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Democrats May Give Alternative Energy a New Push
Norm Alster, NY Times
THE fortunes of alternative energy companies have been linked to two factors outside their control: oil prices and politics.
Rising oil prices have moved in the companies’ favor over the last few years, making the price of producing energy from wind, solar, geothermal or organic sources more competitive.
Now some analysts and money managers are hoping the imminent Democratic takeover of Congress will also be bullish for alternative energy stocks by improving prospects for favorable legislation for the industry.
One likely initiative, known as a national renewable portfolio standard, would require utilities to derive 10 percent of their electricity output from renewable sources by 2020. Currently, less than 3 percent of electricity is generated from such sources. Senator Jeff Bingaman, Democrat of New Mexico, the presumptive chairman of the Senate Energy and Natural Resources Committee, says he hopes to pass “some version” of a renewable portfolio standard in the next Congress.
The details of such legislation — as well as whether it would be approved by Congress and signed by President Bush — are very much uncertain. But that hasn’t stopped investors from placing their bets.
(10 Dec 2006)
How To Live the Good Life Without Oil
Eli Kintisch, Discover
The unnervingly high price of oil – along with the increasingly intensive drilling to get it – has suddenly pushed renewable power squarely into the mainstream.
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The upside of stratospheric oil prices is reflected in what is happening on the other side of the balance sheet. The past year looks like the turning point when alternatives to fossil fuels – everything from solar energy, wind turbines, ethanol, and the hybrid car – finally hit the mainstream. “It’s hard to argue it’s not,” says Richard Hamilton, CEO of California biocrops startup Ceres. “We’ll look back and say this is the year where people rallied together to start down the irreversible path of becoming less dependent on oil,” says Samir Kaul, a partner in venture capital firm Khosla Ventures in Menlo Park, California, which invests in energy and other tech startups.
Hamilton and Kaul are cheerleaders for the renewable energy industry, but even hardened policy types see the need for new sources of energy. Security hawks have stepped up their rhetoric during this election year to push for more hybrid cars and biofuels, and for billions in new research to reduce the country’s dangerous dependence on foreign petroleum. “We are fighting a war against terror and paying for both sides of the war,” says James Woolsey, a member of the Set America Free Coalition.
Meanwhile, the markets are voting with their dollars.
(Jan 2007)
Discover picked this as #1 on their list of the top 100 science stories of 2006. -L
A Great Bubbling
Daniel Yergin, Newsweek
High oil prices are transforming the world’s political landscape—and launching an era of high-tech innovation that could rival the Internet boom.
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The world will never be quite the same. High oil prices are not only changing the political and economic landscapes but they could also change energy itself, because they are stimulating the most widespread drive for technological innovation this sector has ever seen.
…Of course, many of the new initiatives will not succeed. With this rapid growth comes a degree of hype that has some echoes of the Internet frenzy. But that cycle of boom and bust left a set of technologies that are transforming business and society. And one clear difference is that in the Internet boom the business plans focused on eyeballs and didn’t worry so much about how to make money. Here the market opportunity is clearer.
This diverse but intense focus on energy technology will likely have wide effects. There will be new ways to find or develop conventional energy. The competitive position of alternatives will be enhanced. The boom in conventional, corn-based ethanol, with its overwhelming political support, will nevertheless run into limits of land and food-versus-fuel competition. The current holy grail in liquid fuels is the search for economically competitive cellulosic ethanol, made from crop waste or specially designed energy crops. Overall, some of the most intriguing possibilities will come from applying biology and genetic engineering to energy problems.
Much else is now on the energy-technology agenda—from fuel cells and solar energy to advances, on the demand side, in how we use energy and the ways in which our cars are powered. Technological advances, along with regulations, enabled the United States and Japan to double their energy efficiency in the 1970s. That could happen again. When it is all added up, there has never been so much activity in new energy technologies. If it stays at this pace, expect dramatic results.
Yergin, chairman of Cambridge Energy Research Associates and executive vice president of IHS, received the Pulitzer Prize for his book “The Prize: The Epic Quest for Oil, Money & Power.” He is writing a new book on energy and geopolitics.
(18 Dec 2006)
