The UK Spectator has an interesting article that reaffirms the point made on this site over the past year; new drilling technologies have caused the current and projected supply of natural gas to balloon. With natural gas being a relatively green energy, especially when compared to oi and coal, the environmental and price considerations make it the clear winner in the alternative energy war.
As I’ve noted before, the shift toward greater consumption of natural gas will be a slow process. A lot has to do with infrastructure changes and changes in the way current machinery is powered. With a glut in supply, pricing should remain low for natural gas until we start seeing a major shift to natural gas powered devices.
We live in a world filled with scarcity. Energy resources certainly are a scarce resource. Thus, the explosion of natural gas production over the past 7 or so years is great news for the world.
While energy sources like sunlight and wind are free and naturally replenished, converting them into large quantities of electricity requires vast amounts of natural resources — most notably, land. Even a cursory look at these costs exposes the deep contradictions in the renewable energy movement…READ MORE.
My Take: Robert Bryce’s opinion piece is an interesting one because he talks about the environmental costs that are obvious, but overlooked, when considering many of the more popular ‘green’ fuel sources. To drive the point home, Bryce discusses California’s push for 1/3rd of its energy to come from a renewable energy source by 2020. When considering the size of wind or solar power to achieve this goal, you begin to understand the immense scale of such a project.
The main takeaway I receive from reading about such observations is this…People want cleaner fuel and less reliance on foreign sources for energy. The trendiest green technologies (solar and wind) have yet to make a great leap in efficiency and scale that is needed to handle a sizable portion of society’s energy demand. A compromise must be reached between desires and what is practical or failure will likely triumph.
What type of compromise is possible? Bryce highlights in his opinion piece natural gas and nuclear power. While I think people may have become a little too bearish on nuclear’s future role as a resource, let’s shelve that discussion and focus on natural gas. The fact is that in the U.S. we’ve recently discovered that we have much largest supplies of natural gas beneath our feet than was estimated only a few years ago. Though natural gas does not fall into the category of a renewable energy source, it is one of the cleanest fossil fuels.
The driving factor in favor of natural gas is that it is, based on historical price ranges and supply estimates, a practical and cleaner energy source than coal or oil based alternatives. For example, American Electric Power of Columbus, Ohio is in the process of phasing out their coal powered plants and replacing them with gas powered plants to comply with EPA regulations by 2020. The estimated cost is between $6-$8 billion.
It does not matter how much political will exists, if a technology cannot practically provide a basic societal need, it is not going to be embarrassed by the majority. The push for greater dependence on renewable energy is fine, but when it is not practical people will look beyond the surface to the deeper desire of such legislation. The deeper desire is to reduce emissions and dependence on foreign sources for energy. Natural gas is a cleaner alternative to the current fuel sources that are shunned and is a practical fuel source. For this reason, you should not shy away from considering natural gas an energy investment option.
Energy is once again on the front burner. Crises in the Middle East and North Africa are roiling global oil markets, and disaster in Japan set off a chain of events that once again calls into question the safety of nuclear power, an important source of electricity. The most immediate impact on most Americans is pain at the pump, with gasoline prices now more than $4 a gallon in parts of the U.S. But what’s painful for the pocketbook may also resent opportunities for investors, who can find attractive stocks in almost every segment of the energy market…READ MORE.
My Take: Interest in energy stocks is on the rise as the result of increasing energy costs. I’ve written about energy related investments on numerous occasions. The article above does a good job of providing a primer on a number of energy related investments and mixes a few specific stock recommendation in.
If you’re mad about your energy bill and need some direction as to where to invest, start with the article above.