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Alternative Energy

T. Boone Pickens Loses "Big" in Alternative Energy

No, he didn't lose a donkey.

But T. Boone Pickens lost a synonym for the animal and a whole lot of money in the wind industry.

"I'm in the wind business..." said Pickens yesterday on MSNBC's Morning Joe. "I've lost my ass in the business."

Pickens didn't blame his own investment for the current situation. He acknowledged that the technological shift in shale oil and gas development has greatly changed the game for American energy, and has made drilling more practical and affordable.

But the statement was just a precursor to his observations that Washington has little priority to setting a national energy policy that is both sustainable and affordable to Americans.

On the show, Pickens hammered home the point that the current administration not only lacks an intelligent energy policy. "They don't have an energy policy."

Why this statement is shocking to anyone, especially the hosts, shouldn't confuse anyone.

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An Unlikely New Supporter for Alternative Energy

During a biofuels conference at Mississippi State University last week, Navy Secretary Ray Mabus announced that his branch would be leading the charge to lessen the U.S. Department of Defense's (DOD) dependence on fossil fuels.

This involves a rather large chunk of traditional fuel usage.

On average, the federal government consumes about 2% of the fossil fuels used in the United States - and the DOD accounts for about 90% of that.

With the Obama administration emphasizing a move to alternative and renewable fuel sources, Mabus is signaling that the military is on board - sort of.

The Trouble with Foreign Oil

As a former governor of Mississippi and ambassador to Saudi Arabia, Secretary Mabus knows something about the position of oil in American foreign policy.

He noted during the conference that, for every $1 rise in the cost of crude oil, the Navy has to come up with at least $32 million.

So when the Libyan crisis hit earlier this year, and oil spiked $30 a barrel, that translated into almost $1 billion of additional costs to the Navy. It's no wonder, then, that Mabus is committed to meeting 50% of the Navy's onshore and fleet fuel needs with non-fossil sources by 2020.

Additionally, in what is now mantra from both sides of the political aisle, reliance on foreign oil sources presents a national security problem.

"When we did an examination of the vulnerabilities of the Navy and Marine Corps, fuel rose to the top of the list pretty fast," Mabus said. "We simply buy too much fossil fuel from actual and potentially volatile places. We would never allow some of these countries we buy fuel from to build our ships, our aircraft, our ground vehicles - but because we depend on them for fuel, we give them a say in whether our ships sail, our aircraft fly, our ground vehicles operate."

The push seems serious enough, and it does reflect similar statements coming from other branches of the military.

But questions remain: What are the alternative sources? How much volume can each genuinely give to the effort? And what are the possible drawbacks of such alternatives?

Biofuels to the Rescue

From the Navy's perspective, biofuels have shown some serious promise.

In certain theaters of operation, bio additives are already in use for both jet fuel and lighter vessel options. And the initial results have been quite encouraging.

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Money Morning Mailbag: Rising Global Energy Demand Is Providing Key Investor Opportunities

Energy companies reported robust third-quarter profits this week in another sign that rising global energy demand is something investors can't afford to ignore.

Exxon Mobil Corp. (NYSE: XOM) reported yesterday (Thursday) its third-quarter net income rose 55% from a year earlier to $7.35 billion, or $1.44 a share - the biggest jump in six years. Royal Dutch Shell PLC (NYSE ADR: RDS.A, RDS.B) reported its third-quarter profit rose 18% from the year before, noting it's in a "delivery window for new growth," and ConocoPhillips (NYSE: COP) said its third-quarter profit more than doubled.

"Global oil demand implications have continued to surprise to the upside," Barclays Plc (NYSE ADR: BCS) analysts wrote in an Oct. 20 note to clients.

Money Morning Chief Investment Strategist Keith Fitz-Gerald addressed the importance of energy industry investing earlier this week on a Fox Business Network appearance.

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Iraq's Energy Sector Is Moving Forward – With or Without the U.S.

Iraq on Wednesday broke the record - 207 days - for the time between a parliamentary election and the formation of a government. But while Iraq's government is at a standstill, the country's energy sector remains dynamic and U.S. companies can't afford to wait for the political climate to thaw before diving in.

Iraq is slowly retaking the shape of one of the world's most prolific oil producers. Its reserves are actually 25% larger than previously thought.

"Iraq's oil reserves which are extractable are 143.1 billion barrels," Hussein al-Shahristani, Iraq's oil minister, said earlier this week, basing his comments on data provided by Organization of Petroleum Exporting Countries (OPEC).

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China Ousts U.S. as Most Attractive Market for Renewable Energy Investing

China for the first time has overtaken the United States as the most attractive country for renewable energy investment, according to a quarterly index ranking released yesterday (Wednesday) by accounting firm Ernst & Young.

As the world's biggest energy consumer, China set a goal to generate 15% of its electricity from renewable sources by 2020 - up from 9% in 2008 - and has been encouraging investment in its clean energy companies to make its target.

"China has all the benefits of capital, government will, and it's a massive market," Ben Warren, Ernst & Young's environment and energy infrastructure leader, told Bloomberg. "We would expect to see China retaining a dominant position."

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China Traffic Jam Just a Brief Bottleneck on the Road to Growth

Besides recently being crowned the world's second-largest economy, China now has the dubious distinction of spawning the world's longest traffic jam. And it's all directly attributable to China's voracious appetite for energy and automobiles.

A line of cars and trucks 60 miles long (100 kilometers) has snarled the road along the Beijing-Tibet 110 Expressway for the past nine days.

The bumper-to-bumper gridlock, which finally began to ease yesterday (Wednesday), was created by a surge in trucks carrying coal from the province of Inner Mongolia to the suburbs of Beijing, where power plants continue to suck up and incinerate millions of tons of the black rock.

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Breaking Down the British Giant: Who Will Buy BP's Best Assets?

There's no question that some of BP PLC (NYSE ARD: BP)'s assets are on the block.

The company said Monday that the total cost of the Gulf oil spill had already risen to $3.5 billion. And while it's too early to estimate the final costs associated with the spill, analysts have pegged the tab at $20 billion to $40 billion. Some even believe the total cost could come in near $100 billion.

BP has already paid $165 million to settle individual claims and agreed to set up a $20 billion escrow fund to absorb further damages. It's also suspended its dividend to conserve cash.

But that's not enough. With costs soaring, BP said in June that it is looking to raise at least $10 billion through asset sales in the next 12 months. With that the run on BP's assets commenced.

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New 'Energy Advantage' Advisory Service Uncovers Top Energy-Sector Profit Opportunities

Oil prices will reach a record $150 a barrel in the next 12 months, sending gasoline prices to $3.80 a gallon. Commercial nuclear power will continue its comeback, but as small, sealed "mini-reactors" that can produce energy for up to 60 years - instead of as the hulking power plants of years gone by.

New global-warming regulations will turn air-pollution credits into financial assets that can trade like stocks or bonds. And a little-known U.S. pipeline and East Coast shipping terminal will transform the formerly fragmented U.S. natural-gas market into a fast-moving global marketplace - with profit opportunities to match .

To help investors profit from these global opportunities, Dr. Kent Moors - a career-energy-sector insider who is an advisor to six of the world's Top 10 oil companies and a consultant to some of the world's largest oil-producing nations - has launched the Energy Advantage advisory service.

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The "New" Global Energy Sector: "The Profit Opportunity of Our Lifetime"

Oil prices will reach a record $150 a barrel, sending gasoline prices to $3.80 a gallon. Commercial nuclear power is making a comeback - but in "nuclear batteries," instead of in hulking power plants of the past. New global-warming regulations will turn air-pollution credits into financial assets that can trade like stocks or bonds. And China's zooming growth will turn the global energy sector upside down.

If this sounds like a view of the distant future - the global energy sector's own version of "Future Shock" - think again.

All of these "predictions" are becoming a reality, even as you read this. And while these transformative events will likely make the global energy sector more volatile and confusing than ever, they are also creating the largest wealth-creating opportunities that most investors will ever see, says Dr. Kent Moors, a career energy-sector consultant who works with governments and corporations throughout the world.

For all the details on Dr. Moor's energy-sector predictions, please read on...

Money Morning Mailbag: Emergent Natural Gas Market Improves U.S. Fleet Vehicles

The global energy sector is shifting which means huge changes lay ahead for the U.S. natural gas market. Dr. Kent Moors, a career energy-sector consultant who works with governments and corporations throughout the world, says the United States' fragmented natural gas market is "about to become one global market, operating at the speed of light."

U.S. natural gas will play a major part in reducing greenhouse gas emissions by replacing older, inefficient coal plants. Its use is likely to double to 40% of the energy market over the next several decades, according to a study by the Massachusetts Institute of Technology.

The abundance of natural gas - especially shale gas, an unconventional source packed tightly in rock formations - in the United States has driven down natural gas prices, making the fuel more desirable. Shale gas has grown to 15%-20% of the U.S. natural gas output, and as companies design better drilling technology, shale gas reserves will be more easily attainable.

"Natural gas is becoming sexy again, with all this new technology to get the gas out of the shale," Kim Hill, director of the Sustainable Transportation and Communities group for the nonprofit Center for Automotive Research told The New York Times.

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Taipan Daily: Profit from Alternative Energy ETF's in Wake of BP Oil Spill

Publisher's Note: Justice is taking a few days off for a family event. We've asked Taipan's Senior Research Director, Sara Nunnally, to step in. Justice will be back next week. But in the meantime, enjoy Sara's insightful look into the Gulf oil crisis, and what it could mean to you and your investments. How many […]

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Buy, Sell or Hold: Enbridge Energy Partners, L.P. (NYSE: EEP) Brings Some Stability to a Volatile Market

It seems like every week there's a new development that forces investors to rethink their investment strategies.

This week we will see the initial consequences of the weekend's all-important Group of 20 (G20) meeting. A lot of very important issues are up for debate among the world's top 20 countries, as are policies that will shape the intensity and distribution of global growth in the months and years ahead.

The meeting will be fraught with controversy as each economy is proceeding at its own distinct pace of growth and faces its own set of challenges.

China, which recently showed a superlative 50% year-over-year increase in exports, has run out of excuses to justify its undervalued currency. The country also is facing strong inflationary pressures, which include labor strikes by workers demanding higher pay.

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Hot Stocks: General Electric is Being Powered by China Growth, but Held Back by its Financial Arm

General Electric Company (NYSE: GE) has more than a century of history behind it and it's seen worse times than we're going through right now. It's a global juggernaut, and its foothold in emerging markets - particularly China - makes the company worth looking at.

But at the end of the day, its financial unit is holding GE back, and that isn't likely to change any time soon.

Let me explain.

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Eight Semiconductor Stocks To Charge Up Your Portfolio

Today's world literally runs on semiconductors. Virtually every device that plugs in or uses a battery has its functions controlled by semiconductors of one type or another. And, with spending curtailed in the recent financial crisis, many of the semiconductors in use are either wearing out or going out of date. But, good times are here again for semiconductors. Here's how to make a profit on the new semiconductor boom market.

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ABB Ltd. Buys Smart Grid Software Maker to Jump Ahead in Energy Management Industry

Swiss engineering company ABB Ltd. (NYSE ADR: ABB) today (Wednesday) announced it will buy software maker Ventyx for over $1 billion to strengthen its position among energy management competitors by offering smart grid electricity distribution.

ABB will integrate Ventyx into its power-systems division, allowing it to provide modern smart grid software to grid operators who want to run a more efficient distribution system. The deal represents electrical engineering companies' need to prepare energy management networks to handle an increasing supply of renewable sources, like wind and solar.

"The big advantage for energy companies, utilities and industrial customers is that they will now have a single supplier of enterprise-wide information technology platforms and power automation systems," said ABB Chief Executive Officer Joe Hogan. "The advantage for our shareholders is a cash-generating acquisition in an exciting growth market, with a strong management team, a highly complementary offering and geographic scope, and an attractive return on capital employed."

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