Welcome to the Green Chip Weekend Edition — our insights from the week in everything alternative and cleantech, as well as links to our most-read Green Chip and sister publication articles.
Because of all the doubletalk, only extremely informed investors are profiting in this market.
Just this week, BP suspended its time-honored dividend; was forced to create an initial $20 billion compensation fund; and its chief executive was subjected to a Congressional grilling.
And as all that happened, we saw headlines like these:
-
BP agrees to $20 billion spill fund, cuts dividend
-
Scenario: BP faces tough future after oil spill
-
Gulf spill damages may hit $100 billion: Louisiana treasurer
-
BP chief evades questions at Capitol Hill grilling
-
Lawmakers accuse BP chief of evasion over oil spill
Did you see that $100 billion estimate in there?
That's six year's worth of BP profits.
All the negative press, the monstrous cleanup and compensation estimates, and the 2.5 million gallon per day leak hasn't been stemmed... and BP (NYSE: BP) has gained nearly $3.00 per share since Wednesday.
Irrational actions, irrational market
The BP example is only one of conundrums I've seen this week...
I also saw Texas Republican Representative Joe Barton apologize to Hayward during Congressional questioning, calling the harsh government criticism and creation of $20 billion compensation fund “equivalent to a shakedown.”
Yes, that makes Joe Barton a douchebag... But it also highlights just how far this nation's ideological pendulum swings.
Elected officials from both parties have even introduced legislation to lift the drilling ban now in place for the Gulf.
I know it's an election year, but those lost jobs mean squat in the face of the worst environmental disaster ever on U.S. soil.
But there were even more head-scratching moments this week...
On Wednesday, Obama told the nation:
... Oil is a finite resource. We consume more than 20% of the world's oil, but have less than 2% of the world's oil reserves. And that's part of the reason oil companies are drilling a mile beneath the surface of the ocean because we're running out of places to drill on land and in shallow water.
For decades, we have known the days of cheap and easily accessible oil were numbered. For decades, we have talked and talked about the need to end America's century-long addiction to fossil fuels. And for decades, we have failed to act with the sense of urgency that this challenge requires. Time and again, the path forward has been blocked not only by oil industry lobbyists, but also by a lack of political courage and candor.
He then called on the Senate to pass a version of the Energy Bill passed by the house last year, saying “the one approach I will not accept is inaction.”
Yet Reuters reported on Thursday that Senate Majority Leader Harry Reid emerged from a meeting with fellow Democrats refusing to embrace energy and environment legislation.
The article went on to say that — in an election year — “Some lawmakers are hoping to avoid casting votes on climate legislation that could raise energy and other consumer prices.”
Obama better get ready to accept inaction.
And it should piss you off that 1) lawmakers consistently trade passing needed legislation for reelection; and 2) artificially low energy prices are part of the cause of the BP disaster.
I guess our Senators are part of the vast majority unable to comprehend Obama's tenth-grade-level speech...
Noise-canceling profits
A market depends on conflicting opinions — bulls and bears, buyer and sellers.. all trying to make a buck.
The same can be said of Congress and the nation as a whole.
And at this moment, with polarization as prevalent as it is, you can't get caught up betting on a contentious issue.
You can't invest in oil drillers when some support a moratorium and others are trying to lift it...
You can't bet on cap-and-trade (or a carbon tax) with the Senate majority leader refusing to take up the bill...
What you have to do is hunker down and put your money in technologies and solutions that aren't a part of ideological debates or that are simply too economic to fail.
In the United States, that means limiting broad exposure to solar and wind until a renewable portfolio standard (RPS) is passed.
It means staying on the sidelines of the carbon game until a clear strategy is established.
It means canceling out the noise — no matter how difficult — and making good buys in energy sectors that are politically agnostic.
And right now, when it looks like renewables and oil will be playing political seesaw for some to come, it means investing in natural gas.
You see, natural gas is on political common ground...
It's fossil fuel that burns cleaner than coal and oil; it's cheap and abundant right here in the States.
So while other energy technologies are penalized because of political doubletalk and uncertain future, natural gas has established a bottom and started to rally:
Right now, natural gas has the most certain future of any energy source out there — not just for electricity generation, but — as I've been reporting (see here and here) — for transportation, as well.
There will once again be opportunities elsewhere once the spill is stopped, the cleanup is completed, and we start focusing on a clean energy future.
But until then, I'm long natural gas.
Call it like you see it,
Nick
Obama to Address Nation on Gulf Oil Spill: What You Need to Know before 8:00 Tomorrow
Green Chip Publisher Jeff Siegel explores how alternative energy stocks will react after President Obama's speech tomorrow night.
What Soros and Pickens Already Know: Introducing the “Champagne of Fuels”
Our latest report from Green Chip details how you could ride along for an easy 1,925% gains on the $1.50-per-gallon transportation technology that's going to power the 21st century.
BP Spill to Spur Clean Energy Transition: Seven Days That Will Change the Energy Industry Forever
Editor Nick Hodge puts forth seven days that will change the energy industry forever, and how you can profit as the transition ensues.
Behavioral Economics and Investing: How Emotions Can Lead to Investment Losses
Wealth Daily Editor Steve Christ examines behavioral economics and investing and reveals how emotions can lead to losses.
Natural Gas as a Transportation Fuel: Introducing the "Champagne of Fuels"
Green Chip Editor Nick Hodge discusses real-world energy solutions and highlights one such option: natural gas as a transportation fuel.
Molybdenum: The Metal that Could have Saved 9/11: The Twin Towers' Fatal Flaw
Publisher Brian Hicks brings readers an important investment story heard at a summertime BBQ about the metal that could have changed 9/11 — and will most certainly impact the future.
The End of Offshore Drilling?: The Oil Spill's Silver Lining
Energy & Capital's Nick Hodge explains why the BP oil spill is forcing profitable changes in the domestic fossil fuel industry.
Global Market Shake Up: The Tiny Engineering Firm Cornering a $100bil Market
Still in its infancy, the Financial Times recently reported that this breaking technology “promises to shake up the global market.” This tiny, $1.20 engineering firm is literally cornering a market that the DoE estimates will be worth over $100 billion by 2020. Read our latest report now on the how the future of lighting could pad your pockets for years to come.
Subscribe to