Did Canada Hold this Secret Back from the Chinese?

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Did Canada Hold this Secret Back from the Chinese? By Keith Kohl | Thursday, February 9th, 2012 It was a mission to China with only one possible outcome. On Tuesday, I mentioned that Canadian Prime Minister Stephen Harper had headed across the Pacific to improve trade relations. Trillions of dollars in future revenue were at stake. Of course, Harper knows deep down that China is desperate for one thing he and his country can offer: a safe, secure supply of energy. Furthermore, we know it isn't just the bituminous sands in Alberta that has China's attention... No, they're after another one of Canada's resources. Rumor has it that as Harper boarded his plane, he turned to an aide and muttered, “Let's just hope they don't bring it up.” Did he have good reason to worry? Advertisement Mining Will Never Be the Same Nobody ever thought these rare earths and precious metals would see the light of day. But that's about to change, thanks to one tiny explorer's game-changing technology. In fact, it's already made select investors 500% richer. And it could make you 744xs your money. Get the whole story right here.  A Conventional Crisis The crisis that Canada is experiencing with their conventional gas production is something I have touched on in the past. And with the prospect of a Sino-Canadian relationship blossoming in the future, it's imperative that we take a closer look at how they'll be supplying natural gas to the Chinese. Canada's natural gas industry has been active for more than a century, with the country's first gas exports occurring in 1889. The real crux of Canadian natural gas is the Western Canadian Sedimentary Basin (WCSB): There's no question as to how important it is for Canada. The area contains about two-thirds of the country's gas reserves, 90% of its usable coal resources, and the 1.6 trillion barrels of oil-in-place found in the three major oil sands locations. But the Prime Minister does indeed have reason to worry... You see, he fully understands the situation surrounding Canada's conventional natural gas. To begin with, conventional gas production in the Western Canada is heading in just one direction: down. Growing decline rates aren't helping matters: click to enlarge What's more, despite the fact that gas producers are drilling more wells than ever before, productivity has fallen significantly... Even in Alberta — the most dominating producer among the Canadian provinces — marketable natural gas production fell by 26% during the last decade. Remember, approximately 70% of Canada's gas output comes from this region. All of these factors add up to a very profitable future in Canada's unconventional gas plays. Growth that Investors Will Bank On Let's face reality here. We know what's driving Canada into the Asian LNG markets. We'll let this flat chart speak for us: So why would Canada wants to ship its gas to the Far East? Well, considering how flush the United States is with natural gas, who can blame them... Even our own natural gas companies have been moving their activities into oil. More to the point, Asian countries are willing to pay a 400% premium for natural gas, compared to U.S. prices. That alone could prove fruitful when Canadian investors see serious growth over the next few decades. We can't forget the kind of growth that U.S. companies have had over the last four years in developing unconventional oil and gas resources. In fact, these stocks have been absolutely crushing major indexes. During the last six months, the S&P 500 hasn't even been close: That blue line is just one of many Bakken stocks my readers have been capitalizing on lately. And I can tell you that it's not too late to join their success. In fact, I've outlined everything right here to help you get started. The chart above shows the kind of performance we're going to see with stocks breaking into Canada's unconventional gas sector... Next week, I'll give you the first crack at several I have my eye on. Until next time, Keith Kohl @KeithKohl1 on Twitter A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta tar sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.   Related Articles Investing in the Eagle Ford Formation Who Is Henry Hub? 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