This week we’ve been looking at those overlooked sleeper investments that every one of us craves for in our portfolio.
That feeling of finally pinpointing an underdog in the market, finding that quiet part of the sector that is due for a resurgence.
In many ways, the cat is finally out of the bag when it comes to the role that nuclear power will play in meeting our future power demand needs. Make no mistake, dear reader, the world is going to be using A LOT of electric power in the years and decades to come as we push for the electrification of anything and everything under the sun… from cars to buildings. No corner of the market is immune to its draw.
Truth is, we’ve been slowly moving down a path to electrification, except now things are starting to accelerate — quickly.
In fact, our electric power demand is ramping up so fast that it’ll finally push one underdog investment back into the limelight.
Are you ready for our natural gas-fueled future?
If I were asked to name one beaten down commodity that has been pummeled into a bloody pulp time and time again for seemingly forever, my first and immediate response would be: Natural gas!
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You know this sad story just as well as I do, and the veteran members of our investment community probably know by now what’s about to come next.
But first, let’s quickly lay the groundwork…
The real story of our natural gas fortunes goes back more than a decade, when drillers started utilizing both horizontal drilling and hydraulic fracturing to tap into the tight rock formations that held an immense amount of oil and natural gas.
Within a few short years, U.S. natural gas production surged higher, with output more than doubling since 2006. I know a lot of people out there like to attribute the death of the U.S. coal industry to renewables like wind and solar, but the real coal killer was cheap, plentiful natural gas.
You can bet none of that natural gas was wasted. Not only does natural gas make up 36% of the United States’ energy consumption, but it also accounts for 42% of our electric power sector.
Thing is, we’re going to need a lot more of that juice going forward — there’s no shortage of bullish sentiment for U.S. power markets.
You see, all that new demand generated by AI data centers is going to have to come from somewhere. And even though Big Tech is turning to nuclear power for the answer, the cold, hard truth is that it will take years to not only develop the next-gen tech like small modular reactors, but also construct new traditional nuclear capacity.
In other words, no full transition is going to take place overnight. Even setting up the massive amount of solar and wind capacity will take years.
Up until this point, there hasn’t been much concern over our true bridge (natural gas) away from fossil fuels. After all, there is a double-edged sword when it comes to natural gas production. We’ve been able to reliably tap into immense shale gas formations like the Marcellus for more than a decade, and the amount of associated gas that accompanied the oil boom flooded the market with new supply.
We had so much natural gas at our fingertips that we became the world’s largest exporter of LNG within a few short years.
Nothing could go wrong… or could it?
The days of a natural gas supply glut may be nearing an end. If our shale gas production continues at the same pace it’s been all year, we’ll witness the first year-over-year production decline since the EIA started collecting this data 24 years ago.
Keep in mind that our tight gas formations account for nearly 80% of the United States’ dry gas production.
That may be a more frightening thought than most can imagine.
Remember, electric power demand from AI data centers is exploding higher; Goldman Sachs is projecting data center power demand will grow 160% over the next six years.
In fact, natural gas demand is projected to grow by 10 billion cubic feet per day between now and 2030 simply from data center demand and planned coal plant retirements.
I’d give you three guesses as to what would happen if natural gas production continues to decline going forward, but I have a feeling you’ll only need one.
It’s certainly enough to make you look twice at this underdog investment.
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.
