If Oil Shocks Are The Threat Then Why Are We Killing Diversification?

Added: 2026-05-29

[00:00:00]You know, for years, Americans have been told the same thing every time uh energy prices spike.

[00:00:08]Not really much we can do.

[00:00:11]Not a whole lot we can do. It's it's a global market. Oil goes up, gas goes up, natural gas spikes, utility bills spike, a war breaks out overseas, and then inflation surges. Basically, we're told the same thing all the time. not a lot we can do. But if that's true, if there's not a lot that we can do, if global oil and gas shocks can hammer the American economy, then why would any administration weaken the very industries that provide insulation from those shocks?

[00:00:53]And this is the part where I'm going to throw you a bit of a curveball, but that's the contradiction that people don't want to talk about because the thing that would provide us more insulation from those shocks is actually renewable energy.

[00:01:13]Look at China.

[00:01:15]Whether you support renewable energy or not politically, one thing is objectively true. The more diversified your energy system is, the more resilience your country has, especially when it comes to these price shocks. You have more flexibility, you have more insulation, you have more buffers. The more ways you can produce energy domestically, the less vulnerable you are to disruptions in any one fuel source.

[00:01:49]And that's just common sense. Now when people think about energy they don't think about it in terms of every single source of energy sort of collaborates and impacts every other source of energy. And what that means is along the supply chain, along the energy supply chain, if you shut down and kill, say, a huge wind project.

[00:02:22]Now, nobody would ever think about the impact that would have on gas prices because cars don't run on wind.

[00:02:30]That is the very simplistic and rudimentary way to think about that.

[00:02:39]Cars don't run on solar.

[00:02:44]That is that is very much true.

[00:02:49]But along that supply chain, that wind and that solar or that nuclear or that geothermal will collaborate, intersect with oil and gas and have an impact on oil and gas itself.

[00:03:10]It absolutely does. It's obviously not a direct impact, but it does impact it.

[00:03:20]Let me give you a couple of examples.

[00:03:22]This first one's not huge, but we still burn 200,000 barrels of oil a day to generate electricity, which is wild to me because that's very old technology.

[00:03:38]We're still burning 200,000 barrels of crude oil in this country to generate electricity that could be easily replaced with renewable energy easily. Piece of cake. Um, and bam, you just basically increased your crude oil inventory by 200,000 barrels a day. Just like that. Now that's not a huge number.

[00:04:02]Just consider the fact how much uh natural gas liquids are used in the gasoline making process.

[00:04:10]It's a lot. Butane, pentane, isobutane.

[00:04:17]There's a lot of liquids that break out of natural gas that are used in the gasoline making process.

[00:04:26]And you may be wondering, well, what does that have to do with wind energy?

[00:04:30]Well, the less natural gas you're burning to make electricity because you've replaced that with more renewable or nuclear or geothermal or whatever, right?

[00:04:45]Then essentially the more natural gas you have available to produce more gasoline, all of these things intersect is what I'm saying. They're all buffers.

[00:04:56]They're all insulators to each other.

[00:04:59]This is why China has the most diverse energy profile on the planet. This for this exact reason right here. And here in a few weeks when things really start to get hairy, when countries around the world are seeing significant supply shortages, I'm talking four to six weeks out.

[00:05:20]You'll be looking at China. China's going to be just fine.

[00:05:24]China's going to be sitting pretty because they have the most diverse energy portfolio on the planet.

[00:05:38]They get low on natural gas, they can just use more renewables or coal or whatever. like they have a ton of everything because diversification in itself is protection.

[00:05:57]When your economy depends too much on one thing, you ever heard the term don't put all your eggs in one basket?

[00:06:07]That that didn't come from Easter.

[00:06:10]Well, I mean it it may have, but that's not what it means now.

[00:06:16]So our current situation in the United States where we're trying to kill renewable energy is, you know, likely mostly fed by lobbying money and not a real willingness and effort to help this energy dominance we hear about.

[00:06:39]at the exact moment we're in another war overseas in the Middle East, we're trying to kill other forms of energy that would actually help us.

[00:06:52]And if you think about how just irrational that is strategically, we're over here debating whether to just stop charging taxes on gas.

[00:07:06]We're watching our gasoline inventories just get drained to nothing and oil prices are are still volatile. Kuwait got attacked tonight, so God knows what oil prices are going to do tomorrow.

[00:07:20]We're we're literally trying to destroy buffers and insulators. And instead of saying we need every source of domestic energy we can possibly get, the political response is increasingly ideological warfare against renewables.

[00:07:44]Not because solar panels are going to make gas cheaper tomorrow. No, that's not how it works.

[00:07:51]But it does work. That's the part people miss.

[00:07:56]It seems like these days in this country, if something is even slightly complex, it's completely missed.

[00:08:03]You have to be able to think past um step one and two. You have to be able to think Step four, five, six. A country powered entirely by one dominant energy system can become a hostage to that system and to the weaknesses of it. And that's what we've done.

[00:08:28]The more concentrated the system, the more catastrophic disruptions become.

[00:08:38]And right now we are exposing exactly how fragile we are as an oil dependent, transportation dependent economic model and how weak we are during geopolitical conflict.

[00:08:56]When every crisis becomes an oil crisis and every oil crisis becomes an inflation, it just on and on. We repeat, rinse, repeat, rinse, repeat. We do this every few years.

[00:09:09]What? Till the end of time.

[00:09:13]That's what we do in this country.

[00:09:16]Energy security is not simply about producing more oil.

[00:09:22]That's just putting more of your eggs into that one basket. It's about creating systems resilient enough that a single disruption doesn't ripple through the entire economy like a shock wave.

[00:09:41]And people don't realize it, but the fact of the matter is renewable energy can absolutely add to and contribute to resilience. Whether the critics of it want to admit that or not, every megawatt of domestic electricity generated from either wind, solar, hydroelectric power, or nuclear is electricity that does not depend on a tanker going through the straight of Hormuz.

[00:10:15]Every home powered by rooftop solar is slightly less exposed to volatility in the natural gas market.

[00:10:29]Now, of course, this doesn't mean that renewable energy solves everything. No one ever said it did.

[00:10:38]Of course, it doesn't. Of course, it has issues. Of course, it has limitations.

[00:10:43]Intermittency issues are real. Need more batteries. Of course, grid storage.

[00:10:50]That's a challenge. Transmission infrastructure matters.

[00:10:58]But for some reason, we live in a country where it's all or nothing.

[00:11:04]It's it's got to be all or nothing. If anything has one problem, we can't use it. That's our attitude towards renewable energy. Completely disregarding all of the problems we have with oil and gas. Largely geopolitical, largely due to things that happen on the other side of the world and often things that we start problems that we create ourselves and often because we want more control over the thing that's disrupting the thing. Do you know what I mean? It's it's like this vicious circle. It's it's nuts if you think about it.

[00:11:47]Historically, strong nations, these strongest nations diversify any and all critical systems precisely because no single system is perfectly reliable.

[00:12:04]We've diversified our food supply. We've diversified our our our military assets, our manufacturing, our trade partners.

[00:12:15]Why would energy be any different?

[00:12:21]Yet somehow the debate has become so politicized that even discussing resilience sounds ideological.

[00:12:36]And meanwhile, ordinary Americans are left exposed to the consequences with higher gas, higher groceries, higher utilities, higher transportation cost, higher inflation, all amplified by geopolitical instability thousands and thousands of miles away. That should be I don't know. Seems like that should be a wakeup call.

[00:13:04]This this thing is bigger than like renewable versus fossil fuels. It's not even that.

[00:13:14]We're going to need oil and gas far we'll be all dead and gone and we're still going to need dead oil and gas.

[00:13:22]Okay, that's just reality, right? That's not what anyone's saying. Nobody's saying get off oil and gas. Of course, we need oil and gas.

[00:13:30]It runs the whole economy. It helps grow our food, fertilizer, right? Heavy industry needs it. But acknowledging that reality should not mean intentionally rejecting diversification.

[00:13:48]The smarter approach would be the exact opposite of what we're doing right now.

[00:13:56]use domestic oil and gas while aggressively building systems that reduce long-term exposure to oil shocks.

[00:14:05]That's all it is. That's what resilience looks like. But instead, we've drifted into this bizarre political environment where some leaders think simultaneously that global instability threatens energy markets while also undermining sections that could actually partially shield the economy from those disruptions.

[00:14:40]And the result of that is what we're seeing today. Americans remain trapped in a system where every overseas conflict threatens household survival cost. And that's what I talked about yesterday. How we do nothing to protect the things in this country that are critical to survival. We literally treat those things just like a Netflix subscription. We don't treat them any different. That's not strength.

[00:15:08]That's that's dependence. And it's a lot of stupidity.

[00:15:21]And probably the most frustrating part is all of this was entirely predictable.

[00:15:27]But the thing is, there's too much money changing hands for what needs to be done to actually get done.

[00:15:37]We've been warned by all the experts for decades that the modern global economy was too dependent on oil and gas and those energy choke points and just in time systems that we use.

[00:16:01]And the solution was never one thing. It was never one magic bullet or pill or whatever you want to say. It was always going to require a lot of things. More domestic production, more strategic reserves, grid modernization, nuclear power, renewables, storage efficiency, infrastructure hardening, a broad and diverse portfolio.

[00:16:26]Period.

[00:16:29]And that is what national security is really about.

[00:16:35]The more diverse you are, the more national security you have when it comes to energy. Folks, if you haven't had a chance, the newest episode of the American Power podcast just dropped.

[00:16:47]Please go check it out on Apple, Spotify, anywhere you can find your podcast. Also, otherwise, leave your thoughts in the comments section. Really appreciate all my followers and subscribers so much. Hope you guys have a great week. Thanks.