Oil and Natural Gas – why they’re a good play today
Today's Financial News - Posted December 7, 2009
Alex Green, Chief Investment Strategist of Investment U and Investment Director at The Oxford Club, reviews energy positions – and why black gold is still the play of the day.
Alex Green (Investment U):
Some day in the future, human beings will likely colonize Mars. But if I suggested you invest in its colonization now, you’d rightly think I was a few cards short of a full deck.
The same is true of much-ballyhooed “alternative energy.”
Someday, nano-engineered solar panels and wind turbines may power the nation and the rest of the world. But it won’t be anytime soon. Today, wind and solar combined make up just one-sixth of 1% of American energy consumption.
As for the Cassandras who insist we simply don’t have any choice but to look elsewhere and that our planet is running out of oil and natural gas… well, take it with a whole shaker full of salt.
Here’s why – and how we can play the current oil and natural gas investment situation…
How to “Run Out of Oil” Multiple Times
Consider this from Pulitzer Prize-winning columnist, George Will:
“In 1914, the Bureau of Mines said U.S. oil reserves would be exhausted by 1924. In 1939, the Interior Department said the world had 13 years worth of petroleum reserves.
In 1970, the world’s proven oil reserves were an estimated 612 billion barrels. By 2006, more than 767 billion barrels had been pumped and proven reserves were 1.2 trillion barrels. In 1977, Scold-in-Chief Jimmy Carter predicted that mankind ‘could use up all the proven reserves of oil in the entire world by the end of the next decade.’ Since then, the world has consumed three times more oil than was then in the world’s proven reserves.”
The world’s population is rapidly rising, of course. And so is discretionary income. Nearly 2 billion of the world’s 6.2 billion population don’t have electricity and have never flipped a light switch.
So surely that means nuclear power is likely to play a major role in meeting future energy demand?
Click here for the rest of Mr. Green’s article on Investment U.
Next Article: Get ready for the “War Bump”
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