Methane to downtrend 25% to $2 tcf"Don't change the engine; change the fuel"
Rick Rule has lived through more "boom and busts" in the natural gas sector than almost anybody. The latest bust has brought natural gas prices down from about $4.80 per trillion cubic feet (tcf) to $2.65 per tcf in the past nine months… And Rick says it isn't over yet.
Rick told me he wouldn't be surprised if natural gas prices hit $2 in the short term. That's about a 25% decline from current prices.
If this forecast proves correct, that's an even stronger argument behind the buildout of a new transportation network based on natural gas. At $2 per tcf, natural gas would be more than 65% cheaper as a transportation fuel than gasoline.
Rick says, "The cure for lower prices has always been lower prices." In other words, with cheap natural gas prices, it's just a matter of time before the markets begin to adapt. Soon we will be exporting the fuel to emerging markets, replacing coal with natural gas in our electric plants… and running our cars on natural gas.
Rick sees that happening in the next five years. That forecast may seem like an eternity in today's markets. Most investors are looking for quick scores these days: 100% gains inside of a few months.
But getting in early and holding stocks through megatrends is how millionaires are created.
Imagine buying shares of Apple after the tech giant released its first iPhone in June 2007. Five years later, you would be sitting on gains of more than 300%.
In 2003, before "fracking" became an everyday story in the financial media, a small company called Range Resources began using this new technology to unlock natural gas. Five years later, the stock had jumped nearly 1,300%.
Right now, you have the chance to invest in one of the biggest energy megatrends in more than a decade. We have a massive supply of natural gas. And it's dirt-cheap. Like Rick suggests, it's just a matter of time before the markets adapt.
Trucking companies are adapting right now. Waste Management, UPS, Coca-Cola, and Wal-Mart are buying trucks with engines that run on natural gas. Clean Energy Fuels is building natural gas fueling stations across every major highway in America. Soon, Ford and GM will be selling cars that run on the clean fuel.
I agree with Rick. It's just a matter of time before we see widespread adoption of natural gas as a transportation fuel. Getting in early on this trend could result in huge profits for investors.
Good investing,
Frank Curzio
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