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Michael Kern

Michael Kern

Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com, 

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Which Is The Better Investment: Big Oil Or Renewables?

The COVID-19 pandemic has shot holes in every industry on the planet, but in particular, the energy industry. It has highlighted our shortcomings and our failures to move beyond fossil fuels in a way that should act as a giant red flag to not only the politicians in charge, but also investors looking to keep their money safe going forward. We are in a precarious position at the moment, and the policies enacted now, and the technology we choose to invest in for the future have the potential to create a more sustainable world if we make the right choice.

The “new energy order” is a phrase that has been tossed around a lot in recent months, but it’s not without merit. Currently, the world, and its various economies, is hyper-dependent on non-renewable fossil fuel resources. And as we saw back in March when oil prices turned negative for the first time in history, that’s not a good thing. Oil-dependant economies took a devastating blow - many of which are still struggling to bounce back.

But now, despite all of the doom and gloom, the world has the opportunity to make a truly meaningful change.

Does this mean giving up on oil entirely? Absolutely not. Oil is still a vital part of our energy mix - and moreover - a vital part of many-an-economy. Giving up on oil would leave hundreds of thousands of people jobless and entire countries without much-needed revenue to keep their economies growing.

Related: Nigeria Prepares For An Extended Period Of Low Oil Prices

That doesn’t mean we should go all-in on oil either, however.

As stimulus bills are rolled out across the world to create jobs, help sustain entire populations, and keep businesses afloat, there are a number of countries pushing a new green agenda. From subsidies to investments in solar, wind, and other renewable projects, this green push will play a vital role in paving the way towards a greener tomorrow. And help stimulate the economy in the process.

Solar and wind power will help lower utility bills for struggling Americans. Government investment in the renewable industry could create hundreds of thousands of jobs for people who are desperate to get back to work. And perhaps most importantly, these projects will help cut carbon-emissions going forward, allowing us to potentially curb the risk of looming climate disaster.

Presidential hopeful Joe Biden noted, “electrifying an increased share of our economy will be the greatest spurring of job creation and economic competitiveness in the 21st century”

All of this is great news for investors, as well. While Big Oil stumbled this year, clean companies such as Enphase Energy, Tesla, and Jinko Solar have flourished. Related: Hurricane Laura Makes Landfall In Oil Heartland

Jinko Solar, for its part, saw its share price nearly double from a low of $12.51 to $22.71 at the time of writing. 

Enphase Energy, one of the world’s leading solar tech companies, saw its share price jump from a March low of $23.99 to a yearly high of $76.98 in just a few months, representing a shocking 220 percent rise in its share price.

The story of the year, however, might be with Tesla. The global electric vehicle giant soared from a $361.22 low back in march to a headline-grabbing $2277.48 today. 

While not all alternative energy companies have fared as well, there is not a single fossil fuel company that has defied the wider market like these examples.

Renewable energy might not have the glam & glitz of Big Oil’s history in the markets, but it’s clear the winds of change are blowing, and investors are beginning to take note.

By Michael Kern for Oilprice.com

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  • Mamdouh Salameh on August 29 2020 said:
    The global economy and civilization as we know and enjoy don’t exist without oil and natural gas and vice versa. The global economy will continue to run on oil and gas well into the future.

    It follows then that for the well-being of the global economy, investment in oil and natural gas assets is the way forward for the foreseeable future. There will neither be a post-oil era nor a peak oil demand throughout the 21st century and probably far beyond. Moreover, the notions of an imminent global energy transition from oil and gas to renewables and zero emissions by 2050 are illusions. Oil and gas will continue to be the fulcrum of the global economy and the core business of the global oil industry well into the future. Any mandatory transition will not achieve the desired effect. Renewables have to compete with other sources of energy for a market share.

    Therefore, the talk about a new energy order is not only premature but it is no more than idle talk.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Ronald Wagner on August 29 2020 said:
    You "forget" about natural gas! It is far cheaper than "renewables" and can more reliably provide electricity and heat. It does not require a battery backup and does not create mass pollution from dangerous elements that need to be separated out from expired wind turbines and solar panels.
    It is already available throughout all populated areas in advanced countries. It can power any vehicle including trucks, ships, locomotives, automobiles, etc. It provides the lowest priced electricity for any use and in the greatest amounts.

    Sure, billionaires want to make more billions with new technology but renewable workers will make half what they do in the oil and gas industries while the consumers will foot the bill.

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