Thursday, December 29, 2005

Safe Haven | The Potential Emerging Energy Crunch

It's interesting to look at an investors viewpoint on "energy" and the oil supply issue. The Potential Emerging Energy Crunch (by Sol Palha) He lists several potential energy sources and points out how they all have problems preventing wide use right now. The issue is the high oil prices we saw over the last year, and he is trying to say the energy prices will continue to be high for the forseeable future, and that there is one solution: Uranium and Nuclear Power.

Hurm. Apparently Uranium is a hot thing to invest in right now ... my office-neighbor who's a serious day trader type of investor, he's really focussed on Uranium right now.

His reasoning about Uranium is there's a serious growth in Uranium demand around the world, not only from new reactors but also from stockpiling activities.

That may be, but I find his reasoning overall suspicious. First, Uranium and Nuclear Power is not a substitute for oil. No-way-no-how will you ever drive up to a fueling station and ask to fill-er-up with Uranium.

Uranium and Nuclear Power can only provide heat, from which they make electricity. Hence, Nuclear Power can run our homes and factories, but not our cars unless we convert to electric cars.

The energy price problem of the last year is oil prices. It is for oil we are fighting the wars in the Middle East. That's because the U.S. has stupiedly made a dependency on oil to run our economy.

In fact all the energy alternates he discusses produce electricity and aren't suitable for vehicles unless the U.S. were to convert to electric cars.

He does miss out on one glaringly important alternate energy source that's currently a rising star: Biodiesel. Biodiesel has an interesting advantage that it can be grown "anywhere", is simple to make, and can easily drive a diesel engine.

Now, back to the author of the post above. He's clearly an investment advisor. It's well known that investment advisors are more often than not pushing "products" which will drive investment transactions regardless of how sound an investment they are.