Hey There Income Hunter,

 

The Federal Energy Regulatory Commission (FERC) is delaying requirements to consider climate change prior to approving natural gas projects.

 

Two green energy guidelines that had been approved last month will now simply be called drafts so the US can move forward on a nat gas deal with Europe.

 

The US and EU have announced a major deal on liquified natural gas, in an attempt to reduce the Continent’s reliance on Russian energy.

 

The deal will last at least until 2030 and include about 50 billion cubic meters per year of US gas, which is more than double the current amount. 

 

This is the greatest opportunity in a decade in natural gas and liquid natural gas.

Today, I’ll share an emerging name I like based on this deal

 

 

Europe’s Key-Pipeline Flows to Russia Cut Off

 

The sanctions have added to an energy crisis that was already painful enough.

 

Plus, an earthquake in Japan impacted coal-fired power plants, so now the utilities are turning to liquid natural gas, which piles on the already spiking demand.

 

The graph below shows the pressure on Europe after shutting down Russian LNG supply.

 

 

Enter Southwest Energy Company (Ticker: SWN) 

 

SWN is the second-largest natural gas producer in the US. The company is headquartered in Texas and is engaged in exploration, development and production of oil and gas assets. It generated $1.7 billion in net cash flow in 2021 and has been using it to add capacity and decrease debt.

 

In 2022 SWN plans a capital investment program of up to $2 billion. The company plans on using free cash flow to further reduce debt down to roughly 1.25 times leverage and its rating was increased to BB+ earlier this year – one step from investment grade.

 

SWN Price Spiking Higher

 

SWN soared Friday on much higher volume but it has a wide open road ahead of it now as the prices should climb based on the deal with Europe and increased demand in Japan. 

Bring It Home

 

First, environment, social and governance (ESG) lowered productivity of current energy sources including oil, gas and coal …

 

Then COVID created supply chain issues, which lowered productivity even further …

 

Now, fossil fuel energy sources are more in demand than ever and they will soon be valued based on the country’s position in a new divided global structure. 

 

So, as the West bans imports from “bad actors,” it finds itself way behind the curve on production, which will cause the value of US and Canadian energy sources to increase. 

 

The evolving  global macro environment creates excellent trading opportunities like SWN and there are many more to come.

 

Live and Trade With Passion My Friend,

Griff