RE:RE:RE:A question then
emmitt wrote:
Here are a few reasons why some are bullish on natural gas.
-The first is the switch from coal usage to natural gas usage. Federal environmental regulations are forcing companies to use natural gas because it releases fewer carbon emissions than coal. About one-third of coal-generating capacity in the U.S. from 2012 will be retired by 2020.
-the second is the increased use of natural gas in producing petrochemicals. Oil was used in the past but now ethane (a type of natural gas) demand is expected to grow by more than 600,000 barrels per day by 2018, to 1.6 million bpd.
Third is U.S. exports of lLNG. The U.S. will begin shipping LNG around the world by the end of the year in order to meet rising energy demand – which will double over the next 10 years.
emmitt; I agree that NG has a good mid – long term future but I don’t see much strength in the near term. LNG export from North America is in the very early days and it will be several years before Canada begins to export LNG.
The conversion from Coal to NG for Electricity will help but that is another long term process. It takes several years to permit and build a new Power Plant. Regulations sound good. It’s a lot easier for Politicians to say things than it is to actually get it done. There will be a lot of push back from the Coal and Electricity Industries not to mention Consumers (voters) complaining about High Electricity bills.
A BRUTAL 2015/16 winter would help in the near term but I think that it will take a few years for the North American NG market fundamentals to change in a major way.
The recent 5 yr. NG forecast from the IEA is not very exciting;
https://www.iea.org/newsroomandevents/pressreleases/2015/june/despite-decline-in-oil-prices-natural-gas-demand-outlook-revised-down.html
Long Run has a “near term” debt problem. Personally I don’t expect Long Run to go bankrupt but I will be surprised if they can meet the May 31 2016 debt reduction requirement without selling some assets or be taken over. The current market conditions are not favourable for companies with debt issues (see Legacy).
That does not mean that at the current Share Price LRE doesn’t have the potential for a very nice gain. I would rate it as High Risk POTENTIAL High Reward.
As they say “No Risk No Reward”!!
It’s not clear to me what you were referring to in this statement’
“The U.S. will begin shipping LNG around the world by the end of the year in order to meet rising energy demand – which will double over the next 10 years.”
The IEA has predicted that Global Energy Consumption will grow by 37% by 2040 from 2014 levels.
https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&cad=rja&uact=8&ved=0CEIQFjAH&url=http%3A%2F%2Fwww.iea.org%2Ftextbase%2Fnpsum%2Fweo2014sum.pdf&ei=s6mIVdKUCYS-ggShw4CICQ&usg=AFQjCNGd8y_x2G3uAXltBBCfZzHJGoZTpQ
As Always; Do Your Own Due Diligence; It’s Your Money !!