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Gore's Renewable Energy Challenge, And How It Would Shift Investing

by: Hard Assets Investor July 22, 2008    
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By Julian Murdoch

Al Gore has thrown down the gauntlet. It's certainly not the first piece of hand wear he's tossed around, but this time he's actually invoked Kennedy. He has made his "we will go to the moon" challenge, but it's a green planet he's focused on.

I challenge our nation to commit to producing 100 percent of our electricity from renewable energy and truly clean carbon-free sources within 10 years.

Reaching for the stars indeed.

Let me suspend both my hope and my cynicism and look at this challenge from an investor's point of view. Assume this challenge is achievable. Assume a presidential candidate gloms on to it, makes it a major part of his campaign platform and then, that the country rallies behind it and succeeds.

How does that change my investment strategies?

Day one: Dump all my oil, gas and thermal coal holdings - not only to free up cash for other investments but because they would end up being fairly worthless by the end of Gore's 10-year challenge period. Okay, perhaps not worthless, but if the U.S. just got out of the carbon-fuels business, the ripple effect would be tremendous and likely dampen the oil markets for decades. After all, with this newfound, high-efficiency electric grid will come a greater support system for electric and alternative-fuel vehicles.

Now, what to do with that money? Since wind, solar and geothermal power aren't tradable commodities, I'd delve into the manufacturing companies that supply the parts that make the world go round. Metals - the most basic and most obscure - would be in high demand: wind turbines and photovoltaic cells that will be needed to complete Gore's vision, not to mention a complete overhaul of the nation's electric grid. The real challenge would be getting on board with the right venture cap funds. Much of the technology to meet this challenge is nascent, and small companies with niche patents could be the biggest windfall beneficiaries.

And finally, the national electrical grid is in such bad shape and needs vast repairs and expansion if this plan is to work. Investing in the companies that will do the work - electric utilities - would probably be the first area of my new investments to show positive returns. These are ultimately old-economy companies doing hard, physical work, and would need capital in a hurry to get the job done.

Oh yeah, one last investment. A cherry red 1967 Mustang - a nice museum piece and reminder of the good ole days of carbon-burning cars.

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This article has 23 comments:

  •  
    Jul 22 12:25 PM
    I challenge Al Gore to commit to using 100% of the energy used in his house, transportation, and the rest, to come from renewable sources (no gimmicky CO2 indulgences, please) and truly carbon-free sources, by the end of this year. With his contacts and vast financial resources that should be easy to do. Then he can write a book about how wealthy we will have to be to survive in his brave new expensive world.
    Reply
  •  
    Jul 22 01:03 PM
    If Al Gore really wants a greener planet he should want to increase greenhouse emissions in the atmosphere.
    Reply
  •  
    Jul 22 09:38 PM
    For a greener planet and reduced CO2 emissions, Gore should get rid of his plane, bring his house into the 21st century, and turn off his limo when it's parked outside his speaking engagements.
    Reply
  •  
    Jul 22 10:03 PM
    CO2 is a valuable recylcable nutrient for plants. Plants are growing twice as fast in an atmosphere that contains 1000 ppm CO2. We are not even halfway there.
    Reply
  •  
    Jul 23 05:02 AM
    I challenge Al Gore to explain why carbon emmissions are still rising and yet the planet is cooling at the fastest rate in the history of instrumentation. Hmm. Could it be because Global Warming (now called "climate change" by the propaganda and marketing departments) is simply a farce designed to get us to sacrifice what's left of our capitalism in the name of "the greater good"? Nah! Not here in Amerika!
    Reply
  •  
    Jul 23 08:51 AM
    after removing CO2 availability as a limit to plant growth rate, you still have other soil nutrients that become limiting - phosphorus, molybdenum, boron, sometimes even sulfur. buy stock in miracle gro - read the label!
    > jack
    Reply
  •  
    Jul 23 09:51 AM
    Too bad we can't invest in the corruption industry at the United Nations.

    The whole "Cap & Trade" system will be the domain of the U.N. and we know (or should know) that the U.N. is answerable to none. If the U.N. becomes the driving force of global warming, we will all be in trouble.

    "Buy Guns, Store Food"
    Reply
  •  
    Jul 23 11:11 AM
    One has to question Al Gore's real motives.

    His global warming crusade is making a lot of green for him.
    He gets a minimum of $100,000 for every talk his gives on global warming. No wonder he did not want to run again for president and get only a measly $200,000 / year salary.

    www.thesmokinggun.com/...

    You would think someone worth $100 million would do these talks for free, especially if he really believes in climate change.

    Matthew Simmons does all his talks on Peak Oil for free.
    Reply
  •  
    Jul 23 11:38 AM
    OK - so it's easy to make fun of Al Gore. Just follow Rush Limbaugh, eh?
    Now if Hard Asset could come up with a few actual suggestions in this wide world of wind, solar or grid hardware ( I assume she is a pro investor with analytic insights) ... now that would be helpful. Perhaps too hard work?
    Reply
  •  
    Jul 23 12:21 PM
    It is past time for Al Gore and his Red-Green friends to depart the scene so we can have the Congress adopt a serious plan to combat our nation's energy crisis while there's still time left. All the pristine air in the world won't do you a bit of good if you can't afford to feed your family or get to work.
    Reply
  •  
    Jul 23 12:28 PM
    Al's plan would "shift investing" alright. RIGHT OUT of America and into countries that are using all their domestic energy resources they can find to successfully BUILD their economies. Why is this so difficult for otherwise "intelligent"... people to understand...???
    Reply
  •  
    Jul 23 12:33 PM
    Gee, this is ALREADY occurring... How about that!
    Reply
  •  
    Jul 23 01:16 PM
    I guess one of the reasons that Algore came up recently with this hysterical proposal to replace all carbon based energy sources by renewable sources within ten years is that he cannot cry wolf for another ten years and nothing really happens.

    He looks better if he proposes to replace all the conventional working power assets in that period. Then he can claim, see, I salvaged you little guys. He has to hurry before the consensus community finds out that the king of carbon footprints is actually naked.

    The the 10,000 ft2 mansion, the private jet and and his motorcade that are running on CO2 credits have already been mentioned.
    This guy has such low moral standard that even if he was right in all aspects I would it not take from him. Not a word. Get out of my life!

    Dont get me wrong I am all for energy conservation but not for the wrong reasons and not with those phony UN implications. This will only drain our pockets and line the pocket of some selected few.
    Reply
  •  
    Jul 23 01:21 PM
    If a company produced electricity using wind power would pay common shareholders a yield of ten percent and if that income were tax free to everyone who was retired in the US, I would invest in it.

    I am retired and my idea would benefit the US. General Electric and Boone Pickens would create jobs and we would have to buy less oil.

    Also, we should use coal but make it cleaner.
    Reply
  •  
    Jul 23 01:46 PM
    jj,

    You're right on track.

    I look at it this way. Who would I rather trust?

    Pickens, a Texan who has made $4 billion in the private sector and certainly doesn't need the little bit of money he could make from this venture, of which he's spending $58 million of his own money to promote?

    Or Gore, a well-known Leftist political ideologue who has never accomplshed anything worthwhile (...except, of course, according to himself, INVENTED the internet), other than line his pockets on the public dole?

    That's an easy choice for me, my friend. Besides, Pickens' energy plan makes COMMON SENSE, which is more than can be said for anything emanating from Washington these days!
    Reply
  •  
    Jul 23 01:53 PM
    I'll say this, too. Pickens has more LEADERSHIP abilities than all the politicians in Washington lined up end to end. And the brains and money so they can't silence him. Those are THE two qualities we've been sorely missing in this energy debate.
    Reply
  •  
    Jul 23 02:06 PM
    Not to mention he has more first-hand KNOWLEDGE of the energy industry than all the Washington politicians and their so-called expert advisors and lobbyists put together. He came along in the nick of time, so far as I'm concerned.
    Reply
  •  
    Jul 23 02:22 PM
    There is certainly a lack of leadership on the energy front and it won't get any better. All Obama and McCain can come up as ideas is: ethanol subsides, hydrogen economy and opening up US coastal drilling.

    If Obama and McCain spoke to T. Boon Pickens, Matthew Simmons and Robert Hirsch they would quickly learn the following:

    1) There no magic bullet to solve the energy challenge.

    2) The master solution is the sum of numerous small solutions: conservation, high CAFE standards, increased public transit spending, wind, solar, nuclear, etc.

    3) Solving the energy challenge will also solve other problems at the same time: Climate change, national security, global famine, domestic economy and resource wars to name a few.
    Reply
  •  
    Jul 23 03:06 PM
    Here, Here! And don't forget NG, ANWR, oil shale and coal. We can either get on a "war footing" about domestic energy, or get ready to go to WAR!
    Reply
  •  
    Jul 23 03:31 PM
    And if our government wanted to spend our money on some USEFUL R&D for a change (...instead of useless earmarks!), they could invest it in our domestic gas hydrates. Located off the Alaskan and South Carolina coasts, this "ice" is 160X the density of traditional NG, and we have no idea how to develop it yet.
    Reply
  •  
    Jul 23 04:11 PM
    There is plenty of good ideas out there.

    Matthew Simmons (a Texas oilman like T. Boone and Harvard man like Gore) advocates innovative energy sources like geothermal and oceanic power generation.

    Robert Hirsch has a laundry list of ideas including things like the redesign of present day automobiles. He suggests a 42 volt (instead of 12 volt) electrical system, electrical powered valves (instead of using camshafts), electrical powered power steering and AC. You add up enough of things and the average car mileage will jump from 22 mpg to 45+ mpg. Considering 2/3 of oil is used for transportation. That would kill 33% of the demand right there.

    Let's not forget T. Boone. This 80 yr old man will accomplish more to allievate the energy dilemma in the remaining days of his life than Al Gore, Obama and McCain put together. I really like the coverage he is getting with the CNN interviews and his Wind farm commericals.

    Reply
  •  
    Jul 23 04:54 PM
    Me, too! Unlike Washington politicians, who believe you can talk a crisis to death with their pointless chatter, Boone understands you actually have to DO something to FIX a problem.

    So he did his research, considered the real-life options, found investors (...rumored to include Warren Buffett), and ordered $2 billion worth of windmills from GE. ON THE COME, mind you, since there's no way yet to connect them to the electric grid.

    Thank God for bigger than life, real American entrepreneurs like Boone Pickens. When they're all gone, there will be nothing left but the "suits," like the politicians, their lobbyists, lawyers, and other so-called "experts" that now dominate Wahington.

    We're VERY LUCKY throwbacks with the guts and boldness of T. Boone and his like are still with us, and we'll be in serious trouble when they're all gone. Meanwhile, if he's up to this life altering challenge at the age of 80, I'm going to do everything I can to help him pull it off!

    Reply
  •  
    Jul 24 09:40 AM
    guys you are sick of choosing the lesser of 2 evils. if i did not have such an army of skeletons in my closet i would run for office not because i want that headache but because i am sick of what we are given to choose from. PAUL8756. have you ever read the battle of athens? it is a great read, a true story that happened here, reasonably accurate, written by a liberal who meant to discredit the participants but found that they were in the right. i know it is true because my father and uncles were a small part of it and when i was a teenager i dated the daughter of the youngest kennedy brother. just saying we do not have to stand for such corruption.
    Reply
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