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DON'T RISK MORE IN OVER-SUPPLY OF NATURAL GAS, BET ON THE PIPELINES
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Robert Cohen
May 24, 2012, 4:27:36 PM5/24/12
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ROBTCOHEN: I'll say it again: Fracking or Fracturing is a dream come true.
Contaminating massive water supplies, acquifers and lakes is a nightmare.
PRESIDENT ROMNEY has hinted <reporter Michael Isikoff, MSNBC> the ENERGY cabinet Secretary position for 'the major Bakken oil fracturer' whom is his campaign's 'key energy policy advisor.' The primary purpose of the government is to protect health and safety, NOT to allow wolf to guard chicken house. Meanwhile, an e-mail which seems to me true enough about how to bet on natural gas:
Get Ready to Say Goodbye to George, Abe, and Even Ben
There is a technological revolution coming that will change the way you live, work, and shop. It will spell the end of paper currency as we know it, but could also spell big profits for investors ahead of the curve. To learn more, check out Jeff Opdyke’s latest special report here.
The Best Way to Cash In On the Coming Natural Gas Boom
By Jeff D. Opdyke, Editor, The Sovereign Individual
Dear Sovereign Investor,
Let’s get the obvious contradiction out of the way … I am an unabashed fan of natural gas, yet the commodity itself has no place in an investor’s portfolio. It is a trader’s game only.
The reason for this seemingly contradictory position is the supply-demand fundamentals in the nat-gas market. The world is awash in natural gas. Every time an energy exploration company pokes a hole in the ground, it’s a Jed Clampett moment and natural gas just bubbles up. Recent calculations by the International Energy Agency suggest the world has enough natural gas today to meet global demand for the next 250 years. The U.S. itself has supplies that could stretch well into the next century.
Even when you start to account for the coming demand – and it is coming – you still can’t soak up all this free-flowing gas.
--------------------------------------------------------------------------------
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Too much supply. Not enough demand. Never a winning combination.
Indeed, as I write, natural gas is perched right at $2.70 per million BTUs. And while that’s significantly up from just under $1.90 last month, the fuel is still trading at depressed levels. And it will do so for a long time because there’s simply no catalyst for prices to sustain any meaningful rise. After all, production companies can just crank up the volume anytime prices rise enough to warrant it – which, in turn, will push prices right back down again.
Like I said … not the kind of business you want to be in as an investor.
That said, there’s a huge opportunity in natural gas.
How Do You Light Southern California from
Southern Wyoming?
Over the past few months, I’ve spent many hours looking for the best way to invest in natural gas – and I’ve found it.
No question that demand for the fuel is on the ascent. It’s cleaner burning and, more important to business, it’s cheap. Utilities around the U.S. are increasingly dumping coal to switch to nat-gas. So, too, are big industrial companies that produce energy-intensive items like aluminum and steel.
And you have a budding new industry that one day will line American highways with fueling stations for cars and light trucks that run on compressed natural gas.
Thus, we come to one of the opportunities that exist in natural gas: transportation.
You have to be able to move the gas around the country.
America is crisscrossed by a network of pipelines that ferry gas from gas fields in Texas, Louisiana, Pennsylvania, the Great Plains and elsewhere to customers all along the East and West Coasts and into major cities. You can’t just plop a rig into downtown Los Angeles and drill for gas … you pipe it from a gas basin in southern Wyoming.
That’s where you want to be as an investor – in the pipeline business.
Up 40% in 18 Months … and Much More to Come
Demand for natural gas is never ending and, in fact, continues to grow as those utility and manufacturing companies suck up ever-more natural gas. Pipelines don’t take the risks inherent in drilling and they don’t worry too much about gas prices since demand for their services really isn’t dependent on the fuel’s cost.
Best of all, because their business is so stable, most of them pay healthy dividends. That makes the pipelines one of my favorite and conservative plays on rising demand for natural gas in America.
One of the best companies in the sector is Oklahoma-based Williams Partners. It owns interests in or operates 15,000 miles of interstate gas pipelines throughout the U.S., 1,000 miles of pipelines that transport liquefied natural gas, and more than 10,000 miles of oil and gas gathering pipelines.
My subscribers to The Sovereign Individual newsletter are already well aware of Williams. We’ve owned shares in the company now for about 18 months and they’re up about 40%, well ahead of the S&P 500. Of our gain, more than 12 percentage points is from the substantial dividend payments we’re collecting every quarter. Better still, Williams recently promised to increase its dividend payments by 20% a year through at least 2014.
The company’s pipelines currently can handle some 6.6 billion cubic feet of natural gas a day, and LNG production of more than 200,000 barrels a day – but there’s more capacity on the way.
Williams last year launched a $1 billion plan to build the so-called Commonwealth Pipeline that aims to span 200-plus miles from West Virginia to Peach Bottom, Pennsylvania, as part of a move to extract and distribute more natural gas from the prolific Marcellus Shale deposit. (The time line for that project has slowed a bit because of weak gas prices.)
The Challenge is also an Opportunity to Profit
Meanwhile, Williams and Cabot Oil & Gas recently disclosed a partnership that looks to build on a new pipeline to transport Cabot’s natural gas production to New England and New York markets.
In my final analysis, Williams Partners is one the best ways to cash in on natural gas. The opportunity in this industry simply isn’t the fuel itself … it’s transporting that fuel to the increasing number of consumers who want it. That’s where the profits are being made.
Until next time, stay Sovereign…
Jeff D. Opdyke
P.S. I’m not the only one excited about natural gas. My colleague Andy Hecht – a man once called a trading “legend” by Guy Adami – thinks natural gas is ready to explode. He sees it in the same position as silver was back in the mid-90s… before it went on an 800% rise. He’s found three ways to play this coming boom – click here for his latest video report.
--------------------------------------------------------------------------------
Related Reading:
The White House is Telling Us to Buy Oil Stocks
Obama’s Flawed Energy Initiative
The Big Opportunities Coming in Cooking Oil and Other Lesser-Known Commodities
Profit from Unclaimed Dividends
RECENT ARTICLES
5/23/2012
A
Contaminating massive water supplies, acquifers and lakes is a nightmare.
PRESIDENT ROMNEY has hinted <reporter Michael Isikoff, MSNBC> the ENERGY cabinet Secretary position for 'the major Bakken oil fracturer' whom is his campaign's 'key energy policy advisor.' The primary purpose of the government is to protect health and safety, NOT to allow wolf to guard chicken house. Meanwhile, an e-mail which seems to me true enough about how to bet on natural gas:
Get Ready to Say Goodbye to George, Abe, and Even Ben
There is a technological revolution coming that will change the way you live, work, and shop. It will spell the end of paper currency as we know it, but could also spell big profits for investors ahead of the curve. To learn more, check out Jeff Opdyke’s latest special report here.
The Best Way to Cash In On the Coming Natural Gas Boom
By Jeff D. Opdyke, Editor, The Sovereign Individual
Dear Sovereign Investor,
Let’s get the obvious contradiction out of the way … I am an unabashed fan of natural gas, yet the commodity itself has no place in an investor’s portfolio. It is a trader’s game only.
The reason for this seemingly contradictory position is the supply-demand fundamentals in the nat-gas market. The world is awash in natural gas. Every time an energy exploration company pokes a hole in the ground, it’s a Jed Clampett moment and natural gas just bubbles up. Recent calculations by the International Energy Agency suggest the world has enough natural gas today to meet global demand for the next 250 years. The U.S. itself has supplies that could stretch well into the next century.
Even when you start to account for the coming demand – and it is coming – you still can’t soak up all this free-flowing gas.
--------------------------------------------------------------------------------
Advertisement
Former U.S. Congressman Releases Controversial “Tell-All” Book
Former U.S. Congressman, Robert Bauman, has just released one of the most controversial books we've ever seen.
Inside, he reveals the secrets to getting a second passport and establishing a part-time or full-time offshore residency in one of over 80 beautiful, get-away countries... starting in 30 days or less.
| And you can get this 722-page guide to international living and travel right now – but this offer won't be available for much longer.
To claim your copy click here.
--------------------------------------------------------------------------------
Too much supply. Not enough demand. Never a winning combination.
Indeed, as I write, natural gas is perched right at $2.70 per million BTUs. And while that’s significantly up from just under $1.90 last month, the fuel is still trading at depressed levels. And it will do so for a long time because there’s simply no catalyst for prices to sustain any meaningful rise. After all, production companies can just crank up the volume anytime prices rise enough to warrant it – which, in turn, will push prices right back down again.
Like I said … not the kind of business you want to be in as an investor.
That said, there’s a huge opportunity in natural gas.
How Do You Light Southern California from
Southern Wyoming?
Over the past few months, I’ve spent many hours looking for the best way to invest in natural gas – and I’ve found it.
No question that demand for the fuel is on the ascent. It’s cleaner burning and, more important to business, it’s cheap. Utilities around the U.S. are increasingly dumping coal to switch to nat-gas. So, too, are big industrial companies that produce energy-intensive items like aluminum and steel.
And you have a budding new industry that one day will line American highways with fueling stations for cars and light trucks that run on compressed natural gas.
Thus, we come to one of the opportunities that exist in natural gas: transportation.
You have to be able to move the gas around the country.
America is crisscrossed by a network of pipelines that ferry gas from gas fields in Texas, Louisiana, Pennsylvania, the Great Plains and elsewhere to customers all along the East and West Coasts and into major cities. You can’t just plop a rig into downtown Los Angeles and drill for gas … you pipe it from a gas basin in southern Wyoming.
That’s where you want to be as an investor – in the pipeline business.
Up 40% in 18 Months … and Much More to Come
Demand for natural gas is never ending and, in fact, continues to grow as those utility and manufacturing companies suck up ever-more natural gas. Pipelines don’t take the risks inherent in drilling and they don’t worry too much about gas prices since demand for their services really isn’t dependent on the fuel’s cost.
Best of all, because their business is so stable, most of them pay healthy dividends. That makes the pipelines one of my favorite and conservative plays on rising demand for natural gas in America.
One of the best companies in the sector is Oklahoma-based Williams Partners. It owns interests in or operates 15,000 miles of interstate gas pipelines throughout the U.S., 1,000 miles of pipelines that transport liquefied natural gas, and more than 10,000 miles of oil and gas gathering pipelines.
My subscribers to The Sovereign Individual newsletter are already well aware of Williams. We’ve owned shares in the company now for about 18 months and they’re up about 40%, well ahead of the S&P 500. Of our gain, more than 12 percentage points is from the substantial dividend payments we’re collecting every quarter. Better still, Williams recently promised to increase its dividend payments by 20% a year through at least 2014.
The company’s pipelines currently can handle some 6.6 billion cubic feet of natural gas a day, and LNG production of more than 200,000 barrels a day – but there’s more capacity on the way.
Williams last year launched a $1 billion plan to build the so-called Commonwealth Pipeline that aims to span 200-plus miles from West Virginia to Peach Bottom, Pennsylvania, as part of a move to extract and distribute more natural gas from the prolific Marcellus Shale deposit. (The time line for that project has slowed a bit because of weak gas prices.)
The Challenge is also an Opportunity to Profit
Meanwhile, Williams and Cabot Oil & Gas recently disclosed a partnership that looks to build on a new pipeline to transport Cabot’s natural gas production to New England and New York markets.
In my final analysis, Williams Partners is one the best ways to cash in on natural gas. The opportunity in this industry simply isn’t the fuel itself … it’s transporting that fuel to the increasing number of consumers who want it. That’s where the profits are being made.
Until next time, stay Sovereign…
Jeff D. Opdyke
P.S. I’m not the only one excited about natural gas. My colleague Andy Hecht – a man once called a trading “legend” by Guy Adami – thinks natural gas is ready to explode. He sees it in the same position as silver was back in the mid-90s… before it went on an 800% rise. He’s found three ways to play this coming boom – click here for his latest video report.
--------------------------------------------------------------------------------
Related Reading:
The White House is Telling Us to Buy Oil Stocks
Obama’s Flawed Energy Initiative
The Big Opportunities Coming in Cooking Oil and Other Lesser-Known Commodities
Profit from Unclaimed Dividends
RECENT ARTICLES
5/23/2012
A
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