Energy: Expert Guides and Resources

Energy investors should know that America is the country that made coal king. Coal from Southern and Midwestern states is what helped build the strongest economy in the world. Some of the companies that made that possible are still around and are still solid investments. Here's a look at some of the major coal mining companies: Peabody Energy (NYSE: BTU) is a large blue chip coal miner with a $5.

For energy investors to successfully trade oil and gas futures, understanding the basic drivers behind oil and gas prices is imperative. In a perfect world, a market’s fundamentals would revolve entirely around demand. That is, you have a buyer with a specific amount in mind, willing to pay a certain price. Rarely, however, is that the case.

One reason natural gas investment prospects are better in North America than the rest of the world is that fracking (hydraulic fracturing of rock) is causing a bona fide natural gas boom right now. Most natural gas production in the United States comes from shale and tight gas; these are reserves of natural gas trapped deep in shale and sedimentary rock that are too hard to drill through.

Energy investors find that it is impossible to have a discussion about national oil companies (NOCs) without shining a light on OPEC. By the end of 2011, more than 80 percent of the world’s proven oil reserves rested in the hands of the 12-member oil cartel. OPEC was created in the 1960s by five founding members: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.

Investing successfully in energy involves a lot of research into many different aspects of energy production and consumption. You can invest in commodities such as coal, oil, and natural gas, or you can purchase stock in an oil company or a company that builds natural gas power plants. You need to keep an eye on not only the energy markets but also the global economy and the news of the day.

For investment purposes, each source of energy is considered its own market sector. Fossil fuels — or, more precisely, nonrenewable fuels like oil, natural gas, coal, and nuclear — dominate global energy consumption, with a 92 percent market share. Renewable fuels like hydroelectricity, solar, wind, and biofuels account for just 8 percent.

Coal investors are interested in cleaner coal, but you should know that, in addition to burying or scrubbing coal emissions after the fuel is burned, there are other ways to make coal cleaner. By converting coal in a gaseous or liquid fuel, it can be used for much more than just boiling water to make steam. Several publicly traded companies break apart and recombine coal molecules into their varying components.

Energy investors considering investing in nuclear energy should know about the ongoing debate of nuclear power plants. Many people have written many words about the benefits and costs of employing nuclear energy for both civilian and military purposes. Those of a certain age can remember the battle of the “No Nukes” versus “Know Nukes” bumper stickers.

Energy investors need to know that, as opposed to other energy sources, there is an almost endless supply of coal. No one talks of “peak coal.” Therefore, coal isn’t affected by new finds, dwindling supply, or politics in the Middle East. In this way, it’s the most honest of energy commodities. You buy at the bottom of the business cycle and sell at the top.