Motley Fool Money Energy Investing 201: Relentless Demand, Uncertain Supply
Jun 11, 2022
Jim Gillies, a Senior Analyst at Motley Fool Canada, shares his insights on the energy investment landscape amidst rising global demand and an uncertain supply chain. He discusses the factors leading to a potential energy crisis, emphasizing the need for strategic reinvestment in the sector. Gillies highlights the contrasting stigmas and profit potential in oil and gas, likening it to the tobacco industry. He also explores investment opportunities for individuals as pension funds shift away from oil, revealing a new frontier for savvy investors.
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Relentless Demand, Stagnant Supply
- Global energy demand is rising at 2% annually, driven by population growth and rising living standards.
- Fossil fuels still meet ~80% of this demand, despite the growth of renewables.
Shale Boom Bust
- Jim Gillies recounts his past negativity towards oil and gas companies due to their overspending.
- He explains how the shale boom of the mid-2010s led to significant capital losses, estimated between $700B and $1T.
Energy's Economic Impact
- Underinvestment in energy production can lead to higher prices.
- This impacts consumers' ability to afford other goods, creating a headwind to economic activity.