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Politics : Sioux Nation -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (181792)	12/5/2009 11:30:15 AM
From: Wharf Rat	1 Recommendation Respond to of 361951

Oldest U.S. Oil Fund Targets Solar Stocks as Crude Outlook Dims By Joe Carroll Dec. 4 (Bloomberg) -- Petroleum & Resources Corp., the oldest U.S. oil fund, plans to invest in solar- and wind-power production for the first time since its founding in 1929 as governments crack down on fuels linked to greenhouse gases. The $555 million closed-end fund, whose biggest holdings are Exxon Mobil Corp. and Chevron Corp., is analyzing wind- power, biofuels, solar and hybrid-car battery makers with an eye to making investments as soon as the second quarter of 2010, Chief Executive Officer Douglas Ober said. Aside from an investment in an ethanol producer two years ago and a wind-turbine manufacturer in the 1990s, the Baltimore- based fund never before ventured into so-called green energy, Ober said. That’s changing now because of legislative efforts to discourage use of oil-based fuels and concern that global crude supplies are getting harder to find. “Climate legislation looks like it may become a reality in Washington, and that’s going to usher in significant changes for the oil companies,” Ober said yesterday in a telephone interview. “We realize there isn’t going to be oil forever, so we need to look for other types of stocks and find the right place to be.” Worldwide demand for energy from renewable sources including windmills and hydroelectric dams will grow at more than triple the rate of oil through 2030, according to the U.S. Energy Department in Washington. Petroleum & Resources rose 10 percent in value in the past decade, compared with a 23 percent drop by the Standard & Poor’s 500 index, as worldwide oil demand swelled by enough to fill 125 supertankers per month. Demand Drivers During the next two decades, growth in renewables will be spurred by higher crude prices, tougher environmental laws and government subsidies, the Energy Department said in its annual International Energy Outlook in May. Hydro is the only renewable electricity source that will be economically competitive with fossil fuels such as coal during that period, except in a few niche markets, according to the report. Wind, solar and other power sources will require government supports, the Energy Department said. Ober, a Princeton University-trained aeronautical engineer, said the rising U.S. government deficit will force policy makers to scale back some of the subsidies currently propping up many alternative-energy companies. Declines Predicted When those supports are reduced or eliminated, renewable- energy stocks will tumble and only the best managed, financially strongest companies will survive, Ober said. The situation will provide opportunities to invest at low prices, he said. Ober, who seeks investments that will generate above- average returns over a 3- to 5-year horizon, added 105,000 shares of Exxon Mobil during the second quarter, bringing the fund’s total to 1 million shares, public filings showed. Ober’s holdings of San Ramon, California-based Chevron, the second-largest U.S. energy company, remained unchanged during the first half of this year at 915,000 shares, or 11.5 percent of assets. The fund’s next three biggest holdings are Los Angeles- based Occidental Petroleum Corp. and offshore oil drillers Noble Corp. and Transocean Ltd. Ober also oversees the $866 million Adams Express Co. closed-end fund. To contact the reporter on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net. bloomberg.com