oil geothermal and carbon

With a seemingly endless upward pressure on the oil price my view is that it is only a matter of time before the market turns its eye toward geothermal energy.

The relentless price increases,( i hear that diesel is $2.25 at Broken Hill) will be a key driver for geothermal going forward. In a world caught short on oil and energy costs being a major factor in tipping several economies into a downward spiral of rising inflation coupled with rising interest rates the world will be acutely aware of alternative energy supplies.
Solar, Wind and Nuclear being the high priests of alternative non-fossil fuel based energy systems will all benefit but each has its problems. Solar and Wind don't give baseload power ( because it is not always sunny or windy) and nuclear has a few issues (greens don't like the waste containment issue, activists don't like the bomb issue and governments don't like making decisions which turn off the generally docile voters issue).

In my view the geothermal sector has a long way to go. There are 440 geothermal plants round the world, though most of them rely on hot water rather than engineered geothermal systems. Sure the technology for the power transfer is off the shelf but the cost of developing the wells and the associated infrastructure is very large, certainly too large for the small number of small listed companies on the ASX to digest themselves ( with the possible exception of GDY).

On top of all of this is Climate Change and the near universally agreed proposition that as a planet we need to reduce carbon emmissions.
Put into the equation the carbon credits regime which is developing round the world and locally Ross Garnaut, Penny Wong, Kev Rudd et al are working assidiously trying to resolve and make the world a better place without sending us all broke in the process. It is a tough call but it looks like there is enough political and social capital to make some serious changes but these will come at economic cost somewhere. Most likely it will be with households like yours and mine which will have to stump up for something, somewhere and probably forever.

One of the likely developments is that clean energy from geothermal will benefit hugely because the taxes applied to the carbon emitting fossil fuel world will not apply to geothermal( because it doesn't emit carbon). This means that the comparative disadvantage that geothermal has now versus fossil fuels will be reversed and the price increases for fossil fuels will make them comparatively more expensive than geothermal. I don't know if Peak Oil is real or not but if it is then normal risk management techniques (hedging your bets as far as we are concerned as equity investors) means that an investment in geothermal would likely pay off well.)

I think there will be a tipping point on geothermal versus fossil fuels. It will be based on price and availability - when it is competitive to fossil fuels and is readily available. When this happens it will be a revolution in how this world works. I believe that Rudd's carbon emmissions and trading platform will be a plank in all of this.

So I am sticking with geothermal and sticking with Green Rock. This isn't a post to yabber on about the benefits of investing in this stock per se but rather I ask for some general feedback on what people/investors a and petrol buyers feel about the geo sector.


cheers
omg.