We used to build things. We used to prepare for the future… to plan. 

I’m not exactly sure when that changed and America devolved into a looter mentality. Perhaps it was in 1973, when President Richard Nixon killed what was left of the gold standard. Or maybe it was in 2002 when Vice President Dick Cheney scoffed that deficits don’t matter. 

Whenever the change happened, it most assuredly happened. No politician can look past the next election cycle, and no major corporation can look past its next quarterly earnings report. 

The idea of investing in the future is a fantasy when we’re borrowing a trillion dollars every 100 days to cover current obligations… and the interest on past obligations. 

For example…

After years of underinvestment (and lack of planning), exacerbated by major environmental, social, and governance (ESG) disincentives, we may be looking at a bona fide energy crisis ahead.

But, as our Freeport Society friend John Pangere points out, this energy crisis is also a fantastic energy opportunity… if you know where to look.

John was once an investment banker… he’s successfully traded currencies, futures, options… and he’s profitably invested in stocks and real estate for years. He’s also the brains and passion behind Rogue Strategic Trader. 

His insights into this issue are invaluable.

Over to you, John… 

And thanks for your kind permission to reprint this essay.

To life, liberty, and the pursuit of wealth.

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America Needs New Sources of Energy and an Infrastructure Upgrade

We’re just a couple of days away from hearing if oil prices will continue to add to consumers’ inflation woes.

On Sunday, OPEC+ oil producers will hold their meeting to set their output policy. Word on the street is that they’ll keep their 2.2 million barrels per day of voluntary production cuts in place.

Considering global demand for electricity is forecast to grow by 68% between 2021 and 2050, this OPEC+ positioning is not ideal, to say the least.

But how bad is it?

Today, I’ll delve into the facts and the data. I’ll show you that despite efforts to move into renewable energy, fossil fuels still produce the majority of energy today. I’ll also explain how and why, in the realm of energy, there’s positive news on the horizon… 

And how it offers one way to profit from the energy stalemate.

The Big Lie

For the past decade, politicians of all stripes, along with industry leaders, advocated for transitioning away from fossil fuels.

Naturally, they poured trillions of dollars into that transition.

With that kind of backing, you’d think the mix of electricity generation would change dramatically. 

It hasn’t.

Since 2010, electricity generation is up 33% worldwide. Back then, about 67% of that generation was from what’s considered a dirty source: coal, oil, or natural gas.

Today, it’s not much different. Coal, oil, and natural gas make up about 62% of worldwide electricity production.

That’s because solar and wind projects can’t provide reliable baseload power. Baseload power is there when you need it. Day or night. Rain or shine. Windy or calm.

Regardless of the weather, it’s always ready to perform. And it’s why we continue to use coal, natural gas, and oil more than any other source of power generation.

You see, turning off one of the only reliable sources of consistent, available power is counterproductive.

Plus, our current electrical grid can’t handle the coming load that artificial intelligence will demand. It can barely handle our current load as it is.

Which is why this OPEC+ stalemate is such a challenge. With oil majors spending less money on oil and gas projects, it doesn’t make sense to attack the foundation of what our world runs on. And with oil companies finding fewer sources of these fuels, we may very well be heading into an energy crisis.

This problem may also get worse before it gets better…

From 132 to Zero

That’s in part due to the decommissioning of reliable baseload power from coal in the United States.

Over the next 25 years, 132 coal power plants are set to go offline in the U.S. alone.

Losing all that without replacing it with another source of reliable power is a massive issue. But that’s just one problem.

Another is that our infrastructure doesn’t inspire much confidence. 

According to the American Society of Civil Engineers (ASCE), we don’t just need new sources of electricity generation. We need to upgrade the system we already have in place at the same time.

The ASCE says all three major components of the electric grid – generation, transmission, and distribution – have a massive investment gap. It estimates that by 2029, that gap will grow to around $197 billion.

That’s why, against the OPEC+ production cuts and the rapidly increasing demand for reliable energy, it’s more important than ever to find solutions.

Help Is on the Way

There is some good news on the horizon.

The $1.2 trillion Infrastructure and Investment Jobs Act of 2021 helps partially fill the gap.

Sure, we can argue there’s plenty of pork in the bill. But with $65 billion for new and upgraded power projects, it was a decent start. More reliable power means fewer massive power outages.

And all that spending creates some great moneymaking opportunities… if you know where to look.

A 2023-2024 bill titled S.1111 could unleash trillions of dollars into a new sector in the world of energy. In fact, it could be the solution to America’s – and the world’s – energy problems. 

S.1111 is better known as the ADVANCE Act… or Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy… and it would boost development and deployment of new nuclear technologies, incentivize expansion in the U.S., and help position our country as the world’s leader in nuclear energy.

Look to companies involved in the nuclear energy space. They’re going to become increasingly valuable. 

Regards,

John Pangere

Senior Analyst, Rogue Strategic Trader

P.S. Thanks again, John. Great stuff. Besides companies in the nuclear space, those on the logistics side of the energy space also present great opportunities right now… which is why we hold several such stocks in our Freeport Investor model portfolio. To learn more about what we’re holding to profit in this space, watch this video. It details why we’re investing in the energy space, plus the four other sectors we’re focusing our investments in as the U.S. (and the globe) lurches from one crisis to the next.