Natural gas is one of the cleanest and most efficient of all energy sources and provides approximately 24% of the world’s energy. Natural gas provides 23% of U.S. energy consumed and heats 60% of U.S. homes. It also provides a feedstock and fuel for the country's chemical and manufacturing industries, and, as of 2007, powered 30% of all U.S. power plants. In fact, nearly all of the new power plants built in the U.S over the last 15 years have been powered by natural gas.

The United States is the world’s largest consumer of natural gas. In 2007, the U.S. consumed approximately 63 billion cubic feet per day of natural gas, and virtually all of it came from one of three sources: domestic production, imports from Canada, or imported Liquefied Natural Gas (LNG).

Natural gas is also a major fuel source around the world, particularly in Europe and increasingly in Asia. In fact, Asia is one of the fastest growing markets for natural gas, with demand growing as economies look to diversify their fuel mix away from coal and toward cleaner burning fuels to reduce pollution.

The expected worldwide increase in natural gas demand over the next decade is driven largely by increased needs for power generation and continued growth in the industrial, commercial and residential sectors. Unfortunately, traditional natural gas production faces a significant challenge in keeping pace:

			The U.S. accounts for more than 22% of total global demand, but holds only 3% of the world’s proven gas reserves domestically.
			Gas production around the world is rising but long term demand will continue to drive future needs
			The natural gas environment is in a period of market transition and natural gas prices while volatile are trending sharply upward from historical levels;
			The emergence of a global liquefied natural gas market is forcing the U.S., Europe and Asia to compete for imports, driving up prices for worldwide natural gas, especially given the increasing linkage in new contracts to the price of crude oil;

China, for example, currently consumes 7.1 BCFD of natural gas, and consumption has risen at an average of 14% per year since 2000, resulting in a demand for natural gas which now exceeds domestic supply. Price for natural gas in the country is driven primarily by marginal LNG imports, which have recently ranged from $12.00 - $25.00 / MMBtu.

Similarly in India, which is the world’s 3rd largest coal producer, demand for natural gas is steadily increasing. Between 2001 and 2007, natural gas consumption grew by over 5% a year and is projected to continue rising. India’s local companies are increasingly focused on growing domestic gas supplies to serve power and industrial needs while Federal and State governments look for new ways to utilize natural gas, from expanding city gas distribution services to introducing and expanding the use of compressed natural gas (CNG) vehicles in Delhi and other population centers.

The use of hydromethanation to convert domestic coal or petroleum coke to natural gas can help create a secure and stable natural gas supply in these regions, which can be used for a wide range of uses, including power generation, thereby helping to improve air quality, enable economic development of rural areas, and create significant ancillary growth in local labor markets. Also, the additional products produced by hydromethanation can provide a source of much-needed ammonia and sulfur-based products to supply rapidly growing domestic fertilizer markets.

With these dynamics as a backdrop, GreatPoint Energy expects to deliver bluegas™ methane to the market at a cost of production lower than new domestic drilled natural gas production and imported LNG.

Furthermore, GreatPoint Energy can deliver these secure, stable supplies to customers under long term supply agreements without price volatility. An increasing price gap between the price of natural gas and the price of coal and petroleum coke creates an enormous opportunity to produce natural gas via hydromethanation.