Respirate

Gold, Oil and Fixed Income? They're All in This CEF (GGN)

Thanks for another interesting article. Always enjoy your clear and entertaining writing style.

GGN sounds like a fine addition to most portfolios in this kind of market. I don't believe the current market rally will be sustained. It's seen a strong rebound from an oversold state, but the rise has been on low and declining volumes, and is spurred on by earnings so weak that they only look ok against "beating" low-ball estimates. Also, like many SA followers, I have serious doubts about the US economy's rebound, despite bull claims that it's just around the corner. We have worked only part way through the 4-5 years of "false growth" excesses; the economy will likely revert to the mean before resuming steady growth at an historical normal rate. Even with government stimulus 2010 looks very weak.

GNN looks promising given its two-sector focus. Increasing demand for a declining energy resources should result in a general upward trend in prices, eventually driving E&P. I've never been a fan of gold investing, but given the extraordinary federal stimulus, inflation should emerge. These are both long term trends, IMO. The large options-funded yield is attractive even if the share price treads water.

Discl.: This afternoon I placed an order for a small opening position, and will "walk" toward a full position if energy shares fall significantly or if the premium narrows.

--R

Fuel Systems Solutions, Toyota and the Phill

New SA posting on Fuel Systems by Mark Krieger. Worth a quick read.

seekingalpha.com/artic...

I don't like buying stocks that have jumped like this one has, but I may make an exception here.

--R

Making Natural Gas Transportation a Reality

Michael, thanks for another exceptional article tying together the topics and constructive comments of the past several weeks. IMO this is by far the best written and most persuasive of the series.

You've convinced me that we could be very close to reducing our gasoline use and foreign oil dependence IF the national will were there. Unfortunately ours is a reactive, not proactive society. Despite our self image as a forward thinking people, the reality is that precious little is accomplished proactively, little sacrifice for our future is made, unless it involves lining our personal pockets. Therein lies the key to acceptance of NGVs. It has to be advantageous economically, either now or projected into the immediate future.

Action may be forced upon us the next time oil prices skyrocket, or if (heaven forbid) crude supplies become interrupted. That's exactly the wrong time to find panic-driven "solutions" - a la ethanol, or spin-doctoring "clean coal" and other non-solutions. No, I'm not very optimistic for thoughtful planning to find intelligent solutions for our energy problems. Still, I'll voice my enthusiastic support for an NG bridge solution to my local legislators and others, using some of your text (with credit given) if that's ok.

I'm sick and tired of this great nation making bad choices and failing to take timely actions, leaving us at the mercy of outside forces. By acting now we can preserve our freedom of action and do better for our posterity.

--R

Is There Enough Natural Gas?

Congratulations, Fitz ... your work here really helps to define the scope of what NG may or not be able to do for our energy future. (You had a busy weekend!) I've been through your article only once so far, and it raises both answers and questions.

- a 20-30 year supply (for all uses) on the shorter end doesn't sound like much help, but balanced against the marginal outflow of wealth to some global rivals like Iran, SA, etc. it would be well worth pursuing.

- long before the eventual end of NG supplies and "peak gas", lower yields and more difficult exploration may drive up prices for all uses

- what will the distribution map look like for NG as motor fuel, vs. industrial and home heating uses?

- a far more complex problem will be to estimate the impact of motor fuel use on NG prices (still better to spend some of the wealth internally than send it to foreign oil suppliers).

- it appears that NG is not 'the' answer to our energy needs, but could be an important part of the overall answer for the relatively short to intermediate term

Thanks also for focusing on facts and numbers in search of constructive solutions rather than whine about big government and bad luck. When time allows I look forward to pouring through your article in greater depth.

- R

A Natural Gas Centric Strategic Long-Term Comprehensive Energy Policy

Hi Michael,
Excellent, persuasive article on your favorite topic! NG transportation happens to be important to me also, and that's largely due to some of your recent articles.

I’m frustrated beyond belief that our country is so sluggish to do anything to address the energy noose around our collective necks. We just continue to kick the can down the road. That’s been a 35 year road by my count. Ho-hum. Oil is relatively cheap now. Life is good. We can fill our gas tanks for less than two bucks a gallon. Funny how the sudden price drop makes everything seem so warm and fuzzy. Problem solved, another crisis averted by that trusty American standby -- procrastination.

The need to supplant at least a portion of our oil imports is obvious, as has been successfully argued in your posts many times.

It's hard to believe that NG/CNG is virtually ignored as a motor fuel, for all the reasons you mention. It's a proven technology that we can use NOW! Guys have been doing self-conversions of cars and pickups for over two decades. Local government fleets have proven the technology.

That NG would reduce air pollution is obvious. It's a much cleaner burning fuel, so much so that people somehow find a way to burn it in their kitchens to cook dinner. It's long been known that lubricant oil changes can be extended to the durability limits of the lubricant itself, because it doesn't become contaminated by gasoline combustion byproducts.

I suspect that the main drawback in the minds of many people is along the lines of concerns raised by User283977 in another post, whether " ... we have sufficient natural gas reserves to meet 10, 20, and 30% of transportation demand over the next 20 - 30 years ...".

Another huge concern is the impact on NG supplies and prices. That really needs to be addressed in a convincing way by anybody arguing for using NG as a motor fuel. Many people, especially politicians, would cringe at the thought of burning NG in competition with the mom and her shivering kids who already have a hard time paying for home heating in the dead of winter.

People just need a bit more reassurance on availability of supply and price. Don't get me wrong. I want that Toyota NG-Hybrid today! I believe NG is a viable and immediately available supplement to petroleum distillates for transportation. I look at it this way: political will and popular support were able to push ethanol forward until it became painfully obvious that it was a very bad idea. The US went to ethanol because it's easy. It was easy politically because it immediately appealed to the grain belt states, and it’s easy to produce using old technology, and it blends into the existing fueling infrastructure - except that it must be transporting by trucks, not pipelines. If we can develop ethanol despite its net consumption of more energy than it provides, NG as an intrinsically superior alternative, should be a fairly straightforward sell to the American people.

--R