by Tom Gentile
In July 2008, oil hit an all-time high of $147.27.
And since then, it's been in a choppy 12-year downtrend.
Then after hitting an all-time low this past April, it's currently sitting at $42 a barrel.
While you shouldn't completely dump oil stocks, as savvy traders we've found a new way to profit on energy by shifting our thinking…
With all the rhetoric about governing for all Americans, sometimes politics is just about picking winners and losers.
Take the ongoing soap opera of who in the energy sector is likely to gain or lose benefits from the current congressional tax plan.
While retaining at least $15 billion in tax subsidies for fossil fuel producers (coal, crude oil, natural gas), the House of Representatives plan would slash support for both renewables and the electric car industry.
The primary moves criticized by both the renewable community and environmentalists are the proposed changes to the renewable electricity production tax credit (PTC).
This credit provides benefits to generation of wind, solar, geothermal, and other types of renewable energy.
Now, the PTC is already scheduled to be phased out in three years (by 2020).
Both wind and solar energy producers have been factoring this into forward guidance as more cost savings are introduced into the renewable sector.
But the House tax plan would accelerate the cut by more than a third. An analysis just completed by an industry player concludes the proposed change could reduce the credit's value by up to 45%.
The renewables industry is quick to point out that the PTC has created hundreds of thousands of jobs nationwide, spawned significant ancillary economic investment, and resulted in the United States becoming a major center for wind and solar power development.
But apparently that's not enough, and it's now on the chopping block – as far as the House is concerned.
The Senate, however, may be planning something else.
Here's who the winners and losers will be...
The June 1, 2017, announcement that the U.S. government intends to withdraw from the 2015 Paris Climate Agreement barely budged energy stocks, coming as it did after five months of dismantling environmental regulation.
Outside the markets, however, the announcement was greeted with a firestorm of international media coverage, condemnation and support, and cheering and hand-wringing from every corner.
Now, the withdrawal may not have much immediate effect. As I said, the markets took it in stride, and it will take at least four years – longer than Trump has left in his first term of office – for the United States to exit the agreement.
But this reshuffling of priorities does mean that America is giving up a leadership position in the absolute fastest-growing, most potentially lucrative segments of the energy sector…
I mean wind and solar, of course.
