My energy transition

Op-ed by Michel Lafontaine* featured exclusively on our website.

Whether it’s Premier Legault preparing to definitively ban the development of natural gas in Quebec, local media fixated on COP26 and the reduction of greenhouse gases, or any of these busy body activists, all of these lovely people seem to have concluded that this oil and gas thing is over and done with and that all of humanity (including another 2 billion people from Africa and Asia by 2050) is becoming rich, prosperous, and above all squeaky clean thanks to windmills, solar panels, and especially those batteries which will take over when the wind doesn’t blow and the sun doesn’t shine.

So, let’s do a reality check. In North America, oil prices have jumped over 70% since the start of the year, while natural gas prices have more than doubled; Biden, who had received US energy independence as a gift from Obama and Trump, is now begging OPEC to increase production. This winter in Europe, the less fortunate may have to choose between “heating” and “eating,” while Gazprom holds all these lovely people hostage. And, the supreme irony, President Macron, fearing the reappearance of the “yellow vest” protesters, is about to subsidize fossil fuels—a wise decision since, politically speaking, a frozen Frenchman is even more dangerous than a frozen Brit.

As manager of my own financial assets, I am a supporter of passive management; I am of the opinion that it is difficult to identify anomalies, stocks that are mispriced by millions of active investors, and therefore my holdings are heavily invested in indexed ETFs.

But since the start of 2021, I’ve made an exception with my family’s two TFSAs. Confronted with these managers of public funds who decide to dump oil stocks without even mentioning the word “fiduciary,” with these new experts in the form of children who march for the climate, with this Swedish teenager who condemns the British for having launched the industrial revolution, the oil and gas securities (Canadian moreover) of these TFSAs have gone from 0% of the two portfolios at the beginning of the year to more than 90%; and as of October 21, the year-to-date return on both portfolios reached 60%, with the nest egg jumping by nearly $148,000.

This bet (it is one, I must admit) could therefore have already covered, for the rest of my life, the costs of any energy transition that one could possibly imagine imposing on me. And for those who would rejoice in advance that this might backfire on me, you would have the added satisfaction of knowing that the bet was not made with your money.

But this satisfaction would be diminished, however, by the fact that it is with your money that activists bet on your future pensions.

*Michel Lafontaine is a retired entrepreneur and economist. The views reflected in this opinion piece are his own.

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