You know I’m extremely bullish on natural gas.
I understand it’s not a popular opinion. For the last two years, natural gas prices have steadily declined right alongside crude oil. Truth is, natural gas has been under pressure as far back as 2008.
So when I mentioned my positive outlook last week, it’s okay if you didn’t blindly jump aboard… you will today. If you’re not, you could miss out on a buying opportunity that shows its face only once a generation.
That might sound like pure hyperbole. I get that. After all, the media headlines today are dominated with stories about renewable energy.
You’ve seen the ones I’m talking about… whether it’s how much solar we’ll be using in 2050 or a new billion-dollar wind project that pops up.
I don’t blame anyone for getting excited over the growth potential for wind and solar. Remember, the EIA reported back in March that solar and wind will account for most of this year’s generating capacity additions.
Just make sure your optimism doesn’t blind you to the reality of the situation… we’re living in a world fueled by natural gas.
And things are only going to get better from here on out…
The Reason You Need to Be Bullish on Natural Gas
Don’t call it a comeback; gas has been here for years… 195 years, to be precise.
That’s how long it’s been since William Hart, the “father of natural gas,” made the first commercial gas discovery outside of the tiny town of Fredonia, New York.
We’ve come quite a long way since, too.
Natural gas accounts for 29% of the United States’ total energy consumption.
We’re using it at a rate of 77.7 billion cubic feet…
Every. Single. Day.
That’s nearly 28 trillion cubic feet of gas each year!
More important, however, is that you can bank on its share in our energy mix increasing.
I’ve told you before that the death of coal is one of the primary catalysts.
If you haven’t accepted that yet, keep in mind that three out of four coal-fired power plants are more than 30 years old.
Roughly 5% of coal’s electric generating capacity was retired last year…
And the cold, bitter pill to swallow here is that coal plants won’t be around much longer. The chart below reiterates what I’ve been saying for years — natural gas, solar, and wind are the new go-to fuels for power generation:
Eventually, every single one of those coal plants will be shuttered.
I know most people believe that’s a good thing… and it IS. What it also means, however, is that we’re going to have a pretty large hole to fill.
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The Perfect Storm for Natural Gas Investors
There’s a slight hiccup in all of this.
To simply say that we’ll just extract more natural gas to make up for that loss of coal power would be a gross mistake.
Truth is, the natural gas we use today isn’t the same as it used to be.
Despite the fact that we’re consuming more and more of it every day, it’s no longer a matter of drilling a 27-foot well like William Hart did in 1821.
We’re not only drilling deeper, but our natural gas supply has also become dependent on hydraulic fracturing. Without it, companies would be unable to tap into the vast shale gas resources that singlehandedly boosted domestic production to what it is today.
If you asked someone about shale gas 10 years ago, you would have gotten nothing more than a blank stare back.
Today, nearly half of our natural gas production is from shale resources. You saw the massive production growth in the Marcellus region last week.
Low natural gas prices have ground production to a halt nearly everywhere else, with only a fraction of drilling rigs running today compared to a few years ago.
It’s important that you put all of these pieces together and look for the best deals in the sector now.
Just don’t wait forever to do it.
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.
