windfarms, a Gamesa (GCTAF.PK) wind turbine manufacturing plant, a resurgent coal mining industry, Waste Management (WMI) landfill gas capture projects, and natural gas exploration as part of the Marcellus Shale deposit.

The accompanying overview and map of energy production in PA can be found at EIA.gov, along with a complete profile of energy-related statistics for the Keystone State. Companies such as Range Resources (RRC) and CNX Gas (CXG) are actively exploring and developing the Marcellus shale for conventional and unconventional natural gas deposits while Waste Management conducts landfill gas capture and waste-to-energy projects at local landfills.

A revitalized coal mining industry is also apparent from a steady stream of coal truck traffic and a $1.3 billion buyout last week of Friedens, PA-based, privately-held PBS Coals Corp. by Russian steelmaker Severstal [Russia: CHMF]. The acquisition will provide Severstal with a source of coking coal and the company already has expansion plans to double the output of local mines, according to reports out of Moscow from Severstal's mining division chief executive.

PBS Coals is still planning to pursue a public stock listing on the Toronto Stock Exchange in an effort to raise capital to fuel expansion plans even if the Severstal deal does not come to fruition. Analysts estimate that PBS Coals could raise as much as $300 million by going public in Toronto.

The EIA energy profile of PA notes that the Commonwealth holds an abundance of fossil fuels such as coal (with smaller reserves of crude oil and natural gas) in addition to five nuclear power plants. Renewable energy initiatives include landfill gas capture, hydro-power through the Susquehanna River basin, and wind power through mountain ranges and the Lake Erie shore. The EIA website also contains a PDF report which analyzes renewable energy production by output, source, and state.

Investors looking for an ETF strategy to invest in the energy themes and companies from PA may consider the following:

• Market Vectors Environmental Services (EVX)
• Market Vectors Nuclear Energy (NLR)
• PowerShares Global Wind Energy (PWND)
• PowerShares Progressive Energy (PUW)
• Market Vectors Coal (KOL)

Comments

[GMiki1:]

Nat gas up today. Is nat gas plentiful? Not to the extent people such as Speaker Pelosi think. Go, nat gas. Go, coal.

2008 Aug 26 10:27 AM

[Brian Pursley:]

"HOUSTON — American natural-gas production is rising at a clip not seen in half a century, pushing down prices of the fuel and reversing conventional wisdom that domestic gas fields were in irreversible decline."

seattletimes.nwsource....

2008 Aug 26 10:43 AM

[Paul Killinger:]

Great to hear the Russians are investing in PA. This will give us a bargaining chip when they national their oil we developed for them.

2008 Aug 27 10:25 AM

[John Lounsbury:]

My understanding is that the number of wells is rising but the volume of production for NG is flat. That does raise questions about sustainability of production unless new untapped fields are opened.

2008 Aug 27 01:15 PM

[January Thaw:]

CXG is a little gem. Glad prices for ng are flat...have to keep it cheaper
than coal...burns cleaner until they can really find a way to clean up coal...
With a recession all around us...we need cheap energy. I haven't seen
too much going dry.

2008 Aug 27 05:35 PM

[nakedjaybird:]

Being the capitalist I am and many of you are, if Russia buying a portion of our 300 year coal supply for export to their steel industry doesn't get your attention and of all the other concerned US resource folks including those that have in-the-ground assets (oil, NG, coal) which sooner or later will become assets for-sale (being we're all capitalists), it seems to me we had better start working a LOT HARDER developing and providing many alternatives for our lifestyle; because if we don't deplete our natural assets, someone else will.

2008 Aug 28 03:25 PM

[nakedjaybird:]

And with the someone else's help, DEPLETION COMES SOONER.

2008 Aug 28 03:32 PM

[nakedjaybird:]

AND ALL US U.S. CAPITALISTS WILL BE RICHER; WOO-HOO!!!!

2008 Aug 28 03:33 PM

[nakedjaybird:]

SOONER; WOO-HOO, WOO-HOO!!

2008 Aug 28 03:34 PM