Ran across this looking for something else. (The way of the internet).

The article link shows additional graphics tables.

Diane

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November 1999
Feature

Hydrocarbon Stocks are Cold: And for a Good Reason

By Jackson W. Robinson

http://www.sustainablebusiness.com/html/insider/nov99/hydro.cfm

[Fair Use: For Educational/Research Purposes Only]

The newly emerging renewable-energy growth stocks are outperforming the fossil fuel groups for several good reasons. For one thing, they are not facing monumental litigation.

Just as the tobacco industry has been clobbered with civil judgments, so the fossil fuel industry may soon be facing damaging consequences for atmospheric pollution. Last year, tobacco companies agreed to the largest financial settlement in history, $206 billion, which it must pay to 46 states. Potentially more devastating are the implications of a new lawsuit filed by the U.S. Justice Department claiming "fraud and deceit..." regarding the health consequences of cigarette smoking. Not surprisingly, the shareholders of tobacco stocks are suffering large losses, a trend that seems likely to continue (WEN September 1997). Such litigation is setting a precedent for future suits aimed at the producers and users of fossil fuels-that is, fuels that generate carbon dioxide (CO2) and nitrous oxide emissions (NOX). And already, the threat may be impacting the industry's performance in the stock market.

A bellwether case in New York

After a summer in which New Yorkers and most Americans endured some of the hottest temperatures on record and the worst ozone in decades, New York State has just launched a massive lawsuit against 17 coal-burning plants in upwind states. It cited the plants for pollution and failure to update their emission control systems.

Such generating facilities are prime candidates for lawsuits. According to a recent New York Times article (Sept. 15, 1999), one third of atmospheric NOX emanates from power plants, and older coal-burning plants are among the worst offenders. NOX is a primary component of ozone, the toxic chemical compound that burns the lungs and eyes and can be life-threatening according to the American Lung Association. (The other primarily source of NOX are vehicles, especially sport utility vehicles and trucks that are not subject to the same emission standards as cars.)

NOX and CO2 emissions may also cause greenhouse gases and global warming although that is still the subject of scientific debate and research. While the links may not yet be as clearly causative as the links between tobacco and heart and lung cancer disease, the fossil fuel sector is already displaying a bunker mentality towards the subject.

Like the Tobacco Companies

In an editorial in The International Herald Tribune (Aug. 19, 1999), David Ignatius points out the "eerie resemblance" between the fossil fuel industry's stance on global warming and tobacco companies' historic suppression and distortion of the facts about smoking's health consequences. Having had the benefit of an early look at the government report, "Preparing for a Changing Climate," Ignatius exposes the hydrocarbon industries' position minimizing the dangers of global warming. And he recites the claims by an industry group, the Competitive Enterprise Institute, that CO2 in the atmosphere is good for plants and that "Trees do better with more CO2)."

Time to avoid hydrocarbon investments?

While the New York lawsuit is currently limited to upwind coal plants, it seems logical to us that the hydrocarbon producers and more flagrant users could eventually be named co-defendants by a much larger plaintiff base seeking trillion dollar settlements. They might be targeted by other states, or the U.S. government, particularly if the scientific evidence about global warming the green house effect becomes more conclusive. Keeping in mind the negative impact of litigation on tobacco stocks, we believe it makes sense to avoid the hydrocarbon group, especially those that are strongly opposed to the clean air Kyoto Protocol initiatives. While we may be very avant-garde in this position, we think the stock market is already turning in the same direction.

[See graphic]

The Exploding Market

Over the last 14 months, a six-member group of public renewable energy stocks (see table) is up +182 percent versus the S&P 500 which has climbed +16 percent (see chart). During the same period, six hydrocarbon-driven company stocks (see table), including two of the coal plants being sued by New York State, are only +2 percent.

If observers like Ignatius are right, fossil fuel stocks will continue to be poor investments. Fortunately, there are better alternatives in emerging, renewable energy growth stocks.

Jack Robinson is President of Winslow Management Company. Winslow is an investment management firm that specializes in environmentally responsible investing.

Excerpted FROM The Winslow Environmental News

-- Anonymous, May 07, 2000

Answers

I think these guys are missing the point. If the "independent" petroleum geologists are correct that oil supplies are limited and will begin decreasing at 3%/year beginning around 2010 to 1015, then these liability issues will be moot.

Hallyx

"The truth would become more popular if it were not always stating ugly facts." ---Henry S. Haskins

-- Anonymous, May 08, 2000

Someone asked... which are the six stocks? [snip]

Over the last 14 months, a six-member group of public renewable energy stocks (see table) is up +182 percent versus the S&P 500 which has climbed +16 percent (see chart). During the same period, six hydrocarbon-driven company stocks (see table), including two of the coal plants being sued by New York State, are only +2 percent.

[snip]

I would extrapolate by reading the article chart the companies, Ive placed ***s next to, and bolded, are the ones.

Diane

From article graphic insert:
Company -- Description

1) Chevron (NYSE: CHV)
Developer and Producer of crude oil

2) Astropower (NASDAQ: APWR) ***
Developer, manufacturer and seller of photovoltaic cells, modules and panels

3) Exxon (NYSE: XON)
Developer and Producer of crude oil

4) York Research (NASDAQ: YORK) ***
Developer and marketer of environmentally- friendly energy projects, like wind farms

5) General Motors (NYSE: GM)
Manufacturer and seller of vehicles

6) Spire *** (NASDAQ: SPIR)
Developer, manufacturer and seller of photovoltaic module equipment

7) Ford Motors (NYSE:F)
Manufacturer and seller of vehicles

8) Ballard *** (NASDAQ: BLDP)
Developer and manufacturer of fuel cells

9) American Electric Power (NYSE: AEP)
Electric utility holding company servicing central US states

10) Fuel Cell Energy *** (AMEX: FCL)
Manufacturer of fuel cells

11) Cinergy (NYSE:CIN)
Electric utility holding company servicing central US states

12) Vestas Wind Systems *** (Danish: VWS)
Manufacturer of wind turbines

-- Anonymous, May 11, 2000