When news of substance comes out of PEC ... the KNIC run up could be really fast.... but how far?? ... 10, 15, ?? Last year we hit around 15 with only laboratory beakers of fuel being available ....
Now there's:
1) a pilot plant operational (or near operational) in California (see www.pure-energy.com, they say 4th quarter).
2) Patent allowance - Patents are effective for 17 years from date of issue ... Wouldn't it be good to wait until the D.O.E. approves the fuel before issuing the patent?? ... Why start the 17 year clock too soon.... makes sense to me ... (my speculation here)
3) DOE approval immenent (go to the KNIC stockholders' meeting video and the speculation there by Doug Dunlop suggested 120 days from what I recall ... that puts it at mid to late Oct) ... with no serious competition for something you can pump into a gas tank.
4) Ford and Chrysler publicly committed to manufacturing hundreds of thousands of flexible fuel vehicles starting this next year (for fleet use perhaps??? ... that would be a good place to sell them ...) ... knowing that there's only about 40 gas stations in the country that have ethanol (remember the Paul Harvey mention of this last spring??)... So where's the fuel coming from??? We think we know ... :-)
6) Raytheon heading the design of the PEC fuel manufacturing sites .... this is a serious company with huge resources behind it.
7) Tremendous PEC Staff ... with the president of PEC being from Smith Barney.
8) PEC has the only practical alternative energy which the oil companies can make money on (through distribution of the fuel) ... and since alternative energy is mandated by the government, the oil companies ought to be supportive of PEC.
9) The fuel has very low emissions compared to gasoline and can have a very positive effect on global warming, etc.
10) The political leadership of the country is making news hitting the topic of Global Warming and Climate Change .... Greenhouse Effect ... etc.
Just today PEC leadership was invited to attend the Whitehouse Conference on Global Warming and Climate Change & the Greenhouse Effect according to a post on AOL. A small portion of it was broadcast on CSPAN. My wife video taped about an hour of it. I reviewed it this evening. It covers a wide range of energy issues ...
One speaker introduced by Bill Clinton really laid a good foundation for a future PEC announement. That was Mary Good (former Under Secretary of Commerce for Technology in the Clinton Administration for 4 years and now is a managing member of Venture Capital Investors). She stated directly to the President, regarding the "Fuel Issue" .. "TO CHANGE FROM PETROLEUM BASED, THE ONLY OTHER SOURCE WE HAVE IS BIOMASS!" She appeared to not be aware of PEC ... but mentioned the old biomass output ... methanol, etc.
She further stated "it is not feasable to grow enough biomass to completely replace petroleum" ... but recommends "ocean grown algae - a major opportunity!" She described some of the work going on in this area. She was in good company ... a speaker beside her is the president and CEO of Honeywell.
We've known that there's only enough biomass waste to replace only a small portion of the petroleum through the PEC process ... but that is still a verrry large number. Now with Mary Good's public pronouncement ... sounds (to me) like there might be enough "green stuff" to supply the PEC process for a complete replacement of petroleum .... Wow!!! And with the PEC process, it should be cleaner burning reducing the green house effect, etc.
Now look what has been happening .... Through this conference the politics are being laid, the news media prepared, the public notified ... that this direction must be taken ... and the public is thinking for the liquid fuels ... methanol, ethanol, etc.. which have their own problems to use them (engine design, inefficiencies, etc.).
With all the above preparation described from the beginning of this letter ... How well do you think the PEC fuel will be received???? There could not have been orchestrated a better foundation for a new product introduction.
This is a whole new type of product which is about to come upon the market for which a demand is in place ... the attributes of which are desired by the public and the politicians ... and the bulk of the politicians and public are unaware the product which fills this need already has been invented ! ! ! Imagine 15 years ago coming out with the personal computer with the attributes wanted by the public and the politicians ... and having a patent on it covering your design for 17 years. Can you say Intel??? .... Microsoft??? ... buying into these companies when they weren't known yet?? ... or buying Ford stock before Henry's first car was shown to the public at the begining of this century?? ... only what would have happened if Henry had a patent on all forms of production cars ... for 17 years at the beginning ???
Now the stock price should be based on anticipated earnings ... Earnings don't happen until there's production ... With the president of PEC being from Smith Barney and the financial world, there should be no problem getting funding for production facilities ... and with Raytheon behind the design (and construction?) of these facilities ... This is a huge resource ... Remember Kim Edwards (CEO of Iomega) had a hard time ramping up production capacity for the Zip drive??? ... well with Raytheon in the background there should be no problem in my guestimation.
The problem might be in quantifying the anticipated production attributes of the fuel to get to estimated earnings with PEC (a privately held firm) to allow a fair market price to be put on KNIC for its share of PEC. We'll have to wait for that one ... and how will PEC fund the cash need for production? ... municipal bonds or some such other thing would reduce the dilution of the existing shares ... but is that the best way for funding this?
What will happen to our KNIC portion of PEC? ... Will it be kept a part of KNIC?...or will our PEC portion be spun off separately ...so that for every share of KNIC, the KNIC stockholder will get X shares of PEC?
The above is speculation on my part & things can go the wrong direction ... but the future for PEC sure seems like it has the potential to be a lot bigger than I anticipated ... and I was speculating pretty big.
Let me know what you think of the above observations. I am not a stockbroker or finance type ... but a director of technology for an aerospace component manufacturer that sets the leading edge of technology for the field we are in.
Regards, Ben |
