Leading up to the Obama administration’s monumental $819-billion stimulus package, major news outlets have begun to run stories that challenge the viability of the alternative-energy component of the bill.

Alternative energy is certainly inevitability – whether or not it makes economic sense for American taxpayers and businesses. And eventually, maybe in our lifetime, renewable sources of energy as envisioned on the grand scale of President Obama and his followers will fulfill the promise of energy independence, environmental improvements and lower costs than fossil fuels.

In the meantime, however, the persistence of the White House to tout alternative energy as an instant fix that creates new jobs and energy sources to alleviate suffering among the unemployed amounts to nothing more than a cruel myth.

While we have been telling readers for months now that green won’t yield any near-term profits for reasons that are political, financial and technological, we see that Bloomberg and The New York Times have finally drawn a similar conclusion – perhaps starting a stampede away from the green monster.

On January 26th, Bloomberg ran a piece that said President Obama “may find it harder to increase renewable energy than his predecessor…”

The Bloomberg piece, in particular, cited the current credit crunch as a huge obstacle toward the construction of a widespread renewable-energy infrastructure. According to Bloomberg, “Obama’s goal to double U.S. renewable- energy by 2012 may take years longer because even fully funded projects take at least three years to develop.”

Further, the Obama folks set unrealistic goals strictly in terms of logistics, as many of these massive new energy projects can years to plan before the first hole is dug.

The New York Times, meanwhile, took a more political angle in their story of January 27th. The Times characterized the renewable energy struggle as geopolitical, with the service-orientated economies of the east coast mostly oblivious to the fossil-fuel mandate of manufacturing elsewhere in America.

This clash could pose some high hurdles for green-energy advocates to clear as they exert pressure from a lofty position of entitlement.

“There’s a bias in our Congress and government against manufacturing, or at least indifference to us, especially on the coasts,” the Times quoted Senator Sherrod Brown, Democrat of Ohio as saying. “It’s up to those of us in the Midwest to show how important manufacturing is. If we pass a climate bill the wrong way, it will hurt American jobs and the American economy, as more and more production jobs go to places like China, where it’s cheaper.”

Even Democrats from these so-called brown states could find themselves in a pickle as they try to balance the needs of their constituents against the partisanship of the new White House.

For decades, California has led the nation in environmental regulation, including the most sweeping effort to address global warming by imposing mandatory caps on greenhouse gas emissions starting in 2012.

As the Times reports: “But California and many East Coast States also differ sharply in the extent to which they depend on coal — a fossil fuel that is a major culprit in producing carbon emissions. California, for example, derived only 20.7 percent of its electricity from coal and 40 percent from hydroelectric power and renewable sources in 2005, while Ohio drew 86 percent of its electricity from coal that year, according to the Department of Energy. Other states of the Great Lakes and Plains are much more like Ohio than California in energy usage.”

Senator Debbie Stabenow, Democrat of Michigan, told the Times, “My message over all is that for us to support what needs to be done in addressing global warming we need to demonstrate that, in fact, jobs are created. It’s not a theoretical argument. We have to come up with a policy that makes sense, that is manageable on the cost end, that creates new technology — and that treats states equitably and addresses regional differences.”

With the Times, Bloomberg and other major media outlets getting wise to the big green lie, investors can easily find themselves in the position of waiting much longer for a profit than the hucksters and politicians would lead you to believe.

Long-suffering readers know that we’ve taken a contrarian position against hybrid and electric cars as evidence continues to mount against their short-term returns for investors. The flip side of our coin, however, is that we don’t know when these investments will start to show profits for shareholders.

Two data points popped up on our computers in recent days, further substantiating our gloomy view of battery-powered vehicles. The latest sales data on hybrid sales proved grim, while an article in the Wall Street Journal provides anecdotal evidence that the market uptake contradicts the market hype for electric cars.

Automobile Magazine recently reported that hybrid sales tumbled 9.9% in 2008. The consensus was that low fuel prices have deterred consumers shelling out the “hybrid premium,” in which these new fangled cars tend to cost more their gas-powered counterparts.

Even the segment-leading Toyota Prius suffered, with sales plunging nearly 30% in the second half of 2008.

The article quoted Andrew Brown Jr., chief technologist at Delphi Corp, as saying “People want the technology, but it’s got to be economical. That’s the challenge in the industry now: to get the cost of those components down.”

With fuel prices averaging around $1.62 nationwide in December 2008, it would take a Prius owner 70,000 miles to recoup the initial premium ($7000 base) over the similarly sized Corolla, according to the article.

One of the earliest causalities in this tough market is a Norwegian start-up Think Global AS. The Wall Street Journal described Think “as one of the front-runners” in the electric-car segment. Unfortunately, Think investors got caught in the squeeze between PR spin, no cash and cheap gas.

Just as Think was ready to ramp up manufacturing from 350 of its two-seater cars to 10,000, the bottom fell out of the market in every which way possible. The timing was horrible for Think. The worsening cash crunch forced creditors to demand faster payments. In the end, Think filed for bankruptcy protection.

Venture capitalists, the self-proclaimed smartest guys in the room, lost out on Think. The company’s demise came in the middle of venture drought as these super investors cut off cash infusions into green technology overall.

Now with significant incursions by the world biggest car makers into electric and hybrid vehicles, upstarts such as Think and others face more formidable obstacles to success. Still, regardless of how big the player, the economy and enduring low gas prices will continue to hammer green vehicles for investors.

Eventually, hybrid and electric vehicles will hit pay dirt. For the time being, you’re still better off putting your money into a bank CD.

For the past few months, we’ve cautioned investors from buying into the hype that Obama’s green revolution would provide a new path to Easy Street for investors. Now an article in today’s Wall Street Journal reports that Obama’s $825 billion economic-recovery package “may not provide as big a near-term lift for the economy as expected.”

While this poses major obstacles for investors who bought in early on the hype to invest in raw materials such as steel and cement, the implications are even darker for America’s fledgling renewable energy sector.

On the campaign trail, Obama vowed to invest $150 billion over the next 10 years on renewable energy — giving rise to an entire new sector that would create thousands of jobs.

But it looks like Obama’s stimulus plan is more sizzle than steak for individual investors and the legion of unemployed.

The Journal says that nonpartisan Congressional Budget Office (CBO) projected less than half of the $355 billion that House Democrats want to spend on highways, bridges and other job-creating investments is likely to be used before the end of fiscal 2010. What that means is that the balance would be spent after the recession is expected to end.

Republicans said the analysis shows that the package, which Democratic leaders drew up with top Obama aides to boost the ailing economy, wouldn’t create the promised jobs, according to the Journal. “Clearly, we’re not talking about a stimulus bill,” said Virginia Rep. Eric Cantor, the second-ranking House Republican, in the article.

In fact, upon close scrutiny, most of the stimulus package would initially go toward jobless benefits, health care for the poor and middle-class tax cuts.

The bill originally gave states 90 days to spend money on infrastructure projects or risk losing the funds. But in a new report the CBO study concluded that states couldn’t act that fast. Democrats replaced that provision with one that would award states a bonus if they spend the money within 120 days.

Even if the states could pull together plans that would accommodate 120-day limit, the renewable energy projects that would be part of these packages could easily get tied up in court for years to come.

As we’ve said before, the problem with this bill to construct a green industry fails to take into account that the very people who proclaim allegiance to green are also the same people who could fight solar arrays, wind farms and energy superhighways on the grounds of environmental damage.

Endangered species, protected waterways and national parks are all potential battlegrounds for green vs. green in courtrooms across America. This is where federal mandates clash with local sentiment on setting both national and regional priorities from investments in renewable energy.

All of this is additional bad news for headline investors making a grab for that pot of gold at the end of the renewable energy rainbow. President Obama talks about a new transparency in government, and now we can see through his campaign promises to make everyone rich with green.

This from Rude Awakening:

Now that the Obama Administration is about to descend upon Washington DC, the nation’s list of “Top Priorities” will receive a makeover. I will leave it to political pundits to evaluate the pros and cons of the makeover. My beat is investing. So I will be looking for opportunity in those industries that seem most likely to prosper during the early days of the Obama Administration. Clean Energy and Infrastructure are two leading candidates…which is why Trinity Industries (NYSE:TRN) is one very promising stock.

Trinity is a multi-industry company. It has divisions that sell products and services to the construction, transportation, industrial and energy sectors of the economy. Trinity’s five principal business units include its Railcar, Railcar Leasing and Management Services, Inland Barge, Construction Products and Energy Equipment groups.

I’ll get to the windmill angle shortly. But first, I want to explain that each of Trinity’s business units has its own story. And this helps put the windmill tower business in perspective.

Trinity’s Railcar group has a long history of building and repairing railway cars and components. These include auto carrier cars, boxcars, gondolas, hopper cars, intermodal cars, specialty cars and tank cars. So Trinity has long experience in fabricating metal for tough outdoor jobs like railway equipment.

And Trinity’s Construction Products group has a long history producing concrete, aggregates and asphalt, as well as highway products like the beams and girders used in highway bridge construction. Thus, the Construction group has solid experience serving customers in the construction and foundation industry.

But the business group that we want to focus on is the Energy Equipment Group (EEG). The EEG manufactures large tank systems (such as propane tanks), tank containers, tank heads for pressure vessels and structural wind towers.

So the EEG capitalizes on Trinity’s long experience in building robust metal systems like rail cars and pressure tanks. And the EEG utilizes the corporate experience in the foundation and construction work that the Construction group has.

Trinity’s Energy Equipment Group produces wind towers through a wholly owned subsidiary called Trinity Structural Towers Inc. Quite simply, TSTI fabricates tubular towers, and I mean BIG tubular towers.

These tubular towers are the large poles on which the windmill turbines sit. They can be 20 or more feet in diameter at the base, and 250 or more feet high. Some of the poles even have an elevator inside, so the maintenance people can get to the top. And some of the towers are so big that you could land a helicopter on the topside platform. Is that big enough for you?

These massive towers have to be able to withstand the utmost in stress. First, there’s the windmill turbine and blades that can weigh up to 100 tons – the weight of a fully-fueled Boeing 757. And then this assembly has to handle the stress of high winds, heavy rainstorms and lightning strikes. The towers will spend the next 40 or 60 or 80 years exposed to the elements. The turbine blades at the top can be over 200 feet long and rotate at speeds of over 20 revolutions per minute. That’s a full revolution of the blade set every three seconds. And that’s one heck of a lot of stress. So only the strongest tower systems can hold up.

Just the tower foundations alone can go 50 or more feet into the Earth. And because soil and bedrock conditions change over any large area, almost every windmill tower requires its own unique engineering, excavation and construction plan.

So TSTI offers an array of services related to design, fabrication, construction, installation, testing, operation and maintenance of windmill towers and generating systems. In this respect, TSTI provides steel turbine components, concrete and aggregates, product transportation and specialized coatings that relate to wind tower design and construction. (Just the effort to transport these large tower components to the site is a logistical business in and of itself.)

TSTI operates some massive production facilities. Indeed, the TSTI plants are among the largest production facilities in North America for fabricating tubular wind towers. TSTI can fabricate to the detailed design of a turbine manufacturer like GE (NYSE:GE), Vestas or Gamesa. Or TSTI can work with customers to design and fabricate towers that meet unique criteria for both the turbine and project location.

TSTI subjects its towers to strict quality tests similar to those used for building high-pressure tanks and railway tank cars. And Trinity adds value with its extensive corporate experience (from railway cars and barges) in coating structures exposed to every conceivable weather condition. This is critical for the future maintenance and safety of the tower. After all, the tower holds up the turbine and generator. And a steady generator is the key to the overall reliability of the power system — not just of the windmill itself, but for feeding power into the overall electric grid.

Trinity is currently producing towers to support turbines as large as 2.5 megawatts, enough electricity to power about 1,750 homes ( or two average-sized Wal Mart -NYSE:WMT-stores). The next generation of turbines will be rated at 3 megawatts or more, and Trinity will have towers for those, as well.

Wind power currently produces a fraction of 1% of the U.S. total electrical supply. But there are plans and policies afoot to increase U.S. electric power output to more than 20% of the total supply within the next 20 years. The only way to do this is by setting big turbines onto big tubular towers. No, make that lots of big turbines onto lots of big tubular towers.

And who makes those big tubular towers? Now you know.

Demand for rail cars and barges has fallen in the past year, and this has hurt Trinity’s overall profitability. But Trinity is compensating with a fast-growing backlog of orders for windmill towers. Trinity even pays a dividend of 32 cents per share, or a yield of about 0.9%.

I expect Trinity to be a growing stock, even in a market that will be weighed down by many other negative economic and political issues going forward. By the end of 2009, Trinity could be selling for $46 per share.

Source: Buy Trinity Industries

T. Boone Pickens, oil man, hedge-fund manager and natural gas entrepreneur, made headlines earlier this year when he announced an initial investment of $2-billion in a new Texas wind farm. Wrapped in the brilliance of Old Glory, he stepped up to the soap box and declared how he would wean America off evil foreign oil. Overnight, the 80-year-old Texas legend became the most unlikely poster boy for the green energy movement.

Given Pickens’ Texas Holdem swagger, wind energy – and by association all alternative energy – took on a measure of safety that deluded many investors into thinking they could simultaneously buy their way into the Wall Street Hall of Fame and the Pearly Gates of St. Peter.

Now, it turns out, Pickens’ massive project is sucking cash instead of blowing in the wind. And in one of the most under-reported stories of the year, Pickens finally admitted that the wind farm has been put on hold indefinitely.

Just as investors followed Pickens to the alter of green, they should now also pull green from their portfolio.

The same market dynamics that forced Pickens away from wind continue to crush the green industry as a whole: difficult financing and low oil prices. Some rosy optimists still cling to the belief that President-elect Obama will wave his magic green wand and make all those problems go away. But with record unemployment, the struggle to save Detroit and expensive wars in the Middle East, we contend that Mr. Obama’s green initiatives will prove to be nothing more than campaign rhetoric for at least the first 12 months of his administration.

Certainly big money men such as Pickens, electric-car magnate Elon Musk and Silicon Valley’s new breed of green venture capitalists have influence in Washington. But we’re still not convinced that Obama, for all his good intentions, can make a convincing argument to throw billions behind green in these tough, recessionary times.

As it now stands, Pickens’ Mesa Power has already placed orders for the first phase of the Pampa Wind Project, 667 wind turbines from General Electric capable of generating 1,000 megawatts of electricity, enough to power more than 300,000 average U.S. households.

The first phase of the project, estimated at $2 billion, was originally scheduled to come online in early 2011.

He still expects to take delivery of the project’s 2,700 turbines in 2010, but their installation might be delayed until wind is more competitive economically, he was quoted as saying. Still, 2010 isn’t that far away, and the likelihood of oil rebounding to this summer’s high of near $150 by then is quite slim.

Futures of light sweet crude were trading on the New York Mercantile Exchange at about $57 a barrel, a 21-month low. Unless, Obama can create thousands of new jobs in 2009 so consumers can drive to the mall, oil prices will continue to remain depressed.

While green investments will certainly make a rebound in our lifetime, it won’t take place in the next 12 months.

This from Investment U:

Our next President will be faced with unprecedented challenges in health care, energy, global warming, an aging infrastructure and huge “legacy” automobile businesses that are teetering on the verge of bankruptcy.

He’s also being presented with an incredible opportunity… one that, if implemented correctly, could have profoundly positive effects on the economic health of the world, just when we need it.

For years, the engine that fueled global economic growth was the spending of the American consumer. Market crashes because of the dot-coms and the housing boom have left many individuals with too much debt and not enough money. Americans are tapped out, and they’re closing their wallets.

Reinvigorating our economy rests upon jumpstarting consumer spending – and ultimately improving the financial condition of millions of Americans. It’s much easier said than done – and this new administration will have its work cut out for it.

If you’ve got an eye on how these government actions could benefit your bottom line, you should take a look at our past. You might find these newest sources of “economic fuel” and wealth creation look surprisingly familiar. The government’s solution could be just the thing our portfolio needs for a healthy return in the years to come…

The Cause of The Current U.S. Economic Slowdown

Ask most people to give you the cause of the current economic slowdown enveloping the United States and the rest of the world, and their likely answer will be the explosion of housing and the subsequent bubble in the credit markets.

But that was just the peak of the problem, not the beginning. The trouble has its roots in something that started 20 or 30 years ago.

That was when we started seeing the shift away from personal savings in America and toward the beginning of a huge consumer credit crisis.

And now, we are witnessing first-hand the effects of the increasing use of massive leverage can have on the markets, and ultimately on the American consumer. They’re broke and can no longer be the fuel that powers the world’s economic engine.

With consumer spending slowing, layoffs increasing and hiring all but stopped, the prospects for future economic growth aren’t particularly bright. Or are they? We have almost everything we need to fire up the world’s economic engine again: The ingenuity of the American people, plenty of factories, etc.

There’s only one thing missing… the fuel to get it going again. So what’s going to be the new “fuel?” History is a great teacher, and we need look no further than the Great Depression, and Franklin D. Roosevelt’s New Deal.

The New Deal was a series of programs Roosevelt employed between 1933 and 1936 with the intent to provide work for the unemployed, reform of financial and business operations, and economic recovery. Here are a couple of examples:

• The Works Progress Administration (WPA) was the largest of the New Deal agencies. It alone was responsible for providing almost eight million jobs. What did all of those people do? They built public buildings, roads, bridges and other infrastructure projects. Anyone who needed a job could easily become eligible.

• Another program, created by an act of Congress in 1933, was the Tennessee Valley Authority. The TVA, as it was known, was chartered to provide food, navigation and flood control, electrical generation, fertilizer manufacturing and general economic development for the people of the Tennessee Valley, a region hard hit by the Great Depression. And it was just what the doctor ordered: The TVA’s projects were catalysts that fueled unprecedented economic growth in the area that continued through the 1960s. Today, the TVA’s 43 power plants make it one of the largest producers of power in the country.

7 Companies Profiting From a “New” New Deal

While the slowdown we are experiencing is nowhere near as severe as the Great Depression, the solution will be the creation of similar New Deal programs in two specific areas: the infrastructure and energy sectors.

More specifically, developing energy savings, making alternative forms of energy our mainstream sources, and building the green infrastructure to support what will be our growing energy independence.

More insulation in a house’s walls, lower thermostats, fluorescent bulbs, more fuel efficient cars and commercial building energy management systems are just a few of the ways to save energy. Public transportation is another. Expect the new government to provide tax incentives for these and other programs as short-term incentives to save. Companies that stand to benefit are Owens Corning (NYSE:OC): insulation, General Electric (NYSE:GE): lighting and Johnson Controls (NYSE:JCI): energy management systems.

Clearly wind, solar geothermal and tidal energy companies stand to benefit, too. While a comprehensive list is beyond the scope of this article, companies like First Solar (Nasdaq:FSLR): solar panels, Ormat Technologies (NYSE:ORA): geothermal and Vestas Wind Systems (PINK:VWDRY): wind turbines, will do well.

As new green sources of energy begin to come on-line in a big way, the nation’s electrical grids will have to be upgraded to move the power to where it’s needed. This is a huge project, and one of the biggest winners will be ABB (NYSE:ABB): power and automation technologies.

Ironically, the same government that’s trying to find a solution to the energy problems we face has been the biggest roadblock to solving them. The trillion dollar coal and oil subsidies prolong the carbon industry’s advantage over – and are a constant roadblock for – fledgling alternative energy companies.

The new President and his administration have an opportunity to turn the recession ship around, before it runs aground. By implementing new energy and infrastructure projects, thousands of new jobs will be provided at a time when they are desperately needed, and most importantly, these projects will provide the fuel to restart the world’s economic engine.

Source: Obama’s New “Economic Fuel”… and 7 Ways to Profit