by Gary Alexander

January 19, 2022

When lonely feelings chill the meadows of your mind,
Just think: If Winter comes, can Spring be far behind?
Beneath the deepest snows, the secret of a rose
Is merely that it knows, You Must Believe in Spring

–by Alan and Marilyn Bergman (1967)

Three of the greatest lyric songwriters of the late 20th century died in the last two months, first the Broadway genius Stephen Sondheim and jazz composer Dave Frishberg in late November, and then last week (January 8), Marilyn Bergman, half of the songwriting couple, married since 1958, died at age 93.

The Bergmans’ most profound poetry came in conjunction with French film composer, Michel Legrand, who died three years ago while I was on a Jazz Cruise in the Caribbean, where a young pianist honored him with a 10-minute medley of four or five of the songs Legrand wrote with the Bergmans: “Windmills of Your Mind” (from The Thomas Crown Affair in 1968), “What Are You Doing the Rest of Your Life?” (from Happy Endings, 1969), “How Do You Keep the Music Playing?” (from Best Friends, 1982), and “Papa, Can You Hear Me?” (from Yentl, 1983), and then the song that launched their partnership: “You Must Believe in Spring,” from a 1967 French comedy translated as The Young Ladies of Rochefort.

That tune ends with this profound statement – which applies to far more than the weather:

In a world of snow, of things that come and go,
Where what you think you know, you can’t be certain of…
You Must Believe in Spring… and love

Whatever we “think we know,” we seem to forget that winter comes each year. Last February 10-27, Texas came to a halt over an unseasonably cold stretch that lasted 17 days and stretched green energy resources beyond their ability to meet the needs of the state, and now, a full year into the Green Dream Team’s plans for us, we have energy prices up 60% or more, threatening to freeze some poor families, nd whose fault is it? It must be those greedy oil companies! It can’t possibly be misguided politicians.

With yet another killer storm assaulting the East Coast this week, we seem to act surprised when major Interstate highways are locked in place overnight, or store shelves are barren, or families can’t afford heat. Yet this is the week we hold Inaugurations or stage NFL playoffs in ice rinks like Green Bay!

The latest example of misplaced outrage is a letter from 41 Congress Members (including former Presidential candidates, Senators Elizabeth Warren and Bernie Sanders) to the Federal Energy Regulatory Commission, calling for price controls, asking them to use their “power to influence retail rates for natural gas and electricity” to limit “the effect that anticipated increases in heating and energy costs will have on our constituents this winter.” They accused energy firms of “market manipulation” and “profiteering.”

The Energy Information Administration (EIA) countered with common-sense Economics 101: “The main reason wholesale prices of natural gas, crude oil, and petroleum products have risen is that fuel demand has increased from recent lows faster than production.” And why is that? The Biden Administration made it a crusade to phase out fossil fuels by canceling the Atlantic Coast Pipeline and the PennEast Pipeline, so that getting gas to New England (Ms. Warren’s Massachusetts and Sanders’ Vermont) now involves Russian tankers entering Boston harbor, a greater political risk and costlier route than pipeline transport.

The Cost After One Year of Biden’s Energy Policies

This week marks the one-year anniversary of the Inauguration of President Joe Biden. Where do we stand on energy costs, due to changes in supply and demand? At the end of 2021, the use of petroleum products hit a new record high for winter-time use (see chart, below), by volume, and more so in price terms. The red line (2021, below) even exceeded the December 2019 volume usage, before COVID struck the world.

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

In Europe, where the Green Revolution is even more radicalized, energy costs have risen far faster than here. The average price of a Brent crude last quarter was up almost 100% from its Q4-2020 average. In addition, British gas prices rose 5-fold from January to October and European gas prices rose 7-fold:

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Here are some U.S. energy price increases in the last 52 weeks – since Mr. Biden was sworn in:

Here are some notes for each energy source, how they are measured, and why they have risen so fast.

  • Heating Oil trades at $2.67 per gallon, almost doubling in a year, reaching its highest price since 2014. Storage levels have been falling the last two months. Inventories fell by 515,000 barrels in the two weeks ending January 7. Also, OPEC exports are below their allowed increases in some nations.
  • WTI Crude Oil trades around $84 per barrel, another seven-year high, up from a theoretical price below zero in April 2020. Due to a recent rise in demand, analysts see crude oil prices rising higher.
  • Gasoline futures are $2.43 per gallon, up 69% from Inauguration Day but a bit below the $2.51 peak last October. Part of that is due to inventories rising by 7.961 million barrels in early January.
  • Natural gas futures trade at around $4.25 per million British thermal units (BTUs), which is well below the peak of $6.20 last October, but there is a huge global price anomaly here, as natural gas prices overseas are up to seven times above U.S. prices as Europe and Asia urgently seek supplies.

It’s also important to remember that there are no totally “clean” sources of energy. Fossil fuels were once viewed as the clean solution to killing whales for their oil, or harnessing manure-producing horses to pull our carriages through urban streets. Now, with the advent of electric vehicles (EVs), the sad truth is that the mining of cobalt and lithium for batteries can also damage the environment and raise the cost of EVs.

  • Lithium comes from China, where prices rose to 327,500 yuan ($51,575) per metric ton as of mid-January 2022, up over 500% in the last year, mostly due to demand from battery makers. According to Benchmark Mineral Intelligence, battery manufacturer’s lithium carbonate stocks are between low and non-existent. China cannot keep up with rising orders, as producers can’t fulfill all current orders.
  • Cobalt futures traded above $70,000 per metric ton, near the 3-1/2-year high of $71,750 from the beginning of July 2018. Cobalt is used in the production of lithium-ion batteries in electric vehicles.

My investment conclusion from this brief survey is that fossil fuels will return to a more balanced place in a common-sense energy policy – and portfolio. I am looking at specific energy plays which could make their presence known once America returns to a more sensible energy policy after the mid-term elections.


If you’re so inclined, here’s the timeless Tony Bennett singing You Must Believe in Spring with pianist Bill Eva.

All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.

Please see important disclosures below.

Also In This Issue

Global Mail by Ivan Martchev
So Far 2022 Looks Like 2018

Sector Spotlight by Jason Bodner
When the Fed Speaks, Everyone Listens – Way Too Much

View Full Archive
Read Past Issues Here

About The Author

Gary Alexander
SENIOR EDITOR

Gary Alexander has been Senior Writer at Navellier since 2009.  He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks.  For the previous 20 years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.

Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s.  He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division.  Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander

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