One of The Motley Fool's key tenants of successful long-term investing is buying into a strong and clear growth catalyst. One of the easiest ways to accomplish this is by investing into a megatrend that is also a decades-long global socioeconomic trend. One of the strongest examples is LNG (liquefied natural gas) shipping. There are four primary catalysts fueling this megatrend.
First, the UN is projecting the earth's population will increase from $7 billion to $9.6 billion by 2050. This will naturally increase the need for energy.
Second, the growth in the developing world will ensure that global economic growth from nations such as Brazil, China, India, and Russia (as well as the continent of Africa) will drive global economic activity. This will boost demand for gas as an energy source and for industrial uses.
The third reason is environmental. Gas-fired power plants are far cleaner burning than coal or oil plants, and for nations such as China (which struggles with famously unhealthy levels of pollution) this will become a priority in the coming decades. Also, consider Japan's post-Fukushima energy conundrum. After extensive safety evaluation only half its nuclear power plants will be allowed to restart and no new plants are likely to be commissioned within a decade (necessitating extensive LNG importation).
The final reason is geo-political security. The recent Russo-Ukranian crisis over the Crimea illustrates the need for western nations such as Europe (which imports 30% of its natural gas and 35% of its oil from Russia) to diversify its energy sources.
Currently, the global LNG capacity is 281 mtpa (million metric tons per annum) with an additional 110 mtpa under construction. The U.S. has over 20 proposed LNG export projects undergoing regulatory review that would add an additional 190 mtpa (a 50% potential increase in global capacity). This enormous LNG capacity is being serviced by 362 LNG tankers with another 104 under construction (76 to be delivered in 2014-2015). Analysts are projecting short-term tanker pricing weakness through 2015 due to the large number of new tanker deliveries. The situation is expected to reverse itself beyond 2016 due to new LNG export capacity coming online. Certain companies (and partnerships) make excellent investments to participate in this megatrend.