Green Energy

Russia: The Greatest Threat to the Energy Markets

There's an old saying, "The more things change, the more they stay the same."
And modern Russia a perfect example of this saying. And this move to the past autocratic methods is creating a very unstable future for the energy markets.
Dr. Moors explains the warning signs in Moscow that are making energy traders start to worry.
To find out what's happening and what it means to you, read on...

Why I Cancelled Everything in Germany and Took the Next Flight to Dubai

Something big unfolded on my trip to Frankfurt last week.
It began with meetings in Germany over natural gas prices. They morphed into a discussion on how government subsidies affect energy prices. Our conversation turned to a recent IMF report that criticized taxes on energy - specifically pre-tax concessions - those provided by governments to producers in oil exporting countries.
That led four of us to drop everything in Germany and fly to Dubai, so we could hash out the matter firsthand with some of the folks responsible for those tax benefits.
What we learned there could change everything in the global energy markets and have huge consequences for energy investors around the world.
Remember, you heard it here first

Investing in Clean Energy Stocks Just Got More Risky

Despite its promising future, clean energy stocks have proved to be an investing minefield.

Even China-based clean energy stocks are no longer a safe haven. Yesterday (Monday) Suntech Power Holdings Co. Ltd. (NYSE ADR: STP) defaulted on its debt.

Heavy losses caused by plummeting prices for solar panels - which fell 73% from 2010 to 2012 - left Suntech unable to make the payment on a $541 million bond that was due Friday.

The news caused Suntech stock, already down 80% over the past year, to slip another 10%.

While numerous U.S. renewable energy companies have faltered, most notably the 2011 bankruptcy of solar panel maker Solyndra, Suntech is the first Chinese clean energy company that could go under.

What's new is a reluctance on the part of the Chinese government to keep pouring subsidies into money-losing companies.

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Watch What Carl Icahn Does to These Energy Stocks

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Energy stocks have been largely left behind in the recent stock market rally - except for those with interest from activist investors like Carl Icahn.  

You see, concerns about global demand as well as political pressure to focus on alternative energy have weighed on energy stocks. So have the low price and oversupply conditions in the natural gas markets.

Many of these energy stocks trade at what seem to be very low prices compared with the assets owned by the corporations and their future prospects.

This has attracted the attention of many activist investors looking to force the share price to unlock the real value of the underlying corporation.

One of the best-known activist investors, Carl Icahn, has accumulated several positions in leading energy companies in the past year because of low prices and under-valuations.

Take, for example, what Icahn's done with CVR Energy Inc. (NYSE: CVI).

Icahn owns 83% of CVR, a refiner that has seen its stock price soar recently as refining margins have improved. The company also has a fertilizer business that is a major beneficiary of lower natural gas prices.

The stock has better than doubled in the past year so it would be foolish for investors to chase the shares now.

But CVR does serve as an example of the sizable returns Icahn is looking to achieve in his foray into additional energy investments, like the following two stocks he's been accumulating.

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Why Oil Refiners Are Among the Best Energy Stocks to Buy Now

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Shale oil production continues its upward path, increasing overall U.S. oil production and making specific groups of energy stocks among the best to buy right now.

In fact, the U.S. Energy Information Agency (EIA) reported last month that domestic oil production surpassed the 7 million barrel a day level, the highest point in nearly 20 years. Production this year, the EIA says, will rise by another 14%.

This is obviously good news for the companies producing that oil, and it gets even better. Many industries outside the energy sector, including chemicals and railroads, have benefited from the shale boom.

But there is one subsector in the energy industry that has reaped the rewards of plentiful oil from the Bakken and other areas more than any other, and that's the refining industry.

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The Next Big Boom in Energy Isn't What You Think

As the ongoing debate between renewables and fossil fuels continues, there is a wrong-headed presumption that there will only be one clear victor.

But recent trends in the wind and solar age tell us that this conclusion just isn't so.

The truth is both types of energy will be required to work in tandem in order to achieve our energy goals in the future.

And - as these developments accelerate - it is in this "new" energy balance that individual investors will find the next big boom.

These days, with oil-rich countries like Saudi Arabia and the United Arab Emirates unveiling huge renewable energy projects, even some analysts are drawing the wrong conclusions.

But I have to stress, renewable development is not a signal these countries are running out of crude oil anytime soon.

Quite the contrary, countries like Saudi Arabia realize that one side of this energy equation will require the help of the other.

The same holds true in North America, where the surplus of unconventional natural gas has led some to the erroneous conclusion that wind and solar - still requiring significant government subsidies - have been dealt a fatal blow.

Wrong again. This is not a winner-take-all battle. There will be no silver bullet that delivers the next "new age of energy"

Rather, it will be in the integration of all the available energy sources that will lead to the next big development. And that is going to require sourcing from genuinely distinct and dissimilar energy categories-including wind and solar.

In fact, three recent events provide clear indications that this "energy integration boom" is already well underway.

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The Path to Energy Independence is More Rocky Than It Seems

You might have seen yesterday's headline in the Wall Street Journal: "U.S. Redraws World Oil Map."

As the article explains, U.S. oil production is now on pace to surpass Saudi Arabia by 2020. This would make the United States world's largest oil producer. We're already the second-largest natural gas producer, according to 2010 EIA estimates.

It's all thanks to the U.S. shale boom that has unlocked billions of barrels of oil and trillions of feet of natural gas from the Appalachian Mountains to the Pacific Coast, from the Bakken in North Dakota to the shale fields of southern Texas.

But all of this fracking has caused some serious economic and environmental problems.

And while I greatly advocate increased drilling and domestic production, we still must address a wide-range of problems now plaguing the shale oil and gas sectors.

After all - with apologies to Voltaire and Spiderman - with such great fortune comes greater responsibility.

That's why I am in the third day of what has become a very interesting conference here in Pittsburgh. It was convened to set the agenda moving forward to deal with the almost invisible aspects of shale oil and gas drilling.

In fact, for the first time, the conference's primary focus will be on the negatives caused by the drilling.

We also have questions surrounding the amount of water required to frack these formations (the process needs a lot of water to break open rock and release hydrocarbons), as well as the ongoing public health fears from the chemicals used.

Now, we are seeing parallel economic problems as well.

In the Marcellus basin, researchers are now recording some of these shortcomings and placing them in four basic categories.

The real concern is that these four problems - in infrastructure, labor, local inflation, and the environment - will remain well after the drilling (and the revenue) has moved on.

So before you decide to declare "energy independence", take a look at some of the downside that may come along with it.



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