Boon or Boondoggle? What say you?
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Cap and Trade Legislation
What Carbon Regulation Means for Energy Investors
By Nick Hodge
Wednesday, February 25th, 2009
"It begins with energy."
That's how Obama introduced his budget last night in an address to a joint session of Congress. And where the Federal dollars go, so should your portfolio.
The hour-long address was rife with references to energy, each of which could have profitable investment implications.
As he trumpeted during the campaign, renewable energy seems to be a large part of his plan. "We know the country that harnesses the power of clean, renewable energy will lead the 21st century," he said.
In fact, the only two times he mentioned oil was to tell us our future as a nation depends on using less of it:
We have known for decades that our survival depends on finding new sources of energy. Yet we import more oil today than ever before.
The only way this century will be another American century is if we confront at last the price of our dependence on oil. . .
That confrontation could prove very profitable for energy investors.
But it's not just his planned battle against oil dependence that will spur profits, he's also declared war on rising carbon emissions. And we all know that wars are profitable.
Calling for Carbon Caps
Other than mandating its use, capping carbon emissions is the next best thing to spur wide scale adoption of renewable energy. A cap-and-trade program instantly makes carbon a liability, thereby driving up the cost of burning fossil fuels to generate electricity or using carbon-intensive boilers to power energy-hungry industrial processes.
What that means is renewable energy instantly become more competitive, if not advantageous.
A utility is much more likely to build a wind or solar farm than construct a new coal plant if they know the coal plant comes with exorbitant lifetime carbon costs.
Remember this Obama quote from January a year ago? "So, if somebody wants to build a coal plant, they can - it's just that it will bankrupt them, because they are going to be charged a huge sum for all that greenhouse gas that's being emitted."
The industrial sector, too, would be more apt to cover their roofs with solar rather than use soon-to-be costly boilers and generators.
The idea here is to make renewables cost-competitive with traditional resources in an attempt to spur demand for clean energy and set us on a sustainable trajectory both economically and ecologically.
For investors, it means having to switch investment strategies to adapt to the changing dynamic of the energy market as we know it. It's a transition that, if understood and acted on, can make smart investors a lot of money.
Here's what the president asked for last night:
But to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy. So I ask this Congress to send me legislation that places a market- based cap on carbon pollution and drives the production of more renewable energy in America. And to support that innovation, we will invest fifteen billion dollars a year to develop technologies like wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient cars and trucks built right here in America.
He's telling you the industries that are about to receive direct federal investment, and a de facto competitive advantage. Long-term winners are being created, all you have to do is place your bet and wait. Recently sagging stock prices should present the perfect opportunity to do that.
What Carbon Regulation Means for Energy Investors
By Nick Hodge
Wednesday, February 25th, 2009
"It begins with energy."
That's how Obama introduced his budget last night in an address to a joint session of Congress. And where the Federal dollars go, so should your portfolio.
The hour-long address was rife with references to energy, each of which could have profitable investment implications.
As he trumpeted during the campaign, renewable energy seems to be a large part of his plan. "We know the country that harnesses the power of clean, renewable energy will lead the 21st century," he said.
In fact, the only two times he mentioned oil was to tell us our future as a nation depends on using less of it:
We have known for decades that our survival depends on finding new sources of energy. Yet we import more oil today than ever before.
The only way this century will be another American century is if we confront at last the price of our dependence on oil. . .
That confrontation could prove very profitable for energy investors.
But it's not just his planned battle against oil dependence that will spur profits, he's also declared war on rising carbon emissions. And we all know that wars are profitable.
Calling for Carbon Caps
Other than mandating its use, capping carbon emissions is the next best thing to spur wide scale adoption of renewable energy. A cap-and-trade program instantly makes carbon a liability, thereby driving up the cost of burning fossil fuels to generate electricity or using carbon-intensive boilers to power energy-hungry industrial processes.
What that means is renewable energy instantly become more competitive, if not advantageous.
A utility is much more likely to build a wind or solar farm than construct a new coal plant if they know the coal plant comes with exorbitant lifetime carbon costs.
Remember this Obama quote from January a year ago? "So, if somebody wants to build a coal plant, they can - it's just that it will bankrupt them, because they are going to be charged a huge sum for all that greenhouse gas that's being emitted."
The industrial sector, too, would be more apt to cover their roofs with solar rather than use soon-to-be costly boilers and generators.
The idea here is to make renewables cost-competitive with traditional resources in an attempt to spur demand for clean energy and set us on a sustainable trajectory both economically and ecologically.
For investors, it means having to switch investment strategies to adapt to the changing dynamic of the energy market as we know it. It's a transition that, if understood and acted on, can make smart investors a lot of money.
Here's what the president asked for last night:
But to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy. So I ask this Congress to send me legislation that places a market- based cap on carbon pollution and drives the production of more renewable energy in America. And to support that innovation, we will invest fifteen billion dollars a year to develop technologies like wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient cars and trucks built right here in America.
He's telling you the industries that are about to receive direct federal investment, and a de facto competitive advantage. Long-term winners are being created, all you have to do is place your bet and wait. Recently sagging stock prices should present the perfect opportunity to do that.
Top Opinion
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oldschoollenny "traditional... 2009/05/29 14:05:04Boondoggle Squared! This will be an economy killer! At the worst possible time!
+8dont have enough space here to show my opinion or how I feel about this admin attempt to destroy this country if not the world
What a scam...
If I didn't know better I'd say you been around the block, ese! LOL!
I helped run a wind energy co. for awhile until I realized what a sham it was (constructing phony turbines for Annual Report pics in certain areas as backdrop to begging Govt for more tax subsidies as the power was undependable and "bumping the grid" was just not that effective at the times when needed) and I helped them go "junk bond" (Drexel Burnham for $60 mil - big money back then) and then got out.
When I saw what the "big guys" were taking out over the years of that tax sham to their accounts I got out! Poste Haste!
Before he died my Daddy told me (and for all his faults he was a smart man) "son, when they start having you sign the Docs, its time to head for the Docks.....get out!"
They did. And I did!
T Boone Pickens aside, wind is mostly a sham. It may end being part of the solution, but a small part. The biggest part the "green weanies" have cut out of the picture (viz Cap & Trade)..And that is O&G-->OCS, ANWR, CONUS, etc. Also Bakken etc.....
and Nuclear........... the Libs will just talk about that.....but they still listen to Michael Douglas about it (China Syndrome)....... We are dealing with complete idiots Jack.....the Libs are so damn stupid they thin CH4 is a non-fossil fuel (Nan Pelosi on MTP)
WPT was an exploration killer, as you know
But trying to explain that to a lib? I might as well go out and talk to my
Something less then the total collapse of life as we know it -I hope. Let's say their little experiment is worth trying. (Try and imagine for a minute.) Still not a good idea at a time like this for pete sake! Let the ecomomy recover first then maybe we can absorb the shock a little better.
In my opinion the supposed link between carbon emissions and global warming is a big hoax. Still, it's important to become less dependent on foreign oil, and "green" energy sources have a potential to help clean up the environment. That's all cool.
So how about if the government would offer some kind of incentive -- tax breaks, rebates, etc. -- to encourage companies and individuals to convert to green energy sources? How about if the government would offer incentives or rewards for technological advances, WITHOUT penalizing everyone, so that we could become a cleaner, greener society over the next 10 years or so? How about if they let us drill our own oil and gas in the meantime? How about investing in nuclear power plants? These ideas make a lot more sense to me.
If you think solar and wind can replace oil, coal, and gas, you must have your head in the clouds. Using less oil etc. would be really nice. So let's work toward that goal without making stupid moves that will bring our country to a standstill.
If you drive up the cost of energy, you will drastically drive up the cost of EVERYTHING. It will end up being to...'''
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In my opinion the supposed link between carbon emissions and global warming is a big hoax. Still, it's important to become less dependent on foreign oil, and "green" energy sources have a potential to help clean up the environment. That's all cool.
So how about if the government would offer some kind of incentive -- tax breaks, rebates, etc. -- to encourage companies and individuals to convert to green energy sources? How about if the government would offer incentives or rewards for technological advances, WITHOUT penalizing everyone, so that we could become a cleaner, greener society over the next 10 years or so? How about if they let us drill our own oil and gas in the meantime? How about investing in nuclear power plants? These ideas make a lot more sense to me.
If you think solar and wind can replace oil, coal, and gas, you must have your head in the clouds. Using less oil etc. would be really nice. So let's work toward that goal without making stupid moves that will bring our country to a standstill.
If you drive up the cost of energy, you will drastically drive up the cost of EVERYTHING. It will end up being too expensive to do business in the USA. Less business means less jobs. No job, and you can't afford $5 -$10 per gallon gas to drive to the grocery store. But it won't make much difference anyway if there are no trucks delivering the food to the stores. Obama's plan is a recipe for another Great Depression.
I'm planting a bigger garden this year, and thinking about buying a bicylce while I can still afford one...
This is not a libs verse convs.problem this will effect every last one of us forever.
Just part of the bigger take over plan...WAKE UP!
********************
IN THE NEWS: "Charges Against 'New Black Panthers' Dropped by Obama Justice Dept. Three men were accused of trying to threaten voters and block poll and campaign workers by the threat of force -- one even brandishing what prosecutors call a deadly weapon."
Members of the New Black Panthers attend a rally outside the Lamar County Courthouse in Paris, Texas November 17, 2008. SEE STORY HERE @ http://www.foxnews.com/politi...
(I warned you guys.)
You can't mean {gasp} that there might just be an anti-capitalism, control-oriented ring to all this can you? Possibly?
Come on now girl.......... We SHOULD pay higher prices for our energy. Its only right!
We will consume less...........too much "consumin" goin' on doncha see? Doncha?
All that carnsarn Consumin' goin' ohhnn.........
But, we all know that the best way for the government to control the people is to make them dependent on the government. When they take our means of making a living and being able to support ourselves, they have us. That's where they are going.
But then again Obie cares more about Pundits than citizens.
Clean coal is a pile of poo.
Tis all a scam to raise taxes pile of poo.
I am being nice and keeping my answer to a minimal, but I think you see where my opinion lies.
Another obama liberal program that will hurt this country....that is his plan.......this will not help so called global warming,it is just a revenue generator for big government.
This week, the House Energy and Commerce Committee is holding three days of hearings where they will hear testimony from fifty-four witnesses on the cap-and-trade draft bill introduced by committee Chairman Henry Waxman and Energy Subcommittee Chairman Ed Markey (D-Mass.).
The principle behind a cap-and-trade system is that it would limit carbon and global warming emissions for companies and utilities. Companies that bring their emissions below the established limit would be able to sell or trade carbon allowances to other companies so that those companies could produce more carbon than the legally established limit.
Democrats argue that implementing a cap-and-trade system would cut the 2005 levels of carbon dioxide emissions, which are suspected to cause global warming, by 20% by the year 2020, and would use money raised from auctioned carbon allowances to support other government programs.
“Left unabated, global warming and our dependence on oil will jeopardize America’s national security and will increase our economic risk,” said Rep. Markey. “We cannot wish away the...
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This week, the House Energy and Commerce Committee is holding three days of hearings where they will hear testimony from fifty-four witnesses on the cap-and-trade draft bill introduced by committee Chairman Henry Waxman and Energy Subcommittee Chairman Ed Markey (D-Mass.).
The principle behind a cap-and-trade system is that it would limit carbon and global warming emissions for companies and utilities. Companies that bring their emissions below the established limit would be able to sell or trade carbon allowances to other companies so that those companies could produce more carbon than the legally established limit.
Democrats argue that implementing a cap-and-trade system would cut the 2005 levels of carbon dioxide emissions, which are suspected to cause global warming, by 20% by the year 2020, and would use money raised from auctioned carbon allowances to support other government programs.
“Left unabated, global warming and our dependence on oil will jeopardize America’s national security and will increase our economic risk,” said Rep. Markey. “We cannot wish away these problems.”
Some Republicans argue that implementing such a system will slow the economy further and will lead to higher energy prices. Senator John McCain (R-Ariz.) said he supports cap-and-trade but disagrees with the Democratic-sponsored legislation, calling it "irresponsible, ill-conceived and distorted.”
"The president's proposal of auctioning 100 percent of the carbon credits is bad economic policy that would cost businesses billions of dollars and allow for little-to-no transition into a low carbon system," McCain said, Tuesday. "I am a supporter of a strong cap-and-trade system, but I will not and cannot align myself with a giant government slush fund that will further burden our businesses and consumer."
Democrats argue auctioning carbon credits would create funds that could be used to provide rebates for industries that are vulnerable to international competition and have suggested the funds could also be used to provide more middle class tax cuts.
McCain believes a more gradual approach should be taken that would “accommodate the transition costs and allow businesses to stay open and prevent drastic increases in utility rates for customers.”
Additionally, many Democrats would like to see key alterations made to the bill. For instance, John Dingell (D-Mich.), would like to see a provision increasing loans to auto makers to develop more efficient vehicles.
All 23 of the Republicans on the House Energy and Commerce Committee have requested additional hearings for the bill, arguing that the legislation lacks detail and that the cost to consumers and businesses is uncertain. Democrats have denied the Republicans’ appeal.