Green Push Takes A Hit

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The push for
energy efficiency
and
alternative fuel development
over the past five years has taken a major step backwards over the past six months as oil prices fall to new lows. Super-cheap
crude
has taken away companies’ incentive to invest in alternative options, something that has put natural gas companies and biofuel firms on the list of businesses feeling the pinch.

Related Link: New Biotech ETF From ALPS

Hitting Small Firms

Small firms like Arizona Biodiesel and Blue Ridge Biofuels that convert used restaurant oil into usable fuel have been forced to cut prices in order to remain competitive. With gas stations posting record low prices, consumers are becoming less and less likely to worry about their carbon footprint.

Ethanol Producers Hit

Ethanol producers are likely to feel the pressure of dropping prices this year too, as corn prices recover and demand continues to slacken. Last year, shares of
Archer-Daniels Midland CompanyADM
gained more than 16 percent, since the company was able to produce the ethanol with relatively low margins. But persistent price pressure coupled with increasing margins will likely cut into profits this year.

Related Link: Natural Gas Spikes Following Reduced Stockpiles

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Natural Gas Companies Hit

Natural gas companies are also feeling the squeeze this year as their customers aren’t seeing the same cost savings for swapping out diesel. Shares of
Cheniere Energy, Inc.LNG
have lost 3.36 percent over the past six months, as shipping companies are reluctant to pay a premium for trucks that use natural gas when diesel prices are only marginally higher. A lack of natural gas demand will also hurt
KBR, Inc. KBR
, as the company produces the industrial equipment used at natural gas plants.
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Posted In: CommoditiesMarketsArizona BiodieselBlue Ridge Biofuels
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