By Porter Stansberry & Sean Goldsmith in the S&A Digest:

Cambridge Energy Research Associates is currently holding its annual conference in Houston. The conference, which hosts the biggest energy players in the world, is split into three days of discussion: oil day, gas day, and power day. Yesterday was oil day. But according to the update below (courtesy of John Kingston at Platt's), all anybody could talk about was gas:

ConocoPhillips CEO James Mulva gave a lunch keynote in which he referred to the US' growing reserves of natural gas as "The Gift." (It was sort of a play on the fact that Daniel Yergin, chairman of CERA, is the author of the oil industry classic history, "The Prize.")

Andy Inglis, chief executive of exploration and production for BP, also talked about shale gas several times during his presentation as part of the Oil Plenary. A panel on US Energy Policy also kept coming back to the shale gas issue.

The evening's dinner speaker, Eni CEO Paolo Scaroni, said in the first five minutes of his address, "Natural gas is going to be an increasing part of our energy future... the world is awash in gas."

The CERA meeting is otherwise just way too big and covers too many topics for it to be summed up with a sort-of "theme of the day." But the repeated "intrusion" of gas into oil day made this year's meeting an exception.

... Tom Walters, a top executive at ExxonMobil, explained his company's bullish views on gas (courtesy of Rig Zone):

Walters joined a group of industry leaders to address a global gas plenary on "The Role of Natural Gas in the Future Energy Mix." He noted that despite the effects of the recent economic downturn, the long-term outlook for natural gas is positive. "We expect global energy demand to increase nearly 30 percent in the next 20 years. By 2030, global gas demand will be around 140 billion cubic feet per day higher than 2009," he said.

The major driver of this demand is power generation, which will account for more than half of the gas demand growth, Walters said. He also emphasized the environmental benefits of natural gas as a source of power generation. "Natural gas is a cleaner-burning source of fuel and power generation that over the next 20 years will continue to form an increasingly important role in the global energy mix. This can be attributed to its advantages of lower carbon emissions and greater flexibility into power generation."

When the world's largest energy companies say natural gas is the world's future energy source, it's best to listen. These companies are the market. Plus, the world needs a cheap energy source cleaner than coal – especially in China. While gas is up from its 2009 lows, it's still trading at one of its cheapest points in over five years.



Crux Note: The S&A Digest comes free with a subscription to Porter Stansberry's Investment Advisory. Porter recently recommended his favorite way to profit from the trend in natural gas. He thinks this investment could double in the next 18 months alone, and readers will earn 8% yields while they wait. To access Porter's report, click here.

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