The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (TheStreet)-- In an attempt to address the rising costs of fuel and crude oil, President Obama stated that it is vital for the U.S. to embark on a long-term plan to tap domestic resources and soften its dependency on foreign oil.
That policy could potentially influence the iShares Dow Jones US Oil & Gas Exploration (IEO), Oil Service HOLDRs (OIH), Market Vectors Global Alternative Energy ETF (GEX) and the Market Vectors Uranium and Nuclear Energy ETF (NLR).
Obama specifically called for new incentives to boost production of crude oil, gas and biofuels as well as more stringent fuel efficiency standards on vehicles and further development of alternative energy solutions.Obama reaffirmed his support for nuclear power and the usage of natural gas. Although the specific incentives are still a work in progress some could include shortening lease terms, speeding up the process of securing lease and drilling permits, lowering the royalties paid to the federal government for leases and expanding production areas offshore. According to the Department of Interior, there could be as much as 11.6 billion barrels of untapped crude oil and 59.2 trillion cubic feet of natural gas in the Gulf of Mexico, but fewer than half of the leases on federal land are active. Critics blame the lack of drilling on bureaucratic red tape and strict guidelines which make it extremely challenging for drillers. At the end of the day, Obama's energy plan aims to reduce oil imports by nearly one-third over the next 10 years and reduce the nation's dependency on imported oil. As mentioned above, some ETFs that are likely influenced by the President's plan include:
- iShares Dow Jones US Oil & Gas Exploration and Production, which includes companies in its portfolio such as Occidental Petroleum (OXY), Apache (APA), Devon Energy (DVN) and Chesapeake Energy (CHK) in its top holdings.
- Oil Service HOLDRs, which includes Schlumberger (SLB), Baker Hughes (BHI) and Halliburton (HAL) as its top holdings.
- Market Vectors Glb Alternative Energy ETF, which is a diversified play on alternative energy. Some of its top holdings include First Solar (FSLR), Vesta Wind Systems (VWS) and Cree (CREE).
- Market Vectors Uranium & Nuclear Energy ETF, which is an equity play in nuclear energy. Top holdings include Constellation Energy (CEG), Cameco (CCO) and Exelon (EXC).
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV