Further evidence here of the correlation between oil prices and the fortune of alternative energy companies.

As it says, "The falling cost of conventional fuel has also taken some of the shine off alternative energy. Ethanol producers Aventine and Verasun have both lost nearly a third of their value since early August. Another ethanol company, Hawkeye Holdings, was forced to postpone its initial public offering last week. "

Ethanol of course is the most sensitive of the alternative energies to conventional oil prices. For all that, I think the fall in oil prices has been overplayed. It seems more likely that what is happening is that we are testing the bottom of a new trading range. That now seems to be $60 - $80. All in all, I think there are still more reasons why the price of oil could still go up, rather than down.

A war with Iran, possibly next year being one of them . . .

Early on at AEI, it was obvious that what people wanted to know was;

who are all the fully listed (i.e. not OTC) alternative energy companies which pursued alternative energy as a major part of their business, thus creating genuine alternative energy exposure for AE investors - globally?

So I do find it ridiculous of some alternative energy sites to list major vehicle producers as alternative companies, because a corner of the research division produces the odd fuel cell and flex-fuel / hybrid vehicle which makes up less than 1% of their total sales. Similarly, GE - an industrial collosus - is the world's second largest producer of wind turbines but this is a very low percentage of their overall sales. And there's no point in including Wacker Chemie AG in solar stocks, although a siginificant producer of polysilicon, when according to their annual report, Wacker polysilicon contributes just 5% of their sales and not of all of that is to the solar industry, but to the semiconductor industry.

Alternative Energy Investors are not interested in either bit-players or blue chip firms doing a cameo role.

So I wanted to let you know we have added some new stocks to our list and after careful analysis, excluded some other candidates that might have been included elsewhere.

Our new stocks - going up shortly - are;

Biodiesel
i) Biopetrol Industries
ii) EOP Biodiesel

Biogas
i) Schmack Biogas

Solar
i) Centrosolar
ii) Reinecke & Pohl Sun Energy
iii) Roth & Rau
iv) Sunline

Hydro
i) Avista
ii) Brookfield Asset Management
iii) Idacorp
iv) PG&E;
v) Portland General
vi) Transcanada

Wind stocks;
i) Nordex

Which brings our total to 141.

We are just starting to see a clear correlation between the price of oil and the fortunes of alternative energy stocks. Nowhere it would appear is this more marked than with solar and biofuel stocks. With oil prices now falling to a 6 month low this needs to be taken into account.

I think what this shows is a couple of points;

i) the price of oil trumps the price of carbon by a multiple (and will continue to do so) as a widely understood price signal for or against alternative energy investment - carbon markets because they are small and new, lack liquidity and long-term future pricing
ii) solar and biofuel stocks are starting to be looked at as sectors in their own right influenced by the global economy - rather than strange and exotic curiosities that behave uniquely as individual companies

Oil, like all prices never goes one way forever. For an excellent review of oil prices from 2004 - 2006, I recommend this wiki here.