TER: Where does the investment opportunity lie for green technologies? Are these companies actually doing a lot of development, or is it that they're purchased by larger companies?

GM: You know that's a very interesting question. If I was a large multinational producer, I'd be looking at replacing my traditional revenue models. If you've got the opportunity to do that by acquiring profitable companies in the green tech space I'd absolutely do that. You're going to see a lot of these companies start off as fledging green producers of energy, and then be acquired by the larger companies as a way of those bigger companies augmenting traditional revenue models. So absolutely there's going to be lots of pick-ups.

TER: Are you seeing any opportunities in natural gas? Some people are saying that there simply isn't enough supply, while others insist there's really going to be an opportunity going forward.

GM: I'm one of those at this point that agree with the supply issues that you've mentioned. There's been technology, like horizontal fracking, which basically makes available a tremendous amount of natural gas from historical traditional sources. So it's going to take a while for the supply to clear out. That's sort of the short-term view. I think the long-term view is it's a cleaner source. We're going to continue to need power. I look at China as essentially going through the industrial revolution right now, and just barely scraping the surface of what total consumption ultimately will be there. So I don't think you can really discount any source certainly in the long run.

TER: Do you consider natural gas a green technology, or more of a conventional energy source?

GM: I look at it more as conventional. Just by virtue of it still being a fossil fuel.

TER: The LME recently issued its first warrants for cobalt. How do you think it's going to impact cobalt in general?

GM: I'm glad they did that to cobalt and to moly as well. It's going to be great for the companies to basically price hedge. You're able to lock in the price that you sell cobalt for. It smoothes the peaks and valleys of price fluctuations. It adds a level of transparency as well to the metal. Certainly from a tracking standpoint it's a whole lot easier to find it. It's a leveler. It's a hedger. I think it's a great development for cobalt.

TER: Lithium and cobalt are linked, of course, because of lithium-cobalt batteries. Lithium has been the hot story in the energy markets. Do you see cobalt creating the same kind of buzz?

GM: Yes. I think it's a matter of awareness. Absolutely lithium has had just a tremendous amount of buzz. There was a while there, when I was a broker, that you'd be seeing little lithium companies spreading up all over the place. The second they had a press release that there was lithium you'd see the price spike. I think that the same potential exists for cobalt, but you know, again, it's just about awareness. I don't think people understand how important cobalt is in HEVs, as well as the other uses, such as the super alloys that I mentioned. I think the awareness is going to catch up, and therein lays the opportunity.

TER: Are there any other energy sectors that you're keeping an eye on?

GM: Oil and gas is certainly an area that I've had some experience in. I think it's interesting that we're creeping up again in the price. We'll see if that backs off.

TER: Do you see oil at some point going much higher than it is right now, or getting to the $100 per barrel point again?

GM: It's funny how you start hearing those comments as it starts creeping up to $100. I don't know. I think it's due for probably a correction to the downside. I have trouble seeing why it is where it is right now.

TER: China is growing massively in their industrial revolution and requesting a lot of solar investments. What are some interesting plays for investors?

GM: The China question is interesting to me from an investor standpoint. A lot of the investments you see going on in China involve a lot of private companies being formed, private companies raising money in the solar space. Obviously investors can't participate in that. Again, it's almost a cobalt story because these technologies also require large amounts of batteries, and by extension, cobalt. So it's difficult perhaps to play it directly, but again it comes back to cobalt.

TER: Critics complain that a lot of these green technologies, such as solar and wind energy, are only surviving because of government subsidies. Do you agree with that? What happens if those government subsidies are removed?

GM: Well, it's a technology question, isn't it? It's taken government subsidies to get them to where they are right now, and subsidies are also driving technologies to make them more efficient, which then brings the cost down. It's a profitability paradigm. We've already seen tremendous developments in alternative energies, which are now almost as cost effective when you compare them against the price of, let's say, oil. We're going to get to a point where these things are profitable on their own, if they aren't already. Aside from that there's this global movement towards green. People want to stop killing the planet, to put it bluntly. So I think all of these technologies that I referenced are here to stay.

TER: Gordon, we appreciate your input.

By arrangement with: www.theenergyreport.com

Post your comment  (0)

Connect:

Post to Twitter

Post to Facebook