So what do we see coming down the line?
One way or another, there’s an industry that, I believe, is destined to do well in our current environment – even in the face of President Obama’s second term (and no, it’s not health care).
I’ll explain more below, but first, let’s look back and lay some foundation…
President Obama made many campaign promises to win his second term. He said that he’d bring new jobs and more economic growth to America. He wants to rebuild the middle class. Indeed, President Obama wants to put his imprint on the country in all manner of ways. How can Obama formulate policy to accomplish some of this?
President Obama can’t accomplish much if he can’t keep the lights on, figuratively speaking. That is, it’s imperative that Obama promote energy development in one form or another. There’s an investable idea in there, too…
Energy Choices, Good and Bad
In his first four years in office, and in the arena of energy development, President Obama presided over a variety of successes and some notable failures.
One example of policy failure came via a series of embarrassments with Obama’s effort to promote “renewable” energy — the Solyndra story and much more. Yes, of course, there were renewable projects that “worked,” often as not due to massive subsidies. But still, overall, with renewable energy efforts, a lot of government grants just plain went to money heaven. Obama took his political knocks over the problems.
There were other things during Obama’s first term that happened independent of any Obama policy, one way or the other. Consider the BP oil well blowout that occurred in 2010 in the Gulf of Mexico (GOM). A complex energy system failed and a superwell blew out, spilling tens of thousands of barrels per day into the GOM.
Subsequent to the BP blowout, we lived for several months through media frenzy, with images of a blown-out well spewing oil on the Internet 24/7 and crude washing up on the beaches. In an industry-government effort worthy of a wartime emergency program, the Obama administration oversaw the oil spill containment and cleanup, the offshore drilling moratorium and then a so-called “permitorium.”
The BP blowout was a huge problem — with many arguable policy calls, to be sure. But it was Obama’s problem to handle, and his administration dealt with it.
Meanwhile, onshore, during President Obama’s first term, we had a U.S. drilling boom. All across the country, things went like gangbusters for “tight” oil and shale gas. Even “blue” political states like Ohio, Pennsylvania and New York are now part of the revolution in U.S. domestic energy production. The money and jobs are there for the asking, and don’t think for a minute that the politicians aren’t eyeballing that money and those jobs.
It’s ironic, actually, that by the end of his first term, President Obama traveled across the country saying good things about the U.S. oil and natural gas industries. Indeed, one constant drumbeat of Obama’s campaign stump speech was to brag about how much more oil and gas were coming out of the ground on his watch.
The point is that despite his evident willingness to bash oil companies while saving the environment, President Obama has taken credit for a big part of the oil patch boom of recent years. And that brings us to an industrial sector that has to do well in the future if President Obama plans to do well in his second term.
Drill He Must!
No more suspense. There’s one part of the drilling industry that should have good years ahead. It’s drill pipe.
Huh? Drill pipe? During the second term of the Obama administration? Well, yes. And no, I’m not crazy. Look, I know that the Obama administration is hard over in the “environmentalist” direction. I know that the Obama administration wants to bring hydraulic fracturing — “fracking” — under more federal control, using the Environmental Protection Agency as the brass knuckles. That and much more.
Still, the people who work with President Obama know that they have to deliver results to the voters. Obama needs jobs for the economy. He needs energy, economic growth and tax revenues. Obama’s policymakers need something that works, and works fast. No more Solyndras — or at least not too many more.
Thus, a second Obama term has to include healthy respect for shale gas drilling and other oil drilling. The “shale gale” will continue and the Obama administration will not just live with it, but help things along.
At the end of the day, the Obama administration has to support drilling and fracking, because that’s where the energy is. In other words, oil and gas energy resources will help President Obama grow the economy, create jobs, rebuild the middle class and more.
Mark my words. Without continuing supplies of clean energy (OK, relatively clean energy, for all the purists), Obama’s second term will crash and burn.
Save The Planet, Invest In Drill Pipe…
It may seem odd to recommend a drill pipe maker in connection with Pres. Obama’s reelection – but that’s exactly what I suggested my paid-up readers do in the latest issue of Outstanding Investments.
It’s true, our president has never really expressed a lot of love towards the fossil fuel industry. But still, I believe that drill pipe manufacturers (one in particular) will do well in the months and years to come. Here’s why.
Rest assured that the global energy industry IS growing. Despite obvious economic problems across the world, people continue to want their hydrocarbon-powered cars, trucks, airplanes, space-heat, plastics, mechanized agriculture, fertilized crops and more.
Indeed, if you want to see what life looks like without access to oil, natural gas, refined products and more, look no further than parts of New York and New Jersey, post-Hurricane Sandy. You want a “low carbon” footprint? There you go.
Here in the U.S., we’re talking about the directional drilling and the “fracking” industry. This industrial capability is foundational to U.S. energy security, not to mention the gale of shale gas that’s blowing across the landscape.
The key thing to understand, in all of this, is that the Obama administration has a strong environmentalist policy direction. Look no further than the Environmental Protection Agency, or the Department of Energy, over the past couple years.
Indeed, Pres. Obama has made no secret of his belief that “man-caused” environmental change is happening, and that U.S. policy can and must do something about it. Indeed, at a news conference this week, Pres. Obama mentioned “climate change” in connection with a question about Hurricane Sandy.
On my end, I’m a trained geologist — or a “Harvard-trained geologist,” as the Agora Financial marketing guys always likes to note. Pres. Obama attended the Harvard Law School. I attended the Harvard Geology Department.
On my end, in one way or another, I’ve been studying earth history and earth science since 1973. I’ve read countless scholarly books and technical papers on all manner of “change” to the earth and its features. I’ve worked in and around geological matters and issues for a long, long time. I’m more than competent to understand the debate about climate change.
Still, I’m NOT going to argue over climate change, here. I’m NOT going to go there, OK?
What I can say, with complete assurance, however, is that if Pres. Obama wants to “do something” about climate change, then he had better do something about using natural gas. Because natural gas is much less of a carbon-emitter than oil or coal.
If the Obama administration is serious about climate change, then it had also better be serious about natural gas. And that means fracking. And that means drilling. And that means drill pipe. It also means one company that I’ve tipped my readers about is way over-sold, in my view.
One way or another drill bits are going to be spinning in America. And yes, it’ll happen under Obama’s second term.
Want to get on board? Want to save the planet? …Invest in drill pipe.
That’s all for now. Thanks for reading.
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