Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Profiting from Alternative Energies That Work

Commodities / Renewable Energy Jul 23, 2008 - 07:14 AM GMT

By: Money_and_Markets

Commodities

Best Financial Markets Analysis ArticleSean Brodrick writes: Many Americans are disgusted by the fact that, faced with an energy crisis, the government seems to produce nothing but hot air. I think the government is paralyzed because there's no one clear solution.

Instead, there are a multitude of options — more drilling, nuclear power, hydrogen cars, solar power ... you name it. Every alternative has a lobby in Washington to press its case, but there's no one to tell our elected officials which is the best route to take.


I field these questions all the time, from friends and co-workers who ask me if this or that particular energy solution is the next big thing. So let me give you my appraisal of three alternative energy solutions that work and three that DON'T — along with some choice investments you can make to power your own bottom line.

Let's start with ...

Energy Solutions That Don't Work

You probably already know that corn-based ethanol isn't the right solution, for the simple reason that nearly as much energy is used making corn-based ethanol as you get out of it. So I won't waste a lot of time except to point out that the U.S. Department of Agriculture STILL anticipates corn ethanol production of 9.3 billion gallons for the crop marketing year 2007/2008. That will use more than one-fourth of our corn crop (and drive your food prices through the roof). Now, here are three more solutions you may think will work ... that probably won't.

Bad Idea #1 — Oil from Algae

Not all algae are created equal. Some are just pond scum, and some algae, properly cultivated, can produce biodiesel — that is, diesel you can grow right in your own back yard (or converted swimming pool).

Biodiesel from algae is still a ways off from large-scale viability.
Biodiesel from algae is still a ways off from large-scale viability.

So what's the problem? Scale.

While it is true that algae can produce more biodiesel per acre per year than many land crops, it takes either lots of ponds or land covered in clear plastic algae-growing tubes, which have to be made from the oil you're trying to grow.

So algae-based biodiesel will become a viable solution when the technology improves or we convert Lake Michigan to a biodiesel refinery.

Bad Idea #2 — Hydrogen Cars

What many people don't understand is that hydrogen isn't a fuel, it's a storage medium. So, whatever energy you store in a hydrogen-powered car has to be generated some other way (coal, natural gas, nuclear, etc.).

And then there's the danger factor. A tank of compressed hydrogen can explode with an earth-shattering "KA-BOOM" if hit hard enough. So you end up with highly pressurized, reinforced storage vessels which are three to four times the size of conventional fuel tanks.

Then there's the cost — the price of a hydrogen car easily runs over $150,000. Sure, costs will come down, but not that much.

Why does this idea have so much traction? Because both Washington and Wall Street love expensive boondoggles, making hydrogen fuel cells into black holes for your tax dollars.

Bad Idea #3 — Shale Oil

There is a big difference between oil shale and shale natural gas, and it is confusing the heck out of people. Let me make it simple: Shale natural gas works. Shale oil doesn't — not yet anyway.

Oil shale is a rock that contains an organic compound called kerogen. Left on its own, kerogen might turn into oil in 100 million years. Oil shale is different from shale natural gas in a lot of ways. For one thing, shale gas is economically feasible, but shale oil hasn't proved profitable (yet).

To harvest the kerogen, the rock is dug up and heated to 700 degrees Fahrenheit. On average, you have to process about two tons of rock to get one barrel of synthetic oil. The rock expands during the heating process, so you can't put it back in the hole you took it out of (or at least, not all of it). And the kerogen-harvesting process makes the rock carcinogenic, so you have to be careful how you store it.

Newer technology removes the kerogen without digging up all the rock, but that process still has bugs that are being ironed out.

Finally, three barrels of water are needed to make one barrel of synthetic crude from oil shale.

The Bureau of Land Management estimates the shale formation in western Colorado, where a lot of activity is focused, could yield as much as 1.8 trillion barrels of oil. However, that part of Colorado is dry country. It will also probably take a lot of energy to crack the oil out of the rock, though nuclear power could provide that energy.

Royal Dutch Shell is trying to prove naysayers wrong — it is investing a lot of money in oil shale. Petrobras, one of the world's best-run and most forward thinking oil companies, is also experimenting with oil shale. So maybe it will work eventually. But right now, the technology isn't there yet.

In fact, the problem with many solutions that sound good on paper is that the technology just doesn't work yet. But ...

Here Are Three Energy Solutions That Work Right Now

These three sources of energy can work — today — to power our homes and rev up our cars.

Solution #1: Wind Power

Critics will point out that the wind seems to stop blowing when you want electricity most — on hot summer days. And that is a problem. However, a study last year by Stanford University shows that wind power from interconnected farms can be used as reliable base load electric power.

Wind power, especially when used on a large scale, is a great alternative source of energy.
Wind power, especially when used on a large scale, is a great alternative source of energy.

As one might expect, not all locations make sense for wind farms.

But legendary oilman T. Boone Pickens says the United States should take advantage of the so-called "wind corridor," stretching from the Canadian border to West Texas. Energy from wind turbines built there could supply 20% or more of the nation's power by 2030, according to a new report from the Department of Energy.

U.S. electrical demand is expected to grow another 39% through 2030, so wind would help fill the gap.

And although wind is expensive, costs per unit should come down with a larger scale operation. Besides, with the cost of coal and natural gas rising, wind is already becoming more competitive.

Solution #2: Solar Power

Unlike wind, we tend to get the most solar power when most electricity is needed — during hot summer months. And the technology is working now.

There are two general forms of solar power. The first is PV or photovoltaic, which converts energy from photons directly into electricity. The second is thermal, which uses the sun's heat, concentrated to heat liquids to transfer that heat, boil water and turn a turbine.

A rooftop photovoltaic system is fairly expensive — about $35,000 to $40,000, though the cost can be reduced through tax incentives and rebates. In sunny Florida, where I live, the system would probably pay for itself in 15 years or less — a lot less if electricity rates go through the roof, as Florida Power & Light is now threatening.

Solar thermal is also expensive, though cheaper than PV-based solar power. The Mojave Desert in the southwest is home to the largest solar thermal system in the United States. This Solar Energy Generation System (SEGS) has a total capacity of 354 megawatts.

New technology allows for better, cheaper storage of solar energy even when the sun isn't shining. Of course, wind and solar aren't widely used to power cars ... but that can change.

Solution #3: More and Better Electric Cars

There is technology available today to plug an electric car into your home power grid. In short, it turns a fleet of electric cars into a network of mobile generators that can draw energy from the power grid and send electricity back to the grid during periods of peak demand. It's called a vehicle-to-grid system, or V2G.

Only 20% of cars are in use at any time, so the rest could work as plug-in batteries and load buffers for the electric grid. By combining new electric cars with wind and solar power we'd have a 1-2-3 integrated solution to the energy crisis.

America's existing electric grid could support 180 million electric cars, and a concerted effort to upgrade the grid could let it support 200 million.

There are other advantages, too. With the same amount of electricity, you can drive an electric car three times farther than a hydrogen car. On 100 kilowatts of electricity you can drive an electric car 75 miles while a hydrogen fuel cell car of similar size can do only about 16 miles.

Are there obstacles? Yes! First of all, many electric cars can't keep up with the speeds on America's highways.

The easy solution to that is to lower the speed limits for all cars (55 or 60 mph) and allow electric cars to go at even lower speeds (45 mph or so) on major highways.

As Ronald Reagan said, when confronted by government-mandated 55-mph speed limits, "Speaking just personally, I think it's not a bad thing if we all slow down just a bit and enjoy the scenery a little more."

The second problem is that manufacturers simply can't make electric cars fast enough. U.S. consumers buy between 15 million and 17 million new cars per year. Meanwhile, Toyota only makes 20,000 of its Prius hybrid models a month, and GM is planning on building just 60,000 of its new Volt electric cars in 2010.

The new battery-powered Think City, which will enter the U.S. market at the end of 2009, will be able to travel up to 110 miles on a single charge, with a top speed of about 65 mph, and be priced below $25,000. Yet the manufacturer plans to sell only 10,000 units at most in the U.S. during its debut year.

But that's where the government can help, too. World War II saw U.S. auto makers go from making cars to tanks in a matter of months. With can-do spirit, government money and a big ol' pair of scissors cutting through red tape, Detroit could become the electric car capital of the world.

Look, there is no "silver bullet" solution. It's a bunch of bullets strung together for just one possible solution. And I haven't covered other workable alternative energy solutions including nuclear power, electrified rail or cars powered by compressed natural gas.

Moreover, the best thing we can do is use less energy — conservation. The cheapest oil is oil you don't use.

Still, I want you to know that there are workable solutions right now. And not only can they help our country, but they can reward investors, too ...

How You Can Profit in Alternative Energy

There are a bunch of great funds in the alternative energy space. Here are two that focus on two of the solutions I talked about today — wind and solar.

The Claymore/Mac Global Solar Energy Index ETF (TAN) holds a basket of 25 stocks in the solar space, and it is a fund with a global portfolio, as its name implies.

The PowerShares Global Wind Energy ETF (PWND) is a basket of 32 companies, also worldwide, that are focusing on wind energy.

Yours for trading profits,

Sean

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Thomas C. Gandolfo
23 Jul 08, 10:04
Your CYA Agenda

Mr. Brodrick: If you were properly informed and unbiased, you'd know that Biodiesel from Algae IS SCALABLE!

I'm not going to tell you THE best (Patent Pending) scalable Algae-to-Biodiesel technology.


Alex
24 Jul 08, 02:45
Very very good idea

There are more good ideas being developed!!!

We are making natural looking trees that are fitted with leaves made from a combination of nano materials. These leaves convert solar radiation (light & heat) and wind energy into electricity. All this in one system, in one beautiful tree or plant.

This idea generates more energy than conventional solar panels and is competitive with wind turbines, our trees and plants are in tune with nature, can be placed anywhere with virtually no obstructions, provides shade, cooling the air, protecting young crops from wind damage, provides wind break, can be placed in cities and help to prevent heat islands. All this with trees and plants and much more. It is a responsible use of land and our eco systems.

But investors for this project are hard to find.

Although the business as a huge market, and is very profitable, we are unable to get big investments. The small investor yes, no problem, but it does not get our product quickly to the market.

any suggestions?

Now imagine all those beautiful trees, Natural looking trees and plants, giving you and me all the energy we need in a responsible and real green way, using our land the way we should.Electricity at 0,3/0,2 per Kwh

more info at: solarbotanic@apollo.lv

Alex van der Beek


Olaf
24 Jul 08, 05:32
Alternative Energies

First i want to say that hydrogen is one of the methods of energy storage. There are already good storage tanks available which do not explode after a collision! These are made from fiber composites.

Further is the hydrogen car market that is not developed yet which off course means high prices. But many manufacturers of cars are working on hydrogen powered cars.

The same is for algea, much more energy is available per unit of area and above all, algea grow much faster than any other vegitation. That is why it is such a promissing alternative.

For the rest geothermal is not mentioned which is also a rapidly growing market.

Also efforts to reduce electricity and oil consumption are being developed from more efficient electronics to more efficient cars and aircraft and buildings.

What Gore said is right, the US is able to change very fast to renewables but it just doesn't want to because of the Bush government.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in