Alternative ETFs: Investing In the Shift From Oil
November 15th, 2010 at 1:00am by Tom Lydon
Demand for crude oil is increasing as countries develop and the world population increases, and the world may soon run out of oil before a viable alternative is readily available. Therein lies the case for alternative energy exchange traded funds (ETFs).
According to the University of California Davis, global crude oil reserves will run dry 90 years before a replacement is available at our current technological progression, reports Anil Das For International Business Times. That means if we’re going to be ready, world governments will have to step up their efforts at making alternative energy a larger source of power production.
Previous projections put 2040 as the time when alternatives can viably replace oil, but researchers also believe that the estimate could be “overly optimistic about the diffusion of new technologies.”
Crude oil is inching up to $90 a barrel, again, and the International Energy Agency (IEA) stated that prices and demand will continue to grow for the next 25 years, writes Ami Cholia for Alt Transport. The IEA also estimated that average crude oil prices could jump 88% by 2035 to $113 in inflation adjusted dollars while demand will increase by 18% for oil and 44% for natural gas.
Fossil fuels will make up more than half of the increase in total energy demand. If the world wants to slow down or stop the damages from climate change, we would have to invest $1 trillion in extra investments by 2030, which would increase total investments needed to $11.6 trillion. [Solar ETFs May Shine As Law Fails to Pass.]
For more information on alternative energy sector, visit our alternative energy category. Green energy still has a ways to go – the industry is still in its early stages as it looks for more efficient and cost-effective ways to get this sector truly going. It’s still not clear which green energy sector will be the dominant one, so consider one of the broad alternative energy ETFs if you want total exposure to this market:
- PowerShares Cleantech Portfolio (NYSEArca: PZD)
- Market Vectors Global Alternative Energy (NYSEArca: GEX)
- iShares S&P Global Clean Energy Index Fund (NYSEArca: ICLN)
- PowerShares Global Clean Energy Portfolio (NYSEArca: PBD)
- PowerShares WilderHill Clean Energy Portfolio (NYSEArca: PBW)
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.