X-Message-Number: 29477 From: "Mark Plus" <> Subject: The alternative energy bubble Date: Mon, 30 Apr 2007 08:51:03 -0700 This follows up something Perry Metzger wrote a few weeks back (in Cryonet #29261). Perry wrote, >About your "no one is doing anything", Mark: right now VC spending on >energy is on the order of tens of billions of dollars, though a few years >ago it was a tiny fraction of that. I have friends at some of the largest >VCs in the country, and they're all sending heavily on energy right now. I followed up in Cryonet #29290 with: >The same kinds of people who also gave us the dot-com and real estate >bubbles? I can almost guarantee that these venture capitalists have >invested into nonobvious perpetual motion machines instead of real sources >of net energy, with a depressingly familiar collapse of asset values to >follow in a few years. Turns out other people who study alternative energy for a living have arrived at a similar assessment about the bubble: http://www.nytimes.com/2007/04/30/business/30energy.html?_r=2&oref=slogin&oref=slogin Venture Capital Rushes Into Alternative Energy By MATTHEW L. WALD Published: April 30, 2007 Money is flowing into alternative energy companies so fast that the warning signs of a bubble are appearing, according to a report on investment in clean technology by a New York research firm, Lux Research. . . Matthew M. Nordan, president of Lux, said that the amount of venture capital put into clean energy investments last year was $1.5 billion, up 141 percent from the $623 million of 2005, and that in the same period, initial public offerings by companies in this sector rose to $4.1 billion, from $1.6 billion in 2005. The initial public offerings were primarily in companies involved in solar power or biofuels, according to the report, to be released today. The investment is driven by fear that the peak of oil production is approaching, he said, and by the possibility of new taxes or other restraints in an effort to curb global warming gases, principally the carbon dioxide that is given off by burning fossil fuels. Money is sitting on the shelf waiting to be invested, and investors are now chasing entrepreneurs, he said, rather than the other way around. When you see venture capital more than double from one year to the next, and I.P.O. values double from one year to the next, that's the sign of a bubble in the making, said Mr. Nordan. [Mark resumes] Funny how these financially sophistiicated people have caught the "fear that the peak of oil production is approaching." I guess they fear that more than they fear losing their shirts when their investments turn to ashes. Mark Plus _________________________________________________________________ Interest Rates NEAR 39yr LOWS! $430,000 Mortgage for $1,299/mo - Calculate new payment http://www.lowermybills.com/lre/index.jsp?sourceid=lmb-9632-19132&moid=14888 Rate This Message: http://www.cryonet.org/cgi-bin/rate.cgi?msg=29477