Woke Green Energy Policies Are a Disaster… for the Environment

Position Your Portfolio for Justin Trudeau’s Just Transition Plan

“You arrogant ass. You’ve killed us!”

If you’re up on your ’90s movies, you’ll realize I’m stealing a line from The Hunt for Red October, when a Russian submariner chastises his arrogant commander, who has fired a torpedo at a U.S. submarine, only to have the U.S. sub maneuver in such a way that the Russian torpedo destroys the Russian sub.

I’m co-opting this line today to talk about Justin Trudeau, Canada’s egregiously woke prime minister and a recent pronouncement of his that says A) he and the enviro-lobby are not acting in the best interest of humanity and the planet, and B) that we, as the ones who will be hurt by this, need to prepare now.

At the heart of today’s grievance is Canada’s Just Transition movement, a plan that aims to push the country off fossil fuels.

Now, to be clear, this isn’t just a Great White North thing. There are similar efforts underway at differing levels all over the Western world. And, to be clear as well, I am all for green energy. I invest in green energy. Green energy is the future. And it’s going be pretty cool when we have a Jetsonian world running on wind, solar, tidal, and other forms of energy that cause no stress to the environment.

However…

Just Transition, as well as efforts in the U.S. to limit pipeline construction or stop drilling, are going to create an economic disaster. Moreover, you could argue—rightly—that they actually cause more harm to the environment.

Here’s what I mean:

The U.S. and Canada impose some of the world’s most stringent environmental regs on the energy industry—far more stringent than you’ll find in, say, Saudi Arabia, Russia, Venezuela, Nigeria, etc.

So what these myopic “transitioners” apparently fail to see is that they are pushing production away from regions where enviro laws are far more friendly to Mother Nature, and into jurisdictions where production largely does not give a rat’s backside about global climate issues when there’s money to be made locally in an economy that is poor and still developing.

Probably worth mentioning as well that shipping all that oil from abroad to America (roughly 8.5 million barrels a day, per the U.S. Energy Information Agency) means burning lots of fossil fuel for oil tankers to transit the seas.

Oh, and there’s this small aside: Sloughing off production to places like Saudi Arabia, Russia, Venezuela, and Iran just pumps more money into the coffers of authoritarian regimes that really aren’t so keen on America to begin with.

Thing is, America and Canada combined have the capacity to ramp up oil production by an amount large enough to meet domestic demand, thereby reducing far dirtier production needs elsewhere around the world.

Alas, they don’t do that because of federal rules and regulations—and, frankly, federal attitudes toward the industry. Right now, for instance, politicians are mouthing off about oil companies raking in huge profits and want to impose a windfall profits tax.

OK, but where was talk of windfall losses rebates when the industry was destroyed by COVID-19 and lost billions? Or let’s talk about governmental actions that cause oil prices to rise, like, say, the Federal Reserve’s mismanagement of the economy that has resulted in excessive inflation.

Plans like Trudeau’s Just Transition, as well as America’s overly eager push to punish the oil-and-gas industry, are going to cause a not-unexpected disaster on you and me.

This all-hands-on-deck effort to force a green-energy industry to root faster than it can, means killing off fossil fuels earlier than is feasible.

Energy companies are now loath to expand production because of the hostile attitude of woke politicians who are in bed with environmentalists, who themselves are earning a paycheck fighting against oil and gas. After all, why sink billions into finding new oil reserves when government can come along and slap your company with all kinds of egregious taxes and mandates, and enviro-extremists can tie you up in court for a decade?

Meanwhile, green energy is simply not ready for prime-time.

I don’t care how much money governments or whoever sinks into wind farms, solar power, electric cars, or turning cow dung into electricity. Those efforts will not happen fast enough to re-electrify an entire planet that has spent more than 150 years building the fossil fuel-based energy infrastructure we have today.

To think otherwise is to wish upon a unicorn burp that Santa and the Easter Bunny are real.

Yet, plans like Just Transition are wishing upon those unicorn burps. And, worse, they have governmental authority to mandate all manner of stupidity. As they do, however, they are simply driving away the oil-and-gas industry… which will reduce its drilling efforts… which means less and less oil for a planet that still demands more and more oil to meet growing energy needs.

All of which means we’re fast coming upon a wholly foreseeable moment when the world suddenly realizes it does not have enough oil supply to meet oil demand… and prices for oil are going to rise with such ferocity that all-time highs near $150 per barrel are going to look quaint.

My bet: We see oil at $250 or more, which means gasoline at $15 per gallon, minimum (mathematically, gasoline would have to sell for $12.50 per gallon, before governmental taxes and profits, just to recoup the cost of a $250 barrel or oil).

So, what I am telling you is this: As woke governments “just transition,” you should “just position” yourself for the problems to come by owning oil stocks—particularly drillers, production companies, and refineries like those in our Global Intelligence Portfolio.

Their prices one day are going to shoot the moon… and that day draws ever-closer as overly woke politicians like Trudeau take the world down the right path but at a speed much too fast for the global economy to accommodate without causing a crisis.