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Stock Market Woes Bode Well for Ethanol Long Term; Perhaps for Nuclear, Too

Posted on Thursday, January 26, 2017 by Gary Schwendiman
MarketWatch: The S&P 500 has increased just 1.7% over the past 24 months.

Copyright: palinchak/

It’s no secret that our economy continues to be sluggish. Periods like these remind us to look to the long-term picture and recall how what appears to be a downturn in an industry can actually lead to long-term growth. I am not at all surprised by what’s happening at the moment, and if you read my book, you’ll see that it predicts many details of the current scenario.

A year ago, MarketWatch published bleak figures for many branches of industry, especially the energy sector, and within the energy sector, especially oil and gas—but also coal.  In MarketWatch’s publication this week, two oil-industry companies again feature in the ten stocks with the biggest declines so far this year.

Long term, this picture works in favor of ethanol as a preferred fuel source. The low oil prices on the stock and gas prices at the pump mean that hybrids and electric cars are even more unreasonably expensive by comparison, so internal-combustion-engine vehicles will continue to predominate by a great distance. Eventually, gas prices will go up again, and developments in ethanol technology will position it perfectly to take over as an alternative that’s both cleaner and more economical.

I’m also not too upset by last week’s announcement that New York’s Indian Point nuclear power plant is to close fourteen years early. As Jared Anderson, writing for Forbes, points out, the main reason for this early closure is the glut of cheap natural gas on the market right now as a result of fracking. I’m not concerned, because—as I underscore and show in detail in my book—the glut of gas from fracking is a bubble. There’s one thing that you can depend on bubbles to do, and that is burst, and it doesn’t usually take that long.

When the fracking bubble bursts, all the wind and solar in the world won’t make up for the large-scale, storable baseload power that a gas or coal plant can provide. Gas and coal are dirty, and when the bubble bursts, gas will no longer be cheap. Here comes nuclear to save the day. Even, perhaps, several small modular reactors, like those in the pipeline now. Zero emissions, can be stored underground, cheaper to permit and produce than a traditional large plant.


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