The Green-Energy Revolution Ensures a Fossil-Fuel Boom

Green energy has made incredible strides... But the full revolution is still decades away... Meanwhile, Wall Street is telling fossil-fuel companies to close up shop... Higher oil prices are here to stay... How investors can take advantage... Green energy is taking over the world... That's thanks to a technology revolution over the past decade, more […] [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] Green energy has made incredible strides... But the full revolution is still decades away... Meanwhile, Wall Street is telling fossil-fuel companies to close up shop... Higher oil prices are here to stay... How investors can take advantage... --------------------------------------------------------------- Green energy is taking over the world... That's thanks to a technology revolution over the past decade, more than anything. Electric cars were nothing more than a novelty when they first hit the scene. They were expensive... and they could only travel a few dozen miles per charge. Now, the typical range for an electric vehicle ("EVs") is hundreds of miles longer. They're often darn near the same sticker price as a comparable gasoline-powered vehicle. And the total lifetime cost of ownership (including charging costs), in most cases, is thousands less than a gas-powered car. Meanwhile, generating green electricity has only gotten easier. Solar power is now cheaper than coal. Wind power is similarly inexpensive. And the cost of batteries to store this green electricity is down around 90% in a decade. These green-energy trends are here now. And they're not going to slow down. The technology will keep improving. Costs for these alternative energy sources will keep falling. And the end result will be a much different world than the one we live in today. But to pick up on the theme of [my Digest yesterday]( there's a wide gap between perception and reality when it comes to the green-energy story. I (Brett Eversole) will explain the details today... The widely accepted belief is that this 'green utopia' is already here... Or that, at worst, it's only a few years away. And if you believe that, there's one logical assumption... Fossil fuels as we know them are dead. There's just one problem with this assumption, though. The timing is way off. As I will illustrate today... right now, the energy sector is the market's biggest example of a mismatch between perception and reality. And therein lies the biggest opportunity today for savvy investors. Sure, electric vehicles are everywhere now... They've gone from a neat status symbol to a legitimate competitor to the conventional combustion-engine-powered vehicles. But EVs make up just 5% of vehicle sales in the U.S. That number is growing fast, and it likely won't slow down. But we're still far from only seeing EVs on the road. More than 95% of the cars sold right now still need gasoline. And given that the average vehicle stays on the road for about 12 years, it'll be a decade or two before we see a full transition to EVs. Similarly, while solar and wind power have gotten cheaper, they're still a long way away from powering the grid. We'd need billions of dollars' worth of infrastructure investment to make that possible. Plus, with the intermittence of green power, we'll need battery technology to improve by orders of magnitude while dropping in price by another 90%. I'm not saying that won't happen. I'd actually bet it will. But the perception is that we're a decade farther along in these trends than we actually are. The transition will last longer than most people think... The reality is that we're going to need oil and gas for another decade or two. The International Energy Agency ("IEA") – an autonomous energy-policy organization with 31 member countries, including the U.S., U.K., and Germany – predicts oil demand will peak in the mid-2030s. And it says demand will remain significant even in 2050. That alone is a powerful breakdown in perception and reality. It's one we can exploit as investors. Here's the crazy part, though... The folks that want this green utopia to be here, right now, are taking foolish actions, too. And the unintended consequence is that oil and gas will stay at elevated prices for years to come. Let me tell you a story that explains why... It's about a little-known investment firm called Engine No. 1... In 2020, this tiny hedge fund bought $40 million worth of ExxonMobil (XOM) shares, the largest player in the energy space. Now, since ExxonMobil has a market value of nearly $400 billion, a $40 million investment is nothing. Still, Engine No. 1 began an activist campaign to change the trajectory of the company. The firm was founded by Christopher James – who actually once operated a coal mine and built oil and gas storage facilities before founding this "impact focused" investment firm. James wrote an open letter in December 2020, saying ExxonMobil's management was... ... putting itself at existential risk by spending big on oil and natural gas megaprojects and failing to reckon with the business threat posed by the energy transition. Engine No. 1 got several major shareholders on its side, including major pension funds like the California State Teachers' Retirement System. And the firm managed to win multiple board seats in the process in May 2021. Now, it gets a say in the company going forward. In simple terms, this saga was the investment world telling ExxonMobil it doesn't like the company looking for new fossil-fuel investments. In the meantime, all the cash the company has saved by not making these investments has been going back to shareholders. ExxonMobil announced a $30 billion share-buyback program earlier this year. I'm sure you can see the irony here... Activists want big energy companies to stop finding new oil because they yearn for an alternative-energy reality that simply isn't here yet. The results are twofold... First, oil companies aren't going to invest for the future. Instead, they'll return tons of cash to their shareholders. Second, because they're not investing... they're not looking for more of the oil and gas we need... and we won't be able to fill the demand that will be around for a decade or more to come. That means oil and gas prices will have to stay high. In the simplest terms, the green-energy revolution guarantees a long-term boom for oil and gas. This story is bigger than just ExxonMobil, though. Investors' anti-fossil-fuel tilt is having a real impact on current drilling, even in this boom time for the industry... Today, companies aren't pumping enough oil out of the ground to keep up with demand... This is not what typically happens in an energy boom. The typical cycle goes like this... Prices rise for some reason – maybe a supply disruption or a spike in demand. Those high prices cause companies to go out and look for more oil and gas. Huge amounts of capital investment mean we find a lot more of the stuff in the ground. And the high prices mean we can pull it out at a profit, even if it's expensive. Eventually, we end up with way too much new oil and gas. It floods the market, and prices crash. As they say, the cure for high prices is high prices. We should be near the end of that cycle today. Oil and gas prices have soared. And companies should be pumping the stuff as fast as possible. But they aren't. And we can see it by looking at the U.S. oil-rig count. It measures how many rigs are active in the U.S. at any given time. This is a great leading indicator for oil supply. The lower the number of rigs, the less supply will come to market. The higher the rig count, the faster supply can catch up. Today, we're at 596 rigs. And that's still a long way off from recent highs. Check it out... As you can see, hundreds of rigs shut down during the great oil bust of 2020... Oil prices were way below the "breakeven" price at which oil companies can start to turn a profit. So instead of running at a loss, it made more sense to close up shop. That year, the active-rig count fell below 200 for the first time in at least a decade. We've improved from that extreme low today. But the number of active rigs remains below average... And it's still well below 2018 highs. Meanwhile, demand for oil is through the roof. Estimates show it's near 100 million barrels per day. And industry analysts expect that number to keep climbing in the coming decade. That means rig counts need to come up... a lot. They're still only at a third of where they were in late 2014 and early 2015. Before that, the total oil-rig count was above 1,300 for years. It hit a peak of around 1,600... And the price of oil was also around $100 per barrel for most of that time. This dynamic is mostly thanks to the shift in sentiment about energy on Wall Street. Investors are telling oil companies not to do what they do. But the green-energy utopia they seek is decades away, not years. This guarantees high energy prices for years to come... The U.S. is not going to get enough supply online to outpace demand anytime soon. And that means prices could stay where they are – or go even higher. That's the truth at a high level... The perception is that fossil fuels are dead. The reality is that they've got a long life ahead. And as investors, we can exploit the masses getting this completely wrong. Contrary to popular belief, this setup ensures a continued boom for oil and gas companies. And it'll be one unlike anything we've seen before. That's because high prices will mean record revenues for these companies. That's typical in a boom. But the companies usually reinvest those sales into future production. Today, Wall Street is telling them not to. So this boom will lead to record sales... record margins... and record profits. These companies will turn into cash-gushing machines the likes of which we've never seen. Investors who correctly position themselves today could see hundreds-of-percent gains... But you've still got to be discerning in what you buy. To this point, I've hand-selected five companies that I believe offer the largest upside and lowest risk for this trade. I explain a bit about those companies in a brand-new presentation I just put together. And there's plenty else I cover as well, including how we got to this position... and why this boom is unlike any other in history. [You can watch it right here for free](. Once you understand the full picture, the takeaway and investment opportunity will be obvious. Simply put: when it comes to energy today, perception does not match reality. But I urge you to take advantage of this mismatch quickly. The world won't miss this reality forever. We're starting to see some of the impacts reach the mainstream already – with all-time highs in gas prices earlier this year, for example. Once everyone else wakes up to what we see, the biggest gains in this trade will already be gone. So if you're interested at all in what I'm saying and are a believer in this overlooked opportunity in oil and gas, [click here right now for more detail](... including how to get my recommendations on how to play this trend in your investment portfolio today. --------------------------------------------------------------- Recommended Links: # [If 2022 Has Been a Bad Year for You, READ THIS]( Steve Sjuggerud just came forward with his No. 1 recommendation for those who have seen losses in their portfolios in 2022. It's an opportunity with TRIPLE-DIGIT market potential, and the story you're being fed by the news cycle today means that you're likely going to miss out on the best moment to get in... [Get the critical details here](. --------------------------------------------------------------- # [Huge Recession Loophole (See These Charts)]( Amid today's market turmoil, THIS is one of the biggest and most bullish opportunities today: a red-hot sector with almost unlimited pricing power and a history of outperforming in recessions. It's also the sector where Dr. David Eifrig spent half of his professional life and, as a result, is extremely qualified to spot world-class opportunities today. [Take a look at the evidence here](. --------------------------------------------------------------- New 52-week highs (as of 9/6/22): None. In today's mailbag, feedback [on yesterday's Digest](... another update from the U.K. now that there's a new prime minister in place... and a follow-up on a conversation from last week... Do you have a comment or question? As always, send your notes to feedback@stansberryresearch.com. "Thanks for the contrarian indicators on the energy markets and reiterating current recommendations... The green transition will definitely take much longer and require massive investment. The investment numbers are staggering. We still have to transition energy production plants for all the EVs being sold. These will put even more demand on production plants. "The true innovation is needed at the electrical production plants. We have made tremendous progress on new energy production with hydrogen, geothermal, and I believe that the original Nicola Tesla's inventions were kept secret as Edison's innovations were better suited for profiteering. "I really hope that we'll use original Tesla electrical production technology for the sake of our climate which is raising hell. I still see the relatively high pricing of the EVs being problematic in the U.S. market for many would-be buyers. Prices alone will delay EV adoption in the U.S. markets. Competition will inevitably drive prices down." – Paid-up subscriber Rodger G. "Since you liked my last one here is another update on the U.K. for you. As the rat Johnson leaves the sinking ship of the U.K. economy here is what is in store for his successor Liz Truss. "Tens of thousands of businesses are at risk of going under without government support because of soaring energy bills according to Red Flag Alert, which monitors the financial health of firms. Among those that survive, many will be forced to make workers redundant, the consultancy said. "Red Flag is warning that more than 75,000 larger firms that are high energy users – such as steel, glass, and concrete companies – are at risk of insolvency or are likely to lay off staff without government support... They estimate 26,720 of them could fail because of energy costs. That's in addition to the 26,000 insolvencies they'd already predicted this year. "That's more than during the pandemic, and more than in any other recession... Bottomline is the U.K. is facing a catastrophic depression and so will the rest of Europe. This is going to impact the U.S. economy big time." – Paid-up subscriber Steven I. "In response to Stansberry Alliance member G.M.'s comment from [one of last week's Digests](... Re: Wow, I could hardly believe what I was reading [in yesterday's mailbag]... I had three jobs, a dead father and a mother to support and still managed to buy a vehicle, pay my tuition through university, and start my own business, buy property(ies) and prosper... I never made excuses about the 'easy life' the previous generations enjoyed! ... and I never borrowed money, let alone expected someone else to pay off my loans... No wonder things are so messed up... can you imagine believing this sad story??... The opportunities available to today's youth are a magnitude greater than what was available in my era. Of course, you have to be prepared to work for it. The participation medals stop once you enter the real grown up world. I guess this is a tough transition for some. "What the gentleman states about opportunities here today being a magnitude greater is of course totally correct, but what he's missing is the point about the core financials of what we have to deal with today, compared to years gone by. "As an example, let's use a random year, such as 1950... "Figures obviously vary, but a quick internet search of census.gov shows that back in 1950 the average weekly wage in America was around $3,300. During the same year the average price of a home was around $7,500. So, a worker back in 1950 could afford to buy a home with approximately 2.3x an average yearly income. However, using the figures from 2020, we see the average yearly income is now around $67,500, but an average home in 2020 now costs around $380,000... which is a multiple of nearly 6x income! "As I say, these are just very rough ballpark figures, but THAT'S why it's so much harder for so-called 'millennials' and current day youngsters to achieve anything even close to what prior generations did. Assets like property, which are essential 'items' for anyone, are now SO much harder to possess... Someone starting from scratch here in this day and age, now has to work MUCH harder to get on the ladder. And the same is true for almost any asset you can think of – it's the percentage of average income that's the key thing to look at." – Paid-up subscriber F.I. Good investing, Brett Eversole Jacksonville, Florida September 7, 2022 --------------------------------------------------------------- Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open positions across all Stansberry Research portfolios Stock Buy Date Return Publication Analyst MSFT Microsoft 11/11/10 906.9% Retirement Millionaire Doc ADP Automatic Data 10/09/08 838.1% Extreme Value Ferris MSFT Microsoft 02/10/12 778.8% Stansberry's Investment Advisory Porter ETH/USD Ethereum 02/21/20 553.9% Stansberry Innovations Report Wade HSY Hershey 12/07/07 530.2% Stansberry's Investment Advisory Porter AFG American Financial 10/12/12 404.1% Stansberry's Investment Advisory Porter BRK.B Berkshire Hathaway 04/01/09 390.4% Retirement Millionaire Doc WRB W.R. Berkley 03/16/12 365.6% Stansberry's Investment Advisory Porter FSMEX Fidelity Sel Med 09/03/08 288.7% Retirement Millionaire Doc TTD The Trade Desk 10/17/19 281.1% Stansberry Innovations Report Engel Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any Stansberry Research publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio. --------------------------------------------------------------- Top 10 Totals 3 Retirement Millionaire Doc 1 Extreme Value Ferris 4 Stansberry's Investment Advisory Porter 2 Stansberry Innovations Report Engel/Wade --------------------------------------------------------------- Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio Stock Buy Date Return Publication Analyst ETH/USD Ethereum 12/07/18 1,281.7% Crypto Capital Wade ONE-USD Harmony 12/16/19 1,148.8% Crypto Capital Wade POLY/USD Polymath 05/19/20 1,051.0% Crypto Capital Wade MATIC/USD Polygon 02/25/21 840.8% Crypto Capital Wade BTC/USD Bitcoin 11/27/18 400.2% Crypto Capital Wade Please note: Securities appearing in the Top 5 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the Crypto Capital model portfolio. The buy date reflects when the recommendation was made, and the return shows its performance since that date. To learn if it's still a recommended buy today, you must be a subscriber and refer to the most recent portfolio. --------------------------------------------------------------- Stansberry Research Hall of Fame Top 10 all-time, highest-returning closed positions across all Stansberry portfolios Investment Symbol Duration Gain Publication Analyst Nvidia^* NVDA 5.96 years 1,466% Venture Tech. Lashmet Band Protocol crypto 0.32 years 1,169% Crypto Capital Wade Terra crypto 0.41 years 1,164% Crypto Capital Wade Inovio Pharma.^ INO 1.01 years 1,139% Venture Tech. Lashmet Seabridge Gold^ SA 4.20 years 995% Sjug Conf. Sjuggerud Frontier crypto 0.08 years 978% Crypto Capital Wade Binance Coin crypto 1.78 years 963% Crypto Capital Wade Nvidia^* NVDA 4.12 years 777% Venture Tech. Lashmet Intellia Therapeutics NTLA 1.95 years 775% Amer. Moonshots Root Rite Aid 8.5% bond 4.97 years 773% True Income Williams ^ These gains occurred with a partial position in the respective stocks. * The two partial positions in Nvidia were part of a single recommendation. Editor Dave Lashmet closed the first leg of the position in November 2016 for a gain of about 108%. Then, he closed the second leg in July 2020 for a 777% return. And finally, in May 2022, he booked a 1,466% return on the final leg. Subscribers who followed his advice on Nvidia could've recorded a total weighted average gain of more than 600%. You have received this e-mail as part of your subscription to Stansberry Digest. If you no longer want to receive e-mails from Stansberry Digest [click here](. Published by Stansberry Research. You’re receiving this e-mail at {EMAIL}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. 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