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postcards from the florida republic: An independent and profitable state of mind.
"Calvinball" was a game in Calvin and Hobbes, a famous daily comic strip about a young boy and his “come-to-life” stuffed tiger.
Calvinball had one rule: The game can’t be played the same way twice.
Young Calvin lacked the patience for games with strict rules or scorekeeping. So, he changed this game’s rules every single day.
Sounds like the Federal government.
For years, indigenous Western Shoshone and Paiute people have fought to halt a major mining program on their ancestral lands on the Nevada-Oregon border.
Meanwhile, environmentalists (and sue-to-settle shops) have been trying to prevent the mines to save the endangered sage grouse.
Last week, the Ninth District Court – one of the most progressive U.S. courts - issued a Calvinball-style ruling so at odds with precedent that you’ll want to hit happy hour early…
The verdict: Hard no, Native Americans.
You see, “There’s lithium in them hills.” Transportation Secretary Pete Buttigieg and Energy Secretary Jen Granholm have issued "green mandates." We need lots of electric vehicles and charging stations by 2030…
Sorry about your ancestors’ burial grounds.
The ruling is wildly inconsistent with previous rulings and efforts on the energy front. Remember, ancestral lands were why the Keystone Pipeline became a political football for a decade.
On his first day in office, President Biden canceled the Keystone XL Pipeline, which would have cut the lands of the Assiniboine and Sioux in northeastern Montana. The Department of Energy later admitted that this decision cost thousands of jobs and billions in economic activity. But…politics.
Meanwhile, the sage grouse – a bird that looks like the NBC Peacock mated with Hunter S. Thompson – was the rallying mascot for shutting down oil-and-gas development in Western states.
Right now, U.S. Fish and Wildlife Services wants to shut down new oil-and-gas projects in the Permian Basin over a lizard that isn't endangered yet.
There's zero consistency in the system.
Politicians and judges are making it up on the fly, reaching different outcomes based on their political preferences and protected interest. Also, keep in mind Granholm violated the STOCK Act for disclosures of public officials NINE TIMES by not disclosing stock sales in an EV bus and battery company.
Calvinball Across America
Energy Calvinball doesn't just run in Washington politics and federal courtrooms. It's on full display in boardrooms as well.
Remember Blackrock's (BLK) Larry Fink. He's an asset manager running $11 trillion in assets. He famously said that companies must change behavior or that Blackrock would do it for them.
"Climate change has become a defining factor in companies' long-term prospects," Fink wrote in his company's 2020 annual letter.
This week, he nearly snapped the neck of every environmentalist when they heard the news on television that he'd named Amin Nasser to its board of directors.
If that name isn't familiar, Nasser is the CEO of Aramco, the largest oil producer in the world – and, of course, owned by Saudi Arabia.
Blackrock regularly puts its thumbs on the scale in the boardroom of public companies and presses for greater SEC disclosures on carbon emissions – which drives up compliance costs.
But Fink must have Nasser on his board because the Middle East – a region rich in oil and gas (and a rival of American energy) – is part of the asset manager's long-term financial strategy.
It'd be funny if it weren't so incredibly hypocritical. Fink's choice proves that ESG is little more than a corporate buzzword at best and a façade or fugazi at worst.
Natural Gas, A Love Story
America's energy and mineral laws are fickle, contradictory, and change on the fly.
The rules change like a child's whims. But investors like us must not kick the sand or make the politician cry, all while somehow maintaining a calm smile.
These contradictions show the government's desperation to appease the green gods – all while we share a world with China – that will expand its carbon footprint past my lifetime.
Investors need to ignore these politicians… and ignore Blackrock. They need to invest in companies that put shareholders first. Free markets can and will reduce emissions while rewarding shareholders for their investments.
The best place to do both is in the U.S. natural gas industry.
The U.S. is the only nation that has reduced its carbon emissions footprint per the rules of the Paris Accord over the last decade. We can thank natural gas for that.
Natural gas burns half as clean as coal. It's portable, cheap, and provides the greatest bang for the buck in terms of scale and consistency as a baseload fuel. And there are plenty of companies with strong F scores (promoting shareholder interest) and customers all around the globe lining up to buy our fuel.
Think Europe first.
Other European nations will also engage in silly Calvinball rules as well… shutting down nuclear, digging under buildings for coal, refusing to frack for natural gas, and causing inflation.
That creates potential.
The U.S. natural gas industry will be the biggest beneficiary of the never-ending rule changes, manmade energy shortages, and trends in deglobalization and digitalization.
Meanwhile, the Florida Republic should consider electing Hobbes the stuffed tiger as President.
I'm sure he's tired of childish tyranny too.
Florida Republic Capital
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.