With the diminishing importance of oil and and coal as energy sources, North America’s natural gas producers and the exchange traded funds (ETFs) that track them may have great potential.
Coal and oil occupy 60% of North America’s energy market, while the remaining 40% is divided by natural gas, nuclear and renewable energy sources. With increasing environmental regulations and a shift toward energy sources that release fewer carbon emissions, coal and oil are expected to give up some market share to these other sources, states Markus Ermisch of Sun Media.
With the current trends, this soon-to-be available market share will be gobbled up by the nuclear and renewable energy markets. In order for the natural gas market to be a player and grab a huge piece of the pie, it is imperative to jump on the T. Boone Pickens train, catch the attention of the public and politicians and drum up demand. Until there is strong political support to make better use of natural gas, demand could remain flat.
- Market Vectors Coal ETF (KOL): down 67.9% from its Jan. 15 inception
- PowerShares DB Oil (DBO): down 33.7% year-to-date
- United States Natural Gas Fund (UNG): down 20.4% year-to-date
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.