Above all, one crucial variable has changed from a year ago: Congress is now controlled by the Democrats and already the slew of alt. energy and climate change proposals brought forth by various senators leads one to believe that, as far as the federal government is concerned, '07 should see more than just hot air on the alt. energy and clean tech fronts.
Sectors Of Focus
OK, so let's dive right into it (see a complete list of 2007 State of the Union Policy Initiatives here):
Automotive and Fuels
By far, this is the category that got the most attention and the clearest targets.
Key points are:
- Cut down gasoline consumption by 20% by 2017;
- A mandatory Fuels Standard requiring 35 billion gallons of renewable and alternative fuels by 2017 (read: mostly corn-based ethanol for now with coal-to-liquids starting in the latter half of 2010 and cellulosic ethanol in about 2012);
- Tougher fuel economy standards via a "modernization" of CAFE standards
- Research into battery technology for hybrid cars and plug-in hybrids (this is worth noting)
- Focus on cellulosic ethanol (not entirely unexpected but noteworthy nonetheless)
- Doubling the current capacity of the Strategic Petroleum Reserve (SPR) to 1.5 billion barrels by 2027 (hhmmmm...indirectly constraining oil supply in light of the forecasted supply-demand environment of the next two decades...that can only mean good things for alt energy!)
- More solar and wind (yyaaaawwwnnnnn...)
- Clean coal technology - at least another few years away, but worth trying to spot early movers on the technology development side (rather than on the utility side)
- A renewed focus on nuclear power (this is interesting and something several people have been pushing for - one the best ways to play this from a growth angle is via exposure to uranium miners and exploration companies, but that is for another blog)
- First time, as far as I can tell, that this administration was so emphatic about the need to combat climate change
- The President's strategy "will help confront climate change by stopping the projected growth of carbon dioxide emissions from cars, light trucks, and SUVs within 10 years (read: Bush agreed to saying "climate" and "change" together in the same sentence as a gesture of good will but he is nowhere near ready for federally-mandated greenhouse gas caps and carbon trading, so you can probably forget '07...but I wouldn't exclude '08)
Stocks To Watch
Here are a few stocks to watch over the near and medium terms. Admittedly, this is not an exhaustive list and I would welcome suggestions from our readers, especially with regards to battery makers.
Himanshu Pandya beat me to it with a nice and comprehensive post. If you want to make a quick momentum buck, you should be in for a fun ride over the next few days. Beware the hangover!!
Batteries for Hybrid and Plug-in Hybrids
No public company with exposure to cellulosic ethanol to speak of...yet
To Conclude This Evening's Broadcast...
No, I did not include every single alt. energy company listed on U.S. stock markets, and that is because this speech was very light on details for most alt. energy areas except transportation. Transportation is the only category about which we heard some new and substantive things tonight. Nevertheless, I'm curious to see how the solar sector will do tomorrow. Something tells me we might be in for some interesting action.
Independently of this Address, there is some movement on a number of fronts that will be beneficial to various alt. energy sectors, but those initiatives have to be examined independently. Keep checking in for an upcoming review of all of the federal proposals currently on the table.
Disclosure: Author has no position in above-mentioned companies, but has exposure to the solar and uranium mining sectors.