Eoin Treacy's view Four separate headlines caught my eye that demonstrate a number of distinct elements to the increasingly global natural gas market. The first focused on environmental concerns surrounding shale gas drilling in Pennsylvania. The second was on Total's investment in Russia's Novatek to produce LNG. The third was on how Norway's Statoil is attempting to find more gas in an effort to shore up reserves following the peak in North Sea oil production a decade ago. The fourth was on Qatar's intention to double LNG production.

Unconventional natural gas is a game changer for the energy industry. The combination of horizontal drilling and hydraulic fracturing is helping to open up previously inaccessible regions to oil and predominantly gas exploration. The resulting surge in US natural gas supply is helping to depress prices even in an environment where oil prices are pushing above $100. The US, and increasingly Canada, have been the most aggressive in exploiting this resource but it appears to be only a matter of time before the production of unconventional gas is ramped up elsewhere. The additional benefit for the USA is that this boom for the energy industry is happening at home, supporting American jobs and lessening demand for foreign energy resources.

However there are legitimate concerns about the degree of regulatory latitude afforded various drilling operations in expanding the shale gas sector. Well publicized cases of gas coming from people's faucets have stirred up activists and important questions are being asked about the effect on potable water supplies. It is in the long-term interests of the energy sector to ensure that environmental issues are handled responsibly so that unconventional natural gas can be exploited to its full potential.

Every oil company has to think about how it is going to grow its reserves. This can only be done by using new technology on old fields or gaining access to new territory. Large oil companies are increasingly being locked out of major new oil discoveries. Energy nationalism remains a persistent trend and countries have become wary of offering control of reserves in a high price environment. With the emergence of China and India, there is now also significant additional competition for the reserves that do exist. As a result major oil companies are substituting natural gas for oil, on an energy equivalency, basis in their balance sheets. Therefore, they are going to have more natural gas to sell than oil in future.

Natural gas is abundant and prices remain low, it is a less polluting fuel than oil or coal and supply is increasingly secure. The one impediment to natural gas being globally traded has always been the difficulty in transporting it. However this is changing. LNG terminals, tankers and pipelines are all coming on line. The predominance of long-term contracts is also likely to decrease as the market becomes more mature. Anyone with a choice will have already switched to natural gas and it is only a matter of time before consumers demand more options to avail of this comparatively cheap fuel.

So what will be the best investment options?

The bull market in unconventional natural gas is more about the increase in supply than a boom for prices. Therefore while drilling and producing natural gas is going to remain in demand, the companies most likely to benefit are those that transport the gas or benefit from lower input costs such as in the chemical and fertilizer sectors. (Also see Comment of the Day on February 16th). Today, I thought I would concentrate on some of the higher yielding opportunties offering leverage to natural gas.

Hugoton Royalty Trust is a Master Limited Partnership (MLP) with interests in mature natural gas fields in Kansas and elsewhere. It remains in a solid medium-term uptrend and has found support in the region of the 200-day MA on successive occasions over the last two years. It is currently testing the June high near $21.50 and continues to yield 6.73%. A sustained move below $20 would be required to begin to question potential for further higher to lateral ranging.

BreitBurn Energy is oil & gas production and exploration MLP with properties in the Antrim Shale and the New Albany Shale. It remains in a consistent medium-term uptrend and yields 7.45%.

Kinder Morgan is a pipeline company with interests in a number of different products. It yields 6.14% and remains in a consistent medium-term uptrend. Enterprise Products Partners yields 5.44% and has a relatively similar pattern.

Boardwalk Pipeline Partners LP yields 6.25% and has been consolidating above the 2007 peak since July. A sustained move below $30 would be required to question medium-term upside potential.

Energy Transfer Partners yields 6.46%. The pace of its medium-term uptrend has picked up over the last month but a break of the progression of higher reaction lows, currently near $50 would be required to question medium-term upside potential.

Teekay LNG Partners is an LNG tanker company, yields 6.56% and remains in a consistent medium-term uptrend.

Exmar, listed in Belgium, is another LNG tanker company that also produces gas. It currently yields 6.69% and remains in a base formation.