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Renewable Energy

Renewable Energy and Government Subsidies Go Hand in Hand (for Now)

By , Global Energy Strategist, Oil & Energy Investor • @KentMoors_OEI -

The Obama Administration is coming under fire for providing subsidies to renewable energy sources, such as solar, wind, and geothermal.

And not for the first time.

The latest tiff results from a $528 million loan to Solyndra LLC. Despite receiving federal funds, the private, California-based solar panel maker went belly up on Sept. 1, filed Chapter 11 bankruptcy protection, and laid off every one of its more than 1,100 workers.

U.S. Secretary of Energy Steven Chu has gotten more political flak from the loan program in recent months. Political opponents claim it's an example of government waste in the making.

Since 2009, Washington has doled out some $16 billion in 28 loans. The Energy Department says this loan money has resulted in 60,000 jobs.

However, with $6 billion being committed in only the last few weeks (to beat a Sept. 30 budgetary deadline), disasters like Solyndra are something best avoided when Chu speaks on renewables.

Just as predictably, they are likely to figure prominently in the rhetoric coming from the other side.

But the current debate that the Solyndra failure has prompted brings a broad question: Can renewable energy sources make it in the market without a significant push from the government?

Not initially.


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Money Morning Mailbag: Rising Global Energy Demand Is Providing Key Investor Opportunities

By , Associate Editor, Money Morning -

Energy companies reported robust third-quarter profits this week in another sign that rising global energy demand is something investors can't afford to ignore.

Exxon Mobil Corp. (NYSE: XOM) reported yesterday (Thursday) its third-quarter net income rose 55% from a year earlier to $7.35 billion, or $1.44 a share - the biggest jump in six years. Royal Dutch Shell PLC (NYSE ADR: RDS.A, RDS.B) reported its third-quarter profit rose 18% from the year before, noting it's in a "delivery window for new growth," and ConocoPhillips (NYSE: COP) said its third-quarter profit more than doubled.

"Global oil demand implications have continued to surprise to the upside," Barclays Plc (NYSE ADR: BCS) analysts wrote in an Oct. 20 note to clients.

Money Morning Chief Investment Strategist Keith Fitz-Gerald addressed the importance of energy industry investing earlier this week on a Fox Business Network appearance.

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Everything You Need to Know About Tomorrow's OPEC Meeting

By , Global Energy Strategist, Oil & Energy Investor • @KentMoors_OEI -

Crude dropped for the second straight day yesterday (Tuesday) after Saudi Arabia made it clear that the Organization of the Petroleum Exporting Countries (OPEC) will leave its production targets unchanged at its meeting tomorrow (Thursday). Crude oil for November delivery fell 54 cents a barrel - or 0.7% - to finish at $81.67 a barrel on the New York Mercantile Exchange yesterday. Even with yesterday's decline, oil prices are up 11% over the past 12 months.

Speaking in advance of tomorrow's OPEC meeting in Vienna, Saudi Oil Minister Ali al-Naimi said that prices between $70 and $80 a barrel are "ideal," and noted that the market is "very well-balanced" right now. In a related development, Sanford C. Bernstein & Co. LLC slashed its oil-price forecasts for both next year and 2012, and attributed the new viewpoint to big stockpiles.

But this only provides you with part of the picture. And it'll lead you to the wrong conclusions.

So here's the proverbial "rest of the story" - including everything you need to know about tomorrow's OPEC meeting.

For a better understanding of the workings of the global oil market, please read on...

Iraq's Energy Sector Is Moving Forward - With or Without the U.S.

By , Managing Editor, Money Morning -

Iraq on Wednesday broke the record - 207 days - for the time between a parliamentary election and the formation of a government. But while Iraq's government is at a standstill, the country's energy sector remains dynamic and U.S. companies can't afford to wait for the political climate to thaw before diving in.

Iraq is slowly retaking the shape of one of the world's most prolific oil producers. Its reserves are actually 25% larger than previously thought.

"Iraq's oil reserves which are extractable are 143.1 billion barrels," Hussein al-Shahristani, Iraq's oil minister, said earlier this week, basing his comments on data provided by Organization of Petroleum Exporting Countries (OPEC).

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China Continues Game-Changing Energy Moves with Sinopec's $7 Billion Brazil Buy

By , Associate Editor, Money Morning -

Chinese state oil company China Petroleum & Chemical Corp. (Sinopec) (NYSE ADR: SNP) said Friday that it would invest $7.1 billion in the Brazilian unit of Spain's Repsol YPF S.A. (NYSE ADR: REP) to form one of the largest private energy companies in Latin America.

The investment is the second-largest overseas purchase by a Chinese company and drives the market capitalization of Repsol's Brazilian arm up to $17.8 billion. Analysts estimated the company's value at $10.7 billion earlier this year. Sinopec's investment gives it a 40% stake in Repsol's Brazil business, and access to the highly valued Brazilian offshore sub-salt oil fields.

The move highlights South America's importance to China as the Asian powerhouse goes on a spending spree to meet its fast-growing energy demand.

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China Ousts U.S. as Most Attractive Market for Renewable Energy Investing

By , Associate Editor, Money Morning -

China for the first time has overtaken the United States as the most attractive country for renewable energy investment, according to a quarterly index ranking released yesterday (Wednesday) by accounting firm Ernst & Young.

As the world's biggest energy consumer, China set a goal to generate 15% of its electricity from renewable sources by 2020 - up from 9% in 2008 - and has been encouraging investment in its clean energy companies to make its target.

"China has all the benefits of capital, government will, and it's a massive market," Ben Warren, Ernst & Young's environment and energy infrastructure leader, told Bloomberg. "We would expect to see China retaining a dominant position."

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