There are few sectors that are in absolute need of progress. For example, if the tech sector were to never again experience a great leap forward, we’d all be fine. And if healthcare were unable to extend average longevity beyond 70 years, we’d all be okay (except for the 70+ maybe).
But it just isn’t so with energy. We require tremendous amounts of energy for just about everything we do, and more so every year. Meanwhile, we’re running out the irreplaceable fossil fuels we consume for energy at increasingly alarming rates. According to one Stanford University professor,
the world could run out of oil as soon as 33 years.
The simple fact is we need more energy than we have fossil fuel, and thus the energy sector has an absolute need for change. In all likelihood, we’ll never really run out of energy. Humans are innovative enough to develop an alternative source before that actually happens (but we’re also lazy enough to procrastinate for as long as possible).
As of now, it’s still uncertain which alternative energy will de-throne oil as the new global standard. A couple months ago I wrote about solar power, but other alternatives are promising as well — particularly nuclear power (**gasp**), which I’ll write more on later. The bottom line is the energy sector will undergo significant and necessary changes in order to power the future, making it a compelling way to power portfolio returns as well.
Victor K. Lai, CFA
This blog is for informational purposes only. Nothing on this blog represents advice of any kind. Investing is inherently risky and involves the potential for loss.