As I mentioned on
The Panelist...
For the most part, Big Oil is hesitant to embrace alternative energy, preferring
instead to push for more drilling. For some, however, it appears that the
industry is seeing the writing on the wall. Even Big Oil execs know that the
days of fossil fuels may be numbered. As a result, Exxon (XOM) is
heading into the business of hybrid car batteries, BP (BP) is
investing in jatropha and Chevron (CVX) is
looking into solar energy.
That's right. Chevron is
putting some of its eggs into the solar energy basket, rather than indefinitely
relying on a limited resource. And it does make sense. After all, oil is far
more likely to disappear before the sun runs out; the latter has billions of
years of life left. So investing in technology that makes harnessing its energy
for our use makes sense.
The interest of CVX in
developing solar energy technology is an indication that it
may not be solar energy companies that lead the way in technology development in
the future. Other companies want a piece of the pie. And they may have bigger
funding pockets.
BloggingStocks makes this observation on where solar energy
development may be going:
Given the potential size of the bonanza, the investments
should not be surprising, but they could squeeze smaller solar energy companies
out of the market. Firms like JA
Solar (NASDAQ: JASO)
and SunTech
(NYSE: STP)
have their entire futures bet on the success of solar energy and the fact that
there are not many companies in the business, at least until now.
This means that if you have been wary of start-up growth
companies involved in alternative energy, you now have an...alternative. CVX is
doing rather well right now, and diversifying its energy portfolio can only
help, especially if current trends continue. Investors get the stability of a
venerable and proven company, along with a measure of growth from a company that
invests in a new technology sector. And, with CVX reaching out to renewables, it
can give environmentally friendly investors a warm, fuzzy feeling about helping
the company reform its practices.
Disclosure: I do not
invest in any of the companies listed above.
ThePanelist.com is a
website that analyzes ethical investments.