Forget $2, $4, or even $6 for natural gas.
When a friend asked me last week where I thought natural gas was headed, my answer wasn’t what he expected…
It doesn’t matter.
I’ll get to why in just a moment, but first let me say I can understand my friend’s concern when it comes to the price of natural gas.
After all, we saw prices take a 44% nosedive within the last six months:
If you stretch that chart to cover the last four years, you’ll see just how sharply prices fell off a cliff.
In fact, it was only in April that we started to see the beginnings of a comeback…
Making right now the perfect time to buy.
Obama Green Lights Natural Gas
He may not have the best track record when it comes to energy investments, but at least the president’s moving in the right direction — and this time around, he isn’t focusing on bankrupt solar companies…
We’re talking about Obama moving forward with developing our country’s cheap natural gas resources.
In the Energy Information Administration’s early release of its Annual Energy Outlook 2012, natural gas and renewables will take on a stronger role in our electricity generation.
And that’s exactly what the president wants.
That much was evident on Tuesday, when Secretary of the Interior Ken Salazar approved 3,675 new gas wells to be drilled in Uintah County, Utah.
According to the press release:
“The president is focused on expanding safe and responsible production of natural gas as part of an all-of-the-above energy strategy that’s cleaner, cheaper, and full of new jobs,” said Secretary Salazar.
“This agreement is a great example of how collaboration can allow us to uphold America’s conservation values, while bringing growth to Utah’s economy and further reducing our dependence on foreign oil by developing our resources here at home.”
Perhaps our Commander in Chief is finally catching on to the fact that developing our domestic energy resources is a surefire way to create jobs…
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In North Dakota, for example, unemployment in some counties is less than 1%.
This new drilling program will take a decade to complete and is projected to support up to 4,300 jobs.
This news comes on the heels of Obama’s plans to form an interagency task force, the sole purpose of which is to coordinate the development of our natural gas supplies.
Cheap Energy Means New Opportunities
Cheap natural gas is opening new doors for us.
A single rig in the Bakken uses more than three thousand gallons of diesel a day. Overall, the North Dakota Petroleum Marketers Association estimates that up to three million gallons of diesel are used throughout the play on a given day.
Maybe they can take a lesson from the largest natural gas producer in North America, Encana, who has cut company costs in half by running its drilling rigs on LNG instead of diesel…
That’s just one example of how we might take advantage of our oversupply.
Invest Bigger, Invest Better
When it comes to natural gas, there’s money to be made across the Pacific — nobody will argue that fact.
However, I know there are some serious obstacles in the way of ramping up U.S. LNG exports…
Energy Secretary Stephen Chu being grilled recently on Capitol Hill over the matter gave us a little taste of the opposition.
How do you think the industrial sector here in the States will take it when we’re shipping our inexpensive natural gas to Europe, China, and Japan?
When that starts to happen in three years, you can bet domestic prices won’t be at $2/Mcf — or even $4/Mcf.
It’s simple economics: Less supply at home will inevitably give prices a boost.
The bottom line is exporters will be fighting tooth and nail over every tanker that sails.
And that’s just one reason there are ways to invest bigger and better when it comes to U.S. natural gas…
Those opportunities are right here at home — but they don’t lie with the producers drilling into the various shale formations dominating the media’s attention…
Until next time,
A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.
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