Monday, May 19, 2008

Continued Resiliency/A Move to Alternative Energy

The market continues to handle higher oil prices better than expected. But the consumer appears to be nearing a tipping point with gasoline prices. This will bring more and more talk of alternative fuels as politicians will be pandering for votes this fall.

The video I posted last week with T Boone Pickens discussed some of what might work for our energy policy. The key point Boone talked about is getting away from imported oil. Much of this imported oil goes to power our vehicles. He's a proponent of using Natural Gas to power our vehicles. Its clean, reliable, and we have quite a bit of it in the US. Natural gas currently provides about 1/4 of our electricity generation and that must be powered in a different way. He said thats where wind and solar come in. He is currently investing billions of dollars into wind projects in Texas.

How do we invest in this trend? Boone founded Clean Energy Fuels (CLNE). It provides natural gas for vehicle fleets. Right now natural gas is powering buses, taxis, garbage trucks, etc, and it is a growing market. The stock is still pretty speculative, but if you believe in the trend, then its a good investment.

I also like FPL energy (FPL). They are an electric utility based in Florida. They are the largest supplier of wind power, but also use nuclear, natural gas, and others. The key here is nuclear. We will probably see increased interest in nuclear power in the coming years as oil prices have gone up, and coal plants could be scrutinized for carbon emissions. Here's a nice article from the Wall Street Journal about that subject.

In the near term, its good for us to think about upping oil production to help gas prices, but this country is moving in a new direction, especially if the leadership in Washington sees a major change.

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