A new administration took office determined to change the economy’s direction with overhauled policies. The leader and key advisers huddled, drawing up their plans in relative secrecy. Once ready, they were unveiled with great fanfare, heralding a new dawn in economic stewardship.

Markets, caught by surprise without having had the opportunity to assess them via leaks, reacted with horror as the looming hit to GDP, unanticipated by the new administration or investors, was immediately reflected in prices.

This was how the new UK government under then-Prime Minister Liz Truss began in September 2022. In her case the UK gilt market was shocked by the scale of proposed borrowing. Yields rose. Sterling fell. The government’s unrealistic plans were widely criticized, including by many in her own Conservative party.

A tabloid famously wondered whether her time in office would outlast a lettuce and helpfully posted a photo of Truss next to one, continuously broadcast via a webcam. The lettuce visibly decayed, but her time as PM was shorter still at 49 days.

The UK parliamentary system can change its PM with a speed and brutality unmatched in the US. The British Conservative party has historically shown its leaders less loyalty than the US Republican party, and our political system doesn’t offer the same flexibility. If not, Thursday’s tariff-induced $3TN loss of equity market value would be the beginning of the end.

The exit ramp could be Congress withdrawing the emergency powers which President Trump has invoked that give him the ability to impose tariffs. We have no insight into how far markets must decline to induce such. The US Senate passed a resolution, but a veto-proof two thirds majority in both chambers will be required.

There’s a scale of equity market losses that will be sufficient, but we’re not there yet. Given the unpredictability with which tariffs have been used, the president’s current autonomy over their implementation will remain in Damoclesian fashion to limit any animal spirits to the upside.

To quote my friend and former head of bond trading, in the meantime, “Down’s a long way.”

The economy, financial markets and even the president will all be better served if Congress reasserts its authority in this area. Republicans may care to recall that after Liz Truss the UK Conservatives never regained their reputation for competent economic stewardship and suffered a thumping electoral defeat to the Labour Party last year.

While investors endure more tariff trauma with its associated equity market volatility, it’s worth remembering that demand for US natural gas has historically been virtually impervious to fluctuations in GDP growth. We think this will continue, supporting volume throughput across the related infrastructure.

Since the shale revolution released enormous amounts of domestic gas, consumption has grown. The 2008 financial crisis was barely a blip. Even during the 2020 pandemic when crude oil prices briefly went negative because of lockdowns, natural gas volumes fell 1.7% but quickly recovered. Within a couple of years they were 3.7% higher. Over the past decade consumption has grown at a 2.2% compounded annual rate.

The US Energy Information Administration expects production to grow at 2% this year and next.

It’s not hard to see why.

Coal to gas switching has resulted in cheaper, cleaner power over the past fifteen years. Pennsylvania’s Homer City coal burning power plant is being converted into the natural gas Homer City Energy Campus. It’ll produce 4.5 GW, enough to power 2-3 million homes although local data centers will be the main users. That will require around 0.8 Billion Cubic Feet per Day (BCF/D) of natural gas, around 0.7% of US output. When operational in 2027 it’ll be the biggest natural gas power plant in the country.

Demand from data centers and LNG exports will continue to underpin natural gas demand growth.

In one bright spot a few days prior to Liberation Day, Vietnam announced it was cutting its import tax on LNG from 5% to 2%. The White House is assuming that our trade partners will generally not engage in rounds of reciprocal tariff hikes. We need more examples like this.

I was in London last week where I reconnected with several people from high school that I had seen once or not at all in the ensuing 45 years. We had much to catch up on. Satisfyingly, people whose company I enjoyed as a teenager remain that way today. I’ve never regretted emigrating to the US but always enjoy returning to where I grew up.

We have two have funds that seek to profit from this environment:

Energy Mutual Fund

Energy ETF

Important Disclosures

The information provided is for informational purposes only and investors should determine for themselves whether a particular service, security or product is suitable for their investment needs. The information contained herein is not complete, may not be current, is subject to change, and is subject to, and qualified in its entirety by, the more complete disclosures, risk factors and other terms that are contained in the disclosure, prospectus, and offering. Certain information herein has been obtained from third party sources and, although believed to be reliable, has not been independently verified and its accuracy or completeness cannot be guaranteed. No representation is made with respect to the accuracy,  completeness or timeliness of this information. Nothing provided on this site constitutes tax advice. Individuals should seek the advice of their own tax advisor for specific information regarding tax consequences of investments.  Investments in securities entail risk and are not suitable for all investors. This site is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.

References to indexes and benchmarks are hypothetical illustrations of aggregate returns and do not reflect the performance of any actual investment. Investors cannot invest in an index and do not reflect the deduction of the advisor’s fees or other trading expenses. There can be no assurance that current investments will be profitable. Actual realized returns will depend on, among other factors, the value of assets and market conditions at the time of disposition, any related transaction costs, and the timing of the purchase. Indexes and benchmarks may not directly correlate or only partially relate to portfolios managed by SL Advisors as they have different underlying investments and may use different strategies or have different objectives than portfolios managed by SL Advisors (e.g. The Alerian index is a group MLP securities in the oil and gas industries. Portfolios may not include the same investments that are included in the Alerian Index. The S & P Index does not directly relate to investment strategies managed by SL Advisers.)

This site may contain forward-looking statements relating to the objectives, opportunities, and the future performance of the U.S. market generally. Forward-looking statements may be identified by the use of such words as; “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of any particular investment strategy. All are subject to various factors, including, but not limited to general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors affecting a portfolio’s operations that could cause actual results to differ materially from projected results. Such statements are forward-looking in nature and involves a number of known and unknown risks, uncertainties and other factors, and accordingly, actual results may differ materially from those reflected or contemplated in such forward-looking statements. Prospective investors are cautioned not to place undue reliance on any forward-looking statements or examples. None of SL Advisors LLC or any of its affiliates or principals nor any other individual or entity assumes any obligation to update any forward-looking statements as a result of new information, subsequent events or any other circumstances. All statements made herein speak only as of the date that they were made. r

Certain hyperlinks or referenced websites on the Site, if any, are for your convenience and forward you to third parties’ websites, which generally are recognized by their top level domain name. Any descriptions of, references to, or links to other products, publications or services does not constitute an endorsement, authorization, sponsorship by or affiliation with SL Advisors LLC with respect to any linked site or its sponsor, unless expressly stated by SL Advisors LLC. Any such information, products or sites have not necessarily been reviewed by SL Advisors LLC and are provided or maintained by third parties over whom SL Advisors LLC exercise no control. SL Advisors LLC expressly disclaim any responsibility for the content, the accuracy of the information, and/or quality of products or services provided by or advertised on these third-party sites.

All investment strategies have the potential for profit or loss. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be suitable or profitable for a client’s investment portfolio.

Past performance of the American Energy Independence Index is not indicative of future returns.