Thread by @StuLoren

1/ U.S. #energy policy is in serious need of a rethink. Energy policy is not just climate policy, it's #economic policy and it's #foreignpolicy. Our European allies' dependence on #Russian gas supplies is geopolitical malfeasance.

bloomberg.com/news/articles/…

2/ For decades, the U.S. was reliant on energy supplies from the Middle East, which dictated our foreign policy decisions in the region. The #shale revolution provided a brief, decade-long reprieve from the mercy of #OPEC.

3/ But rather than use our energy abundance as a geopolitical and national/economic security tool, we are ceding power back to those whose national interests are not aligned with those of the U.S.

4/ U.S. #oil and #gas reserves are immense - rivaling Russia and Saudi Arabia. Per the #EIA, as of year-end 2019, we had 47.1 billion barrels of oil reserves and 504.5 trillion cubic feet of gas reserves. Both figures were at lower commodity price levels.

eia.gov/naturalgas/cru…

5/ Again per the #EIA, the U.S. had 84 YEARS worth of technically recoverable DRY gas reserves (which doesn't include associated wet gas from shale production).

eia.gov/tools/faqs/faq…

6/ I am all for smart clean energy development where it's geographically viable and price competitive. But let's not kid ourselves. As we're seeing now across the world, intermittent #renewable energy is not yet a reliable substitute for conventional baseload power.

7/ And battery tech is not on the precipice of providing grid-scale storage capacity. On the #EV front, those aren't necessarily any more environmentally friendly than traditional combustion vehicles (see below feature from @FT yesterday).

ig.ft.com/electric-car/

8/ With time, these technologies will improve, but we have to deal with the world as it is today - not how we wish it to be. As an aside, its baffling that clean energy advocates aren't more supportive of #nuclear power, but that's another discussion for another day...

9/ Now, I very much get the concerns around CO2 emissions, methane leaks and - as an avid hiker - land degradation. But an #ESG world - especially the E - is about as close to reality as Disney World.

10/ If investors broadly divest from #fossilfuels but still have 21st Century consumption habits, they really aren't making much of a difference other than helping send the wrong signal to energy company operators to reduce capex.

11/ The policy approach to CO2 reduction has been largely backwards. Implementing policies that restrict supply or development, or that favor renewable resources over conventional ones, gets us nowhere if we aren't having a serious discussion about demand and energy efficiency.

12/ Not many people in developed markets are probably that eager to reduce their consumption habits back to 1950s levels or pay more for services or goods that use less energy. But that's what it will take to make a serious near-term dent in emissions.

13/ Again, technology is a way out of this predicament, but it's not mature enough yet to be a widespread substitution for conventional supplies. Which is why we talk about an energy TRANSITION, not a rapid energy replacement.

14/ Governments globally that have been green advocates seem to now be waking up to the fact that if the road to a cleaner energy future leaves people literally in the dark, it's going to end up a road to nowhere - except to undermining transition efforts and electoral losses.

15/ Which is why our European allies will now be walking back into the uncomfortable embrace of Russia.

16/ If the world still needs oil and gas, which it does, the U.S. should be producing it. We have the resources to implement stricter environmental parameters and produce our resources safer than Russia (the world's leader in methane leaks).

17/ Yes, U.S. methane leaks are too high as well, but industry leaders now appreciate the problem and are likely to take a lead on fixing it.

ft.com/content/881610…

18/ I usually am just focused on #investing. But I deeply care about U.S. policy. And one of my main investment themes right now is that we risk entering an environment where the world is lacking in things we truly need and undervaluing them.

https://twitter.com/StuLoren/status/1438509174065799169?s=20

19/ And another main theme is that the world is getting more dangerous - in part thanks to key natural resources scarcity.

https://twitter.com/StuLoren/status/1445451828502532097?s=20

20/ U.S. energy policy can play a key role in shoring up supplies for our allies, keeping consumer costs lower at home and providing a durable revenue source to our economy. Seems like a win-win-win proposition. Would be a shame to waste the good hand we've been dealt.