Energy demand surged over the course of 2021.
But not all of the demand lies with conventional energy sources, such as coal, natural gas, and oil.
Several governments have ramped up efforts to move away from fossil fuels and switch over to clean, green energy.
In the US, President Biden’s infrastructure plans include several investments into green technology, including electric vehicles (EVs).
Overseas, the EU has pledged efforts to combat climate change by reaching net zero emissions by 2050, which means they’ll need to phase out fossil fuels.
China, the world’s second-largest economy, previously announced plans to test a ban on gas-powered vehicles.
The ban would only affect some parts of China, but the long-term plan is to eliminate gas-powered vehicles.
No timetable exists for when this plan would take effect.
But the switch to new energy sources won’t happen overnight and new COVID-19 concerns could delay it.
Will the green economy be able to take off without fossil fuels? Let’s dissect the issue and show you how you can profit.
Natural-Gas Shortage Sets Off Scramble
In October 2021, fears over natural gas shortages before the winter months had left countries worldwide competing.
At the time global stockpiles for natural gas companies were dangerously low. Meanwhile, prices were soaring due to surges in demand in parts of the world.
Although global economies were in full-recovery swing, oil and natural gas shippers were not.
A surge in demand puts extra pressure on miners and transporters to fulfill orders, which may not be possible in the pandemic era.
Similar to other parts of the mining industry, oil and natural gas took a big hit with 2020 shut-downs and drops in demand.
When economies started recovering, the hunger for fossil fuels renewed, but the supply side couldn’t keep up with demand.
This set off a major bidding war between governments around the world, where the highest bidder got their orders fulfilled, despite the country the tanker was originally intended to go to.
Countries in Europe, along with China, got ahead of the bidding war by falling back on coal and oil plants, undercutting climate progress.
Coal Issue in India
Not exactly left behind but not exactly keeping up with modern energy trends, India still heavily relies on coal as an energy source.
India is the world’s second-largest producer, consumer, and importer of coal and holds the fourth largest coal stockpile.
Earlier in 2021, India faced a major dilemma with rising coal prices threatening their electricity supply.
Its state-controlled mining company, Coal India, produces a significant amount of India’s coal and is struggling to keep up with demand.
Between high prices, surging demand, and trying to fulfill India’s power needs, India and Coal India are in a challenging position.
Throughout the COVID pandemic, Coal India kept prices low domestically.
But back in October 2021, the company’s chairman said a price hike was coming soon.
A price hike could do a lot of damage to domestic energy companies struggling to keep up with demand and their customers.
Oil Shortage Impacts on American Economy
The beginning of the COVID-19 pandemic caused a drop in demand for oil, which made gasoline prices consumer-friendly.
In the US, the national average for gasoline prices reached a low point of $2.18 at the time.
But those prices didn’t last in 2021.
Today consumers in the US are seeing average prices in the $3.10+ range.
Much of this price hike results from latent supply chain issues and increased demand since the economy reopened.
The US oil benchmark, West Texas Intermediate, hit new high prices in October 2021, at $76.98 a barrel.
These high prices were picked up by consumers who were getting back pre-pandemic levels of commuting and traveling.
The question on every US consumer’s mind is, how long will oil prices stay high?
The Organization of the Petroleum Exporting Countries (OPEC), the organization that controls much of the world’s oil supply, is meeting in February 2022 to discuss a supply increase.
The hope is that with increased demand, a supply increase will not harm the high oil prices, but will relieve some of the strain placed on suppliers.
The increase in supply can also affect the price of gasoline in the US, lowering them to more favorable prices.
The All-Electric Movement Gains a Spark
A new emergence of legislation in some parts of the US has developers wondering how they can keep up with the new changes.
Berkeley, California was the first place in the US to enact a ban on gas line hookups in new building construction.
Now, this policy is picking up popularity in other parts of the US.
Some developers have already made their adjustments to build without using gas lines.
However, this policy shift has caught many off guard,, leaving them questioning how they can adapt and if they must comply.
While this ban on gasoline in new construction is limited to a few parts of the country, there are also parts of the US that strictly use electricity.
According to a 2015 survey of US homeowners, the US Energy Information Administration showed that 25% of the country’s homes are only powered by electricity.
In the Southeast part of the US, about 45% of homes are powered by electricity only.
Not only is this move an attempt to combat climate change, but recent oil and natural gas prices hikes and supply shortages are surely contributing to it.
How to Profit From the EV Revolution
The mad scramble to find adequate fossil fuel supplies has refueled the conversation about EVs.
Imagine a world free from the grip of the fossil fuel economy.
Well, maybe that’s not such a great world if you’re invested in oil or natural gas.
But smart investors will notice where the world seems to be trending一green technology.
Yes, there will be a reliance on fossil fuels to get there, but once the green economy takes off, you’ll want to be invested in it.
Avoid regret and look for opportunities in the EV revolution.
Many investors have already started by investing in companies that produce EVs, such as Tesla.
Savvy investors know there will be no green revolution without copper, and here is how you can profit.
EV batteries are not the same as conventional cars, requiring more metals to accommodate power output and battery life.
Find companies in the mining sector that mine for metals that will be in high demand for EV batteries, such as copper, lithium, cobalt, and nickel.
Each of these metals is crucial to the development of EV batteries, and as governments worldwide attempt to phase out conventional cars, those who invest now should see significant returns.
Copper hit record highs in Q2 of 2021, almost hitting $11,000.
Although copper prices today aren’t nearly as high, the forecast for 2022 looks promising.
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