Alternative Energy: Dead ends and secret passages
By J. Christoph Amberger
Taipan Group's Dynamic Market Alert
Alternative Energy: Dead ends and secret passages
by J. Christoph Amberger
It's been a tough month so far for the alternative crowd. First, research reports picked up by the AP and distributed by almost every newspaper in the country painted silver bullet ethanol in a rather mottled gray as a substitute for fossil-based carbohydrates that has played third or fourth fiddle for decades not because of the “vast petro-wing conspiracy” -- but because it is, in most aspects, really just an inferior, less efficient substitute.
(Cheer up if you're invested in ethanol stocks, though. The gravy train of public ethanol subsidies rolling out of Sacramento and, soon, Washington, D.C., cannot be stopped. Since when have politicians actually paid heed to reality when their image and saintly saviors of the world is at stake?)
Solar and wind energy got a poke in the eye when German magazine Der Spiegel interviewed Shell's big kahuna, Jeroen van der Veer. Van der Veer called conventional solar energy a dead end.
In fact, he came up with a daring prediction: By the year 2050, the world will consume more oil, natural gas and coal than now. Energy consumption will have doubled. And up to 30% of consumption will be covered by renewable energies.
(He is predicting an "integrated solution," however: Less CO2 will be released per barrel of oil and coal -- to be deposited in various geological strata rather than being released into the air.)
But while Shell has been involved in building a huge offshore wind park in the North Sea, he is quite honest: Without government subsidies, this would not have been a rational business decision. He'd tell his engineers, "Great work: But next time, everything needs to be 25% cheaper."
Solar energy technology, at least of the solar silicium variety, is not a solution but a "dead end." "Even if you put a solar panel on every roof in Germany, you'll only cover a fraction of energy demand. People just miscalculate the dimensions."
(He does seem upbeat about Shell's microfilm solar technology, though.)
Is this the head of an oil company who is trying to discredit the competition? Maybe. Although in my experience, businesses that can milk governments for billions in subsidies for playing around with alternative product lines -- and have indeed invested hundreds of millions in research themselves -- really don't care all that much from which source their future revenues stream derives... as long as there is one.
To me, it reinforces my basic feeling that the much-touted boutique energy sources that today come in the flavors of switch grass, spring zephyr and California sunshine may continue to play second banana to plain vanilla oil and gas.
Of course, there is another renewable energy source that has undergone a veritable Pauline Conversion: Nuclear Energy has morphed from the whipping boy of the environmentalist left to the poster child of "socially conscious" energy generation. Just who performed this PR miracle I don't know. But the inevitable result of it will be continuing demand -- and soaring prices -- for uranium.
My colleague, Andrew Mickey, has compiled a special research report for you, which we have uploaded for you to our network portal at www.taipanfinancialnews.com. I recommend you take a few minutes to read it. After all, it's free to you... and full of actionable information.
Quote of the Day
“The government says it now takes about 12 weeks for an American to get a passport. A three-month waiting list if you want to get out of the country. But of course to get into the country, there’s no wait at all, you just walk across…”
- Jay Leno, June 6, 2007
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