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Cookin' With Gas

Energy and Capital's Weekend Edition

Written by Nick Hodge
Posted May 26, 2012

You should be out enjoying beer, barbecue, and burgers this weekend, so I'll keep this brief.

The biggest energy investment happenings this week centered on natural gas.

First, research firm Wood Mackenzie came out with some estimates that bode very well for U.S. shale gas exports...

It says by 2020, Europe will be using more U.S. shale gas than European.

The EU's dependence on imported gas will increase to 86%.

It also said China will increase LNG imports by 80% to meet domestic demand by 2030.

Natural gas in Europe costs $10 per thousand cubic feet (tcf) right now and even more in Asia. It's going for $2.57/tcf in the States.

So you can bet the rest of the world wants to get their hands on that cheap gas.

Ain't Seen Nothin' Yet

I know the phrase "fracking boom" has been tossed around a lot lately.

And if one was already under way, it's about to go sonic...

The Ohio House and Senate have now passed a law that will allow fracking to grow responsibly.

It will require companies test water within 1,500 feet of proposed wells, report the fluids and chemicals used in drilling, and track the wastewater after it's injected into disposal wells.

The bill has paved the way for Ohio to add 65,000 jobs and $5 billion in shale gas investment in the next two years. The number of wells there is expected to grow 3,025% by 2015 as a result.

Other states are working on similar measures that will allow fracking to expand while holding drillers accountable.

Even better for the industry and its investors, new fracking methods are being perfected that use no harsh chemicals or water at all.

These methods will do wonders to appease environmentalists — not to mention be beneficial for the bottom line.

Right now, it can cost as much as $15 for every barrel of wastewater that has to has to be hauled away from a frack site. The industry uses more than 56 million barrels of water each day.

This waterless fracking method is already being used by Chevron, Shell, and many other drilling giants.

It's going to kick the fracking industry into overdrive...


Call it like you see it,

Nick Hodge
Editor, Energy and Capital


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