But the renewed interest in ethanol proved to be short-lived, as oil retreated below $20 a barrel just four months later. As a result, many of those smaller ethanol companies couldn’t survive as profitable alternative energy investments.

Flash forward to today, where we’ve seen crude oil prices double in just the past four months. Worldwide oil demand has soared, particularly from fast-growing countries like China and India, and although the global downturn has seen the pace of demand slow, when the global economy gets back on track, it should prove even more bullish for oil.

But there’s another sector that should rise, too…

Rising Oil Prices Spark Interest In Alternative Energy

With oil prices rising again recently, it’s sparked yet another conversation about the viability of certain alternative energies.

One ETF that tracks the performance of clean energy firms is the PowerShares WilderHill Clean Energy (NYSE: PBW) – a widely traded vehicle that gives you exposure to this still-growing sector in a safer way than investing in individual companies.

While firms like Exxon Mobil (NYSE: XOM) rake in billions of dollars per quarter from oil, PBW invests almost entirely in experimental, technology-focused “green” companies. And while these guys stand to benefit from higher oil prices just like specific oil companies, their success depends more on regulatory changes, subsidies and a global recognition of the need for alternative energy solutions.

The Alternative Energy Market Gets More Attention

When it comes to the alternative energy market, wind power, solar, hydroelectric, geothermal and nuclear power have all received attention over the past couple of years.

But when the oil market first began its march towards record high prices, it was the ethanol industry that took center stage and triggered the wider debate over cleaner energy resources.

However, the ethanol market faces a battle. Despite the government’s intervention and subsidies for the industry, newer technologies are needed in order to make ethanol more viable – and the industry’s companies profitable. A good example is Pacific Ethanol (Nasdaq: PEIX) – a company that Bill Gates invested in heavily a few years ago, paying $12 a share. Today, the stock trades for just $0.40.

Below is a daily chart of PowerShares WilderHill Clean Energy (NYSE: PBW), which is currently at a critical juncture:

Chart: http://www.investmentu.com/images/iu063009chart.gif

Three Scenarios for the Clean Energy Fund

As you can see, when the stock market bottomed out in March and oil prices retested their lows, PBW’s Clean Energy Fund did the same.

Since then, however, PBW has doubled off those lows to the June 10 high of $11.37. This is right around the swing high of $11.40 that it tested back in November, before it pulled back to the trendline drawn off the March lows.

In addition, the 50-day and 200-day moving averages are very close to crossing one another – a development that sometimes indicates a short-term top.

So what we have here is a relatively clear-cut conclusion…

• A close above $11.40 would be bullish and should lead to higher prices.
• However, a close below the trendline, currently around $10, would be bearish over the short-term.
• A close or two below the 50-day and 200-day moving averages, which are currently around $9.50, could lead to a move down to $8 or lower.

Source: Alternative Energy Investments: Three Scenarios For Clean Energy

But the renewed interest in ethanol proved to be short-lived, as oil retreated back below $20 a barrel just four months later. As a result, many of those smaller ethanol companies within the alternative energy market couldn’t survive.

Flash forward to today, where we’ve seen crude oil prices double in just the past four months. Worldwide oil demand has soared, particularly from fast-growing countries like China and India, and although the global downturn has seen the pace of demand slow, the global economy gets back on track, it should prove even more bullish for oil.

But there’s another sector that should rise, too…

Viable Alternative Energies: The Clean Energy Tracker

With oil prices rising again recently, it’s sparked yet another conversation about the viability of certain alternative energies.

One ETF that tracks the performance of clean energy firms is the PowerShares WilderHill Clean Energy(NYSE: PBW) – a widely traded vehicle that gives you exposure to this still-growing sector in a safer way than investing in individual companies.

While firms like Exxon Mobil (NYSE: XOM) rake in billions of dollars per quarter from oil, PBW invests almost entirely in experimental, technology-focused “green” companies. And while these guys stand to benefit from higher oil prices just like specific oil companies, their success depends more on regulatory changes, subsidies and a global recognition of the need for alternative energy solutions.

The Government Is Helping… But This Industry Still Faces A Battle

When it comes to the alternative energy market, wind, solar, hydroelectric, geothermal, and nuclear power have all received attention over the past couple of years.

But when the oil market first began its march towards record high prices, it was the ethanol industry that took center stage and triggered the wider debate over cleaner energy resources.

However, the ethanol market faces a battle. Despite the government’s intervention and subsidies for the industry, newer technologies are needed in order to make ethanol more viable – and the industry’s companies profitable. A good example is Pacific Ethanol (NASDAQ: PEIX) – a company that Bill Gates invested heavily in a few years ago, paying $12 a share. Today, the stock trades for just 40 cents.

Below is a daily chart of PowerShares WilderHill Clean Energy (NYSE: PBW), which is currently at a critical juncture.

Three Scenarios For The Clean Energy Fund

As you can see, when the stock market bottomed out in March and oil prices retested their lows, PBW did the same.

Since then, however, PBW has doubled off those lows to the June 10 high of $11.37. This is right around the swing high of $11.40 that it tested back in November before it pulled back to the trendline drawn off the March lows.

In addition, the 50-day and 200-day moving averages are very close to crossing one another – a development that sometimes indicates a short-term top.

So what we have here is a relatively clear-cut conclusion…

• A close above $11.40 would be bullish and should lead to higher prices.

• However, a close below the trendline, currently around $10, would be bearish over the short-term.

• A close or two below the 50-day and 200-day moving averages, which are currently around $9.50, could lead to a move down to $8 or lower.

Source: The Alternative Energy Market: Bullish & Bearish Scenarios For NYSE: PBW

• Sales of existing homes fell 3.1% in October, the lowest drop in four years, Reuters reported. Over the past year, medium home prices also declined 11.3% to $183,300, the biggest percentage drop since the National Association of Realtors began keeping records in 1968.

• Chile’s gross domestic product beat forecasts and grew 4.8% in the third quarter. Domestic demand was strong, as was energy output. “These figures surprised the market and showed that the Chilean economy is surprisingly resistant to a rapid deceleration,” Juan Pablo Castro, an economist at Banco Santander SA in Santiago, told Bloomberg. “Consumption is still growing at around 6 percent even though you’d expect to see the effects of inflation and interest-rate rises.”

• Shares of Solar power manufacturer SunPower Corp. (SPWRA) jumped yesterday after the company announced it had completed an 18-megawatt solar electric power plant in Badajoz, Spain. The plant’s SunPower Tracker follows the sun as it moves across the sky, increasing sunlight capture by up to 30% more than conventional fixed-tilt systems.

• China oil titan Cnooc Ltd. (CEO) and undisclosed partners may spend up to $29 billion to develop deposits in the South China Sea. The state-run oil company is making a big push to feed domestic energy demand as well as put its flag in an oil-rich aquatic area where its facing exploration competition from Vietnam and Indonesia, Bloomberg reported.

• Alpharma Inc. (ALO) yesterday (Monday) agreed to King Pharmaceuticals Inc.’s (KG) $1.6 billion cash takeover offer. The deal values Alpharma at $37 a share – a 54% premium to the company’s closing price on Aug. 21, the last trading day before King’s initial $33-per-share bid.

• Xerox Corp. (XRX) yesterday (Monday) said that 2009 profits are generally in line with analyst expectations and that its strong contingent of repeat customers coupled with cost cuts will help it weather the economic downturn. The company, which last month said it plans to cut about 3,000 jobs, or 5% of its work force, expects 2009 profit to range between $1 a share to $1.25 a share.

• The price of crude oil yesterday (Monday) rose $4.57 a barrel, or 9.15%, to settle at $54.50 a barrel on the New York Mercantile Exchange. Oil climbed more than $5 earlier in the day, reaching a session high of $55.30 a barrel on hopes that equity markets will continue to recover.

Source: Global Investing Roundups, Tuesday, November 25th, 2008

The US’s minority party routed American taxpayers Tuesday when it mopped the floor with citizen-related issues by blocking a vote that would have:

• Killed corporate oil’s $17 billion tax break.
• Taxed excessive corporate oil profits, unless big oil poured the excess into exploring alternative energies.
• Forced oil futures speculators from big investment banks, hedge funds and brokerages to have a lot more than 5% cash in the margin accounts they use to bet on oil. Such a move would have dramatically cooled speculation, which even oil company executives admit makes a barrel of oil (today) $70 to $80 too much.
• Made it a federal crime to price gouge oil and gas.

On the first two issues, Republicans ignored the minimum $17 billion in taxes that would once again flow to US coffers. Instead, they accused Democrats of merely wanting to punish oil companies as a way of expressing the seething anger most American taxpayers feel over gas prices that have skyrocketed for no apparent reason.

Democrats said, “Yup, making oil companies pay their fair share and punishing them for excessive profits while Americans suffer is exactly what we wanted to do.”

“Why that’s un-American,” screamed GOP senators. All while they rushed to call John McCain in order to congratulate him for admitting that, if elected president, he’d continue a program that secretly wiretaps domestic phone calls made by American citizens.

GOP senators made no comment on the bill’s increased margin account provision. What could they say? Big investment banks, hedge funds and brokerages won. Taxpayers lost a huge one. Best to pretend it never happened.

But, Senator I.M. Forsale did applaud the effort. He said the move is part of an effort to make gas so expensive that “poor people won’t have the gas to drive to the bank to cash welfare checks… perverted homosexxxxxuaaaallls can’t afford to drive to city hall to get married and godless whore women are economically prevented from driving to Planned Parenthood clinics.”

He added, “$5 and $6 gas is finally going to shake the losers, the sinners and the old out of the American family tree.”

Republican leader Mitch McConnell of Kentucky acknowledged that Americans are hurting from the high-energy costs. But, he strongly opposed the Democrats’ response and ridiculed those who “think we can tax our way out of this problem.”

“Republicans by and large believe that the solution to this problem, in part, is to increase domestic production,” McConnell said.

A GOP energy plan, rejected by the Senate last month, calls for opening a coastal strip of the Arctic National Wildlife Refuge in Alaska. Drilling in the ANWR would net the US about 454 days of oil, at its current 22-million-a-day burn rate. And, it would take eight to ten years bring the first of this oil to market.

INTERNAL ENDORSEMENT

Just this Once
BELIEVE THE HYPE!

It was the email that shocked the investment world.

One noted investment authority told his readers to take seven huge stock market gains on one day… SEVEN HUGE WINNERS on one day that ranged from 526% to 102%… seven, and on stocks… not options.

But that was just the beginning! It now looks to be setting up to happen again this year, too.

That’s why you must check out the whole story right here.

I actually believe that oil field technology is advanced enough that it would be fairly safe to drill there.

Of course, there’s the human element to consider… as in shortcuts and corrupt contractors. And, with so much at stake, some people might try to cover up mistakes.

Then, I did some research and discovered just how little oil is in ANWR… modest predictions are 5.5 trillion barrels… best-case predictions suggest 10 trillion barrels.

And, that is quite literally – even at the 10-trillion level – a drop in the bucket.

You see, the US Energy Information Agency reported that if Congress gave the go-ahead to pump oil from ANWR, the crude could begin flowing by 2017. It would reach a peak of 876,000 barrels a day by 2029.

But even at peak production, the EIA analysis said, the United States would still have to import more than two-thirds of its oil.

That’s 21 years until peak. And, that peak would be less than one million barrels a day. That’s less than 1/20th of our daily burn.

And, this is a front-burner issue. For whom?

Now, I rarely share with you the thoughts I send in private to my Asia Business & Investing subscribers… but a bit of what I wrote to them on Wednesday is an extension of my thoughts here.

This is what I wrote

Here in the United States… apparently no one in charge is to blame for the state of the economy… fuel and food prices… except, of course, consumers who pay the prices.

Ron Reagan was known as the Teflon President because trouble didn’t stick to him. Today, US leaders in Washington eschew the Teflon, because no one is throwing anything at the White House or Congress.

It’s you and I that need the Teflon.

After all, it was greedy homeowners who created the credit crisis… not nominally regulated banks and lenders.

It is SUV drivers and soccer moms in mini vans who have run up the price of oil – not totally unregulated oil futures speculators (Google “Enron Loophole” for the whole story) or the threatened veto of a farm bill that included a provision to close the seven-year old crooked loophole, which is well known among Washington highest echelons at both ends of Pennsylvania Ave.

…if you’re like me, when you look around don’t you occasionally wonder who led us to the state we are in today… and why everyone in Washington has escaped blame… or worse, won’t accept responsibility?

Instead, what we get is the Mitch McConnells of the world saying “we know Americans are hurting but there’s not a thing Congress can do about it – except to open up oil drilling in the Alaskan Nation Wildlife Refuge…”

See, there it is again… Washington is not to blame… it’s those pesky, do-gooder, unpatriotic, environmentalists who are pissing in the soup.

So, how about this for an idea?

If this oil is so freekin’ critical to the US’s way of life, then we open up the ANWR for oil exploration, but with two huge restrictions.

They would be that ExxonMobil is not allowed to participate in the ANWR.

And, oil company profits would be capped at 6%.

You see, the US Geological Survey estimates that at $30 a barrel, oil company profits would be about 12% on ANWR oil… but, the Department of Energy, on Thursday, said that oil prices will be $129 a barrel in 2009. It should be $86 in 2010. And it should be back over a c-note at $107 in 2015.

So, who knows how high profits would fly on ANWR oil by 2017 when its initial oil came to market.

But, under my restrictions, every penny beyond a 6% profit would evenly flow directly to the Social Security Trust Fund and Medicare.

And, I am certain that as patriotic Americans with the ability to help sustain the American way of life, US oil companies would rush to accept that deal.

Have a great weekend.

Andy

P.S. To let me know what you thought of today’s article, send an e-mail to: feedback@investorsdailyedge.com.

Source: Kiss Your Gas Goodbye

Google, Chevron and Goldman are all betting that this prediction is correct. This from Bloomberg:

Unlike photovoltaic solar panels that convert sunlight to electricity, solar thermal focuses sunrays with mirrors to heat oil in glass pipes to about 700 degrees Fahrenheit (370 degrees Celsius). The oil turns water to steam, which spins an electric turbine. A solar thermal unit that begins operation in 2010 will produce power at 14.2 cents a kilowatt hour, almost triple the 4.8 cents for a plant using pulverized coal, the Energy Information Administration estimates.

Costs for solar thermal may fall as low as 3.5 cents a kilowatt hour by 2020, according to a report commissioned by the U.S. Energy Department. Meanwhile, coal expenses may rise. Congress is considering limits on carbon dioxide and other greenhouse gas emissions. The purchase of pollution permits may be required under a measure the Senate will begin debating next month.

Chevron, Goldman Sachs, FPL, PG&E and other companies have filed more than 50 applications with the Bureau of Land Management to lease government-owned desert property for solar power systems … Google’s philanthropic division put $10 million into eSolar, a start-up in Pasadena, California. Dan Reicher, a former Energy Department official who manages the unit’s climate and energy initiatives, said there will be more such investments.

The PowerShares Clean Energy ETF (PBW) has more than $1.5bn in assets and is one of the most popular ways to invest in solar, biomass, wind, and geothermal energy, says Brian Hunt in Daily Wealth.

“Common sense tells us when the holy trinity of fossil fuels – crude oil, coal, and natural gas – rise in price, companies that provide cleaner substitutes should also rise in price.

“PBW’s only been around for three years […] But with oil approaching $130 a barrel and clean energy stocks out of favor, expect a rally from the ‘treehugger-approved’ companies of the world.”

“Solar panels won’t be accepted en masse unless the economics of it makes sense,” says Charles Delvalle in Investor’s Daily Edge. “Sure, adoption is growing. But it won’t be mainstream until everyone can afford it. The same goes for wind power.

“With so many solutions not making any economic sense, why is adoption skyrocketing? You can thank the government and their incentives. States are ramping up incentives for clean energy production (like California’s $3.3 billion solar initiative). If it weren’t for government incentives adoption would drastically drop.

“When you combine these government incentives with the whole culture change that’s going on, you have a recipe for amazing growth.”