Lessons from the BP spill: The biggest excuse to go green

Wednesday, 23rd June 2010 08:51 - by Riddler

I hope that fellow Traders have enjoyed the recent equities rally, and trust that their carefully chosen stocks are rising nicely. The recent BP spill and subsequent political fall-out has brought to light some very important issues with regards both share dealing on a general level and, more specifically, the issues surrounding energy provision on both sides of the Atlantic. The general lessons I believe should be drawn from the BP oil spill are three-fold. Firstly, it shows that the fortunes of specific stocks are not wholly in the hands of those corporate members charged with creating shareholder value. Instead, it is clear that political and military events can - and will - impact the fortunes of shares. Secondly, the fall-out from the spill shows that reputations that have been built up over many years can vanish in a matter of weeks. The ‘brand’ of BP will take years to rebuild. Lastly, we should all accept that unexpected events cannot, by their very nature, be predicted nor accounted for in our research. The specific issue I believe has been a consequence of this terrible spill, is that ‘green’ energy has not only become a political issue, but also a social and environmental one. I understand that President Obama, who was already committed (via his inauguration speeches) to green energy, has potentially brought forward the timescales for this to be realised. Whilst I don’t agree with the way in which this has become an Anglo-centric issue - as opposed to a collective issue - I do believe that the issues surrounding our demand for oil have reached a critical point in our development. I believe that the issue is not so much the dangers of ‘Peak Oil’, but more the issues of ‘Peak Technology’. The fact that only 30 years ago an off-shore drill of 100ft was considered dangerous, and yet we are now resorting to drilling 5,000ft down is worrying, and seems to suggest that our technology is struggling to keep up with demand. This catastrophic event has accelerated what were seen to be just vague platitudes towards using solar, wind, waste energy and nuclear sources of power over the last 5 years. We have reached a turning point in how we see our energy needs being met, and it’s clear that Obama is using this event to accelerate its development; wrongly or rightly. I thought that alternative energy stocks were going to enjoy a fruitful 2010 and beyond (see previous blogs), but now believe this to be a political, environmental and social necessity. I am currently holding stocks such as TEG, ACTA, AFC, AUG, TNCI and believe that other ‘green’ stocks can play a part in my portfolio.