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Below are my thoughts with the disclaimer that I ain't no geopolitical expert (but I am a voracious reader)
Energy demand in the USA will skyrocket over the coming years due to themes of AI/data centers/EV/energy independence. EV might look like odd man here but all those EV's getting charged in garages still need a lot of energy...a significant portion of which is still coming from fossil fuels.
Zooming out though, the big demand driver is energy independence. I agree with most of Peter Zeihan's analysis on this topic -- while the US (waaaay) over extended itself in blood and treasury over Afghanistan and Iran, the grip on the GOP of the big defense spending Republicans is waning (of which Dick Cheney was a key leader) and what is emerging gradually (over both Democratic and Republican admins) is a US that is withdrawing from it's role of global cop. I'll stop here because I don't want to veer too far off into the weeds of geopolitics. Short story is that I expect US energy demand (and drilling) to increase as a natural side effect of US wanting to rely less on Middle East. Canada and Mexico might still do fine but I fully expect Trump to extract concessions for being a continued buyer of energy from our neighbors.
Obviously I (and all the experts I follow) could be all wrong but the general theme amongst several PE folks I follow is that energy is a long term play atm.
Also important clarification: While I do believe "drill baby drill" will be a theme, the broader theme I am looking to capitalize on is global energy demand increasing (not just fossil fuel). So that includes green, transmission, battery, transport, storage, etc.. There's several PE pitches out there but to the extent possible I'm looking to invest in a public instrument.
As for the rest of your thoughts, that's why I started small positions in PAVE, GRID, and AIRR in the taxable. I think they're going to have a hard time killing the IRA, well, except maybe for sticking it to Elon when they cancel the tax incentive for EV's.
I wouldn't put it past the Trump administration to stick it to the EV industry but yet benefit Musk firms. Musk hasn't invested in Trump or taking a govt. job for philanthropy.
Without the incentive to purchase, the EV becomes a niche product, and Elon has that market. He'd like to position himself as the auto-driving choice (auto-taxi, etc.). This action makes it very difficult for even China to compete domestically. Make no mistake; Trump's win is a win for Elon.
I recently read an article that quoted Exxon CEO. He was basically saying the president can't control oil prices. He doesn't see large increases in production in the short term as the world already has plenty of supply.
The Chinese EVs are eating Tesla’s lunch in China. Tough to compete when these EVs cost 40% lower than the cheapest Tesla model. They are moving manufacturing to Mexico so to minimize tariff in US market.
So, do I need an etf made up of US Enterprises that construct and maintain pipelines, reserve storage tanks, and other things that provide capicity to accomodate the flow problems associated with oversupplies or will the rest of the world save their supplies for tomorrow and just use our cheap supplies until they are gone? I guess I should, after more than 40 years, just sell my little bit of Chevron before gasoline falls to 25 cents again. ( As a teen I could take my mom's car, go places other than I said, and refill the tank for a quarter a gallon before going home.)
@Anna - I remember 25 cent/gallon gasoline. Whew! Talk about the *wayback* machine.
You rang?
I have to chime in. I recall gas at 19 cents.
There were “gas wars” in the 70s in the Detroit area - including outlying suburbs. All the various filling stations participated. I assume this went on elsewhere in the country as well. It was a trick filling up at just the right time after prices had fallen by 20-30 cents a gallon over a couple weeks. Prices would suddenly shoot back up overnight by the full amount they had fallen only to begin slowly falling again. 19-cents sounds about right (but for a day or two only). ISTM I saw 15 cents one time.
For years we were told the world was running out of petro. Well intended? I don’t know. We now know the earth is filthy with carbon based fuels / petroleum. The trick of course is getting to it (can be miles under the ocean) as well as extracting it from deep underground.
Comments
Below are my thoughts with the disclaimer that I ain't no geopolitical expert (but I am a voracious reader)
Energy demand in the USA will skyrocket over the coming years due to themes of AI/data centers/EV/energy independence. EV might look like odd man here but all those EV's getting charged in garages still need a lot of energy...a significant portion of which is still coming from fossil fuels.
Zooming out though, the big demand driver is energy independence. I agree with most of Peter Zeihan's analysis on this topic -- while the US (waaaay) over extended itself in blood and treasury over Afghanistan and Iran, the grip on the GOP of the big defense spending Republicans is waning (of which Dick Cheney was a key leader) and what is emerging gradually (over both Democratic and Republican admins) is a US that is withdrawing from it's role of global cop. I'll stop here because I don't want to veer too far off into the weeds of geopolitics. Short story is that I expect US energy demand (and drilling) to increase as a natural side effect of US wanting to rely less on Middle East. Canada and Mexico might still do fine but I fully expect Trump to extract concessions for being a continued buyer of energy from our neighbors.
Obviously I (and all the experts I follow) could be all wrong but the general theme amongst several PE folks I follow is that energy is a long term play atm.
Also important clarification: While I do believe "drill baby drill" will be a theme, the broader theme I am looking to capitalize on is global energy demand increasing (not just fossil fuel). So that includes green, transmission, battery, transport, storage, etc.. There's several PE pitches out there but to the extent possible I'm looking to invest in a public instrument.
Those data centers aren't going to run on petroleum products pumped out of the ground. If Trump wants to drill baby drill, he's pushing string. We're already the largest oil producer in the world; gas is cheap, Israeli attacks on Iran barely move the needle, and refineries are being converted to bio-fuels, or being closed. Energy independence is here.
https://www.forbes.com/sites/rrapier/2023/05/02/us-energy-independence-soars-to-highest-levels-in-over-70-years/
https://www.newsweek.com/us-energy-independence-first-time-40-years-1878729
As for the rest of your thoughts, that's why I started small positions in PAVE, GRID, and AIRR in the taxable. I think they're going to have a hard time killing the IRA, well, except maybe for sticking it to Elon when they cancel the tax incentive for EV's.
I believe the way to "play" the climate change issues is industrial stocks needed for the grid.
Even "Climate change is bunk" people agree our Grid is a disaster. More storm and fires will only make it worse.
For years we were told the world was running out of petro. Well intended? I don’t know. We now know the earth is filthy with carbon based fuels / petroleum. The trick of course is getting to it (can be miles under the ocean) as well as extracting it from deep underground.