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OPINION

The Liquid Natural Gold Deal

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
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Market bias has shifted higher, but the market still needs a catalyst. As we enter earnings season, the hope is guidance will confirm this is a soft patch and not the economy throwing in the towel after years of frustration and false starts.

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There are lots of deals happening, including a mega deal in the fossil fuel patch. Royal Dutch Shell’s (RD) $70 billion acquisition of BG Group PLC (BG) is not only huge, but underscores the fact the world will use and demand fossil fuels for decades to come. In fact, it’s looking like more and more demand for crude bottomed in the second quarter of last year and has since gathered upward momentum.

But this RD/BG deal is about liquid natural gas (LNG) which we should really call liquid natural gold. Demand is growing around the world and this will be the transition fuel between crude and renewables, which are still a fantasy when it comes to powering an economy. European nations will need more as they abandon nuclear and frown on crude, but Asia will have an insatiable appetite.

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With this in mind, nations that can export natural gas via liquefaction are poised to make a fortune. On that note, no other nation is better positioned than the United States.

Biggest Importers

  • Brazil
  • United Kingdom
  • China
  • India
  • Japan

Our cost is so low there are times producers burn off gas or try to use it in the fracking process. According to BG, the United States will be the only nation with increasing supply in 2025 and provide ten percent of total global exports.

I like the open and we’ll spy for chances to buy.

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