2012 And Beyond: Natural Gas and US Export Markets (3.12.12)

I have been dormant on this blog for quite some time and I think that it's time to become active! I recently released my initial 2012 report covering natural gas, chemical companies and some commodities. We are currently going through an energy revolution; natural gas reserves found in the north eastern corridor of the US are displacing the dynamics of oil and oil based products throughout the country.


Just after releasing my report and attending an alternative energy conference, major car manufacturers came out with press releases stating that they will begin producing vehicles that are capable of running on natural gas. While we have some time before this makes its way around the country, we are certainly starting to see the initial signs. One major issue is obvious, the amount of fueling stations needs to dramatically increase before it is used for travel. What I find most interesting and what is grabbing a lot of headlines around the country, is the actual benefit of cheap natural gas on manufacturing companies, chemical producers and in general, industrial companies. The cost advantage to these companies that is being created by the use of natural gas is changing wage dynamics between the US and overseas workers, as well as production costs for all sorts of products we use in our everyday lives.


Why is this big deal? Well, we have a lot of debt and the US needs a plan to pay down that debt. By reducing production costs, decreasing the wage gap between the US and overseas third world nations, and likely a factor to help stem inflation, natural gas could allow the US to become a net exporter of products across the manufacturing chain, this will increase jobs, reverse the trade gap and hopefully keep prices at home under our own control. As the middle class continues to grow in developing nations, demand for our products will only increase if we can maintain relations and remain cost effective versus having those nations produce the goods themselves.


While natural gas is not the end all be all, it certainly has great potential for this nation. It is the first step in energy independence, it is a cleaner fuel and it will afford us time to create other cleaner alternatives that have economic viability. It took 25+ years for solar to just begin to have real economics that can apply to everyday consumers. I don’t like our reliance on others for energy, and if we have to wait another 15 years for Alternatives to be a sustainable solution for our country, I would much rather have natural gas versus coal or oil. I hope you feel the same.