The Next World Fuel Is Here
Why Liquid Natural Gas Will Surpass
Oil as the World's Primary Fuel
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Corner any oil company CEO, and—if he’s being honest— he'll admit that Liquefied Natural Gas (LNG) will almost certainly leave oil in the dust in the next 20-25 years. And in the meantime, LNG will be the fastest-growing fuel in the energy industry, generating the kind of profits that most of us have never seen before.
In my latest report 2008’s Top Russian Energy Stocks, I recommend a Russian gas company that all by itself accounts for nearly 20% of global gas production.
Up until a few years ago, a nighttime flight across Qatar was the planet's biggest light show. Looking down, you saw mile after mile of oil derricks topped by plumes of fire, burning off billions of cubic feet of "worthless" natural gas.
The derricks were too scattered to bother with. And even if they did hook them up to a pipeline, where would the gas go? Thus the gas—so precious today—went to waste.
Now it's 2008, and a simple new technology is turning the world upside-down. We've figured out a cheap and easy way to transport clean-burning natural gas around the world:
1. Shrink it 610-to-1 by freezing it at -260 F.
2. Ship it as a liquid anywhere.
3. Re-gasify it.
Within days, a shipful of LNG can go from Qatar or Kuwait to Long Beach or London—safely and cheaply. As a result, factories' and electric plants around the world are happily converting to natural gas. Alert investors are seeing dollar signs flowing from every capped well and abandoned field—still holding trillions of cubic feet in the U.S. and worldwide. And that's not to mention active and future wells.
This is not just a band-aid for the twin problems of air pollution and vanishing oil. This is a downright revolution, and it's based on proven world reserves of 6,390 trillion cubic feet of gas, enough to last 150 years!
Inhale deeply and think of the profits: LNG is meeting just 3-5% of America's natural gas demand today, but by 2020 that will climb to 20-25% (painlessly, because it's so cheap).
What’s more, production is growing and prices are rising. This Russian giant has a dozen new projects on the planning board and plans to increase production from 523 billion cubic meters to 560 billion cubic meters by the end of 2010, 590 billion cubic meters by the end of 2020 and as much as 630 billion cubic meters by 2030.
Bottom line: the ROI for early LNG investors will be off the scale. They could easily double their money in the next few years and double it again a few years later—especially those who know the smart ways to get into LNG.
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Sincerely,
Elliott Gue
Editor, The Energy Letter
Elliott H. Gue is editor of The Energy Strategist, the premier financial advisory solely dedicated to covering the complex energy markets. He is also co-editor of The Silk Road to Riches: How You Can Profit by Investing in Asia's Newfound Prosperity.