It's easy to get excited about the U.S. oil and gas boom
Every day, proven reserves in the ground are going up. This is
a complete trend reversal from what most of us have experienced
throughout our lifetimes. Both oil and gas reserves were in
steady decline since the 1970's. But that's changing in a big
For natural gas, the turning point was around 1999. Since
then, proven reserves are up a whopping 100%.
Crude oil maintained its declining profile until around 2008.
But in just 4 years, crude reserves have climbed by 50%. These
are massive increases in very short periods of time.
These numbers are all based on U.S. Energy Information
) data. Funny thing is, due to EIA budget cuts the organization
isn't tracking numbers quite as carefully as it used to. The
latest data is from 2011.
If it was updated as of right now, reserves would have
increased even more. But of course, there aren't a lot of people
reporting to EIA headquarters today. But that's a different
And even if there was no government shutdown, the EIA's
figures are known to be conservative. Technology and recovery
methods are always improving. So much so that we're likely
sitting on enough natural gas to serve our needs for more than
100 years, and enough crude to fulfill 35 years of domestic
But if I was a betting man, I'd wager that we'll still have
plenty of oil in 35 years. If previous estimates were accurate,
we would have run out of oil and natural gas long ago.
The bottom line is this: the U.S. has enough oil and natural
gas to free the country from dependence on foreign oil. One
example is particularly interesting. This chart compares total
daily oil production in the U.S. and Saudi Arabia from 1999 to
Notice how 2002 was the last time we produced more oil than
Saudi Arabia. This is why we've been importing more than 40% of
our oil lately.
The U.S. was really getting crushed in the 2004 through 2008
period. But then things began to change as horizontal drilling
technology permitted access to the vast reserves of oil on U.S.
Now, U.S. imports of crude oil are dropping and domestic
production is booming. And in the near future, we're likely to
overtake Saudi Arabia in oil production once again, decreasing
our foreign oil dependence even more.
The same result is true for natural gas. Horizontal drilling
in areas like the Marcellus shale of Ohio has made natural gas so
abundant that some pipeline operators are overloaded.
The abundance of natural gas makes it far more economical than
crude oil in many industries. The following chart shows the price
of the respective energy sources per MMBTU, or unit of energy
Note that natural gas (red line) is less than 1/3 the cost of
oil (blue line) for the same energy output. That's a compelling
proposition for any industry that can make the switch.
The transportation industry is already switching over. Given
that fuel is around 20% of its overall cost, the industry has a
lot to gain by switching to natural gas-powered vehicles.
With natural gas so cheap, both consumers and businesses are
getting wise to the potential savings. Trains, refuse trucks,
mining trucks, long-haul trucks and even lighter vehicles like
Volvo wagons and Ford F150-s are now available with natural gas
These three charts paint the picture of a dramatically
changing energy landscape here in the U.S. Don't ignore it. It's
going to be here for a while and the benefits - and yes, some
drawbacks - will be felt across the country.
Today at 2:00 pm eastern time
I'll be joining Ian Wyatt to discuss the rapidly changing energy
landscape in our free investing seminar.
This special event is called
U.S. Energy Alert: 3 Profit Plays for 2014 and
During the event we'll be discussing three massive investment
trends for capital gains and steady income; explorers &
producers, pipeline operators (MLPs) and natural gas engine
technology. Plus, we'll share all the details on our top
investment ideas for capital gains and steady income.
If you're interested in learning the best plays please sign up
today. It starts in just a few hours, so
RSVP for this free LIVE teleconference right now
to reserve your seat.