The "It" Energy

Inhaling it can be lethal, but when mixed properly, natural gas may breathe new life into your financial portfolio. U.S. natural gas prices, which trade at about $7 per million British thermal units, are up about 17 percent in the last year. They're off their midsummer high of about $13/MMbtu, but experts predict that natural gas investments are poised for a long-term rise, especially with a new federal administration. After all, alternative energy now carries bipartisan focus. "Energy, in general, has eclipsed Iraq as the number-one conversation in Washington," says R. Skip Horvath, president and CEO of the Natural Gas Supply Association. "That's a sea change. Natural gas will be in conversations for several years."

Why? Natural gas is a triple threat in the energy world. It's clean to produce, cheap relative to oil and plentiful--thanks to recent discoveries of so-called "unconventional" gas. Increasingly, drillers are tapping into shale deposits and coal-bed methane for new supplies. Natural gas also burns cleaner, with less than half the carbon dioxide emissions relative to coal. Plus, it's sort of patriotic. "A lot of the oil we use is derived from overseas; with natural gas, a plethora is here in the U.S.," says Steven Rogé, portfolio manager with R.W. Rogé and Co.