Here’s a great example of a company sticking its money where its mouth is.
This morning, Exxon (XOM) announced that it’s spending $41 billion to acquire XTO Energy (XTO), a major player in natural gas and unconventional shale.
This announcement comes just a few days after the company made a major presentation about the natural gas, and how its era had arrived.
So, longsuffering natural gas bulls, your moment may have finally arrived!
Even if the developed world's (OECD) energy demand has peaked, by 2030 the developing world will consume almost 2/3's more energy.
In the future, natural gas will become the second largest source of energy globally. We'll use more gas than even coal.
If environmental concerns impose carbon costs on companies, natural gas will become even more cost-competitive.
The higher the carbon cost imposed, the more cost competitive natural gas will become. Thus the more environmentally-concerned the world is, the better.
For America this is great news. America has tons of natural gas via unconventional sources such as shale.
Unfortunately Europe will remain heavily dependent on imports. They don't have abundant shale gas like the U.S..
Sourced via a presentation from Exxon Mobil Corporation at the Bank of America Merrill Lynch Energy Conference, Wednesday, November 18, 2009.
Can't figure out why natural gas remains so cheap? Check out Why Natural Gas Investors Are Getting Screwed.