Alternative Energy Stocks Decline as Global Warming Chills Out
The earth’s temperature is slowly but surely increasing? Global warming is going to destroy human kind? Al Gore was right?
Seems not quite.
Recent studies by meteorologist Dr. Judah Cohen show that global warming is now more or less global cooling. Since the peak of the global warming crisis in 2002 winters worldwide have actually been colder, not warmer.
In a great Tech Ticker interview with Daniel Rice, manager of the BlackRock Energy & Resources Fund, (Daniel is also apparently the best-performing U.S. equity fund manager of the past decade according to Morningstar) discusses why alternative energy stocks may not be so attractive over the next few years.
The major points made:
- Assuming recent evidence is true regarding the temporary cease of global warming, investing in alternative energy sectors is a risky proposition.
- Proponents of alternative energy better hope global warming is man-made and that new studies emerge to back their claims.
- Alternative energies are not economical without a substantial carbon tax or heavy government subsidies.
- According to Rice, the cap and trade legislation currently being debated is “not enough to do anything.”
- Don’t drink the Exxon kool-aid and think that their $600 million algae fuel research is them investing in the future, it is simply an image enhancer.
All in all the message from Rice seems to be that alternative energy will be slow as far as popularity and investor interest over the next several years. The only alternative energy that makes sense in Rice’s opinion is wind, other than that it is a longshot.
And while Rice’s points are well made I still think he may be overlooking one key factor, the American public opinion. If we start paying $4 again per gallon of gas I don’t care if we have record sub-artic temperatures during the winter, I am going to support alternative energy R & D with wide open arms.
Video Embedded Below (NOTE: RSS and EMAIL readers click to view this post on the site to watch the interview).
Source:
Top Manager Sees “Huge Risk” in Alternative Energy as Proof of Global Warming Cools
Aaron Task,
Yahoo Finance Tech Ticker, July 15th, 2009
