Profiting From Rising Energy Costs

Rising global energy costs are going to cause major changes in America's future economy.  Gregor McDonald does an excellent job assessing the current situation and speculating future energy trends.  Major changes are equivalent major opportunities for long term investors.  I often like to think about where we can make money as fuel costs rise, natural gas develops, renewable sources progress, and consumption declines.  For now I'm going to assume innovation lags necessity, and our near future is going to involve a massive decrease in energy usage by Americans, due to rising energy costs.  This will be an overall slowdown of the economy, but as usual, some will prosper.  Also, I'm going to consider only cheap solutions that are accessible to most Americans, because that will be the biggest market share.

Cutting Transportation Costs


How do you cut down on transportation costs?  An hour long commute to work in a car will only cost more now that we are 6 years past global peak oil production, and many Americans cannot afford to buy a new hybrid car to cut daily expenses.  The solutions?  Move closer to work.  Take public transportation, walk, or bike.  Car pool with other people privately.  Ride a scooter (Hi China!). Industries to look into:

• Moving and storage companies.  John Doe is going to need a U-Haul to move closer to work.  
• Shoes.  More walking means buying shoes more often.  
• Bicycles.  Especially electric bicycle patent holders and manufactures.  I've seen what happens when sedentary people apply their desire to sit still to  their desire to ride a bike, and it is an electric motor with a battery.  
• Headphones.  Sharing a car with people doesn't mean liking the same music.  I wonder if any public company specializes enough in headphones to get a significant gain from increased sales.

Cutting Home Heating and Cooling Costs

• Smaller homes.  I like stating the obvious.  Smaller homes will be easier to heat and cool.  Maybe that means condos and apartments in high rise buildings, that get to use the heat rising up from the lower units.  This is an especially interesting opportunity to me, given the recent poor performance of real estate in general.  
• Cold weather clothing:  Jackets, hats, blankets, sweaters, and slippers.  If you keep your house at 64 degrees Fahrenheit in the winter, you will have on sweaters and slippers.  No heat at night means more blankets.  No car means more time walking outside even if you use public transportation, which requires better clothing than most people currently use to walk between between their front door and the car.

General Goods

• Plastic Recyclers:  As oil prices rise, so will the cost of producing new plastics.  Previously unprofitable recycled goods might get priced into profitability, creating some nice investment opportunities.

Do you have some ideas about what industries will benefit from rising energy costs?  Let me know!