Over the past few months, as election rhetoric heated up and the economy has cooled, one of Barack Obama's recurring themes has been that the secret to America's future will be the development of an alternative-energy economy. To a populace that has grown increasingly weary of the lackadaisical government approach to economic disaster, this has been particularly galvanizing, and was undoubtedly a major influence on the election. Now that Obama has won, however, the next question is how he will transform those exciting New Deal-esque words into concrete action.
John Podesta, co-chairman of the Obama/Biden transition team, may provide a useful insight into this question. In his day job, Podesta is president of the Center for American Progress (CAP), a liberal think tank that is based in Washington D.C. CAP has already drafted a green-energy stimulus plan; with several programs that are ready to go, it would create 2 million jobs, and would cost a relatively meager $50 billion. While there is no guarantee that CAP's plan will be adopted, given Podesta's proximity to the presidency, it seems likely that at least part of it will become reality within the next year. For a savvy investor, this could be a blueprint for industries that are, potentially, poised to explode with a massive influx of new funds.
Green Autos: Obama has made it very clear that he intends to directly tie any automotive bailout to the development of green technologies. CAP's plan calls for a 4% per year increase in fuel-efficiency standards, as well as investment in new battery technology for plug-in hybrids. With this in mind, it's worth seriously considering which automakers are best poised to go forth with more fuel-efficient models. Furthermore, programs like CAP's "Cash for Clunkers" could be a major boon for companies that process or deal in recycled metals.
Green Building: CAP has proposed a green-infrastructure fund for retrofitting existing public buildings to make them more efficient; furthermore, its "Weatherization Assistance Program" would help homeowners improve their energy consumption profiles. Combined with tax credits for companies that make energy conservation products (like insulation and double-pane windows), this promises a major boost to the construction and home-improvement industries. From 3M (NYSE: MMM) to the Home Depot (NYSE: HD), any company that produces or markets energy conservation materials could experience a serious bounce.
Large-Scale Transportation and Energy Infrastructure: From the plans for a "smart" electric grid to wind and solar farms to vast mass-transit projects, the CAP has called for massive investment in the kinds of large-scale public works programs that are potential game-changers. Alternative energy companies like Cleantech America and Coskata might benefit greatly, as might companies specializing in public transportation. Unfortunately, most rolling stock or bus companies are based overseas, like Kawasaki, or are private, but Bombardier is traded on the Toronto Stock Exchange, and Ford (NYSE: F) also makes buses.
A Caveat: All of this is highly speculative, of course, and a variety of things could easily undermine these suggestions. However, if a green energy economy is where America is headed (a path that seems quite likely), it's highly logical to consider which companies seem best poised to benefit!











Reader Comments (Page 1 of 1)
11-29-2008 @ 1:09PM
Kent said...
I view any investment advice these days with a jaundice eye. You're right, this "green" energy investment portfolios are purely speculative on the basis whether Barack can pass the energy bills. Until then, I'm hoarding all cash in CD's and Treasury Bills, even though the interest rates stink. I no longer laugh at the Great Depression generation who hid their cash under their mattresses. I almost feel the same way.
11-29-2008 @ 3:23PM
Tom Stark said...
Hiding your cash under the matteress may not be such a bad idea. Here's who you'll be hiding it from:
www.ritholtz.com/blog/2008/11/rubin-nobody-was-prepared-for-crisis-of-08/. If I saw the current problems in 2002-3, why couldn't this whole team of genius's see what was coming? Maybe when you are involved in the causes of the problem you can't see as clearly. This whole bailout scheme is a huge fraud on the U.S. citizens, not just the taxpayers. The $700 Billion is better spent paying reparations to those who are hurt by this scam and let CITI, Goldman Sachs and Morgan Stanley bite the dust and maybe go to jail.
12-01-2008 @ 2:14AM
Ted said...
On Dec 5 the Supreme Court will either allow or disallow the usurpation of both the Constitution and the Government of the United States — easily the most pivotal decision since our nation’s founding — and the silence of the news media is deafening (if not downright scary).
http://www.youtube.com/watch?v=GqH7rSHcvgU
12-13-2008 @ 8:05PM
John said...
The Future of Alternative Energies and the future of America
I was driving home from work last week and noticed the latest gas price of $ 1.75, seems like we were just recently at over $ 4 per gallon. Oil is now $ 45 per barrel, commodities like steel are down, our national debt is skyrocketing, and all the once high flying Solar energy stocks and green eco funds have plummeted along with the global markets. They say we are in a severe recession, that demand will fall for energy and that gas could fall to $ 1 per gallon as unemployment hits multi-decade highs. Seems like we were just being shocked by $ 145 per barrel oil and record profits by oil companies, it makes me as an American citizen really feel manipulated and that our government hasn't had a plan for securing our country's future. How did we get into this financial crisis? Who caused this collapse? Seems to me terrorists couldn't have implemented a plan this exacting, yet we hear that this was triggered by only four percent of the outstanding US home loans being in question. Now all conversation turns to how many billions of US tax payer dollars will be reactively given to faltering industries to mitigate loss of jobs in America. These are global corporations asking for US bailouts. Will unsecured pension plans, hurt by the recent stock market collapse, be next to default? Where will jobs come from as we rise out of this global recession? Green technology jobs and projects may be now questionable due to falling energy prices. Will America be the country and we be the innovators of this Intellectual property? Can the hundreds of alternative energy startups get the financing they will need to stay alive through this recession and to successfully commercialize their products?
Barack Obama will take office soon and has stated his administration will invest $ 150B over ten years to catalyze private efforts to build a clean energy future. Let's hope he isn't an advocate of 'clean coal', which many doubt exists or today's Ethanol as his green alternatives. Will Q Microbes hold promise for Ethanol production which is in it's early stages of research at UMASS Amherst? My hope is that he backs strong Solar, Wind, and Natural Gas based 'distributed hydrogen generation' projects, the building of Hydrogen distribution fueling stations, and Fuel Cell use in his ten year plan. Just to think, we could have used $ 25B to setup 20,000 hydrogen fueling stations in the US, instead, hundreds of billions will be wasted on reactive spending rather than implementing long-term energy solutions. Will our new president have the discipline and vision to invest in these energies and infrastructures, to create and capture these jobs, or will he drop these pre-presidential energy plan headlines until another day when prices start rising again? Where will all these billions come from, between the Iraq spending, financial crisis bailouts, and proposed alternative energy initiative investments? The more we print new money, the more we risk the value of the US dollar falling to all time lows and the American family's wealth further disappearing. As we recover from this financial crisis and recession, will India and China's thirst for oil reinitiate the high demand and prices as new cities continue to be developed in these and other emerging countries?
As a citizen and investor interested in the advancement of alternative energies, in America's future, and in managing these global wealth shifting trends, I sincerely hope we aggressively drive energy science, provide research and development dollars to these early startups, and reduce our dependency on dirty foreign oil and fossil fuels. We need a 'Hydrogen Manhattan Project' that integrates Solar, Wind and Natural Gas as a source of power to generate distributed onsite hydrogen coupled with fuel cell use. Focused research and development dollars solve problems through science advancements. Innovation and diversification into green energy is the answer for America and the world. For more information visit and bookmark my website; www.go-h2.net