New White House stance on emissions lifts alternative energy

Alternative energy companies and natural gas producers stand to profit from President Bush's decision to embrace a greenhouse gas emission cap, a Friedman, Billings, Ramsey analyst said Wednesday.

In a Rose Garden speech Wednesday afternoon, the president is expected to propose stopping the growth of the nation's greenhouse gas emissions by 2025 and call for electricity generators to slow those emissions within 10 to 15 years.

Friedman, Billings, Ramsey analyst Kevin Book in a client note said the White House move "could lead to a positive market response for names levered to clean power generation (wind, solar, geothermal, etc.), hybrid vehicles components, and U.S. natural gas extraction."

Shares of solar energy companies surged in late morning trading: First Solar Inc. rose $10.07, or 3.5 percent, to $297.30, Evergreen Solar Inc. rose 24 cents, or 2.3 percent, to $10.68 and SunPower Corp. gained $3.13, or 3.3 percent, to $97.54.

Zoltek Cos., which makes carbon fibers used in wind turbine blades, rose 28 cents to $23.07.

Earlier this week, Book also mentioned natural gas producers Anadarko Petroleum Corp. and Chesapeake Energy Corp. as potential benefiting from Bush's new position. Shares of both natural gas companies rose more than 2 percent.

The analyst also said methane producer CNX Gas Corp. "might benefit from demand at the same time that they potentially monetize 'offsets' at zero monitoring costs."

The White House call for a greenhouse gas cap, could result in short-term "selling pressure on coal mining, refining, coal-levered utilities, and heavy oil extraction names," Book said.

Longer term, the administration's position could be a windfall for engineering and construction companies that build new energy facilities or retrofit existing ones, he said.

"The scale of the retrofit and new energy infrastructure investment that is required to enable fossil fuel combustion under global climate controls could run into the multi-trillion dollar range, far outstripping clean tech investment," Book wrote.

The head of geothermal energy provider Ormat Technologies Inc. welcomed Bush's remarks but said more was needed.

"It is a good sign for every geothermal company," Dita Bronicki, chief executive, said of Bush policy change. "But we need a little more than good intentions. The uncertainty about the extension of the production tax credit doesn't make life for the industry very easy because it is very hard to plan in a situation of uncertainty. What we are really wishing for is to have more specificity and more certainty."