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Renewable Energy Standards

The Gas Price Blame Game And Where to Find the Next the Round of Profits

By Jeff Siegel
Friday, May 2nd, 2008

The gas price blame game was in full swing this week.

President Bush recycled the same old nonsense about drilling in the Arctic Wildlife Refuge. You know, the place that supposedly holds about 10 billion barrels.

According to the Energy Department, opening up the refuge to oil development would only slightly reduce our dependence on imports, and lower prices by less than $0.50 a barrel.

Heck, we'll get a bigger upward move than that if someone sneezes too loud near a refinery.

Incidentally, even if they did open up the refuge to oil development, the oil wouldn't even start flowing for at least 9 years. That'll put us around 2017!

Then Hilary Clinton and John McCain proposed a gas tax holiday that, according to economists would just push the price of gas even higher.

Since refineries cannot increase their supply of gasoline in the space of a few summer months, any lower prices would just boost demand - rewarding Big Oil, instead of the consumer.

Not surprisingly, we haven't heard a peep out of the oil companies on this one. But mention a repeal of all that free money we keep giving them, and they'll rally the million-dollar lobbying troops in a New York minute.

Fortunately, on a local level, some real progress is actually being made with renewable energy standards.

Thank Ohio's Renewable Energy Standards for the Next Round of Investor Profits

Last week, after a unanimous vote, the Ohio State Senate sent new legislation to the desk of Governor Ted Strickland. This legislation establishes a 12.5% renewable electricity standard (RES) by 2025.

And the Governor is expected to sign it.

Now what does this mean for investors?

Well, when it comes to renewables, this is a wind-heavy state.

And according to the American Wind Energy Association, if wind energy constitutes 75% to 95% of the standard, the bill would establish a market for as much as 7,000 megawatts.

This is huge.

And for companies like Gamesa (MCE:GAM.MC), Iberdrola (MCE:IBE.MC), and GE (NYSE:GE), this could provide an absolute avalanche of hefty turbine contracts.

We also expect to see a number of smaller wind developers stepping up to take advantage of this opportunity. Much like we've seen in the past with wind developers in California.

Renewable Energy Standards and Wind Development 

In fact, Green Chip Stocks members are already profiting from one small wind developer with revenue-generating properties in Palm Springs and Tehachapi, California. These are the two hottest wind-generating spots, with transmission, in the country.

But beyond the money we've already been making here (and will continue to make in the near future), there's still something much bigger at play.

· Ohio is a huge industrial state that uses a lot of power. This enables the state to become a very important market for renewables.

· This legislation could help jumpstart the state's manufacturing sector, which is highly-skilled, and looking for work.

· With Ohio on board, there would now be 26 states, plus the District of Columbia, that have mandatory renewable energy standards. That's more than half the country!

If the federal government can't get its act together and do this, the individual states will.

Of course, once the new residents of 1600 Pennsylvania Avenue move in, that could change as well.

But in the meantime, we'll continue to profit—with or without the government's support. Just like we've been doing since we started. And just like we'll do once Ohio's new legislation becomes law.

To a new way of life, and a new generation of wealth...

jeff signature

Jeff

www.energyandcapital.com





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Comments:

Comment by John Ruland on 2008-05-02
Why is drilling in ANWAR, The gulf, Colorado, Montana, NoDak or anywhere else nonsense! For over two decades the environmental lobby and the weak kneed congress have refused to drill where there is oil! Now, when crude prices are skying, drilling is nonsense! All the alternative fuels now under development are NOT going to solve the problem any earlier than drilling in ANWAR - so stop this nonsense of bad-mouthing something that is obvious - and is there ONLY 10 billion barrels????
Comment by William Caldwell on 2008-05-03
Come on! 18 cents is not going to make me run out and buy more gas.
I already cut back on driving by
at leasst 50% when the price of gas
reached $2.50. It is not likely I will use more fuel until it drops down to $2.00
Comment by Texas Red on 2008-05-03
YOUR ARTICLE IS HORSESHIT!
Comment by casper on 2008-05-03
What a load of crap, wind or solar is never going to be more than the darling of the tree huggers. The reason for drilling in north america or south america is to isolate us as much as possible from needing the middle east or russia
Comment by al fierlbeck on 2008-05-03

"Well, when it comes to renewables, this is a wind-heavy state."

There is no wind-heavier state than Washington D.C.. Catch all their wind coming out from their front and rears
and you get all the energy the nation needs.
Comment by BRUCE CAMPBELL on 2008-05-03
THERE YOU GO AGAIN!! IF WE HAD STRTED DRILLING 9 YEARS AGO THE OIL WOULD BE HERE!!
Comment by F. Hecker (not for publication) on 2008-05-03
I appreciate the very useful info your provide in your e-letter. However, I note that if we started ANWR 7 years ago when most Republicans wanted, we might be close to getting 1 million barrels a day from that source. Likewise, starting OCS exploration and production might have provided us with another 1+ million per day. That would be 25% less we would be paying out each day to OPEC and company. Agree, we will never again become wholly self-sufficient in petroleum, but a couple-three-four million barrels per day would have helped make the transition to alternatives a bit easier and less expensive.
Comment by Roger Wincek on 2008-05-03
You protectors of big oil monopolies
are still spewing this make believe
bull pucky of limited oil and gas reserves in the United States! Any renewable resources will take ten years to fully implement. How long do you think the working man can withstand this onslaught of high prices?? If the oil companies would take the patriotic actions they should for this country they would stop plugging the productive wells they drill. The Alaskan wilderness
has enough oil reserves to last the U.S. for sixty years. twenty six thousand square miles of the Bakken preserve under North Dakota up thru Canada. The Gulf of Mexico etc.
Comment by Butchrgt on 2008-05-03
Providing power with using new methods of fan power plants is something that should be screamed at to the Congress and Senate as loudly as we can so that our voices an be heard. We in this country have been taking a back seat for long enough. We need power to lessen some of the demand of fossil fuel. We can generate suffiient kilowatts of power that will definitely make a difference, Not just in the reduction in demand, but to also help in reducing polution nation wide. The blame game is actually in the hands of the government. When states have to take action upon themselves to create alternative methods of producing power, and the Federal government sits on their laurels doesn't really show a hell of a lot of inititive to me. Why are they in Congress, and part of the Government if they aren't going to respond quickly to our needs. If these alternate means of powers will do what the eonomist say it will, why are we not doing anything to relieve the pressure on fuel demands? How much longer are our representatives going to drag their tails? Has anybody seen any laws initiated to help produce these fan power plants? Even they approve a law right at this minute it will be a minimum of 6 months to a year before we realize any benefit from their operation. So, Uncle Sam lets get going so that we can improve a situation that already smells of incompetence. The American people do not need any more false promises, or lip service we need action, and relief from an already bad year and a very dull future. Can we expect some good news in the future, or hear the same thing over and over(NOTHING), who is really the blame for not doing something? Is it the President, Congress, the Senate, or You and Me? You tag who you believe ia responsible for this power shortage.
Comment by Robert Mounts on 2008-05-03
If the oil companies were allowed to drill in Alaska 10 years ago, we would have enough oil to be free of Hugo. And if THE GOVERNMENT would allow more refineries to make gasoline, the prices would be lower.

The more the government gets involved, the higher the cost!!!

I am all for alternative energy. The development of alternative energies is a direct benefit of the frre market system.
Comment by H V Bradley on 2008-05-03
What free money are we "giving" the big oil companies? Unsubstantiated comments like that are not constructive. All we hear is about huge, obscene profits. Never do we hear anything about the huge investment and risk required and Return on Investment, P/E, etc. If they are so hugely profitable, why are they not a WS favorite? I just hope they are big enough to keep finding enough to keep our economy going.
Comment by Larry McNichol on 2008-05-03
I have to ask if you have every read an annual report of one of the large companies. CVX for example paid about 13B in taxes. So much for free government money. Also their investment for finding new oil is larger than their yearly profit. I would suggest a little more honesty in your reporting.
Comment by Dick on 2008-05-03
Jeff is full of wind himself.
Wind Power is NOT going to make a rats ass of difference in the long run.
Let's face it, we will need Nuclear.
Anyone who thinks otherwise probably also believes in the Tooth Fairy.
Comment by BT on 2008-05-03
You have missed the mark on wind. Expensive,ugly,dangerous and cannot build W/O Gov. subsidities! We need to drill for oil all places & expand/build refineries. We won't have other auto energy for 20 years. Our industrial chemistry is based on hydrocarbons. Ethanol is not clean it emits formaldehyde a known carcinogen.Not a good article!
Comment by Tom Mack on 2008-05-03
As an Ohio company trying to bring a new renewable energy product to market, don't count for one minute on the Ohio Renewable Energy bill to bring any new manufacturing jobs to Ohio. The state is a lot of talk, little action. Most investment of Ohio funds has gone to fuel cells, biotech, and IT. The most recent round of state funds followed this trend and it looks like it will continue. These investment funds into biotech and IT do nothing to stimulate manufacturing in Ohio, nor will they. And as for fuel cells, when will we see any large scale manufacturing when we don't even have a viable way to produce the fuel, transport it, or store it in a vehicle?

For real interest in rebuilding the manufacturing sector based on cleantech, look further north, to states like Michigan.

Tom Mack
President/CEO
Alternative Hybrid Locomotive Technologies (AHL-TECH)
Comment by Grover C. Ellisor on 2008-05-03
Response to Article by Jeff Siegal in Energy and Capital dated 5/2/08. Mr. Siegal, I am astonished at your ignorance of the energy crisis the USA faces given your rant in Energy and Capital and that you would be given this rather auspicious format. You have been absorbing the environmental socialistic propaganda for the last 20 years that Americans have had to endure and like so many Americans have come to believe it to our great misfortune. The price Americans are now paying for their ignorance based upon this propaganda is $3.50 per gallon at the pump. The real energy that America needs and must have is oil and gas, coal and Nuclear power. Renewables are less than 15% of the solution whether we like it or not. Our energy solution must be to agressively pursue all three of the above to save us from chaos. All of the public lands and offshore areas should be immediately opened up for leasing and drilling. In Alaska not just the Anwar but the whole state. New coal and nuclear generating plants should be built on a expidated and crash basis similiar to the war effort during World War II. The great futility of current environmental thinking is typified by the US ethanol hysteria which is one of the most stupid and highly tax subsidized of approaches. Basically corn is for food and oil, gas and coal is for energy as any fourth grader should know. The volume of corn required to replace oil and coal reserves is so disproportionate that it begs credulity, yet environmental sociology has led us to the pathetic point today where we disregard our real energy sources in search of the holy grail of renewables. Research and Development over the next 25 years will have to find a replacement for crude oil, but for the next 15 to 20 years we are absolutely stuck with oil as our primary source of portable power for cars and trucks. If Americans don't like $3.50 to $6.00 per gallon of gasoline we better get with the program of real energy development (read oil, coal and nuclear), educate ourselves and instruct our congressmen and senators that their re-election is not what they are in Washington for but to pass real energy bills that will open the country to agressive and real energy developlment. Grover Ellisor
Comment by jt on 2008-05-03
Jeff -

Nice article! After seeing so many solar stocks shoot up to the moon the last year or two, I'm thinking that wind energy stocks are going to have their turn soon. What do you think about Kaydon, KDN? They get a lot of business by making bearings that go into wind turbines.
Comment by Gene Holloway on 2008-05-03
You must be an economically uninformed liberal Democrat.
Comment by Grover C. Ellisor on 2008-05-03
Response to Article by Jeff Siegal in Energy and Capital dated 5/2/08. Mr. Siegal, I am astonished at your ignorance of the energy crisis the USA faces given your rant in Energy and Capital and that you would be given this rather auspicious format. You have been absorbing the environmental socialistic propaganda for the last 20 years that Americans have had to endure and like so many Americans have come to believe it to our great misfortune. The price Americans are now paying for their energy ignorance based upon this propaganda is $3.50 per gallon at the pump. The real energy that America needs and must have is oil and natural gas, coal and Nuclear power. Renewables are less than 15% of the solution whether we like it or not. Our energy solution must be to agressively pursue all three of the above to save us from chaos. All of the public lands and offshore areas should be immediately opened up for leasing and drilling. In Alaska not just the Anwar but the whole state. New coal and nuclear generating plants should be built on a expidated and crash basis similiar to the war effort during World War II. The great futility of current environmental thinking is typified by the US ethanol hysteria which is one of the most stupid and highly tax subsidized of approaches. Basically corn is for food and oil, gas and coal is for energy as any fourth grader should know. The volume of corn required to replace oil and coal reserves is so disproportionate that it begs credulity, yet environmental sociology has led us to the pathetic point today where we disregard our real energy sources in search of the holy grail of renewables. Research and Development over the next 25 years will have to find a replacement for crude oil, but for the next 15 to 20 years we are absolutely stuck with oil as our primary source of portable power for cars and trucks. If Americans don't like $3.50 to $6.00 per gallon of gasoline we better get with the program of real energy development (read oil, coal and nuclear), educate ourselves and instruct our congressmen and senators that their re-election is not what they are in Washington for but to pass real energy bills that will open the country to aggressive and real energy developlment. Grover Ellisor
Comment by Butchrgt on 2008-05-03
I really don't what either John McCain, or Hillary Clinton were thinking, a summer fed tax relief on gasoline. That little bit offered has already been passed by. Now that the gas pumps are charging $3.50 a gallon, what is the sense of lowering it about .23 cents a gallon. By the time the law was passed gas will have risen another 25 ents per gallon anyway.
If they want to do some good they should find a way to reduce the huge demand for fossil fuel, and find alternate ways to permanently use Wind Fan Power plants to help to reduce the cost of power. Introduce a law in congress that would make this happen and soon. We do not need more raises on gasoline at the pumps, the average wage earner has been kiked hard enough as it is without adding more salt to the wound.
Comment by Ron Gieger on 2008-05-03
You green nuts are going to drive us right into the into the waiting arms of Middle East and other foreign producers. All your windmills do not fill gasoline tanks on cars. Ethanol from corn is a joke in terms of quality fuel; it simply drives up the price of food. So it takes 9 years to brinmg on Anwar. If we had started nine years ago, we'd be there. You green nuts stopped that! Thanks to you loud-mouthed green nuts, you are promoting windmills, solar, steam, etc. which is good for about 2-5% of our electrical needs. But you are doing nothing to relieve our dependence on foriegn oil. We need not only to drill Anwar, but the East Coast offshore, the West Coast offshore, Florida offshore, scattered Federal lands all over. We need to be mining oil-shales, using clean-coal technology on our vast supplies of coal. We need to build new refineries, which you "greenies" won't allow. Yes, it may take a few years to get these things going, but if we had started 20 years ago, instead of listening to you "green nuts", we would already be energy independent. So don't blame the oil companies. Yes, it is good to develop alternative sources, nuclear energy, high mileage cars, electric cars, etc. But we need to use every resource we own until something better becomes a reality. So do don't put down oil and gas. It is going to be our predominant resource for years to come. We neeD to go after it where ever we can develop it here in the USA. So you "green nutcakes" and the liberal "brainless" congressmen who suck up to you, need to sit in the back seat and let our country take care of ourselves; using everything the good Lord gave us. Let's get away from dependence on those who want to destroy us. We can stand on our own two feet and be the proud independent nation we are meant to be! GOD BLESS AMERICA!
Comment by John Bensted on 2008-05-04
Jeff,
Your comment in the article "Renewable Energy Standards" dated 5/2/08 mentions that the effort to drill in ANWAR would be futile because it would take 10 year to bring the oil to market. Well, remember during the Clinton administration the prospect of drilling in ANWAR came up for a vote and Clinton railed against it saying that it would take 10 years to bring the oil to market. Well it's 10 years later Jeff and well could really use every domestic source of crude oil possible.
Cheers!
John
Comment by i. MANNIKUS on 2008-05-05
i WOULD LIKE TO KNOW HOW ARE THE OIL COMPANIES GETTING ANY FREE MONEY FROM OUR GOVERNMENT? ARE THEY GETTING A LOWWER TAX RATE ASANY OTHER COMPANY OR IS THE GOVERNMENT GIVING THEM A REBAT OF SOME SORT. I KEEP HEARING FREE MONEY BUT NOBODY EXPLAINS HOW THAT IS.
Comment by EUGENE PFISTER on 2008-05-07
THIS ARTICLE IS A" BUNCH OF CRAP" NEATLY
WRITTEN BY THE "ENVIRO-FASCISTS" AT THE
SIERRA CLUB A VERY UN-AMERICAN GROUP
WHEN CONSIDER THE DAMAGE THEY HAVE
WRECKED ON THE U.S. ECONOMY!

"34% OF ALL" FEDERAL LAWS ON THE BOOKS
PERTAIN TO THE "ENVIRONMENT"....."34%"!

WHAT ELSE DO THE "SIERRA-FASCISTS" WANT?

THE U.S. SHOULD INVESTIGATE THE SIERRA-CLUB & USE THE R.I.C.O. LAWS TO PUT YHEM
OUT OF BUSINESS.