Friday, February 13, 2015

Biologists Elbow Aside Geologists

The replacement of petroleum-based fuels and chemicals with alternative energy sources seems to be moving at a glacial pace.  (Although if polar bears could talk they might explain that the glaciers in their back yards are disappearing at a fairly fast clip.)  Just the same, there has been progress.  Enough progress that in 2014 renewable fuels provided 9.7% of energy consumed in the U.S. (U.S. Energy Information Administration).  Nuclear power provided another 8.5% of our energy principally for electricity generation.

Statistics are impressive, but the rise of renewable energy as an engine of our economy was brought home to me by a list of phone calls.  Besides calling management teams to ask about their companies, we often contact third-parties in a field to ask questions, verify facts.  Professors in particular can be quite insightful, even if it is just to tell us about the other people who are calling to ask questions.  It is like putting the proverbial ear to the rail. 

I was struck the other day by the fact that none of the people on my calling list had a background in geology.  All were either biologists or chemists.  Most certainly there are still battalions of geologists working away in the oil and gas patches of the world.  However, the experts in demand today are not the folks who can tell you where to find crude.  The phones are ringing instead on the desk of experts who have an understanding of the nuts and bolts of breaking down and building up biomass to monomer like benzene or ethylene; or who have some insight into how to use an inorganic catalyst like sunlight to split up organic compounds into hydrogen and carbon in an artificial leaf.

Certainly some of the renewable energy sources  -  wind, geothermal, wave  -  are as sensitive to location as oil and gas drilling.  Geology remains a valuable discipline for geothermal power generation.  However, if my calling list is any indication our world is slowly making the transition from ‘geoconomy’ to ‘bioconomy’ where biology and chemistry trump geology.

Crystal Equity Research’s four novel indices  -  Beach Boys Index, Electric Earth Index, The Mothers of Invention Index and The Atomics Index  -  provide lists of over 1,000 companies involved in alternative energy, energy efficiency and environmental conservation.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.


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