Investors in alternative energy should hang up their hats for a while, says Irwin Greenstein. That’s because the prime business case for investing in alternative energy – sky-high oil prices – has evaporated. And these doesn’t look set to return in the foreseeable future. In the meantime, alternative energy will remain the domain of melodramatic soccer moms, “green-niks,” marketers and hucksters.

News that OPEC that it will cut production by 2.2 million barrels a day had virtually no effect on the price of oil, where it still bumps along the bottom of a four-year low of about $43.

Oil is a boom-and-bust business. Prices will inevitably rise. But when and by how much remains in the hands of Tarot card readers.

Until oil returns to higher prices, alternative energy will remain the domain of melodramatic soccer moms, green-niks, marketers and hucksters.

The price of oil has plunged 30% since October.

By next year, global consumption could drop by 1.3 million barrels a day, or 1.5%, according to Deutsche Bank.

Goldman Sachs has gone as far as to predict that oil may fall to $30 a barrel or lower next year if China’s economy continues to slow down.

Although China may still be forced into a massive alternative energy build-out to stem billions (if not trillions) lost to horrible pollution, the U.S. seems bent on green as a more of a feel-good initiative.

President-elect Obama touts green as part of a national infrastructure expansion to help create new jobs. Given current and near-term oil prices, however, it seems that American taxpayers will end up subsidizing alternative energy.

Americans also feel compelled to go green as a means of cutting air pollution from coal and oil.

It would cheaper and easier for energy companies to install scrubbers rather than pay the green premium. In the end, green could become a marketing program more than a real solution.

Making the assumption that the U.S. economy will eventually recover, there is still no guarantee that our energy consumption will increase – further eroding the need for alternative energy.

On December 17, 2008, the U.S. Department of Energy (DoE) published a presentation that forecast electricity usage dropping to 1% annual growth by 2030 versus 9% in the 1950s. This presentation shows the steady decline of electricity usage over the past 40 years.

This sounds counter-intuitive. But the DoE cites factors such as efficiency, industry standards that stress product uniformity (and hence lower manufacturing costs) and the overall conservation by consumers.

The study also shows that since 2007 alarmist forecasts for electricity consumption are higher than actually use by approximately 5% – a trend that the DOE expects to see well into 2030.

This particular statistic is important to alternative-energy investors. The typical PowerPoint business development pitch is larded with overly optimistic projections that entice investors to part with their money.

The DoE’s numbers were based on higher oil prices. But the agency still forecast that coal and natural gas will supply about 50% of America’s energy needs by 2030, with nuclear and renewable taking up the slack.

Now that oil prices have dropped much faster than the DOE originally expected, it only makes sense that renewable energy will comprise only a fraction of our national energy mix.

In the meantime, investors should look elsewhere for profits.