Wednesday, January 30, 2008

Investment opportunity?

The Minneapolis Fed has a map of nationwide Subprime mortgage concentration. Now, the obvious culprits are shown - Florida, Bakersfield California, Detroit. But another large area of concentration is Western Pennsylvania/Eastern Ohio - coal country. The coal is pretty much mined out. Well, the coal worth mining has been removed - some coal finds were just too small or too deep or too scattered to be cost-effective to mine. The same thing has happened to oil wells, and some closed oil wells AND coal mines are being reopened as rising prices make them economically feasible, after all. But that's not the investment opportunity.

Coal-bed methane is a naturally-occuring gas that can be liberated from coal seams and used just like natural gas. You can cook with it, heat with it, or even pump it into specially-outfitted natural gas cars (dual-fuel gasoline/natural gas vehicles are especially useful, and can be purchased used from fleets). I have seen properties in the region priced as low as $70k claiming "free gas" (though OGM - oil, gas, mineral rights - are not usually specified in the real estate listings). Parts of West Virginia and Kentucky also have some coal-seam methane wells.

http://minneapolisfed.org/community/events/100407/strategies_brewster.pdf Minneapolis Fed map of nationwide Subprime mortgage concentration, page 6

No comments: