The theory of relativity applies to all things, actually. It’s about what is and isn’t in terms of one’s own perspective — standing still, in motion or both. In the energy industry, at more than $100 oil and strong natural gas prices, relativity is greatly in play. Consider the producer who has hedged much of his production at $80 oil. At the time the deal was struck, it was brilliant. Today, he is writing checks for the difference. Still, it is brilliant at $80. We will soon find out if that producer could make it at $80 for much of his production. Consider too the producer who hedged at $80 and had some production shut in for some reason, and a significant enough amount. That producer is writing checks for what he didn’t even sell. Ouch 2.0x. Another relevant factor in relativity is how pleased producers are with their recent success. Money — both from the equity and debt markets — is being thrown at them. And, they are using it wisely — wisely at $130 oil and $12 natural gas. Deja vu, 1980s. No, this isn’t the 1980s. Most producers are more sophisticated than most were back then, and U.S. oil and gas markets are public now, without government price controls. Nevertheless, there are risks. Some producers — or would-be producers with some money for one idea or another — wouldn’t make it below $100 oil and $8 natural gas. Play smart. Play relative. (This is the first in a series of blogs inspired by reading Walter Isaacson’s Einstein: His Life and Universe.) –Nissa Darbonne, Executive Editor, Oil and Gas Investor, A&D Watch, OilandGasInvestor.com; ndarbonne@hartenergy.com