The solar sector is among the most hated on Wall Street. Many names in the solar sector that are heavily shorted, in spite of it being the fastest growing energy sector in the U.S. Meanwhile, the world is using oil faster than it’s being pumped, which is economically dangerous, because oil price spikes have preceded all recessions since 1970. More renewables could serve to lessen our ridiculous economic vulnerability to oil prices.
In this post, which is part of a series of posts on the hot button topic of rising gas prices and record oil company profits, Robert argues against the powerful temptation to tax Exxon/Mobile’s recent windfall profits. Doing so will do nothing to lower recent high gasoline prices, which in reality are driven by global supply and demand and will risk driving more of the oil business overseas. He goes into some depth on each of the main tax breaks and subsidies that the oil sector now enjoys and argues the case that these need to be continued and that the oil sector should not be singled out. He poses the question if it is fair for ExxonMobil to pay even more income taxes, than why not Apple or Google, which have much higher profit margins?
The recent swings in the spot price for crude oil — especially in light of the currently rapid rising spot prices are cause for alarm. Noting that the current run up of prices looks a lot like period leading up to the sudden price spike that occurred in the summer of 2008. It goes on to argues that the global economy needs a better market regulating mechanism that can help manage these swings and reduce their amplitude so they become less damaging to the world’s economies. The energy business — whether it is alternative energy or oil, gas or coal exploration and development — has huge up front capital needs. This needed capital is much harder to raise in a climate of such extreme near term price uncertainty.
The great American car culture is literally running out of gas. Many leading petroleum geologists are warning us that the era of easy cheap oil is over and that we are facing a much steeper rate of depletion than commonly believed. There is nothing that can replace these vast stores of liquid fossil energy that is being pumped out of the ground and drives our car culture. Without cheap plentiful oil the American car culture will rapidly crumble. The impending demise of the car culture and the types of spread out low density living that it has fostered is perhaps the most profound socio-economic earthquake we will have faced in many decades. Will we wisely prepare and build out alternatives to this doomed way of life or we wake up one day unprepared and find that the pumps really have run dry? Talking about giving up on the car culture in America is quite the third rail — no one wants to give up their car — and discussion often veers off into irrational sound bite, talking point filled shouting matches. But the facts are the facts. Cars run on gas and the era of cheap easy oil is over… the world now stands at the top of the oil production curve… at the peak of production. It is like we are all sitting in some great roller coaster ever so slowly rolling perched right at the very top of the precipice. We do not have much time at all to begin re-inventing America and building a green economy that can carry us into the future; if we dilly dally and do nothing events will soon race ahead of us and force drastic sudden change upon us all.
The clean tech green energy sector is hurting badly – along with the rest of our economy. A lot of promising new firms are on life support finding it very difficult to raise desperately needed venture capital. We need to be laying the foundations for future growth now and there is no time to waste, I would argue that this is a paramount issue of national security, that it is not just about jobs or being “green”, but that it is an urgently vital necessity for our country’s future security. This is not an optional choice; it is not a luxury, a nice to have kind of thing; this is the very life blood of our country, of our industrial society. An industrial society needs energy and lots of it. America needs to urgently begin a national crash program of investing in domestically controlled renewable energy supplies, such as wind and solar right now while we still have a little breathing room to begin laying the foundations for a new American energy economy. It is a matter of national security.