US energy independence no longer a pipe dream

We're a lot closer to this goal than we think, and investors can take advantage of it by buying shares in these companies.

By Jim Cramer Sep 10, 2013 9:51AM

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Gas pump (© Thinkstock/Jupiterimages)When will people truly realize how important the domestic oil and gas finds in the U.S. really are? When will there be an understanding that the Eagle Ford, the Niobrara, the Permian and the Bakken shales may have enough oil to make a real dent on imports and change the way we think about which U.S. companies truly have the potential to be major independent companies? When will people recognize the U.S. is a lot closer to energy independence than we think?


It drives me crazy how little-noticed the changes really are. Take Monday. Did you know that the California Energy Commission released numbers showing that 743,000 barrels of oil were shipped by rail last quarter to California refineries? That's up from 215,000 barrels last year at this time. I almost fell of my chair when I read a newswire report about it. Most of it came from North Dakota and Colorado. While the latter's always been a solid producer of oil, the big increase comes from Noble Energy (NBL). The company has said it will triple oil production from the Niobrara field shale in the next five years, which is just about Denver. Overall, Colorado produced 49.3 million barrels of oil last year, a 26% jump from the year before. That's monumental.


It's nothing, though, compared with the Bakken field flowing out of North Dakota, which sent 317,000 barrels by rail to California in the first quarter. California's not even the biggest destination for oil from that monster play, which will produce almost 900,000 barrels a day this year -- up from slightly less than 400,000 two years ago. Independents Whiting (WLL) and Continental (CLR) lead the Bakken: each produced about 65,000 barrels a day in 2012, and I bet those numbers will go up substantially this year.

The once-moribund Permian Basin produced 600,000 barrels a day in 2012, up about 10% more than the year before, and up 25% from seven years ago. Given that drilling permits have doubled since 2005, I expect much more coming from that once-given-up-for growth field. Occidental (OXY) is the biggest producer in the Permian, followed by Pioneer Natural (PXD), Apache (APA) and Kinder Morgan (KMP) following it -- although the latter three generate about half of what Occidental produces every day.


But EOG (EOG) has been making noises that its Delaware Basis portion of the Permian could be its third big find after Eagle Ford and Bakken. That means there's much more than currently meets the eye, or the refineries. Cimarex (XEC) has, of late, also been mentioned as one of the best Permian plays with a substantial year-over-year gain. Same goes for Concho Resources (CXO).


It's the Eagle Ford in Texas, however, that's the most impressive field yet. That field produces 600,000 barrels a day, up 58% from just a year ago! Just one company alone, EOG, is producing about one-fourth of that. No wonder that stock has been such a horse.


Others performing well in the Eagle Ford? ConocoPhllip's (COP) got good acreage, as does Murphy Oil (MUR). Do not forget Sanchez (SN), either -- it just put together a bunch of parcels in the Eagle Ford and is doing an 8-million-share offering right now in order to pay for them.


Finally, let's include a natural gas company. Cabot Oil & Gas (COG) is building a pipeline now to take natural gas to heat homes in the nat-gas-starved New England area, replacing foreign imported oil in a move that will further cut back imports.


All of these incredibly important plays seem to mean very little when taken separately. However, together they paint a picture of continental energy independence that could be a dream realized in 2018, which is not that far from now.


Further, consider the possibility of nat-gas-fed trucks taking over from diesel, the last bastion of imports, responsible for 25% of oil that comes from overseas. If that happens, it'll be possible to think the U.S. could -- with continued conservation and better mileage cars -- actually be energy-independent as a country.


It's no longer a pipe dream. If it were a mission in Washington, it would be game-changer for jobs, for the balance of trade and for domestic security. It's a reality. It's just that people, including major politicians, aren't talking about it. That's shocking to me, and it should be to you, too. However, If we can't make it a mission, let's at least make money off it by buying shares in EOG, Noble, Sanchez, Continental, Whiting, Cimarex and so many others now that it is indeed happening right before our eyes.

 

cramer

 

 

Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and is long OXY.

 

 

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144Comments
Sep 10, 2013 10:36AM
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I have 0% faith in the Russians, I do however hope this works.   You take out all WMD from Syria, you take out any reason for anyone to care about Syria.  Sorry to all the civilians, truly wish and hope the best for you, but sick of all the endless wars in that region.  If the USA gets involved they will be blamed for it, if they don't they will be blamed for it ..... not striking is cheaper so there it is.  
Sep 10, 2013 11:23AM
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Nice to have oil independence, but nicer to have the price come down with it ... why isn't it?
Sep 10, 2013 10:43AM
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Obama himself said Syria giving up its technical  weapons was a good idea -- an idea offered by Russia.  The only original idea Obama has had was to go to war,  I give the Russians credit. Dialogue before war. 
Sep 10, 2013 11:30AM
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Well I suppose we could be watching another President  say something like, where did they hide those WMD's, under here, no, under there? Then laugh (2004 correspondence dinner) as our children die fighting a war where no one can tell who the enemy is. We export more oil than ever, so do any of you really think it would be kept here for the US citizens to use?
Sep 10, 2013 11:05AM
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So geniuses... you're seeing the Dow retrace 100% of last week's losses in a couple of days. SIX straight days of mammoth increases without ANY economy to support them. Where did it come from? How about Bill Gross's admission that bonds are dead. Suddenly we have to recover our markets but not our economy. Suddenly blowing up another country is critical but recovering jobs and incomes is not. WHAT do you really have? Bet you don't know and still won't as it goes... POOF.
Sep 10, 2013 2:25PM
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I look forward to the day that U.S. Citizens start acting like Americans..

 

Much better than, being Republicans, Democrats, Independents, etc...

Liberals, Conservatives, Moderates, etc.

Well maybe Moderates are okay ?  

Sep 10, 2013 11:58AM
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Never thought I'd see the day when Alcoa would be removed from the Dow.  After 54 years, it will be weird....
Sep 10, 2013 2:17PM
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Why would Sadam give Syria his WMD's since he and Iran were always fighting and Iran is a buddy of Syria's.  Some of this crap makes no sense. So we took out a Sunni leader in Iraq  and put in a 
Shiite leader. Now Iran is friends with Iraq. What a mess. The whole middle east is a mess and we need to stop pouring money into it and fix our own house.
Sep 10, 2013 12:02PM
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How will they kick off earnings season without Alcoa on the DOW?  Strange times.
Sep 10, 2013 10:57AM
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Secretary of State John Kerry, brought it up in-a-tongue-cheek-manner, during a Speech..

The Russians jumped on it...

For them to save face also..

They can not afford to support Syria....And they know it.

 

It all has shades of the WMD fiasco in Iraq, and we all know how that went;

Let's see, WHO was RESPONSIBLE for that ??

Of course, Saddam had gassed the Kurds in the North long before...And I will give you that.

About the same thing recently happening in Syria.

These Dictators are brutal..

Sep 10, 2013 5:02PM
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CRAZY8`S;You`re a real Voltaire with your words aren't you?Guys like you are the reason

the Dems won the WH.I have dividend checks to cash now.Thank me, I voted for Obama

twice.Don`t you love the Dow past 15,000?

Sep 10, 2013 1:48PM
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Well if Syria does give up all its chemical warfare material I think Obummer should give his Nobel Peace Prize to Kerry (and his slip up)............ Slip up being their best political move.
Sep 10, 2013 12:54PM
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ex Republican, we have to give it a chance ... lives are at risk
Sep 10, 2013 4:11PM
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ROME: I agree about the market.You won`t hear the idiots on Fox mention the Dow up

over 7,000 points with Obama and how people who were smart enough to invest in this

country when Obama took office are doing great.

Sep 10, 2013 3:51PM
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Barry "no selective memory here" wouldn't have been surprised at all, of finding WMDs in Iraq...

Were they moved or hidden ? Very well could have been...No surprise there either.

Where to? Maybe only in Country, maybe only to a neighbor.. Hidden well?

 

What bothered myself most was that was a premise or motive, "to get approval for the Action."

As far as I'm concerned, there were several other Political Motives and maybe some personal ones that not enough people or important people talked about.

And it all got swept under the rugs...

We lost stature World wide.. 

We have lost much treasure..

And worst, we have lost thousands of American lives.

Those Countries have fared far much worse...AND WHAT HAVE WE GAINED...ZILCH.

Sep 10, 2013 5:12PM
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Hey......... Maybe we will get lucky and Kerry will make a slip up on ObummerCare.
Sep 10, 2013 4:32PM
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ABS:Picking on TRIG.You should be ashamed.If you have any shame.
Sep 10, 2013 12:52PM
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ROME IS STILL BURNING:Do you really think we could sit down with Syria and have

an agreement?I`m no fan of war,but these aren't sane people.

Sep 10, 2013 4:56PM
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DLH2448:Our president did something great.It`s time for the praise and admit I was right

all along.

Sep 10, 2013 4:54PM
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Syria agrees to sign a ban.This is one hell of a great president.The far right should have all

kinds of RESPECT for our president.HE MAKES ME PROUD TO BE AN AMERICAN !

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