What if there was an emergency and no one panicked
Would it still be an emergency?
The Biden administration announced yesterday that we are in a dire situation. “Climate change is an emergency.” Gina McCarthy, the administration’s climate adviser stated,
“We’re not ready to give up on our strong goals. We’re going to double-down to make sure we get those and while it’s disappointing that Congress couldn’t get it over the finish line, that in no way precludes the president from using the full range of his executive authorities to get us to where we need to go.”
Unfortunately for Gina and the other climate crazies, the Supreme Court (USSC) is going to stand in their way. This administration is going to attempt to use the administrative state, all those fun 3-letter agencies (i.e. CDC, FDA, EPA, FBI, SEC, DOJ, DOE, DOI, ETC), to try to force the Green New Deal into action. If anything, it has been a hallmark of this administration for them to attempt to bully their agenda through using the executive branch (albeit unconstitutionally), only to be stymied by the USSC. Less than a month ago, the USSC shutdown the EPA’s authority to mandate carbon emissions. I guess this is what Gina meant when she said “double down”.
All this does is create a greater asymmetric opportunity in energy stocks. These actions from the administration are like stretching a rubber band. However, this rubber band was already stretched from the push for ESG investing. We could be rushing towards a breaking point as inventories get depleted.
With this energy rubber band completely overstretched, it will take years for drilling, exploration, and production companies to reverse the shortfall that is coming. Their services will be in high demand.
Interesting enough, the Dallas Fed conducts a survey of oil and gas companies. These companies are seeing significant shortages of steel tube.
Which is somewhat amazing since these companies are not spending a lot of time drilling new wells. What do you think will happen to the steel price and steel companies when this current climate emergency reverses course into a energy emergency and these drillers desperately need drill pipe?