Meridian Energy: Investment and Brokerage | Commodities Market Outlook

Meridian is involved in a wide range of energy segments in both the conventional and renewable markets. Our main foci are in site investments and the brokerage of commodities in the conventional markets of coal, oil, and natural gas. Our understanding of and experience with bio-fuels, hydroelectric, solar, wind, and conversion technologies is extensive making Meridian a leader in this ever-changing dynamic field.

Meridian is engaged in both the energy brokerage and site investment markets:

Brokerage: Meridian has an extensive network of large and small buyers and sellers in the coal, natural gas, oil/petroleum, and minerals markets. Our inventory of aggregated energy sites and energy commodities vary monthly. However, our extensive industry knowledge and contacts allow Meridian to cater to buyers’ and sellers’ requests regardless of current inventory.

Investment: Meridian will identify and evaluate potential energy investment opportunities for Meridian’s private capital placement or for our network of investors based on specific investment criteria. Our investment criteria varies across each industry segment and thus differs on a case-by-case basis. Meridian focuses on companies with strong fundamentals, cohesive management, and the ability to be a part of a larger acquisition.

Commodities Markets Outlook

Global demand for coal will continue to increase exponentially over the next five years despite public calls in many countries for reducing reliance on the high-carbon fuel as a primary energy source. Coal is the single-largest source of electricity generation globally. The main reason for the projected increase in coal demand over the next five years is surging power generation in emerging economies. Coal demand is expected to grow by 600,000 tons every day over the next five years.

U.S. production of domestic crude oil increased from 5.5 million barrels per day in 2010 to 6.7 million barrels per day in 2020 – an 11% jump. Even with a projected decline after 2020, U.S. crude oil production will remain above 6.1 million barrels per day through 2035. The higher level of production results mainly from increased onshore oil production, predominantly tight oil. Onshore tight oil production will account for 31% of the continental U.S. onshore oil production in 2035, compared with 12% in 2010. As with shale gas, the application of recent technological advances significantly increases the development of tight oil resources.

U.S. dependence on imported liquid fuels continues to decline, primarily as a result of increased domestic oil production, increased production of bio-fuels and lower demand for transportation fuels. Imported liquid fuels as a share of total U.S. liquid fuel use reached 60% in 2005 and 2006 before falling to 50% in 2010. The percentage continues to decline over the projection period to 37% in 2035.

Natural Gas
The estimated unproved technically recoverable resource (TRR) of shale gas for the United States is 482 trillion cubic feet. Drilling in the Marcellus accelerated rapidly in 2010 and 2011. The daily rate of Marcellus production doubled during 2011 alone. Using data though 2010, United States Geological Survey (USGS) updated its TRR estimate for the Marcellus to 84 trillion cubic feet, with a 90% confidence range from 43 to 144 trillion cubic feet—a substantial increase over the previous USGS estimate of 2 trillion cubic feet dating from 2002. Energy Information Administration’s (EIA) TRR estimate for the entire northeast also includes TRR of 16 trillion cubic feet for the Utica shale, which underlies the Marcellus and is still under-explored.

The United States will become a net exporter of liquefied natural gas (LNG) starting in 2016 and an overall net exporter of natural gas in 2021. U.S. LNG exports are expected to start with a capacity of 1.1 billion cubic feet per day in 2016 and increase by an additional 1.1 billion cubic feet per day in 2019. Cumulative U.S. LNG imports from 2011 through 2035 are down, due in part to increased use of LNG in markets outside North America, strong domestic production, and relatively low U.S. natural gas prices in comparison to other global markets.