post

Bring On The Renewables Bubble

by

Power Lines
Photo Credit chefranden

I was talking to Tom last night, and it struck me that a bubble won’t be all bad. There are a couple of reasons why. First off, unlike the last time a green bubble popped when oil prices collapsed in the 1980s, this time around we have China and India to sustain demand, and oil prices.

So why would a bubble be good? For one, we need the inward investment to create an infrastructure capable of serious lobbying, to be able to create favourable Green Tape (the rules, regulations and tax regimes surrounding renewable investments). At the moment energy lobbying is clearly in the hands of the oil and gas companies. This balance needs some redress, and massive capital injections are going to help.

Finally lets not also forget that bubbles can and do change the world. The first internet “bubble” popped, but you’re not about to tell me the transformation is over, and or has even started, yet…Innovation is discontinuous, and that’s why I am not afraid of some bubble tendencies. We just need to make sure some of the gum sticks when it bursts…

 

picture courtesy of chefranden on Flickr under creative commons Attribution 2.0 license.

 

post

The sooner oil hits $200 per barrel, the better!

by

Four bucks a gallon
Creative Commons License photo credit: johnmarkos

Back in 2004 the government’s worst case scenarios had oil reaching $26 per barrel by 2025. This afternoon oil reached $125.98, the fifth day this week we had a record high price for oil. And we are not even halfway through 2008 yet.

Goldman Sachs recently pronounced that oil may soon reach $200 per barrel. I hope they are right. In fact the sooner the better, to my mind!

Why do I say that?
We need to get off our dependence on carbon as an energy source. The CO2 given off by burning oil for energy is poisoning the planet and wiping out animal and plant species at a hitherto unprecedented rate.

We have known this for quite some time now. Scientists were discussing Global Warming and climate change up to 40 years ago. The reason we have done very little to move off oil is that the alternatives were always too expensive. This also meant that raising money for research into renewable power sources was difficult and so alternative energy sources remained high cost.

However, now with oil at $126 per barrel and rising, renewables are starting to look very attractive. Suddenly money is pouring into companies who are trying to research and commercialize Green energy. This is a good thing! This will only continue as long as it is perceived to be profitable. In other words, as long as oil is expensive.

The worst thing that could happen right now for the future of the planet is if oil prices dropped. Roll on $200 per barrel, I say.