What a difference just a few years make.
Anyway, the Marcellus bandwagon has reached some form of critical mass for sure. I see the PBT now has an energy blog and the most recent post has the catchy title: Marcellus Freakonomics, that is commenting on the recent earnings announcement of Range Resources, the discoverer I take and leader of the pack developing the vast Marcellus Shale. I wonder if Levitt gets a royalty on the title alone?
The post has two interesting things really worthing cogitating on. One is that the the company seems to be making the point that there is some vast and unnatural profitability in their natural gas development.. way beyond any other potential investment out there from the numbers transcribed there. I'll skip the tax issues as political as they are, but it sure seems there is a big mispricing there somewhere. Would not such vast profitability be capitalized into land values in most such markets? Makes you wonder about the efficiency of the land markets across Pennsylvania.
But a bigger issue. There is a quote there from the CEO I take is from the earnings call on the future of natural gas trying to address the lower price of natural gas these days compared to the past:
"Most electric generation in the future will be with natural gas. We’ll get through this period of low gas prices. Demand will pick up at some point. It’s going to happen.”If most electricity in the future is natural gas then what does that say for nuclear? I'm not quite disputing the prognostication actually. There is a big issue not talked about that there has not been a lot of movement toward the new domestic nuclear power plants in the US. W is fine I am sure, but part of their growth has been based on that market developing and it's a bit unclear where the domestic nuclear industry is going right now. We may need to get past the recession to really find out.
Time will tell what that says for the growth trajectory at the big W, which is in itself one of the region's largest single largest employers. Something I would love to do actually if I had anywhere near the time would be to compute and compare the jobs impact locally of nuclear and mining, which includes all the new NatGas development. Could be interesting.