William Hart saw a bunch of strange bubbles in the waters of Canadaway Creek…
Now, you’ve probably never heard of Canadaway Creek. I bet you haven’t heard of the town it’s in, either – Fredonia, New York.
But Hart’s observation there in the early 1820s changed the course of humanity…
You see, the bubbles rising to the creek’s surface weren’t just air. They were flammable.
Most of the locals considered the “burning springs” of Canadaway Creek a mere curiosity. However, the bubbles intrigued Hart. So he dug deeper – both literally and figuratively.
Soon, Hart realized that these bubbles weren’t just an oddity of the Earth. Rather, they were a sign of something a lot bigger…
They came from natural gas seeping to the surface.
Until then, people had little practical use for natural gas. It was just there.
That’s when Hart thought of a simple-yet-revolutionary idea…
He would try to capture this gas and use it as a fuel.
Hart began his project between 1821 and 1825, according to historical accounts. The local gunsmith built a “crude” well using hollow logs to channel the gas to the surface.
His method was rudimentary. But it worked.
Hart eventually dug down as much as 70 feet to reach the gas. That wasn’t easy with the tools of the era. But in the end, he harnessed the gas in a controllable, useful way.
Now, at the time, the British were using natural gas as well. But they produced it with coal.
Hart’s basic gas well was the real innovation. And he put it to use as quickly as possible…
Specifically, he lit the streets of Fredonia with gas lamps.
The sight must’ve seemed like magic to the townspeople…
Before that, most of the world relied on whale oil and candles for light. But thanks to Hart, they could now use natural gas from the local waterway to get a steady, clean flame.
The impact of Hart’s work in Fredonia soon spread beyond the town’s borders. Other folks started to see the potential of natural gas as a reliable, efficient source of energy.
People drilled more wells in the region over the next few decades. And like many evolving technologies, the process of harnessing natural gas improved with time.
Soon, folks laid gas lines. And many nearby towns began to enjoy the benefits of the stuff.
Unfortunately, Hart’s life-changing creation didn’t make him rich or famous. He didn’t live long enough.
But Hart’s innovations set the stage for what would become a global industry…
People all over the world started embracing natural gas by the late 19th century. They began using it to light their streets, heat their homes, and power their factories.
These days, the profits tied to natural gas are immense. We rely on it more than any other power source in the U.S. And demand will keep rising in the months and years to come.
That’s particularly interesting because the SPDR S&P Oil & Gas Equipment & Services Fund (XES) recently turned “bullish” in the Power Gauge. In fact, it was the fund’s first “bullish” rating since October.
It since dropped back to a “neutral” rating amid the broader marker sell-off late last week.
Meanwhile, the SPDR S&P Oil & Gas Exploration & Production Fund (XOP) has been in “neutral” or “bearish” territory in the Power Gauge for the past three months.
So it’s possible that a change is brewing in the energy sector. But we’ve likely seen an early signal from the Power Gauge.
If you’ve forgotten about energy in recent months… now’s the time to start thinking about it again.
It may not be a broad “buy” quite yet. But I’ll be watching the space. And I’ll be keeping an eye on XES and XOP in the Power Gauge for a stronger signal on energy overall.
Good investing,
Pete Carmasino
