Tuesday, June 15, 2010

Oil-Gas and a sea change in energy policy!

"The BP oil spill will change energy policy the way 9/11 changed security policy"

Barrack Obama

Currently, there is the equivalent of an Exxon Valdez, pouring into the gulf of Mexico waters, every four days and in case you weren't paying attention when he spoke recently, the U.S. President spoke words that will change the game, and the playing field, for energy companies and investors, forever! His message is summed up in one line. "The BP oil spill will change energy policy the way 9/11 changed security policy".

If you think these are empty words, than you can stop reading right now. Personally, I believe this president will do his utmost, to change the dynamic in complete favor of alternative energy sources such as wind, solar, nuclear, fuel cells electric cars and energy storage such as the advancement of lithium based batteries for both electric vehicles and for the energy grid.

This statement was indeed, the opening shot, in a war on dirty oil, dirty coal, unstable gas etc. There is a sea change approaching in energy investments, nay, it is a tidal wave coming in the United States of America and by proxy, in the rest of the world.

Deep water drilling has been stopped in it's tracks, especially in the gulf, and those companies heavily weighted to that method of oil extraction will be affected, in the negative, over time.  consequently, those oil companies (yes we will need oil for the foreseeable future) that are heavily weighted to onshore supplies (Devon, Suncor, Cenovus) will profit, maybe extraordinarily so and analysts believe Canadian energy companies are undervalued.

If you are an investor in oil and gas, you cannot ignore this coming sea change. The big dogs of oil have given this president all the ammunition to make this sea change (which has been 40 years in the making)

Don't expect this president to sit on his hands like Dubbya did. As an investor, you do so at your peril.

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