Foreign Oil Dependency

The United States is one of the world’s largest consumers of oil, and historically, the country has relied heavily on foreign imports to meet its energy needs. However, recent developments in the domestic energy industry have created opportunities for investors to support American energy independence and potentially benefit from this growth sector.

So why does the Biden Administration look to Venezuela for oil to satisfy our need for oil? Let’s answer that question by taking advantage of the situation and investing in the domestic oil industry.

Investing in American energy independence is more important than ever, particularly in light of the Biden administration’s policies regarding Venezuela and other foreign sources of oil. The Biden administration’s decision to seek a diplomatic solution to the political crisis in Venezuela has complicated America’s access to Venezuelan oil, which is an important source of crude for U.S. refineries. As a result, domestic energy producers are stepping up to fill the void.

Benefits of Investing in the Domestic Oil Industry

One of the primary benefits of investing in the domestic energy industry is the potential for reduced reliance on foreign oil. American companies are exploring and drilling for domestic resources in places like the Permian Basin in Texas and New Mexico, the Bakken Formation in North Dakota, and the Marcellus Formation in Pennsylvania. These efforts have led to an increase in domestic oil production, which has helped to offset declines in oil imports.

In addition to reducing reliance on foreign oil, investing in the domestic energy industry can create jobs and contribute to economic growth. The American Petroleum Institute estimates that the oil and natural gas industry supports over 10 million jobs in the United States and contributes over $1.5 trillion to the economy. Domestic energy production can also lead to lower energy prices for consumers, which can help to spur economic activity in other sectors.

While the Biden administration is prioritizing the development of renewable energy sources like wind and solar, the idea that they can replace oil and natural gas is unreasonable. The conversion of wind to real energy is inefficient, with wind turbines producing only a fraction of their stated capacity. Furthermore, wind turbines kill millions of migrating birds each year and a few towers have inexplicably collapsed. It is clear that there is still a role for traditional energy sources like oil and natural gas in meeting the country's energy needs. Domestic energy companies are investing in technologies that reduce carbon emissions, such as carbon capture and storage, as well as exploring alternative sources of energy like geothermal and hydrogen. This balanced approach to energy production is necessary to ensure energy security, affordability, and sustainability for the United States.

How can I support American energy independence?

For conservative investors looking to invest in the domestic energy industry, there are a variety of options available. One strategy is to invest in individual companies that are involved in the exploration, production, or distribution of oil and natural gas. Some companies that may be of interest to conservative investors include ExxonMobil, Chevron, and ConocoPhillips. These companies are well-established, have strong balance sheets, and are likely to continue generating significant cash flows in the coming years.

Another strategy for investing in the domestic energy industry is to invest in exchange-traded funds (ETFs) or mutual funds that specialize in the energy sector. These funds provide exposure to a diversified basket of energy companies and can be an effective way to spread risk and capture the potential upside of the sector.

Of course, investing in the domestic energy industry is not without risks. The industry is cyclical, and the price of oil and natural gas can be volatile. Political and regulatory risks also exist, particularly as the Biden administration pushes for increased regulation of the industry and a shift toward renewable energy sources.

Despite these risks, however, the case for investing in American energy independence is compelling. The potential for reduced reliance on foreign oil, increased job creation, and the growing demand for cleaner, domestically produced energy sources make the domestic energy industry an attractive investment opportunity. By investing in the industry, conservative investors can support American energy independence and potentially benefit from the growth of this critical sector.

For more information on setting up your portfolio to take advantage of domestic energy production, contact Bob Rubin from Rubin Wealth Advisors today.