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Weekly Energy Update: Hunt for the Next Bakken & The fate of Keystone XL

Again, US natural gas exports; the fate of Keystone XL; a few misses in the hunt for the next Bakken; an upcoming interview you don’t want to miss, and a sneak peek at the reports in this weeks Premium Newsletter…

We’ve covered the US natural gas export story ad nauseum, so this week we’ll just offer a quick note on the bottom line here, and I think everyone pretty much agrees: US natural gas exports will be expanded, but it won’t be like Moses parting the sea. The 19 LNG export projects waiting for approval will be dealt with slowly and piecemeal.

So let’s move on to Keystone XL, which saw a House pass a bill on Wednesday that would pretty much take things out of the president’s hands, speeding up the approval process for this Canada-Texas pipeline. The Obama administration opposed the bill, saying it “seeks to circumvent longstanding and proven processes” by removing a requirement for a presidential permit and by eliminating the need for any new environmental studies.

To wit, the House bill—known as the Northern Route Approval Act--would approve the northern leg of Keystone XL without the inconvenience of waiting for presidential approval. The vote went down with 241 in favor and 175 against and there were only 19 Democrats who supported it.

In an alternative universe, this might be a major victory for Keystone and a major defeat for its opponents. But in this reality, it’s not likely to get past the House. It takes things a bit too far and alienates those Democrats who have traditionally supported Keystone XL. All in all, it’s probably a bad strategic move by the project’s strongest supporters.

Don’t miss our upcoming interview with Breitling CEO Chris Faulkner, who chimes in on this subject to say: “Blocking the project will alienate our most important energy trading partner, Canada [and that Canadian oil sands] will continue to go south irrespective of Keystone XL’s fate.”

Opponents of Keystone XL say it will carry “dirty oil” that could trigger global warming and pose a number of environmental threats to the countries and communities it will traverse.

While everyone waits on the Keystone drama, we’re focusing on pinpointing the next Bakken. In the coming weeks in our Premium Newsletter, we will detail each of the next potential Bakkens and weigh the prospects for you in-depth—so don’t miss out on this opportunity. (start a free trial now before the price increase comes into effect next Friday.)

You’ll have to wait for next week for our top pick here, but for now we’ll point out that the Utica Shale in Ohio is in a bit of a boom-or-bust conundrum. Last week, the state of Ohio released its 2012 production figures—and they did little to support previous analysis that this could be the next great shale play in the US.

There are some diverging opinions on Utica, but the bottom line is that this is turning out to be more of a gas play than an oil play, which isn’t great given the price gap here for the 11 companies operating the wells (or for Ohio).

So far 87 wells have been drilled and put into operation, with average production favoring gas (1,750 barrels of oil per day and 35,000 million cubic feet of gas per day. Compared with the launch of Bakken and Eagle Ford, this is child’s play. (We’ll map all of this out for you in the coming weeks in our Premium Newsletter).

Back to our interview with Chris Faulkner, Breitling warns about another area of uncertainty as we look for the next Bakken—the Monterey Shale. “Some restraint is in order. While preliminary estimates put potential Monterey Shale technically recoverable resources at more than 15 billion barrels, it’s hardly a slam dunk,” he warns.

In our report section below we have borrowed the investing report from the premium service and in it our trader Dan Dicker takes a look at the natural gas market and why he thinks now is the time for investors to start making strategic investments in the space. There is one stock in particular he likes the look of. Scroll down to read the full report.

But this is all next week, and beyond. THIS week’s Premium Newsletter looks at the UK Frack Attack and what we could expect—very optimistically—from a new survey of the country’s shale potential. We also take a look at a looming European Union-US Free-Trade Agreement (FTA) and some tough new European legislation coming online for offshore explorers, and much more…

I urge you to give our Premium service a try as no other service offers the benefits we do.
Also as I mentioned above we will be raising the price from $497 a year to $795 from next week – so now is the time to start a 30 day free trial to see if the research is as good as we say. (there is absolutely no risk to you and you can cancel your membership any time in the 30 days.) Click here to start a free trial.

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