Sorry to say, but we are only in a brief "lull" between crises. Nothing was resolved in the eleventh (and a half) hour Fiscal Cliff compromise, and three new crises are coming down the line in 2013. Here's what we face now and how you can still structure your energy portfolio for profits.
- The Path to Energy Independence is More Rocky Than It Seems
- Hydrokinetic Power is the Next Wave in Cheap Energy
- An Unlikely New Supporter for Alternative Energy
- Looming Loss of Federal Incentives Darkens Future of Solar Power Stocks
- China Traffic Jam Just a Brief Bottleneck on the Road to Growth
- Energize Your Portfolio With These Four 'Smart-Grid' Technology Plays
- ABB Ltd. Buys Smart Grid Software Maker to Jump Ahead in Energy Management Industry
- China, Europe Lapping the United States in the Clean Energy Race
- The Real Story Behind Solar Energy in 2010
- Solar Energy's Future Shines Brightest in China
- Profit on the Horizon: Why Two Big Solar Stocks Will Continue Their Rebound
- As Solar Sector Goes Global, Investors Can Capitalize on Dawning of a New Industry
- General Motors Shifts into Growth Mode by Driving a Cleanup Effort in China
- Recording Demonstrates Confusion About LDK Solar Inventory Quality, WSJ Reports
- LDK Shares Plunge Another 26% Due to Worries, Barron's Report
- Analysts Unhappy with Internal Inventory Audit Report From China's LDK Solar
As the article explains, U.S. oil production is now on pace to surpass Saudi Arabia by 2020. This would make the United States world's largest oil producer. We're already the second-largest natural gas producer, according to 2010 EIA estimates.
It's all thanks to the U.S. shale boom that has unlocked billions of barrels of oil and trillions of feet of natural gas from the Appalachian Mountains to the Pacific Coast, from the Bakken in North Dakota to the shale fields of southern Texas.
But all of this fracking has caused some serious economic and environmental problems.
And while I greatly advocate increased drilling and domestic production, we still must address a wide-range of problems now plaguing the shale oil and gas sectors.
After all - with apologies to Voltaire and Spiderman - with such great fortune comes greater responsibility.
That's why I am in the third day of what has become a very interesting conference here in Pittsburgh. It was convened to set the agenda moving forward to deal with the almost invisible aspects of shale oil and gas drilling.
In fact, for the first time, the conference's primary focus will be on the negatives caused by the drilling.
We also have questions surrounding the amount of water required to frack these formations (the process needs a lot of water to break open rock and release hydrocarbons), as well as the ongoing public health fears from the chemicals used.
Now, we are seeing parallel economic problems as well.
In the Marcellus basin, researchers are now recording some of these shortcomings and placing them in four basic categories.
The real concern is that these four problems - in infrastructure, labor, local inflation, and the environment - will remain well after the drilling (and the revenue) has moved on.
So before you decide to declare "energy independence", take a look at some of the downside that may come along with it.
The key is finding a market that already has billions of dollars in pent up demand - like cheap energy.
Of all the cheap alternatives available to us today, I'm most excited by hydrokinetic power systems for the simple reason that the oceans contain enough energy to potentially support more than 50% of US demand alone, according to the US Department of Energy.
In case you are not familiar with the term, hydrokinetic systems produce power from the water's kinetic energy. It's quite literally power from the motion in the ocean.
Critics charge there are limits involved because the technology we need to make, transmit and store wave-based energy is primitive and prohibitively expensive.
And they're right... it is, or at least has been to date.
That's why despite years of effort and billions of dollars in government-sponsored financing, there are a mere 5 megawatts of wave-generated energy being created worldwide.
According to Forbes Magazine, that's only enough to light 4,000 U.S. homes.
Yet studies estimate that two-thirds of the world's economically feasible hydropower has yet to be exploited. Perhaps not surprisingly, much of this untapped energy is concentrated in South America, Asia and Africa.
That's my kind of opportunity - but it will require a sea change in our thinking (pun absolutely intended).
The Rising Tide in Hydrokinetic Power
That's because traditional "alternative" power choices tend to evolve in terms of how applications like solar, hydro, thermal and gas production ties into the grid. As such, they're dependent on environmental variables that come and go.
On the other hand, hydrokinetic systems really are the grid. By placing turbines, bobbers and impellers into large bodies of water, they become part of the very system they're tapping into.
And it's a whopper of a system.
This involves a rather large chunk of traditional fuel usage.
On average, the federal government consumes about 2% of the fossil fuels used in the United States - and the DOD accounts for about 90% of that.
With the Obama administration emphasizing a move to alternative and renewable fuel sources, Mabus is signaling that the military is on board - sort of.
The Trouble with Foreign OilAs a former governor of Mississippi and ambassador to Saudi Arabia, Secretary Mabus knows something about the position of oil in American foreign policy.
He noted during the conference that, for every $1 rise in the cost of crude oil, the Navy has to come up with at least $32 million.
So when the Libyan crisis hit earlier this year, and oil spiked $30 a barrel, that translated into almost $1 billion of additional costs to the Navy. It's no wonder, then, that Mabus is committed to meeting 50% of the Navy's onshore and fleet fuel needs with non-fossil sources by 2020.
Additionally, in what is now mantra from both sides of the political aisle, reliance on foreign oil sources presents a national security problem.
"When we did an examination of the vulnerabilities of the Navy and Marine Corps, fuel rose to the top of the list pretty fast," Mabus said. "We simply buy too much fossil fuel from actual and potentially volatile places. We would never allow some of these countries we buy fuel from to build our ships, our aircraft, our ground vehicles - but because we depend on them for fuel, we give them a say in whether our ships sail, our aircraft fly, our ground vehicles operate."
The push seems serious enough, and it does reflect similar statements coming from other branches of the military.
But questions remain: What are the alternative sources? How much volume can each genuinely give to the effort? And what are the possible drawbacks of such alternatives?
Biofuels to the RescueFrom the Navy's perspective, biofuels have shown some serious promise.
In certain theaters of operation, bio additives are already in use for both jet fuel and lighter vessel options. And the initial results have been quite encouraging.
The goal of the programs, which include loan guarantees and grants, was to support the early stage growth of renewable energy companies until they became viable enough to attract conventional investors.
But several of the federal programs created as part of the 2009 stimulus package have expiration dates that assumed the economic woes of the recession would have eased by now.
Instead you have a solar power industry worried about what happens after the programs begin to expire - the first as soon as Sept. 30.
"Is the solar industry going to die if we lose these programs? No, but we're going to stall," Roger Efird, managing director of Suntech America, a subsidiary of Suntech Power Holdings Co. Ltd. (NYSE ADR: STP) told USA Today.
Helped by such programs, the solar industry grew 67% last year, but could see that growth flatten as cash-strapped governments both in the United States and Europe begin to cut back.
A line of cars and trucks 60 miles long (100 kilometers) has snarled the road along the Beijing-Tibet 110 Expressway for the past nine days.
The bumper-to-bumper gridlock, which finally began to ease yesterday (Wednesday), was created by a surge in trucks carrying coal from the province of Inner Mongolia to the suburbs of Beijing, where power plants continue to suck up and incinerate millions of tons of the black rock.
As the research director of NextGen - the division of private, New York City-based ABI Research that tracks smart grids worldwide - Fisher has more and more on his plate these days. That's because the wave of new investment in this emerging sector is just beginning.
NextGen also serves as an incubator for brand-new approaches in electronics and smart-grid technology. Over the past several years, the groundwork for smart grids has emerged in a number of countries, Fisher says. For that reason, the rates of both investment and implementation are increasing.
In a brand new report, Fisher's research team estimates that we will spend some $45 billion worldwide between now and 2015 on smart-grid-related transmission-and-distribution (T&D) infrastructure, implementation of related components at the level of utility companies distributing the power to consumers, and smart meters. (These last ingredients allow you to measure usage and redistribute power on your own.)
When compared to the trillions spent on generation and transmission, $45 billion may seem like a pittance.
But it certainly does indicate that a change is approaching. And for certain companies that find themselves in the middle of this significant energy revolution, it's going to mean lots of profits.
ABB will integrate Ventyx into its power-systems division, allowing it to provide modern smart grid software to grid operators who want to run a more efficient distribution system. The deal represents electrical engineering companies' need to prepare energy management networks to handle an increasing supply of renewable sources, like wind and solar.
"The big advantage for energy companies, utilities and industrial customers is that they will now have a single supplier of enterprise-wide information technology platforms and power automation systems," said ABB Chief Executive Officer Joe Hogan. "The advantage for our shareholders is a cash-generating acquisition in an exciting growth market, with a strong management team, a highly complementary offering and geographic scope, and an attractive return on capital employed."
Both clean energy companies and a skilled workforce are heading overseas, where government policies are creating a more welcoming and promising market for clean energy products.
Take Massachusetts-based Evergreen Solar, Inc (Nasdaq: ESLR). In 2008, it used $58 million in government aid to open a new Massachusetts factory to build silicon wafers and cells and assemble solar panels. But in November 2009, it announced the assembly of solar panels would be moved to Wuhan, China, where solar panel manufacturing will cost far less than in the United States.
Analysts also expect the carnage to continue into 2010, and are predicting losses for as many as half of the world's solar companies.
The "thought process" of a Wall Street analyst - and I use that title loosely - goes something like this: