3 Trillion Reasons To Keep This Energy Stock In Your Portfolio

There are three trillion reasons to stay bullish on natural gas in 2025. 

If ever there was a wake-up call for Europe that a catastrophic energy crisis loomed on the horizon, it was the catastrophic energy crisis that took place last week in Spain. The world learned in a single day just how at-risk Spain’s power grid had become through its heavy reliance on renewable energy. 

Granted, it’s going to take months before Red Eléctrica releases its official report on the cause, but at this point it’s simply a matter of time before they accept the truth that the EU’s overly aggressive net zero policies were to blame. 

On a personal note, I think we’re all going to be wholly unsurprised by the findings.  

But there’s one major problem here — Spain isn’t alone. 

You see, Spain isn’t the only EU member with a vulnerable power grid and insufficient storage capacity. 

Even more frightening is that upgrading Europe’s power grid is going to come with a massive price tag. The IEA has forecasted that the EU will have to pour $600 billion PER YEAR to improve its grid — roughly $3 trillion in total! 

For the record, this is more than double what they’re currently spending. The European Commission believes that up to $2.3 trillion will need to be invested through 2050 to upgrade its grid. 

Is it enough to finally force Europe to accept the reality of their energy insecurity?

Maybe, and we’re already seeing signs that some members are starting to crack. 

Today, there’s no better case study into the absurdity of Europe’s inane pace to grow renewables at any cost than Germany. Germany has pushed harder than anyone else to boost its wind and solar capacity — all it cost them was the destruction of more traditional and reliable sources of power. 

Some of my veteran readers might recall how Germany’s strong push toward developing wind power backfired last year after the dreaded Dunkelflaute came back to bite them. 

This problem has extended into 2025. The country’s solar power generation is at its lowest point in a decade, and wind generation has been down by roughly 30% over the last four months. 

Mind you, it's important to understand that the problem isn’t developing clean, renewable sources of energy; nobody should think that’s a bad idea. However, doing so at such an accelerated pace while closing all your nuclear and coal plants is an incredibly dangerous move. 

The good news is that Germany is finally waking up to this fact. 

Last week, Friedrich Merz became Germany’s new chancellor after a second round of voting took place. The reason this is good news is because he said that they’re going to slow the country’s renewable energy expansion to lower electricity costs. 

In order to help stabilize the grid, the Chancellor’s goals include adding approximately 20 GW of natural gas generation. 

You and I know there’s only one way he’ll be able to accomplish this feat: U.S. LNG. The United States was by far the largest LNG supplier to EU members last year, providing nearly half of their imports; in Germany alone, the U.S. supplied 91% of its total LNG imports. 

In fact, imports of LNG across Europe are projected to rise 25% this year, and we know that Germany is actively building LNG import terminals to cut its reliance on Russian natural gas — perhaps they HAVE learned their lesson after all!

Building those import terminals is going to take time, which offers an interesting opportunity for us. While construction takes place, countries like Germany are adding more FSRUs into the mix. These Floating Storage Regasification Units are essentially vessels that can transport, store, and convert LNG back into natural gas. 

This is why energy stocks like Excelerate Energy (NYSE: EE) are at the top of our radar. Excelerate not only has an FSRU off the coast of Germany, its fleet is strategically located throughout the world to take advantage of growing LNG exports.

Of course, the EU energy crisis isn’t the only bullish catalyst for LNG exporters in 2025. Later this week, we’ll take a look at why other countries will be highly motivated to follow suit.