Both climate change zealots and head-in-the-sand deniers came out in full force following President Obama's climate change speech. The rhetoric was empty and the message board comments were hateful and mean-spirited.
What else is new?
In any event, what's done is done. Obama drew yet another line in the sand that will invite heavy winds from Congress, which of course, will take its cues from special interest groups and media whores that squat on both sides of the aisle.
As for me, I can sum up this whole thing in one word: opportunity.
A Very Profitable Revolution
Forget the fact that the climate is changing. Debate who or what is responsible all you want. But there's little doubt the climate is changing — and we will have to acclimate.
And forget the argument that climate change mitigation is priority #1. That ship has sailed, and now it's simply a matter of preparation and maintenance.
Bottom line: This is simply about appeasing the mounting domestic and international support for climate change mitigation while ensuring that the oil and gas industry is not alienated. And in all fairness, this is probably the most rational response we should expect.
So for all those folks who hate Big Oil and want the world to run on sunshine and rainbows, don't hold your breath.
And for all those folks who think the integration of cleaner energy options is anything but an incredible opportunity for consumers, investors, and the planet... you're missing out on a very profitable revolution that is well underway.
Pitfalls and Opportunities
Let's go through some of the key points of Obama's speech yesterday and pinpoint some potential pitfalls and opportunities...
Deploy clean energy. Solar will get the lion's share of this love, and solar operations based in the U.S. are likely to benefit. These include SunPower (NASDAQ: SPWR), First Solar (NASDAQ: FSLR), and SolarCity (NASDAQ: SCTY). Offshore wind could get some love here, too. If it does, look for both GE (NYSE: GE) and Siemens (NYSE: SI) to benefit.
Cut carbon pollution from power plants. This will be an opportunity for Obama to push cost-prohibitive clean coal technology and dump a few more million into next-generation coal plants that have no place in a country that's awash in natural gas.
Build a 21st century transportation sector. Electric cars, mass transit and high-speed rail systems will benefit here. Tesla (NASDAQ: TSLA) may see a fresh coat of shine here, as well as some of the companies operating in the light rail and high-speed rail space — including Siemens, GE, Alstom (PINK SHEETS: AOMFF), Bombardier (TSX: BBD-A), Mitsubishi Heavy Industries (PINK SHEETS: MHVYF), Harsco (NYSE: HSC), and Timken (NYSE: TKR). Unfortunately, this may also include doubling down on one of the biggest welfare scams in the history of the United States. We know it as corn-based ethanol. I can't imagine those special interests have figured out a way to squeeze more blood from the taxpayer stone here, but who knows these days...
Cut energy waste in homes, businesses, and factories. Energy efficiency and conservation technologies will come into play here. Companies likely to benefit include GE, Siemens, and Honeywell (NYSE: HON).
Reduce methane emissions. This could be a slippery slope for Obama, as it could mean more scrutiny on some fracking operations that are pumping out dangerous levels of methane. I'm not exactly sure how many eggshells will be walked on during these talks...
Lead at the federal level. This could include yet another attempt at a national renewable energy standard which, quite frankly, may weaken proactive measures already taken on by individual states.
Prepare the United States for the impacts of climate change. The big play here will be in energy and water infrastructure; it could also promote significant employment in the construction sector.
Conserve land and water resources, and maintain agricultural sustainability. I'm not sure how the president will play this one, either... The greatest threats to our land and water can be traced back to the heavily-subsidized agriculture and biotech industries, which continue to get a free ride on the backs of taxpayers thanks to their successful infiltration of Congress and the White House. If Obama wants to conserve land and water resources and maintain agricultural sustainability, he will have to start by voiding Monsanto's free pass to 1600 Pennsylvania Avenue... and that isn't going to happen.
Negotiate global free trade in environmental goods and services. In other words, how can we keep getting cheap Chinese solar panels?
This is just a quick list I put together following the president's speech.
So of course we will identify more along the way...
But if history is any indication of how successful Obama's plan will be, we will likely see little headway.
Still, there's no doubt that Obama is investing a lot of time and effort into this agenda — and a lot of faith in the companies that can facilitate it.
Fortunately for investors, there remains one undeniable truth: No matter what happens in Washington, domestic oil and gas will continue to be our cash cow for years to come.
To a new way of life and a new generation of wealth...
@JeffSiegel on Twitter
Jeff is the managing editor of Energy and Capital and contributing analyst for the Energy Investor, an independent investment research service focusing primarily on stocks in the oil & gas, modern energy and infrastructure markets. He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor's page.
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