Oil Exporters and Renewable Energy

Written By Nick Hodge

Posted July 15, 2009

Forget far-off forecasts for a minute; let’s look at the here and now.

The fact of the energy matter is that cleantech has passed the tipping point.

Talk about T. Boone’s wind failure and the global warming hoax all you want. I’ll talk about renewable energy.

And apparently so will everyone else, from the president of the Untied States to president of Greenpeace to the president of the United Arab Emirates.

The past year has been a groundswell for renewable energy, even in the face of recession. If anything, global economic turmoil has highlighted the impact clean energy will have on future economies. . . and the willingness of global governments to usher in that future.

Countries in all corners of the world have turned to cleantech, not just for the kilowatt-hours but also for the jobs and related investment it brings with it.

Even China — the environmental abstainer of abstainers — recently announced their plan to spend $290 billion on clean energy in the next decade.

But perhaps the most convincing evidence that cleantech is here to stay is the willingness of stalwart oil nations to adopt the technology. If the countries that control the world’s largest oil reserves are rapidly deploying renewables, what makes anyone think we can drill, baby, drill our way out of looming energy problems?

Biggest Oil Is Going Green

Perhaps you missed it, but here’s how Reuters introduced the story: “Speedy electric cars will soon compete with gas-guzzling SUVs on Abu Dhabi streets as the oil-exporting emirate buys into alternative energy.”

Aren’t those guys swimming in oil?

Perhaps. But unlike some energy neophytes, they understand that it’s a dwindling resource, and that the time to begin a smooth transition to other fuels is now.

It’s not about emissions. It’s not about global warming (can it get much hotter there?). It’s about energy security. And large oil-exporting nations are increasingly turning to renewables to get it.

Shouldn’t we — being 60% dependent on foreign oil — be doing the same? I mean, these guys are the third-largest exporter of oil in the world. And yet they’re salivating over cleantech.

It’s a wake-up call if there ever was one.

The news this week is that Aabar, an investment company wholly owned by the Abu Dhabi government, has taken a 4% stake in Tesla, the U.S.-based electric vehicle manufacturer.

Hmmmm. Why would this oil-rich nation go after alternative transportation before alternative electricity? Can you say ‘secretly dwindling reserves’?

And electric vehicles are just the beginning of their investments. According to the Chairman of Aabar, this is just one of several more planned ventures into clean technology.

But here’s the real kicker: they’re using revenue from oil sales to do it.

If Microsoft was using profits to invest in Apple, it would be a clear sign of a shift in power in a major industry. . . and a clear indication of a giant’s brooding demise.

This is the same thing, only we’re dealing with trillion-dollar global energy markets.

Reuters called it “no small paradox.”

I call it the new energy reality.

Writing on the Wall

Quite frankly, you must’ve been living in a hole if didn’t see this coming. Here at Energy & Capital, we’ve been touting the end of cheap oil for years.

And we’re seeing it all play out right now, albeit with a brief recessionary reprieve.

In addition to the Tesla venture, Abu Dhabi has also invested $22 billion to build the world’s first entirely renewably powered city called Masdar.

According to its website, “It represents Abu Dhabi’s multi-faceted response to the challenges facing a sustainable future. The Masdar Initiative is positioning Abu Dhabi as a global leader and hub for the research and development of renewable energy and sustainable technology.”

These guys already control gobs of precious oil because of their fortunate geographic location. They know that party’s coming to an end, so they’re rapidly pursuing geographically agnostic clean technologies.

As humans and investors, we should be doing the same.

The country even lobbied hard and successfully to be home to the 150-nation International Renewable Energy Agency. They won the bid last month.

So, now we have the United Arab Emirates, third-largest oil exporter and home to the International Renewable Energy Agency.

We’d better step up to the plate.

It should make you wonder: if oil-rich nations are gung-ho for renewables, why is it such a contentious debate here, where we’re not even close to being able to supply our own energy habit?

I’d have to say it’s because of politics and sheeple, since the problem has been clearly identified (peak oil), and the solutions are becoming readily available.

So, while we’ve been talking about a tipping point for some time, I’d have to say we’ve squarely passed it.

Yes, we still need coal. Yes, we still need oil. Yes, we still need natural gas.

But, it’s not mutually exclusive to profit from and support both traditional and clean energy technologies.

Accepting that fact is the only thing keeping us from a secure energy future.

Call it like you see it,


P.S. If you’re still on the fence about investing in renewable energy, now is the time to take the plunge. And you can have an expert guiding you every step of the way. Take a few minutes to read about the next profit play of the Alternative Energy Speculator. At the very least, you can try it risk free for 30-days, but I’m convinced you’ll stick around much longer.

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