WE CAN HAVE LOWER COST ENERGY AND REDUCE ENVIRONMENTAL HARM!
U.S. NEEDS AN ENERGY MARSHALL PLAN – NOW!
Disclaimer: Good Day, Readers. WealthBuildingPowers blog is a financial literacy/competency blog and does not provide specific investment recommendations
WE CAN HAVE LOWER COST ENERGY AND REDUCE ENVIRONMENTAL HARM!
I spent ~15 years working in the energy sector. The energy industry is NOT the enemy.
U.S. energy policies over decades have been dominated by crisis-mentality thinking, promoting expensive, incompetent, quick fixes {like releasing one million barrels per day from our strategic reserves} that are politically motivated while ignoring market and technology realities. DC lifetime political hacks repeatedly backed policies that promise political solutions but whose prospects are almost Zero, with no analysis of cost, return on investment, environmental impact, or national security. These political hacks fail to provide stable rules that support basic research while offering flexibility to American entrepreneurship and innovation.
We need a “Marshall Plan” to ensure energy security for us and our European allies. Our European allies, who are highly dependent on Russian energy, require our help. For such a plan to succeed, we need to secure proper energy supplies immediately for the next few years, which can be done while reducing CO2 emissions.” {Jamie Dimon, CEO J. P. MORGAN}
OUR COSTS ARE ERRATIC AND PAINFUL!
Oil increased 41 percent in price in 2022. The below charts look like a roller coaster ride. This is precisely what your wallets feel like with this constant high price volatility.
Supply and demand drive price movements. When demand surges and the supply does not increase, the price increases. OPEC and Persian Gulf countries are significant supply drivers and maintain considerable control over prices. In reality, many of these countries hate the U.S. Yet we have purchased their oil for decades. Funding their weapons of mass destruction ambitions.
{OPEC Countries –Algeria, Angola, Congo, Ecuador, Equatorial Guinea, Gabon, IR Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and Venezuela. Persian Gulf: Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates.}.
The U.S. MUST produce more of our energy to reduce the wild swings in energy prices.
We DESPERATELY need a FACT AND SCIENCE-BASED long-term {50+ years} U.S. ENERGY PLAN!
GLOBAL WARMING
“Just except for now that a planet with nearly 8 billion people is going to generate more carbon into the atmosphere than a planet with 6 billion or 7 billion did. The more carbon you put into the atmosphere, the more likely it is to have at least some effect on the climate. Even if you don’t buy everything, Al Gore or little Greta Thunberg contends, certain parts of the world are likely to grow warmer and weather patterns more intense and unpredictable, year by year, decade by decade.
Energy policy will be more firmly anchored to security policy. Germany’s decision to mortgage its energy future (and economy) to Russian oil and gas looks to be a strategic blunder of the first order — achieving neither energy security nor a more climate-friendly outcome. Leave aside the squalid spectacle of a former German chancellor on the boards of Russian energy companies. The rapid and sudden movement of much of Germany’s energy supply away from its own nuclear plants to Russian oil and gas made much of this conflict possible by encouraging Putin to believe that he did indeed have Europe in a vise. Our country’s own bad decisions vis-à-vis domestic production and Russian imports to the U.S. also rise to the level of a national-security scandal. Watch for every country to hew its energy policy to its national security in a way we have not seen since the 1970s.” {John Hillian, former assistant secretary of state, is the James C. Wheat Professor in Leadership at Hampden-Sydney College’s Wilson Center for Leadership in the Public Interest and a member of the NR, Inc. Board of Director}
TRASH THE SLOGANS AND CREATE A LONG-TERM STRATEGY
Watching the United States {U.S.} energy slogans (poor substitutes for strategies) is like watching a ping pong match between two LOSERS!.
- GREEN BABY GREEN – TEAM DEMOCRAT
- DRILL BABY DRILL – TEAM REPUBLICAN
The above charts US energy sources from 1950 to 2019. The world is dependent on petroleum, natural gas, oil, and, yes, Nuclear. All the politicians shouting, fighting, and reading/stumbling teleprompters will not quickly change this reality.
WE ARE PAYING FOR THE DAMN UKRAINE WAR!
Russia produces few products or services buyers want, except FOSSIL FUELS and military weapons! Fossil fuels accounted for 63.2% of Russia’s exports in 2017. European countries and the U.S. effectively funded Russia’s war against Ukraine. At $50/barrel or lower, Russia would likely be unable to attack Ukraine!
“The war in Ukraine has emphasized how leaving European and American fossil fuels in the ground can put the West at the will of dictators, increasing the risk of atrocities, war or even the use of weapons of mass destruction. An easing of regulations on drilling in the U.S. and easier regulations on liquefied natural gas exports to flood the global market with oil and natural gas would do far more than any sanctions to stop Putin.” {Mr. Trennert is chairman and CEO of Strategas, an investment-strategy, economic, and policy research firm.}
LACK OF AN ENERGY PLAN HAS CONSEQUENCES
- The U.S. plans to stop buying oil and gas from Evil Empire #1, Russia, and instead buy from Evil Empire #2 – Iran {whose country leaders routinely call for the death and destruction of America} and Evil Empire #3 – Venezuela. That is after we remove the sanctions on Numbers 2 and 3! It sounds like a bad movie! We can copy and paste Iran and Venezuela’s sanctions onto EVIL EMPIRE #1- Russia to save time and money. Yep- A Very Bad Movie. {Maybe Will Smith will play Putin!}
- Our dependence on other countries for oil and gas allows other nations to control U.S. prices. Oil has increased 41 percent YTD 2022!
- In 2021, Biden’s executive orders reduced US energy production, and banks made it more difficult for energy companies to borrow needed capital. We made ourselves more dependent on the middle east and Russian energy. {Another bad movie.}
- On his second day in office, Biden signed the Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis. All those fancy words meant the cancellation of the Keystone XL pipeline permit. A pipeline, if running, would have replaced the daily amount of oil we were purchasing from Russia with Canadian crude.
- Biden Administration also issued Secretarial Order No. 3395, which implemented a 60-day suspension of new oil and gas leasing and drilling permits for federal land and water. Biden followed that action with the Executive Order on Tackling the Climate Crisis at Home and Abroad. This order resulted in a “pause on new oil and natural gas leases on public lands” until a comprehensive review of the climate change impacts can be completed.
- Biden embraced the Green New Deal while promising to punish the companies responsible for greenhouse gas emissions; he promised laws against greenhouse gas producers that would be enforceable and said he would bring the hammer down.
- If Biden’s policies are fully enacted, our nation will be more dependent on countries that want Americans DEAD! We will spend Trillions of dollars on solutions that are unproven and cost-ineffective. It sounds like a typical day in DC!
- Suppose you believe the West can craft sanctions that maximize pain for Russia while minimizing financial stability risks in Europe and the U.S. In that case, you must believe in fairies and unicorns.
PROJECTED RENEWABLES SHARE OF U.S. ELECTRICITY BY 2050
Today’s data indicates we will still be 58% dependent on nonrenewable energy by 2050. We will still need carbon-based fuels, including coal, natural gas, oil, to meet our energy needs
BIDEN FLIP-FLOPS – TELL ME IT AIN’T SO JOE!
On March 21, 2022, Joe Biden met with several energy and finance CEOs pleading for greater US energy output. This is a direct contradiction to his campaign pledge to put US carbon-based energy Companies out of business.
JAMIE DIMON’S {A REAL LEADER} MARSHALL ENERGY PLAN
Jamie Dimon, CEO JP Morgan Chase Company, recognizes we cannot depend on politicians to do the right thing for the American people. Dimon told the President the White House needed to create a “Marshall (Energy) Plan” to develop domestic gas and other energy resources. Dimon told the president that additional gas production is required for the energy security of both Europe and America. Dimon also called for more liquefied natural gas production in Europe and less reliance on Russian imports.
{The Marshall Plan was a U.S.-sponsored effective program that was implemented following the end of World War II. It was intended to aid European countries that had been destroyed because of the war. Congress authorized the plan as the European Recovery Program (ERP).
WHAT SHOULD BE INCLUDED IN THE U.S. ENERGY MARSHALL PLAN
US ENERGY POLICIES THAT DRIVE ENVIRONMENTAL CONTAMINATION TOWARDS ZERO, BY CONVERTING TO CLEANER ENGERGY SOURCES THAT ARE: RELIABLE, SUSTAINABLE, AND AFFORDABLE – BY TBD TIMEFRAME.
- For now, the Federal regulatory authorties should do whatever it takes to supercharge fracking and make guaranteed future purchase commitments. Energy companies do not trust the flip-flopping politicians and require financial incentives to invest $ Billions of capital to produce more. Liquefying gas requires long-term investment and reliable power. Facilities cannot run on intermittent renewables, and companies will not invest billions of dollars if they think regulators will kill them once a crisis passes.
- While Biden promises Europe America’s LNG, the reality is that we do not have enough LNG export capacity to replace the 170 billion cubic meters that Russia sends Europe every year. Much of the 124 billion cubic meters per year of exports the U.S. can ship are tied up in long-term contracts with Asia.
- U.S. gas exports could replace the Russian supply over a matter of years, and the U.S. has the potential to quadruple its gas production by 2030.
- Another major obstacle is a shortage of pipeline capacity. Several large pipelines and LNG export projects have been scrapped amid opposition from progressive states and green groups. It can take four to five years {PAINFUL, RIDICULOUS, YEARS} just to get a federal permit for a pipeline that can be built in six to nine months. While the Trump Administration accelerated permitting, Biden’s regulators have slow-rolled approvals. Two applications to increase LNG exports sat at the Energy Department for more than two years. These two permits were approved two weeks ago as the Administration scrambled to supply Europe with more gas. But that was too late to help this winter.
- Europe resisted signing long-term contracts for U.S. LNG because Russia provided cheap gas. This hampered U.S. investment in LNG export facilities and is one reason 13 approved terminals , that could ship 258 billion cubic meters each year are NOT under construction. Most were approved in the Trump years.
- Now Europe finally agrees to long-term contracts, but the Biden Administration says it opposes long-term U.S. gas investment. The White House national climate adviser stated that U.S. climate policy “is no longer a fight about coal. It is a challenge about natural gas and infrastructure investments because we don’t want to invest in time-limited things. No CEO who wants to keep his well-paying job, is willing to commit $ Billions, with “time-limited” over their head. The reason the Energy Department’s LNG export permits are good through 2050, it takes decades to recoup the investment.
- Europe is finally reckoning with its climate and energy follies. This week, the European Commission committed to streamlining regulations to fast-track LNG import projects. Germany is planning to extend the life of its coal plants, and the U.K. is embracing oil and gas exploration in the North Sea.
- NUCLEAR AND FUSION ENERGY. There have been significant breakthroughs in nuclear fusion energy. K-based JET Laboratory has smashed world records by producing 11 megawatts of power over five seconds from nuclear fusion. While the amount of power is small, only enough to boil about 60 kettles worth of water, it represents a significant breakthrough for fusion technology.
- ADVANCED NUCLEAR REACTOR – TerraPower aims to build its first advanced nuclear reactor in a coal town in Wyoming. The Kemmerer plant will be the first to use an advanced nuclear design called Natrium, developed by TerraPower with GE-Hitachi. Natrium plants do not require an outside energy source to operate their cooling systems, which can be a vulnerability in the case of an emergency shutdown. This contributed to the 2011 disaster at the Fukushima Daiichi nuclear plant in Japan, when a tsunami shut down the diesel generators running their backup cooling system, contributing to a meltdown and release of radioactive material.
https://www.cnbc.com/2021/11/17/bill-gates-terrapower-builds-its-first-nuclear-reactor-in-a-coal-town.html
CONCLUSION – U.S. NEEDS AN ENERGY MARSHALL PLAN – NOW!
Russia’s war with Ukraine demonstrates we should be more Afraid of Nuclear War than Climate Change. The best way to reduce the risk of a catastrophe war is for the U.S. to become the world’s indispensable leader in clean energy. Achieving this requires a comprehensive national energy strategy independent of which political party controls the Whitehouse. Today, we are on a path that will lead to continuous inflation/cost spikes and the threat of war with Americans’ lives at stake.
We need a “Marshall Plan” to ensure energy security for us and our European allies. Our European allies, who are highly dependent on Russian energy, require our help. For such a plan to succeed, we need to secure proper energy supplies immediately for the next few years, which can be done while reducing CO2 emissions.” {Jamie Dimon}
“Sadly, environmentalism has grown into a secular religion in which reasonable debate is regarded as heresy. But if politicians and voters can approach climate change with an open mind, they’ll see that economic growth is likely to solve the issue without heavy-handed government intervention. History has shown that free markets produce incredible leaps in human ingenuity. The greater access the world has to all sorts of energy sources, the faster humanity will discover new technologies that are more environmentally friendly. Rationing fossil fuels would only retard the process of decreasing carbon emissions and cost lives in the process.” {Mr. Trennert is chairman and CEO of Strategas, an investment-strategy, economic, and policy research firm.}
APRIL IS NATIONAL FINANCIAL MONTH
April is National Financial Literacy Month. It’s an excellent opportunity to review and upgrade your financial smarts.
Whether you’re just starting or have been earning your way for quite some time, it’s never too late to learn about saving and improving your financial outlook. Developing a budget and building financial knowledge is the foundation for a brighter future.
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St Jude Hospital: https://www.stjude.org/
Wounded Warrior Project: https://www.woundedwarriorproject.org
Folds of Honor: https://foldsofhonor.org
Wilson’s No-Kill Animal Shelter: https://wcnkas.org
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ABOUT ME
I am a proud nerd (as my beautiful wife and daughter have told me) investment and finance blogger with an N.C. State, Chemical Engineering, University Rutgers, MBA and Harvard University, Advanced Management education.
I left a corporate career because I desired to make a difference as a speaker and writer. I was blessed to be coached and mentored by strong women and men in my family and professional life. It is my time to serve and give back.
DISCLAIMER
I started my first business at ~13 years of age (a small but brilliantly created plant nursery). I am a successful investor in stocks, options, real estate and am happy to share my finance and investment lessons. I am NOT a licensed financial advisor. Please do not construe my suggestions on this blog as recommendations for your situation. As an investor, you must establish your risk/loss tolerance. Investment in any asset involves risk, including complete loss.
Please seek your licensed CPA or fiduciary financial advisors for individual financial advice.
I write this weekly blog to make an impact by reaching an audience and demonstrating the need for financial literacy. I will help you get there.
