Friday, October 1, 2010

The future? Bank on U.S. Shale

US shale resources are exciting. My friends and acquaintances can attest, I get overly excited about the potential of US shale.

Marcellus, Haynesville, Barnett, Fayetteville, Woodford, Utica, Eagle Ford, Bakken -- they are on the tip of my tongue and the forefront of my mind (and those of investors).

US shale gas resources are huge! Trillions and trillions of cubic feet of natural gas -- right under our feet. That means energy independence. That means jobs right here in the US, lots and lots of jobs related to drilling, producing, transporting, processing and exporting domestic natural gas. That means billions of dollars to help our economy and bolster local, state and federal government. That mean gas-generated power plants galore.

While prices for natural gas aren't the best on the Henry Hub today, companies are still investing in US shale and in natural gas in general. (Think of the billions of dollars being invested in Western Australia's massive LNG projects, like Gorgon, Wheatstone, Bonaparte, Ichthys and Gladstone.) To me, that says, they know something laymen don't. (After all, they've got analysts and economists and mathematicians and industry experts ... who study these things for a living.)

In fact, Wood Mackenzie just reported that in the first half of 2010 alone US shale gas expenditure has reached $21 billion. That's a lot of money to change hands, and they predict that the mergers and acquisitions market will continue its hot streak.

Translation: Natural gas is going to pay off, and prices are going to climb.

Ol' T. Boone Pickens is on to something, and natural gas-fueled cars may be just around the corner if he has anything to do with it.

In fact the US may very well become the largest exporter of clean energy because of our natural gas resources. Three LNG import terminals have started the ball rolling on switching on being export teminals, and pipelines have begun the process of both building and becoming bi-directional.

Natural gas is clean-burning. It's domestic, and it's plentiful. Jump on the natural gas/shale bandwagon with me. It's taking off around the corner!

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