Chalk another one up to clean technology.
Legendary Texas oilman, billionaire and America's 117th richest person, T. Boon Pickens, has unveiled a $58 million public relations blitz focused on persuading Americans to reduce their dependence on foreign oil by turning increasingly to natural gas and wind.
Called The Pickens Plan, the project calls for an estimated $1 trillion government investment to displace electricity currently produced with natural gas with clean wind power.
Then, the resultant excess natural gas capacity would be used to power cars and trucks.
T. Boone, the plan's creator, says it would alleviate hundreds of billions of dollars currently spent on oil while creating thousands of U.S. jobs.
According to Pickens, ""I've drilled more dry holes and also found more oil than just about anyone in the industry. With all my experience, I've never been as worried about our energy security as I am now."
But don't get it twisted. Pickens isn't hugging trees just yet. It's all about the bottom line, and T. Boone is heavily vested in both the wind and natural gas industries.
In fact, he's spending $12 billion on what could prove to be the world's biggest wind farm—in Texas, of all places.
Another of his ventures, Clean Energy Fuels (NASDAQ: CLNE), builds and operates natural gas fueling stations for vehicles.
Said Pickens: "Don't get the idea that I've turned green, my business is making money, and I think this is going to make a lot of money."
Making Money with The Pickens Energy Plan
According to The Pickens Plan website:
America is in a hole and it's getting deeper every day. We import 70% of our oil at a cost of $700 billion a year - four times the annual cost of the Iraq war.
I've been an oil man all my life, but this is one emergency we can't drill our way out of. But if we create a new renewable energy network, we can break our addiction to foreign oil.
Breaking that addiction is shaping up to be a multi-billion dollar business, and the "Oracle of Oil" is placing his bet right now.
It's probably wise to follow his lead. In addition to Energy & Capital, Pickens was one of the few insiders calling for $100 oil when that price seemed unfathomable. And the realization of his most recent call for $150 oil seems imminent.
Even if all the points of the plan don't come completely to fruition, the wind and natural gas industries are still poised for a boon.
Just in July, T. Boone's natural gas provider Clean Energy Fuels has:
been awarded a five-year contract from the City of Akron to operate and maintain the fueling station for the city's 45 full-sized compressed natural gas buses
received two liquefied natural gas supply contract renewals from the City of Phoenix that will add $6.7 million to the company's bottom line
secured nearly half its supply of natural gas through June 2011 by entering into an extended definitive agreement with its supplier, Williams Four Corners
Clean Energy Fuels is probably a good place to be. More and more fleets, both governmental and corporate, are switching to natural gas vehicles everyday, for both economic and ecologic reasons.
As this trend plays out, all those fleets are going to need natural gas fueling stations. And Clean Energy is the foremost player in that game.
Another lucrative way to play the emergence of natural gas vehicles would be to invest in the company making natural gas engines. This report has all those details.
The Windier Side of Energy
Pickens isn't just betting on natural gas. He also has ambitious plans to build the world's largest wind farm on the Texas panhandle—for a modest $12 billion.
Back in April. T. Boone made the first down payment on 500 wind turbines at a cost of $2 million dollars each. GE (NYSE: GE) was the lucky beneficiary of that transaction.
But that initial $1 billion (for the 500 turbines) hardly puts a dent in the now $12 billion price tag—the project was originally estimated to cost a mere $6 billion.
By 2012, about 2,700 turbines are slated to be erected on 200,000 acres of the Texas panhandle. That's four times bigger than the word's current largest wind farm.
When finished, 4,000 turbines will crank out enough electricity to power over one million homes.
But a billionaire-oilman-turned-wind-investor isn't the only indication of the momentum the wind sector possesses.
In 2007, wind received the most investment dollars of any clean technology with $50.2 billion, or 43% of all new green investment. It was also the leader in 2006 when it was responsible for 38% of new investment.
The wind industry also dominated asset finance in 2007, receiving about $38.9 billion or 46% of all new-build asset investment, which basically means steel in the ground in the form of either wind farms, solar power plants or biofuel production facilities.
To date, 94 gigawatts (GW) of wind capacity have been installed worldwide, with 20 GW coming online in 2007, led by the U.S., China and Spain.
Wind also received the most public investment in 2007, raising $11.3 billion. It should be noted, however, that $7.2 billion of that investment came just from the IPO of the world's leading wind installer and wind farm manager, Iberdrola Renovables (MCE: IBR).
The wind industry has also been a favorable environment for exits of venture- and private equity-funded companies, as well as for mergers and acquisitions. This has been evidenced by Energias de Portugal's $2.93 billion purchase of Horizon Wind and Scottish & Southern Electric's $3.2 billion purchase of Airtricity.
More recently, investor interest in wind power has heated up due to a report from the U.S. Department of Energy claiming wind can provide 20% of all U.S. Electricity needs by 2030.
For that to happen, more than half a trillion dollars needs to be invested in new turbine manufacturing capacity and capital projects. Just in the first quarter of 2008, the U.S. Installed 1,400 MW of new wind capacity with a price tag of $3 billion. Expect that trend to continue and expand.
The way to profit from this part of Pickens Plan is to stake your claim now in a variety of turbine manufacturers, both foreign and domestic, and also in wind farm developers and owners.
These could be juggernaut wind companies like Vestas Wind Systems (COP: VWS) and Gamesa (MCE: GAM), or in large development firms like Fluor (NYSE: FLR).
Of course, there's also a handful of smaller companies that stand to make a fortune as the wind industry continues to mature.
While it's nearly impossible to say which of those smaller companies are going to succeed as this story unfolds, we'll be providing daily and weekly commentary and recommendations on the matter in all of our publications:
Get ready for a literal windfall of profits.
Call it like you see it,
Nick
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Green nuclear power is the only practical solution to simultaneously (1) ameliorate global warming, (2) avoid dependence on foreign oil/gas, and (3) overcome oil/gas depletion. Only two prime energy sources, coal and uranium, can affordably deliver terawatts of "mother" electricity for: (a) heavy industry, i.e. manufacture of automobiles, ships, airplanes, etc; (b) power for vast fleets of future electric plug-in autos; and (c) production of portable synfuels (hydrogen and ammonia) and biofuels to replace oil. However coal worsens global warming and should be preserved as raw material to make plastics and other organics when oil/gas is gone. This leaves uranium as the only "big-mama" green energy source, an "inconvenient truth".
Solar and wind energy are useful for small-quantity power generation in select locations. But at terawatt levels, immense areas of land and/or sea would be needed, requiring enormous maintenance operations, spoiling scenic land- or sea-scapes, and destroying local ecosystems. As scientifically documented in "The Nuclear Imperative - A Critical Look at the Approaching Energy Crisis" (ISBN 1-4020-4930-7), by 2050 only uranium and thorium can affordably sustain global energy needs for some 3000 years, using proven fuel reprocessing and advanced reactor technology. For the USA, 500 additional nuclear reactors are required, built on 9000 acres (@ $1.5 trillion), compared to 1,500,000 windmills with storage batteries on 6,000,000 windy acres (@ $4.5 trillion). Ten times these numbers are needed for the entire world. (Costs are in 2006 dollars; nuclear, solar, and wind power costs for later years must be multiplied by an inflation factor)
Long misunderstood and irrationally feared because of antiquated beliefs by the general public, modern nuclear power generation is safer, cleaner, and essential for solving the future energy shortfall. Because it takes a decade to design and build a reactor, action must be taken immediately to prevent an economic catastrophe by 2030 when oil starts to run out. Contrary to false propaganda by anti-nuclear groups, the cost of tera-watts of electricity is three times less expensive with nuclear than for wind or solar. Solar and wind power generation requires expensive energy storage systems (batteries, etc) when there is no sunshine or wind. Also many miles of access roads for maintenance and repair are needed to keep blades or solar panels clean from bird droppings, dead birds, sand erosion, and storm damage, and to periodically replace electrodes on storage batteries. Should the USA limit itself to solar and wind energy, it is guaranteed to become impoverished and dependent on synfuels imported from other countries (the future OPECs), who have nuclear power when oil fields are depleted.
A stale anti-nuclear cry is "what do we do with all the long-lived radioactive nuclear waste". The volume of waste amounts to one aspirin tablet per year per person using nuclear electricity, compared to tons of air pollutants and globe-warming gaseous CO2 emitted by coal or fossil-fuel combustion. Nuclear waste can be easily stored and safely transported, as the US nuclear navy has done for half a century. Contrary to allegations that uranium and plutonium in spent fuel elements pose a problem because of million-year half-lives, they are separated from fission products by reprocessing and burnt as fuel in future fast-breeder reactors; they will not be dumped. This reduces 50,000 tons from ten-year accumulation of spent fuel to 500 tons (with shorter decay lives) of fission products, taking centuries instead of decades to fill the Yucca Mountain repository in Nevada. The notion that long radioactive lifetimes are undesirable is also erroneous. The longer the decay lifetime, the less the radiation emitted per gram of radio-isotope. All humans are "hot" because everyone has radioactive potassium-40 (K-40; 0.012% abundance) in his body, which continuously emits beta particles with a half-life of one million years! Man successfully evolved in this environment, and there are even indications that low levels of radiation benefit health (called hormesis).
Energy is man's third most important need after water and food. Those who hinder expansion of nuclear power will be viewed as irresponsible neo-luddites by future generations. Any further delay of a committed US nuclear energy program will cause impoverishment and death of many US citizens by 2050. Those responsible will and must be held accountable for this. Originally the US had planned to have 300 reactors by the year 2000, but instead there are only 104 today. After the Three-Mile-Island (TMI) reactor meltdown in 1979 in the US (with 0 casualties) and Russia's Chernobyl accident in 1986 (with 57 fatalities), public hysteria fanned by fear-mongering antinuclear activists caused cancellations and moratoria on construction of new nuclear plants. While the USA was once the leader, most US businesses with reactor manufacturing know-how closed. Instead France, Russia, Japan, South-Korea, India, and China are now the leaders. Zealous anti-nuclear lobbyists and mal-informed federal and state governments have created the pending energy crisis. We are entering a war-like energy-deprivation period as serious as WW-II or Al-Qaida. Strong bipartisan Manhattan-project-like leadership is needed.