Will Natural Gas Become the Leading Energy Source?
With Kinder Morgan's recent buyout of El Paso and Statoil's buyout of Brigham at a respective 37% and 20% closing-day premium, many investors may be naturally curious of the path forward for energy. Will green energy ever take ground or it will linger as a speculative play? When will we make the shift to natural gas? Will we ever make the shift?
Petroleum and coal have for years fueled the United States economy, providing just less than two-thirds of our energy consumption in 2009. Going forward, much talk is made about moving towards clean energy sources, like wind and solar. These are speculative fields that, in my view, are not too practical from a cost perspective.
While wind and solar energy developments remain very much works in progress, I find that the natural gas industry is ready to go. It is anticipated that the known reserves will last us more than a century. In addition to being much more environmentally-friendly than our two leading energy sources in terms of CO2 emissions, natural gas is also in America's best interest as a matter of security. Fracking critics become increasingly questionable as economic dependency on hostile nations grows.
But yet natural gas provided less than a quarter of 2009 energy consumption. There is tremendous growth potential. As a surveyor of several natural gas sites, I have seen the demand for this energy source from automobile manufacturing plans to the hungry wildcatters setting up sites. In this type of climate, the shift to natural gas provides ideal risk asymmetry. The question then naturally follows, which players of the industry should one invest in?
There were a few companies that I highlighted elsewhere that could outperform their peers. I provide some valuation and competitive analysis in the links below:Continued on the next page