Friday, February 12, 2010

The Oil Kingdom Goes Green

Today's guest article is by Sean Broderick: Sean Brodrick

Saudi Arabia is the world’s richest oil producer — the desert kingdom pumps out nearly 10 million barrels a day of crude. So when Saudi Arabia turns to the sun to solve its energy problems, you should sit up and take notice.

In fact, I think it’s another signpost indicating that we are entering the “Golden Age of Green Energy.” And there are plenty of profits to be made, even for Mom-and-Pop investors.

So what are the Saudis up to? The “Central Bank of Oil” is turning to solar power to run its desalination plants. The Saudis produce more than 18% of the world’s desalinated water.

And the kingdom recently started construction of a desalination plant able to produce enough water for 100,000 people, along with a solar farm with a capacity of 10 megawatts to power it. With costs coming down, the Saudis think electricity from the plant will cost just 8.7 cents per kilowatt hour.

This is just the beginning. There are more than 28 desalination plants scattered around the kingdom. About 1.5 million barrels a day of fuel oil are required to power the equipment used to extract salt and other minerals from sea water.

Saudi Arabio oil consumption (JODI)

But why would the Saudis do this? They’re supposed to be swimming in oil, right? Actually, Saudi DOMESTIC oil demand has been zig-zagging its way higher for years. It’s to be expected in a country where government subsidies recently pegged the price of gasoline at 61 cents a gallon.

In fact, the Saudis are so keen on going green that they recently joined the International Renewable Energy Agency. Saudi Arabia has invested $12.5 billion in the sustainability-oriented King Abdullah University of Science and Technology, and is pouring money into manufacturing materials for solar power.

The Saudi oil minister says the kingdom’s goal is to become the largest exporter of clean energy and the most important center for solar energy research within 30 to 50 years.

That seems to clash with other statements by the Saudis that the desert kingdom is swimming in oil, and that it will be able to meet global oil demand for decades to come.

In fact, I think that Saudi Arabia’s oil production may have already peaked, and its crude reserves are not inexhaustible. On the other hand, the sun will still be shining on Saudi Arabia when the last oil rig has long turned to dust.

The Next Oil Crisis Is Already Here

What’s more, there’s plenty of evidence that oil production has peaked in at least 33 of 48 countries, including Kuwait, Russia and Mexico.

And speaking of Mexico, do you want to see a scary chart? Take a look at this chart of Mexico crude oil supply. Mind you, this is America’s #2 supplier of crude oil (Saudi Arabia is America’s #4 supplier of imported oil).

Mexico Crude Oil Supply 2001-2009

Mexico’s crude oil production is plunging as its giant oil field Cantarell nears the end of its productive life. If current rates of decline continue, Mexico could stop exporting oil in about seven years.

America’s #3 supplier of crude oil is Venezuela. Do you know what’s happening in Venezuela right now? Drivers in Venezuela can fill up for 25 cents a gallon. Venezuela’s domestic oil use is soaring. As a result, Venezuela’s oil exports are falling.

At the same time, Venezuela is experiencing a drought that has severely cut hydropower, and President Hugo Chavez has declared an “Electricity Emergency” as this oil-rich nation suffers rolling blackouts. Venezuela is planning to divert power from its refineries to keep the lights on in the cities, meaning even less product for export.

We haven’t seen these problems and others around the world reflected in oil prices yet because A) OPEC still has some surplus capacity and B) the global economy in still mired in recession. But the ingredients for the next oil spike are in place … waiting to ignite.

Going Green Takes on a Sense of Urgency

Governments from Europe to the United States to China are lining up to throw money at alternative energy. Sure, worries about global warming are a part of it.

But there’s also a deep desire for real energy independence. The nations of the world would love to be able to thumb their noses at the increasingly voracious greed of OPEC members.

And, as the Saudi example shows, even OPEC members can see the writing on the wall. We’re in the twilight of the Age of Oil. The Golden Age of Green is about to dawn.

And here’s some good news …

#1) Wind Power. Despite a battered economy and financial woes, America added to its wind power at a furious pace in 2009 — capacity grew by 39%! The United States now receives nearly 2% of its electricity from wind turbines, up from virtually nothing a few years ago.

What’s more, wind power is providing one thing in very short supply in the United States — jobs. The U.S. wind-manufacturing industry now employs 85,000 people, according to the New York Times. And half the components for wind farms are made in America, up from 25% in 2004.

#2) Solar Power. Vermont Senator Bernie Sanders just proposed the “10 Million Solar Roofs and 10 Million Gallons of Solar Hot Water Act.” Sanders’ bill would authorize rebates to cover up to half the cost of the 10 million solar power systems and 200,000 water heating systems. If this bill becomes law, about 100 gigawatts of solar photovoltaic systems will be installed.

By way of introducing his plan, Sanders said: “At a time when we spend $350 billion importing oil from Saudi Arabia and other countries every year, the United States must move away from foreign oil to energy independence.”

#3) Geothermal. On February 1, the Department of Energy unveiled a $28.4 billion budget request for the 2011 fiscal year (which starts in October this year). Part of the package is a 25% increase for the government’s geothermal program.

According to a 2006 report from the Massachusetts Institute of Technology, the amount of enhanced geothermal system resources in the United States could provide 140,000 times the total annual energy use in the country. You can see why the government is interested in geothermal.

#4) Nuclear. The Obama administration’s 2011 budget proposes tripling the loan guarantee program for nuclear power plants — from the $18.5 billion that Congress has already approved to $54.5 billion. Energy Secretary Steven Chu said this could launch 7 to 10 new nuclear power plants in the United States alone.

These are just four examples and just the good news in the United States. The world is going for green energy big-time. For example, let’s look at China …

  • China is already leapfrogging the United States in the manufacture of wind and solar power. But it has to — its domestic electricity demand is rising by a whopping 15% a year. To keep up, China has to add electricity generation at a pace nine times faster!

  • Chinese power companies have to buy new equipment anyway, and alternative energy, particularly wind and nuclear, is increasingly priced competitively.

  • China also has the advantage of low labor costs and a renewable fee slapped on ALL electricity users. This fee is just one way Beijing has of showing it is serious about going green.

I could give you plenty more examples from around the world. Globally, governments invested $25 billion in renewable power and energy efficiency projects in 2009. This is going to mushroom to $60 billion in 2010 and another $60 billion in 2011. Energy companies and big banks are lining up to invest, too!

Get Going or Get Out of the Way

Despite the big push into renewable/alternative energy, this industry is still in the very early stages. Our civilization is based on petroleum, as this chart of U.S. Primary Energy Consumption from the Energy Information Administration shows …

U.S. Primary Energy Consumption from the Energy Information Administration

I think the fact that the alternative energy industry is so young shows it has enormous potential … the potential for fortunes to be made as America and the world go green.

It’s Time to Power up with Profit Potential

Green is the color of alternative energy, and it’s also the color of money. I think there’s plenty of money to be made in this trend.

That’s why I’m issuing a hot-off-the-presses new report — “The Golden Age of Green Energy.” It includes in-depth analysis of the forces driving the alternative energy stocks, highlighting many red-hot companies and rock-solid funds — as well as stocks and funds you should avoid.

In this special report, I’m also naming my eight superstar picks in alternative energy. For example …

Pick #1 — Biomass

Turning waste into energy is a process that has been going on for hundreds of years, and it’s getting much more sophisticated. What’s more, it’s an alternative energy system that works. That’s why my first pick is a small-cap company that provides waste disposal services and sells the electricity and steam generated by the waste.

Pick #2 — Solar

There are many good choices in solar (and some bad ones, too). But as they say in the gold fields, why buy one prospector when you can buy the guy selling picks and shovels to many miners? That’s what my second pick does — it’s a provider of solar power manufacturing equipment. It has a lot of exposure to the booming solar market in China, too!

Pick #3 — Natural Gas-Powered Vehicles

Electric cars may be part of our future, but one alternative fuel that can power cars on the highways now is natural gas. And there is a company that is on the cutting edge of this bright future in transportation. This company is inking contracts all over the map with airports, waste-haul truckers, bus companies and more.

Pick #4 — Oil Sands

Canada’s oil sands production could rise to over 6 million barrels a day in a few decades, becoming a big piece of our future energy picture. That’s why I’ve got my sights on a company that is digging deep into the oil sands and coming up with buckets of profits. You can buy its reserves for about 20 cents on the dollar, its costs are going lower, and its profits are likely to go much higher!

Pick #5 — Wind

I’ve got a second “picks and shovels” play for you. Just like with solar, the best part of wind power is owning the company that makes the equipment that wind farms use. In fact, this company is becoming the go-to company for utilities to adapt wind systems to their power grids.

Pick #6 — Smart Energy Grid

My pick in this sector is a company on the cutting edge of implementing software and hardware that help control energy load, read meters remotely, manage billing, and detect theft and outages. Even better, it has pricing power, which should lead to fatter profit margins. Finally, its earnings are rising and it pays a hefty dividend. This stock should ramp up, and soon!

Alternative Energy Picks #7 and #8: My Two Best Funds

I have my two best alternative energy funds for you. They’re very different, and they’re both holding baskets of stocks that are poised to make a killing on the bright and shining future in alternative energy.

These are already red-hot stocks and funds. But let me tell you about three forces that could send these stocks much higher.

Three Profit Triggers for You

There are three developments in alternative energy that can pile up more and more profits in your pocket.

Profit trigger #1 is the flood of government money — at least $120 billion over the next two years, and potentially much more than that.

Profit trigger #2 is all the private money flowing into alternative energy from conventional energy companies and banks. This is some of the biggest money in the world — and it’s all going into alternative energy. It takes a lot of time to shift that money around — and that means you have plenty of time to get in front of it.

Profit trigger #3 is the market correction going on right now. Some great clean energy stocks with dynamite earnings potential are being dragged down with the rest of the market, and a reduction of solar subsidies in Europe also added to the short-term pain. The correction won’t last forever. In fact, we could see a cyclical bottom soon. And when stocks head higher again — floating on a sea of government cash — you know that alternative energy stocks will be riding the crest of that wave.

8 of My Best Picks — Crown Jewels of the Golden Age of Green Energy

Some of my picks are large companies — some are so small, you’ve probably never heard of them. One thing they all have in common: They’re in the vanguard of this boom. They’re the ones in the forefront of new technology and development. They’re the companies that the big behemoths are hunting down for potential buy-outs.

And they’re all yours at a huge discount if you sign up now.

This report will sell for $149 when it is published on Tuesday, February 16. But if you buy it now, you can get it for $99 — fully one-third off the cover price.

Even better, this price includes the report and three follow-ups.

If you feel you can’t afford it, please don’t buy it. But consider this: The biggest money in the world — government money — is poised to flood into this sector. You can’t afford not to take advantage of this gold rush in green energy.

The toll-free number to call is 800-291-8545.

Just say you want “The Golden Age of Green Energy” plus all my follow-up reports on all my picks. Or, order online at my secure website.

Best wishes,


P.S. Remember: By signing up before February 16, you get a double benefit: You will be among the first to get this information, giving you a jump on other investors. Plus, you will save 33% off the cover price. So I suggest you call 1-800-291-8545 right away.

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Friday, February 5, 2010

Why Is DOE Dragging Its Feet on Alternative Energy?

We've been very frustrated with the Dept of Energy. After spending many weeks preparing grant proposals last year, then waiting months only to be told that our projects were "not transformative", we have the right to be a bit ticked off at the government bureaucrats.

It turns out we're not alone in our situation. According to BNET Energy,

It’s been nearly a year since the Department of Energy received $37 billion as part of the American Recovery and Reinvestment Act — aka stimulus money — and they have managed to spend $2.1 billion. That’s it. Eleven bureaucratic months later and the DOE has doled out 5.7 percent of the funds authorized in the stimulus bill. Now, to be clear, the DOE is moving faster than it has in the past and it has awarded about $25.2 billion in funds, according to information on its Web site.

It’s been awhile since BNET Energy checked in the DOE’s stimulus spending. Back in August, I wrote about DOE’s progress and at the time the government agency had awarded $9.5 billion and spent $451 million. But with DOE Secretary Steven Chu’s testimony Thursday before the Senate Committee on Natural Resources and Energy, I thought it was a perfect time to check in and write about the agency’s stimulus spending.

Chu, who was asked about the figure during his testimony on the department’s proposed fiscal 2011 budget, said he was frustrated with the slow down.

Sen. Bryon Dorgan, D-N.D., hinted at the lack of stimulus spending early on in the testimony when he asked Chu — after noting the large amount of money given to the agency – if he was having fun with it? Dorgan did note the DOE had been delayed in part by slow Senate confirmations.


Later Sen. Lisa Murkowski, R-Alaska, honed in on the molasses-like distribution of the stimulus funds. Her biggest concern was with $32 billion unspent, how do you deal with the backlog funds, recognizing that it’s likely the DOE will get a second infusion of cash as a jobs bill comes forward?

Chu expressed disappointment with the slow disbursement of funds and laid some of the blame on the states. “The states widely vary with how they’re getting the money out,” Chu told the committee. He said some states have spent upwards of 20 percent of the stimulus funds given to them by the DOE, while others have spent zero.

Can we expect anything more out of an Administration whose speciality is blatherskitism? Or, should we attribute the delay to an attempt by the oil companies to suppress alternatives? Take your pick, it's probably a little of both.