There is a mounting crisis.
It started, as most crises do, in small fashion and grew, slowly, until it was much more grand.
Now, it’s affecting millions of people. You may be one of them.
The president has certainly not solved the problem. And Congress has also faltered.
The crisis is real. And it’s spreading.
But it’s not the financial meltdown I speak of. This, I believe, is a more serious crisis. One that’s been longer in the making and could have farther reaching implications.
It’s an energy crisis.
And while this issue is multifaceted—affecting everything from electricity production to water treatment—today I want to focus on the future of transportation as just one aspect of our energy woes.
The Problems with Transportation
Quite frankly, the problem with transportation is that its very essence is built on the presumption that there is an infinite supply of oil.
That is, the entire transportation infrastructure relies primarily on oil and nothing else.
Cars and trucks run on fuels refined from it. Millions of miles of pipes transport it. Millions of gas stations sell it. And billions of us use it. Everyday.
And it’s great. It’s cheap. It’s convenient. And, until recently, we really haven’t had any major problems with it. We’re infatuated with it.
So much so that that we’re ( the global community) expected to demand 37% more of it by 2030, according to the Energy Information Administration.
Here’s the exact quote:
Demand will hit 118 million barrels per day (bpd) from today’s existing 86 million barrels, driven in large part by transport needs, the EIA said.
Problem is, we’re (again, the global community) struggling to produce enough oil to meet our current demand of just over 86 million bpd. There is no chance we’ll be producing 118 million barrels per day by 2030.
Even with modest new discoveries, offshore drilling, and the highly touted Bakken formation, world oil production isn’t ever likely to surpass 100 bpd. That’s just the data. Plain and simple.
Don’t kill the messenger, prepare for the future.
The Future of Transportation
To be clear, we are not running out of oil. As noted Peak Oil researcher Robert Hirsch puts it, "We’re running down."
Oil production is not going to shut down overnight. Instead, it will be a long and gradual descent, most likely with a sustained plateau period—which we’re probably in now, or headed into soon.
At any rate, many savvy businessmen and corporations are very busy plugging away at a way to alleviate the drastic shortages of oil for a transportation fuel that we’re likely to face in the next twenty years.
Needless to say, the investment opportunities abound.
Because the future of transportation isn’t going to be based on one fuel. We’ll no longer be under the rule of a Black Gold dictatorship.
Instead, we’ll be using a mix of fuels, each specially tailored to their use in order to maximize efficiency.
Natural gas is on the table, a la the Pickens Plan. Second generation biofuels—the corn stuff is out—like algae biodiesel and cellulosic ethanol are on the table.
And, perhaps most importantly, electric vehicles are on the table. This is particularly important because today’s rechargeable batteries are capable of providing vehicle ranges that accommodate the daily commutes of most drivers.
And, once the transition is under way, we’ll be able to produce the electricity needed for cars with renewable resources like wind, solar, and geothermal.
As difficult as it is for most people today to comprehend this notion of the future, it will be equally be as difficult for our grandchildren to understand our oil-based past.
Not only will this revolutionize the way we view transportation, but the myriad investment opportunities this transition will present is incomparable.
Consider this:
According to the U.S. Department of Energy, The direct economic costs of oil dependence to the United States are expected to reach $560 billion dollars in 2008." Most of that money—$330 billion to be exact—will be going to countries that are less-than-friendly to the United States.
This will bring the 5-year (2004-2008) economic costs of U.S. oil dependence to $1.7 trillion, of which $1 trillion is wealth transfer to oil exporting states.
Listen. Every natural gas vehicle sold. Every electric vehicle produced. Every distilled gallon of biofuel. They all subtract from the $1.7 trillion total.
As that money is shifted away from being used for oil and toward renewables, you can be in a unique position to earn windfall profits by having your portfolio properly positioned.
I’ve prepared a full report for you on exactly how to do just that. It’s going to be the investment opportunity of a lifetime. Possibly ever.
Be sure to continue reading Wealth Daily for continuing coverage of these trends, and the associated investment opportunities, as they emerge.
Call it like you see it,
Nick
