Today’s financial markets provide investor with a broad set of energy investment options. Legacy oil and gas companies continue to provide the enormous consumption of oil and gas fuels projected for several decades. Additionally, we see the beginning of the business growth curve for alternative energy companies in the area of Wind, Solar, and Bio Fuels etc. Alternative energy development is also on all the big oil companies’ strategic plans and they are investing in alternative energy. This represents a trend in our opinion to a Hybrid Energy future.
In a previous research note WSG highlighted the Brazil and China growth/need for oil. This demand is also reflected in the Merger and Acquisition activity in this sector. The value of gas and oil M&A is at $38.8 bn year to date for 2010. This is the highest year to date level since data provider Dialogical records began in 1995. Last week Schlumberger oil group launched a $12.2bn bid for rival Smith Industries. Oil price stabilization is one of the catalysts that have contributed to the activity.
Oil and gas demand projections on a global basis are significant and will continue to result in earnings growth for the major providers.
Investment in alternative energy technologies opportunities is at the beginning of the traditional business curve. Growth rate opportunities are encouraging. The Wind energy sector is projected to grow by 155% by 2012. Many States have embraced Wind technology and are moving forward with projects. New Jersey’s Governor is escalating the off shore Wind farm project. New York is using funding from the American Recovery and Reinvestment Act in support of 118 energy conservation projects. Solar projects are being implemented in several States and being incorporated into new cost effhcicient architecture.
Incentives by the Fed for “clean energy” is clearly motivating entrepreneurs to create and improve the alternative energy technologies.
Hybrid energy is making its way to the front of the pack after years of test trials. The future energy infrastructure will be a diverse set of technology that will integrate heritage Oil and gas with new alternative energy tech such as Wind, Solar and Bio Fuels. The future for energy markets is very exciting.
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