Green Investment Boom going broke just like all the other investment booms

http://www.planetark.com/dailynewsstory.cfm/newsid/50799/story.htm

Link: Planet Ark : ANALYSIS - 'Green' Loses Cachet On Wall Street .

US: October 29, 2008

LOS ANGELES - "Going green" doesn't have quite the cachet it used to, at least on Wall Street.

Investors in renewable energy stocks have seen their sector hit hard in recent weeks on concerns that tightening credit and a weak global economy could arrest growth of the high-flying industry despite its long-term promise.

"The general economic slowdown is taking everybody's eyes off what was an increasing momentum around concerns of climate change and the cost of energy," said Paul Maeder, a general partner with venture capital firm Highland Capital Partners.

Until credit becomes more available, big solar and wind projects will be more difficult to finance, and certainly more expensive. A drop in demand will also mean lower prices on solar panels and wind turbines, hurting manufacturers' profitability.

In the end, experts said, the downturn will determine who the winners and losers are in what had been a booming environment for all.

"There are too many players out there, and there are too many smaller players," Chris Walsh, manager of the $28 million Alger Green Fund, said of the burgeoning solar industry. "You have to be careful about which ones you invest in now."

Solar stocks, considered the darlings of alternative energy for their meteoric rise in 2007, have retreated so much this year that most have given back the triple-digit gains they logged last year. Investors fear that scarce access to credit will threaten development of costly solar and wind projects, while falling oil prices are dampening interest in alternative energy across the board. To make matters worse, a frozen market for initial public offerings and an increasingly picky venture capital community have restricted key avenues of funding for startups.

DOUR NEWS FOR RENEWABLES

Long term, many investors expect renewables to be a much bigger part of worldwide energy consumption due to increased concerns about climate change and high energy prices. Dour announcements, however, are cropping up nearly every day.

Most recently, FPL Group, the largest US operator of wind generation, said on Monday it would slash its 2009 spending and reduce its wind turbine additions, citing the bleak economic climate. The Florida utility also warned of more spending deferrals if conditions worsen.

The announcement came a few days after the American Wind Energy Association said construction starts for new wind farms would slow in 2009, citing the "evolving financial crisis."

(((Massive decline in wind-turbine orders, because they feed on debt, y'know.)))
http://www.planetark.com/dailynewsstory.cfm/newsid/50811/story.htm

(((In other news, even oil guys can't make money, and even coal plants are on hold.)))

http://www.planetark.com/dailynewsstory.cfm/newsid/50807/story.htm

http://www.iht.com/articles/2008/10/28/business/renover2.php?WT.mc_id=glob_mrktg_lead&WT.mc_ev=click

(((How far does the USA have to financially decline before it exceeds the original Kyoto demands for reduced carbon consumption?
I wonder, idly.)))

(...)

"Oil is integral to the real economy," said Jan Stuart, an energy economist in New York for UBS. (((What's a "real economy"? Anybody got a clue right now?))) "If the real economy goes down, oil goes down. The market right now is trading a long recession and literally no growth in oil demand for years." (((Severe and continuing DECLINE in fossil demand... I didn't want to see people do this through the simple expedient of starving themselves, but that looks like the story here.)))

Didier Houssin, director of the office of energy markets and security at the International Energy Agency, the world's main forecaster, said there were strong uncertainties about how demand will evolve because of the economic and financial crisis. "That remains a big mystery," he said.

Faced with slowing growth, the International Energy Agency has been paring its forecast for global oil demand since the beginning of the year. But its analysts still see oil demand expanding by 400,000 barrels a day this year, to 86.5 million barrels a day. When the year started, they forecast growth of two million barrels a day for 2008. Some analysts say the energy agency's current forecast is still hopelessly optimistic.

"Despite the IEA's wishful thinking, demand is disappearing very quickly," said Lawrence Goldstein, an economist at the Energy Policy Research Foundation in Washington, who said he expected global oil demand to fall this year. It would be the first drop since the energy shock of the early 1980s.

The double impact of record high prices and slower economic growth has been particularly visible in the United States, which accounts for a quarter of the world's total oil consumption and where demand has slipped to its lowest level since June 1999. Americans have been driving less and flying less this year. Automakers are desperate for a government bailout and airlines are losing billions of dollars. (((Remember how Kyoto was supposed to "hurt our economy"?)))

As a result, U.S. oil demand will probably decline by 5 percent this year, said Stuart, the UBS energy economist. (((A stat so amazing I find it hard to believe.)))

Similar declines are also taking place in most developed economies, which account for 60 percent of global demand. In Japan, for example, oil consumption in August tumbled 12 percent from a year earlier, while oil use in France has declined 10 percent.

"There is no question the physical oil market has weakened," Stuart said. "The credit crisis has dried up commerce and halted trade, and that has effectively pushed down demand for oil. The trouble is that no one can predict when this is going to end." (...)

(((Hey, I can predict it. I predict the demand for oil goes to zero in the next 20 years. And stays there.)))