The “Black Turtle” of Offshore Oil

The pictures of oil gushing from the burst pipe at the bottom the Gulf of Mexico, accompanied by images of black, clogged mangroves and dead turtles may mark a turning point in the US zeitgeist towards the use of renewable energy and green technologies. 

As this disaster so clearly demonstrates, the US is as much at risk as it has ever been.  While the ability to drill these wells has been developed, the ability to mitigate an environmental disaster is effectively nil.  Theoretically this kind of a disaster looks like a tail risk, but we can’t say that with any certainty since we don’t have enough data.  What should be clear at this point to consumers, regulators, legislators and all the other stakeholders is that biofuels ought to be significantly preferred over the current situation.  Ironically, since off-shore drilling is off the table, the Climate bill will probably now be stalled without sufficient Republican support.

Going a bit further, it’s possible that the BP oil spill may prove to be an ever bigger boon to the electric vehicle (EV) value chain than fuels.  I’m pretty sure that Boeing isn’t introducing a plug-in 777 any time soon, so that end of the transportation spectrum will continue to look at biofuels, but clearly, the electrification of transportation is coming sooner rather than later.  Notice the recently announced deal between Tesla and Toyota.  If 2009 was the year of Efficiency, might 2010 will be the year of the EV?

About  the Author:
David Waserstein joined I2BF in 2009 as Director of Investments.  Most recently, Mr. Waserstein worked as an investment professional at Hudson Clean Energy Partners, one of the world’s largest renewable energy-focused private equity groups with $1.024bn AUM.  Additionally, David is the founder of High Water Mark Advisors, LLC and Anvanta Systems.  He has a track record of providing high-value management consulting with a focus in the areas of funding and strategic development.  David holds an MBA from Columbia University, Graduate School of Business as well as a BA from Tufts University in Political Science.