Will A New American Energy Boom Supercharge The Economy? | Doomberg

**Adam Taggart** (0:05)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. In today's discussion, we look at the all-important energy market. Remember, without energy, there is no economy. As we look to 2025, where are global energy trends headed? What impact will the incoming administration's energy policies have? And where are the best opportunities for investors likely to lie? To discuss in depth, we're fortunate to sit down with the green chicken himself, the energy expert Doomberg. Doomberg, wonderful to see you again. Thanks so much for joining us today.

**Doomberg** (0:41)
Adam, happy New Year. It's so great to see you again. Always enjoy coming on your show, and really wholehearted congratulations to you on your success. Going out on your own was no easy thing, and to see your YouTube channel and your Substack grow, really testimony to the hard work that you put into producing such high-quality content. So an honor to be back with you and looking forward to another fantastic discussion.

**Adam Taggart** (1:03)
You're very kind. You're proving right out of the gate why you're one of my favorite people to interview Doomberg, and it has been too long since we've had you on this channel, so I'm glad we're remedying that here. I should say, given your kind words, that to do what I do, I do rely on the advice and support of mentors. You and the team at Doomberg are right at the top of that list, and I'll say right back at you just in terms of the wonderful success of the platform that you built at Doomberg. It is one that has inspired me greatly, especially over this past year. So thank you for all the leadership and all the support.

**Doomberg** (1:39)
It's very kind of you to say thank you.

**Adam Taggart** (1:41)
All right. Well, look, enough gushing. Let's jump into this. So really, Doomberg, this could be a very organic discussion. I wanted to have you on because you have one of the most interesting ways to look at the world, and I think you have also one of the most analytical minds of the folks that I talked to in terms of how you see the world, and of course, energy plays a foundational role in all that, but you look at all sorts of inputs besides just energy. But maybe let's start there. So we're talking here at the beginning of a new year. First, let's be a little retrospective. As you look back on 2024, what were the most significant developments in the energy industry to take place in your perspective?

**Doomberg** (2:25)
Yeah, great question. And I bring my answer with three pillars. First, OPEC continued to struggle to keep a floor price under oil and is beginning to lose its grip on that all-important market. And one of the consequences of an artificially high price of oil, as kept there by OPEC, has been this emergence of natural gas and a huge abundance of it because it is being co-produced in places like the Permian to meet the marginal barrel of oil at elevated prices. And so OPEC keeping oil prices high caused there to be a deluge of natural gas in North America, so much so that at the beginning of this year, the ratio of the price of oil to the price of natural gas reached, I believe, around 50, when it should be historically between 10 and 20 and on an energy content closer to 6 And so in April, we put out a piece that I think was probably our highlight of the year, and we wrote a summary of all of our natural gas pieces at the end of December called This Year in Gas. The piece we wrote in April pointed out this arbitrage, and the piece was titled Generational Arbitrage. And we made the call that clean, extremely cheap hydrocarbons don't stay cheap forever. One of the things that has to happen is people will eventually switch their engines. And while we were focused on the North American market in that piece, and there were indeed some burgeoning signs of incremental demand for natural gas in North America, what really changed the game in the global natural gas market and kept a lid on oil prices was a wave of engine switching in China, which you and I have discussed on a prior appearance. And that made diesel prices go down, which caused crack spreads to go down, and it further proofed that oil prices were held artificially high because they still stayed stubbornly above $70 a barrel. But then the other third major plank, beyond OPEC weakening, engine switching towards lighter hydrocarbons, there was also this third leg, which is the realization that while nuclear energy may be ideal to power the artificial intelligence revolution, in fact, the speed with which such facilities could come on line is incongruent with the exponential nature of the demand for new power from that sector. And we made the call in a piece called Bridge Burning, that natural gas, especially in North America, where it is still, even though it's almost tripled this morning off the bottom, it is still the cheapest, cleanest hydrocarbon on the board and the quickest to bring on line. And so natural gas was as low as $1.50 per million BTU at the beginning of the year. And when we made that call in April, it traded for as high as $4.20 per million BTU on the last trading day of 2024