We’ve got gas!!! [Not the Beano type]

A golden age is upon us. Natural gas is abundant, cheap and near the points of consumption; generally far away from conflict zones.  IEA just put forward a scenario whereby the consumption of natural gas could rise by more than 50% to 5.1 trillion cubic meters in 2035 – that would have it increasing its stake in meeting global energy demand from 21% now to 25% then.
Total recoverable resources could sustain consumption for over 250 years. Plus all major regions have recoverable resources equal to at least 75 years at current consumption.

In a USA context, the gas glut has already begun disappearing with storage tracking at the 5 year average mark. A major hurricane or other interruptions to supply and/or unexpected increases in demand could see natural gas pushing back up to the $6-7 mmbtu level by February-March 2012.

One wrinkle in the reliability of gas, is fracking; at least fracking as it’s been regulated to date. The evidence is in – the chemicals used do contaminate water and have leaked into the water table with damaging effect. The federal government is taking a closer look even with the support of Texas!  So, regulatory delays are likely to tighten supply too.

The debate about GHG mitigation and natural gas cuts both ways. Use more gas and displace coal and oil = good for a cooler planet but if gas displaces nuclear or renewables then it has a warming effect. At current forecast it is more likely a substitution fuel for coal in power and oil in transportation thus net-net we’re ahead on greenhouse gas emissions (GHG).

One comment on displacing nuclear: Given the tragedy of Japan, I think I write for most members of the planet when I say I would rather adapt to more CO2 then depleted Uranium. If nuclear is at such a state that we cannot anticipate what might go wrong then it should be reserved for the laboratory and not powering our garden parties.

Some stocks to bet on: NFX, SWN, DVN, CHK, CLR, LNG and AGL.