Our interest in energy independence rises and falls historically with the price of oil. When the price peaks so does our awareness of the pitfalls inherent in foreign energy sources. When the price declines so does our concern with filling up our SUVs.

"When the public got to $4 a gallon that was a sea change," says V. John White, executive director of the Center for Energy Efficiency and Renewable Technology. "That was the level at which people said, 'OK, I get it. I ain't buyin' the SUV.'"

Now that oil is trading for half of what it was a year ago, will we still want to invest in alternative energy sources? The data seem to indicate the correlation continues.

The NEX, or WilderHill New Energy Global Innovation Index, which tracks clean energy stocks worldwide, jumped 36 percent between April 1 and June 30, far outpacing the 15 percent recovery of the S&P 500, according to a report released this month by New Energy Finance, a London-based research firm.

Oil prices more than doubled between February and late June, reaching an eight-month high near $70 a barrel. Now some are predicting an economic turnaround will begin before the year's end, based on a stronger banking sector and improving housing market. That would mean more demand for oil and potentially tightening supplies.

The New Energy Finance report attributed the NEX rebound to an uptick in oil prices from lows reached last winter and also to optimism inspired by billions of dollars committed by governments worldwide to green stimulus packages, which will generate sales and profits for the clean energy industry through the coming years. The rebound contrasts strikingly with the NEX's performance during the worst of the economic crisis. In the first quarter of 2009 the index slipped 9 percent, and in the last quarter of 2008 it fell 36 percent. During the entire year of 2008 the index lost 61 percent.

"The higher oil price has helped to rekindle investor interest in clean energy stock, but it was certainly not the only factor," says Michael Liebreich, chairman and chief executive officer of New Energy Finance. "The governments of major economies have committed $162.8 billion to green stimulus programs since last autumn."

The alternative energy industry was pummeled more by the economic crisis than the collapsing price of oil, says Reid Detchon, vice president for energy and climate at the United Nations Foundation, an independent advocacy group. Stimulus funds are encouraging to investors, but there are problems. So many companies are losing money, so they have little use for tax credits. Nonetheless, "investors are looking to the future and see the intention and likelihood that the U.S. will be leading a major shift in our economy away from traditional sources of energy toward clean, low-carbon sources," he says.

U.S. leaders should implement a tax on oil and gas now while prices are low to support alternative energy sources and transportation methods, White says. As prices rise the tax could be rescinded.

"If people saw the relationship between the taxes they pay and change in the transportation system that benefited them, I think people could be talked into it," he says. "The money that we are sending outside of the country to pay for the oil we buy is money that is lost to the economy, and it's money that in some cases empowers our enemies."

Change will take time but must be unmarred by ups and downs, he says.

"The federal government has become a critical partner in the renewable energy technology sector, and the stimulus is a lifeline that is keeping things on track," White says. "Slowly the credit markets are coming back, but that's much ore of an impact than the falling price of oil. The sector is strong because there is a lot of very good technology that is available, but the question is can they finance their projects?"

MNN homepage photo: Henrik5000/iStockphoto

As oil prices drop, will it be so easy to be green?
Now that oil is trading for half of what it was last summer, will investors want to put their money into alternative energy sources? We look at the data.