Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles.
Offbeat and out of the box, Malcolm Gladwell is one of my all-time favorite reads.
So it didn’t surprise me when his first book — “The Tipping Point: How Little Things Can Make a Big Difference” — spent 28 weeks on the New York Times Best Seller List…
Insightful as always, Gladwell describes “tipping points” as the moment when the unique suddenly becomes commonplace, changing everything in the process.
It is a simple premise to be sure, but one that has reverberated through conference rooms around the world ever since.
After all, if you’re smart enough to be in on the ground floor at the very moment when something finally “tips”, money stand to be made.
Nowhere is this more apparent than in our endless quest for energy independence.
It seems most folks are searching for that elusive tipping point when some singular event will suddenly change everything we think about our energy future.
But the larger truth is that these same folks will likely be looking for quite some time.
And it’s not because energy independence is impossible. It’s because when this moment arrives, there won’t be one event that frees us from the grip of the Middle East… Instead, there will be thousands of smaller tipping points along the way.
A Tipping Point in Natural Gas
That why I’m so bullish on natural gas. After years of smaller breakthroughs, the industry now seems to be on the brink of something quite big.
Natural gas, in other words, is about to “tip”.
Because while we continue to look at other alternatives to fuel our cars and chase after the mirage behind corn-based ethanol, a much simpler solution might be staring us right in the face.
The best part is this solution can be had for about 90 cents to an equivalent gallon of gasoline.
That’s no typo… Ninety cents a gallon is about what it would cost today to fuel up your car with natural gas.
That is part of the solution to the oil crisis that has been put forward by T. Boone Pickens for years now:
Natural gas is a cleaner fuel source and North America has an abundance of supply to tap into… Just look at what’s occurring with shale development throughout the country. It’s real and it’s happening everywhere — from Northeast British Columbia to the Barnett Shale in Texas; from the Appalachian Basin to the Fayetteville Shale in Alabama. In today’s business and economic environment, natural gas is much more exciting and promising than oil. It is the premium fossil fuel.
That’s how Pickens felt about it in 2008.
Today — with gasoline prices now headed above $4.00 a gallon for the foreseeable future — Boone’s vision of a natural gas-powered transportation system may finally be gaining some traction.
Boone believes that by making a switch to natural gas, the U.S. could achieve virtual energy independence almost overnight.
How’s that for a tipping point?
What’s more, the Texas oil magnate believes abundant gas reserves have made the United States the “Saudi Arabia of natural gas.”
That’s no mere hyperbole; it’s a fact…
According to a IHS CERA research study released last week, the U.S. has enough natural gas to meet current demand levels for more than 100 years.
Thanks largely to shale natural gas, “The unconventional gas revolution is the most important energy development so far this century, and it has the potential to boost gas production far beyond North America,” said IHS CERA chairman Daniel Yergin.
Meanwhile, on the whole, these resources have almost doubled in the past year. The U.S. Energy Information Agency’s 2011 outlook now projects technically recoverable unproven shale gas reserves sit at 827 trillion cubic feet — 474 trillion cubic feet larger than the previous year’s outlook.
That makes the supply of natural gas plentiful and, best of all, home-grown… which is why a move to natural gas-fueled cars could turn the hard truth about oil on its head.
The problem is we are not quite to the end of the rainbow — or the tipping point — on this one. Not yet.
Of the 12 million natural gas-powered cars worldwide, there are only about 110,000 on U.S. roads today.
What’s more, there’s not much when it comes to choice for consumers, even though Honda has been building a compressed natural gas Civic (with a $26,000 price tag) for years… All of which makes you wonder why anyone would dish out $40,000 plus for a Chevy Volt.
Fill Up for $7 a Tank
But when you ponder the fact that you could fill up your car from the gas line in your garage for a mere $7 and travel 200 miles on a full tank, the advantages of natural gas are as obvious as the dangers in the Middle East.
One way for investors to bet on this surging market for natural gas is with Range Resources (NYSE: RRC).
The Fort Worth-based natural gas and oil producer is already producing the equivalent of 260 million cubic feet of natural gas per day from its Marcellus Shale properties. The company plans to reach 400 million by the end of this year and to exceed 600 million by the end of 2012.
Beyond that, Range believes it will ultimately realize net production equivalent of 2 billion to 3 billion cubic feet of gas per day from the Marcellus.
For shareholders, that kind of growth will eventually be translated into big share price moves.
Another play is in the fracking technology that makes all of this possible in the first place.
In fact, Publisher Brian Hicks has put together a report on the company he believes will be his best energy investment over the next two years. This company owns a cutting-edge type of fracking technology that has already been utilized at more than 236 drill sites and counting.
No matter how you decide to invest in this growing resource play, get in before it tips for good.
As for more great investment ideas, check out the week’s top-read Wealth Daily and Energy & Capital articles below.
Your bargain-hunting analyst,
Editor, Wealth Daily
Cleantech Wins Big: The End of Oil is Here
Editor Nick Hodge tells readers in this investment webinar about the groundbreaking development in the battery storage sector… and why oil companies are shakin’ in their boots.
Futureshock: Growing Organs… And Your Bank Account
Editor Steve Christ explores the miracle of regenerative medicine and explains how early investors can make some money on the seismic changes that are about to rock the medical world.
Buy American Express Call Options: Why You MUST Own This Stock Before March Ends
Editor Ian Cooper uncovers why shares of American Express could run before March comes to a close.
Japan’s BP Moment: Instant Noodles and Batteries
Yes, these events are horrific… But the bird’s-eye brutal truth is that, save for those in the immediate area, these events quickly fade into history — their impact on lives, not markets.
Sucked Under by the Black Tide: A Billion Dollar River of Cash is Flowing into this Sector
What’s a gallon of oil worth to you these days? $2? $3? $5? Is it worth a year in jail, or maybe a bullet between the eyes? How about a chance to dip into a billion dollar river of cash? Adam Lass discusses in today’s Wealth Daily.
Make Money as the World Goes Mad: A Candid Interview with Greg McCoach
Publisher Brian Hicks shares with readers his recent sit-down with commodities guru Greg McCoach.
Nuked: The End of Nuclear Power
Editor Chris DeHaemer discusses the fate of nuclear in the aftermath of natural disaster in Japan, and shares with readers the energy plays he’s focusing on for the foreseeable future.
Canadian Oil Sands Takeover: An Unconventional Future for Crude
Energy and Capital‘s Keith Kohl gives investors further insight into the future of oil sands production.
Nuclear Investing: Japan to America: Your Nuclear Renaissance is Dead!
Editor Jeff Siegel discusses how Japan’s nuclear power crisis could end support for nuclear power in the United States.
Blood In the Streets: This Time, It’s Different
Editor Chris DeHaemer shares with readers why waiting for natural gas to go up has been a little like waiting for Godot.
Gold to Outperform in 2011: Stocks Rise with Investor Interest
Analyst Greg McCoach discusses precious and base metal stock investing in 2011.
Fracturing: The Last War We’ll Fight on American Soil
Editor Keith Kohl explains how the controversial hydraulic fracturing process is causing heated public debate, the outcome of which will be extremely profitable for early investor