Investors Should Take Note Of The U.S. Oil And Gas 'Boom'

Includes: BP, CHK, EEP, LNG, RDS.A, XOM
by: Investment U

By Steve McDonald

One industry in the United States will create 1.4 million jobs by 2030. These will all be non-government, high-paying jobs and most will not require college educations. The best news, this is one of the best short and long-term indicators of investment potential ever.


A recent Wall Street Journal article reported that despite the high national unemployment rate of around 9 percent, the energy industry is churning out jobs at an amazing rate. Since 2003 the energy industry has shown an 80-percent increase in new jobs: up from 200,000 to 440,000.

One in five new jobs are now coming from energy and most are due to technological advances in exploration and development – fracking and horizontal drilling.

By the way, all of this is happening without any Department of Energy loans or guarantees.

Unlikely Locations

The most stunning aspect of this gas and oil boom, and it is a boom, is that it is happening in places no one ever dreamed would be energy centers; Pennsylvania, Ohio and North Dakota.

North Dakota, long known for farming and being the home of Roger Maris, has the nation’s lowest unemployment rate – 3.5 percent – and 16,000 job openings. Not just job openings but jobs that do not require degrees. And some are even paying $100,000 per year.

All of these jobs are due to oil and gas production. North Dakota is now pumping 440,000 barrels of oil a day, four times the amount in 2006.

In Pennsylvania, the center of the Marcellus Shale, 18,000 jobs were created in the gas business in just the first half of 2011.

It gets better. A study commissioned by the American Petroleum Institute by Wood Mackenzie concluded that with a better energy policy from Washington we could see an additional 1.4 million more jobs from energy by 2030.

1.4 million more. That’s 2.8 million new jobs.

Investors Follow The Jobs

Any industry that is creating as many jobs as the gas and oil industry has to be a solid bet for the next 10 years and longer. This is happening right before our eyes and it is just the beginning.

This is what real growth looks like and this amount of job creation is a screaming buy signal. Recent events in the industry are early indications of what we can look forward to in US energy.

Cheniere Energy (AMEX: LNG) doubled when they signed their agreement to export liquefied natural gas (LNG) to BP plc. (NYSE: BP) for re-sale in Europe and Asia.

This is a market that hasn’t even reached its infancy. The demand for gas in Asia and Europe is exploding and the US is now in the position to compete with and beat the Russians for the market.

In the past two years the US has been producing so much oil the pipelines cannot handle the volume.

Enbridge Energy (NYSE: EEP) recently bought a 50-percent stake in the Seaway pipeline that runs from Oklahoma to the Gulf Coast. In the past this pipeline delivered imported oil from the Gulf Coast to Oklahoma. Enbridge is reversing the flow to pump oil from Oklahoma to the refineries on the Gulf Coast that will then refine it to gasoline and export most it.

According to DoE numbers, United States exports of petroleum products have reached 2.6 million barrels a day – double the level of three years ago. Roughly 15 percent of the gasoline and diesel refined in the U.S. is now exported, according to U.S. Energy Department data.

That’s right! We are now exporting gasoline…

Demand for oil at home has been slumping since the slow down following the financial crisis, but Asia and other parts of the emerging world are screaming for it, and their demand is expected to grow for decades. The United States may finally be in the right place at the right time.

This play can be as simple as buying any of the majors; ExxonMobil (NYSE: XOM), Royal Dutch Shell (NYSE: RDS.A), BP, Chesapeake (NYSE: CHK), etc. Or, you can ride the no dividend but higher-growth route of the smaller producers and drillers.

Either way the jobs the energy industry is producing are the single best and most blatant buy indicators you’ll ever find. The long term winner is U.S. energy and you have to be in it.

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