Unless you’re a Texan, I’ll assume you don’t read The Texas Tribune, an Austin-based news source for the Lone Star State. Which means you probably haven’t seen this headline, which ran on Sunday: “Swaths of East Texas without power amid a heat wave after severe storms.”
You might not have seen this headline either, from NPR: “Much of the U.S. could see power blackouts this summer, a grid assessment reveals.”
Or this one from The Washington Post: “Fresh blackout threats emerge as power grid faces a stressful summer.”
These headlines, and countless others, tell a dangerous story: The U.S. power grid could easily reach breaking point as summer temperatures peak.
This is, sadly, an “I told you so” moment.
And, equally sadly, it was all too easy to predict…
How an Energy Super Shock Leads to $15 Gasoline
I’ve written to you before about the energy “super shock” we are racing toward as a society. It’s one of the three major super shocks that will unfold as the rest of this decade plays out.
Energy was always going to be the earliest super shock to arrive. Those headlines above say it’s here… and it’s only going to get worse.
What’s in store during this super shock?
Rolling blackouts could hit states across America. Meanwhile, energy prices are going to soar higher. And it’s all because the green energy lobby has ignored common sense. Instead, it has browbeat politicians and bleeding hearts into forcing changes on the energy sector that are much too quick.
We’re talking about oil prices at $150 per barrel. Oil price spikes to $250. At that level, you’re paying $15 per gallon for gasoline. A single barrel of oil produces roughly 20 gallons of gasoline. That’s $12.50 per gallon right there for a $250 oil barrel. Add in the various taxes and … boom! That’s $15.
Or more.
To be clear, I have no problem with green energy. I’ve personally made investments in this space. It will build a wonderful world for our grandchildren.
But I do have a problem with the green-energy militants who want the world to immediately cease the production and use of oil and gas, and replace it with power produced by wind, solar, and the good tidings that come with rubbing Buddha’s fat belly.
They fail to acknowledge the folly of their fallacy.
No Way to Replace Energy Infrastructure So Quickly
The fallacy is that renewable energy can replace fossil fuels in the next decade or so. And the folly is not accepting the reality that there’s no way the world can suddenly replace more than a century’s worth of energy infrastructure in a few years.
And yet, their incessant bleating has sharply reduced the willingness of oil and gas companies to search out new oil and gas reserves.
That bleating has also reduced the willingness of power producers to reinvest in existing power stations. Instead, they’re having to invest in technology based on solar, wind, and sprites wishing upon shooting stars.
As the International Energy Agency noted in a report last month, “Clean energy investment is extending its lead over fossil fuels.”
That means power producers are pouring more money into green tech as opposed to keeping the current power grid from collapsing. That’s where investors put their money because of all the noise and hatred surrounding fossil fuels.
We’re reaping what the green lobby has sowed: An energy infrastructure incapable of meeting existing demand, much less growing demand.
And that’s not just a summer challenge.
Prepare Your Portfolio Now for the Energy Super Shock
Summer or winter, America’s power grid is no longer fit for purpose.
Extreme cold snaps sent Texas’ power grid offline in 2021. Indoor home temperatures dropped below freezing, causing the death of 250 Texans. Pacific storms took California’s power grid down in January. And last year, over Christmas, brutal Artic weather had utility companies in Massachusetts, New York, and various states in the South and Midwest all but on bended knee, pleading with customers not to run the heat because the grid was likely to fail.
This is precisely what happens when infrastructure is incapable of handling demand. When you critically underinvestment in maintaining and upgrading this infrastructure, this is the result.
Again, I’m not against the push for a green energy future. I’m against the pace at which the greenies expect this to occur.
Nevertheless, they’re the squeaky wheel getting all the government grease.
Which means those of us who recognize we’re launching ourselves into a brick wall need to start preparing now.
Here’s the reality: Despite all the investment in green energy, global demand for oil and gas is actually still rising. In fact, it’s expected to set a new record high this year.
And now, the IEA is worried supply will fall well short of demand as early as later this year.
Our goal: To position ourselves as investors for the energy super shock that’s already underway.
More to come…