It’s easy to get lost in today’s global market — especially if you happen to be investing in the energy sector.
Just today, for example, I saw two radically different articles showcasing the utter absurdity of the media when it comes to oil predictions.
One claimed oil would reach $150 per barrel sometime in the near future and possibly break $200. The other was adamant that oil would drop to $75 per barrel, then collapse even lower.
This, of course, happens all the time. Some pundit out there needs a bit of attention, so he makes a quick, eye-catching prediction and sends it to the far reaches of the Internet.
Naturally, everyone forgets about it a couple days later.
This kind of lunacy is why I do my best research out in the field, like a junket I took with one of my colleagues a few months back. We landed at San Antonio International and immediately started the trek to our hotel in Cotulla, Texas.
If the name doesn’t ring a bell, don’t feel too bad. You may, however, recognize the place when I tell you we had traveled to the oil-rich heart of the Eagle Ford Shale.
At first, it was smooth sailing. We cruised down Interstate 35, taking in the sights, until we reached the outskirts of LaSalle County. Almost instantaneously, the busy road transformed into a crowded parking lot.
Cars and trucks carrying crude crawled at a snail’s pace down the highway, with no end to the madness in sight.
We first thought there must have been a terrible accident. Nowhere but the D.C. beltway at rush hour had I ever experienced this kind of traffic… but by the time we reached Cotulla, we saw nothing.
We made what should have been an hour tops into a three-hour ordeal. As if on cue, the bellhop smiled and explained that this kind of traffic is commonplace in South Texas.
Thanks to the shale boom, Texas’s traffic problems have turned the area into an economic war zone.
Roads were packed with seven-axle trucks carrying oil equipment crowding the lanes, tearing up the pavement faster than it can be fixed. Locals have to leave their houses twice as early just to get to work on time.
To be honest, we really weren’t all that surprised.
The economic boom we witnessed that day is something we’ve been covering for years. And through it all, Texas has had an unbelievable influx of people employing billions of dollars of drilling equipment.
This chart helps explain why:
In 2013, five states and the Gulf of Mexico accounted for more than 80% of the crude oil produced in the United States — or about 6 million barrels per day. And Texas was, by far, the biggest producer.
Considering this, we knew problems en route to Cotulla weren’t just some isolated incident.
Wherever the oil boom has brought prosperity, it has also brought more people and more congestion to the area… that’s simply one of the consequences when your state is responsible for 35% of the United States’ domestic oil production.
It’s also why the government in Texas was able to earmark nearly a quarter of a billion dollars to fix its beaten-down roadways.
Diversifying U.S. Oil
Look, it’s far too easy for individual investors like us to lose our way and get starstruck by massive integrated oil conglomerates like ExxonMobil and BP.
Fortunately, trips like the one I took to Cotulla help me sift through the eye-grabbing snake oil predictions that plague the media headlines today.
Every one of us jamming the roads in and out of Cotulla, myself included, were there because of one simple reason: the Eagle Ford shale. The congestion comes from all facets of this oil boom… from the billions of pounds of sand to the millions of gallons of water and chemicals needed to fracture every single well in the area.
And when production in South Texas tops two million barrels per day in 2017, I’ll know the slow traffic was worth the wait.
Of course, there’s a wealth of both diversity and opportunity that comes with the complexity of this energy production — and there are plenty of ways to add a little diversity to your holdings.
I’ve always held a certain fondness for the drillers that help fuel these economic booms.
Make no mistake — these are the stocks responsible for doubling Texas’ oil production in such a short period of time.
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.
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