Big Oil Is Hinting at Huge Gains for Clean Energy Investors
Editor’s note: “Big Oil Is Hinting at Huge Gains for Clean Energy Investors” was previously published in February 2023. It has since been updated to include the most relevant information available.
If we fail to adapt, we fail to move forward.
So said legendary UCLA basketball coach John Wooden, who won 10 national championships in just 12 years – a record that hasn’t been touched since and likely never will be again.
I remember hearing that quote as an 8-year-old at a summer basketball camp.
It inspired me then. And it inspires me now – so much so that the quote, in many senses, has been my guide to investing.
As a society, we must adapt to move forward.
If we want to be successful investors, then we should identify the adaptations society is making to move forward and invest in them.
Invest in change.
In fact, one of the greatest investment opportunities we’re presented with today involves such change on a massive scale.
And the 2022 global energy crisis has kicked it into overdrive.
The Hypergrowth Clean Energy Transition
It’s been a year since Russia launched its invasion of Ukraine. Over those 12 months, the world suffered through an enormous energy crisis. And to move beyond this crisis, the world has been forced to adapt – to reimagine its global energy ecosystem and restructure supply chains to produce more reliable energy.
Governments and corporations across the world have been faced with two decisions. Either pump more fossil fuels, or accelerate the development of locally sourced alternative energies.
The overwhelming majority of governments and corporations chose the latter: Accelerate the development and deployment of solar, wind, hydrogen, electric vehicles, energy storage, and more.
Last year, the U.S. passed legislation to accelerate the transition to renewable energies. So did the European Union, Japan, China, Australia, and pretty much every major economic powerhouse in the world.
In total, that poured a record $1.4 trillion into the clean energy sector – a significant increase from 2021.
In order to move forward, society must adapt.
In 2022, society adapted by accelerating the global transition to clean energies.
Even oil companies agree on this regard.
In its 2023 energy outlook report released last week, Oil titan BP (BP) – a $100 billion fossil fuel powerhouse that is among the largest and most powerful energy firms in the world – said:
“The increased importance placed on energy security as a result of the Russia-Ukraine war leads over time to a shift away from imported fossil fuels towards locally produced non-fossil fuels, accelerating the energy transition.”
The company increased its long-term demand forecasts for renewable energies by about 5% – and cut its long-term demand forecasts for fossil fuels by about 5% – from its 2022 outlook.
The Final Word
The Clean Energy Revolution has accelerated. Even the oil titans agree. This is the adaptation the world has chosen to move forward from the 2022 global energy crisis.
Successful investors invest in generational adaptations.
If you haven’t already moved with them, you need to do so right now.
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On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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