Sometimes you can’t help but watch the government shoot itself in the foot.
That’s the feeling I got this week when the USDA halted the sale of mineral leases in the Wayne National Forest.
The decision has set more Utica shale development back a year, so that another report can be released on the effects of the hydraulic fracturing process.
But it’s not as if this story is new…
To date, more than a million wells have undergone hydraulic fracturing since 1949.
In the Barnett shale — where our shale boom effectively began — more than 15,000 wells have been stimulated using the same process.
Isn’t the rhetoric coming out of D.C. lately all about job creation?
Developing that shale resource could’ve created more than 200,000 Ohio-based jobs over the next three years. What’s more, Ohio would’ve pulled in nearly $500 million in tax revenue from now till 2015.
It’s as simple as that. And nobody knows this kind of growth story better than Ohio’s neighbor…
Follow the Neighbor
Since 2001, the natural gas industry in Pennsylvania has been on fire.
Back then, natural gas made up less than 2% of the state’s electric generation.
Today, it makes up 17% of that total.
That’s a tenfold increase.
And there’s only one casualty in this whole situation: coal.
Ten years ago, coal made up almost 60% of that share, which has fallen to about 46% today.
Of course, PA has only been tapping into the Marcellus shale for about six years when the first well was drilled by Range Resources.
Since then, nearly 4,000 wells have been drilled in the state.
As a result, natural gas production in Pennsylvania (which accounts for nearly 66% of total gas production in the Northeast United States) has been on fire, increasing to approximately three billion cubic feet a day.
The bottom line here is that this growth story is another sign that the U.S. is heading toward a natural gas revolution.
And quite frankly, it’s paid off in spades for investors so far. Check out how just three of the biggest Marcellus operators in 2010 have performed for investors over the long run:
Are you preparing for the next phase of this shale explosion?
Later this week, we’ll tackle a few upcoming plays that are still flying under Wall Street’s radar.
Enjoy your weekend,
Editor, Energy and Capital
P.S. Not sure trade how to trade this volatile market? Here are some of the hottest investment stories to cross my desk this week. Getting started is easier than you might think…
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