natural gas etf
Oh, the law of unintended consequences and the opportunities it brings.
Thanks to the new standard of Keynesian Abenomics, the Nikkei has blasted 47% higher since November. The Yen has lost about 25% against the U.S. dollar in the same time.
While we don't know what the future will hold for these trends, there's something else going on that will not fade quickly: The weak Yen has made imports to Japan a whole lot more expensive...including energy.
Since the Fukishima-Daiichi nuclear disasters in March 2011, Japan has compensated for its offline nuclear power plants by importing copious amounts of Liquefied Natural Gas (LNG). It was the fastest way to keep electricity output stable in an economy reliant on non-domestic energy suppliers.
Energy now accounts for about one-third of all Japanese imports. In March, those imports were valued at $17 billion Yen for the month. The following month, that number hit $22 billion.
Not surprisingly, in April Japan set a new record for spending on LNG imports. To be sure, a foundering Yen has contributed greatly. But this nation built on exports needs to keep the lights on. If all of Japan's nuclear plants were up and running at capacity, they'd supply 30% of the country's electricity needs. Instead, they account for just 2%.
And Japan is not alone.
How to Invest in the U.S. Natural Gas Revolution
It's no secret America has been in the midst of a natural gas revolution.
The technological advancement of fracking is causing nothing less than a full on shale boom, opening up amazing new profit opportunities if you know how to invest in natural gas - which I'll get to later.
According to the International Energy Agency (IEA), shale's share of U.S. oil & gas production will soar over the next 20 years. By 2035, the agency expects as much as 25% of U.S. oil and 50% of U.S. gas production will come from this source alone.
Thanks to the complexity and time involved, fracking a well is expensive, with costs running up to $10 million per well. It also requires a lot of room, a number of vehicles, and sophisticated and powerful equipment to get the job done.
But finding, drilling, and production costs are coming down as efficiencies are being gained. And this phenomenon will accelerate the rate at which supply hits the market.
Since late 2010, the time to drill a Bakken well has fallen dramatically - from 36 to 22 days currently.
Natural Gas Prices Move as the Switchover from Coal Continues
Natural gas prices have been on the rise in 2013. One of the major contributing factors for the rise, and one that will push gas prices even higher in the years ahead, has been singled out by Money Morning Global Energy Strategist, Dr. Kent Moors a number of times...
That factor is the switch by electric power companies from coal-fired electric generation to natural gas-fired generation. More than 9,000 megawatts of coal-fired generation were retired in 2012 alone.
The switchover is occurring because of two main reasons.
The first reason is how low natural gas prices are - even though the switch is causing a price climb.
The second is that burning natural gas is about half as polluting as burning coal.
Two Natural Gas Stocks to Buy Now Before the Transportation Revolution
Exploration and drilling for oil in America's newfound shale fields has unleashed a game-changing byproduct - enormous pools of natural gas that could meet the nation's energy needs for the next century.
In fact, the discoveries are so colossal they're set to rattle energy markets around the planet.
"North America has set off a supply shock that is sending ripples throughout the world," the International Energy Agency (IEA) said in its 2013 medium-term report.
But the first place to feel the effects will be right here at home.
You see, the supply surge will spur a massive switch away from smog-belching diesel engines to clean-burning, natural gas-powered vehicles.
Natural Gas Companies Inch Closer to LNG Export Approvals
Those natural gas companies awaiting approval to export liquefied natural gas (LNG) got a hopeful sign last week.
The push toward the United States becoming a prominent LNG exporter moved forward Friday. The U.S. Department of Energy (DOE) approved only the second facility to export LNG to countries without a free trade agreement with the United States.
The Obama administration gave the thumbs up (a 20-year approval) to the Freeport LNG project in Texas. It is owned 50/50 by ConocoPhillips (NYSE: COP) and Michael Smith, the founder, chairman and CEO of Basin Exploration (later sold to Stone Energy).
Natural Gas Stocks: Time to Pick the Next Winner in LNG Export Race
There's a worldwide race heating up to supply the world with liquefied natural gas (LNG) and right now the U.S. lags far behind.
But that's about to change, with the U.S. expected to go from 0% of global LNG exports today to 9%-12% as early as 2020.
Investors should get ready because certain natural gas stocks will surge along with the exports.
So far, only Cheniere Energy Inc. (NYSE: LNG) is allowed to export LNG out of the U.S. to both free trade and non-free trade agreement (FTA) countries- it hopes to begin exporting in 2015.
And Cheniere's stock has been on a tear since earning that approval.
When the DOE announced the approval of LNG exports from Sabine Pass on May 20, 2011, Cheniere was trading at $7.69. The stock soared over 30% that day, finishing at $10.04, and today trades nearly 301% higher at $30.82.
Now, investors have another chance to profit from an LNG company.
Once again the catalyst will be approval from the DOE to export LNG to non-FTA countries.
And a non-FTA permit is the key with LNG exports.
Natural Gas Companies Attempt to Make Fracking Safer
Hydraulic fracturing, or fracking, is the most important energy industry development in the past few decades, unlocking value for U.S. natural gas companies.
Its extensive use in the United States is completely reshaping the world energy scene.
But there is one question that lingers over the U.S. energy industry: Is fracking safe?
One of those saying fracking is 100% safe is sometimes controversial oil billionaire T. Boone Pickens.
Natural Gas Prices Could Triple – And So Could Your Profits
Natural gas prices are finally turning around, hitting multi-month highs - and piquing the interest of legendary investors who say the commodity has a lot higher to climb.
While most commodities are moving lower in price - some quite sharply - natural gas has soared in 2013.
The June natural gas futures contract on Monday settled at $4.392 per million BTU, putting it up 31% so far this year. This makes natural gas the top performer among the 24 commodities in the Standard & Poor's GSCI index.
Noted contrarian investor Jeremy Grantham of GMO Asset Management is among the natural gas bulls. He recently told a value investing conference in Toronto that investing in natural gas at today's low prices is a no-brainer.
Why I'm So Bullish About Natural Gas
I just arrived in Texas yesterday for my latest round of oil meetings.
The crude market continues to absorb accelerations in investment despite of some lateral price movements. That will be an important topic of discussion.
But my interest has moved in another direction.
Natural gas futures closed on the NYMEX on Thursday $4.14 per 1,000 cubic feet (or million BTUs). We have not seen prices reach these levels in quite some time.
Why T. Boone Pickens Likes These Natural Gas Companies
Legendary investor T. Boone Pickens has been called the Warren Buffett of energy investing, and over the years he has built up quite a legacy.
From his days as a wildcatter drilling in unknown oilfields, Pickens went on to start his own oil company, Mesa Energy, take on the likes of Exxon Mobil Corp. (NYSE: XOM), and manage a hedge fund, BP Capital.
As the head of Mesa, Pickens became known as a corporate raider, caught up in the deal-crazy days of the 80s. His first deal was to purchase energy company Hugoton Production Co. - a move made famous by the fact the company was 30 times the size of his own.
And today, at age 84, Pickens is still buying up energy stocks.
When you analyze his current top 10 holdings, it becomes clear natural gas companies are among his favorites.
We here at Money Morning certainly agree natural gas companies are primed to profit from the surge in U.S. natural gas production, largely a result of fracking, which has dramatically changed our country's energy outlook.
Less than 10 years ago, it was estimated that as much as 15% of our domestic gas would have to be imported in liquefied natural gas (LNG) form by 2020.
But now, the U.S. is projected to be a net exporter of gas by 2020, accounting for 9%-12% of global LNG trade.
And by 2040, U.S. consumption of natural gas is projected to rise more than 25% from 2010 levels, and domestic natural gas production is expected to climb more than 45% during the same period, Exxon Mobil said in a recent energy outlook.
So how do investors best tap into this trend?