Thursday, July 24, 2008

Is WIND a Trend?

With the price of oil surging (see previous post) and some arguing that we have hit peak supplies of oil it is time to develop alternative energy sources.

In 1970, we (United States) imported 24% of our oil. Today, it's nearly 70% and rising. As oil prices rise, we are sending massive amounts of wealth out of our country. The US represents just 4% of the world's population, but we use 25% of the world's oil demand. According to T. Boone Pickens, America is addicted to foreign oil and it's time to look at other sources of energy. Mr. Pickens predicts that oil prices will hit $300 a barrel in 10 years if the United States fails to reduce its dependence on foreign imports.

Mr. Pickens has a plan. The plan promotes alternatives to oil, including natural gas, wind, and solar. A major feature of the plan is replacing the electricity that the United States gets from natural gas with WIND energy. This would then allow that natural gas to provide 38% of the States' fuel for transportation and reduce its dependence on foreign oil.

The Pickens Plan calls for the United States to leverage its wind corridor in the middle of the country which stretches from Texas through the great plains to the Canadian border. The Great Plains states are home to great wind energy potential. The Department of Energy reports that 20% of America's electricity can come from wind.

Two new ETFs were recently launched that will give investors an opportunity to invest in companies that specialize in wind:
  • First Trust Global Wind Energy (FAN)
  • Powershares Global Wind Energy Portfolio (PWND)

These ETFs are so new it's too early to identify a solid trend. However, I believe that with high oil prices and a push towards to clean energy there is potential that WIND will soon be a trend. Add these funds to your watch list and see what happens as the Pickens Plan gains momentum.


Skip Reardon said...


Glad to see you blogging - AND - particularly about the investment trends in the alternative energy arena!

All the best!


Adam Zuercher said...


We'll see how this new blogging venture goes. I'm excited about it and hoping clients and friends find it to be a valuable resource.

Be sure tell your friends and colleagues to visit the blog as well.