The elusive holy grail of natural gas

Until Congress or the candidates acknowledge that the fuel is the future, calling a bottom is a fool's errand.

By Jim Cramer Jul 10, 2012 10:06AM

Like everyone, I am inclined to want to call the bottom in natural gas.

 

We are seeing a dramatic slowing in drilling (the Philadelphia Inquirer has a great article on the decision by oil and gas companies to stop aggressive drilling in the Marcellus shale).

 

We are seeing switches in budgets away from natural gas and toward oil and gassy oils in dramatic fashion. We are having a really hot summer -- so hot that we are burning off a ton of the stuff. There's a plan to begin exporting natural gas from both Canada and Louisiana.

 

We are seeing utilities at last do joint ventures directly with natural gas companies, no longer content to just pay for natural gas.

 

We are witnessing the wholesale stopping of new coal plants and the shuttering of old coal plants and the quick building of new natural gas plants, courtesy of an EPA that's the toughest we've ever seen. And it seems to be getting only tougher because of a recent U.S. Court of Appeals decision pretty much giving the EPA unbridled power to get even tougher on coal plants.

 

We are seeing the mothballing of coal plants that aren't finished and the bankruptcy of utilities that were trying to build new plants.

 

We are watching trucks and now locomotives being built to use natural gas, and they are almost immediately economical.

 

We are getting downgrades of the likes of clean-energy fuels because of the rapid build-up of competitors that want to provide nationwide natural gas filling stations.

 

We are watching Ford (F) and General Motors (GM) commissioning light-duty trucks for use among regular folks and small businesses.

 

And it's all for naught. Any bottom call, even one that says we are not on the upswing because natural gas has risen almost a dollar to $2.80, isn't worth squat without some acknowledgement, or some push from Congress, and we aren't getting it from either presidential candidate.

 

I have listened to Harold Hamm, the CEO of Continental Resources (CLR) and Mitt Romney's energy adviser, talking about energy self-sufficiency, but Hamm is an oilman. I ought to know. I spent a couple of days with him in the field, and the greatness of Hamm and his Bakken North Dakota fields is that they provide clean-burning oil that's perfect for gasoline. But again, Hamm is an oilman through and through. He probably burns off more natural gas than many smaller independents produce. He's not a real natural gas fan.

 

Romney isn't either. Hamm was a very important choice for Romney as an energy adviser, because had Romney picked someone schooled in natural gas -- like Anadarko (APC) chairman Jim Hackett or Devon (DVN) chairman Larry Nichols or former XTO Energy CEO and founder Bob Simpson, all of whom are available -- that would have said we are going to harness natural gas for surface vehicles, the holy grail of use.

 

And President Barack Obama? He never stops saying that natural gas is just one of many fuels -- and we know he and his base are anti-fossil-fuel. He's not a fracking defender either.

 

Without support from Congress, without at least an acknowledgment that it is the fuel of the future by one of the presidential candidates, calling a bottom is a fool's errand.

 

Oh, and guess what. Natural gas stocks are telling you the same thing. Sure, they may have bottomed. But they haven't gone higher. Don't bet they will without a change in the political environment. And I don't see one happening anytime soon.

 

 

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 DVN.

 

 

 

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12Comments
Jul 10, 2012 3:55PM
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cramer has been pumping nat gas for about 7 years......that's right......all the way down to record lows

......if he says there isn't a bottom you can be sure we are close to the bottom

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T Boone Pickens will let us know when it is time to buy the natural gas fueled cars.  He is working hard on it and using his own money to boot,.   Natural Gas is the future of this country as an interim to "green" fuels.   Good article Jim.
Jul 10, 2012 3:05PM
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i see another cramer pick ...agnico eagle mines taking a beating...........nice rigor cramer
Jul 10, 2012 3:03PM
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wakeup and socialist MAKE money in the market.......we warn others of the scam .....

the ones on his coatails are the ones who bought countrywide ,alcoa,1900 dollar gold and on and on

 

amarcuns like duffer feed the scam

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By the way, our neck of the woods is hell bent on producing fracking sand.   Mines and mills are going up all over the countryside with an estimated 50 year life span.   Railroad lines and spurs are being rejuvenated everyday with new track and ties.  Trucking firms are hiring drivers until the tracks are laid.   Seems someone is in the know on where our energy will be coming from for the next few decades or better.  I would say if not today, the bottom will be some time soon.   Long KMP, WES, PBA, IRET.  Bought CLNE when it was 12 sold at 23.  Keeping an eye on it.

Jul 10, 2012 6:41PM
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HEY, JIMMY BOY, HAVEN'T HERD FROM YOU IN A WHILE AND WHEN WE DO, ITS ALL JUST STUPID BLATHER.
Jul 10, 2012 11:14AM
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hey all you cra MAR cuns who bought gold at 1900 on this hack's advice...

do you still want to keep losing?

Jul 10, 2012 2:28PM
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I see Cramer's stalkers, Wakeupnow07 and socialist1, haven't lost their grip on Jim's coattails.
Jul 11, 2012 7:34AM
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But Jim Cramer is a successful financial rich guy, and the rest of you bozos with time on your hands are merely a bunch of grumpy wanabees.HEY, JIMMY BOY, HAVEN'T HERD FROM YOU IN A WHILE AND WHEN WE DO, ITS ALL JUST STUPID BLATHER.
Jul 11, 2012 5:39AM
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But Jim Cramer is a successful financial rich guy, and the rest of you bozos with time on your hands are merely a bunch of grumpy wanabees.

 

Jul 10, 2012 11:10AM
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ugh......the ess hole is back spewing his inane comments........jail this shyster NOW

before one more of his poor cretin followers loses money

Jul 10, 2012 12:24PM
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last time he said holy grail those who bought lost 7% immediately which is so typical

of this gap down know nothing................babble babble, i'm great , buy my crap so i get rich off you

WHAT A PARASITE

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