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Alternative may be primary

June 24, 2008

Mark on the markets Mark Patterson

Alternative may become primary

Many of the “alternative energy” sources may someday become primary sources of energy in this country and around the world. But much of the research and capabilities are still not in reach of most of us. There has only been a greater emphasis to search for and develop these alternative energies in the very recent past, since typical fuel sources have become very expensive. I am aware of the fact that many people have had an interest and may be using alternative energy, but I am speaking for the rest of us ignorant folks that may not have been as forward thinking.
The price of crude oil and its refined products like gasoline, heating oil and diesel fuel are a major drag on our economy. Not the only drag, but a drag none the less.
We (US citizens and Government), have the ability to access oil in and around our country that could give us the energy independence that we need. However drilling for oil in environmentally sensitive areas are a political football that is not realistic at this time. Even if we could drill for oil in these massive reserves, it would not fix the problem of lack of refining capacity.
There are many great technologies for producing energy and less pollutants, that are currently available or at least “in the works”.
Many people would like to invest their money in ways that are good for the environment and to make a profit. A concept that many thought could not be done in tandem. However there is opportunity to do just that in some Exchange Traded Funds that have become available recently.
Let me name a few of these ETF’s; solar energy is represented with an ETF, whose ticker symbol is “KWT”. A new ETF for wind power is “FAN”, a global alternative is “GEX”, and “QCLN” is involved with solar, biofuels and advanced batteries. There are many others that have a lot of merit, but just do your homework on these ETF’s or any company for that matter. You want to make sure that there is a real business that has good trading volume and not just a shell of a company or ETF to attract eager money.
If the price of fuel comes down quickly, these alternative ETF’s will go down as well. My belief is that while energy prices may pull back a bit, higher prices are here to stay. We must not forget about these other alternative sources and go back to reliance on foreign oil.
I like to drive and consume energy as much as anyone; I just do not like being held hostage by OPEC or Venezuela.

Mark Patterson is a registered investment advisor with MHP Asset Management LLC, and can be reached at 447-1978 or Mark@ MHP-Asset.com