An article in the Wall Street Journal caught my eye, leading me to wonder if green investors may be crying the blues in 2009 and beyond.

The article talked about federal investigators looking into a Dutch-Swiss oil trader, Vitol Group.

The enforcement attorneys were trying to answer a big question: Whether or not oil speculators were behind the big price run-up this past summer — when oil approached $150 per barrel (today, oil hit $38 barrel).

The investigation by Commodity Futures Trading Commission potentially comes at an inopportune time for green investors. Green stocks began to shine with record-high oil prices. Although speculative-driven prices entered the dialogue, most experts blamed China, India, Russia and other booming emerging markets for consuming the world’s oil and gas inventories and driving up prices.

However, since hedge funds are largely unregulated no one really knows for certain the role they played (if any) in pumping up the price of oil.

The probe into Vitol may help answer that question — and determine the viability of green investments.

The Journal reported that Vitol’s trading contracts on the New York Mercantile Exchange at one point in July constituted 11% of all crude-oil bets outstanding on Nymex around the time oil was skyrocketing to new highs. The attorneys are now investigating if, in fact, the percentage of Vitol’s trading contracts were even higher than that.

If Vitol’s trade sufficiently “influenced” oil price fluctuations, some form of legal action could be pursued against the trader.

According to the Journal, Vitol made an estimated $1 billion to $1.5 billion on its record $146.7 billion in reported 2007 revenues, say traders familiar with the company. That works out to an average of $4.5 million to $6.8 million for each of Vitol’s 220 equity partners, although the top seven partners get a larger share of the spoils, the Journal said. Vitol reports its equity value at more than $5 billion.

An important distinction to make about Vitol’s trades is that they covered physical oil, not oil futures. By physical oil we’re talking about stockpiling oil shipments in tankers and other places, to keep crude off the market until Vitol could get its high price.

The Journal made sure that readers understood Vitol’s trading practices did not break the law — at least at this point in the investigation.

In August, though, Vitol emerged as the mystery trader that U.S. regulators reclassified as a large “noncommercial” trader — essentially a speculator, reported the Journal. Vitol’s trades helped reinforce the notion that indeed speculators were behind rising oil prices rather than OPEC and other producers.

This investigation could prove to be real bad timing for Vitol.

Under current SEC Chairman Christopher Cox, the agency has been lambasted for failing to protect investors from the current meltdown. President-elect Obama won’t make the same mistake.

His pick to head the SEC, veteran regulator Mary Schapiro, is expected to mop up the mess and restore confidence in the regulatory agency through new, strict guidelines.

She spent more than 20 years supervising financial markets. In her past position, she served as chief executive of the Financial Industry Regulatory Authority, a broker dealer watchdog. Schapiro has a stellar reputation for integrity and putting investors first.

What does all of this have to do with the price of green?

Well, that’s the big “What if?”

But here is how it could play out…

Schapiro digs up enough evidence to make a painful example of Vitol — and other traders like it. The backroom speculators are forced into the media glare, and pilloried for driving up oil prices.

At the same time, the economy bounces along the bottom and gas consumption stays relatively low.

Combined, these forces conspire to depress oil prices far longer than anticipated today — to the extent that OPEC’s supply cutbacks have only a negligible impact on spurring the price of oil at least here in the U.S.

Overall, this scenario is very bad news for green investors. Low oil totally crushes the economic argument for green technology.

Worse, if the economy remains sluggish for the next few years, the Obama camp could have a difficult time of imposing clean-air surcharges and penalties on American companies.

In the end, we believe that fossil fuels, and nuclear, will continue to reign in the coming years.