It’s amazing how a devastating event like a hurricane can focus attention on an already existent problem. Katrina, by knocking out oil refineries, rigs and pipelines on the Gulf Coast, has many investors freaking out about rising fossil fuel prices and the impact on the overall economy.
This morning I pick up the newspaper and read about executives in Alberta’s oil patch worried about $70-a-barrel oil. Admitting that it’s great for the top line, and for their stocks, they also acknowledge that rising operating expenses — i.e. higher fuel costs means it costs them more to retrieve and process the oil and natural gas — is negating many of the positives that investors have been fixated on. Think about how high natural gas prices are pummelling oil sand production.
And it’s not just oil companies feeling the pain. Any company that relies on fossil fuels to power their operations — airlines, manufacturers, trucking companies, taxi companies — are entering panic mode. Methanex, the world’s top maker of methanol, says it’s closing one of its B.C. plants because of high natural gas prices.
I read another story today about General Motors, and how the company is admitting that sales of large SUVs have peaked and that, in all likelihood, it’s all downhill from here as higher prices at the pumps discourage people from buying gas-guzzlers. Is this a surprise?
Meanwhile, homeowners are getting squeezed on many fronts. On top of the rising cost of driving a car, natural gas and electricity prices are skyrocketing. Combine that with rising health concerns of using dirty fossil fuels and you’ve got the perfect storm. For example, a survey released today from IBM’s healthcare services unit found that 4 out of 10 Canadians have felt a health impact from air pollution.
The survey found 97 per cent of Canadians were willing to reduce the amount of air pollution or emissions they create by conserving energy. Eighty-six per cent said they have tried to reduce the effects of pollution in their homes, 59 per cent have spoken to others about the problem and 29 per cent belonged to or donated to an environmental organization. Increased government spending on public transit was supported by 71 per cent of respondents, while 23 per cent were willing to support increased gasoline prices.
Hurricane Katrina is giving everybody a much-needed dose of reality.
What’s the impact on renewables and cleantech? Well, as hydro and natural gas bills rise every month, as filling up your SUV becomes more costly, as companies begin to cite rising energy costs as part of profit warnings in the coming quarters, and as more people begin to directly experience the effects of smog pollution on their health, the prospect for hybrid-electric vehicles, pure EVs, solar thermal and PV technologies, wind farms, geothermal systems, biodiesel, biomass and hydrogen fuel cells becomes that much better. That much more necessary.
Companies and homeowners will begin to look for ways to displace their need for natural gas, oil and gasoline, and this will continue to spur innovation from and interest in cleantech companies.
The reality is nothing new. The awareness is.