As the financial crisis paints a mixed picture of job losses and oil price slumps, new energy is favored as a fresh growth area to steer the U.S. economy out of recession.
Aware of the grave unemployment situation and the fragility of an oil-guzzling economy, the Obama administration will probably pin its hopes on developing alternative energy for long-term growth, analysts said.
A highlight of Barack Obama's campaign themes during the 2008 presidential elections, the green economy is expected to produce millions of new jobs and ease the pains imposed by runaway oil prices on drivers.
Will the new energy drive the U.S. to recovery this time, as the dot-com boom did in the 1990s recession and the real estate sector did after the 2001 contraction?
Investing in renewable energy and energy-saving sectors can create four times as many jobs as investing the same amount of money in fossil fuels, according to a report by a U.S. research institute.
Compared with the already mature traditional energy sectors, clean energy is a new area with a much bigger room for growth, which means more infrastructure construction and more jobs.
By shifting toward a green economy, the United States can also reduce dependence on non-renewable energy sources such as oil and coal.
World crude prices rocketed to a record high of more than 147 U.S. dollars per barrel in the summer of 2008, raising concerns about energy safety in the United States. The fact that major oil-rich areas are geo-politically sensitive reinforced the necessity of finding new energy sources.
Reducing the use of fossil fuels also brings less greenhouse gas emission, the key to tackling climate change.
It may seem less urgent to move to a clean economy as oil prices currently have retreated to around 60 U.S. dollars per barrel, nearly 60 percent down from last summer.
And, the Energy Information Administration of the U.S. Department of Energy recently predicted that the benchmark crude futures price traded in New York will decline to an average of 55 U.S. dollars per barrel in the second half of 2009, and an average of 51.70 U.S. dollars per barrel in the whole year of 2009, compared with an average of 99.6 U.S. dollars last year and more than 70 U.S. dollars in 2007.
However, Thomas Boone Pickens, a Texas oil tycoon and founder of the hedge fund BP Capital, who has become an alternative energy advocate, told the media oil prices would not always stay low and that investing in new energy remains the trend.
Foresight is necessary to the development of the energy industry, which concerns a country's economic and strategic safety, analysts said.
"If developed countries can put money into fostering a low-carbon economy, it will not only stimulate immediate demand but also lay a solid foundation for long-term growth," World Bank chief economist, Justin Yifu Lin, said.
He told Xinhua that one of the solutions for the crisis-hit developed countries is to combine economic recovery with tackling climate change.
In a advisory report to the Obama administration obtained by Xinhua, the U.S. think tank Brookings Institution suggested speeding up support for new energy for sustainable development.
The U.S. cannot bet its future on reductions in oil prices, or it will face greater economic and geo-political risks once the economy revives, the report said.
(Xinhua News Agency May 26, 2009)
