Posted on 20 May 2013 by Douglas ChadwickNatural Gas is the Earth`s greenest fossil fuel. In the U.S.A. it now costs 20% less than oil to produce the same amount of useable energy. It has the ability to replace oil, be it for engines, heating houses or simply producing electricity. Shale gas can be found in all the continents, but is particularly prolific in America and Great Britain. As the means of extraction improves and technology advances, it is quite feasible that these countries’ energy needs may be satisfied for the 150 years. So what`s not to like? Well the new method for extracting this gas from deep below the earth`s surface is called “The Fracking Process”. It involves pumping water, steam and fluids at very high pressure into the layers of shale and this releases the trapped gas. (A bit like taking Epsom Salts.) The concern with this process is that it could release “nasties” into the water table and could also cause minor earth movements. The Extraction Industry is well aware of the problems and undoubtedly will come up with the solutions. The financial gains are so huge that this must be a certainty. If this all comes to pass, then it does beg some interesting questions of the future. If the demand for oil drops and the price collapses as the West converts to gas where will the Middle Eastern Arab states sell their oil? Will a falling income see these States return to the conditions of a century ago? If they do, what happens to the West`s Armament Industry? Perhaps they will have to fall back on manufacturing peaceful products like washing machines and desalination plants. These are questions for the future. Today we are interested in how we might take advantage of this changing energy scenario. The price of natural gas has already tumbled in the USA and is likely to harmonise across all users. It is after all a simple commodity. You recover it, transport it and then use it. However for this to happen vast sums of money will have to be spent in a number of industries - the gas recovery industry, the engine conversion and electrical generation industries and finally the means of getting it to the customer. All of this expenditure will have to be recovered through the pricing structure. So just maybe the price of gas will not fall further and may in fact have to rise to allow these industries to make a profit. At Saltydog we must locate the Fund Managers that are investing into those companies which are on the supply side of these new Industries. Coal had its day and now it looks as if Oil maybe going to hit the buffers. Perhaps we are now about to enter the Age of Gas.