More Backward Thinking

This is bad news for my array of green energy stock portfolios:

For all the support that the presidential candidates are expressing for renewable energy, alternative energies like wind and solar are facing big new challenges because of the credit freeze and the plunge in oil and natural gas prices.

Shares of alternative energy companies have fallen even more sharply than the rest of the stock market in recent months. The struggles of financial institutions are raising fears that investment capital for big renewable energy projects is likely to get tighter.

Advocates are concerned that if the prices for oil and gas keep falling, the incentive for utilities and consumers to buy expensive renewable energy will shrink. That is what happened in the 1980s when a decade of advances for alternative energy collapsed amid falling prices for conventional fuels.

“Everyone is in shock about what the new world is going to be,” said V. John White, executive director of the Center for Energy Efficiency and Renewable Technology, a California advocacy group. “Surely, renewable energy projects and new technologies are at risk because of their capital intensity.”

I can confirm that the stocks are falling off the cliff.

It would be a catastrophic mistake to let renewable energy projects to go unfunded. The minor fluctuations in oil and gas prices belie the very major upward trend that is certain to continue as we reach peak production levels. The fact that natural gas-producing nations are considering the creation of a cartel shows you that these markets will remain artificially high to prop up the price, and that the interests of consumer energy needs or the environment will be the last thing on the list.

We can replace the trouble in the venture capital funding with a serious investment at the federal level in green projects. And you can combine that with energy efficiency policies like we have in California - and there's a legitimate economic benefit in doing so, because the job-creation possibilities are great:

OAKLAND, Calif. — California’s energy-efficiency policies created nearly 1.5 million jobs from 1977 to 2007, while eliminating fewer than 25,000, according to a study to be released Monday [...]

“Consumers were able to reduce energy spending,” the study said, adding that “these savings were diverted to other demand.”

“When consumers shift one dollar of demand from electricity to groceries,” the report said, they create jobs among retailers, wholesalers, food processors and other businesses.

If we let the renewable industry fail, we imperil jobs in this country, we cut off the one area that can bring us out of the economic slowdown, and we consign ourselves to a deindustrialized shell of a nation, losing power and losing time. We cannot chase the golden goose of cheap energy anymore. It's time for a change.