Thursday, October 23, 2008

Collapsing Oil Prices and Alternative Energy

Oil prices have plummeted in recent weeks. There has been a lot of analysis on what will happen to alternative energy. Seeking Alpha has a section that aggregates loads of information on what is going on and what can happen from a financial perspective. Generally, as the price of traditional energy supply drops the need to replace them with alternatives diminishes and the appeal of these investments is generally declining.

I wonder if the general "green" trend will decline along with the changing attitude in the financial markets. Further, petrochemical alternatives were also being developed, such as bioplastics, and these are probably falling out of favor as well. It will be interesting to see how quickly and to what extent environmental concerns will be cast off. Critical mass was not quite achieved and I don't think it will now for some time as people are going to be more concerned with keeping their house rather than the size of their carbon footprint. I think the idea of being "green" is still holding but as the economic decline becomes more severe it will likely fade.

No comments: