To limit carbon emissions to a level that does not seriously threaten the future of the planet, annual investment in renewable energy, energy efficiency and carbon capture and storage must reach $500bn by 2020. That’s a more than three-fold growth over the $155bn recorded last year.
Other Small cap news...
Major coup for Kurdish oil play Heritage
This is the stark conclusion of a new report from the United Nations. Just consider the scale of this problem... Major coup for Kurdish oil play Heritage
- Heritage Oil (ticker: HOIL), which recently made a huge oil discovery in the increasingly important Kurdistan, is to acquire the Turkish exploration and production company Enel.
- The deal will create a major new Kurdish-focussed oil company. Heritage Oil’s shares are up 277% since January.
- Look out for the release of my brand new oil report on Friday. In it I reveal one tiny company which is one of the few on the planet with a license to look for oil in Kurdistan. Could this be the “next Heritage”?
According to the Intergovernmental Panel on Climate Change we must limit the increase in the world’s average temperature to 2.0°C - 2.4°C. This means that we must stabilise the amount of CO2 in the atmosphere to 445-490 parts per million. If we’re to achieve these two, CO2 emissions must peak by 2020. That requires a concerted global effort to use less fossil fuels, or else to burn them in a way that generates fewer CO2 emissions.
Investment in alternative energy is soaring
The good news is that the world does seem to have got the message. Investment into the alternative energy sector is soaring. In 2002 the amount of money invested into sustainable energy projects was just $22bn, and two years later this had risen to a still modest $35bn. By 2008, this figure had quadrupled. $155bn was invested into sustainable energy projects in 2008 and at this rate of progress the $500bn target, which the UN believes must be reached by 2020, is well within range.
The details of this investment are interesting. Although more than half is made in Europe and North America the rest of the world is also doing its bit...
Ad here
Although it is often named as the greatest threat to the environment, China has been increasing its investment in sustainable energy projects at a faster rate than either the Europe or the USA. Brazil, too, which has a major ethanol fuel industry based on sugar cane, has been a major contributor to new sustainable energy projects. When you add the burgeoning participation of India and Africa, these developing nations are already investing as much in the planet’s sustainable future as North America.
In terms of the type of project, the largest recipient of sustainable energy funds is wind power. In 2008 this accounted for as much as the next two, solar power and biofuels, put together. Meanwhile, biomass, marine and hydro, geothermal and projects designed to enhance energy efficiency are all tiny by comparison.
Much the fastest growing, though, are geothermal - albeit from a very low base, and solar power. Geothermal taps into the natural heat of the earth while solar power is derived from the sun. The latter seems especially promising. At a recent conference, Anthony Patt, of the International Institute for Applied Systems Analysis, argued that all of Europe’s energy needs could be supplied by solar panels situated in the Sahara desert.
The real opportunity right now is in oil
One reason for optimism about solar power is that it is benefitting from technological advance. New photovoltaic cells can concentrate sunlight onto a small target area of semiconductors, while improvements to the latter can convert more of the source energy into electricity. Another reason to favour solar power is that so many of the world’s poor live in hot climates.
But still, advances in alternative energy and in ways to become more efficient in our use of fossil energy face two big hurdles. The first is the appetite of investors. Government measures have encouraged alternative energy, but still the industry relies largely upon far-sighted private sector finance. Last year the financial crisis hit early stage investment into projects with a distant pay-off especially hard. Investment into the alternative energy sector ground to a halt.
The other problem is our dependence upon the motor car. In the United States about two-thirds of oil is used in the transport sector and in developing countries cars top the list of most people’s aspirations. For all the talk of electric vehicles, biodiesel and fuel cells, the era of the petrol-fuelled car will not end soon.
Listen, the oil price may or may not be high on your agenda. I’m sure that you have your own priorities to think about - I know I have.
The major investment theme of the moment
But know this: the world’s thirst for oil is undiminished. We need it too much. The race is on to find the new supplies we desperately need.That makes oil the major investment theme of today - the opportunity of the moment. And that’s why it’s critical that you read the brand new report I’ll send you in the next few days.
You see, I believe we could soon see a massive increase in the price of crude oil. I’m not talking simply about another rally above $100. I’m talking about a permanent, sustained new oil crisis that could make the petro-booms of the 1970s... even the last two years... look small in comparison.
Invest in the right small companies and you could make a fortune. The three companies I’m recommending in my new report each have a unique proposition that, for me, sets them ahead of any "normal" oil play you’ll find. If you’re looking to make money from oil, you’d do well to consider these shares.
Look out for my oil report soon...
Good investing,
Tom Bulford
For The Penny Sleuth
P.P.S. If you want to follow the insights of a small company investor, and uncover the hidden gems of the stock market, find out more about The Penny Sleuth by clicking here.
