Learning from Hurricane Sandy and Investing in Our Energy Future

Hurricane Sandy’s wounds remain fresh along the US East Coast, particularly in and around New York City where cleanup costs stretched into the billions of dollars. The storm caused government and private industry to reconsider critical infrastructure vulnerabilities, especially with regard to energy production, transport and distribution, in both the power and liquid fuels sectors.

Native New Yorker, energy analyst and author John Licata is the Founder and Chief Energy Strategist at Blue Phoenix, a commodity research and consulting firm. Licata began thinking about local energy infrastructure issues in Sandy’s immediate aftermath, when he found himself working in the dark at his Long Island home. He did so much writing, in fact, it motivated him to write the new book entitled Lessons from Frankenstorm, Investing for Future Power Disruptions.

Complacency is one of the biggest threats. “Doing nothing can be a big storm as well,” Licata told Breaking Energy. “We can’t think this is only going happen once every 100 years. We have a lot of energy infrastructure located close to the water, this needs to be reconsidered.”

And that reconsideration offers potential business opportunities for companies and innovators finding ways to increase reliability and energy efficiency. The book delves into new opportunities, companies to watch and technologies that can help improve the situation, he said. “We can learn lessons from Sandy and it’s not just about playing Monday morning quarterback, but putting things in place so that next big storm does not leave people without lights for weeks.”

“Today, I’m loudly beating the drum that energy storage in secure locations is vital for growth here at home as well as for financial centers around the world. That spells opportunity for investors,” he writes in the introduction.

The chapter on investment ideas looks at everything from 3D printing to wind power and cyber security. It’s surprising to see how many well-known companies are active in sectors one might not immediately associate with their core businesses.

For example, Licata asks if Xerox can now be considered an alternative energy play because of their work printing silver on thin materials that could greatly improve solar panel technology. He also discusses Lockheed Martin’s involvement in sectors far beyond the traditional defense systems usually associated with the giant DOD contractor.

“When I think of cyberterrorism, I immediately think of defense, and that leads me to Lockheed Martin (NYSE: LMT). Although the name is viewed as a defense play, it is actually involved in diverse areas such as tidal energy, bio energy, fuel cells, energy efficiency, smart-grid solutions, nuclear solutions, nanotechnology, and surveillance systems. It’s that last area that piques my interest. In fact, cyber-related activities comprised about 20 percent of total sales for Lockheed.”

As a native New Yorker whose Staten Island hometown was devastated by Hurricane Sandy, Licata focuses a lot on the metropolitan area and important energy-related initiatives state and local government leaders are implementing. “There’s an opportunity to have New York State be a model in many ways, including in energy,” he quotes New York Energy Czar Richard Kauffman as saying to begin one of the chapters.

“New York can be source of innovation like California led with clean tech,” Licata said.

John has over 15 years of energy and metals research/strategy experience, which has made him a highly sought out industry veteran for viewpoints related to advanced energy technologies and industries. John has held research, trading, and strategy positions at Dow Jones, Salomon Smith Barney, BrokerageAmerica, and on the trading floor of the New York Mercantile Exchange (NYMEX). His book, “Lessons from Frankenstorm,” is available from these outlets.