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Does the Stock Market Pay Adequate Attention to Clean Energy?

4 July 2007 - Features - Editor

No one will fault the stock market for excessive preoccupation with environmental and conservation matters! It appears that there is a wide chasm between concern for the ozone layer and the unrelenting pressure for ever-increasing revenues and profits. The road from fossil fuels to hydrogen and other forms of clean energy has hardly stirred any stock market emotions. A part of the reason may be that Universities and many other not-for-profit organizations have had so much to do with new developments on the energy sector.

Since the major part of the strategic oil reserves of the United States is earmarked for military contingencies, civilian demands for fossil fuels have to be seen in a geo-political light. The extent to which we are dependent on oil supplies from relatively hostile countries is hardly appreciated in stock market circles. The focus on quarterly results leaves little room for such long-term thinking. However, we will soon arrive at a junction of energy alternatives which the stock market can no longer ignore.

Why do hybrid fuel engines, solar power, wind mills, and other innovations which have large conservation potentials, not make greater impacts on stock market thinking? How can scientific breakthroughs to substitute oil find greater resource support? Can something be done to accelerate use of alternative and clean forms of fuel and energy? Does your portfolio have significant shares in companies which produce fuel cells and establish hydrogen highways?

Stock market analysts have a slew of reasons for being skeptical of alternate energy investment projects. Cost has been a traditional and formidable hurdle, with many technological developments being simply impractical from economic perspectives. The latter has an echo in poor conversion efficiencies achieved by most prototypes as well. The logistics of refueling have been daunting mainly because hydrogen does not exist by itself in nature. It is not an easy substance to store and to measure.

However, the end of the fossil fuel era is on the horizon. The defects in early versions of hydrogen and other clean energy forms have been largely overcome. The hydrogen highway between California and British Columbia in Canada is a striking example. Portable generation sets and refueling facilities are quickly becoming so common that an end to fossil fuel dominance seems but a matter of time.

Do review your portfolio for positioning in the brave new world of hydrogen fuel cells. We are at your service should you require some investment options to weigh in this star sector.

 


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