A couple of interesting items in the news yesterday on topics dear to alt energy investors’ hearts. Firstly, a new report (PDF document) by CIBC World Markets arguing that globalization could be reversed by high oil prices. The folks at CIBC WM contend that growing shipping costs driven by higher prices for transportation fuels could erase the Asian labor cost advantage, driving a renaissance in North America’s manufacturing sector. What’s the main culprit? Peak Oil, albeit not called directly Peak Oil. I watched an interview with Jeff Rubin, CIBC WM’s Chief Economist, on Bloomberg’s In Focus yesterday, and he pin-pointed supply problems as underlying what he saw as a secular upward trend in oil prices. Mr. Rubin certainly didn’t appear to be of the opinion that major new supply would come on-stream in the foreseeable future, and believed that the solution to this energy crunch rested with demand-side management. He was therefore opposed to lowering taxes on fuel on grounds that that would do nothing to curtail demand. The second thing that caught my attention yesterday was an article in the WSJ (subscription required to view the full version) discussing new research by Cambridge Energy Research Associates (CERA) showing a marked increase in the cost of building power plants. Last Thursday, I wrote an article discussing the potential for energy efficiency. As noted in the WSJ article, certain utilities are turning to efficiency measures like smart metering as a way not to have to build new generation capacity because of growing costs. See the WSJ Environmental Capital blog’s summary of the article. Taken together, these two pieces of information are in line with my belief that a significant push toward efficiency and demand-side management across energy-intensive sectors is about to get underway, as it already has in the airline industry.
