TheStreet.com's Jim Cramer says perhaps he can learn from Gov. Ed Rendell of Pennsylvania, who has become a believer in the fuel.

Maybe President Obama can make the transition to natural gas that Ed Rendell just did in Pennsylvania. The transition is a simple one: Focus on jobs and many things go well; don't focus on jobs and you aren't focused on anything.

When I first heard of the Marcellus Shale from Aubrey McClendon of Chesapeake (NYSE: CHK) (Cramer's Take), I was pretty much in disbelief. How could there be so much natural gas in some place in western Pennsylvania? Too good to be true.

True, Schlumberger's stock has meandered in the past three months, but that's just a disguise.

Oilfield and energy services company Schlumberger (NYSE: SLB), first recommended on May 6, 2009 at a price of $56.05, remains well-positioned to benefit from the secular trend of increased oil and natural gas exploration and development.

Baxter (NYSE: BAX) is hosting an analyst day on September 16. BAX closed at $55.60. BAX September option implied volatility of 22 is near its 26-week average of 32 according to Track Data, suggesting decreasing price movement.

Chesapeake Energy (NYSE: CHK) closed at $23.09. Natural gas is recently up 1.32% to 2.844 according to Bloomberg. CHK September option implied volatility is at 45, October is at 47; below its 26-week average of 61, according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

The plunge in natural gas prices has hurt natural gas and related energy support plays, but just look on that as a buy opportunity, given natural gas's likely large role in the U.S.'s energy future.

Hence, I'm Reiterating my Buy rating for Enterprise Products Partners (NYSE: EPD), first recommended on April 29, 2009 at a price of $24.24.

This morning, oil firm Halliburton (NYSE:HAL) posted second-quarter earnings and a warning about North American natural gas markets. First things first, HAL reported second-quarter earnings of 30 cents per share (excluding a $12-million charge stemming from job cuts). While these results were far worse than the 55 cents per share the company earned a year ago, they still managed to top the consensus estimate by four cents per share. The situation was the same for quarterly revenue, which fell to $3.49 billion (from $4.49 billion a year ago) but still managed to outpace the Street's expectations - which called for $3.41 billion.

The U.S. natural gas market has been slumping of late – with prices trading around $3.50 per million BTUs – but don't be fooled: one hot summer and a recovering U.S. economy will turn that sector around in a hurry. And with this in mind, Chesapeake Energy (NYSE: CHK) is worth a look.

Chesapeake concentrates on increasing natural gas reserves via acquisition and field development. CHK has proved reserves of 12 trillion cubic feet of natural gas equivalent, mostly in the mid-continent U.S. region.

Unlike crude oil, natural gas is mainly a domestic product, with 84% of US natural gas produced withing the United States. The US produces more natural gas that any other country except Russia. Yet because of the strong demand in the US, prices paid by US consumers are the highest in the world.

So while crude oil it subject to the political maneuvers of OPEC and other oil producing countries, that is not the case with natural gas. The moves in natural gas prices is mainly a domestic affair. Prices peaked last July at $13.694 per million BTU's and since then have fallen 74%. Natural gas in storage was at 1.614 trillion cubic feet, 35% higher than last year and 23% above the five year average.

With this glut of supplies, prices have fallen steadily and hit a 6 1/2 year low at $3.504 per million BTU's then rebounded, up 1.8 cents at $3.628 per million BTU's. The slight uptick was said to have come from bargain hunting at these low prices.

Have the natural gas prices dropped in your area?

There has been little to cheer about this earnings season, and even mediocre news has brought hope to some. However, today Anadarko Petroleum (NYSE: APC), one of my long time favorites, has reported that profits rose three-fold to $824 million, or $1.79 a share, versus $264 million, or 56 cents a share, from last year.

This result is in good part due to the sale of a Brazilian oil field and non-cash hedging gains related to derivatives.

Here's an idea if you are worried about your heating bills this winter. The price of natural gas is crashing. The price decreases last week continued a down trend that's gone on for six months. Why? The economic downturn slows demand for gas and many companies are announcing layoffs and closing plants around the country. Reduced prices for natural gas are also a result of growing capacity in the U.S. because of increases in production at new fields. Natural gas prices are at multi-year lows falling from 65% from more than $13.31 per MMBtu (the way gas is measured) in July 2008 to under $5 -- the lowest since October 13, 2006.

United States Natural Gas (NYSE: UNG) is an exchange-traded fund (ETF) that reflects the price of natural gas in the United States. UNG attempts to mirror the performance, net expenses, of natural gas at the Henry Hub, Louisiana.

Noble Energy (NYSE: NBL - option chain) shares have risen this higher morning after the company announced a major natural gas discovery in the Tamar prospect in the Mediterranean Sea off the coast of Israel. NBL owns a 36% stake in the well, and company CEO Charles Davidson called the find the largest discovery in the company's history.

If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NBL.

NBL opened this morning at $50.44. So far today the stock has hit a low of $47.59 and a high of $50.50. As of 12:15, NBL is trading at $49.77, up 2.98 (6.4%). The chart for NBL looks neutral and S&P gives NBL a 3 STARS (out of 5) hold ranking.

For a bullish hedged play on this stock, I would consider a February bull-put credit spread below the $35 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think, but still leverages nice returns. For this particular trade, we will make a 6.4% return in just four weeks as long as NBL is above $35 at February expiration. Noble would have to fall by more than 29% before we would start to lose money. Learn more about this type of trade here.

NBL hasn't been below $35 in the past year except for two days in October and has shown support around $41 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in NBL.

There's nothing like a supply cut and geopolitical tension to put a floor under oil's price.

Oil popped above $50 a barrel Tuesday after Kuwait and Qatar indicated they will implement supply cuts announced last month, and Russia shutoff gas shipments to Europe stemming from its natural gas dispute with Ukraine.

Oil rose $1.66 to $50.47 per barrel. Natural gas rose 10 cents to $6.18 per million BTUs. The price of oil has risen about $12 in two weeks.

Economist Richard Felson said Tuesday geopolitical tension has re-entered the oil price equation. "Demand is so weak, prices should not be rising. And had they occurred alone, neither the Russian natural gas dispute nor Middle East tension would be enough to increase prices either," Felson said. "But the geopolitical tension combined with OPEC's production cut has been enough to attract oil buyers back to the market."

Over the past few months we have seen the price of gas fall from about $4.00 per gallon to under $2.00 per gallon in most locations.

The price of natural gas has also fallen 25% over the same period. Good news for homeowners, right? Wrong. Homeowners who heat with natural gas saw an increase of 5% in their heating bills. Customers are angry and rightly so. Complaints are pouring in to utility providers and regulators. Some homeowners have had to turn down their thermostats to save money.

Now, if you have electric heat, it's even worse. One third of the home owners in the Northeast use electricity to heat their homes. They have seen an increase of 5% blamed primarily on the cost of coal.

Heating oil prices have dropped by 13% but this affects only 7% of home owners.

By the time all these complaints are filed and investigated winter will be over. Meanwhile, a large population of homeowners will have been held hostage by the energy companies.

Piedmont Natural Gas Company, Inc. (NYSE: PNY) is one of the few corporations to report earnings this week -- and, judging by its results, that may be a good thing. PNY reported a widened fourth-quarter loss of $13.2 million, or 18 cents per share, while revenue improved by 12% to $311.8 million. Gross margin for the period contracted from 29.1% to 28.1%.

Ahead of the report, analysts were expecting a more modest quarterly loss of about 13 cents per share, according to Thomson Financial. Piedmont's forecast for the next fiscal year also fell short of Wall Street's expectations; the company backed its fiscal 2009 guidance for earnings of $1.55 to $1.65 per share, compared to analysts' consensus estimate for earnings of $1.66 per share.

This oil trade takes the cake.

At the zenith of the speculative bubble in the oil patch -- when crude hit $147 per barrel in July -- you had everyone from T. Boone Pickens to Prince Alaweed touting $200-per-barrel oil by the end of the year.

Crude is now trading around $40 -- down $107 per barrel in less than six months. Unbelievable!

And this latest drop comes after OPEC voted to cut daily production by an eye-popping 4.2 billion barrels per day.

Looks like the world is awash in crude oil.

Needless to say, those euphoric longs in the oil stocks got destroyed. Most energy stocks lost 50% to 70% of their value during the course of the sell-off in crude.

And remember those television commercials with T. Boone and Chesapeake Energy (NYSE: CHK) CEO Aubrey McClendon pushing for the expansion of natural gas?

Well, natural gas prices are down 60% from their mid-year highs.

If you put money into T. Boone's Clean Energy Fuels Corp. (NASDAQ: CLNE) as recently as September, when the stock was trading at $20, you now own Mr. Pickens' vision for $5.

In October Loews Corp. (NYSE: L) acquired $490 million on 21.2 million common shares of Boardwalk Pipeline Partners LP (NYSE: BWP), which plans to use the proceeds to expand its pipelines.

Loews, which owns stakes in insurance company CNA Financial Corp. as well as oil and gas companies and hotels, paid $23.13 per share, Friday's closing price, was $19.49 so your buying at a discount to the general partner.

Boardwalk said the cost to complete three pipeline projects is estimated at $3.9 billion. It has financed the projects to date with a combination of equity and debt issuance, cash from operations and by borrowing from the partnership's $1 billion revolving credit facility.

Lowes is the largest shareholder with a 70% equity interest. Boardwalk Pipeline Partners is in the business of interstate transportation, gathering, and storage of natural gas. The company operates through two subsidiaries -- Texas Gas Transmission and Gulf South Pipeline Company -- with a combined 13,550 miles of pipeline in 11 states.

Natural gas prices are down significantly, but I think most investors and users of natural gas alike think that is temporary and the price which is cyclical is near a low point and destined to go up. In the mean time BWP is off its 52 week high of $32.25, down in line with the overall market. The difference here is that BWP has almost a 10% yield while trading at a price to book value near 1.0. It seems to me that this stock will reward your patience while they expand the network and later when gas prices rise as expected.

Last weeks gas prices: At the New York Mercantile Exchange (NYMEX) The January 2009 contract settled at $5.686 per MMBtu.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture and planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I do not own shares of BWP or L, but I am considering them.