Publisher's Note:

By now you've heard us tell the Bakken story numerous times.

But I just want to reiterate that the Bakken - as an oil play - is still in its infancy. In fact, I consider it where the Canadian oil sands were in 2000-2001, before the boom began.

Last week, the US Geological Survey released a report on the Bakken formation. In it, they confirmed the region contains billions of barrels in light, sweet oil. BILLIONS!

Others are catching on to the story. Friday, industry letter Rigzone asked the question, "Is the Bakken area the new Saudi Arabia?"

Nobody really knows.

But one thing is for sure - the Bakken is becoming the hottest oil play in North America .

We've identified 3 ways to play it. One company has already delivered our readers 43% gains just in the past month. The other is up 66%. Both are making 52-week highs today... and each trade is just shy of $10 a share.

Each could easily double or triple in the coming months as the full potential of the Bakken is understood by the market. This report explains the 3 opportunities we've identified.

- Brian Hicks

Now on to today's Energy and Capital...

In the past two years the price of corn in the United States has more than doubled, driven partly by demand for alternative fuels such as ethanol.

That is one of the key pieces of data being used to fuel the growing debate now known as food versus fuel.

And that debate has been increasingly in the limelight as global food prices continue to climb, causing unrest in numerous locations around the world.

In the past few weeks alone we've seen riots in developing nations including Indonesia, the Philippines and Haiti.

But for all the now-known harms associated with using food for fuel, that action isn't the only thing causing food price angst.

World Bank President Robert Zoellick says there is in fact a "perfect storm of things coming together" that is causing higher food prices--mainly financial market speculators, high energy prices and increased demand for food.

And with rapid advances in technology and refining techniques, biofuels may not be in as much trouble as some would have you think.

You see, a growing number of companies are now pursuing cellulosic technology, which can be applied to a variety of non-food crops like grasses and to waste products like food scraps and corn stover.

Plus, with the problems of first generation biofuels now exposed and known, new biofuel regulations are being imposed to make sure they actually reduce emissions and don't contribute to higher food prices.

Investing in Non-Food Biofuel Companies

If you need evidence that the biofuel market is not dead, just look across the pond.

Over the weekend, Germany's environment minister said the European Union can still achieve its 2020 target of 10% biofuels without adding to soaring food prices.

And biofuel mandates here in the U.S. requiring 36 billion gallons a year to be in our pipelines aren't going away either.

So more and more, it's looking like corn-based ethanol is old news as companies and The Street increasingly focus on investing in cellulosic ethanol and biodiesel.

It may be contrarian, but check out just a few of the recent transactions going on in this industry:

• Copec to Invest $650 Million in Forestry and Energy Operations; Company to Research Cellulosic Ethanol Production
• Iogen Corp. Receives Tentative Approval for $500 Million Cellulosic Ethanol Plant Near Saskatoon, SK
• Range Fuels Receives $100 Million in Funding for Cellulosic Ethanol Research and Production
• Coskata Raises $19.5 Million in Funding for Cellulosic Ethanol Research

But this industry isn't limited to just private companies. A slew of public companies are also entering the space, on both the cellulosic ethanol and biodiesel sides.

O2Diesel Corp. (AMEX: OTD) recently entered into an agreement with KL Process Design Group to develop cellulosic ethanol projects in Europe and other burgeoning markets.

Incidentally, KL is the first company to bring a small scale wood waste cellulosic facility to commercial scale in the U.S. That means their technology isn't using food or agricultural land to create fuel.

And I've got my eye on a few other cellulosic ethanol companies that are making ethanol in novel ways, like from construction waste and trash that would otherwise end up in landfills.

On the biodiesel side, Gushan Environmental Energy (NYSE: GU) has been on a near 100% run since March 10^th. The China-based producer of biodiesel from animal fat and waste grease has been receiving increased attention from The Street despite posting less than stellar 4Q numbers in early March.

The Bottom Line on Biofuel Companies

The major players in the corn-based ethanol game--Verasun Energy Corp (NYSE: VSE), Pacific Ethanol Inc. (NASDAQ: PEIX), et al.--have been on a significant downslide for the past year or so.

Their decline has kept some of the non-food biofuel plays low as well. But as the truth about cellulosic ethanol and biodiesel is disseminated, and the differences between food-based and nonfood-based biofuels become clearer, I suspect we'll see an uptick in the latter.

Of course, I wouldn't touch any of the traditional corn-based companies with a ten-foot pole.

But picking up some shares of battered cellulosic and legitimate biodiesel companies could be a successful green contrarian strategy.

Call it like you see it,

Nick

PS. Playing biofuel companies is just one of the contrarian ways the Alternative Energy Speculator will make subscribers money in the green markets. Just ask the members up 54% on the latest solar play that was initiated when the rest of the markets were down. To get in on these market defying green gains, click here.

Energy & Capital

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Nick,

So many non-truths on corn-based ethanol are in the regular press, I stopped reading them much less comment on them. The objective for subscribing to a service like this to get fact based information. Let me through out two of many observations. Corn and rice cannot be grown on the same land, yet rice prices have more than doubled. If you feed a pound of corn to a cow, 1/3 by weight will be CO2 coming out the cow's mouth, 1/3 will be the nutrients that actual feed the cow and 1/3 will be starch left on the ground behind the cow. If you were to put that same pound of corn in an ethanol plant, 1/3 will be CO2, 1/3 will be ethanol made from starch and 1/3 will be concentrated nutrients left over and fed to the cow. Lots of facts are out there. Check out www.ethanol.org, www.ncga.com or www.ethanolrfa.org. They list many studies performed by a host of credible sources.

As for investing in a Verasun type company, I agree it has risks. No one wants to be on the wrong side of perception vs. truth when stock price is at stake.

Brian Woldt
Farmer/Ethanol Plant Board Member

It has occurred to me on several occasions that there is a major Indian reserve in Montana or Dakota where the Bakken formation goes. You cannot come to any acceptable terms with the group.

Rob Gillingham

While I find many of your articles very interesting and on target, I think the Bakken series of articles are a little misleading. This has been known about for decades and the oil is essentially trapped in oil shale at 10,000 feet - the USGS is talking about a few billion barrels, not 500 billion.

Thanks

Finally, someone's looking beyond the food basket! Over 3 years ago I started researching for bio-fuels that wouldn't strip our foods and found a great one.
www.bluefireethanol.com. Everything they do is from waste and grasses. And they clean the environment with their tetchnology.
Check it out because their website lays it out and they're still small, but they are the little engine that could!