We've bore witness to this brewing energy war for years.
There have been lots of small changes — a rig here or there that switches from diesel to LNG, or perhaps a new report that hits the newswire — that most people haven't been paying much attention to...
But now we may have reached a tipping point in the battle between coal and natural gas.
And for those of us who have been paying attention, it's been a long time coming.
The Turning Point
For the first time since the EIA has been gathering data on U.S. energy consumption, electrical power generated by natural gas equaled that of coal.
Each accounted for about 32% of our total generation:
Natural gas has also trumped coal as the power source for new power plants.
Over 80% of generators built during the last ten years have been geared toward natural gas:
Here at Energy and Capital, we've been talking about the transition from coal to natural gas for a long time.
And the reasons we maintain our bullish stance on the future of nat gas keep stacking up...
The China Factor
About a month ago, my colleague Nick Hodge mentioned something we mustn't forget: The rest of the world hasn't undergone a shale gas boom.
Not a week after he said it, we saw further proof that the cheap natural gas we've enjoyed here in the States won't spread across the globe — at least, not any time soon — as ExxonMobil decided to pull the plug on its shale gas tests in Poland.
Disappointing is an understatement when you're beholden to Russia for your gas supply.
Putin has proven how quickly he'll turn off the lights if you don't pay his asking price. This dispute between Russia and the Ukraine has been going on for decades.
Since Poland counts on Russia for about two-thirds of its gas, you can understand how important it is for them to develop their unconventional gas reserves.
The latest disappointing results by Exxon and subsequent decision to pull out aren't helping Poland any.
Hopefully China has better luck when they begin tapping into their shale formations...
Chinese demand is only going to multiply in the years to come. In 2010, China's gas demand was about the same as Germany's, but by 2035 it will match that of the entire European Union!
Last year, China used about 131.7 billion cubic meters of natural gas, a figure expected to more than double by 2020.
If the Chinese can't figure out how to develop and extract their shale resources, the surplus of natural gas in the United States is going to fetch a pretty penny from those who need it most... and that alone will make LNG a hot commodity for decades to come.
A Better Way to Play Gas
I've never been a big fan of the major oil companies like Exxon. Quite frankly, the entire company is undergoing an identity crisis.
And I know I'm not the only one who's hesitant to put my money in Exxon.
There's really no need to put your bets on big oil when there are better opportunities out there...
If there's one play that will deliver over the long run, the best — and safest — has always been with infrastructure. And these plays go beyond North American pipelines, roads, and bridges...
On a global scale, we're talking about as much as $50 trillion that'll be spent on infrastructure improvements.
There are three companies in particular that are involved in nearly every project on the docket. In fact, completing these projects would be nearly impossible without them.
Over the last few weeks, we've seen billions of dollars earmarked for these types of projects...
You'll want to be invested in these companies before they break ground on this massive construction project.
Until next time,
A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.