I got this one from Breakaway investor (yesterday - Tue 6/05/07 7:21 PM )

I think this company is NGS (http://www.ngsgi.com/). I dont own any shares.

http://www1.youreletters.com/t/1261901/18038950/822995/3451/


The $786 billion solution

By Andrew Mickey, BreakAway Investor

More than 100 years ago, the Dene tribe and the British Crown reached a formal agreement known simply as “Treaty Eight.” Treaty Eight established that the Dene tribe’s oil- and mineral-rich territories could not be mined without the permission of the Dene elders.

Thanks to Treaty Eight, officially signed in 1899, the Dene have become critical players in the energy industry for almost 40 years. You see, the Dene are sitting on a massive tract of land along the Beaufort Sea, an area brimming with oil and natural gas reserves.

The Beaufort Sea, which is actually part of the Arctic Ocean, has been eyed by the energy industry for decades. Although the vast resources of the Beaufort could be tapped, there was previously no way to transport them from the Artic down to the markets in southern Canada.

But the circumstances changed dramatically in the early ‘70s. When OPEC decided to cut production and send the world energy markets into a tizzy, the Canadian government began to negotiate with the Dene tribe to build a massive 800-mile pipeline from the Beaufort Sea all the way down to southern Canada. The project came to be known more popularly as the Mackenzie Venture.

However, after an arduous three-year study costing the Canadian government $5.6 million, Canadian authorities shut it down before the project even got started.

At that time in history, natural gas was trading for an inflation-adjusted $1 to $2 per MMcf. Shortly after an MMcf of natural gas started fetching almost $8, Exxon Mobil began considering the Mackenzie Venture.

For anyone that hasn’t heard about the Mackenzie Venture, it was a proposed $16 billion pipeline system that crosses northern Canada near the Artic Circle. Once completed, the pipeline would provide 25% more energy to the United States in the form of natural gas, which is more energy than all of the oil imported from Saudi Arabia.

Needless to say, that’s a heck of a lot of energy! And with electricity prices climbing right along with natural gas prices, the Mackenzie Venture would have been very helpful in alleviating the tight supply and demand situation in the natural gas markets.

The Mackenzie Venture was going to be the savior of rising natural gas demand in the U.S. The project was so important, the U.S. federal government has already committed to fronting more than $12 billion in cheap loans to help get the project off the ground.

Soon, the high hopes of the energy industry for a new supply of natural gas (that the Mackenzie Venture was going to supply) suddenly came crashing down again. Last week, Exxon’s CEO, Rex Tillerson, told shareholders, “We are now in a situation where [the Mackenzie Venture] is not economic at current costs.”

Without the oil giant’s deep pockets behind the project, there’s not much hope left for its completion. As a result, we have no major new sources of natural gas expected to come on line anytime soon.

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