While natural gas bulls are pounding the table for $5/mcf natural gas, producers know that the biggest source of supply lies at existing wellheads.
In North Dakota's Bakken Field, for instance, one-third of all natural gas is flared or burned off because there isn't enough infrastructure for it to reach market. Absent adequate piping, absent storage, absent a huge market of CNG cars and absent an active LNG export capability, the "f" word in natural gas isn't fracking, it's flaring.
For that reason I see Williams Companies (NYSE:WMB), which spun out its exploration arm as WPX Energy at the start of the year, as one of the most interesting plays in natural gas today.
Williams is in the natural gas infrastructure business. Rival El Paso has been acquired. Unlike rival Enbridge (NYSE:ENB), they're active outside the Gulf of Mexico, which seems to have adequate infrastructure. Unlike rival Spectra Energy (NYSE:SE) their share price has been going up, not sideways.
WMB shares plunged after the WPX spin-off, but since then they have risen about 30%. Despite a neutral rating from Zacks they have an enormous opportunity in building pipelines that bring new supplies to the market, an opportunity they seem to be pursuing aggressively.
Better natural gas infrastructure can do more to raise supplies than drilling can. It's analogous, in my mind, to the situation in solar energy, where the buy side is outperforming the sell side, and will until the installed cost of solar panels falls below 50 cents per watt, the installed cost of grid energy. Natural gas can also smooth out the intermittency of solar and wind production on the grid - the two forms are actually complementary in that way.
Natural gas is a natural byproduct of oil production, so supplies of gas aren't a big problem in the near or medium term. The bottleneck lies in getting that supply to market, meaning WMB has a big opportunity in front of it.
If you have a better natural gas infrastructure play in mind, leave it in the comments and let's talk about it. But to me, this seems like the biggest no-brainer in the energy business.