I've received quite a few emails recently from my Scarcity & Real Wealth
subscribers regarding hydraulic fracturing, or fracking. It's clear that many of them have been reading up on the subject.
And they should. Because even with stricter regulatory burdens on the horizon, this could well be the most profitable and rewarding subsector of the entire energy universe.
In order to understand why, let me take you back a few years in order to understand where we once stood on the natural gas landscape.
"The era of inexpensive natural gas is over."
Back in 2005, Hurricane Rita struck the Texas coast, Microsoft (Nasdaq: MSFT) released the Xbox 360 console, the Chicago White Sox won the World Series, and the United States seemed to be running out of natural gas.
At least, that's what everybody thought.
Gas supplies were dwindling, and the only hope for meeting the U.S.'s growing need appeared to be purchases from overseas. In fact, liquefied natural gas (LNG) imports had surged nearly 30% the prior year, and companies were investing heavily in new import terminals.
In its annual report to shareholders, Chenier Energy (NYSE: LNG) boldly declared "the era of inexpensive North American gas is over." So investors and consumers braced for a day when domestic natural gas reserves ran dry and incoming tankers hauled in supplies from distant lands.
That day never came.
It turns out the United States isn't running out of natural gas -- it is actually swimming in it. It won't need to borrow from its neighbors. Quite the opposite. Stockpiles are overflowing with surplus supply that can be sold overseas. So those import terminals are now being converted to export facilities.
That's an amazing 180-degree turnaround in a relatively short period of time. So what happened? Did somebody suddenly discover the largest gas reservoir this side of Qatar? Not exactly.
The credit for the natural gas revolution belongs almost entirely to one of the most controversial -- yet indisputably successful -- drilling techniques ever devised: hydraulic fracturing.
Whether you love it or hate it, one thing is for sure -- you better not ignore it.
A 100-Year Supply of Fuel
The Energy Information Agency (EIA) now believes there is a staggering 2,543 trillion cubic feet of recoverable gas in the United States. The country burns about 25 trillion cubic feet a year, give or take.