Coming Soon for Those Who Believe the Oil Companies Face Smooth Sailing: A Haircut of Epic Proportions

It’s amusing to me how many people are being led along by the nose by the propaganda of the traditional energy industry.  Think of all those investors and bankers who believe that the oil companies are going to dominate the 21st Century just as they did the 20th–all of them soon to get a haircut of epic proportions.

And it’s not as if my book (Bullish on Renewable Energy, which outlines how the forces of pure market economics are rapidly conspiring against the world of fossil fuels) is the only clue.

First of all,  you have the 350.org people with their divestment campaigns, urging investors to get out before it’s too late, before company valuations start collapsing into free-fall.

On top of it all, you have articles like this one, which include:

NV Energy, a Nevada based utility owned by Berkshire Hathaway, struck a PPA to buy electricity at 3.87 cents per kWh from the 100 MW Playa Solar 2 project that is being developed by First Solar. The price on the 20-year, fixed-rate contract not only represents a new landmark for solar power in the United States, it could quite possibly be the lowest electricity rate in the country. The best price offered last year was 4.6 cents a kilowatt-hour, under a PPA signed by SunPower in Nevada. The sub-5 cent rates certainly indicate that the solar industry is maturing. Utility-scale solar power plants are becoming more economical to build and operate, driven by improving panel energy yields, the availability of cheaper financing and lower soft costs.

There are two reasons my personal portfolio is entirely “extraction free” (i.e., excludes any positions in companies that extract fossil fuels from the Earth).  First is that I actually care about the world around me.  Second is that I’m not willing to take the major haircut that is so obviously headed in the direction of Big Oil.