We usually don’t like the idea of mixing politics and business, but this cannot be ignored. There is a stark contrast in viewpoints the presumptive Republican and Democratic Presidential nominees are taking toward alternative energy. President Obama is making alternative energy one of the central tenets of his domestic agenda. Governor Romney, on the other hand, is more likely to let alternative energy initiatives take the back burner. If you are hedging your investments based on America’s energy future, this election matters.
President Obama’s most recent weekly address focused on the promise of energy innovations to create jobs, lower pollution and decrease dependency on foreign oil. The fact that he chose this topic is significant. Considering the monumental immediate challenges the President faces on a daily basis—a sluggish domestic economy, fighting a foreign war, rising oil prices—competing interests that demand the President’s attention are legion.
While Obama supports increasing domestic energy production, he clearly laid out his position on alternative energy:
The recent spike in gas prices has been another painful reminder of why we have to invest in this technology. As usual, politicians have been rolling out their three-point plans for two-dollar gas: drill, drill, and drill some more….But you and I both know that with only 2% of the world’s oil reserves, we can’t just drill our way to lower gas prices – not when we consume 20 percent of the world’s oil. We need an all-of-the-above strategy that relies less on foreign oil and more on American-made energy – solar, wind, natural gas, biofuels, and more.”
In the weekly address the President also called for Congress to end the $4 billion in subsidies to U.S. oil companies. And in the budget he recently presented to Congress, Obama proposed over three quarters of a billion dollars to be earmarked toward alternative energy.
Contrast this to Governor Romney, who plainly will not be a cheerleader for alternative energy. Romney’s energy platform first and foremost highlights oil and gas development, including streamlining permitting; accounting for regulatory costs in environmental laws; streamlining nuclear sitting; opening America’s energy reserves for development; supporting pipeline construction; and preventing over regulation of shale gas development. At the very bottom of his energy plank, support for alternative energy is muted if not derisive:
…we should not be in the business of steering investment toward particular politically favored approaches. That is a recipe for both time and money wasted on projects that do not bring us dividends. The failure of windmills and solar plants to become economically viable or make a significant contribution to our energy supply is a prime example.
And in a speech last week Romney exclaimed:
What is (Obama’s) energy policy? It is apparently to make it hard to get coal out of the ground with more regulations, hard to take advantage of our oil resources, makes it harder to get the gas out of the ground. And as a result while he’s happy with wind and solar – we all like wind and solar – but you can’t drive a car with a windmill on it. My plan is that we’re going to finally get America energy secure by taking advantage of our coal, our oil, our gas and bringing in that Keystone pipeline from Canada.”
I admittedly have a fight in this game: I fully support a responsible transition away from our dependency on foreign oil and toward an energy future that has a much larger mix of solar, wind and other renew ables. Having said that, I am not a purist. Since everyone I know drives, and heats their houses, I believe domestic oil production is important. I am especially supportive of utilizing domestic natural gas, which if done properly, is a much preferable alternative to coal-fired power plants and diesel-powered truck fleets.
Even though the President has limited power to directly implement energy policy nation-wide, what a president chooses to focus on can make a huge difference on long-term energy usage patterns. If you think Obama is going to get reelected this fall, long-term investors will want to look at high quality alternative energy companies such as Covanta (CVA 16.28 ↓-0.91%) and PowerSecure (POWR 6.64 ↓-0.45%) . If you believe Romney will get the job, consider hedging your bets toward big oil, such as Exxon Mobil (XOM 85.86 ↑0.62%) or Chevron Corporation (CVX 106.56 ↑1.15%).
Harris Roen, Editor
Roen Financial Report