As I’ve been doing my research on energy, I’ve come more and more bearish on green tech for the foreseeable future. The world will continue to rely on oil and oil companies. The reasons are the following:
1. Russia Out of the Picture. With refined Russian goods out of the picture due to the European price caps, there will be less oil produced reducing availability.
2. Food Security and OPEC. As food prices rise OPEC countries will limit oil production to increase prices so they can reduce food price inflation within their own economies.
3. America the Manufacturing Hub. America is becoming a manufacturing hub again with high amount of cheap energy through natural gas availabile. Anything that requires immense and cheap energy will be manufactured in the US. This means less energy exports.
4. Green Energy, Bootstrapping Problem. To produce solar energy has a huge bootstrapping problem requiring high amounts of energy. This is particularly acute with polysilicon for solar energy. The green energy transition will only be possible through cheap natural gas.
5. Lack of American investment. American oil companies are no longer investing in new oil developments. With the government passing the Inflation Reduction Act to invest in climate change, most oil companies are extracting as much from their existing projects as possible without investing in new oil fields.
All of this leads me to suspect that oil prices will likely just keep going up for the foreseeable future.
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