The Coming Wind Energy Boom
By Ian Cooper | Saturday, May 17th, 2008
Note: Part of this article originally appeared in Wealth Daily. We didn't want you to miss out.
U.S. consumers are slightly aggravated.
Living in world of flawed seasonal adjustments, we were just told that gas prices fell 2% last month.
Huh, you say? You paid much more? So did we. But that's what happens when gas prices rise 5.6% in April, and the economists are allowed to statistically readjust, smoothing for seasonal oddities.
You see, historically, gas prices rise in April as we near warmer weather months and summer driving season. Taking that into consideration, the government adjusts its data to reflect the expected rise in gas prices, underscoring trend variations.
And since gas prices did not rise as much as they've historically risen in April, the adjustment showed that prices fell in April.
But flawed stats aside, energy costs are skyrocketing.
Americans want a solution... and they want it now. $127 a barrel oil is just another reason why Americans want new energy solutions. Natural gas is nearing $11.50. Electricity costs are skyrocketing. And Americans, and the rest of the world for that matter, want a solution now.
Domestically, there's the Bakken solution and the solar solution. But now there's talk of wind power solutions.
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Twenty years from now wind energy could produce 20% of America's electricity.
An Energy Department study found that wind energy could generate 20% of U.S. electricity by 2030, as compared to today's one percent.
The good news — The Energy Department report finds that achieving a 20% wind contribution to U.S. electricity supply would:
Reduce carbon dioxide emissions from electricity generation by 25 percent in 2030.
Reduce natural gas use by 11%;
Reduce water consumption associated with electricity generation by 4 trillion gallons by 2030;
Increase annual revenues to local communities to more than $1.5 billion by 2030; and
Support roughly 500,000 jobs in the U.S., with an average of more than 150,000 workers directly employed by the wind industry.
To achieve 20%, wind turbines would have to produce 300,000 megawatts of power, compared to today's generated 16,000 megawatts.
It's doable.
And it should come as no surprise that billionaire investors are lining up for a piece of the coming wind energy boom, including T. Boone Pickens.
But before we get into Pickens' investment, let's review why investing with billionaires can pay off handsomely.
Follow the Smart Money
"A lot of people don't know this, but Ian Cooper and I developed an insanely simple, but highly effect trading technique in 2001," said Brian Hicks on February 13, 2008. "We called in the ‘Billionaire Boys Club.'"
The system was simple enough... buy and hold the same stocks that the billionaires were buying in the open market. And, it worked brilliantly.
We followed Sumner Redstone religiously in 2002 and 2003, as he bought millions of shares of Midway Games and WMS Industries in the open market.
And it turned out to be one of the best trades we made all year.
Midway games (MWY) quadrupled in price in 2003, flying from $3 to more than $12.
WMS Industries (WMS) went from $12 to $21 inside of six months:
And we did it again in 2008 with T. Boone Pickens.
Trading alongside billionaires - the ultimate smart money - is easy money.
"You have a chance to make a fortune following one billionaire who has snapped up millions of shares in a small energy stock. He's acquired a 3 million share stake in a natural gas company that currently trades a market value of about $600 million," said Brian on February 13, 2008.
That company was Interoil (IOC:AMEX).
And we were spot on...
It made sense not to bet against Pickens. He's not one to throw around investment dollars at just any company. A man of his stature is sure to have done plenty of research, and is sure to be well in the know before investing in any company.
It's why we followed his lead into Interoil after he increased his holdings in the beaten down oil play with explosive opportunities in Papua New Guinea.
Yep, thanks to Pickens, IOC became the buying opportunity of a lifetime for Pure Energy Trader.
And it paid off just as we planned.
After months of waiting, our Canadian company with operations in Papua New Guinea announced a gas and gas liquids discovery in the Antelope structure in its Elk-4 well.
Says a recent press release:
"The Elk-4 well has successfully penetrated the Antelope structure, a new discovery which will significantly augment the gas found at the Elk-1 discovery well. Drilling operations experienced a gas kick and a flow of gas and gas liquids to surface which was circulated and flared. The well is now being prepared to drill deeper under pressure followed by comprehensive evaluation.
‘This well confirms the presence of hydrocarbons in the Antelope structure," said Mr. Phil Mulacek, CEO and Chairman of InterOil. "We are very excited about this early result and we look forward to drilling ahead to establish the commerciality of this discovery.'"
And there's still further upside for IOC.
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International Companies are Dominating the Cleantech Space
Many of the world's new energy technologies are being developed in countries outside the United States. Germany, for example, is mother to the modern solar industry. The Danes have all but cornered the wind industry with the now-famous Vestas Wind Systems. Green Chip International is taking full advantage of this phenomenon. Its latest German solar recommendation is up about 11% in under two weeks. Everyday, international renewables companies are delivering monster gains.
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But as with most billionaires, diversification is the key to profit making.
"When I go into these markets, I expect to make money on them. I don't expect to lose," says Pickens.
With plans to spend some $10 billion to build the world's biggest wind farm, the billionaire has gone green.
Pickens' Mesa Power just ordered 667 turbines from General Electric to begin a $10 billion wind far project in Texas. When completed by 2014, the wind farm will be capable of producing 4,000 megawatts, or enough energy to power 1.2 million U.S. homes.
And it's a brilliant move, as we deal with $122+ oil.
"Oil fields have a declining curve - you find one, it peaks and starts downhill, you've got to find another one to replace it. It drives you crazy! With wind, there's no decline. "You need a giant plan for America," he says. "Not the pissant 83 megawatt [windfarm] deals being stamped all over the country. There needs to be a huge plan from someone with leadership. It's going to take years to do, but it has to start now."
Fortunately, we're familiar with the potential as well.
Says Brian Hicks:
"We simply cannot ignore about the wind energy market is its growth during 2007. Last year, a record-breaking 20,000 megawatts (MW) of wind power were installed around the world. That means that wind energy supplied approximately 94,000 MW of energy. In other words, that's a growth of around $36 billion.
Let's put this into perspective...
Between 2005 and 2007, both Germany and Spain's wind power capacity experienced impressive growth (about 21% and 51%, respectively). Now look back at the U.S. growth.
Our capacity catapulted nearly 84%!
Don't think for a second that wind energy is about slow down...
Since 2000, wind power production has increased fivefold. Remember that during that period, oil prices have grown nearly the amount. Now that a peak oil is starting to get under the global spotlight, we can expect to see a massive interest in renewables like wind energy.
I've personally read reports from the U.S. Department of Energy stating that wind energy supplied in just three U.S. states could potentially power the entire nation!
Think about it for a minute.
We're talking about a source of energy that is a renewable, clean, has a low operating cost and has technology that's been around for over century (the first power producing windmill was created back in 1887).
But it isn't just the past growth that we're impressed with. Over the next two years, the Global Wind Energy Council (GWEC) predicts that the world's installed wind power capacity will practically double to 149.5 GW. If you notice, the installed capacity in 2007 was 94,000 MW-which was higher than originally forecasted!"
Lesson learned... Any one that says you can't make money following billionaires isn't making the money we're rolling in.
Good Investing,
Ian L. Cooper
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In case you missed our other investment opportunity highlights, here's what we covered in Wealth Daily, Gold World, Energy and Capital, and your free blogs for the week of May 12, 2008.
Housing Bottom: The Worst is Over... Again.
There is no bottom for banks until housing bottoms. And that won't happen until 2010... if we're lucky. Yet, the banking community would have us believe we're bottoming now. But they're wrong. Banks will continue to crumble and should be shorted at tops.
Income Investing: The 7 Golden Rules for the Lazy Investor
By Warren Buffett's own math, matching the gains of the U.S stock market over the last century is going to be quite a tall order. In his most recent annual report Buffett once again pointed out that in order to equal the U.S. market over the 20th century, the Dow will need to close at roughly the 2,000,000 mark on December 31, 2099.
Investing in Eastern Europe: Profits in Russia and Former Satellite States
The Soviet Union, Czechoslovakia, and Yugoslavia are no more. But the countries that comprised them now enjoy some of the world's highest economic growth rates, creating ever-increasing options for investors.
Peak Oil and the Rail Revolution: Say Goodbye to Cheap Air Travel
"I had no doubt that the air travel business was in for a world of hurt, once oil prices started going up fast. And when that happened, air travel to such far-flung destinations would be out of reach for regular folks like me. I just didn't think that day would come quite so soon. I can already see my window of opportunity to lay on the beaches of Thailand, or hike the rugged mountains of Tibet or Japan, closing."
Foreclosures Hit New Records: Courts Jammed with New Notices
Riddle me this housing bulls (what's left of you). How can housing possibly be anywhere near a bottom when foreclosures continue to set one new record after another?
Solar Technology Stocks: Don't Miss the Next 20% One Day Solar Gain
The renewable energy markets are maturing quite rapidly. The solar sector, in particular, is showing signs of advancement as clear leaders are emerging every day. What we're seeing is a shift in the way the market as a whole views this industry.
Iamgold Increases 1Q Net Earnings by 205% yr/yr: Production Increases to 234,000 Ounces of Gold
Iamgold produced 234,000 ounces of gold during the quarter, compared with 219,000 ounces one year ago, and realized an average gold price of $899 an ounce, 39% higher than in the same period of 2007.
Investing in Physical Gold: Breaking Two Myths of Investing in Physical Gold
There is a herculean mountain of inaccurate information floating around about investing in physical gold bullion.
Among these erroneous concerns is the belief that storing physical gold is a difficult and that physical gold bullion is illiquid, making it an unwise investment.
WorldWater & Solar Technologies: Clean Water from Solar Energy
U.S.-based company WorldWater & Solar Technologies (WWAT.OB) has experience in dealing with water-related crises. From New Orleans to the Middle East and hopefully soon to Myanmar, they create the solar panels that drive water pumps for many applications.
Trading Secrets of the 3160s
OPEC President Chakib Khelil won't rule out $200 oil, even though supply is adequate, because the market is driven by the dollar, as the world oil markets face their biggest supply disruption in years. "In terms of fundamentals, stocks are high, demand is easing, supply is satisfactory. Therefore normally, without geo-political problems and the fall of the dollar, the prices of oil would not be at this level," he said.
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Current Energy Prices
Crude Oil $126.29 2.17
Gasoline RBOB $3.22 0.06
Natural Gas $11.09 -0.31
Heating Oil $3.70 0.08
Propane $1.73 0.01
Categories
Fossil Fuels
Renewables & Alternative Energy
Global Energy
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Peak Oil
How This Backdoor Oil Play Makes Millions
Only a decade ago, the vast deposits of oil in the Bakken formation were too difficult to extract...
A groundbreaking drilling technique has completely changed the playing field. You see, using this breakthrough technology, a few oil companies now have access to billions of barrels of oil.
One company has already jumped over 63% in under a month!
Now that the 2008 drilling programs are underway, a few small oil producers are ready to make another round of profits.
Learn more about how to invest in the Bakken oil boom.
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Economic Releases for the week of Monday, May 19th, 2008:
May 19 - Leading Indicators
May 20 - PPI
May 21 - Crude Inventories
May 21 - FOMC Minutes
May 22 - Initial Claims
May 23 - Existing Home Sales
Brought to you by Wealth Daily
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From the Archives...
Oil Companies Move to Investing in Wind Energy
2008-05-16 - Sam Hopkins
Say Goodbye to Cheap Air Travel
2008-05-15 - Chris Nelder
The One Natural Gas Stock Guaranteed to Rise in June
2008-05-13 - Keith Kohl
How a Utility Can be a Renewable Energy Safe Haven
2008-05-12 - Nick Hodge
Arju Murti Was Right... And So Were We.
2008-05-10 - Ian Cooper |
