Natural Gas: What You Need to Know

Beyond playing the energy sector with individual oil stocks or an exchange-traded fund such as the U.S. Oil Fund (USO Quote), how much do you know about investing in the natural gas industry?

The following are key insights from TheStreet.com.

From Oil Follows Rollercoaster Path Thursday:

Natural gas futures dove from roughly $8.25 per million British thermal units to below $7.75 per million British thermal units in less than 10 minutes midmorning [Sept. 18].

The cause of the extreme volatility in natural gas isn't entirely clear. Jim Williams, economist at WTRG economics in Arkansas, said in an email that the fall may have been connected to the near-implosion of Constellation Energy (CEG Quote), which got a downgrade in the morning from Citigroup and by midday had a buyout offer from a Warren Buffett-controlled company.

Read the full version of Oil Follows Rollercoaster Path Thursday. (Related: Constellation Energy Attracts $4.7 Billion Bid From Buffet)

From The Real Story With Frank Curzio: More Potholes on Wall Street (Audio, Sept. 17):

Chuck Marvin: "Anybody who's looking to invest in some of these natural gas companies right now, it's really important to look at where they [the wells] are, is there existing infrastructure pipeline -- or do new pipelines need to be built -- and how long are the lease terms? Because these things can collapse and can essentially implode really, really quickly."

To listen to the full version of Curzio and Marvin's natural gas discussion, go to The Real Story page and click "More Potholes on Wall Street."

From Cramer: A Winning Play for 2010 (Video, Sept. 3):

Cramer: "Transocean (RIG Quote) comes out today and says that there's a gigantic increase in day rates. Brazil comes out and says they may have four times the amount of natural gas in one field. All these things mean one thing: We need more rigs... I think that you have to look at natural gas as a 2009, 2010 story. And if you're selling it here, you're literally just reacting to the tick-by-tick of the natural gas futures."

To watch the video, click the player below:

From Cramer's 'Mad Money' Recap: Sept. 2:

[Jim] Cramer talked with Clean Energy (CLNE Quote) president and CEO Andrew Littlefair about his company's outlook as interest in natural gas as an alternative fuel heats up ahead of the November elections.

Littlefair said that passage of Proposition 10, a California ballot initiative, will devote $3 billion to alternative fuels, signaling a boon for not only his company, but also for the entire alternative fuel industry. He said that this one initiative alone could displace as much as 1.5 billion gallons of gasoline and diesel fuel a year.

Littlefair said that while he sees ethanol as an important step towards alternative fuels, only natural gas in its liquefied or compressed forms, can deliver the big numbers needed to reduce the country's need for foreign oil.

Read the full article. Plus, don't miss Cramer's take on the long-term positives of natural gas in this video on TheStreet.com TV: Cramer: Natural Gas Pains Won't Last (Aug. 20).

From Cramer Interviews Chesapeake Energy CEO (Video, Aug. 1):

Jim Cramer: "Tell me what you've been up to in Washington?

Aubrey McClendon, CEO of Chesapeake Energy (CHK Quote): "Was in Washington this week, having conversations with Congressional leaders about energy policy. Basically talking about how we can begin to move our transportation network away from expensive, dirty, imported oil to clean, affordable, abundant, American natural gas. And if we can do that, we can bring $2 gasoline back to the American people... This conversation that I've embarked on in Washington, I couldn't have had three or four years ago and the reason for that is these technological breakthroughs we've had in accessing gas from all these shale formations... They absolutely allow this country to address its energy issues and its environmental issues with a clean slate of paper."

Watch the video on TheStreet.com TV.

Plus, don't miss this Chesapeake-focused video on TheStreet.com TV: Cramer: Chesapeake Energy's Got Legs (Jul. 25).