Postcards: The Real "Threat" to Democracy

The lawyers make the laws. The lawyers break the laws. And the lawyers sue to prevent the laws from enabling our energy transition. This makes no sense. Fix it. ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more You are a free subscriber to Postcards from the Florida Republic. To upgrade to paid and receive the daily Republic Risk Letter, [subscribe here](. --------------------------------------------------------------- [Postcards: The Real "Threat" to Democracy]( The lawyers make the laws. The lawyers break the laws. And the lawyers sue to prevent the laws from enabling our energy transition. This makes no sense. Fix it. [Garrett {NAME}]( Feb 15   [READ IN APP](   Market Update: Another day, another rally. Liquidity is strong. Markets like to see positive action on the energy front. It’s a reminder never to be short unless these readings go negative.     And if you do get short… keep the stops tight.  Dear Fellow Expat:     The 2008 GOP presidential campaign slogan was “Drill, Baby Drill.”    Today, we need to chant “Mine, Baby, Mine.” America needs rare earth elements, copper, lithium, and other critical minerals to achieve its “Green Dream.”  We are way behind China on this, and we can’t accomplish all of our goals without Russia’s help. [But here we are… in a “Green Malaise](   Instead, we get long-winded rants about “threats to democracy” ahead of October. I’m sorry if you feel that someone else winning threatens democracy. I don’t have the time or the energy to engage in “whataboutism.” I like to enjoy my life. If this is your issue, maybe you should do what I do in these times… and have a Long Drink. It’s great for the knees and better for the soul. [Plus, you’ll forget about what ails you](. Besides, in these caterwauls, there’s not even a subtle nod to the increasing grip of the regulatory state, which operates without Congressional oversight.  That’s by definition… Undemocratic. The entire green movement is an exercise in “dirigisme.” It also complements other Republic Trends of the Decade in Digitalization and Decarbonization. If that’s where we’re heading, I’m long all three. I’m not going to fight the trend. I’ll profit and lobby against the regulatory grip once I’ve made my fortune.    I’m focused on how to make money and less on the idiots at the helm. I wondered today what would happen after one of the most important announcements in the history of the United States mining sector. It came just a few days ago, but we were too worried about the ages of our presidential hopefuls. Did you notice? Do you know the question that matters? It’s simple. Will we unleash American energy?    No… [Upgrade to paid]( Here Come The Lawyers Last week, American Rare Earths announced that it found 64% more rare earth minerals than expected at its Wyoming mine locations. Chatter suggests we may have discovered more rare earth metals - critical ingredients for everything from phones and EVs in Wyoming - than all of what China has. [We could become]( leader overnight.]( would be MASSIVE to the government mandates for green energy… it could affect the onshore manufacturing of smartphones. It could propel GDP in a positive way (FINALLY without debt). “This exceeded our wildest dreams,” CEO Donald Swartz told Cowboy State Daily.  Oh… shit… hold on. I got too excited. Wake up, cowboy. We’re not over the finish line. There are two problems…     Lawyers… and their activist collusion with lawmakers.     If advocacy groups get their way… barely any of these metals will ever get out of the ground. If we're serious about a green transition, the “Sue and Settle” process must end. There’s just one problem: There’s too much money in it… and too much power.    [Upgrade to paid]( Drill, Fill, Kill    Lawyers. Always lawyers.     If these environmental lawyers get their way… we’re not achieving anything.  It’s a constant problem.     [I’ve written about the challenge in the Permian Basin.]( An environmental group under investigation is suing to stop oil and gas transportation over a lizard. [Along the Nevada-Oregon border,]( groups are suing to stop lithium production. The problem is that the government supports specific projects and doesn’t support others. This raises questions about policy consistency.     At its core, both government agencies use a long-term strategy that undermines our natural resources production. The government agencies settle with environmental lawyers. Then, they pass rules without Congress to appease the lawsuits.     This bastardization of democracy is called “Sue and Settle.”    A cartoon alligator being sued for mining lithium by a long line of lawyers (Dall E) This is a legal practice. It enables different groups to sue the government over [Insert your own endangered animal/water issue/climate change/air condition/smell]. The government accepts a deal. Then, the government agrees with the various groups’ recommendations as legal ideas for addressing the issue. Then, they accept the recommendations as law.    No Congress is involved. Court cases - which are decided ahead of time - lead to public policy changes. They regularly end up in favor of less production of raw materials. The practice of "sue and settle' effectively bypasses the established legislative authority of Congress. Take a guess: who was president when this got out of hand? It instead substitutes “democracy” with a behind-the-scenes agreement between well-monied advocacy groups and governmental bodies. And as Congress is investigating - [it’s hard to know where the money comes from](   This method undermines the democratic process. [Tom Pyle at the American Energy Alliance]( is rarely incorrect. He said in April 2021: “The swamp has been refilled, and this kind of secretive effort – only revealed via lawsuit – demonstrates the worst elements of Washington DC. Unelected and unaccountable bureaucrats are again cycling through the revolving door of government and special interest groups to circumvent the people's will all in the name of greater government control.” For anyone reading this and shaking their head… prove him wrong. We end up with new policies without legislative approval. That’s how this works. And it’s not just energy that is vulnerable here. From farming and pharmaceuticals to defense and beyond, every industry is safe from these backdoor tactics that lack direct oversight from elected officials.  [I pointed this out last July.]( “The Center for Biological Diversity routinely files lawsuits to stop the production of critical minerals; Navy and Air Force training; building and expanding military bases; and most recently trying to stop our space and rocket program by suing the FAA over SpaceX.” “Democracy!!!” they cry. Recently, a Utah group sued to prevent the launch of a Potash mine in the state. This is comical because Potash doesn’t create the carbon emissions or threat to water that other fertilizers do. If you need evidence that this is not a severe movement - but one grounded in economic malaise and legal malpractice, here](. This process eliminates the constitutional requirement for policy creation through the legislative branch. You know Congress. “But Democracy!!!!” But more importantly, states have sovereignty over critical issues related to their wealth. This lack of transparency and accountability renders the approach fundamentally undemocratic. Full stop. Let’s stop listening to people babble about Democracy. If we look back at the significant cases of suing and settling over the decade… it’s not just one or two of these things. Here’s a docket of Sue and Settle investigated by Congress that is [193 pages long.]( Scott and I did a quick ChatGPT search, and there are a number that should make you shake your head. This is what ChatGPT kicked out in about 14 seconds.    - “Western Watersheds Project v. Schneider: Environmental advocacy organizations took legal action against the Trump administration's decision to lessen habitat protections for the sage grouse, a bird species of the American West. The lawsuit argued that the administration's rollbacks were made without adequate consideration of scientific data and conservation requirements necessary to maintain the sage grouse population.    - Center for Biological Diversity v. Kempthorne: The Center for Biological Diversity initiated a case against the U.S. Department of the Interior, under Secretary Dirk Kempthorne, to advocate for stronger protections for polar bears faced with climate change threats, notably the loss of Arctic ice habitats. The lawsuit aimed to secure comprehensive protections for polar bears under the Endangered Species Act, tackling the broader environmental issues contributing to climate change. [P.S. Polar bear populations are rising, not falling] - Natural Resources Defense Council (NRDC) v. EPA: The NRDC filed a lawsuit against the EPA's endorsement of specific pesticides due to potential environmental and public health hazards. This legal action urged the EPA to undertake detailed risk assessments of these substances. They did… and now the cost of farming is rising. - Environmental Integrity Project v. EPA: Environmental groups sued the EPA, targeting the regulatory standards for coal ash disposal. The groups argued that existing regulations were insufficient to safeguard public health and the environment from the hazards of coal ash, a byproduct of coal-fired power generation. The legal action led to a 2014 settlement agreement in which the EPA committed to updating and strengthening its coal ash handling and storage rules.  - Standing Rock Sioux Tribe v. Army Corps of Engineers: The legal dispute involving the Standing Rock Sioux Tribe and the Army Corps of Engineers centers on approving and constructing the Dakota Access Pipeline. At the heart of the case are concerns raised by the tribe regarding potential threats to their ancestral lands, water sources, and cultural sites posed by the pipeline's route.     - Roadless Area Defense v. Johanns: Conservationists opposed the Forest Service's development rule that permitted development activities in roadless areas within national forests. The conservationists' challenge succeeded, leading to the 2009 reinstatement of protections restricting road construction and logging in these untouched forest areas. “    These cases flow like the river from lawyers. But remember… it’s all about democracy. This is a method for the EPA to enact laws that no one voted for… while appeasing the people who rotate through the revolving door with them.   “Democracy! Neal… Democracy!!!”  They’re frauds. That’s Not All Of course… don’t forget self-dealing. Remember that many policy decisions come down to money. As you likely know, natural gas prices have plunged after the Biden Administration froze natural gas export plans for many U.S. companies.     New climate Czar John Podesta - who replaced John Kerry - heavily influenced the recent decision to freeze these exports. What reasons could there be?    Well, I always follow Occam’s Razor: Money.    What should surprise no one is that Podesta’s brother Tony is a powerful Washington lobbyist and has represented countless foreign companies in the global LNG industry.   His previous clients include LNG group Golden Pass, co-owned by a Qatar-based company, and a Bulgarian company called Protos Energy.     Both companies would benefit from a shutdown in U.S. LNG exports.     Funny how that works, huh? [The influence peddling is off the charts here](   If there’s a dollar to be made from a foreign government, these people will take it.    America is not a serious nation. We don’t produce our resources because there’s lots of money in lawsuits and grifting donations to “save the planet.”     We will pay for this. But at least the people in D.C. get to pat themselves on the back.  Making Money  Okay... so after all this... how do we make money?  I’m not sure how exactly we’ll navigate America’s needs for rare earth metals in the future.  Will producers be sued like they were at Thacker Pass… and delay the production of things we need? Probably. But I do know how we’ll make money.   Despite all the worries about where the metals and minerals will originate...  We know know one thing.  The semiconductor and electrical component industry is about to make a killing.  We will focus on the switchboard companies… the semiconductor companies… the electrical component companies already accepting government money under this never-ending process of pumping money into the economy. There is more than $1 trillion here, and they’re already bragging about generating GDP by inhibiting normal oil and gas production. Behind Washington’s bright ideas are networks of components, active and passive devices, peripherals, connectors, and hardware, each playing a necessary role in connecting the world.   Semiconductors are the bedrock of modern electronics, powering the smart devices essential for a green future.   On top of that, scores of companies, from design houses to contract manufacturers and suppliers, contribute to the industry's ecosystem. Each component and player is necessary to the collective effort of achieving sustainability.  President Biden signed the $280 billion CHIPS Act into law to meet this growing demand, funding new projects to address this significant uptake. Currently, new factories are being constructed across the country:  - Intel in Arizona: $20 billion for advanced fabs.  - Micron in New York: A massive plant for memory chips.  - Samsung in Texas: $17 billion for a new fab producing advanced chips.  - TSMC in Arizona: $40 billion project for 3nm chips.  The market is beginning to recognize this. Over the last year, there have been substantial gains in AI and semiconductor foundries, such as Super Micro Computer (SMCI), up 250% year-to-date.  We've recently taken a position in Tower Semiconductor (TSEM), a value semiconductor foundry that meets all our criteria for a reversion trade. The stock has risen 11% in two weeks. We have a $40 target. Other opportunities in this space are looking attractive. We will have a report on the best tech opportunities for subscribers of the Republic Risk Letter shortly. Be sure to sign up.  [Upgrade to paid]( We have to follow the money while the people in D.C. get to pat themselves on the back.  So… let’s get our money back from them. We’ll have a report for you later this month. On top of that, we’ll be back to talk about the downstream part of the oil and gas sector tomorrow when we discuss names like Valero (VLO) and HF Sinclair (DINO).   Stay positive,     Garrett {NAME} Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. Under company rules, editors and writers cannot recommend their positions. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. 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