business

The stock market turned positive for the first time this year in recent days, thanks to the nine-week rebound from the bear market that began in October 2007.

The bad news: the price of oil, $58.50 a barrel on Monday, is up about 30 percent year-to-date, while the S&P 500 index of company stocks is about break-even on the year.

Some analysts predict summer oil prices of more than $80 a barrel as the U.S. economy starts to recover in the second half of the year. That's double the price of this winter, when gasoline prices dipped below $2 per gallon.

"The oil rally is a sign of economic stability returning to the United States and China," said Brad Sorenson, director of sector research at Charles Schwab & Co. "We're not as bullish as some on $90 oil this year. Inventories are still high."

Meanwhile, spending on alternative-energy projects in the United States declined by 63 percent in the first quarter, to $277 million compared with $715 million in 2008, according to an Ernst & Young analysis based on data from Dow Jones Venture Source.

"Investors took a deep breath and paused," said Ernst & Young's Joseph Muscat, who will participate in a "Cleantech" forum on energy innovation in Minnesota sponsored by the Collaborative this morning. "The weak economy has caused demand for energy in general to go down."

The key question: Will complacent consumers and businesses forget the surging energy prices of 2008 or learn from them?

Investments in clean energy and conservation are rising overall. And government recently has moved to encourage aggressive investment in everything from conservation to geothermal heating and battery-powered vehicles. Americans support home-grown, clean energy sources and cutting the $500 billion annual tab for foreign oil. An economy that requires less oil per unit of growth is a stronger economy. A few recent developments are encouraging:

•Ford said last week that it's going to retool its Wayne, Mich., SUV factory with a $550 million overhaul that will result in more than 3,000 jobs in construction, parts and on the line producing its fuel-sipping Focus and electric-powered Focus compacts.

"This is about investing in efficient and flexible American manufacturing, fuel economy and the electrification of vehicles," said Ford CEO Alan Mulally.

•Investment actually increased in battery-storage companies in the first quarter, according to the Ernst & Young report.

•A wind-turbine assembly plant will open later this year in a refurbished Novi, Mich., auto factory. About 250 former autoworkers will make 74-ton turbines, creating dozens of related jobs for suppliers, a first bloom for the fledgling Michigan wind industry.

•Employment at the four-year-old Suzlon wind-turbine plant in Pipestone, Minn., has more than doubled to about 500. And Juhl Wind, the nearby community-based wind developer founded by Dan Juhl, is raising about $100 million from investors.

•In Isanti, Minn., Ever Cat Fuels CEO Clayton McNeff, a 40-year-old chemist and entrepreneur, will open a $7 million pilot plant that he says will produce 5 million gallons annually of biodiesel made from renewable feedstocks that range from stinkweed to soybeans to algae. It relies on a low-water, low-waste chemical conversion process that has gotten international attention.

•Fabcon, a Savage company that builds huge commercial exterior walls, is incorporating increasing amounts of coal ash, recycled tires and plastics into stronger, lighter products that take less and less energy to make.

•At Minnetonka-based Natureworks, a Cargill-related venture, and Golden Valley-based Segetis, scientists have developed alternatives to oil-based resins that are going into next-generation plastics, clothing and other products and that have the potential to replace millions of barrels of oil annually.

I'll take this future over one built on inflated home prices, funny-money mortgages and cheap TVs from China.

Neal St. Anthony • 612-673-7144 • nstanthony@startribune.com