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By: Doug Fogel — April 14, 2020

Our Energy Grid Is Under Attack - Part 1

It was a warm October morning in 2019.

 I was headed out for my daily caffeine fix, and as I drove I sensed something weird with the sky.

There was a strange, giant grey cloud on the horizon. At first I thought it was a thunderhead.

 Then it hit me – that wasn’t a cloud.

 It was a huge plume of smoke to the north.

Wildfire!

As I live in Northern California, we get wildfires every year… especially in the fall, when the dreaded “Diablo” winds blow.

This new wildfire was clearly too close for comfort, so when I got home I went online and saw that it was about 30 miles away or so and headed south…

Right towards us.

The fire had started at an area known as “The Geysers,” which features a field of geysers spread out over remote, mountainous terrain. 

And thanks to the Diablo winds from the previous night, it had exploded in size (on its way to destroying 77,758 acres).

On this morning, those winds had subsided, but were due to resume their ferocity in a couple of days.

The following morning dawned hazy – think Beijing – and you could now smell the smoke.

The fire was obviously advancing toward us, even though there hadn’t been strong winds for the past 36 hours or so.

But because of the high wind warnings, there were now rumors that a mandatory evacuation was likely.

So I packed up some clothes and my laptop just in case.

Then I called a friend in Petaluma some 35 miles to the south of Healdsburg, where I live, to see if I could stay there if I had to evacuate.

Thankfully the answer was yes, as the next morning my cell phone started screeching that it was time to evacuate… NOW.

Trying not to panic, I loaded up my car and found myself trapped in a sluggish line of traffic inching its way south. 

Three hours later, I made it to my friend’s house (a trip that usually takes 30 minutes).

The next few days were nerve wracking, as the winds did indeed turn hellacious and threatened area cities and towns.

I wondered if I’d have a home to return to…

Fortunately, heroic firefighters and first-responders saved Healdsburg and all the other surrounding towns from the fire – which is now known as the Kincaid Fire.

Four days after being evacuated were cleared to return home, but when I got there I found we had no electricity or gas, as PG&E (Pacific Gas and Electric, our power company) had pulled the plug on it.

Such power shutoffs are the new norm for much of California during fire season (roughly May through October), as it’s easily the most effective way for PG&E to reduce the odds of wildfires caused by high winds.

Intermittent power shutoffs might also become the new norm for much of the rest of the US.

Deadlier wildfires in California and the Western US… stronger hurricanes in Florida, the Eastern Seaboard, and the Gulf states…  more destructive tornadoes in the Midwest…

Bottom line is Mother Nature is a huge threat to the security of what we've all come to consider "on-demand" power.

But it’s far from the only threat.

There are also Russian and Chinese hackers to worry about. For years they've been breaking into the computer systems that control our energy grids.

Terrorists are always trying to do that as well.

In fact, it's a rare day that utility companies don't have to thwart one or more attempts to hack into their computer systems.

And of course the political instability of several energy producing countries is also a threat, as is the manipulation of energy supplies (as evidenced by the recent OPEC spat between Russia and Saudi Arabia).

The bottom line is threats to our energy grid are serious, and growing.

Fortunately, there’s one bright spot to the increasing threats to on-demand power – they’re opening up outstanding profit opportunities for investors.

One consideration for playing this space is to invest in businesses working to ensure a high level of power availability.

Another is to invest in companies developing technologies that help detect and combat cyber-attacks on our grids.

Right now I’m researching these kinds of opportunities in energy security.

I'm looking to have a concrete investment idea for you next week.

Until then, stay safe in every way.

I'll leave the light on for you,

Doug Fogel

Editor, True Market Insiders

 

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