Sustainable Energy Opportunity
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I’m hitching a ride on a topic that my boss Ian Wyatt is writing about today: renewable energy.
I have to say right out of the gate that I am extremely skeptical of investments in general. That’s the only way to be if you value your investment capital and hope to make it work for you in the markets. Being generous and trusting are good qualities in a boy scout, but not an investor. We need to be skeptical misers.
So when it comes to an industry that’s largely unprofitable, filled with failure, buoyed only by government grants and lots of hopeful talk from environmentalists, I’m wont to be even more skeptical, if that’s possible.
It’s been said before, but it bears repeating: wind and solar only work when it’s windy or sunny. You simply can’t rely on these two technologies as they are and get anything close to the electricity generation that’s required to power today’s infrastructure.
I’m confident that solar power will one day come into viability on a large scale, but there’s still the problem of what to do if the sun doesn’t shine. You hear environmentalists throw around the word “sustainability” a lot. It’s actually kind of humorous, because there’s NOTHING sustainable about getting our electricity generation from ANY of the current green alternatives.
Let me back up and define sustainability from an environmentalist’s perspective. According to the World Commission on Environment and Development:
“Environmental sustainability is development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs.”
That’s kind of a broad definition, but I think the idea of saving a finite resource just so my grandkids can use it seems a little…pointless, I guess, especially if we really don’t have much of an alternative.
To put it into perspective, here’s a pie chart that shows electricity generation by source from the International Energy Agency:
Is stopping the usage of fossil fuels a sustainable venture? That is, if we cut way back on that usage, will we even be able to have the energy to sustain our current way of life? I don’t see how.
So anytime I hear someone talk about green energy, or renewable energy or sustainable energy, I just think to myself, “We get the lion’s share of energy from coal, and that’s not going to change in my lifetime or yours.”
Is coal renewable? Not in the strictest sense of the word – and not in the way environmentalists mean – but there’s so much of it that at this point, it really doesn’t matter if we’re not replenishing our coal reserves.
By almost any measure, our coal use is sustainable.
According to the Dept. of Energy, we have enough coal in the United States alone to last for another 232 years at current rates of consumption.
Now, there’s no question that coal is dirty, so it’s not green. But I don’t see many environmentalists living without electricity. You could argue that the whole electric car phenomenon will force us to use more coal. Coal spews even more carbon into the air than gasoline, so it could be that electric cars pollute more than gas-run cars.
It’s another example of unintended consequences and how the cure can be worse than the disease.
For me, the only prudent investment in “sustainable” energy these days is to buy coal and natural gas companies at cheap prices. I’m not about to start investing in “could-be” companies or “might-be” technologies or “should-be” initiatives.
Why bother when coal companies are so inexpensive, already profitable and in it for the long-haul? Why look for the next tiny wind-farm startup when there are American natural gas companies selling at cheap valuations? Why re-invent the wheel when we already have perfectly good wheel factories providing plenty of wheels?
Here, I’ll make it really simple for you: if you want sustainable energy, invest in coal. If you want greener sustainable energy, invest in natural gas.
Right now I’m looking at a full report on a coal company written by Chief Investment Strategist Ian Wyatt for Energy World Profits subscribers. So far this year, this stock is up 20%. If you believe in the trend that we’ll use more energy, and therefore, more coal in the future, there’s not a better way to get started than to buy this company now. Click here for access to this report.
If you like natural gas, we’ve just completed a research report all about America’s largest oil and natural gas reserves and the small companies with the drilling rights. Click here now to read this free report.
If you have any questions or ideas about alternative energy stocks, I’d certainly like to read them. Send your letters to editorial@resourceprospector.com
Good investing,
Kevin McElroy
Editor
Resource Prospector
