Natural Gas Is Not Economical In North Dakota -- Bakken, North Dakota, USA

Update

Yup. Less than an hour later after posting the original note below, CNBC's Erin Burnett had a segment on natural gas. It was noted that XOM is now the biggest American natural gas E&P company and shifting its focus toward a 50/50 mix of oil/natural gas.

Then, just a few minutes ago (March 23, 2011, 11:00 a.m. EST, I come across this article: XOM Touts Importance of Natural Gas for Future Energy Needs. Incredible timing. 

Original Post

The director of the NDIC has said many times that natural gas is not economical to gather and produce in North Dakota ... yet.

When I was growing up in North Dakota, it was often said that that part of the world was God's country.

Maybe.

Today, a Bloomberg headline: US Natural Gas Output May Get Boost From Japan Nuclear Crisis

The $99 trillion U.S. natural-gas industry, led by Exxon Mobil and Chesapeake Energy, is prepared for a surge in demand as Japan's nuclear crisis shakes confidence in atomic energy ...

Natural gas futures have risen 11 percent since the March 11 record earthquake and tsunami in Japan spurred a round-the- clock battle against a meltdown of nuclear reactors there. Futures gained as much as 0.5 percent to $4.275 per million British thermal units on the New York Mercantile Exchange and were at $4.264 at 11:11 a.m. in Singapore. Nymex gas contracts for delivery in March 2015 touched $6.083 on March 16. The contract has since fallen 1.5 percent to $5.99.

Production of the heating and power-plant fuel can be ramped up within months, thanks to the industry’s ability to extract gas cheaply from vast shale deposits in North America ...

By the way, XOM recently announced it was going to move back toward natural gas, something that caught many of us by surprise, and was quite contrary to what the rest of the industry was doing.

I doubt the crisis in Japan will change the natural gas situation in North Dakota overnight, but the nuclear disaster is just one more undeniable sign that Boone Pickens is right: natural gas is the bridge to our energy future.

I couldn't be happier. I've been accumulating shares in companies engaged in natural gas for years. I think there is more upside potential for natural gas than for oil. If oil goes up another dollar, that's less than one percent. If natural gas goes up one dollar, that's 25 percent.

Note: this is not an investment site. I am inappropriately exuberant about the Bakken and the oil and gas industry. No one should construe anything I write as being investment advice.