When economic powers ‘switched’ energy sources a hundred years ago from coal to oil, mainly to get the upper hand on potential geopolitical foes, panic and paranoia ensued as it was believed by many political leaders and entrepreneurs the world would run out of oil. And therefore, when the next war came along, the country with the least oil would be defeated. 

This led promoters, entrepreneurs, politicians and geologists to push for oil exploration worldwide, outside their own country, often travelling to nations where they didn’t understand the culture. This led to many unfortunate geopolitical incidents, deaths, wealth disparity, and corruption. But back then, it was believed the ends justified the means. They thought they could not secure enough black gold for their nation’s survival; naturally, finding large oil deposits would also make them rich.

Eventually, politicians would clash with entrepreneurs and investors as the oil exploration and discovery race matured, with its many senseless dramas making media headlines across the globe.

The world had/has enough oil to meet our demands… and then some. 

Although wars have been fought for decades over the commodity, we’re switching things up again.

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Today’s Scarcity Mindset Is Warranted

As we now ‘switch’ energy sources once again and electrify our vehicles and ‘green’ our industries, the political elite and many entrepreneurs are racing to secure copper supply (as well as critical minerals such as lithium and cobalt). It is believed by many that, once again, we won’t have enough copper to go around. And, without significant copper supply, your country will be left behind in today’s geopolitical environment.

Mind you, unlike oil a hundred years ago, I think it’s warranted to be worried about copper scarcity, at least for the next 10 years or so. From my vantage point, it will indeed be limited in supply, and many countries will have to scrap, or at least delay, some of their green energy initiatives. When they delay these massive infrastructure programs, they will be scorned for not making enough effort to clean up their environment and help in the global climate change battle… this will have negative economic consequences for such countries.

In my latest pod, Alex and I discuss why the world won’t be able to support the green transition (at least not this decade) and what this could mean for our respective economies, copper supply shortfalls, and its future price appreciation potential.

Stay hungry,

Aaron