Climate Change Is Real… But So Is the Necessity for Fossil Fuels

Alexander Green By Alexander Green, Chief Investment Strategist, The Oxford Club

Alternative Energy

Managing Editor’s Note: This article first appeared just a little more than a week ago in our sister publication Investment U. We found Chief Investment Strategist Alexander Green’s perspective on global warming and fossil fuels to be as cleareyed and thoughtful as ever, which is why we’re sharing it with you.

Investment Uis the flagship e-letter of The Oxford Club and is a great resource for understanding the fundamentals of the marketplace. It’s an essential read if you want to bolster your investment knowledge and learn proven profit-making strategies from some of the finest minds in finance, including Alex Green.

We hope you enjoy the article.

– Patrick Little, Managing Editor


Today, the price of oil is more than 40% lower than it was 10 years ago.

This should make consumers happy. After all, it has reduced prices at the pump further still. It has lowered inflation. And it has goosed the economy.

It should make investors happy too. Most companies are buyers, not producers, of oil. Lowering their costs reduces prices and boosts net income. And since share prices follow earnings, that’s a plus for the stock market.

But you’ll notice there is one vocal group that is entirely unhappy with the drop in oil: environmentalists. They argue that lower prices will stoke demand and increase greenhouse gases.

I’m not insensitive to their concerns. I’m an environmentalist myself. Not one who sits in an air-conditioned office wringing his hands about the future of the planet. I actually spend a great deal of time hiking in the wilderness, awestruck by the beauty and majesty of the natural world that sustains us all.

Climate change is real. And carbon emissions are a big part of it. Yet the voices of many prominent environmentalists are remarkably shrill…

  • Author Bill McKibben writes that “we need to view the fossil-fuel industry in a new light. It has become a rogue industry, reckless like no other force on Earth. It is Public Enemy Number One to the survival of our planetary civilization.”
  • James Hansen, a prominent climate scientist, says oil company CEOs should be “tried for high crimes against humanity and nature.”
  • And in a review of Naomi Klein’s book This Changes Everything: Capitalism vs. the Climate in The New York Times, Rob Nixon openly laments that we are unable to bankrupt the major oil companies.

This is not environmentalism. This is mindless anti-corporatism.

How will you heat your home, drive your car or fly from point A to point B without fossil fuels?

Wind power? Hydro? Solar? Hamsters on a wheel?

Fossil fuels aren’t just our primary source of energy. They are used to create everything from plastic chairs to personal computers to lifesaving medical devices.

They have led to continual, groundbreaking improvements in communications, transportation and technology. Their use has correlated with a dramatic increase in income, standards of living and human life expectancy. No other source could possibly meet the energy needs of the more than 7 billion inhabitants of this planet.

So, yes, let’s do what we reasonably can to reduce greenhouse emissions. But that doesn’t require returning to a pre-industrial age.

At some point – and it may be sooner than we think – human ingenuity, technology and entrepreneurship will deliver alternative energy sources that are safer and greener. We know this because the free market provides ample incentives and rewards.

Fossil fuels are the lifeblood of the world economy. They are indispensable. Moreover, the rout in the oil patch in recent years is setting us up, in my view, for one of the great buying opportunities of our lifetimes.

However, you might miss it if you’re busy demonizing the fossil fuel industry.

That’s not just hypocritical and naïve. It’s an assault on human welfare.

Good investing,

Alex

P.S. Fossil fuels are essential for the global economic engine to run… and yet, air pollution is a worldwide problem that can’t be ignored.

But the so-called “Jupiter Engine” – a new technology set to go live in Texas by December 17, 2017 – aims to not only solve this problem… but supplant traditional power sources at 3,288 U.S. energy plants.

One analyst says the company behind this technology could see its profits soar as much as 1,002%… He says it could be “the biggest opportunity to get rich in your lifetime.”

For more information, click here.