In his State of the Union Address in late January President Obama made a forthright call for a major push on clean technology in order to address the nation's energy issues. Since then we have seen the price of both oil and gasoline spike sharply higher as a result of events in North Africa and the Middle East and the world has also faced tremendous anxiety over the risk of a nuclear meltdown in Japan.
In an article at the time of the President's speech, I discussed the results of a Gallup poll which indicated that a large percentage of voters favored such action in broad terms. Indeed, 83% of voters stated a belief that the government should 'pass an energy bill that provides incentives for using solar and other alternative energy sources'. Only 15% opposed this statement.
Given the tumultuous events that have taken place since January, it is worth re-visiting the issue and asking what the evidence now suggests with regards to the nation's views on energy policy. Interestingly, three recent opinion polls offer some insight here.
Firstly, the acceptance of nuclear as an option has dropped dramatically to levels actually below those seen after the accident at Three Mile Island. A CBS News poll conducted between the 18th and 21st of this month suggested that only 43% of those polled would now approve of the building of new nuclear facilities in the U.S. The highs and lows of approval of nuclear as reported by CBS News and the New York Times over the past 30 years are shown in the table below.
Approval of building of new nuclear facilities
|Following Key events||% Approval|
|1977 highs in approval||69%|
|Three Mile Island accident||46%|
|2008 - rising acceptance||57%|
Source: New York Times, CBS News.
Clearly, we are at a very low ebb, having fallen sharply from the greater levels of approval for nuclear seen recently. Only during the immediate period following the Chernobyl disaster has the approval rating been lower, when it reached 34%. This is no doubt going to influence the political debate going forward.
Meanwhile, another poll indicates that voters have reacted to events by increasing the level of support they would give to investments in renewables versus nuclear. This poll, conducted by ORC International for the anti-nuclear think tank The Civil Society Institute was conducted on March 15th and 16th.
This poll points to a large swing in favor of renewables. Asked whether they are now more or less supportive of 'using clean renewable energy resources - such as wind and solar - and increased energy efficiency as an alternative to more nuclear power', 76% of those polled said they were more supportive and only 13% said they were less supportive. Meanwhile, 58% of respondents said they were less supportive of nuclear than they were before the events in Japan - and 67% said they would be opposed to the construction of a new nuclear plant within 50 miles of their residence.
Finally, a poll conducted for the Pew Research Centre between March the 17th and 20th again points strongly to a decline in support for increased use of nuclear, whilst also showing increased support for both allowing more offshore drilling and more Federal spending on renewable energy research. The results are provided below:
|Increased use of nuclear||39%||52%|
|Support for offshore drilling||57%||37%|
|More federal spending on renewable energy research||74%||21%|
Source: Pew Research Center
The results are fairly clear. In October of last year there had been a small majority of 45 to 44 in favor of more nuclear. Clearly that has been heavily reversed. Similarly, the 57 vs. 37 majority in favor of more offshore drilling is a significant reversal of a 44 vs. 52 majority against last June in the aftermath of the BP oil spill. Clearly, the conflicting lessons from the various disasters and upheavals faced in the last twelve months are leaving fewer and fewer good options on energy policy.
My main point is that this debate is clearly very much alive now. The table below is intended to highlight some of the main players whose stock prices are likely to be influenced by this debate - with no relative predictions implied.
|Possible Policy Initiatives||Key Players|
|Natural Gas Transportation||CLNE, WPRT, CMI|
|Electric Car||TSLA, AONE, HEV, VLNC, OTCPK:ABAT, LIT|
|Biofuels||PEIX, REX, BIOF, GPRE, ANDE, AMRS, CZZ|
|Clean Energy Standard|
|Solar||SPWRA, FSLR, WFR, TSL, STP, YGE, JASO, HSOL, SOL, CSIQ, PWER, TAN|
|Wind||OTCPK:VWDRY, OTCPK:GCTAF, AMSC, APWR, GE, FAN, PWND|
|Nuclear||PKN, NLR, NUCL|
|Combined-cycle natural gas plants||UNG|
Anyone reading my articles over the course of the past two months will know that I significantly reduced the level of risk in my clean technology portfolio at the beginning of the developments in Libya and currently have a fairly conservative approach to risk management. My only recommendation since the Fukushima disaster has been long solar and my favored play is SunPower (SPWRA).
I believe that rising oil prices will eventually bring a broader rally in clean technology stocks. However, for now, I prefer to be relatively nimble and rifle-shoot for trades as and when I see them. From that point of view, SunPower seems to me to be the single best trade for now.
Disclosure: I am long SPWRA.