Jeff Siegel - Angel Publishing

Renewable Energy Stimulus

There's certainly been no shortage of rhetoric lately in regards to the billions in stimulus money set aside for new energy projects. I'm sure you've heard it all by now. "The stimulus isn't working." "Where are all the jobs?" "Unemployment is still rising."

While I'm not going to sit here and defend or ridicule the stimulus, no one really should have expected the results of the stimulus to be apparent by now.

How can we possibly know if this thing's going to work until all the money has been distributed, and all those projects get underway? And even then, many of these projects won't be ready for years.

So is the stimulus going to work? Who the hell knows? Maybe it will, maybe it won't. But I believe it's a bit premature to start judging its effectiveness before it's even had an opportunity to kick in.

Of course, I won't lie. I'm pretty impatient myself when it comes to waiting for the government to get those energy grants out. After all, there's a lot of renewable energy projects being held back right now as we wait for guidance on this stuff

So needless to say, I was pleased to listen in on the conference call that the Treasury Department and the DOE hosted yesterday. While we already knew the initial $3 billion in grants would be coming out this year, we finally got word that the application portal will go live on August 1. Certainly we would've like to have seen that sooner. But at least now we have a definitive date in place.

The grants are not taxable, and are expected to be paid within 60 days after the applications are received - assuming all requirements are met. The projects must also be placed in service by the end of 2010.

Once these grants are distributed, we believe that financing will begin to flow again, and the momentum we saw in 2006 and 2007 will return.

But again, we won't know for sure until the money starts flowing and projects get underway.

Jeff

Pickens Wind Farm

I was pretty bummed out this morning after hearing that T. Boone Pickens would be cancelling his 4 GW wind farm project. Not so much because that beautiful 4 GW wind farm won't be built in Sweetwater, TX - but because this little piece of news is likely to serve as an excellent opportunity for renewable energy naysayers to leave a fresh trail of misinformation about the wind energy industry.

It's already plastered all over message boards and blogs.

Here are a few comments that I found on one particularly hostile message board. . .

"Why did anyone believe this wind farm would ever get built? Wind energy is a scam. It's just another reason for big government to make more money off the backs of taxpayers."

"T. Boone Pickens is only trying to make money. He realized that he couldn't make money from a stupid wind farm that nobody wants anyway, so he walked away. When are people in this country going to wake up and realize that coal is whats best for Americans. It's cheap and we have 500 years of it. Time to silence the crazy treehuggers that are bankrupting this country."

"LOL! What a joke. Drill Baby Drill!!!"

We know why these folks are spouting off. They simply have no problem furthering our reliance on fossil fuels (which in some respects, could be perceived as treasonous). Environmental concerns are laughable to them (because most have absolutely no idea that natural capital can no longer be liquidated without fiscal consequences) and quite a few still believe that they'll be labeled as liberals if they embrace renewable energy integration. I guess they didn't get the memo about how supporting the integration of renewable energy is probably one of the most patriotic things you can do.

Regardless, there seems to be a lot of speculation about why Pickens cancelled the 4 GW farm, and is now restructuring his wind energy plans. But it is likely that the main reason is transmission.

In 2011, 687 GE wind turbines are scheduled to be delivered. But the necessary transmission lines being built to move all that wind power won't be ready until 2013. Bottom line: He can't have $2 billion dollars worth of turbines sitting around for two years while transmission is still being built. Therefore, Pickens is looking to build three or four smaller wind farms elsewhere.

Truth is, this is not an issue with wind energy. It's an issue with infrastructure. And much of the necessary infrastructure upgrades are being planned and built right now.

You see, transmission doesn't go up like shopping malls. These are huge, capital-intensive projects. But don't let the fossil fools use this as an opportunity to further their campaigns of misinformation about renewable energy integration. These upgrades and new developments ARE happening, primarily because our current infrastructure is crumbling, and it's in desperate need of modernization. Of course, those billions (that's right, billions...with a "B") in stimulus funds are going to enable this massive undertaking too. These upgrades will not only help us move all that new renewable energy to the grid, but they'll also enable a more efficient utilization of all the power we generate - both renewable and non-renewable.

Of course, as a renewable energy advocate and investor, I'm primarily focused on renewables. And the fact is, across the nation, new transmission is being built in an effort to facilitate new wind energy projects. Sure, the recession has slowed development. But the recession has slowed development of coal, nuclear and oil projects too. Nothing has been spared. But when the smoke clears, it will primarily be renewable energy projects that get back on track the fastest.

Truth is, hardly anyone wants to touch a coal project these days, even if it is intended to be a mythical "clean coal" project. And while I believe it's possible that we will see some future nuclear development, issues with NIMBYism (Not In My Backyard), waste disposal and extremely high capital costs will make those projects a lot more difficult to get off the ground, compared to new wind farms, solar fields and geothermal power plants.

So yes, Mr. Pickens' announcement is a setback for the wind industry. But it won't stop the momentum that will continue to allow wind, as well as all other renewables to become a much larger part of our overall energy mix.

Jeff

GM Electric SUV

Given the continued volatility surrounding the U.S. auto market, we were quite pleased to hear some positive news from GM Vice Chairman, Tom Stephens.

According to Stephens, GM is still on track to launch a plug-in SUV in 2011. Some were concerned this wouldn't' happen, as the electrified SUV was supposed to be a Saturn Vue. Saturn was scrapped by GM as a part of its reorganization. However, we're now hearing that the SUV will come from either Chevy, Cadillac, Buick or GMC.

Stephens also said that GM is considering the launch of an all-electric compact car for congested cities. If that happens, they'll be joining other automakers, like Mitsubishi, Nissan and Ford, which are developing and launching their own smaller all-electric vehicles now.

Either way, GM remains committed to getting its plug-in - the Volt - on the road ASAP. Stephens added in a recent interview...

" I can tell you that I won't lose one day in terms of customers being able to walk into dealerships and actually purchase a plug-in"

GM also has plans to have a total of 14 new hybrid models on the road by 2012.

Jeff

Toyota Hybrid Electric

The Nikkei Business Daily reported on Saturday that Toyota will start mass producing plug-in hybrid electric vehicles (PHEV) in 2012.

The company's focusing on bringing the price of these PHEVs in at a comparable price to Mitsubishi's i-MiEV electric car - which hits the Japanese market this year with a $47,800 price tag (before subsidies). The i-MiEV has a top speed of 82 mph, with an all-electric range of 100 miles.

The Toyota PHEV is expected to deliver an all-electric range of between 12.4 and 18.6 miles, but since it's a PHEV, a gasoline engine can kick in if the vehicle goes beyond its all-electric range.

Toyota will be using lithium-ion batteries produced by its joint venture with Panasonic Corporation, and plans to pump out 20,000 to 30,000 PHEVs in its first year of output.

This news comes after data from the Japan Automobile Dealers Association showed sales of the Toyota Prius jumped 258 percent from last year. The Prius was also the best-selling car last month in Japan.

Jeff

NYC Offshore Wind

City officials announced today that they are kicking around the idea of building a wind farm off the Rockaway Peninsula. . .about 13 miles off the coast of New York City.

The offshore wind farm would be the largest in the United States, boasting 350 megawatts.

Here's what Kevin Burke, CEO of Con Edison had to say about it...

"If the technical, environmental, economic and social challenges can be met, and we have the support of government, energy and environmental leaders, I am confident this project will be built and produce enormous benefits for our region."

Of course, it's likely that the price tag will be the key.

Back in 2007, a proposal for a 140 megawatt wind farm off the shore of Jones Beach was canceled after project estimates came in at more than twice the initial estimate.

And this latest 350 megawatt project is estimated to run anywhere between $1.35 billion and $2.7 billion.

Still, a lot has changed in the past two years. Most importantly, a pro-renewables White House that is likely to get its national renewable porftolio standard approved this year.

I suppose we'll get a better handle on how this will work out later in the year. But I'm optimistic that at some point very soon, a big chunk of New York City's power is going to come from offshore wind.

Jeff

Wind Power Investing

On Wednesday, the vice-president of the Chinese Wind Energy Association announced that China is planning to set up seven wind power bases - with a minimum capacity of 10 GW each - by 2020.

That means each wind power base will generate more than double the power that's expected to be generated at T. Boone Pickens' wind farm in Texas. That's huge!

Certainly for those who invest in turbine manufacturers, this kind of continued support for wind energy in China could prove to be quite lucrative. But this opportunity is not limited to only the Middle Kingdom.

As it stands, the U.S. surpassed Germany as the country with the largest amount of installed wind power capacity in 2008. This, after more than 8,500 megawatts of new wind power increased the nation's cumulative total to more than 25,300 megawatts - representing a growth of about 50 percent.

Based on this growth rate, and assuming long-term policy support (which is now in place), this puts the U.S. on a trajectory to generate 20 percent of our electricity from wind energy by 2030.

This is a massive jump, based on the 1.25 percent that was generated by installed wind projects at the end of 2008 - and a massive opportunity for investors.

Of course, the real catalyst here is Washington.

Secretary of Energy Steven Chu has been very vocal about his support for wind energy development, saying that he believes wind energy is one of our most promising renewable energy sources.

Not surprisingly, the wind energy industry picked up $93 million from the stimulus to further develop wind energy in the U.S.

We also believe that much of the new investment in transmission and infrastructure is being made to facilitate the continued growth of wind in the U.S. After all, the DOE didn't announce that wind energy could produce 20 percent of our electricity by 2030 without taking into account infrastructure development.

The writing is on the wall, my friend. And unless you hate money, there's absolutely no reason you shouldn't be properly positioned in the wind energy market.

Wind Energy Investing: What the Stimulus Holds

When we talk about investing in wind energy, most focus on turbine manufacturers. It's a common and logical connection.

Today, GE (NYSE:GE), Vestas (CPH:VWS), Siemens (NYSE:SI), Suzlon (NSE:SUZLON) and Gamesa (MCE:GAM) are the main suppliers of wind turbines in the U.S.

The Green Energy Gold Rush

$148 billion was invested in the renewable energy sector last year. Are you getting your share of those profits?

The world's wealthiest investors are... and they're doing it outside the U.S. In fact, half of the world's wealthiest investors -- those with assets greater than $1 million -- are invested in green markets.

This report contains all the information you need to start investing just like the richest people in the world. You can't afford to continue leaving these unchecked profits on the table.

And they are likely to remain the major players too.

In fact, Vestas is now in the process of constructing two new manufacturing facilities in Colorado. Both are expected to be operational in 2010.

Gamesa has built four new wind turbine production facilities in the U.S. over the past two years, and Siemens is expected to begin construction on its newest turbine production facility next month in Hutchinson, Kansas. This comes just two years after the company built a rotor blade manufacturing facility in Fort Madison, IA.

Now a couple of years ago, turbine prices were exorbitant...and the down time between the initial order and receipt of the turbines was anywhere between two to four years.

Today, however, thanks to the recession - prices for wind turbines have fallen 18 percent globally. This is primarily because of declining demand and a decrease in the cost of raw materials.

Perhaps this hasn't made turbine manufacturers do cartwheels, but it has allowed some wind farm developers to get better pricing. At least the ones that have the financing to continue their expansion projects.

That being said, once a lot of that stimulus money finally gets funneled through the system later this year, we'll definitely see a lot of those wind farm developments that have been on hold for the past year or so, get back on track. As a result, turbine orders will pick up.

Now some have suggested that it's too risky to count on that stimulus money. But the fact is, that money's already been set aside and is currently being distributed. Granted, the distribution of that money may be too slow for some. But I'd prefer a slower distribution to a bunch of blank checks being thrown around wildly - something Washington is famous for.

In the meantime, we continue to believe the near-term opportunities here will be found primarily in the wind farm developers that are either currently developing new projects, or at least have the necessary financing to begin development in Q3 and Q4, 2009.

In 2010, we'll likely see turbine orders pick up enough to at least start to make a difference when earnings come out.

Of course, everyone has a different take on the timing. But the bottom line is that the world's largest wind turbine manufacturers have already begun building out their manufacturing right here in the U.S. They wouldn't be doing that if there wasn't real opportunity here.

Again...the writing is on the wall.

And whether you believe it's the right thing or not, the government is facilitating the wind energy industry's early growth, not only by offering direct support for research, testing and development. . .but also by building out our nation's electric infrastructure to enable the transmission of new wind power generation.

This is all going down right now.

Even as the climate change and energy debates continue on the Hill - the wind energy industry is continuing to grow and develop at a rapid pace. And in no time at all, wind will go from being considered an alternative form of power generation to simply another form of power generation.

Now as I already mentioned, we see wind developers representing the best near-term opportunities for investors. Particularly those with operations in California. And next week, I'll get into more detail on why that is. I'll also clue you in on a publicly-traded wind energy developer that could easily be one of our biggest winners for 2009.

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

Jeff

Green Car Survey

A new survey conducted by market research firm, Synovate has shown that about six in ten people would choose an environmentally-friendlier car over a gas-powered one.

The survey asked the 13,500 respondents to make their decision without thinking about cost. Here are some of the results...

40 percent of respondents said green would be their preferred purchase.
20 percent said green cars were their dream car.
More than 70 percent of Chinese respondents said they would buy a green car, compared to 42 percent of Americans.
At about 40 percent, it was the Chinese who were most likely to take public transportation more often in the next year. Americans were among the least, at 2 percent.
Germans were most likely to choose green cars over conventional gas-powered cars.
South Africans and Indians, who typically view cars as status symbols, were least likely to choose a green car.

The survey was conducted three months ago in Australia, Brazil, Canada, China, Egypt, France, Germany, Greece, India, Japan, Korea, Malaysia, South Africa, Thailand, Turkey, the United Arab Emirates, Britain, and the U.S.

It should be noted that the survey targeted city-dwellers - where public transportation tends to be more readily available, and traffic congestion tends to be significantly worse than in rural areas.

Jeff

Ontario Nuclear Development

The Canadian province of Ontario announced yesterday that it has suspended a plan to build two new nuclear reactors.

The reason?

According to government officials, concerns about pricing and uncertainty regarding the future of Atomic Energy Corporation (the favored bidder for the nuclear projects), prevented Ontario from continuing with the procurement.

But the Globe and Mail newspaper reported the following...

"Canadian nuclear safety regulators say they have underestimated the seriousness of a design feature at the country's electricity-producing reactors that would cause them to experience dangerous power pulses during a major accident.

If reactors are not shut down quickly, their ability to keep radioactivity from escaping would be put to the test, according to an internal commission document.

The document says Canada's seven nuclear stations, which all use Candu technology, have a feature known as 'positive reactivity feedback,' in which their atomic chain reactions automatically speed up if the water pumped into the reactors to cool them leaks, one of the worst accidents possible at a nuclear station. If reactors aren't immediately shut down during this type of incident, positive reactivity leads to a quick snowballing in the pace of nuclear reactions, which in turn could cause potentially damaging overheating.

The fear is that with a large loss of coolant, such overheating could put the nuclear facilities' containment features - the concrete domes and other protective mechanisms around reactors that are the last-ditch defences to stop the spread of radioactivity into the environment - to a dangerous test.

The commission is monitoring the problem closely because positive reactivity could lead to 'severe core damage and early challenge of containment integrity if not arrested in time' during a severe loss of coolant accident, the document said."

Now I'm not a nuclear engineer, and I don't pretend to understand much about nuclear power generation. But I am your typical consumer. And no matter how many times I hear from pro-nuclear types that nuclear is safe, it's stuff like this that makes me realize we're probably a lot better off spending our time and money expanding our renewable energy and smart grid infrastructure.

Of course, I'll probably get quite a few hostile comments to that statement. But the fact is, if a bunch of solar panels or wind turbines overheat - I don't need to be worried about radioactivity issues. And that makes all the difference.

Jeff

Investing In Cap And Trade

It may not have made as many waves as the Michael Jackson story, but last week, after the House passed the cap-and-trade bill, the media response was overwhelming. Not that anyone should be surprised. This is a huge issue.

However, it seemed that much of the earliest coverage stirred up an awful lot of hostility and opposition. And it was everywhere. From the most conservative blogs to the most liberal social media sites - those who oppose any kind of effective climate change legislation were not pacing back and forth in the waiting room. They were hitting up every possible media outlet to express their opinions and outrage.

Now I have no intention of opening up the global warming debate here. Those who believe global warming is some kind of scam are not going to change the minds of those who believe there's something to it. And vice-versa.

However, one thing that I'm finding increasingly frustrating is the amount of manipulated data that's being disseminated all over the internet...and mainstream media.

Let's first take a look at the data that was debunked earlier in the year - but was used as a rallying cry on Fox & Friends last Friday.

You've likely heard it before — that cap-and-trade will cost consumers an extra $3,100 a year. This is the figure that a handful of bureaucrats in D.C. came up with after massaging some data found in an MIT study.

John Reilly, one of the study's authors told House Minority Leader, John Boehner that the MIT study had been misrepresented in press releases distributed by the National Republican Congressional Committee. Reilly stated that it was misleading and simplistic to only look at the impact on energy prices, as it didn't account for the proposals that have been designed to offset the energy cost impacts on middle and lower income households.

Of course, it wasn't just Boehner's office that pumped out the press releases about the supposed high costs associated with cap-and-trade.

The Heritage Foundation chimed in with their analysis of the bill which they claim adds little more than a massive energy tax in disguise that promises job losses, income cuts and a sharp left turn toward big government.

Their cost estimate is $1,500 a year.

On the other side of the coin, we have John Reilly's estimate of about $800 a year. . .an EPA analysis which estimates a cost of between $98 and $140 a year. . .and a Congressional Budget Office estimate that puts the total at $175 a year.

I suspect all of these numbers have already been run through the opposition's spin mill, rejected thoroughly, and blasted back out on the internet.

Either way, no matter how accurate or manipulated the data - the truth will only be realized in practice.

Listen: Certainly no one wants to spend more money for electricity. Especially during these rough economic times. And this is what opponents of climate change legislation are banking on - telling us that energy will cost more because it will cost more to produce. But isn't this really just an illusion - like the "cheap" energy we consume today?

I would argue that energy production would not cost more. The price we pay to the utilities for that energy, however, would. And there's a very important difference between the two.

What we're really talking about here is attaching an environmental cost to the production of electricity. But that cost has always been there. It's just that you and I never see that cost on our bill.

Bottom line: There is a definite environmental cost associated with the production and combustion of fossil fuels. And that cost is the deterioration of natural capital (water, minerals, fish, trees, oil, soil, air, and living systems, including wetlands, estuaries, coral reefs and rainforests)

Now before you write this off as some kind of random environmental agenda, hear me out...

As explained in the book Natural Capitalism (which is an absolute must-read for environmentalists, economists and business leaders), natural capital has never really been valued appropriately. Rather, it has constantly been liquidated, thereby further enabling the deterioration of ecosystem services that really represent the most important type of capital - things like the regulation of atmosphere and climate, the cycling of nutrients and water, pollination, control of pests and diseases, and the maintenance of biodiversity. While the value of these free, natural, and self-regulating services are worth trillions annually, this value has never really been reflected on balance sheets.

Instead, the costs associated with the loss of natural capital have long been externalized onto the environment. i.e.) you, me and every single thing that lives around us.

And the truth is, we're only talking about CO2 with this cap-and-trade bill. As far as I'm concerned, there's still the mercury issues associated with coal, the waste issues associated with nuclear, and the security issues associated with our reliance on oil. These aren't included in the bill. But throw those on your tab, and you'll see an even higher cost per kWh (or higher cost per gallon of gas when referring to oil being used primarily as a transportation fuel)

The price we pay for energy today does not reflect the true cost of producing that energy. An effective climate change bill could at least begin to enable a more accurate cost structure.

I know, I know. No one wants to shell out a penny more for anything. And I'm no different. But if we truly believe in a free market system, than we should not resist a fair and accurate cost analysis of energy. Because the truth is, it's never really existed.

Now understand, I'm not saying cap-and-trade is the answer. To be honest, this thing is so politically-motivated, it's hard to figure out the most effective, and honest solution. Seems to me, the best way to do this is simply to charge consumers the REAL price. I'm confident that if no subsidies existed (direct or indirect) for any kind of power generation (fossil fuel or renewable), and ALL natural capital costs were figured into the equation - the market would dictate the rapid expansion of renewable energy and smart grid development, which would thereby enable a decrease in fossil fuel consumption, and ultimately a decrease in CO2 emissions.

Jeff

California Car Windows

Yesterday, the California Air Resources Board (CARB) announced it had adopted a new regulation that will require all new cars sold in the state to have windows that reflect or absorb heat-producing rays from the sun.

The goal is to help keep cars cooler so less air conditioning will be needed. This will increase fuel efficiency and prevent about 700,000 metric tons of CO2 from entering the atmosphere. That's the equivalent of taking 140,000 cars off the road for an entire year.

There are two types of glass technology that are likely to be used...

Infrared Reflective Glass - which uses a coated film placed between two pieces of glass.
Solar Absorbing Glass - which is laminated using a solar absorbing material that limits solar energy going into the vehicle.

Compared to the cars available today, these new windows will block 33% more heat-producing rays from the sun, thereby cooling the vehicle's cabin by about 14 degrees Fahrenheit.

As side benefits, these windows will also reduce upholstery fading and dashboard cracking.

The new regulation goes into effect in 2012.

CARB also announced another new regulation yesterday that requires more than a dozen landfills in the state to install equipment that captures methane gas.

I don't have the details, but I'm assuming that much of this methane will be used by waste management companies to generate electricity. This is actually becoming more and more of a common practice. In fact, according to the DOE, in 2005, there were roughly 400 operational landfill gas projects in the United States delivering 9 billion kilowatt hours of electricity - or enough to power more than 725,000 homes, and heat close to 1.2 million homes.

In 2007, Waste Management, Inc. reported that there were 427 operational projects in the U.S. delivering 1,275 megawatts, as well as 550 candidate landfills identified by the EPA. Combined, these projects would amount to 2,595 megawatts, or enough to power more than 2.3 million homes.

To put that in perspective, based on the 2006 U.S. Census, which estimated housing units data, this is enough juice to power every housing unit in the states of Delaware, Wyoming, Vermont, South Dakota, North Dakota, and the District of Columbia, combined.

Methane (which is about 50 percent of landfill gas), is 23 times as potent as CO2, and has more than doubled its atmospheric concentrations over the last two centuries.

Jeff

Detroit Fuel Economy

According to a new University of Michigan report, a successful turnaround for Detroit automakers could hinge on a rapid cultural transformation. What's that mean, exactly?

Well, the report, "Fixing Detroit: How Far, How Fast, How Fuel Efficient," noted that the existing culture within the domestic auto companies systematically underestimates the value of fuel economy - which has crippled profitability.

Here's what Rob Leinbaum, former GM employee and report co-author had to say...

"For years it has discounted consumer research results when calculating the benefits of improving fuel economy, often by as much as two thirds. If GM had followed its own market research results over the last three decades, they would not be in Chapter 11 today."

And here's an excerpt from the report that discusses fuel economy standards...

"To address the questions of speed and scope of change, we looked at the actions of other large corporations that have managed successful turnarounds. There is extensive literature on this subject, both academic studies and interviews with corporate leaders. In order to address the question of fuel economy standards, we model the impacts of different fuel economy standard increases (30%-35 miles per gallon (MPG), 40%-37.7 MPG, 50%-40.4 MPG) on the profitability and sales of the industry and separately for the Detroit 3, the Japan 3, and all others. The model captures the cost of fuel economy improvement on suppliers, its impact on pricing, and the resulting changes in demand. The inputs to the model are the most recent and accepted estimates of all the key parameters, but since there is debate on many of these values, we conduct an extensive sensitivity analysis on the results.

Findings

The lessons from successful turnarounds are very clear:

Implement Broad, Deep, Fast Change: All successful efforts addressed the fundamental issues that drove them into crisis and they did it as quickly as possible.
Replace Management Team: In addition to changes in strategy and structure, in all cases there were widespread changes in management.
Transform Culture: All of the successful companies considered changing culture a critical requirement and made it a top priority for success.
Build a portfolio of excellent products: The path to long-term financial health for any company rests on having a great product portfolio. Our domestic auto industry, in its modern incarnation, has never been able to execute an excellent portfolio, only isolated successes.

The impact of higher fuel economy standards on industry profits is also very clear:

An industry-wide mandated increase in fuel economy of 30% to 50% (35 MPG to 40.5 MPG) would increase the Detroit 3's gross profits by roughly $3 billion per year, and increase sales by the equivalent of two large assembly plants
The Detroit 3 gain profits over base in all scenarios, with the largest profits gained from pursuing more aggressive fuel economy.
Japanese automakers profit gains are smaller than the Detroit 3, with the smallest profits gained from pursuing 50% increase (40.4 MPG) in fuel economy.
At 50% increase, the Japanese industry loses sales while the domestics continue to gain in sales and profitability, a result driven by the different starting points.

The value given to fuel economy by automakers has critical impact moving forward:

There is compelling evidence that the Detroit 3 have systematically underestimated the value of fuel economy to customers.
Because Detroit 3 automakers have long underestimated the consumer value of fuel economy, raising fuel economy standards will not cost more than consumers would be willing to pay.
In every scenario, the average cost-per-vehicle (direct plus indirect) is less than what consumers would be willing to pay."

This particular report built on an earlier University of Michigan Transportation Research Institute study that predicted the Detroit automakers could lose billions in profits and thousands of jobs in the event of an oil spike. The study predicted that when gas crossed the $3 a gallon market, losses could reach $11 billion.

Ford and GM had combined losses of more than $57.2 billion by the time gas hit $4 a gallon last year.

Jeff

Nissan Electric Vehicle

In an effort to capitalize on President Obama's plan to get electric and plug-in hybrid electric vehicles on the nation's highways, Nissan is seeking to invest more than a half billion dollars to begin the production of electric vehicles at a manufacturing plant in Smyrna, Tennessee.

The Japanese automaker expects to produce between 50,000 and 100,000 "eco-friendly" vehicles per year at the Smyrna plant by 2012. Of course, the term "eco-friendly" can be read many ways. In other words, "eco-friendly" can describe more fuel-efficient, conventional vehicles, just as easily as it could describe vehicles that don't use a drop of gasoline. And according to reports from Reuters and a number of other sources, Nissan is expected to first produce a small passenger vehicle at the Smyrna plant.

Still, Nissan is also planning to construct a production facility (with NEC Corporation) that will pump out high-performance lithium-ion batteries. Clearly those are destined to power Nissan's electric offerings.

But in the meantime, it would be nice to get some clarification as to when Nissan plans to produce these electric vehicles in Smyrna. After all, the company has applied for a low-interest loan from the U.S. government. And it should be understandable that we want some kind of clarification on the details going forward. Especially since we're now talking about our tax dollars at work. But I'm optimistic we'll get those details soon.

Also worth noting today is Mitsubishi's announcement that it plans to cut the price of the i MiEV electric car to $21,000. This does include tax breaks and subsidies, but the end result is a discount of more than half.

The i MiEV will only be available in Japan this year, but the company plans to bring the vehicle to North America in 2010.

Jeff

Continental Airlines Biofuel

Representatives from Continental Airlines have announced that the company's recent biofuel test on a Boeing 737-800 delivered an increase of 1.1 percent in fuel efficiency, and a 60 to 80 percent reduction in emissions compared to traditional jet fuel.

The biofuel blend was a mix of traditional jet fuel and a biofuel derived from algae and jatropha - two feedstocks that are gaining in popularity with both environmentalists and biofuel producers.

Algae-based biofuels are still relatively new, with mostly demonstration plants in operation now. But the outlook is promising.

One advantage to algae is its potential oil yield per acre. Early research indicates that there is a significant increase in oil yield compared to the traditional feedstocks we use today, like palm and soy. Also, unlike a lot of other biofuel feedstocks, algae offers less water waste. In fact, it can grow in brackish, saline and wastewater - thereby reducing fresh water for growth. Incidentally, the nutrients in wastewater actually feed algae, making it possible to cultivate at any one of the 5,100 wastewater treatment facilities operating in the U.S.

Additional benefits include...

No one country has a monopoly on algae production or algae production equipment.
Algae can grow in temperatures ranging form below freezing to 158 degrees Fahrenheit.
It does not compete directly with food crops.
Algae biofuels offer value-added byproducts, such as syngas, high-protein animal feeds, and biopolymers.
The algae growth cycle can actually be used as a carbon sequestration mechanism, because CO2 is the primary input required for algae to grow.

Of course, since we are in the earliest stages, algae-based biodiesel is also cost prohibitive right now. But as with anything. . . if there's potential, those costs will come down.

Jatropha is also quite popular these days, as this is also not a food crop. In fact, it's actually poisonous if eaten. Jatropha also grows extremely fast, and can be grown on virtually barren land with little rainfall. It can survive up to three years of consecutive drought conditions, and live for up to 50 years.

Jeff

Hybrid Electric Cars

About two weeks ago, Coda Automotive (a new electric car manufacturer), announced that it will have an all-electric sedan hitting the California market in 2010. The Coda electric car delivers a range of between 90 and 120 miles on a single charge, with a top speed of 80 mph.

Tianjin Lishin Battery is supplying the batteries for this particular vehicle. You may be familiar with Tianjin, as this is one of the world's largest manufacturers of lithium-ion cells and a key supplier to Apple, Motorola, and Samsung.

Coda is expected to have about 2,700 vehicles available in 2010, with production capacity set to reach 20,000 by 2011.

Of course, Coda's electric car is just one more option in an ever-growing line of higher mpg (or mpg equivalent) vehicles. Truth is, from the smallest suburban garages to the biggest automakers, these next generation, fuel-efficient vehicles really are being developed quite rapidly compared to where we were just a few years ago...

GM's still committed to getting the Volt out next year.
Ford will be pumping out new electric vehicles in just two years.
Mitsubishi recently announced that it will begin leasing its i-MiEV electric car in Japan, next month.
Subaru's new Stella EV is expected to be available to consumers this summer
Daimler has invested in Tesla Motors (maker of the electric vehicle sensation, the Tesla Roadster), and will use Tesla's batteries in its Smart electric car...which is expected to hit later in the year in a testing phase.

And don't forget the guys (and gals) that are converting conventional and hybrid vehicles to Plug-In Hybrid Electric Vehicles (PHEVs)...right now. While conversion are nothing new, the momentum behind conversions is definitely growing and developing.

Stake Your Claim in the Stimulus Goldmine

With $787 billion in pork now sloshing around Washington D.C., one industry in particular stands to grab the lion's share.

And for the investors that get there first, this moneymaking opportunity is one that may just turn out to be the mother lode.

To learn more about the Stimulus Goldmine that could easily double when all of that pork gets spent click here.

We recently saw Raser Technologies (NYSE:RZ) show off its electric Hummer (with a 40-mile all-electric range) in Washington. And a small California company - Plug In Conversions Corp. - has just completed a new software upgrade that enables all-electric driving at speeds of up to 70 miles per hour in a converted Prius.

Building Tomorrow's Vehicles...Today

A new generation of engineers is also being groomed to take on the personal transportation challenges of tomorrow. In fact, last Friday, students from Ohio State University took first place in the EcoCAR Challenge - an advanced vehicle technology competition run by the DOE, GM and the Argonne National Laboratory.

Essentially, this challenge requires students to design and build advanced propulsion solutions, utilizing a variety of clean vehicle options. These include...

All-electric
Range-extended electric
Hybrid
Plug-in hybrid
Fuel cell

The students also incorporate lightweight materials, improve aerodynamics and use alternative fuels, like ethanol, biodiesel and hydrogen.

Interestingly enough, Ohio State also announced a 2,000 mpg-equivalent solar car just last month. It's not a practical vehicle you could drive to work everyday. But the technology that these college students are developing is exactly the kind of technology that so many car manufacturers ignored , or simply denied for decades. Of course, that all changed when gas hit $4.00 a gallon.

Nonetheless, we're certainly excited to see what the future holds for a new generation of fuel-efficient vehicles. And while I am partial to electric and plug-in hybrid electric vehicles (particularly because these vehicles more than meet my needs, as well as the needs of more than half the daily commuting population), there are dozens of potential options coming down the pike. From electrification to advanced biofuels to new designs of old ideas - the race is on to take us out of the stone age of vehicle development...and into the 21^st Century.

Which do you think will take the lead?

Let us know your thoughts in the comments section below.

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

Jeff

Illinois Wind Farm

While risk is not something most investors embrace, it is proving to be a catalyst for new wind energy developments.

In an effort to capitalize on the growing demand for renewable energy in the U.S., Ireland's Mainstream Renewable Power is developing new wind sites - from greenfield through construction - with the intention of selling the projects to the utilities down the road. This is a winning prospect for the utilities, as it takes a big chunk of the development risk out of the equation. It essentially becomes a much more attractive investment.

Mainstream recently bought three wind farms in Illinois that will now be ramped up to a capacity of 787 megawatts. It will come at a cost of $1.7 billion, and take about 4 years to complete.

This deal is Mainstream's second North American deal in just three months. The first was a a $742.4 million joint venture with Alberta Wind Energy Corporation to build about 400 megawatts of wind energy in Alberta.

Jeff

Lake Erie Offshore Wind

According to officials in Cuyahoga County,Ohio, a new offshore wind development could be built in Lake Erie within three years.

The first phase of the project is expected to include three to five turbines, and would provide local manufacturing jobs for many who have been affected by massive cutbacks in the auto industry.

While the cost to develop wind power in the lake is almost twice as expensive as onshore wind development, the wind speeds tend to be stronger - especially in parts of Lake Michigan and Lake Superior. Developers hope to utilize these robust wind resources to expand the states wind power generation.

And nearly 10,000 miles from the strong winds in the Buckeye state, it looks like a burgeoning geothermal industry could spark new job growth in Australia.

According to the Australian Geothermal Energy Association, more than 17,000 new jobs could be created in the geothermal industry by 2050. Australia currently has around $1.5 billion new projects underway.

The Cooper Basin, NSW and South Australia are said to hold massive geothermal potential.

Jeff

Clean Energy Jobs

According to a report released today by the Pew Charitable Trusts, the number of jobs resulting from the nation's burgeoning clean energy economy has grown almost two and half times faster than overall jobs from 1998 to 2007.

While some question the validity of green job growth, Pew's study suggests that clean energy jobs grew at a rate of 9.1 percent, while traditional jobs grew by 3.7 percent over the 9-year time frame.

In the report, Pew states that a clean energy economy generates jobs, businesses and investments while expanding clean energy production, increasing energy efficiency, reducing greenhouse gas emissions, waste and pollution, and conserving water and other natural resources.

Five categories are recognized in the study:

Clean Energy
Energy Efficiency
Environmentally Friendly Production
Conservation and Pollution Mitigation
Training and Support

The report also breaks down the clean energy job numbers by state, offering 2007 data. Take a look below to see how many jobs have been created in your state, thanks to the clean energy economy:

Alabama - 7,849

Alaska - 2,140

Arizona - 11,578

Arkansas - 4,597

California - 125,390

Colorado - 17,008

Connecticut - 10,147

Delaware - 2,368

Washington D.C. - 5,325

Florida - 31,122

Georgia - 16,222

Hawaii - 2,732

Idaho - 4,517

Illinois - 28,395

Indiana - 17,298

Iowa - 7,702

Kansas - 8,017

Kentucky - 9,308

Louisiana - 10,641

Maine - 6,000

Maryland - 12,908

Massachusetts - 26,678

Michigan - 22,674

Minnesota - 19,994

Mississippi - 3,200

Missouri - 11,714

Montana - 2,155

Nebraska - 5,292

Nevada - 3,641

New Hampshire - 4,029

New Jersey - 25,397

New Mexico - 4,815

New York - 34,363

North Carolina - 6,997

North Dakota - 2,112

Ohio - 35,267

Oklahoma - 5,465

Oregon - 19,340

Pennsylvania - 38,763

Rhode Island - 2,328

South Carolina - 11,255

South Dakota - 1,636

Tennessee - 15,507

Texas - 55,646

Utah - 5,199

Vermont - 2,161

Virginia - 16,907

Washington - 17,013

West Virginia - 3,065

Wisconsin - 15,089

Wyoming - 1,419

Jeff

Coda Electric Car

A new electric car manufacturer, Coda Automotive, announced today that it will introduce a full-performance, all-electric sedan to the California market - next year.

The vehicle features a 33.8 kWh, 333V lithium iron phosphate battery pack with an 8-year, 100,000-mile warranty. The batteries are being supplied by Tianjin Lishen Battery. Tianjin Lishen is one the world's largest manufacturers of lithium-ion cells and a key supplier to Apple, Motorola, and Samsung.

Coda's sedan takes about six hours to charge, and delivers a range of between 90 to 120 miles, with a top speed of 80 mph. The car also comes with factory-standard equipment, like navigation, a green screen that monitors efficiency, roadside assistance, Bluetooth system, power windows, doors, and mirrors, anti-lock brakes, advanced airbags with an occupant detection system - and for all you Howard Stern fans - Sirius satellite capability.

About 2,700 vehicles will hit the market in 2010, with production capacity set to reach 20,000 by 2011.

The five-passenger sedan will be available for $45,000 before the $7,500 federal tax credit and any additional state incentives.

Jeff

Obama Geothermal Development

It may not be as shiny as solar or as obvious as wind, but no matter how you slice it - geothermal energy is a powerhouse when it comes to renewable energy generation.

As we highlighted in our book, Investing in Renewable Energy: Making Money on Green Chip Stocks...geothermal actually holds significant advantages over other forms of renewable and fossil fuel-based energy.

It's one of the cheapest forms of energy
It produces almost 50 times less CO2, nitric oxide, and sulfur emissions than conventional fossil fuel power plants
It requires no power storage
It's perfect for baseload power (power that's generated all the time). Geothermal power plants run at 89 to 97 percent uptime, compared to 75 to 90 percent uptime offered from coal and nuclear
The supply of geothermal energy is virtually inexhaustible.

And as my colleague Nick Hodge pointed out in April, geothermal energy capacity is actually expected to grow 89% between now and 2015 - from 11,007 megawatts at the end of 2008 to over 20,800 megawatts in the next 6 years.

That works out to a compounded annual growth rate of 9.5%.

Take a look...

Obama Loves Geothermal

To add more fuel to this geothermal fire, it has become quite obvious that the Obama administration is aggressively pursuing increased geothermal development.

For starters, the recent stimulus set aside $400 million for geothermal. Congress also coughed up $45 million for the DOE's geothermal program, and in March, the DOE announced $84 million worth of funding for enhanced geothermal systems.

And just last week, the President announced another $350 million in Recovery Act funding for geothermal projects!

Here's the breakdown on that one...

$140 million for geothermal demonstration projects
$80 million for enhanced geothermal systems technology research and development
$100 million for innovative exploration techniques
$30 million for a national geothermal data system, resource assessment, and classification system.

According to Karl Gawell, executive director of the Geothermal Energy Association, this is more funding now than in the past 20 years.

One company that's certainly going to benefit from all of this is Ormat Technologies (NYSE:ORA).

Now we've been preaching this stock for years. In fact, we first recommended Ormat in January, 2005, when it was trading around $16 a share. And we've been following it ever since.

Thanks Obama...
For Making Me Rich!!!

Love him or hate him, there's one thing you can count on with Barack Obama in office...

He's going to make renewable energy investors insanely wealthy!

Don't believe it?

The proof is in the numbers.

Click here now.

Our most recent assessment came in our March 3, 2009 letter. Take a look...

"Ormat Technologies is one of the biggest geothermal players in the market. Vertically-integrated, the company designs, owns and operates a number of geothermal power plants and recovered energy systems across the globe.

Ormat recently announced revenues increased 35.2% in Q4 and 16.5% for fiscal 2008. Net income also increased 31.3% for the quarter and 82% for the year. The stock currently trades around $23 a share. Our 12-month price target is $41."

Today, Ormat trades around $41 a share.

Here's how the stock has performed since the start of the year...

And Ormat isn't the only geothermal stock paying off for Green Chip investors either.

A few weeks ago I told you about a little $0.85 geothermal stock that was significantly undervalued.

That stock is now trading at over $1.70 a share!

Take a look...

But we're expecting much more. And here's why...

Turns out, the DOE is now expected to pony up $84 million for this company to build its next power plant. Certainly that has helped push the stock up, but there's another piece of news that's right around the corner - and it'll push this thing up even higher.

You see, now that the company can build its next power plant - on the DOE's dime - the only major hurdle for the company is securing a power purchase agreement.

Now if you know anything about the energy business, you know that a long-term power purchase agreement is what seals the deal for investors. It's the final piece of the puzzle that guarantees decades-long revenue streams.

And it's what every trend-chaser on Wall Street waits for.

Just look what happened the last time this company announced a power purchase agreement, back in 2007...

Now here's the important part...

What a lot of folks don't know is that this company is in advanced negotiations for a long-term power purchase agreement - right now.

Once that agreement is signed, and the press release goes out - the stock is going to explode. Just like it did the last time.

If you'd like to read more about this stock, click here now.

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

Jeff

http://www.angelnexus.com/o/web/12713

Volvo Diesel Electric

Volvo announced today that it is launching a new partnership with Swedish energy company, Vattenfall, to develop plug-in hybrid electric vehicles. This is actually an extension of a joint project the two companies announced in January. That project was focused on testing the technology.

Under the new plan, Volvo will manufacture the cars and Vattenfall will develop the charging systems. Vattenfall will also allow its customers to sign an agreement to get their power from renewable resources.

The first three demonstration vehicles will be on the road this summer. They will combine a rear-wheel drive electric motor (powered by a lithium ion battery pack) and a front-wheel drive diesel engine.

And Magna International, the Canada-based auto supplier, announced on Saturday that it sees the electrification of vehicles as one of its key strategic initiatives.

You may remember back in January, when Magna and Ford announced the two companies were developing a new Ford battery electric vehicle to be released in 2011. Magna will provide the energy storage system, battery charger, motor controller, and electric traction motor for that vehicle.

Magna International, by the way, was recently given permission by the German government to acquire Opel from GM. It'll be interesting to see how Magna's new love for electrification plays into Opel's future.

Jeff

www.greenchipstocks.com