Methane is a greenhouse gas with global warming potential; however, it is one of the cleanest-burning fuels, because it is the purest form of natural gas and is much cleaner than burning coal. The sources of methane gas are natural gas fields; decaying organic wastes of solid waste landfills, such as manure, wastewater sludge, municipal solid waste and landfills; and coal deposits from coal-bed methane extraction.

Coal-bed methane generally consists of at least 95% methane, unlike natural gas, which has methane plus significant quantities of ethane, propane, butane and pentane, as well as carbon dioxide, nitrogen, helium and hydrogen sulfide. The heavy hydrocarbons need to be extracted before the natural gas is distributed, but methane can be used as fuel right away. Methane from coal-bed reservoirs can be recovered economically, since it resides in coal seams at shallow depths

CNX Gas (CXG) is a Pittsburgh, Pa.-based producer of coal-bed methane and owns coal-bed methane rights for 4.5 billion tons of proven coal reserves in Appalachia, the Illinois Basin and other areas. The stock has a P/E of 41 and a PEG of 1.27.

Peabody Energy (BTU) produces coal-bed methane, mines for coal, and develops mine-mouth coal-fueled generating plants. In addition, it converts coal to natural gas and other fuels. The stock has a P/E of 96, a PEG of 1.86 and a yield of 0.3%.

Consol Energy (CNX), one of the methane gas pioneers, produces coal-bed methane gas from its coal properties in the Northern and the Central Appalachian basin, which it resells to wholesalers, and also develops oil and gas from properties in the Appalachian and Illinois Basins. It is also involved in the mining of steam coal and metallurgical coal. The stock has a P/E of 90, a PEG of 1.63 and a yield of 0.4%.

Range Resources (RRC), which trades on the New York Stock Exchange, produces coal-bed methane and oil and gas in the eastern portion of the U.S. The stock has a P/E of 62, a PEG of 1.68 and a yield of 0.3%.

Big Cat Energy (BCTE.OB) has patented technology, known as the ARID Tool, which is an aquifer recharge injection device, that allows coal bed methane extractors to re-inject water produced from producing coal seams. The stock recently generated negative earnings of 16 cents per share. This is an extremely low-cap stock and should therefore be considered extremely speculative.

Far East Energy (FEEC.OB) is a Houston-based company that explores for, develops and markets coal-bed methane gas in the Shanxi Province in northern China and in the Yunnan Province in southern China. The stock recently generated negative earnings of 11 cents per share. This is an extremely low-cap stock and should therefore be considered extremely speculative.

Gastar Exploration (GST) explores for and develops coal-bed methane property in the Powder River Basin of Wyoming and Montana. It also explores and develops oil and gas properties in North America and Australia. The stock has a forward P/E of 42. The stock trades on the American Stock Exchange.

Quest Resource (QRCP) develops coal-bed methane in the Cherokee Basin, which includes 15 counties in southeastern Kansas and northeastern Oklahoma. It also has a natural gas pipelines division. The stock has a forward P/E of 18.

Storm Cat Energy (SCU) explores for coal-bed methane in central Alberta. It also explores and develops unconventional gas reserves from fractured shales, coal beds and tight sand formations, including coal-bed methane gas, as well as oil properties in Canada, Mongolia and the U.S. The stock has a forward P/E of 23. This is a very low-cap stock that trades on the American Stock Exchange and should therefore be considered very speculative.

Waste Management (WMI), which trades on the New York Stock Exchange, is the largest waste services company in the U.S. It is planning on spending approximately $400 million over the next five years to build methane gas to electricity plants at 60 landfills. Its facilities will be built in Colorado, New York, Texas, Virginia, Illinois, Massachusetts and Wisconsin. The stock has a P/E of 16, a PEG of 1.52 and a yield of 2.9%.

Climate Exchange (CXCHF.PK) owns the Chicago Climate Exchange, which trades in the emissions of six gasses including methane, carbon dioxide, nitrous oxide, sulfur hexafluoride, perfluorocarbons and hydrofluorocarbons, and the European Climate Exchange, which provides futures contracts and options contracts of emissions, known as Carbon Financial Instruments. Goldman Sachs has taken a major position in this company. Net profit margin was down 15.89%.

If you like methane gas stocks, you should also look at natural gas utility stocks and other green stocks.

Author does not own any of the above.

By Stockerblog.com