Mitchell Thomas, The Daily Record Newswire
In recent years we have been barraged with formidable conflicts in the Middle East. The issue of infectious religious zealots perpetuating their terrorist tactics to our shores gives reason for alarm. We also associate these regions with energy production and the probability of an oil inflow interruption, affecting our appetite for domestic energy consumption.
A factor that may put some of these concerns at ease is provided by the United States Energy Information Administration. We have gradually improved our various energy production output to satisfy 84 percent of our current energy needs. These levels have not occurred since 1990.
These levels were obtained by emphasizing alternative energy production, greater exploration and conservation. Alternative energy provides approximately 14 percent of our electrical energy needs. The added benefit to the environment is the lowering of our carbon footprint, which is invaluable.
The United States has been on a path of energy conservation by reducing total consumption. The EIA has declared that our measured consumption was reduced by five percent from 2008 through 2012. Naturally during a recession consumption is at a low point, however, a five percent decrease during a recovery is unfathomable.
In comparison, the second largest global economy is China, currently involved in an industrial revolution; their consumption has increased by 30 percent during the same time period. This increase makes China more vulnerable to global oil shocks and geopolitical risk affecting their economic growth.
The path of energy conservation has evolved into improvements to our economy putting approximately 81 billion dollars that were once exported to foreign nations (some hostile to the U.S.) to now be implemented for domestic growth and job creation.
The EIA predicts imported crude will fall to only 21 percent of our domestic needs by 2015. This improvement compared to our 2012 imports of 40 percent speaks favorable volumes of our energy strategy.
Domestic production of 9.5 million barrels is returning to levels not experienced since 1970. We import 7.7 million barrels a day and the EIA has listed the top six exporters of crude to the United States: Canada providing 33 percent of our imported crude, Saudi Arabia is 17 percent, Mexico is 11 percent, Venezuela is 10 percent, Colombia is 5 percent and Iraq is 4.5 percent. The feeling of dependence on certain countries for our crude oil needs leaves us with an aura of defenselessness.
Energy is the lifeblood to our economic growth, security and stability of lifestyle. We are currently on a solid path to energy independence. The strides made with our ingenuity to extract sources by a variety of means are a testimony of our society to respond to the energy challenges we face.
Energy is vital to maintaining our standard of living. Investment opportunities for domestic energy equities should be a strong consideration in your portfolio. We are continuing to improve in this genre, and the catalyst for corporations to increase their profit potential makes this area very alluring. Speak to your investment representative regarding these opportunities.
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Mitchell Thomas is an international equity analyst/portfolio manager/head trader for Karpus Investment Management, an independent, registered investment advisor that manages assets for individuals, corporations and trustees. Offices are located at 183 Sully's Trail, Pittsford, N.Y. 14534; (585) 586-4680.
Published: Wed, Nov 19, 2014
