BP Spill to Spur Clean Energy Transition

The fossil fuel industry has shown us its even uglier side this year.

Forget the wars, emissions, and being held hostage by hostile foreign regimes...

Our endless pursuit of limited resources is now costing American lives at home and destroying crucial ecosystems and billion-dollar industries.

And while the BP calamity is by far the worst, there have been multiple oil- and gas-related disasters this year that have barely made headlines.

As events like this continue to add great cost — human and monetary — to the already high toll of fossil fuel dependence, we're starting to see a monumental shift in the way the nation views the energy industry.

Below you'll find seven days that will permanently change energy policy in the United States, followed by how we can profit as we finally come to our energy senses.

Seven days that will change the energy industry forever

1. March 2, 2010 - Two workers are killed at a Holly Corp. (NYSE: HOC) refinery when fire breaks out on an asphalt tank.

2. April 2, 2010 - In the worst refinery accident since 2005, four die at a Tesoro (NYSE: TSO) refinery after a heat exchanger failed in the highly flammable naphtha unit.

3. April 5, 2010 - A methane explosion at the Upper Big Branch Mine owned by regulation-ignoring Massey Energy (NYSE: MEE) kills at least 25 workers.

4. June 4, 2010 - A ruptured natural gas well owned by EOG Resources (NYSE: EOG) explodes, sending gas and drilling fluid 75 feet in the air. No one was killed, but local roads were closed and a no-fly zone created around the site. The company has since been ordered to cease all natural gas drilling operations in Pennsylvania.

5. June 7, 2010 - Seven drilling crew members are severely burned while exploring for natural gas after an explosion at an abandoned coal mine in West Virginia. It's the second fire in the Marcellus Shale in a week.

6. June 7, 2010 - A 36-inch natural gas pipeline owned by Enterprise Product Partners (NYSE: EPD) explodes when struck by an electrical crew. Three workers died.

7. April 20, 2010 and every day since - An explosion on the BP-licensed Transocean oil rig kills 11 workers. The rig collapses, breaking the pipe... and 40,000 barrels per day have yet to be stopped from flowing from it. That was 57 days ago.

Reality sets in

Of course, the need to transition to alternative energy is dire. And while the need has at least been recognized, action has been slow to follow; we've been cobbling what needs to be paved.

Those in the know have been relentlessly calling for this transition, putting their money where their mouth is in the process. Being in tune with a changing energy industry has already handed smart investors handsome returns from the technologies slowly supplanting our conventional fuels.

But the events above are speeding up this transition in a way not seen before. Politics are being at least partially cast aside and the nation is pissed off at the oil industry.

You can almost feel the momentum building behind new energy solutions. Here's what's already happening...

Bill Gates has called for a “revolution” to decrease oil dependency. He, GE (NYSE: GE) CEO Jeff Immelt, and a handful of other corporate executives are urging the government to triple its investments in clean energy research, development, and deployment (RD&D) from $5 billion to $16 billion annually.

They also called for an energy strategy board to develop and monitor a national energy plan for Congress and underscored the need for a price on carbon emissions.

In similar spirit, the Senate struck down a measure proposed by Lisa Murkowski that would've revoked the EPA's power to regulate emissions. 

As he visited the Gulf Coast for a fourth time this week, Obama said the BP oil spill will change energy policy the way 9/11 changed security policy. He's already put a moratorium on offshore drilling.

And he's not stopping there:

Beyond the risks inherent in drilling four miles beneath the surface of the Earth, our dependence on oil means that we will continue to send billions of dollars of our hard-earned wealth to other countries every month — including many in dangerous and unstable regions," he said.

In other words, our continued dependence on fossil fuels will jeopardize our national security. It will smother our planet. And it will continue to put our economy and our environment at risk.

We cannot delay any longer...

Change gonna come

Now, we've still got a massive oil spill to first stop — and then to clean up. The markets are going to have to digest that first.

But clean stocks are already showing relative strength.

I'd be taking a look at natural gas as a bridge fuel, particularly with respect to transportation.

And though wind and solar are the poster children, those industries are dangerously close to commoditization, and consolidation is inevitable.

For now, I'd be taking aim at the low-hanging fruit: the technologies helping us increase efficiency while reducing our rampant waste.

Given the caustic year the traditional energy establishment is having so far, I truly believe a permanent change in energy attitude has begun in earnest.

But that's not to say the entire industry will change overnight. As investors, we must remain practical to remain profitable.

Call it like you see it,

Nick

P.S. A nat gas boom will happen first — both for transportation and baseload generation as oil and coal come under fire. Efficiency will come next, and will include the build-out of the smart grid. Then we'll begin to fully explore distributed and large-scale renewable generation. And as I already do with thousands of investors, I can help you profit from the years-long cleantech bull market ahead of us.