What Does "Drill Baby Drill" Mean For Real Estate?

The Real Estate Espresso Podcast

What Does “Drill Baby Drill” Mean For Real Estate?

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What Does “Drill Baby Drill” Mean For Real Estate?

Welcome to the Real Estate Espresso Podcast, your morning shot of what’s new in the world of real estate investing. I’m your host, Victor Menasce. On today’s show, we’re talking about the implications of ‘Drill baby drill’ on real estate across the US.

The world is facing the conflict between economic growth and burning fossil fuels, with the consequent impact on pollution in the environment. Large consumers of energy on a per capita basis are the US and Canada. The North American lifestyle is characterized by heavy energy consumption due to factors such as large houses, multiple cars, inefficient construction methods, large distances between home and work, low population density, and relatively low energy costs.

The World Bank classifies countries with a national income per capita between $1026 per person per year and $12,375 per person per year as lower middle and upper middle income countries. This number is very low compared to what we are accustomed to in North America.

There’s an abundance of energy in the U.S., courtesy of the fraction revolution. Much of the crude oil produced in the U.S. is exported. Meanwhile, the country imports heavy oil which is combined with the light oil to produce the range of products that a refinery separates from crude oil.

Presently, the U.S. exports about 10% of its natural gas production in the form of LNG, the maximum capacity for liquefaction in the country today. This cheap natural gas supply has prompted our company to invest in several projects in Lake Charles, Louisiana, over the last seven years.

However, the last five years have been challenging in the RV park business in Lake Charles, Louisiana, with hurdles like hurricanes, a pandemic, and roadblocks from the Biden administration hindering the building of additional LNG infrastructure.

The future seems to be heading towards a surge in investment in petrochemical plants using natural gas as their primary fuel source and a significant expansion in the country’s natural gas liquefaction capacity. Consequently, real estate along the Gulf Coast, in the shadow of these developments, is likely to benefit significantly.

Ladies and gentlemen, as you ponder on this, I wish you a fantastic rest of your day.

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