Alternative Energy & Energy Independence: Obama Versus McCain ~ market folly

Friday, October 31, 2008

Alternative Energy & Energy Independence: Obama Versus McCain

I'm going to keep this plain and simple. The upcoming Presidential election will undoubtedly focus on the economy. However, I also believe people will be focused on alternative energy. So, cut and dry, let's look at McCain's and Obama's separate plans in this regard. (Hat tip to the Green Skeptic for assembling all of this information).

Obama's alternative energy plans (as per his website):

  • Provide short-term relief to American families facing pain at the pump
  • Help create five million new jobs by strategically investing $150 billion over the next ten years to catalyze private efforts to build a clean energy future.
  • Within 10 years save more oil than we currently import from the Middle East and Venezuela combined.
  • Put 1 million Plug-In Hybrid cars -- cars that can get up to 150 miles per gallon -- on the road by 2015, cars that we will work to make sure are built here in America.
  • Ensure 10 percent of our electricity comes from renewable sources by 2012, and 25 percent by 2025.
  • Implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80 percent by 2050.

And now, McCain's plans:
  • Expanding domestic oil exploration;
  • Promoting and expanding the use of domestic supplies of natural gas;
  • Changing how we power our transportation sector;
  • Becoming a leader in a "New International Green Economy";
  • Committing US$2B annually to advancing clean coal technologies;
  • Constructing 45 new nuclear power plants by 2030 with ultimate goal of 100;
  • Creating a permanent Tax Credit equal to 10 percent of wages spent on R&D;
  • Proposing a Cap-and-Trade system that sets limits on Greenhouse Gas Emissions while encouraging development of low-cost compliance options;
  • Greening The Federal Government A Priority Of His Administration.
  • Move The United States Toward Electricity Grid And Metering Improvements To Save Energy.
  • Addressing Speculative Pricing Of Oil , but not imposing a windfall profits tax.

So, while we obviously have to wait until November to find out the outcome of the election, it doesn't mean we can't start positioning our portfolios to benefit over the coming years. While I realize there are technicalities, politics, and logistics behind each plan, let's just look at things from a broad-based prospective for now. It's very clear that alternative energy could be one of the better investments you could make in the coming years. But, which type of energy will be brought to scale? My guess is that a combination of types will be used, so its best to spread your bets around.

Teeka Tiwari has written two pieces about which stocks they think will benefit the most should either gentlemen take office. If McCain is elected, they expect the following stocks to outperform: Cameron (CAM), Transocean (RIG), Diamond Offshore Drilling (DO), Halliburton (HAL), Cameco (CCJ) and nuclear ETF Market Vectors Nuclear Energy (NLR).

In an Obama victory, Tiwari likes the following names: Icon (ICLR), Accenture (ACN), Energy Conversion Devices (ENER), LDK Solar (LDK), and General Electric (GE).

I agree with Teeka on some of their selections, but not all of them. I am mainly using this post as a platform to establish each candidate's position as a reference point for my future series of posts on alternative energy investing. While all these names could potentially benefit if the respective candidate takes office, I still think the best bet is to position yourself across multiple alternative energy types. Because, undoubtedly, the world will shift to new means of creating energy and I highly doubt there will be a "global standard." Individual nations will determine what is best for them, and numerous types of alt-energy could be positioned to benefit.
Also, I think its very worthwhile to play the current energy landscape, because (among other reasons) it will take a long time to bring alternative energy to scale. To read about how to play energy in the intermediate term, check my post out here.

So, which stocks do you think are most poised to benefit in either a McCain or Obama victory? Post up your thoughts!

Sources: The Green Skeptic, Tycoon Report, iStockAnalyst (Teeka Tiwari)

blog comments powered by Disqus