President Obama Announces an “All-out, All of the Above Strategy” for Energy Security
President Obama made the case Tuesday night for producing more of the United States’ energy supplies domestically in pursuing an “all-of-the-above” approach to further bolster the economy and national security.
President Obama used his State of the Union address last night to again call on Congress to deliver a bill for a Clean Energy Standard. This happens to be the case in the many developed countries around the world. He stated a more effective energy policy that ends subsidies to the oil industry, bolsters US energy security, and steps up support for clean and renewable energy would create thousands of American jobs.
He set out the case for government intervention in the energy market, arguing that federal support for emerging clean energy technologies is helping to create jobs and enhance energy securities. In establishing energy reforms as one of the central themes of his address, Obama argued the US should seek “a future where we’re in control of our own energy, and our security and prosperity aren’t so tied to unstable parts of the world”. He was also clear in that the U.S. needs an “all-out, all-of-the-above strategy that develops every available source of American energy”.
His reference; “Some technologies don’t pan out; some companies fail,” was a thinly veiled reference to solar company Solyndra, which collapsed after receiving government support. “But I will not walk away from the promise of clean energy … I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here.” He urged Congress to free up funds to support clean energy by ending all subsidies to the oil industry. “We’ve subsidised oil companies for a century – that’s long enough,” Obama said to applause from Congress. “It’s time to end the taxpayer giveaways to an industry that rarely has been more profitable, and double-down on a clean energy industry that never has been more promising. Pass clean energy tax credits. Create these jobs.”
This speech was by far the most supportive from any President on renewable and clean energy. Yet there will be some on the progressive side that will argue, he is allowing for more oil-drilling. And of course there will be those that say ‘phooey’ to anything that involves clean energy.
What many on both sides of the spectrum need to understand is that in order to move forward in this world of increasing new technologies is, as a country need to take advantage of everything we have in order to be atop the world economically as well as in our own energy security.
China as we know is making major advancements into renewable clean energy. They are also the largest emitter of CO2. And more importantly in 2009, China’s president stated; ‘the western countries built themselves up on the back of oil, and while we are firmly committed to advancing our use and production of renewable and clean energy, we see no reason why we should not be able to industrialize ourselves on oil as did the West.’
China is using an ‘all of the above’ approach and so should we if we are intent on winning the race to future energy security.
I commend President Obama for his commitment to the approach, “all of the above” when it comes to energy.
Investor/blogger Kevin Quon writes:
“The future must entail clean, renewable energy. Drilling for oil isn’t sustainable and is increasingly getting dangerous as companies move offshore. Natural gas prolongs the inevitable and requires significant infrastructure changes. Nuclear energy has always been a double-edged sword from both a political and environmental standpoint. Coal remains a cigarette in the mouth of the world. As a result, there are only a few alternatives, all of which have their advantages and their setbacks. Solar energy, Biofuels, Geothermal energy, Hydropower, and Wind energy stand as the known core alternatives to the hydrocarbon-based energy standard we have today.
Clean Technologies: wind, geothermal, solar and biofuels.
Investors of today may be disappointed by much of their choices when it comes to direct investment in sustainable energy. The most stable and profitable companies remain the conglomerates who derive a small portion of their profits from such sources. As for the direct players, nearly all have been victim to the latest struggles of their respective industries. Yet in each sector, there remain viable direct investments that prospective investors may wish to look into.
Solar Power
The solar industry has practically collapsed under the weight of falling subsidies and inventory dumping. The ongoing European Debt crisis casted a shadow of uncertainty in the largest market for solar. Yet renewed hope came in the form of Warren Buffett’s investment into two utility-scale solar projects supplied by First Solar (FSLR). Falling solar panel prices also bode well for consumers as widespread acceptance and increasing affordability have increased the industry’s demand and long-term future. First Solar remains one of the few viable investments in this sector, with its industry-leading margins that have kept the company profitable throughout the crisis.
Biofuels
The industry is trying to shake off its negative connotation to unsustainable ethanol in light of innovative and proven second generation technology. The struggle remains to be the ability to raise capital and public acceptance in order to bring online production capacity to work on a commercial scale. One of the bright shining lights in this industry remains Solazyme (SZYM), which utilizes algae-based technology to convert non-food sources into renewable oil equivalents, chemicals, food and even cosmetics. Out of companies that provide sustainable ethanol, investors may want to consider Cosan (CZZ), a Brazilian-based sugar company with leading ethanol production capacity and distribution capabilities. Especially as American ethanol subsidies have come to an end, Brazilian-based ethanol companies may continue to outshine their ethanol counterparts in America with access to cheaper input materials.
Geothermal Energy
Geothermal is practically non-existent from the public trading realm and is much smaller in size. Yet it also remains one of the more stable prospects. One of the most direct plays on the industry remains Ormat Technologies (ORA). The company was founded 1965 and remains the only vertically integrated provider of geothermal and recovered energy-based equipment.
Hydropower
Another stable industry, hydropower companies tend be utility companies governed by municipalities in light of the high capital expenditures necessary to build a dam. Brazil remains one of the greatest developers of hydropower with its vast river resources, abundant rains, and lack of alternatives when it comes to energy sources. Centrais Electricas Brasileiras (EBR), more commonly known as Electrobras, operates 29 hydroelectric plants throughout Brazil. The company remains diversified into thermal, coal and oil power generation units, however, and therefore is a far stretch from being a pure play on hydropower.
Wind Energy
The wind industry has been dominated by the Chinese market, which dethroned the United States in 2010 as the largest wind power installer. Yet publicly traded Chinese companies in America came under increased scrutiny in early 2011 that resulted in a lack of viable wind investments. The most viable investments may continue to be General Electric (GE) or Siemens (SI), neither of which are pure plays on the industry. American Superconductor Corp (AMSC) would have been a solid company to consider had the company not been victimized by China’s Sinovel through corporate espionage. One of the more direct plays to consider is China Ming Yang Power Group (MY), which IPO’d on the NYSE in 2010, and stands as the largest non-state owned wind turbine manufacturer in China. The company has encountered rising expenses and difficulties including weather that interrupted installations. Yet management has initiated a share repurchase program for $50 million, which is impressive for a company currently trading with a market capitalization of $359 million as of January 23, 2012.”
We need to support President Obama and anyone else who supports clean and renewable energy because, we cannot just stick our heads in the sand and think that the way of yesterday’s “oil only” objectives will be enough to compete in a world that is racing toward the “future of tomorrow” with new energy technologies.
