Guest Post: Natgas Down, Opportunity Up

Tyler Durden's picture

From Marin Katusa of Casey Research

Natgas Down, Opportunity Up

The energy market is a complex beast, its many parts interconnected through a multitude of linkages. When one part fails, the entire system reacts: certain linkages are burdened with extra stress, while other components sit idle. Only by studying the entire machine can one understand the rippling effects that stem from one change.

With the energy market, the system is made up of various sectors - oil, natural gas, uranium, coal, and alternative energies - and the countries that have each of those energy resources. The components are then linked through a long line of forces, including the geographic distributions of supply and demand, international allegiances and trade deals, global markets and commodity prices, and the ever-evolving field of international relations. A change in any country, sector, or linkage resonates through the entire system.

From this perspective, North America's shale gas revolution truly earns its accolade as a "game changer." As many people now understand, the boom in natural gas reserves and production in the United States and Canada is changing the way North America will power itself in the future.

What a lot of people do not understand is how to profit from this shift.

Natural gas prices are depressed and expected to remain so for the short to medium term, so investing in natural gas options or a natural gas exchange-traded fund is not likely to bring home the big bucks anytime soon. Domestic natural gas equities are an even riskier idea - most producers are scaling back production and selling assets as they hunker down in preparation for a tough few years.

In this case, the way to profit is by understanding how natural gas' changing role is impacting North America's energy machine as a whole. Cheap natural gas is prompting utilities to switch from coal to gas where possible. The confluence of cheap natural gas and a risky global economy has droves of investors turning their backs on green energy, the sector that was such a market darling only a few years ago. Farther down the road, North Americans are debating - and in places implementing - a range of strategies to take advantage of the continent's newfound abundance of natural gas, from natural-gas-powered transport trucks to exportation of liquefied natural gas (LNG).

Isaac Newton showed us that for every action there is an equal and opposite reaction. That is why every downside force in the energy sector creates upside opportunities elsewhere. The challenge is finding them. It takes an understanding of the entire global energy machine to figure out what areas are benefitting from the changing landscape.

For Every Down, There's an Up

Natural gas seems to know that it is heading for several years in the doldrums and, in fighting spirit, it is trying to take a couple of other energy sectors down with it.

With coal, it is succeeding, but there are still lots of coal opportunities outside of the United States. With uranium, the global supply-demand scenario and America's position within it is in such flux right now that cheap natural gas is doing little to reduce America's need for U3O8. Then there's the well-field services sector, where the successes born from horizontal drilling and fracturing created the gas supply glut that is forcing production cuts. Far from slowing down, however, well-field service companies are busier than ever as the oil industry adopts fracking to access shale oil, and the deepwater Gulf of Mexico continues to test the limits of drilling technology.


The sector feeling the worst impacts from gas' downturn is thermal coal. Demand for the coal burned to generate power in the US is plummeting as utilities take advantage of the cheapest natural gas in ten years. Consumption of coal to produce electricity is expected to fall 2% this year to its lowest level since 1992, while gas-fired consumption rises 5.6%. Making matters worse, winter heating demand is falling in the face of mild weather: through January, this has been the warmest winter since 2006 and the fourth-warmest on record. With natural gas and warm weather conspiring against it, coal demand is decidedly down - in the second week of February, coal consumption was 4.3% lower than it was a year ago.

Exports are not going to provide any help. Last year, Europe bought 50% of America's thermal coal exports, but demand from the EU is shrinking as the region struggles to stave off a recession. The economies of the EU shrank 0.3% in the fourth quarter of 2011 compared to the previous quarter, the first contraction since mid-2009.

In response, US thermal coal prices are deteriorating. Appalachian coal, the US thermal-coal benchmark, fell 15% in January alone to sit near US$60 per tonne and has moved little since (by comparison, Australian thermal coal is currently fetching almost US$120 per tonne). Mining costs to dig thermal coal out of the ground range from $60 to $75 per tonne for Central Appalachian producers, which means margins are already razor thin or nonexistent. Several major US thermal coal producers are reducing output and in some cases closing mines, including Arch Coal (NYSE.ACI), Patriot Coal (NYSE.PCX), and Alpha Natural Resources (NYSE.ANR).

Now for some good news. Thermal coal prices in the United States may be faltering, but that doesn't mean that coal is in the doldrums across the globe. In fact, quite the contrary: global thermal-coal demand is expected to increase by 50% from 2008 to 2035, with the vast majority of increased demand coming from the developing world. That equates to a demand increase of 1.5% each year, and production is not quite expected to keep up to that pace. Rising demand plus not-quite-enough supply equals investment opportunities - maybe not in the US, but elsewhere.

That's just thermal coal. There's another component to the coal world: metallurgical coal, the higher-carbon coal used to make steel. Supplies are even tighter with metallurgical coal, which is why our subscribers have exposure to "met coal" through either equities or a fund. More recommendations are on the horizon: the upcoming edition of the Casey Energy Report will be all about coal. We will provide the background, supply and demand projections, and the best ways to profit from the global coal sector.


The abundance of cheap gas has utilities looking to build more gas-fired power plants. Some observers have suggested that this will be to the detriment of the nuclear sector in the US. But that perspective is pretty shortsighted.

It is true that some utilities have delayed plans for new nuclear plants by a few years, primarily in response to the Fukushima nuclear disaster in Japan and the ensuing public backlash against uranium. But that backlash is already fading; and those delays will have only a minimal impact on the nuclear sector in the US. Five new generators are on track for completion this decade, including two reactors approved just a few weeks ago (the first new reactor approvals in the US in over 30 years). Those will add to the 104 reactors that are already in operation around the country and already produce 20% of the nation's power.

Those reactors will eat up 19,724 tonnes of U3O8 this year, which represents 29% of global uranium demand. If that seems like a large amount, it is! The US produces more nuclear power than any other country on earth, which means it consumes more uranium that any other nation. However, decades of declining domestic production have left the US producing only 4% of the world's uranium.

With so little homegrown uranium, the United States has to import more than 80% of the uranium it needs to fuel its reactors. Thankfully, for 18 years a deal with Russia has filled that gap. The "Megatons to Megawatts" agreement, whereby Russia downblends highly enriched uranium from nuclear warheads to create reactor fuel, has provided the US with a steady, inexpensive source of uranium since 1993. The problem is that the program is coming to an end next year.

At present the world is producing just enough uranium to meet global demand, but this precarious balance is already tipping. There are dozens of new reactors under construction in China, India, South Korea, and Russia that will need fuel. Production increases from new mines and mine expansions are not expected to keep pace. The race to secure uranium resources is on, and for the first time the US has to compete.

The answer is domestic production. The rocks underneath the United States hold lots of uranium, enough to make a significant contribution to the country's uranium needs. The biggest impediment to mining this resource is public opposition to the nebulous dangers of uranium mining, but as the Megatons program ends Americans will start to see that the alternatives to domestic production are decidedly worse: competing against China, India, and the like for uranium is an expensive and unstable way to acquire a desperately needed energy resource. In fact, we have been vocal in predicting a demand-driven boom in US uranium production. We even expect to see "Made in America" uranium garnering a premium over imported yellowcake, in the same way that in-demand Brent crude oil earns a premium above oversupplied West Texas Intermediate crude.

We have already recommended a range of investments to our subscribers to gain exposure to the coming uranium resurgence and, as with coal, there is more to come: the next edition of the Casey Energy Opportunities newsletter will focus on uranium, with recommendations to boot.

Well-Field Services

The techniques used to unlock natural gas from shale reservoirs - horizontal drilling and well fracturing - worked so well that they created a supply glut that is altering the global energy scene. That supply glut is now prompting natural gas producers to cut back on output, which you might think would be bad news for the well-field service companies that complete those tasks.

Not to worry: North America is also in the midst of a crude-oil production boom, and the common theme linking most of the continent's new wells is highly technical drilling and production methods. The purveyors of those techniques are the continent's well-field service companies, and their services are very much in demand.

Well-field service companies have been able to compensate for lost gas fracking business by shifting to oil, as the oil industry has adopted fracking to unlock its shale deposits. If you've read about the oil production boom that is keeping North Dakota's economy hopping, you read about the Bakken shale formation. In the Bakken, wells are drilled horizontally to follow along the oil-bearing layer, and then high-pressure fluids are forced down the well to fracture the shale and release the oil.

Meanwhile, the challenges of producing oil in the deepwater Gulf of Mexico continue to test the limits of drilling technology. Pushing through kilometers of water before drilling through just as much rock and then extracting and transporting oil from a platform rocked by waves and threatened by hurricanes demands a wealth of specialized equipment and operators.

Most oil and gas companies do not own drill rigs, nor do they actually drill or fracture their own wells. They contract those jobs out to companies that drill and frac for a living, known as well-field service companies. And with wells in America's booming oil and gas fields requiring more complicated and more technical services with each passing year, the services these companies provide are essential to North America's oil and gas producers.

The Casey energy team is all over the well-field services sector. Subscribers to the Casey Energy Report newsletter and the Casey Energy Confidential alert service were alerted to our latest recommendation in the sector in mid-November. Three months later, our investment is already up roughly 50% and we suggested that subscribers take a "Casey Free Ride," which means selling enough shares to recoup one's initial investment and retaining the remaining "free" shares for continued, risk-free upside exposure.

The Take-Home

When a machine is as interconnected as the global energy trade, no part can change without impacting the rest. The dramatic debut of shale gas in North America has done far more than just depress domestic natural-gas prices - a shift of this magnitude has impacts that reach far beyond one commodity or one country. Some of those impacts are negative, but hidden in the doom and gloom lie opportunities to profit. The key is to open your horizons and embrace the complexity and interconnectedness of the global energy machine... either that, or find a good mechanic who can do the job for you.

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GoinFawr's picture

LoL, here's your 'argument':

MK's conjecture=fact

Well, that's me convinced.


mayhem_korner's picture



Show me the err of my info, or return to your ignorance and spare us your grandstanding.  Good luck.

GoinFawr's picture

It's not the verifiable info you've introduced that I am questioning,  just the shitty conjecture and worthless conclusions you've somehow managed to draw from it.

mayhem_korner's picture



Which conjecture and worthless conclusion have I drawn, GF?  That propagation of natural gas vehicle filling stations is more difficult/costly than you are led to believe?  Since the technology has been around for decades, help me understand how misinformed my conjecture is when it hasn't happened yet?  What is the world missing that these stations haven't infiltrated like IPads?  Tell us...illuminate us with your wisdom.  Please

You know what I love about ZH?  It's that when someone informed brings some insight to something I'm unfamiliar with, or debunks an assumption that I wouldn't know was fallacy.  I appreciate the expertise that others can bring to issues for which I'm not knowledgable.

And on those occasions where folks have introduced fallacy, there is typically a quick response by any number of informed folks offering correction and/or facts.  You don't see 'em lining up to debunk what I've written, do you? 

You are out of information, so you simply "state" that I don't know my stuff.  You are projecting your own deficiencies on the issue GF.  Most reasonable folks know when to chalk up the "L" and go home.


GoinFawr's picture

"since the technology has been around for decades, help me understand how misinformed my conjecture is when it hasn't happened yet? "

 until 2009 natty prices were relatively sky high?

mayhem_korner's picture



Really?  Feb 1992 spot prices were under $1.00/MMBtu.  Natgas prices were high in the mid-1980s and then fell through the 1990s until 2000, when they jumped from the $2s to much higher levels (peaked at $9.91 settle in Jan 2001), but have since roller-coastered between $3s and $8s until they started to collapse in July 2008.

Your welcome for the facts, putz.

GoinFawr's picture

You just keep inadvertently shot-gunning your own argument in the face; it's priceless.

chistletoe's picture

and why is that a problem?  do you need a list of home builders looking for work these days?


Right now, calorie for calorie, natural gas is priced at about 1/5 wholesale gasoline.


How many people do you know who might buy a car that got 150 miles per gallon equivalent, even if there were not too many filling stations?


But there are other issues ... one reason that there is a surplus of natural gas is that we have much less uses for it ... the total supply is a small fraction of the total supply of oil ... and this article fails to mention the primary use of natural gas, which is to manufacture nitrogen fertilizer ... rather important, and probably not a good idea to threaten ....

mayhem_korner's picture

and this article fails to mention the primary use of natural gas, which is to manufacture nitrogen fertilizer ... rather important, and probably not a good idea to threaten ....


From where do you get your (mis)information?  The greatest use of natural gas is power generation ; industrial use is second, but that includes everything from steel to resins to aluminum smelting to fertilizers.  But don't believe me, here's a link:

You'll note at the bottom it provides a blurb about how natural gas as a vehicle fuel is insignificant.

GoinFawr's picture

No, you'll note at the bottom is a blurb about now natural gas as a vehicle fuel is "is still in its infancy", kind of like Mayhem Korner, with "demand...expected to increase."

GoinFawr's picture

So great for city fleets! Also, 60% of  the propane produced, which makes a great autogas, comes from refining natty! Say, if I drive a car that runs on propane derived from natty....

mayhem_korner's picture



You're lost beyond remediation.  You have no idea what you are saying.  None. 

GoinFawr's picture

Comment composed of info taken directly from your link. I can see how that would be frustrating for you.

the grateful unemployed's picture

yeah and if takes all day just to fill one truck why your trash will never get picked up and there will be garbage in the streets. Mayhem is a Natgas (player) hater.he has all the facts and figures, but none of it interfaces with the reality on the ground. like to see him go to work on the cost of gasoline, cafe standards, ME wars, shipping costs halfway around the world, and pollution. when i saw how expensive a home CNG compressor was i thought the same thing, then i thought, what if my neighbors went together and bought one?  of course if takes all day to fill one vehicle. i'll just buy a chevy volt (it fills up immediately!!) and shut up, which is what some of these (politician) guys want i guess.

Flakmeister's picture

Fill your boots.... go out and get a one is stopping you....

Don't be surprised when the BTU arbitrage vanishes in a few years and you find that your CAPEX will not pay for itself....

devo's picture

Say my time horizon is 10 years, what would be the best (long) NG play? I agree it might go down short term, but timing that is iffy. It's going to go way up at some point.

css1971's picture

On the basis that we're hitting bottom and NG does improve, I came up with the following a while back.:

Not commodity funds or ETCs, potentially several years of dubious performance paying fund fees. Not futures, you could be rolling them for a while.

Build your own portfolio

  • Which means stocks, preferably those which'll pay a dividend in the meantime.
    • NG producers which survive the current slump should do well. Top 6: (APC, BP, CHK, DVN, XOM, XTO)
    • Utilities (no idea in the US)
      • If home filling takes off, ng supplying utilities will do especially well.
        • Filling device producers.
        • Even if not, who else has the infrastructure already in place to pipe gas to filling stations?
      • Electricitiy utilities which have CCGT power stations, their input costs dropped.
    • Auto conversion services.
      • Kit / high pressure tank producers.
    • Biogas producers; waste water treatment utilities.
    • LNG shipping.
    • Infrastructure; liquifaction/gassification terminals, pipes
mayhem_korner's picture



Helpful - not.

You list a bunch of supply chain functions, but no companies that actually engage in those functions.  If you cannot name a utility within the U.S., what are you doing offering advice?  And, BTW, utility returns are regulated, so they are constrained from "breaking out" due to the cost-plus regulatory paradigm that exists in all 50 U.S. states.

Electric utilities that have CCGT (for those that don't speak power, that's "combined cycle gas turbines")?  Natural gas generators are on the margin 90% of the time, so when their input cost goes down, the clearing price of power goes down proportionately, so there is no increase in margin gained.  Look up RTO bidding rules and lambda.


Lot of folks on this topic spewing conjecture with no substance; reader beware...

GoinFawr's picture

which came first MK, chicken or egg?

mayhem_korner's picture



I love that ZH time-stamps posts.  Tells me that it took you almost 7 hours to think up 7 words to reply with a weak attempt at misdirection (in a conversation you weren't involved in).  The stench of your desperation is emanating through pixillated cyber-space.

Since you have nothing to offer on the subject of natural gas filling stations, I'm going to assume that you are an expert in things like metaphysics, philosophy, and evolutionary biology and know the answer to your question.  So why don't you go first, 'cause I only have an opinion on the chicken/egg thing.

GoinFawr's picture

"Tells me that it took you almost 7 hours to think up 7 words to reply"

Well, you certainly have a high opinion of yourself if you think that you've been on my mind for the last seven hours.

Hedgetard55's picture

Well, FWIW I just dipped a toe into Hugoton, HGT, at $14.75, yielding about 7%, and down from $24. Can it go to 9 or 10? Yes, but long term it's lots of income and will eventually go higher. Or not.

earleflorida's picture

sell calls, or buy long-term puts

dcb's picture

Yup, I read in the ft ntural gas was at a 10 year low, looked like a bottom formation. I think it was up about 50% in three says. one day was 22% up on it's own.

earleflorida's picture

Thorium fueled nuclear reactors have a fail-safe melt-down.

Thorium is abundant in the U.S., along with all the "Rare-Earth-Elements".

America's 'Met-Coal', largest customer is China,... which by the way has increased its demand just recently.

Natural Gas [Blue-Gold] fracking and processing should immediately be put on "Fast-Track-Legislation" to enhance our entire fueling transportation depots. 

Every petro fill-station in the U.S. should have "Nat-Gas" fuel.

Every manufacturer/ design of storage facilities should be working overtime to bring this "Nat'l Security Issue" to reality regarding foreign dependence [pure unadulterated blackmail] to an end.

Every auto/truck/18 wheeler/etc./etc., that comes off american /foreign assembly lines should be modified with nat-gas fuel storage tanks, and carburetor's   

The private sector is doing their darn`est to overcome bureaucratic bullshit by this fascist gov't. run by big-oil and cameco,... which in turn are controlled by the Saudi's! Yes, the same saudi's that flew into the World Trade Center on 9/11!


disabledvet's picture

what the author failed to mention is the fact that the US is the only nuclear power that does not reprocess its Uranium as well. The facilities exist to that as well..and "that's a lot of uranium that can have that happen" btw.

Elvis is Alive's picture

"Works for trucks, but passenger vehicles will prove difficult."

I have read that two or three times here. That isn't true. Conversion kits have been sold and installed for around $1000 in Mexico and Brazil. The issue with the U.S. is the red tape. If you follow EPA regs, cost is closer to $10,000. This article says $5000 but that is not what I have found.


earleflorida's picture

emerging markets leading the way into the future via  pre-historic developed nations,... morassed in the past.  funny?

But what does Gov't Motors do - but build a ~ $60k chevy [officially shit-canned as of today] volt, when GM has for years been manufacturing flex-fuel vehicles in Brazil for a decade.

thanks for link   :-))

LowProfile's picture

That link was very interesting (thanks), as I learned nat gas used to maintain cruising speed. 

Government is naturally the biggest hurdle, but you will be stuck refueling at home for the next 10 years (at a minimum) if you convert now.  Not an issue if you stick close to home.

Also, gasoline is relatively inexpensive here compared to Brazil (AFAIKT), so after you figure in the energy costs of compressing the gas into the tank (which are significant), along with the cost of a dual fuel conversion (assuming that price gets down to $1k), it still may not be cost effective.

Fleet vehicles make the most sense at present.

Long term, thorium makes the most sense.

alex_g's picture

Elvis, i think it's Argentina, not Mexico, that leads in CNG cars.

Also, you don't need to use the EPA certified shops at $8-10k, you can buy the non-EPA approved kit and install it.  You just don't get the tax credit.

malek's picture

Does that include the compressor station to turn low pressure pipelined nat gas into liquified gas, or do you assume those stations magically pop up?

JohnKozac's picture

I added some UNG and KOL last week on the dip for long term hold. Seems too cheap given the other commodities prices. In the long term these prices return to the mean.

Elvis is Alive's picture

There is a guy on here trolling the boards with questions about NG facts. Is the U.S. producing more or less natural gas than 30 years ago?

His point was we are producing less natural gas than 30 years. That is no longer true though. We have now exceeded 1973 production.

If you see the graph, such a statement clearly misses the trend.

The other comment concerned how much natural gas the U.S. imports. Natural gas isn't like oil. Sure, the U.S. imports natural gas from Canada and Mexico via pipeline, but it is not like Canada and Mexico can sell it to someone else.

Besides, the trend is clear: exports of NG are up and imports down:

A couple of things here: the same academics who could quote you the law of supply and demand are insisting that it does not apply to oil and NG. Oil supply has peaked, and demand is "inelastic". What utter horseshit!!

U.S. gasoline demand is now at ten year lows and oil production is at seven year highs.

If you want to know why oil is so high in price, it is time to quit pointing fingers at oil companies and start pointing them at the Fed, ECB, and CFTC.

The CFTC is the rare government agency that has made FEMA, the TSA, and SEC look competent by comparison.

mayhem_korner's picture



This is a weak article with only a superficial understanding of the interplay between natural gas and the rest of the energy complex.  State and local RPS and environmental regulations are having more impact on coal prices and the shutting down of old coal generation than are natural gas prices.  Just look to the decisions in So. California for evidence of that.  And nuke (uranium) demand is, with very few exceptions, not affected by natural gas prices. 

earleflorida's picture

yep,... keep building thems' thar uraniums' on the coast of fault-lines. brilliant!

mayhem_korner's picture



You normally respond in a way that has nothing to do with the prior post, Jethro?

Stuck on Zero's picture

There is an enormous opportunity in natural gas.  That is in building "totem engines."  Totem engines are cogeneration units  sit in your basement, burn natural gas and generate electricity and hot water.  Thermal efficiency in converting chemical energy to useful product exceeds 85%.  A good totem engines could reduce carbon emissions in the U.S. by 30% and reduce power bills for consumers by 50%.  The key is to build a small cogeneration unit that lasts a long time.  Larger systems, such as found in schools, factories, and apartment complexes exist everywhere.  Small units could be turbines, fuel cell, or ICEs.  Fiat, Mercedes and others have tried the internal combustion engines approach.  If you want to make money invest in companies building fuel cell approaches that use nano-catalysts.  Opportunities abound.

css1971's picture

British Gas are offering a cogeneration unit. The Baxi is the one mentioned on their site.

A Stirling engine no less.

mayhem_korner's picture



Single-home sized cogen hasn't caught on in three decades.  It's not a new concept.  It is prohibitively expensive to do, however.  And, moreover, no engine runs 24x7x365, so you cannot go "off-grid" unless you have a backup.  Even in mid-sized industrial sites (like a hospital), the notion of buying 2 times the needed capacity - sized for peak kw demand - makes it uneconomic.

GoinFawr's picture

"It is prohibitively expensive to do, however"

There's that bs assertion again. Please provide evidence.

mayhem_korner's picture



Here's a nice study on cogeneration showing payback times of up to 159 years for light industrial:


And here's a nice tome from a "greenie" who basically transferred disposable income to a micro-generation manufacturer (spent $24K to save $500 and is not 'off grid'):


From the below sources, the following points on natural gas refueling stations:

- natural gas vehicles have been around since the 1930s

- cost of a home compressor = $4,000, not including any piping or metering

- incremental cost of a CNG Honda Civic = $7K, but more likely $12K - $18K

- cost of a SLOW-FILL station in CA = $472,000 (fill rate = 1 gallon per hour)

- cost of a fast-fill station in OK = $1.3 million

- 10 gasoline stations can be constructed for every 1 CNG station (assuming underground NG distribution exists)

- as of 2008, 25% of the 130,000 total NG vehicles in the U.S. were non-fleet residential,0,7...


Let me know when you're done poring through this and have come to a different conclusion, a**wipe:

GoinFawr's picture

nope, still looks feasible should demand swell, thanks for all the swell links!

mayhem_korner's picture



Finally!  I was wondering when you were going to pen words of utter defeat.  I'll see you on another post, but I'll do my best to take it easy on you. 


GoinFawr's picture

Unfortunately Mr. Costanza just because you believe it it doesn't actually make it true.

You've 'penned' yourself into a corner and declared 'Victory is mine!'. I'll just go ahead and expect that from you from now on as it seems to be your MO.

Seriously, what's your angle here? Do you honestly expect me to believe that out of a sense of the purest snowy white altruism you're trying to rescue the world from making what you see as an expensive mistake, despite all the evidence that you yourself have provided to the contrary?

Pull the other one.


Atomizer's picture

Under UN Agenda 21 guidelines, banning all internal combustion engines by replacing them with Natural gas fuel source will create another Keynesian bubble. T Boone Pickens’ hedge will have finally paid off. If you can’t make cultural changes happen, mandate & fine peasants under the illusion of Democracy.

max2205's picture

Miles driven is way down but gas prices are way up.

I am sure it's different this time

Flakmeister's picture

Ahh the standard cornucopian nonsense....

There is no commerically demonstrated Thorium reactor yet and our transportation infrastructure is not electric...

You are looking at a 50 year time frame, minimum...

To all you NG people out there...

1) Does the US currently import or export NG on a net basis?

2) Current daily US NG production is how many barrels of oil equivalent (BTU basis)?

3) What happens if 5% of oil usage is displaced by NG usage?

4) If there is indeed a 100 year supply of NG in the US, how long does it last if you increase production by a) 3% p.a. b) 5% p.a..