The Cooling of Global Warming and How to Profit From it
Poll after poll is being released that points out the obvious: The public is just not that worried about global warming. I think that’s probably because human-caused global warming doesn’t exist! Yes, the climate changes–it has changed for millions of years–but it’s not caused by us Homo sapiens. We have released the most CO2 ever into the atmosphere over the last twenty years and guess what? No global warming! I think it’s fairly obvious that the climate changes due to sunspots and other natural cycles. By the way, don’t plants need CO2 to exist? And the left calls it a pollutant? Where’s the logic in that?
Anyway, back to the point. If global warming is not going to cause a tidal wave over New York City in the near future, how can we profit from this realization? The interesting fact that coincides with the lowering of the public anxiety level is that in the last decade, North America has discovered the yellow brick road to energy independence! We are sitting on 1.4 trillion barrels of shale oil and even more natural gas! The only thing standing in our way is having the will to extract it. Imagine, no more reliance on foreign oil! I for one think this outcome will be realized quicker than anyone else seems to think, and is the most consequential geopolitical change in centuries.
So how do you make money from this thesis? Well first of all, U.S. companies are out in front when it comes to this technology. There will be a LOT of wells to be drilled. I think all of this supply could eventually put pressure on oil prices and be damaging to the profits of big oil. However, the suppliers of all of this drilling equipment will do very well. So I would do some research on oilfield service companies and pick your entry points.
If you follow this line of thought further, North America could be awash in cheap energy in a fairly short period of time. So what types of industry will profit from lowered fuel costs? Airlines come to mind. Energy intensive manufacturing also will benefit.
The harder question is what will happen to the value of the U.S. Dollar? Lower commodity prices typically lead to a higher USD. However, there will also be pressure on the dollar from the removal of the USD as a reserve and trading currency. So, the FX outcome is a bit murkier.
Of course this thesis rests on the political winds to come. I hope they are winds of change and the U.S. government gets out of the way of our own success. However, even if the left is successful in stopping this energy revolution in the short run, I think the pressure will become too great over time. They will have to allow this transformation to move forward. Otherwise, their agenda is not the wellbeing of the United States but something much darker.