The Energy Revolution Is Already Here

You’re probably hearing a lot about Greta Thunberg and her crusade for action on climate change right now.

Now I’m not going to wade into that fraught discussion today.

 

I will only say this…

Her opinion is about as important as a lot of other commentators who feel they should have a say on the science of climate change.

That is to say, not much.

In my opinion, scientists — not politicians, media commentators or activists — are the only voices worth listening to on this issue.

You can of course make up your own mind on what you want to believe. But please make sure your listening to relevant people.

After all, you wouldn’t ask a ‘pundit’ (or a well-meaning 16-year-old kid) about your cancer diagnosis! You’d ask a doctor who’s trained in such things.

There are too many clever clogs — people who are smart, but aren’t smart enough to realise the limitations of their own intelligence — who feel the need to shout their own opinion here.

Me?

I prefer to listen to those with actual skin in the game.

Take Max Koeune, CEO of McCain Foods Inc (the famous potato chip manufacturer) and not exactly a raging ‘greenie’, who said recently:

The pace of climate change is accelerating, and not just what you read in the news, but what the people we work with are facing and what our business has to deal with.

And for those who question the uncertainty around the science of climate change, I’d point them to famous trader Nassim Taleb — a man who made his money from betting on big unlikely events.

He points out this:

We have only one planet. This fact radically constrains the kinds of risks that are appropriate to take at a large scale. Even a risk with a very low probability becomes unacceptable when it affects all of us — there is no reversing mistakes of that magnitude.

Anyway, it would appear that free markets are riding to the rescue on this issue regardless.

Let me explain how…

The lithium boom is NOT over. Here’s three stocks riding the next lithium frenzy.

In a perfect world

The old story goes that inventor Nikola Tesla discovered a way to generate free electricity in the early 1900s.


Money Morning

Source: Nikola Tesla

[Click to open in a new window]

He said his ‘Tesla Coil’ could tap into the Earth’s natural current. An unlimited supply of electricity at our finger tips.

Getting to it would be as simple as sticking a pole in your backyard.

But alas, it wasn’t to be…

According to conspiracy lore, Tesla’s wireless electricity scheme did not catch on because it was suppressed by big electricity manufacturers.

Notably the famous financier JP Morgan, who had been financing Tesla’s projects, is said to have exclaimed:

Where do I put the meter?

And that was the end of that. Corporate interests won out over free power.

If true, that’s over 100 years of pollution-free (and actually free!) energy the world has missed out on.

Think that sounds a bit far-fetched?

As the Maier files explained, it’s not that unbelievable:

The scientific jury is out on whether Tesla’s coils are a possible global power source, but Morgan certainly pulled the plug on free power in Tesla’s lifetime.

And suppression of customer-friendly electrical goods was hardly unknown in the USA. Time magazine reported in 1945 that Philips, Osram and GE had engaged in a conspiracy to suppress light bulb technology that would have produced cheaper and longer lasting bulbs.

Think today’s coal magnates and fossil fuel barons wouldn’t conspire to make sure they’re not left with stranded assets?

Think again!

The same could be said at the other end of the conspiracy spectrum too, of course.

That ‘global warming is a cover for power hungry leftists’ keen to inject big government into the energy industry.

Whatever your political beliefs, none of it might matter anyway.

Because it looks like a clear winner is emerging…

Change in energy is coming

If I say the word ‘Texas’ to you, what do you think of?

Cowboys, Stetsons and huge ranches no doubt?

And probably oil.

The ‘Lone Star’ state is certainly no natural friend of the greener (or redder) side of politics.

Which makes this revelation even more surprising…

You see, Texas has the lowest cost energy prices in the entire US. And it’s all due to — no, not oil — but wind power!

Why?

Because it’s cheaper.

Michael Milken of the Milken Institute explained on CNBC:

For two-thirds of the world, renewables are cheaper than a significant amount of carbon-based energy, so it isn’t just an argument of environment, it’s now just pure economics.

He then added that:

Investments in clean energy technology are increasing, which means that such new sources of fuel are becoming more cost efficient.

The state that has the lowest cost energy, Texas, is the state in the United States that has the largest amount of wind power.

Not ideology, but simple economics is driving investment in this energy.

As it should be.

Like Australia has right now, the US had its fair share of pushback a decade ago.

Milken again:

If you go to the United States a decade ago, you had the leaders testify that there would be no substitute for coal, that renewables would make up a very small part of the United States’ [energy mix].’

Fast forward to today and in 74% of cases renewables are the cheaper option in the US.

The fact is this…

Change in energy is coming. It’s being driven by technology and economics. If it’s going to help the climate too, then that’s good.

But as far as I can see the world is moving this way no matter what. And Australia needs to get a move on with it too.

Huge investing opportunities exist today for you in battery tech, renewable tech and certain unique mining companies.

Aussie rich lister Mike Cannon-Brookes has even just announced plans to build a $25 billion solar farm to ship energy to South East Asia via a huge 3,000 km cable.

This is the kind of visionary entrepreneurship I think we need.

Energy — like banking — is a 20th century industry going through a paradigm shift.

And like with banking, we can’t be held back by the economic interests of those close to power…

Good investing,

Ryan Dinse,
Editor, Money Morning

PS: Rare earths are a key component in this coming renewables boom. For an in-depth look at the commodities of the future, check out this free report.


Ryan Dinse is an Editor at Money Morning. He has worked in finance and investing for the past two decades as a financial planner, senior credit analyst, equity trader and fintech entrepreneur. With an academic background in economics, he believes that the key to making good investments is investing appropriately at each stage of the economic cycle. Different market conditions provide different opportunities. Ryan combines fundamental, technical and economic analysis with the goal of making sure you are in the right investments at the right time.  


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