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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Ramsey Su who wrote (49124)	4/29/2004 10:16:59 PM
From: energyplay	Read Replies (2) \| Respond to of 74559

Hi Ramsey - I think A G KBE wants the Federal government to make it easier to build more LNG terminals, and decide what trade off of NG drilling vs. coal it wants. I would buy natural gas. I would not get an adjustable rate mortgage...;-) I would buy NG in the form of royalty trusts and some smaller E&Ps who are growing reserves. Futures will be erratic and subject to hedge fund games. (like the price of silver has been the past year) Some of the roylaty trusts have great tax advantages. In order of preference - Buy TMR - consider going heavy on this. I expect a big move this year, aobut 50%. You will need to re evaluate in Jan 2005 - might want to hold this for a number of years. Great value play Buy some KCS and BEXP for about the same time period Royalty trusts Buy SJT for long term hold Buy DOM for a one year hold - 1/2 position Buy some (2 or more) Canadians, like Accliam AE, Paramount PMT, Vermillion VMT, Advantage AVN. The distribution yield on these is pretty high. For taxable accounts, Acclaim's return for much of this year should be classified as return of capital and tax free. If you can only buy one or two, consider TMR and Paramount. Paramount does have a little downside risk, but also upside potential and 15% distribution. ************** The supply / demand case for NG is getting stronger. I expect we may see a huge increase (like a ramp up)over the summer, aided by hedge funds piling in, followed by a dip in the fall if the first part of winter could be warm. This roller coaster could be like what we have seen in the price of gold and copper. Stock prices will follow. Long term outlook will be positive, but you may not want to hold through the dip after the ramp up. How hot was it in San Diego ?

To: Ramsey Su who wrote (49124)	4/30/2004 5:21:50 PM
From: Maurice Winn	Respond to of 74559

Ramsey, <Now please tell me what he is saying. Should I buy some natural gas or not? >, he almost spelled it out for you in the last two paragraphs: <...Access to world natural gas supplies will require a major expansion of LNG terminal import capacity and the development of the newer offshore re-gasification technologies. Without the flexibility such facilities impart, imbalances in supply and demand must inevitably engender price volatility. As the technology of LNG liquefaction and shipping has improved and as safety considerations have lessened, a major expansion of U.S. import capability appears to be under way. These movements bode well for widespread natural gas availability in North America in the next decade and beyond. The near term, however, is apt to continue to be challenging. > You shouldn't buy natural gas. You should buy the technology which will deliver it to where it's needed, which is in a Yank-tank SUV. Uncle Al obviously didn't write all that himself. He has the luxury of having experts to review stuff and lay it all out for him to macrocopically attach it to the rest of the economy. It was a very well written summary of the oil and gas business over a century. While I'm happy to give him lots of credit and literally have done by holding his US$ in my little Tonka Truck, I don't think he can write that. So, if you had trouble reading all the way through it, that will be because of ADHD and you should take your Ritalin. You certainly can't blame Uncle Al for your lack of focus. The question is just what technology to buy? The obvious answers are big LNG ships, or the terminals to unload them, or the trucks or railway tankers to deliver the LNG to the users, or the storage tanks at the factories and power stations. Lots of the gas will probably be sent by pipeline from the terminals to existing pipelines. More pipelines will be needed. But that's all just industrial revolution civil engineering. What's really needed is a way to get it into SUV combustion chambers. That's where the big bucks are. That means vehicle fuel system cryogenics and service station delivery systems. Not to mention different engines to burn the stuff effectively. Engineer and I have, just coincidentally, been discussing via PM how to get hydrogen into SUVs [and other vehicles] and the economics of it. LNG is four parts hydrogen and one part carbon, so that's a good start. If it comes already in liquid form, that's a problem solved. Maybe natural gas by pipeline to big power stations, then electricity by wire to houses, then by electrolysis to H2 [and O2] and by pump into a storage tank, then transfer to the SUV when it comes home [or to a similar set up at a service station]. Cryogenic H2 in an SUV would give better range than storage as a gas [due to weight of tank and size limitation, gas taking up a lot more room than liquid, even if highly compressed. Nothing will happen until the SUVs can burn LNG. If vehicle economics swap to H2, or maybe methanol-powered fuel cells, then that will be a competitive issue to watch out for. So, invest in LNG pipelines to major cities, terminals, cryogenic storage for SUVs or, best of all, a zeolite catalyst which would switch methane to methanol [the Mobil synthetic petrol plant in Taranaki did that as well as then switching the methanol to petrol [gasoline]], which was inefficient so the process was stopped at methanol a decade or so ago. A really winning investment would be a single step natural gas to gasoline zeolite catalyst. 18 years ago, BP had taken over Sohio and a guy who used to be a zeolite chemist/engineer/scientist swapped over to being a crude oil trader. He got a salary rise, bought some braces, stopped having to fill in time sheets and got an expense account. It seemed mad to me to reward a crude oil trader more than somebody who might invent the holy grail zeolite process, but that's big business for you. Find the person who can make methane into gasoline in a single step and put your money on the nose. Otherwise, go with the cryogenics in SUVs or in transport. Don't buy natural gas. But, on the other hand, photovoltaics are getting cheaper and better. See bpsolar.com Cover Death Valley with those, electrolyze water, put the H2 in cryogenic form into an SUV and away you go. Engineer says just pump it as a gas into a tank, but cryogenics are cooler [if more expensive in capital]. So, the answer is you should not buy natural gas. You should take your Ritalin. You should join the Uncle Al KBE Admiration Society. Mqurice