The election is finally over (thank you very much) and the market can now move onto the last hurdle before taking off on its long awaited bullish run. The fiscal cliff is coming, but with such a decisive victory for the Democrats, I believe the opposition will now be less intractable and more amenable to a reasonable deal that will avoid calamity. We will see, but in the meantime …
- I enjoyed your article from Monday before the election on energy, so you can guess that I agreed with it (all things being equal). This morning, I awoke to the fact that Mr. Obama will not have to rent a moving truck for a while, and is probably going to be pushing his energy policy with the congress. So here’s my question. Alternative energy companies have been taken out to the woodshed for some time, now. What’s (in your opinion) going to shift the equation for an investor to want to dip a toe back into that sector?
Let me answer the question with the quote below. The words effectively sum up one reason an investor might want to take long look at opportunities in energy other than the tired fossil-fuel originals.
- On energy and the environment, the Department of Energy and the Environmental Protection Agency (EPA) will remain in the hands of conservation-minded policymakers, who want to tilt the energy market in favor of clean technologies, back strict controls on greenhouse emissions and vehicle efficiency and are somewhat skeptical about drilling for oil and gas.
Consider as well the following potential realities.
- Obama has also pledged to eliminate more than $46 billion in subsidies for fossil fuel companies, a plan the industry has vigorously protested.
- Still, throughout the campaign and during the debates, Obama has touted the benefits of increasing production of cleaner burning natural gas, winning him praise from America’s Natural Gas Alliance, an industry lobby group.
Then again, consider the political reality of and opportunity in the information below.
While the Obama Administration has put approval of TransCanada’s Keystone XL pipeline on hold, eventual approval is expected, an action that will increase the flow of cheaper crude oil from Canada to refineries on the Gulf Coast at Port Arthur, Texas. Companies with refineries in Port Arthur or in nearby Beaumont include Valero Energy Corp, Shell, France’s Total and Exxon Mobil Corp.
As is often the case, readers who write to me actually don’t have just “a” question …
- I like alternative energy on a grand scale, because we in the US are ‘behind the 8-ball’ on this compared to many other developed countries. We’ve got the brain power here to make this work, so what’s holding this back? I see a tipping point far in the distance, make no mistake. How best to get there from where I am on the Curve, as an investor?
The only thing holding back faster growth in the alternative energy sector is politics, infrastructure, and demand. The politics will change in the next four years for many reasons, the infrastructure is coming (Obama’s re-election helps with this), and we are already seeing demand rise. Investors will make money investing in the growth, so get in early. Simple as that.
Trade in the day; Invest in your life …
