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Obama's New Energy Plan

An Investor's Take on Energy Independence

Written by Nick Hodge
Posted March 30, 2011

Obama continued his media assault this week...

Two days after he took over the networks to explain his Libya rationale (been there, got the t-shirt in 2003), the president is now tackling the $3.50 gas situation.

His answer?

We'll cut our oil imports by 33% in 10 years.

Unlike his Libya plan — which won't make you money until U.S. companies go in to rebuild and take the oil — the energy plan is already sending certain stocks higher.

But you need to know where to look.

The best place to start is with the four prongs of this new plan:

  1. Boosting domestic energy production

  2. Using more natural gas in vehicles

  3. Making cars more efficient

  4. Encouraging biofuels

Often Right, Always Early

I heard my fellow editor, Adam Lass, say this morning that people in our business are often right, but they're always early.

He said it's because we live what we do; we see the evidence every day.

He's right.

The very first stock I ever recommended was Westport Innovations (NASDAQ: WPRT). I was new to the newsletter business and had just launched the Alternative Energy Speculator.

That was July 2007. Westport traded for $10.50 and wasn't even on the NASDAQ yet. You could only buy it in Toronto.

But I knew natural gas vehicles were going to be huge, and I made sure my readers knew as well.

The Great Recession quickly ensued, and Westport fell to $4.00 as oil toppled from $150 to $50 — erasing our energy problems from recent memory and delaying the adoption of more economical natural gas vehicles.

Flash to spring 2011...

The president is backing Senate legislation that would offer tax breaks for five years to anyone buying a natural gas vehicle. It's a great idea.

So was buying Westport — and its sister play, Clean Energy Fuels (NASDAQ: CLNE) — years ago:

Westport and Clean Energy Fuels 5-Year

~~SIGNUP_EAC~~

Another Energy Plan

Having read every bit of energy news I could get my hands on over past five years, I've seen my share of energy plans.

There's been a proposed carbon tax, a gas tax, a renewable portfolio standard, a renewable energy standard, weatherization programs, Cash for Clunkers, and plenty more.

But for all the effort, our dependence on oil has yet to abate.

We still import almost 70% of our daily needs. (At that pace, we'll send $10 trillion overseas in 10 years.)

I've learned not to put much stock in the impact government plans will have on the real world. But I've also learned that new energy plans drive the sectors they impact.

A new solar mandate sends solar stocks higher, a ban on offshore drilling sends those stocks lower, and so on...

Today, we got four new flavors of the week. Who knows how this plan will pan out in five years — or if it will even exist?

The point is that it's driving profits today — and you need to capitalize.

Domestic energy production, natural gas vehicles, efficient cars, biofuels... Representatives from all those sectors are moving higher today:

New Energy Plan Stocks

And remember, the stuff you see in these pages today will be the subject of mainstream news in a few years.

That's not only our goal; it's our business.

Call it like you see it,

Nick Hodge

Nick
Editor, Energy and Capital

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