It's winter, It gets cold, get used to it, DUH ...

[russell dunn]

Well, O.K.

Since you guys have apparently cornered the market on the use of that explanation
of our current NFW weather patterns, then let me encourage you to expound on why
all of the natural gas is gone and we are again in a shortage.

After all of the exhortations regarding the urgent need for energy independence and
pipeline construction, drill and frack, onetime jobs, ... that gas didn't get exported,
did it ? Can't recall hearing about that part.

This is a voting year and likely to be a year of record heating and cooling expenses
for Lakewood residents, if this doesn't qualify for Lakewood General Discussions then
maybe we should look further into the way the utility commodities are purchased.

I'm no commie when it it comes to heating the house. I keep those doors and windows
tight and prefer to invite someone in rather than spreading my warmth around to the
undeserving by relocating my furnace to the front lawn. SOB? You bet !

So, where did the gas go ?

[Tim Liston]

“So, where did the (natural) gas go?” Russ I’m not sure….

I thought it was pretty tough to export natural gas because it has to be liquefied first. And that which is exported, my understanding is that it can only be exported to countries that permit imports of their own energy supplies (oil). Maybe you know what is going on. I have always felt that a smart U.S. would import all we possibly can and leave what we have in the ground, for now.

But as for the natural gas shortage, well, it’s been REALLY COLD outside. Plus frankly this “100 year supply” assertion when it comes to natural gas and associated fracking liquids is just a myth. I do read where what we have in storage is at a low that matches 2005 when natural gas was selling for about $14 per 1MM BTU. Yet it’s only at about $5.20 or so as I write.

A few months ago I bought the equivalent of about 10 billion BTU on the futures market. That’s a lot. I got it at about $2.50 per 1MM BTU on average. It was pretty easy to see that natural gas was way underpriced. There was (still is) all this ridiculous hoo-hah about the aforementioned 100 year glut, all the wonders of fracking, and we were coming off two very warm winters. Plus the historical low price. Lest you think I’m bragging (which I am) I have admittedly lost money in prior years on natural gas, by assuming that then even higher prices were too low. I’ve taken some lumps. But natural gas prices have always been too low IMO.

We’ll never see $2.50 (or even $4) per 1MM BTU again but I’ll sell half of my natural gas before May because the media will declare that natural gas supplies will then be plentiful. And because that’s when gasoline (the stuff in your car) kicks in. Early spring is the time of year when some gasoline refineries somehow schedule “routine maintenance” all at the same time, which just happens to be the same time that they can't keep up demand for summer formulations (despite that we drive less), which just happens to be the same time when a mysterious explosion happens in a Texas refinery, which just happens to be the same time as Middle East rebels blow up a pipeline, which just happens to be the same time Obama starts threatening another Middle East oil producing country, which just happens to be a month or two AFTER Goldman Sachs has already loaded up on gasoline futures and has dumped natural gas futures.... So don't worry, natural gas will become at least a little cheaper and there will be “plenty” of it. My guess is that $5 and change (where we are at right now) is the natural gas top for a while. But gasoline will hit $4.00+ a gallon retail (again), $3.25 NY harbor RBOB and maybe more this summer. And we’ll all be wondering why we’re short of gasoline instead…..

[russell dunn]

An insightful answer from Tim including his hands-on experiences with the investment
portion of natural gas and the ethereal story of where it came from and where it might
actually end up being consumed. Make no mistake about my thanks to Tim.

Scott Walker has had to step up and ask some hard questions regarding Wisconsin
constituents and their painful under supply of heating fuels during this totally and
predictable normal winter. Don't even mention the fact that North Dakota is flaring
away enough gas every day to provide warmth to the underserved in his state.

The pipelines and interstate transmission services that are touted as being patriotic
and worthy of a good flag waving so often terminate in a tax-free port designed for
the exportation of what we have left to conserve for our continent.

[Jim O'Bryan]

The pipelines and interstate transmission services that are touted as being patriotic
and worthy of a good flag waving so often terminate in a tax-free port designed for
the exportation of what we have left to conserve for our continent.

Russ

While not as insightful as Tim's it has been reported that as much as 40% of the natural
gas being recovered in ANWAR, and on the North Slope of Alaska ends up being used by
the Navy's HAARP program.

Now when I worked for BP I could have quoted actual numbers, but now I can only go by
what I have read and heard from friends at BP.

HAARP is the Navy's project to study the ionosphere in Alaska.

Yeah it all just gets weirder from here.

.

[Scott Meeson]

“So, where did the (natural) gas go?” Russ I’m not sure….

I thought it was pretty tough to export natural gas because it has to be liquefied first. And that which is exported, my understanding is that it can only be exported to countries that permit imports of their own energy supplies (oil). Maybe you know what is going on. I have always felt that a smart U.S. would import all we possibly can and leave what we have in the ground, for now.

But as for the natural gas shortage, well, it’s been REALLY COLD outside. Plus frankly this “100 year supply” assertion when it comes to natural gas and associated fracking liquids is just a myth. I do read where what we have in storage is at a low that matches 2005 when natural gas was selling for about $14 per 1MM BTU. Yet it’s only at about $5.20 or so as I write.

A few months ago I bought the equivalent of about 10 billion BTU on the futures market. That’s a lot. I got it at about $2.50 per 1MM BTU on average. It was pretty easy to see that natural gas was way underpriced. There was (still is) all this ridiculous hoo-hah about the aforementioned 100 year glut, all the wonders of fracking, and we were coming off two very warm winters. Plus the historical low price. Lest you think I’m bragging (which I am) I have admittedly lost money in prior years on natural gas, by assuming that then even higher prices were too low. I’ve taken some lumps. But natural gas prices have always been too low IMO.

We’ll never see $2.50 (or even $4) per 1MM BTU again but I’ll sell half of my natural gas before May because the media will declare that natural gas supplies will then be plentiful. And because that’s when gasoline (the stuff in your car) kicks in. Early spring is the time of year when some gasoline refineries somehow schedule “routine maintenance” all at the same time, which just happens to be the same time that they can't keep up demand for summer formulations (despite that we drive less), which just happens to be the same time when a mysterious explosion happens in a Texas refinery, which just happens to be the same time as Middle East rebels blow up a pipeline, which just happens to be the same time Obama starts threatening another Middle East oil producing country, which just happens to be a month or two AFTER Goldman Sachs has already loaded up on gasoline futures and has dumped natural gas futures.... So don't worry, natural gas will become at least a little cheaper and there will be “plenty” of it. My guess is that $5 and change (where we are at right now) is the natural gas top for a while. But gasoline will hit $4.00+ a gallon retail (again), $3.25 NY harbor RBOB and maybe more this summer. And we’ll all be wondering why we’re short of gasoline instead…..

Hi Tim,

Just freaking impressive! If you wouldn't mind, what natural gas contract(s) did you purchase(a few months ago) at about an average of $2.50 per mmBtu? It would be kind of interesting to follow the performance of your contract(s).

Scott Meeson

[Tim Liston]

Scott….

I didn’t buy the nat gas futures directly. I bought them by way of an exchange traded fund (ETF), ticker symbol UNG. UNG owns natural gas futures and UNG trades just like any other stock on the NYSE. It’s a great way to buy natural gas futures without all the complications. UNG moves up and down in line with its underlying futures. You do pay a small fee but only about 1% a year. Nat gas was about $2.50-$3.00 per MM BTUs when I bought UNG (over a couple occasions).

I own several ETFs. A couple for equities, one for agricultural commodities, one that bets that bank stocks will go down (big loser so far). Another that invests in natural gas developers. Some of the most widely traded “stocks” are actually ETFs, e.g. SPY.

Again, ticker symbol UNG. That gets you exposure to natural gas futures.