The Coming Natural Gas “Crash”

This year I’m thankful… I’m not exposed to gas fracking!  Not literally- by exposure to hydraulic fracturing fluids- and not financially either, vested in petro-speculation.  I had always cast an eye toward fracking, for one simple reason if nothing else: I, along with others, remember the last boom and bust in natural gas.  And while few are alive from the really big boom and bust, the lessons are written for anyone willing to read them.  You know, “due dilligence.”

Good signs of a bubble: sudden growth, with multiple investment opportunities, going down past professional financiers to prosumers and onto “Main Street” (however you define that).  Not so good sign: opacity, as in opaque deals, pricing, and even basic processes and technologies.  That is bad since, without informed deals, prosumers and Main Street (and even some pros) jump in for fear of missing out on a boom, with little time (or possibly even ability) to do their due dilligence.  That is also… present in spades in the situation at hand.

Of course, some people will make out like bandits; there are always some in every bubble.  The better question is who, because everyone thinks it’s going to be them.  It’s obvious they can’t all be, can they?  Of course everyone can’t be- in a turnabout, the success of a few is predicated on them beating out the rest.  Continue reading