Natural gas production in the U.S. is taking off and the potential for liquefied natural gas, or LNG, exports is becoming more and more realized every day. Unless you have a job in the natural gas industry, though, it might be harder to see how this could benefit you. Although you might not see it right now, these events could have some significant effects on your wallet.
Abundant, cheap, natural gas has made a significant impact on how utility companies generate electricity and on how much that electricity costs the consumer. Southern Company (NYSE: SO ) , a company that once generated more than 50% of its electricity from coal, is now the third-largest consumer of natural gas in the U.S. Major shifts like the one Southern enacted are occurring across the entire utilities space. The more options that utilities have in fuel sources, the better the prices they can get.
But what about LNG exports? Will they send natural gas prices soaring? Motley Fool Special Ops analyst, Michael Olsen, certainly doesn't see that happening. With stiff competition from other sources of LNG, such as Australia and Qatar, and the expensive processing needed for LNG, the U.S. will need to rely on its one major advantage: cheap feedstock. When it's all said and done, natural gas prices will likely only go up by about 10% or so, thanks to LNG.
Tune into the video below to learn more about how natural gas affects you as Foolish investor. Analysts Michael Olsen and Joel South are joined by Fool.com contributor Tyler Crowe to discuss this hot topic.
The funadamental changes in the energy space are creating incredible investment opportunities. Find out which under-the-radar energy stock is The Motley Fool's chief investment officer's top pick for this year in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.