Mike Norman, anchor, HardAssetsInvestor.com (Norman): Hello everybody, and welcome back to HardAssetsInvestor.com. I am Mike Norman, your host. We’re here for the second part of my interview with Stephen Schork, editor of The Schork Report.

By the way, I just want to tell you, your publication is fantastic. I was in that business myself for awhile, and there are not too many newsletters or investment sorts of publications that I find to be very strong in their analysis; yours is excellent.

Stephen Schork, editor, The Schork Report (Schork): I appreciate that; thank you.

Norman: In the last interview, I said let’s take a look at the whole green movement and alternative energy. We have a president in place now who is really behind this trend. What sort of an impact, if any, do you think it’s going to have in the short term and in the long term?

Schork: Well, ultimately I think it has an upward skew on price, and my concern is that with this administration … unlike the prior administration – with the Bush administration, all things were on the table. Now this isn’t going to be a pro-Republican/Democrat argument, but what is clear with this administration is their outward hostility toward the oil and gas industry.

If we just take some of the quotes on Reuters and on Fox and so forth with regard to their stance, it is a nasty rhetoric. So I think this administration, unlike the other administration, has taken the approach that it’s all or nothing, that we’re putting everything behind the green agenda, which I fully support.

Norman: How does that translate into a higher … you’re saying the impact is going to be a bullish impact on petroleum prices.

Schork: A bullish impact on petroleum prices because ultimately it restricts supply of petroleum; because all the investment dollars … there were just so many dollars available to the marketplace. Now if I’m being told by government fiat that I have to allocate a certain amount of my production or my exploration toward green, well, those are dollars with which I can’t go after a proven, more efficient marketplace in the hydrocarbons.

So I am not going to be able to grow my hydrocarbon portion of the balance sheet like I did five years ago, and that’s a problem because we were in the situation 10 years ago with natural gas. There was a severe problem with the maturation of domestic sources of natural gas in this country. A tremendous amount of research, a tremendous amount of investment went into new extraction techniques.

We are now getting gas from sources – tight geological formations, coal bed methane, shale – which 10 years ago were not economically feasible. But it is now, so what happens is, we got that gas to the market. If you limit that investment – and this administration is signaling they are going to be absolutely unfriendly – then that next new technology to get the oil that is sitting in the Saskatchewan Plain right now is never going to make it to the market.

Norman: OK, but doesn’t the same thing happen … in other words, yes, in the short term, you limit the investment into the traditional sources of energy, petroleum, oil, natural gas. But in the longer term, because the investment is flowing into the alternates, the technology catches up and we start to produce more of that – just as we produced more of the natural gas, where in the beginning, as you said, there was difficulty in bringing it on domestically.

Schork: I certainly agree, and I’m certainly a big believer in technology catching up. If you make the price high enough, i.e., you put oil at $100 a barrel, all of sudden, you know what? Matt Simmons’ [author/analyst] argument about the world running out of oil kind of falls on deaf ears, because all of a sudden, we don’t find all that oil right off the coast of Brazil or under the Antarctic/Arctic polar caps.

But again, with the technologies, it is this reasonable investment. We have to appreciate that what is so beautiful about hydrocarbons is the amount of energy that you can pack into a relatively small amount. This is why gasoline is such a beautiful source of energy.