America vs. Cuba

The lights went out in Cuba. And I mean went out!

Like, pitch black, no electricity, across the entire country.

All 10 million Cubans with no way to brew up the perfectly sweet shot of coffee called a cafecito or grill up a nice Cuban sandwich. (I miss Miami!)

The ancient grid was so obsolete and decrepit that a malfunction in Cuba’s largest power plant, paired with a couple of electricity plants already offline—and nasty weather preventing oil tankers offshore from delivering much-needed oil to power those plants—doomed the country.

And here’s where we veer off into the point of today’s dispatch: America, I’d like to introduce you to Cuba, your power-starved island neighbor. This might just be your future…

We like to think that we’re so advanced in the US. I mean, we have iPhones and Teslas.

Alas, when it comes to America’s power grid, Uncle Sam isn’t far behind the Castro Kingdom. And that’s pretty damning.

That sounds like yellow journalism.

But I point you to Texas.

You probably remember the big Texas power outage in the winter of 2021. That was just a high-profile example of the 210 power outages that blackened the Lone Star State between 2000 and 2023—a nation-leading number, according to Department of Energy data.

But Texas is not alone.

In the same period, Michigan recorded 157 outages. California, 145. North Carolina, 111. In all, nearly 2,200 significant power outages hit America in that span—almost 100 per year.

Seems a lot.

Then again, like Cuba, America’s electrical grid is getting by on duct tape and a bit of Bubble Yum gum.

The American Society of Civil Engineers rates America’s infrastructure every four years. In 2021, the last report, the engineers awarded a C+ to America’s power infrastructure and had this to say:

The majority of the nation’s grid is aging, with some components over a century old—far past their 50-year life expectancy—and others, including 70% of [transmission and distribution] lines, are well into the second half of their lifespans.

Clearly, that’s not good.

Certainly, it helps explain all those outages and why they so consistently happen.

I want to say here that, “I’m pretty sure we’ll never have a countrywide blackout,” but then again I was in the Northeast Blackout of 2003 that saw eight states and a Canadian province go offline—affecting 55 million people for up to four days.

Given the right conditions and the wrong circumstances, could a cascading event take down the entire country? I don’t know. But given the state of America’s power grid, the idea is not implausible.

There is, of course, a bigger point here: What I worry will be an energy Super Shock that roils the country.

Electrical power is just part of that.

America as a nation is heavily dependent on fossil fuels to function. But the green energy militia isn’t happy about that. They’d just as soon power down all the non-renewable sources of power and locomotion tomorrow and declare victory for Mother Nature.

There is, however, a fundamental flaw in their logic…

The economy requires fossil fuels. Demands it. Cannot open on Monday morning without it.

The infrastructure is simply not yet in place to fully cater to a green economy. Not enough charging stations for electric vehicles, and those vehicles are not time-efficient, given that a Tesla can take 8 to 12 hours to fully charge. Even topping up the battery from 20% to 80% at a fueling station takes 25 to 30 minutes, vs. the four minutes I need to fill my Mini Cooper Countryman at the local BP gas station here in Lisbon.

There simply aren’t enough renewable sources of always-on power to run homes and businesses and factories.

Planes and trains don’t run on electricity at the moment, so the global economy would collapse if people and goods couldn’t move around the planet with the help of fossil fuels…

Toothpaste and electronics and aspirin and nail polish and on and on and on and on all demand fossil fuel byproducts. Without them, we’re back to pre-industrial communications and lifestyle.

Right now, America produces the world’s largest quantity of oil every day, and the largest quantity of natural gas. But companies have been curtailing their exploration of new sources of oil and gas because the push toward green energy is displacing investment dollars.

Right now, that doesn’t hurt too much.

But in the not-too-distant future, we will feel the sting in the form of higher oil prices. It might very well be the last bull market in oil, but it will be a doozy as oil prices surge. That, of course, will raise prices markedly for toothpaste and electronics and aspirin and…

No one I know is prepared for this. No one really thinks about it because we’re producing so much oil and gas now. Seems like the good times will keep on rollin’.

Until they stop.

At that point, the mass media will be talking about an energy price shock—a Super Shock—not unlike the gasoline shock that hit America in the wake of the Arab Oil Embargo in 1973.

Even those who are prepared won’t escape the full impact of this particular Super Shock because businesses will shutter. Power outages could be more common. And prices will be higher for consumer goods.

Still, preparing for what’s to come will at least lessen the pain…

But how to prepare, El Jefe? Buy a miniature nuclear reactor for my backyard?

Own some rock-solid energy stocks.

As the Super Shock unfolds, energy stocks will see a rush of investors dumping money into them. Share prices will skyrocket. You will pocket big gains that will help offset the price inflation in your life.

It won’t help with any blackouts that materialize. But you’ll be able to easily afford the suddenly pricier cafecito and Cuban sandwich.