Investors' actions say much about the appeal of 'clean' energy

The Oklahoman Editorial Published: October 24, 2013
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FOR years, liberals have claimed old-fashioned energy — the oil and gas that Oklahoma has produced for decades — would inevitably give way to “clean” energy sources like solar and wind power. Investors' actions suggest otherwise.

Research by Bloomberg New Energy Finance finds that third-quarter global investment in so-called clean energy has fallen 20 percent since last year. This year's investments in renewable energy and related technologies will likely be lower than the 2012 total, which was down 11 percent from 2011. By quarter, new investment in clean energy has fallen 41 percent from a high of $78 billion in the second quarter of 2011 to $45.9 billion in this year's third quarter.

What's especially telling is that venture capital firms are increasingly moving to the sidelines. Those firms aren't risk-averse when it comes to developing new technologies. Investors' withdrawal from clean energy suggests they don't see a future there. Global venture capital and private equity investment has plummeted 82 percent from $4.1 billion in the third quarter of 2008 to $724 million in this year's third quarter.

Michael Liebreich, chief executive of Bloomberg New Energy Finance, attributes declining investor interest in part to “policy uncertainty in Europe” and “the lure of cheap gas in the U.S.”

Basically, consumers have access to an abundant and affordable supply of energy that allows cheaper electricity generation. That's good news for anyone who enjoys indoor lighting, but good news is often considered bad in the realm of climate change alarmism.

As a result of hydraulic fracturing, U.S. domestic oil and gas production has soared. As natural gas supply has increased, prices have declined. This ultimately benefits citizens' take-home pay but creates a problem for “clean” energy proponents. Large-scale alternative energy production is only attractive or feasible if the price of traditional energy increases exponentially, or if taxpayers underwrite alternative energy production. European countries have opted for the latter, but the consumer impact has been harsh.

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