Global Energy - Energy and Capital

Crude Oil Forecast

Crude oil forecasts for $150 to $200 oil aside, the Energy Department believes oil prices will fall to $70 a barrel in the next seven years, as production begins in Azerbaijan, Canada, Brazil and Kazakhstan.

But a $70 scenario assumes that OPEC producers will maintain their 40% market share of global oil supply, with plans to invest in additional production.

And from $70, oil is expected to jump to $113 a barrel by 2030, as the market remains "relatively tight," they said. That's a 92% revision from last year's "$59 by 2030" forecast.

But even $113 may be off, as the issue of supply vs. demand force prices higher. It's not speculation sending oil higher.

Even Buffett agrees that it's a supply and demand issue, and not speculation.

"In my lifetime, up until the last year or two, there's been a huge amount of excess supply available," he said. "We don't have excess capacity in the world anymore, and that's why you're seeing these oil prices."

Couple that with news that world energy consumption will rise 50% between 2005 and 2030, as demand in developing countries rises 85% and oil "worst case" scenarios become plausible.

Other Oil Issues...

The weak dollar isn't helping, and neither are OPEC comments that oil could reach $170 this year on currency and geopolitical risks. A falling U.S. dollar makes goods priced in dollars cheaper for foreign buyers, resulting in higher demand.

Threats against Iran over nuclear projects aren't doing much to help. There's a growing fear that in the event of war with Iran, the Strait of Hormuz (passageway for 90% of oil exported from Gulf producers) would be jeopardized. If that happens, we'd see an immediate oil super-spike.

And then there's Libya, which is threatening to reduce production. According to Bloomberg, Shokri Ghanem, chairman of Libya's National Oil Corporation said reductions may be made because of an over-supplied oil market, and in response to Iranian sanctions.

So how do you profit from it?

You buy domestic crude oil and alternative energy companies. Oil is going higher. Nothing is stopping the rise. The dollar is weakening. And inflationary pressures remain tight.

Making these companies even more attractive are the oil and gas discoveries and the fact that domestic explorations are more appealing given geopolitical tension.

Even the President agrees.

"Our problem in America gets solved when we aggressively go for domestic exploration," Bush said.

To protect your portfolio from higher oil cost, diversify with domestic and alternative energy companies, like Royale Energy (ROYL), Marathon Oil (MRO), SandRidge (SD) and the many stocks recommended in Pure Energy Trader, The $20 Trillion Report, and GreenChipStocks.com.

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 June 23, 2008.

Platinum Mining Companies: Zimbabwe Set For a New $400 Million Platinum Mine
Platinum is extremely rare, occurring at only 0.003 parts per billion in the Earth's crust. This makes the most precious of all precious metals about 30 times rarer than gold. In fact, it's so rare that if all the platinum in the world was poured into one Olympic-size swimming pool it would scarcely be deep enough to cover your ankles.

The Big Picture on Q2 2008, Part 2: Commodities and Renewables Charge While Market Tanks
In part 1 of this series, we reviewed the trends in financials, fossil fuels and electricity. This week, we take a look at renewables, food and fertilizer.

Brazilian Ethanol: The Break-Out Brazilian Energy Play
Brazilian sugar refiners are ready to satisfy America's energy sweet tooth. Here's what I mean, and why the Brazilian ethanol recommendation noted below is about to explode.

Investing In Safaricom: The Coming African Stock Boom
Nigeria is mired in oil turmoil, and Zimbabwe's elections just turned bloody again. But regional growth is at 30-year highs and has room to run. That's why today I'm telling you to buy Africa. Across Africa, outbursts and opportunities pose huge potential for risk and reward to the international investors swarming in. Here's how you can make money in African investments.

Investing in Wind Energy: How to Own 52 Wind Stocks for $30
As oil prices stay high, the wind power and alternative energy themes are becoming increasingly popular, making the latest ETF issue even more enticing at $30.

Investing in Electric Vehicles: The DIY Strategy for Energy Price Hedging
If you think $4 at the pump is bad, just wait. It's not getting better anytime soon. By now, we've heard all the reasons for escalating prices: rising demand in India and China, a falling dollar, speculative trading and many others.

Microsoft-Yahoo Deal Back On?: Don't get too excited, though.
TechCrunch is reporting that Yahoo and Microsoft talks are back on. "The information we have is thin, but what one source is saying that Microsoft is talking a price lower than the $33 they were offering when the talks disintegrated in May," the report said.

When Will the Credit Crisis End?: Peak by Q1 2009, says Goldman Sachs
The credit crisis will not peak until the first quarter of 2009, said Goldman Sachs. And, according to the latest Goldman forecast, global financials will need to raise another $65 billion by this time next year to deal with losses.

Dow Does it Again...Tack on Another 25%: Chemical Giant Hikes Prices for a Second Time
The last time I wrote about Liveris was less than a month ago, when he decided that his company had no other choice but to raise prices 20% across the board. His input costs (read the price of oil), he complained had simply become too high crushing his margins.

El Paso Calls Heating Up: Why it's still a buy...
You may want to keep El Paso (EP) on radar. The El Paso August 2008 23 calls are seeing interest with 7,986 call contracts trading hands versus open interest of 69. The spike is being attributed to news that the company has expanded land holdings in the Haynesville shale area. While the stock has since retreated on the comments made at the Wachovia Nantucket Equity Conference, it and the call options are a buy.

How to Protect for Downside
This rally won't last, we said June 12. Bank earnings are next week. The world is on the edge of severe crises. Israel and Iran are ready to fight. Oil is heading up. Gas is skyrocketing. Thousands of homes are in foreclosures. Global banks are struggling. Home equity loans are the new subprime fiasco. Unemployment is rising. Food riots are daily. Bond insurers are losing ratings. Oh, and then there are the hundreds of trillions in derivatives.

Norway's Wind Energy Outlook

Norway sure has its extremes.

The days are getting longer and longer this time of year, evening out the gloomy darkness of the long Nordic winter.

In energy there's balance too. Norway's North Sea oil production is expected to drop by 100,000 barrels this year...

But the Norwegian government and local companies are looking towards a future in another abundant regional energy source—Wind power.

Still, we think they need to do more.

Norway's Wind Energy: Gusts Instead of Steady Breezes

On May 15, the Norwegian Ministry of Petroleum and Energy revised its 2008 budget to include a 100,000 barrel-per-day drop in oil production, down to 2.4 million bpd.

Here's the kicker: Norway's not alone in its decline—the U.K., the largest oil producer in the European Union, peaked in 1999.

In fact, 2007 was the year the U.K. turned into a net oil importer, as field decline rates and increasing fuel consumption put the squeeze on native capacity.

Luckily for the companies bringing North Sea oil up and out of the ocean, record high NYMEX and London-traded crude prices have bolstered the bottom lines of firms like Norway's StatoilHydro (NYSE:STO), a longtime Global Growth Stocks holding (and currently a 71% gain).

But we know $125 oil is only good if you can find the oil to sell, and those days seem numbered in the blustery waters of northern Europe.

It's a good thing, then, that Norway recognizes its wind energy potential.

As Deputy Petroleum and Energy Minister Liv Monica Stubholdt said recently, "Norway is among the (world's) most ideal locations for wind power, both on the coast and offshore."

But progress is moving more slowly than it should for a true transitional energy economy to emerge.

That goes for Norway, and its North Sea neighbors, too.

North Sea Countries Waffling in Wind

Last week, I alerted Green Chip Review subscribers to an unfortunate development in the United Kingdom's movement towards lofty renewable energy targets.

Royal Dutch Shell (NYSE:RDS.A), which along with BP (NYSE:BP) announced record profits in the first quarter, pulled out of an offshore wind farm project that would provide tens of thousands of Greater London homes with electricity.

Germany's electricity giant E.ON AG (OTC:EONGY) also got cold feet on the London Array.

Disappointing, considering the London Array has the potential to power a full quarter of all homes in the capital city area when completed.

And that's just a fraction of the total capacity that could come from Germany, the U.K., Belgium, Denmark and the Netherlands...

The German Wind Energy Institute said in 2000 that the total offshore wind bounty among those five nations is equivalent to five times their total electricity consumption.

Five times!

Yet Shell and E.ON have moved on wind in fits and starts, and StatoilHydro's New Energy Wind division is treading lightly with just a couple of wind farm demonstrator projects.

"Offshore makes sense in a way," that division's project head Jan Fredrik Stadaas says. "It is our area of competence."

That echoes what I heard in my time on the North Sea coast of Scotland, where I met with Norwegian oil rig engineer Gunnar Foss back in 2006.

Foss is involved with Canadian firm Talisman Energy (NYSE:TLM) and a deepwater wind pilot project they are working on, taking offshore structural pointers from the oil industry and moving it to the renewables sphere.

This collaboration is essential and encouraging to us energy investors, but the window for offsetting North Sea oil declines with clean energy advances is closing by the year.

We'll keep track of every turn of the turbines here at Energy and Capital, and tell you how to play the next big move.

Regards,

Sam Hopkins

OPEC: The Oil Cartel

Admit it. If OPEC were a public company, you'd be hard pressed NOT to want to own shares.

The world's biggest cartel is set to bring its members over $1 trillion this year, beating Department of Energy estimates by $150 billion and soaring over last year's net by 57%.

That's stellar performance...

But then again, OPEC's price-fixing ability makes increasing revenue a self-fulfilling prophecy...

Right?

Well, a few major factors could break the cycle:

OPEC members departing the cartel

Non-OPEC oil production rising in places like Brazil, Canada and Kazakhstan

General distaste for price-fixing in politics and public opinion

Whether a perfect storm will uproot OPEC, though, is far from certain.

Indonesia's "Wells Are Drying"

Indonesian President Yudhoyono told the world this week that the country's OPEC membership is in question because, quite simply, Indonesia's "wells are drying."

Indonesia, eastern Asia's only OPEC member, joined the ring two years after it was launched in Baghdad in 1960.

Since then, that country of over 17,000 islands has turned from an export power into a net importer—production declined from 1.66 million bpd in 1980 to 1.1 million in 2006, while daily consumption tripled over the same period.

Economic growth at over 6% a year, even factoring in the 2008 slowdown, means Indonesia has to hold on to what it's got left.

Indonesia has revisited its OPEC membership in the past, but decided to stay on to maintain high-level relations with big-time oil powers like Saudi Arabia. After all, Indonesia has the world's highest Muslim population, giving it another major tie to Gulf exporters.

Indonesia isn't the only country to consider leaving OPEC in recent years.

And declining production isn't the only reason for splitting, as Nigeria can attest.

Low Prices Almost Drove Nigeria from OPEC

It seems like it must have been a previous lifetime, but in 2002 oil was around 20 bucks a barrel.

That's when Nigeria and OPEC were at odds over the country's "undisciplined policies" and production that exceeded daily OPEC quotas by 300,000 bpd.

New Nigerian production was coming online at the time, and national leaders and companies operating there got vexed by low limits coming from OPEC headquarters in Vienna.

These days, Nigeria is making the news with illegal pipeline siphoning and rebel attacks that shut down production and refinery facilities, putting them in danger of under-producing by OPEC standards, and leading to a higher risk premium in futures trading.

Like any club, membership in OPEC comes with commitment, but benefits too. That's why the threat of attrition is balanced by new members who want to tap OPEC"s power and expert-sharing structure.

Ecuador and Angola Come On Board OPEC

Ecuador, South America's second-largest oil supplier to the United States, was a member of OPEC for two decades before leaving in 1992, to produce more oil than Vienna was mandating at the time. Ecuador rejoined under new center-left leadership in 2007, and is now like Nigeria, below quota.

Angola cast its lot with OPEC for the first time in 2007, and the country is now the third largest crude oil producer in Africa, behind Nigeria and Libya. Consumption hasn't grown at such a high rate in Angola as in Indonesia or even Ecuador, because the economy is anemic.

So there's still room for Angola to ramp up output before worrying about domestic supplies.

In non-OPEC countries like the U.S., the situation is one of trying to maximize export profits while turning away from oil for domestic use.

Some experts say what we're seeing now may be the last hurrah for non-OPEC production.

Non-OPEC Production Falters

"No non-OPEC member is in a position to produce more," says energy expert Francis Perrin. "They are selling all the oil they can."

Perrin includes reputed fossil fuel saviors like Kazakhstan's Caspian basin, Brazil's recent deepwater offshore finds, and even Canada's oil sands in that appraisal, saying declines in high-quality North Sea fields can't be offset by hard-to-get, sour crude from the latest sources.

Canada's oil has to be cooked, Kazakhstan's 1.5 million bpd Kashagan field is delayed another few years, and Brazil's Carioca field is in a "pre-salt formation," at depths that have been known to melt even uranium-tipped drillbits.

Companies like Noble Corporation (NYSE:NE), which specializes in deepwater offshore exploration, will thrive in the high-pressure environment.

The Oil Service HOLDRs ETF (AMEX:OIH) is also a great play on rising prices and interest in new resources.

What's more, commodity cartels are coming into fashion, and OPEC is always the reference point (after all, you'd probably rather draw a parallel to OPEC than to Colombian drug lords).

Iran and Russia have been talking about a "gas OPEC" for a couple of years now, and Vietnam is quietly pushing forward with the idea of a five-country Mekong Delta "rice OPEC" as grain prices skyrocket.

To make a long story short, OPEC is widely seen as a model for success with no real rival in the energy world. Until that changes, it's a force we're going to have to reckon with.

Regards,

Sam Hopkins

www.energyandcapital.com

Investing in Wind Energy

"Green doesn't always mean more expensive."

That's what Chief Executive Mark Levin has to say about the matter.

He runs a company called Home Office Solutions Group (HOSG), which sells furniture to small businesses.

The company has reported its green sales are 'going strong', despite an overall decline in average purchases being attributed to what some would call a 'rough patch' in the economy.

In fact, one of HOSG's most popular items is the Think chair, manufactured by Steelcase Inc. (NYSE: SCS).

The chair is made with as much as 37% recycled materials and can be sold at retail for $569. Steelcase's Leap chair—which is very similar, just not green—sells for $250 more.

So you see, green doesn't always cost more.

But recycled materials aren't the only thing making the Think chair green.

Steelcase also has committed to buy all the renewable energy credits generated by a Texas wind farm in an effort to reduce its carbon footprint.

The wind farm from which Steelcase will purchase its electricity was built by a Deere & Co. (NYSE: DE) subsidiary.

All of a sudden we have this green menage from a group of companies that aren't generally thought of as pioneers in the field. And there are plenty of others consdering investing in wind energy as well.

The Growing Use of Wind Energy

That's because companies from multiple sectors are seeing an accumulation of reasons to go green.

For starters, some companies are going green to take advantage of tax credits spawned by legislation on The Hill. Some of those tax credits expire at the end of the year, and companies are hastily implementing projects to ensure they get their breaks.

Even if such projects require a little more up front capital, the long-term benefits are being realized through higher efficiency and lower energy usage.

Plus, more stringent energy legislation is on the way. So some companies—even those formerly opposed to such rules—are taking action to stay ahead of the energy policies they know are in the pipeline.

I'm talking, of course, about laws requiring less emission of greenhouse gases or the increased use of renewables, or both.

Most recently, we saw Ohio enact legislation requiring 12.5% of its electricity to be generated renewably by 2025.

Including Ohio, 29 states have now enacted some sort of renewable portfolio standard (RPS). That's 58% for those keeping count.

Right now, wind energy is the renewable resource of choice for generating utility-scale power.

In 2007, wind generated revenues soared above $30 billion for the first time. That number is expected to grow 177% in the next ten years to $83.4 billion.

Just last year the U.S added 5,244 MW of new wind capacity—a 45% expansion. Total installed wind capacity now stands at 16,819 MW, with another 3,626 under construction.

Wind Energy Investing: The Foreign Winds are Blowing

What most don't know is that the domestic wind energy market is currently being dominated by overseas players.

With the exception of General Electric, foreign competitors—mostly from Europe—have taken a strong position as wind market leaders.

Because of their early aggression in tackling environmental issues, it's no secret that European firms have led the way in many renewable technologies. Their cavalierness has led Germany to be the cradle of the solar revolution, the Scots to take the lead on wave power and a Portuguese/Spanish/Danish tandem to lead on wind.

Last year, Energias de Portugal—the national utility—bought Horizon Wind Energy from Goldman Sachs for $2.15 billion—the highest price ever paid for a wind-only company.

For its part, Spanish company Acciona acquired rights to about 1,300 MW of wind farms in the Midwest.

But the U.S wind market isn't the only one that's booming. Europe still has billions to claim as well.

In its most recent report, the European Wind Energy Association (EWEA) said that wind became the leader in terms of new installed energy capacity.

Through 2020, wind is expected to account for 34% of new generating capacity. It'll account for 46% from 2020-2030.

And the goal of attaining 12-14% of Europe's power from wind by 2020 is well within reach.

By 2020, it's expected that 180 gigawatts (GW) of electricity will be supplied by the wind—enough for about 107 million European households.

For that to happen, wind-based capacity needs to increase 9.5 GW per year through 2020. That shouldn't be too hard, considering the EU installed 8.5 gigawatts worth of wind capacity last year.

In addition to the companies mentioned above, Green Chip International has its investment portfolio primed to take advantage of all growth in the wind industry—no matter where it happens.

The portfolio includes a global clean energy ETF and three foreign-based companies with significant wind exposure, amons several others. All are set to capitalize on the coming growth in the global wind business.

But the one I'm most excited about is going to release its first quarter earnings this Thursday.

Company revenues are expected to rise nearly 20% and net profit is forecast to rise 135% over the same quarter numbers from 2007.

When these numbers come out, I assure you investors will go crazy. Some analysts are predicting a target price some 23% higher than it is now.

This is surely a company you want to be invested in before the first quarter numbers are released. As I write this, the price is already starting to tick northward.

But only Green Chip International members are going to be privied to the information needed to profit from the company that's as close to a sure bet as it gets. So become a Green Chip International member today!

Call it like you see it,

Nick

Russian ETF

Russia is the dominant natural gas exporter in the world, with the largest endowment of the fuel in its territory.

Natural gas prices are up (rising over 90% in the U.S. since August 2007), and so is its popularity as energy icons like T. Boone Pickens are pushing for liquefied natural gas to become a viable transportation fuel to replace refined oil.

Below, I'll tell you about a Russian ETF that is capitalizing on Russia's prime position in the important international natural gas trade.

First, check out the following chart on natural gas futures.

As you can see in this chart, natural gas prices run in cycles. But the trend is heading up.

You see, leading European consumers are eager to secure steady supply on favorable terms, which means dealing with Russia. For years, that has meant dealing with one leader—Vladimir Putin.

That's about to change when a new president takes power May 7.

President-elect Dimitri Medvedev's first official trip was announced this week, and it will take him to Russia's two biggest neighbors and major energy allies, Kazakhstan and China.

Kazakhstan is expected to come out with at least a jump of 1 million barrels of oil per day after 2011, and China is the world's second largest energy consumer, with a growing appetite for natural gas that pollutes less than coal.

But right now, current President Vladimir Putin is putting ink to paper in Greece, a country that doesn't even border Russia, and was never a Soviet satellite state. Greece will however be an integral part of Russia's export future and a key transit point for European energy.

Russian Natural Gas and the South Stream Pipeline Project

The South Stream pipeline project, which will carry some 10 billion cubic meters of natural gas through Greece every year (of 30 billion in potential capacity), is a joint venture of Russia's gas export monopoly Gazprom and Italy's energy titan, Eni.

From a Russian compressor station, natural gas will be pumped under the Black Sea to Bulgaria, and then overland to Greece and Italy.

And it turns out that, when all is said and done, Medvedev's first jaunt as president to Kazakhstan and China, and Putin's Mediterranean connection in his closing days may not be so far apart in terms of Russia's national economic interest.

Buried in the news reports of Tuesday's Russian-Greek bilateral agreement on the South Stream pipeline was a hint that Central Asian gas would soon be transported through the conduit, in addition to original Russian fuel.

"Central Asian" is code for "Kazakh" in energy circles, because Kazakhstan is one of the last and best hopes for traditional fossil fuel.

By bringing millions of barrels of oil online, Kazakhstan is sure to see gas production ramp up as well. After all, the new wave of fossil fuel production and profit means new facilities built in the country may take advantage of gas byproducts rather than burning it off in wasteful flares.

And with tight connections confirmed by a new Russian president, even as the old one hangs around, Gazprom's got the bead on Kazakh gas, making it not only a Russian gas export giant but a king in international transport as well.

The Russian ETF on a Long Run

... Which leads me to why I'm sticking with my recommendation of the Market Vectors Russia ETF (NYSE:RSX).

The RSX ETF has continued its rise since I last told you about it in March, not rising directly in line with natural gas prices but certainly tied to fuel. The Russian ETF's top holdings include:

Gazprom
Rosneft (Russia's national oil exporter), as well as
Nickel giant Norilsk... and a few non-resource plays like mobile phone service provider Vimpel (NYSE:VIP) to boot.

You can bet on the RSX ETF, with Russia poised to maintain its perch on top of the world's natural gas industry.

Regards,

Sam Hopkins

Investing in CNG

Imagine filling up your tank for $5.

That's what some car owners are doing in Utah, where gas is selling for $0.638 per gallon.

The only caveat: it's compressed natural gas (CNG), not the unleaded liquid stuff we're used to.

According to the Natural Gas Vehicle Coalition, Utah boasts the country's lowest rate for the increasingly popular fuel. But no matter where you buy it, CNG is undoubtedly cheaper than the national average price of $3.60 for regular unleaded.

So you can see why the fuel—and the cars that burn it—are rapidly growing in popularity. Private ownership of natural gas cars and trucks in Utah has grown from basically zero to over 5,000 vehicles in just a few short years.

Use of the fuel is growing so fast that Utah's 20 public CNG stations are struggling to keep enough in supply. Fleets requiring CNG, including a local Coca-Cola distributor, may find it easier to come by at the state's 71 private fueling facilities.

Markets & Incentives for CNG

Of course, Utah probably has the cheapest CNG prices in the nation. But even in California, where the price stands at about $2.50 per gallon equivalent, the novel fuel is a bargain.

Still, the cheap prices haven't kept Utah-based utility Questar Corp. (NYSE: STR) from turning a tidy profit. Questar is the cheapest provider of natural gas in the continental U.S. And it can offer CNG at even lower rates thanks to federal tax incentives.

But don't let the cheap price of their product fool you. Questar stock has climbed 29% in the past three months. And if the current trend is any indication, this one is going to go higher. Take a look at the upward trend the company has been in for years:

You see, the utility isn't the only attendant at this natural gas party to receive incentives. Purchases of new, qualified used and some converted vehicles are also eligible for federal and state tax incentives—some up to $7,000. In many cases, the $7,000 incentive is enough to offset the associated premium of buying a CNG-fueled vehicle.

Right now, new CNG vehicles are only available in New York and California. And only one company, Honda Motor Co. (NYSE: HMC), is making them.

According to company executives, they can't make the specialized vehicles fast enough. Nonetheless, they're fast-approaching making new CNG vehicles available for sale in Utah to capitalize on the booming market.

Until then, consumers are doing all they can to get their hands on used CNG vehicles and to convert regular gasoline engines to run off the stuff.

Can you blame them? With oil less than a dime away from $120, you can bet the nascent natural gas vehicle market is on the cusp of exploding.

Investing in CNG

There are a number of ways to get a leg up on this emerging market. And they don't have to be strictly CNG-related.

As you may know, CNG is just a storage option for natural gas. Made mostly of methane (about 75%), natural gas can be stored in its original gaseous state or it can be liquefied (LNG) or compressed (CNG).

So at this point, any exposure to natural gas is probably good exposure.

Natural gas contracts for June 2008 have climbed from around $7.33 per million British thermal units (MBTU) to over $11.00 in the las five months or so.

One way to get in is through a sure bet like the aforementioned Questar Corp. The company is in a serious uptrend that I think will only go higher along with demand for more economical and environmentally friendly fuel and vehicles.

I've also talked to my colleague Keith Kohl about natural gas stocks. Without hesitation, he offered Range Resources (NYSE: RRC) and Chesapeake Energy Corp. (NYSE: CHK) as two of his favorite plays.

Both have been going gangbusters lately and are well-established companies in the sector.

But there's a younger company that could soon explode the way Range and Chesapeake have.

It's a manufacturing company with an engine that runs off CNG. The company has been loading up contracts from city and state fleets around the country.

And I want you to have first crack at it. All the details are included in this full CNG report.

Call it like you see it,

Nick

China Coal Crisis

How much energy do you need to make it through a couple of weeks?

After you're done figuring in the work commute, taking the kids wherever they need to go, and assuming you like to see what you're doing at night, the average U.S. household goes through about 350 kilowatt-hours in 14 days.

This spring, Chinese consumers are frantically tallying their own fortnightly consumption, because the national coal stockpile has shrunk to only enough for 15 days.

And that's the best-case scenario according to some in the Middle Kingdom, where coal is the only royalty left.

Vice President of the national electricity regulator, Wang Yeping, and the head of China Power Investment Corporation, Liu Shuo, both told media that the real reserve number may be down to a mere 7 days.

One week of the primary energy source for an economy growing steadily in double-digits per year!

Now tell me we're not in an energy crisis.

China's Coal Crisis Persists

The United States Department of Energy says that worldwide coal consumption is expected to increase by 74% from 2004 to 2030, with coal trade jumping by 44% in about the same time span.

Contrary to popular belief, the world isn't trending away from coal consumption as we undergo a clean energy epiphany.

The DOE reference case has coal use increasing as a percentage of total energy consumption, up to 28% in 2030 from 26% today.

China plays a large part in that rise, it being in the process of constructing more than 500 coal-fired power plants to fuel greater demand for electricity in private and public applications.

After all, it's not just new skyscrapers and their microwave-happy denizens chugging juice—it's streetlights and Olympic sites too.

Plus, hundreds of millions of rural Chinese have yet to gain their first grid access, meaning the strain will increase.

This winter I wrote about the clogs and chaos at train stations across southern China, the result of winter snows that halted transport routes for people and materials alike, creating a coal crisis.

One local official in the province of Guangdong rejoiced at the time when he found out that coal cars were arriving in the capital of Guangzhou for the first time in weeks.

"We now have a full 10 days' supply of coal!" he beamed.

Here we are months later, with the mildest weather in the year, and China is back in the same sooty situation with no blizzard to blame.

Though China has the world's #3 coal reserves and the DOE predicted in 2007 that primary coal consumers should be able to subsist mostly on their own national mining.

China gets 78% of its power from coal, and government regulations are trying to make mines more secure and dial down the thousands of deaths a year in mom-and-pop collieries across the country.

Combine greater regulation with tightening supply, and you get price pressure that squeezes China's power margins too close for comfort.

First the Torch, Now the Streetlights?

China's dream-turned-nightmare in 2008 may have only begun when several protesters flung themselves at torch runners and managed to put it out several times.

Can you imagine what havoc rolling blackouts would wreak in any of the six cities hosting events?

The government has some $1.3 trillion in foreign currency reserves, and it launched the China Investment Corporation last year to spread some of that around to buffer against the dwindling dollar.

But CIC's $3 billion stake in private equity group Blackstone's IPO shed over $1.2 billion in value from May 2007 through February of this year.

Early February was the thick of the China winter coal crisis, too, and I said at the time that China's reserves would be better spent securing coal supply, namely from nearby Australia, rather than buying into a real estate IPO at the top of the market as CIC did with Blackstone.

The Shanghai and Shenzhen stock markets tanked in turn, leaving few sure things in China's investment purview.

Except energy, that is.

Coal Continues to Run

Bloomberg says the price of Asian benchmark coal is up nearly 50% this year alone. That and food commodity pressure is leading to price inflation across the economy that is at the highest level in more than a decade.

Coal stock prices are also escalating, delivering handsome returns to readers who bought my recommendations the last time I related China's energy woes a few months back.

Every single one of the companies I told you about on February 6 on has delivered whopping returns:

China's Yanzhou Coal Mining (NYSE:YZC) dipped with the local market but is now in the green, and Swiss-based Xstrata (LON:XTA) gained a solid 17%. Aussie coal company Coal & Allied Industries (ASX:CNA) gained nearly 40% in 3 months, and New Hope Corporation (ASX:NHC) is up 113% since late January.

This time, I want you to take a good look at the Market Vectors Coal ETF (NYSE:KOL).

KOL has just broken to new highs and is a good buy on dips as we've seen a 22% uptick since just one month ago.

China won't let the energy run out, and you should make sure you pack your portfolio with coal, too.

Regards,

Sam Hopkins

Green Energy Stocks

Denmark is quickly becoming a heavyweight energy force.

Meanwhile, other economies, namely the U.S. and China, are scrambling all over the world to buttress themselves against the weight of peak oil.

But in this age of fossil fuel panic, consider that the Danish enjoyed 75% economic growth from 1980 to 2007 while keeping energy consumption growth down to 6%.

In the meantime, Denmark's showcase alternative energy stock, Vestas Wind Systems, has become a domestic blue chip along the lines of IBM or General Electric.

If you're serious about making money in the new energy economy, you must understand companies like Vestas and the national support that has allowed them to maintain stellar growth.

Here we'll look at a few key features of blue chip green energy stocks.

Green Energy Stocks on the Rise

Renewable energy stocks that are worth putting your money in for the long term are:

Heavily traded on their home exchanges
Secure in their basic commodity supplies (esp. in the case of solar PV), and
Look abroad for a significant portion of their growth

By virtue of its small size and central location to European economic giants like Germany and the United Kingdom, Denmark has devoted itself to pioneering advances in wind energy.

Danish Minister for Climate and Energy Connie Hedegaard told a gathering of offshore wind energy heavy-hitters in Berlin last December that her country's wind energy industry has delivered 90 percent of the world's total installed offshore capacity.

Vestas, in turn, has enjoyed remarkable and unfettered growth. Vestas has been able to boost its earnings at a terrific pace, rising from 201 million euros in 2006 to 443 million euros in 2007... that's a 120% increase!

Take a gander at Vestas's Copenhagen share price over the past five years:

And from March 1998 to March 2008, Vestas's share price logged a 1,695% gain!

This is exactly the green energy blue chip stuff I'm talking about.

And there's plenty more where this came from, if you know where to look and what sinkholes to avoid.

Day Traders Don't Get Green

One of the worst things to hit many true investors' opinions of green energy stocks is the amount of volatility that we're seeing in today's overall market (the Chicago Board of Options Exchange Volatility Index keeps setting higher support levels), and the added factor that thinly-traded energy startups on the OTC and pink sheets are often subject to the whims of day traders.

Many of these chart jockeys don't understand a tenth of what goes into building a renewable energy company, so shares get tossed to and fro and unwitting buyers can get stuck with dud shares that are almost impossible to get rid of.

What's worse, some traders whose first fortunes were made in the dot-com boom have a tendency to blend clean energy technology stocks with computer-based tech companies. That means that from time to time clean energy companies that supply the core micromechanical elements of things like wind turbines and solar panels get dragged down with shabby news in the semiconductor industry.

Don't get me wrong--the cleantech overlap can be very real, like with the increasing competition between solar panel manufacturers for silicon supply, which of course is also key to microchips.

In most scenarios, however, someone rings a "tech" bell and these dogs salivate, getting their 5% in-and-out trade and leaving chaos in their wake.

If you're in it for long-term appreciation and know how real the worldwide renewable energy bull market is, you want to go abroad where government's like Denmark's and Germany's are sowing the seeds of green energy independence and economic health.

The most promising trend today, in fact, is the systematic reduction of government subsidies in these countries where price guarantees for clean energy producers has stimulated the growth of Vestas and others.

We're now seeing that mold stripped away, leaving strong companies like Vestas that are fit for a new energy age.

Regards,

Sam Hopkins

P.S. A combination of trading skill and clean energy expertise has returned outstanding gains to Green Chip Stocks and Alternative Energy Trader subscribers, avoiding the pitfalls of bulletin-board knee-jerks. Our stocks have significant basic material stockpiles, heavy trading volume, and aggressive overseas expansion.

But for long-term investors, Green Chip International is finding "Green Chip Blue Chips" like Vestas all over the world. In fact, we've just issued a new "buy" on a company with just the kind of solid international growth we're targeting. To learn more, click here: http://www.angelnexus.com/o/web/5072

The Chevron Commercials

"Oil, energy, the environment. It is the story of our time."

Those are the words that begin the now-famous Chevron (NYSE: CVX) commercial alerting the public that an oil company can be a part of the solution.

I'll get to the semantics of why that doesn't work in a moment. For now, let's deal with the opening quote.

Oil, energy and the environment are indeed the stories of our time. Just on my way to the office this morning I listened to:

An NPR Climate Connections story about urban sprawl and the associated rise in fuel and energy consumption,
A radio blurb about rising energy costs, and
A story about the local utility (BGE, a unit of Constellation Energy) being forced to give its customers a rebate per a settlement reached with the state of Maryland.

With the issues so prevalent, there are certainly numerous ways to profit. Let's delve into a few, using the Chevron commercial as a catalyst.

Oil and Energy

Although many think so, oil and energy are not synonymous. This is a point I recently argued in a piece about cleantech's correlation to oil prices.

You see, as ubiquitous as oil is, its primary uses are for transportation fuels, chemicals and plastics. Of course, those uses are extremely important and--at least for now--they're things we've become critically dependent on.

Yet narrowly defining oil as energy only causes convolution. Imagining--as the commercial suggests--an oil company as part of the solution does more to foster confusion than to provide any real insight.

By definition, a company that is touting its activities in solar and geothermal isn't an oil company at all. It's an energy company.

The Chevron Spin Factory

Basically, what Chevron is telling us is that the oil era is coming to an end, though Peak Oil and climate change are never mentioned. The company is not saying it's pursuing clean energy because it's the right thing to do. They're doing so just to stay relevant in a rapidly evolving energy economy.

The question then becomes: will Chevron (and other "oil companies") be able to evolve fast enough? Or will they be leap-frogged by other, pure renewable energy companies?

Well, as many will tell you, it's hard to say. But the sheer notion that an oil company has to drop millions to tout its clean credentials tells us that they know the world is headed down the cleantech road.

And while they drag their feet in getting there, trying to squeeze out every last barrel of profit (and they'll be successful, at least in the short term), the energy market will eventually pass them by.

Obviously, spending only $2.5 billion on clean energy research while spending $15 billion to buy back their own shares, is the tell-tale sign this oil company won't be part of the solution.

Perhaps comedically, they've spread their (natural?) resources too thinly. One company can't reign supreme in each of the numerous facets of the energy industry. You know the old saying: jack of all trades, master of none.

So don't buy the hype of Chevron the Energy Company when, even while trying to brand themselves as such, they still call themselves an oil company.

There will, however, be a profitable merger of energy technologies for some time going forward.

Sure, there's still money to be made in oil. But what my colleague Jeff Siegel refers to as a new generation of wealth will only be available to those investing in green chip stocks.

You can read about those opportunities three days a week simply by signing up for the FREE Green Chip Review.

The Environment

More and more, effects on the environment are being calculated in to the cost of energy.

In fact, just a few months ago three of the largest investment banks (Citigroup, Morgan Stanley, and JP Morgan Chase) announced the formation of "Carbon Principles"--a set of guidelines the banks will follow when lending money to carbon-intensive projects such as coal-fired power plants.

Of course, we'll still be burning coal to produce electricity for the next several decades. Just as we'll still be using oil for limited applications.

What will change is how we use them. We'll be using more efficient engines. We'll blend gasoline with biofuels. We'll be capturing the noxious gases from the flues. All while significantly increasing the amount of energy we get from renewable resources.

You see, it's not just about energy. It's about efficiency as well. It's not possible to simply wean ourselves off fossil fuels overnight. There will be a series of transitional technologies that help usher in the switch.

And it's possible to take those to the bank as well. Just last week, legendary oilman T. Boone Pickens was on CNBC touting the benefits of his natural gas company, Clean Energy Fuels (NASDAQ: CLNE).

While still a nonrenewable fuel, natural gas is cheaper, burns cleaner and can be domestically sourced. So using it as a transportation fuel helps limit the adverse effects on the environment while reducing dependence on foreign oil.

T. Boone, of course, is a master of making money in the oil sector. But even he knows that isn't the path forward.

He has the same investment philosophy as the Alternative Energy Speculator: let's make money on cleantech investments and the stop-gap technologies being used to limit our fossil fuel use and make it cleaner.

If he really thought oil companies were the way forward, he'd still be pushing that front instead of founding natural gas fuel companies, water companies and, most recently, announcing intentions to build the world's largest wind farm.

You too can profit like Pickens. To learn how, check out this lucrative way to profit via natural gas-fueled vehicles with the Alternative Energy Speculator.

Until next time,

Nick

www.energyandcapital.com

Oil in Egypt

The main military obstacle to new oil discoveries in today's Middle East isn't the work of insurgents.

This one's on the Nazis.

The deserts of North Africa, where some of the fiercest battles of World War II were fought, are now the last frontiers of light, sweet crude. Libya has shown the area's potential, with that country now officially holding Africa's largest proven crude reserves (41 billion barrels).

Meanwhile, right next door in Egypt, bountiful underground oil is buried under 22 million land mines courtesy of the Desert Fox, Gen. Erwin Rommel, and his enemies in the British Eighth Army.

But the road to investing in Egypt's oil and their energy-fed economic boom is getting clearer by the day.

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Access to Oil in Egypt Blocked, But Stock Market Still Rallies

Leading German news magazine Der Spiegel recently ran a feature on Egypt's northwestern region, where the pivotal battle of el-Alamein was fought.

There, towards the Libyan border, 4.8 billion barrels of oil lie underground . . . and just 13% of the landmines in the area have been cleared.

"The mines," national landmine clearing director Fathy el-Shazly says, "deny access to approximately 22% of the national territory."

Nevertheless, the Egyptian economy is growing rapidly, drawing more international investment than ever before.

The Cairo Stock Exchange main index has enjoyed a more than 400% increase in the past five years to a market cap of more than $150 billion, and the exchange group is about to launch an ETF on Wall Street based on the CASE 30 index of blue-chip Egyptian stocks.

The land of the Pharaohs is drawing more and more energy exploration in the age of Peak Oil, and leaving one-fifth of the country closed to capital is an untenable situation.

Egypt is itching to move forward, since the hydrocarbons in just that one area would boost Egypt's oil reserves to par with those of the southwestern African nation of Angola, which is a member of OPEC.

In the meantime, the country is asserting its resource wealth in other ways.

LNG Business Rising Rapidly; Egypt Oil to Follow

Strategically located on the Mediterranean and the Suez Canal, Egypt is a western-friendly country that straddles a major chokepoint in world fossil fuel transit.

This is important because Egypt can help mitigate some of the risk of Iran's threats to the Strait of Hormuz, which leads out of the Persian Gulf.

The U.S. Department of Energy says Egypt is now the sixth-largest liquefied natural gas producer in the world, bursting to that rank just since 2005, when its first LNG export terminal came online. And Egypt holds 58.5 trillion cubic feet of proven natural gas reserves, so that power trade is just getting started.

What's more, T. Boone Pickens, a titan of the energy investment world, is backing LNG as an alternative transportation fuel as oil rises further and further. LNG has huge potential as an alternative fossil energy source going forward.

No wonder, then, that BP (NYSE:BP), Italy's Eni (NYSE:E), BG Group (OTC:BRGYY), and a slew of other international energy companies have gotten in on Egypt's LNG projects, putting them in prime position to take advantage of future oil development, too.

One Egyptian oil field has even been developed near el-Alamein in the Qattara Depression, where geological features that were treacherous to tanks have been a boon to oil exploration, since Qattara is mine-free.

Egypt's investment landscape is just as promising to those who know the terrain. The Egypt ETF, set to launch in the second quarter of this year, will be a magnet for investors who want a piece of the country's progress.

We'll be watching for direct plays as old mines are cleared in the northwest, and new opportunities are set in their place.

Regards,

Sam Hopkins

International Cleantech Investments

Like every year, I went out for a couple of beers this St. Patrick's Day.

I'm normally a Guinness drinker, but this March 17, I opted for a brew that's a little less like crude oil or coffee, opting for an Irish red. As I enjoyed my pints, I took in the bar stool news of the day.

"Man, did you hear about that big bank going down?"

"Yep, what a mess!" his buddy replied, referring to the Bear Stearns nosedive, "but I'll be damned if gas prices aren't going up!"

My fellow Saint Pat's patrons captured today's economy in a nutshell. There are two sure paths to profit in this market:

International growth as the American financial system tries to steady itself, and
The unstoppable fuel rush that's stimulating every energy sector in this era of $100+ oil.

Let's look at a burgeoning market that lets us play both of these monster trends at once, with international cleantech investments.

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Renewable Energy Attractiveness Index

Once a quarter, accounting firm Ernst & Young's U.K.-based Renewable Energy Group releases its Renewable Energy Attractiveness Indexes... one for the United States and one for the entire world.

These rankings give us a quantitative glance at just how enticing it is for alternative energy companies to do business in markets as diverse as California and Turkey, and the outlook should give energy investors plenty of confidence moving forward.

First off, the picture in the U.S. is not bleak when it comes to renewables. On the international scale, the U.S. is listed as the most attractive market for renewable energy, but Washington lost us a few points when renewable energy targets were removed from the late-2007 Energy Independence & Security Act (the "Energy Bill").

It may surprise you to know that in second place you won't find Japan, the world's number-two economy. Nor is any of the BRIC countries (Brazil, Russia, India and China) the runner-up in E&Y's All Renewables Index.

It's the other member of the post-WW2 world's most ironic financial triumvirate: Germany.

As "by far the largest market for solar power," in Ernst & Young's words, Germany is credited with not only setting its total power generation targets above the European Union goal of 20% by 2020 (Germany has upped the ante to 27% by 2020 and 45% by 2030), but also crafting the country's Renewable Energies Heating Law, which mandates that all new buildings after January 1, 2009, must be built with renewable energy heating systems.

That change is expected to save Germany $73.9 billion in heating costs by 2020, according to Ernst & Young, and I guarantee you that well-placed companies are in for billions in contracts along the way.

Get Ready for the Cleantech Wave

Here in the States, there's a happy flipside to high gas prices, messy political situations in most of the oil-producing world, and a post-industrial "knowledge-based" economy centered on Silicon Valley and Wall Street. You see, clean energy technologies are drawing expert engineers and seasoned venture capitalists in droves.

The National Venture Capital Association and Thomson Financial say that in just the first three quarters of 2007, U.S. venture capital flowing into cleantech and clean energy start-ups increased to $2.6 billion, up from $1.8 billion in all of 2006.

And from year-end '06 through today, we've seen a barrel of oil skyrocket from $58 to $109--an 88% jump. With each $10 plateau, new energy options become viable.

Even Saudi Arabia's Oil Minister Ali al-Naimi said in early March that alternative fuels will keep oil at a minimum of $60 to $70. "From now there's a line below which prices won't fall," he said, confirming the bull market for cleantech as he spoke for fossil fuel's heartland.

Silicon Valley's biggest names recognize the renewable energy reality, too. Last week, Silicon Valley lobbying group TechNet put its yearly suggestions to Congress, with members like Cisco and Intel CEOs as well as financial heavy-hitters from JP Morgan listing clean energy technology as a top concern.

In its "2008 Innovation Policy Agenda," TechNet asks Congress for a major national push with a Green Technologies Initiative. As the group's position paper requests, Congress should:

Promote and highlight new technologies and innovation as a critical part of the solution to national security, economic competitiveness and global energy and environmental challenges and encourage a national commitment for investment in and adoption of innovative green technologies. In addition, encourage public policies, best practices and initiatives to spur the development and adoption of new technologies to enhance energy efficiency, encourage use of renewable energy and protect the environment.

What they leave out is the multi-billion dollar bull market in renewable energy technology that this will create, giving investors an angle not only on new energy but also the tech sector, with hearty international exposure to boot.

Energy and Capital editors Jeff Siegel, Nick Hodge, and I are all working on a new service, Green Chip International, specifically to capitalize on this tidal wave of opportunity.

Stay tuned,

Sam Hopkins

The Green Exchange

What better way to celebrate St. Patrick's Day than by going green?

That must've been the idea lurking in the back of the minds of the decision makers over at the New York Mercantile Exchange (NYMEX). Today, they're unleashing a new trading platform called the Green Exchange.

The exchange is a joint venture between NYMEX, Evolution Markets, Morgan Stanley and Merrill Lynch, among others. The idea is to trade carbon credit contracts and futures in a world where the greenhouse gas is increasingly becoming commoditized.

If you've been keeping up on my carbon market chronicling, you know that the U.S. already has a small emissions-trading market. It's called the Chicago Climate Exchange, but its stature will be dwarfed when this new market is unveiled.

The Green Exchange and the Extended Reach of Carbon Emissions

Beyond merely buying and selling contracts for greenhouse gases, there are myriad other opportunities to profit from the carbon market.

Just take a look at what some of the financial heavyweights have done lately:

Citigroup has pledged $50 billion for green initiatives over the next ten years
Bank of America has made a similar $20 billion commitment
Citi, JPMorgan Chase and Morgan Stanley are now taking carbon emissions into consideration when deciding whether or not to finance new dirty power plants

These guys know that carbon now has a price--one that is expected to rise drastically--and they're doing everything they can to profit from it and hedge against it.

They also know that clean energy (and cleaner energy) are leading the fight against caustic emissions. And as the cost of carbon goes up--both economically and ecologically--countries, states and companies will be forced to invest in and purchase clean technologies.

But in addition to spurring spending on clean technologies, the advent of the Green Exchange provides some symbolic meaning as well. First off, it reverses the former U.S. position of abstaining or even denouncing any sort of emission caps or cap-and-trade system.

Secondly, it hints at the future of climate initiatives in the U.S. In fact, if the frontrunner among several Congressional climate change bills is passed, New Energy Finance estimates the American market for emissions could reach $1 trillion by 2020.

Profiting Without Trading Carbon

The most important thing to realize in view of these recent carbon market developments is that you don't actually have to trade carbon contracts to profit from the trend.

You see, generating carbon credits requires heavy investment in technologies that reduce emissions. That means a ramp-up in solar, wind and geothermal projects and the like.

But it also means cleaning up the emissions of dirtier sectors like coal- and natural gas-fired power plants, industrial plants and transportation.

So it's possible to invest in the companies that provide these solutions as a way to leverage the exploding carbon market.

A recent Environmental Protection Agency (EPA) announcement provides a prime example. Last week, the EPA announced strong new pollution controls on the nation's locomotives, ships and passenger ferries.

And while some of the projects resulting from that decision could potentially harvest and sell carbon credits, a few companies are also going to profit handsomely from the billions it will cost to clean up the nation's trains and vessels.

Wouldn't it be nice to know what companies will be getting those contracts and invest in them before the run-up in stock price?

That's exactly the aim of my new service, Alternative Energy Speculator--to seek out emerging clean-tech companies as well as stop-gap technologies.

While the ultimate goal is a transition to a low-carbon economy, we're willing to take a profit on the steps being used to get there, like cleaning up the coal industry or using natural gas in lieu of other dirtier fuels.

We're also willing to take on higher risk than most--hence the "speculator." But of course higher risk means higher reward. And that's exactly what I plan on delivering.

I encourage you to follow this link to read more about Alternative Energy Speculator. The portfolio already has some big winners in it. And I plan on adding more very soon.

Until next time,

Nick

Libya Oil

In February, $85 to $90 sounded like an agreeable oil price to Shokri Ghanem. Then, in early March the head of Libya's National Oil Company declared that his country had "no complaint" with $100 per barrel. Now, we're pushing $110, and Libya's big-mouth momentum is building with each dollar.

That's because official estimates say Libya can produce oil for one dollar a barrel. At $110 on the world market, the simple math gives Libya a $109 profit margin.

Dr. Ghanem is a man of the world. He was born in the Libyan capital of Tripoli, received his graduate degrees in Boston, and usually makes his press announcements from Vienna, where OPEC is headquartered.

His country, on the other hand, has spent most of the past two decades isolated from the international community, marked as a state sponsor of terror and restricted from trading its oil freely on the global market.

In the mid 80s, Libyan leader Col. Muammar Qaddafi was usually seen sporting drab military fatigues and sunglasses. Libyan agents under his command were linked to the bombing of Pan Am Flight 103 over Lockerbie, Scotland in 1988, and other terror attacks as well.

Libyans were even the bad guys in the 1985 classic "Back to the Future"--they were the reason why Marty McFly ended up speeding off in the time-traveling DeLorean!

Now Libya has apologized officially for its involvement in the Lockerbie bombing of Pan Am Flight 103 in 1988 and other attacks, and Col. Qaddafi, the hardcase of old, sports a shiny shawl in public.

After the U.S.-led invasion of Iraq in 2003, Libya renounced its early-stage program to develop weapons of mass destruction, putting a smile on many Pentagon faces and helping to bring Libya in from the diplomatic cold.

That move also made it possible for U.S. oil firms, always thirsty for new supply to position themselves for a fossil fuel frenzy.

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Libya's Producing Oil for $1 a Barrel

Having sat dormant since Reagan slammed the doors on Libyan oil in 1986, Libya looked like a fossil fuel time capsule. On the other side of the Sahara from Libya and across the Red Sea, Persian Gulf fields are dwindling, with supergiants like Saudi Arabia's Ghawar in irreversible decline and needing a 30% to 55% water cut for extraction.

Down in sub-Saharan Africa, Nigeria in recent years has become one of the most hostile environments for doing business in the oil-producing world--and that's saying a lot.

Lucky thing for us, then, that Libya--not Nigeria--has Africa's largest oil reserves, with a proven 41 billion barrels underground. And word is, much of that is the lightest, sweetest and easiest-to-extract black gold left on earth.

That's right, Tripoli tea.

None other than the U.S. Department of Energy confirms the bonanza:

Overall, Libya is considered a highly attractive oil province due to its low cost of oil recovery (as low as $1 per barrel at some fields), the high quality of its oil, and its proximity to European markets [emphasis mine].

"A Time for Watching?" Hardly!

"It is not a good time for action, it is a time for watching," Shokri Ghanem said to Reuters early in March, just before the monthly OPEC meeting.

He predicted no output increase in February or March, and he was right. But Dr. Ghanem is one of very few national oil company heads who can actually expect major export capacity increases from near-surface wells in the coming years.

Despite Ghanem's stoic approach to OPEC output, he has to be grinning on the inside. After all, his country is planning for a brighter future with the knowledge that they will be selling fresh oil into a triple-digit crude market.

In December 2007, Qaddafi announced plans to start a national sovereign-wealth fund to invest Libyan oil revenues, with over $155 billion to be spread around various industries.

That same month, France's Nicolas Sarkozy became the first western head of state after the diplomatic thaw began in 2003 to host Qaddafi. In Paris, they agreed to nearly $15 billion in deals for airplanes and other big-ticket items. It's the kind of money France knows Libya has, and France also knows Libya has the oil to make France secure about its domestic supply.

While the entire world watches oil tick up, up, and past another ten-dollar plateau, OPEC officials have every incentive to keep talking prices skyward.

But now is not a time for watching, it's a time for investing.

We're in the middle of a monumental energy and commodity bull market, as other assets wobble on credit concerns and raw materials seem to give us the only real and true equity left in the world.

Global Growth Stocks subscribers have already reaped triple-digit gains on my Libyan oil play, a small Canadian company that beat the majors to revive sleeping drill holes. We're seeing more profits in international energy every day at Energy and Capital, and we're keeping you up to date with every development in markets and the mouths that move them.

Regards,

Sam Hopkins

Energy Storage Stocks

We all know that large amounts of electricity are now being produced via renewable resources like wind and solar.

And as great as that may be, wide-scale deployment of these technologies has been hindered by a litany of hurdles--one of which is energy storage.

You see, there are several steps that renewably-produced electricity must go through before it can be introduced to the grid or into a home. This has led to the creation of a robust market for advanced electronic products like inverters, converters, generators and batteries.

We've been playing energy storage stocks for a little while at both Green Chip Stocks and the Alternative Energy Speculator through a variety of inverter and demand-response companies.

But a new development in this industry could open up an entire new conduit for profit.

One Energy Storage Stock Via the Hydrogen Sector

Some have dubbed it the "unglamorous pillar" of an energy revolution that is cleaning up the world's energy supply. But energy storage, in my opinion, will soon be the recipient of billions of investment dollars just like the other, more glamorous, aspects of renewable energy.

Although the supply of wind and solar energy far exceeds the world's energy needs, it's not always available at the time when the most demand is put on the grid. So a good bit of improvement in energy storage devices is needed to harness a greater share of the earth's free natural resources more efficiently.

And we're on the brink of the commercialization of a variety of new storage technologies.

UK-based ITM Power plc (LSE: ITM), for example, is placing its bet on the storage of energy in hydrogen. It is developing an electrolyzer that uses solar or wind power to split water into hydrogen and oxygen. The hydrogen is then pressurized and stored for use in electricity production or for powering cars.

The company plans to start production this year of the electrolyzers and next year of hydrogen fuel cells the produce electricity.

Energy Storage for Vehicles

EnerDel's--a subsidiary of Ener1, Inc. (OTC: ENEI)--aim is to supply batteries for the "Th!nk City" electric vehicle, manufactured by Norway's Think Global.

EnerDel has a patented lithium-ion battery which is proving to be lighter and cheaper than its nickel metal hydride rival currently used in some hybrid cars like the Prius.

And lithium-ion has also won the endorsement of Tesla. The company manufacturing the now famed all-electric Tesla Roadster is using them to power tomorrow's electric vehicles.

Investors are already taking note of the potential market for electric vehicle batteries, sending Ener1 on a 284% run in the last year. And shares are still less than a dollar. Take a look:

Energy Storage Stocks for the Grid

Even utilities have their eyes on energy storage as a way of easing dependence on dirty backup plants and preventing the construction of new substations. Some are even using batteries the size of a double-decker bus to store renewably-produced electricity for later use.

Ohio-based American Electric Power Company, Inc. (NYSE: AEP), which delivers electricity to about 5 million customers in 11 states, installed a one megawatt (MW) battery in West Virginia two years ago. The company will add six MW of storage capacity this year before expanding to 1,000 MW in the next decade.

Another company, Beacon Power Corp. (NASDAQ: BCON), is making flywheels that can store energy and aid in relieving pressure on power grids. Beacon builds its own plants using flywheel technology and makes money by selling power to the utility when it's needed.

Beacon's first plant is being built in New York and they plan on seeing revenue from it this year.

Other utilities, like Xcel Energy Inc. (NYSE: XEL), are also testing ways of storing energy rather than paying to produce more. The company announced last week that it will be testing a one MW battery to store energy from a Minnesota wind farm.

According to some energy storage experts, the cost of one of these "mega batteries" could be as little as half the cost of building a new natural gas-fired peaker plant.

It is obviously cleaner, as well. And that also has its perks in today's market for obvious reasons.

Right now, there are a handful of companies actively pursing this type of technology. Each one is using a different type of battery or energy storage device. But it's not yet clear which one will be ultimate winner.

There could be room for all of them to be successful or just a few companies could beat out the rest. Either way, you have to be on top of this emerging market to know how to play the competitive world of high-performance battery stocks.

The Alternative Energy Speculator is focused on just that. We're already well-positioned to take advantage of the boom in energy storage stocks, as well as other investment opportunities arising on the path to a clean energy future.

Be sure to keep an eye out for a way to subscribe to this service at a discounted rate. It should be headed your way soon.

Until next time,

Nick

www.energyandcapital.com

Gazprom Stock

Post-Soviet Russia's economic kingmaker is natural gas, and new President-elect Dmitri Medvedev is also the country's energy czar, helping steer soaring stock prices.

In this article, we'll take a look at Russia's gas monopoly, Gazprom--in the context of the country's new leadership.

Russia has the world's largest natural gas reserves and is also the largest international exporter of the fuel. Since the Soviet Union officially dissolved in December 1991, natural gas prices have more than quadrupled. That leaves us with a political situation where gas supplies are very sensitive, and the correlation between Russia's politics and resource stocks is stronger than ever.

Russia's President-elect is Russia's Natural Gas Czar

42 year-old Dmitri Medvedev is a lawyer by training and has worked his way up through the St. Petersburg city government (where he met his mentor, current president Vladimir Putin). But his most important position to date is his ongoing chairmanship of Gazprom, the Russian natural gas export monopoly.

In elections this past weekend, Putin's endorsement led 42 year-old Medvedev to win over 70% of the vote.

Also over the weekend, Gazprom cut natural gas supplies to Ukraine by a quarter over a pricing dispute. This is not the first time for Ukraine, or fellow former Soviet republic Belarus, to suffer a gas supply drop as leaders debate the end of Russian energy patronage with Moscow. A similar row in 2006 led to major European Union debates over energy security and a commitment to kickstart renewable and safe nuclear energy

Take a look at this BBC map of Europe's main gas pipelines and you'll see why EU officials are biting their nails again over this latest episode in the continental energy saga:

Europe is up in arms, because cuts to Ukraine and Belarus harm supplies to western Europe.

As he leads, Medvedev's Gazprom background will craft his policy decisions on both national and international energy affairs.

Medvedev's management of the monopoly will also affect how world leaders view him, and Russian stocks may move on his judgment.

Russia's Economy Depends on Gas

Today's Russia is running at just under 8% GDP growth, with 2007 in the books as the eighth straight year of economic expansion. The U.S. Department of Energy reckons that oil and gas account for about 20% of Russia's total economic size.

In the mid-90s, a dire need for investment in the Russia's abundant (but at that time relatively cheap) natural resources brought on auctions at cut-rate prices to international majors like Shell and BP. The Moscow government's inability to manage all of Russia's widespread resources--from east to west, the country spans 11 time zones--also attracted also to a class of tycoons known as oligarchs, who saw huge wealth potential in Moscow's poor resource management.

Much of Russia's gas endowment is located in Siberia's most inhospitable reaches--the kind of place where leaders from Peter the Great through Putin could exile enemies and know their voices would probably never be heard again.

Working in Siberia can be an advantage, though, if you're trying to stay a continent away from your own government!

Gazprom Got Back the Gas... Investors are Happy

During Putin's tenure, oligarchs were jailed, contracts with Shell and BP were renegotiated to give the state a bigger chunk of rising natural gas and oil price returns.

The oligarchs' former holdings were folded into Gazprom and highly-publicized trials ended in--guess what--Siberian exile for the fallen tycoons.

Gazprom, in the meantime, has launched a successful IPO in London (LON:GAZP), and the company's stock is available in the pink sheets here in the U.S. as OTC:OGZPY. As the company plays hardball with Ukraine and Belarus, Europe is still not in a position to refuse Russian gas.

Russia has channeled a great portion of its oil and gas revenue into foreign currency reserves and a stabilization fund, which combine to over $620 billion today. On the stock market end of things, Gazprom's fortunes should continue rising as Medvedev takes office, though we don't know for sure whether he will be allowed to keep one hand on the gas spigot and the other on a the presidential pen. In either position, Gazprom's success is at the top of Medvedev's priority list, and investors will reap the rewards.

Russian Gas Spurs Gazprom Stock Gains

Gazprom shares are up over 57% since early 2006, and other Russian resource trades like Norilsk Nickel (OTC:NILSY) are also delivering big gains, with Norilsk ADR shares over 80% above where they traded in March 2007.

Both Gazprom and Norilsk are leading components of the Market Vectors Russia ETF Trust (NYSE:RSX), which has gained over 25% in the past year, up to today's share price just below $50.

It's right for a Russia fund to be overweight on resources, but as Russia's economy matures and diversifies, the 20% total of the national economy that the DOE says oil and gas make up should actually come down.

Then, we will have more access to strong consumer plays, technology startups, and other Russian stocks that get away from current resource supremacy. Right now, Gazprom is set to continue leading the Russian pack.

Regards,

Sam Hopkins

Investing in African Platinum

South Africa's economy is expected to grow by 4% in 2008, doubling the U.S. outlook. Its energy consumption is surging even higher, leading to mine shutdowns and sending platinum prices through the roof.

On Wednesday, February 20, South African finance minister Trevor Manuel announced a five-year, $7.6 billion investment in state energy utility Eskom to beef up supplies ahead of the showcase 2010 World Cup soccer tournament, and to sustain the country's booming economy.

South Africa leads the world's platinum producers, with 80% of all international production and 88% of recoverable reserves (former Soviet states hold most of the rest). But for at least five days in January, the country's gold and platinum processors ground to a halt, as blackouts spread across the country due to thin coal-fed electricity supply.

Platinum supplies are always tight, because it takes approximately ten tons of mined ore to get just one ounce of the precious metal. As we see in the chart below, all the platinum produced in the world in 2006 only added up to a mere 8.7% of the total gold, and 1.2% of silver mined that year.

About half of that platinum ends up in catalytic converters which cut down on toxic emissions from internal combustion engines. Another 40% gets used in jewelry and the remaining 10% or so is held in physical form for investment purposes.

Now, with South Africa's energy woes adding to the natural state of scarcity for this metal, investing in platinum has become the investment of the century.

Higher international emissions standards for diesel trucks are pushing platinum demand up, and since supply is always tight, platinum's price per ounce soared by nearly a third in 2007--a staggering one-year jump for a precious metal.

Over the past five years, platinum prices have tripled, going especially hyperbolic lately with this South African power problem.

2008: Another Record Year for Platinum

My colleague Luke Burgess laid it out plainly in a recent issue of Gold World:

Global platinum supplies are expected to fall 135,000 ounces, or 2%, to 6.66 million ounces this year. Meanwhile, demand is expected to increase by 195,000 ounces, or 2.9%, to a record 6.925 million ounces.

This would leave the platinum market with a supply deficit of 265,000 ounces, the seventh year in the past eight that the market has recorded a shortfall.

Sounds grim, right? Wrong.

This is anything but a bleak situation for investors, and there are multiple ways to get in.

Platinum Investments Drive South African ETF

South Africa's economy is leaping into the 21^st century and the commodity-heavy iShares MSCI South Africa Index ETF (NYSE:EZA) shows us what's fueling the country's boom.

From 2004-2007, the South Africa ETF gained an average of 26.67% per year! And, this ETF is heavy on metals, especially gold and platinum.

Among EZA's top holdings are Impala Platinum Holdings (OTC:IMPUY), with a 9.37% fund allocation, and Anglo Platinum Limited (OTC:AGPPY), which makes up just under 5% of EZA.

In just one month, from January 28 to February 26, Impala gained over 26%, while Anglo Platinum shot up by 17.26%!

Finally, a Platinum ETF!

The iShares South Africa fund isn't the only ETF at play here. In late 2006, talk of a platinum ETF similar to the StreetTracks Gold Trust (NYSE:GLD) sparked a rally in platinum, driving it through the important $1300/ounce barrier for the first time in early '07.

Remember what I said before: only 10% of the world's platinum is kept for investment purposes.

So last April's launch of PHPT, a fund backed by physical platinum on the London Stock Exchange and managed by ETF Securities, was sort of a self-fulfilling prophecy: start buying tons of platinum from a tight market, and the price of your platinum will go up immediately.

Sure enough, LON:PHPT is up by over 46% in the past six months!

South Africa is today--and is likely to always be--the center of the world's platinum resource industry, and we are clearly seeing the link between national energy supply squeezes and the prices of precious metals.

Platinum is the perfect play this growing link, and we'll keep you up to date on more ways to profit.

Regards,

Sam Hopkins