It’s easy to root for an underdog.
But is natural gas really an underdog at this point?
Once you look beyond the short term, it’s nearly impossible to think so — especially considering global gas production is expected to triple by 2035.
For those of you who aren’t keeping score, that increase in production is roughly three times the current production of Russia, the world’s top gas producer.
And as we’ve said many times before, we’re staring down an unconventional road in the energy sector…
You can see above how important these unconventional resources are to us.
In the case of natural gas, half of our recoverable gas is from unconventional sources.
By now, most of us have seen or heard about the growth expected to take place in the prominent shale formations across the country.
When the International Energy Agency (IEA) released their latest report, Golden Rules for a Golden Age of Gas, the future looked even brighter for a certain group of bullish natural gas investors…
The Trick to Gas Investing
A little tip for natural gas investors: Don’t focus on the glut, or even the ultra-low prices that followed it.
Avoid looking for short-term profits in natural gas, because if you’re looking for prices to rebound to $10/Mcf within the year — or even the next two years — you’re going to be sorely disappointed.
Simply put, the transition to natural gas won’t happen overnight.
But it will happen.
And you can certainly bank on it, starting today…
Breaking One of Their Golden Rules
One of the golden rules proposed by the IEA is to treat water responsibly.
The goals laid out directly in the report were simple enough.
-
Reduce freshwater use by improving operational efficiency; reuse or recycle, wherever practical, to reduce the burden on local water resources
-
Store and dispose of produced and waste water safely
-
Minimize use of chemical additives and promote the development and use of more environmentally-friendly benign alternatives
Buried on page 54 of the IEA’s new report are all the reasons why water is so critical to these tight gas plays.
For starters, one shale well costs upwards of $8 million. The cost includes (among other things) buying and transporting more than 2,000 tonnes of sand and over 15,000 cubic meters of water.
The latter alone involves more than 500 trucks to haul the water to the site.
On that same page, you’ll find one of the best ways to profit by breaking one of these golden rules…
According to the report:
The hydraulic fracturing process accounts for around 40% of the total well cost — around twice as much as the second most expensive item, the rig itself.
By comparison, a typical onshore conventional vertical gas well in the same area would cost around $3 million, with 40% being spent on the rig.
Below, the IEA report shows us exactly how important (and costly) hydraulic fracturing is to the entire development process:
Now imagine what happens when drillers are able to both cut costs and increase production, all in one clean step…
Last week, I told readers this game-changing technology is only now grabbing attention from the major shale players.
This new technology removes water from the equation!
Until next time,
Keith Kohl
Check us out on YouTube!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.
For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.
Keith’s keen trading acumen and investment research also extend all the way into the complex biotech sector, where he and his readers take advantage of the newest and most groundbreaking medical therapies being developed by nearly 1,000 biotech companies. His network includes hundreds of experts, from M.D.s and Ph.D.s to lab scientists grinding out the latest medical technology and treatments. You can join his vast investment community and target the most profitable biotech stocks in Keith’s Topline Trader advisory newsletter.
