The Week In Cleantech (Jun 22 to Jun 28) – More Oil Sands, Please…

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On Sunday, Ed Pilkington at The Guardian informed us that a leading climate scientist was going to push for oil company leaders to be tried. I’m not sure one will ever be able to draw exact parallels between fossil energy and cigarettes, seeing as the latter had no bearing on industrialization and economic growth. Nevertheless, alt energy investors would benefit greatly if fossil fuels were given the same treatment as cigarettes by local policy-makers. Are potential bans on drive-thrus a sign that such times are upon us? On Monday, Martin LaMonica at CNET News told us that VC and PE investors saw no bubble in cleantech. Of course, toward the very end, it is acknowledged that some sectors exhibit bubblish behavior (i.e. solar and biofuels). In my view, the way this issue was addressed by the investors as reported in the article is inappropriate. A bubble isn’t about the long-term capital needs of an industry; it’s what happens in the near term when too much capital is chasing too few opportunities, leading to a mispricing of risk. Arguing that there is no bubble in cleantech based on the fact that the industry will have important long-term capital needs if it is to deliver on its promises is, in my view, akin to saying there was never a bubble in housing because over a 20-year period the US housing stock will need significant capital infusions to keep up with demographic growth. On Tuesday, Shawn McCarthy at the Globe & Mail informed us that the oil sands were trying an image makeover. I certainly hope they succeed, and that America sources a growing portion of its energy needs from there. Since this is already some of the costliest crude to extract and since the marginal cost of a barrel of tar sand oil continues to mount, an energy strategy based on this resource will do wonders for the price of gasoline, thus bolstering the case for alt energy as an investment theme. Mine on! On Wednesday, Research Recap alerted us to the world’s first ever credit rating agency for carbon offsets. Of course it was only a matter of time before something like this emerged. Interesting idea but not sure what the prospects are. On Thursday, Cleantech.com informed us that Duke was buying a wind power developer. Further sign of the rapid maturation of this sector, which in my view holds better near-term prospects than solar. Tune in on Monday for a post by Tom on a new way for US investors to play wind. On Friday, Craig Rubens at earth2tech told about Gordon Brown’s plans for a GPB100 billion green revolution. Seeing as the UK has lagged most of its Western European counterparts in the deployment of alternative energy, the potential certainly exists for plenty of growth there. The question is: is this for real or is it a desperate attempt by an unpopular politician to build credibility with its electorate? Nevertheless, should the UK go Germany’s way, it could present interesting opportunities. On Saturday, Matt Richtel at the New York Times told us that venture investors were wrapping up in an unusually bleak quarter. Small cap investors – such as yours truly – beware! This also means that things are tough for small public firms trying to raise funds. Interesting point made about the fact that VCs may be focusing too much on ventures that Wall Street doesn’t care for, compounding cyclical issues. The Week In Cleantech is a collection of our favorite stories from the past week generated by our Cleantech News service. Register your site with us if you want your articles to appear here.

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