Energy Bill Opportunities
How to Profit from Cowards and Thieves
Well, once again, politics have trumped progress.
With politicians unwilling to take a meaningful stand on energy legislation so close to an election, the United States now risks falling further behind the rest of the world in the energy game.
I won't even get into the nuts and bolts of this pathetic attempt at an energy bill. It's just not worth it.
But the bottom line is that our nation is run by cowards and thieves.
I don't care which side of the aisle — at the end of the day, it's all about making sure those campaign coffers are filled.
For the hardworking folks in this country who want to embrace a safer, cleaner, and more economically sustainable energy economy for future generations — this is unfortunate.
But for investors, there's actually still a number of opportunities that will stem from this latest energy bill.
And we're not going to ignore them.
So, so efficient
Not surprisingly, this new “energy bill” latched on to the easiest and least-controversial measure: energy efficiency.
And please don't mistake my tone for disappointment.
As we've been saying for years, energy efficiency is the easiest way to embrace a new energy economy.
You can generate all the solar and wind power you want; but if you continue to waste it, how much progress are you really making?
So yes, we are certainly pleased that energy efficiency is still a priority in Washington — despite the motivation of our elected officials.
In the bill, a $5 billion home efficiency incentives package is expected.
Called the Home Star program, supporters claim that it will result in the creation of tens of thousands of jobs while significantly reducing energy consumption. Some have also suggested that the reduction in power consumption will be the equivalent of the output of three coal-fired power plants every year.
And consumers who participate in the program could save anywhere from $200 to $500 a year in energy costs.
Big Box players that provide weatherization materials and energy efficient appliances — like Home Depot (NYSE: HD), Lowes (NYSE: LOW), and Best Buy (NYSE: BBY) — will probably benefit in the short term. And since GE (NYSE: GE) has its hand in nearly every new energy efficiency gadget and tool, it will also likely benefit.
With about $4 billion worth of incentives to convert trucks to run on natural gas, there are definitely some opportunities here.
One is Clean Energy Fuels (NASDAQ: CLNE), which builds and operates advanced natural gas fueling stations across the country. Any further support for converting trucks to run on natural gas will certainly bolster this stock.
My colleague Nick Hodge also has a very profitable play in this area. It's a company that makes state-of-the-art engines that run on natural gas. They've got major deals with Peterbilt and Volvo, and guys like George Soros and T. Boone Pickens already own 7 million shares combined.
You can read more about this one as a member of Nick's Alternative Energy Speculator.
Not interested in natural gas?
Well, word on the Hill is that the Oil Spill Liability Trust Fund tax may be raised from 8 cents a barrel to 49 cents per barrel. If that were to happen, the cost would certainly trickle down to the consumer.
Throw that on top of the effects of peak oil or any major or minor disruption along the way, and you've got the recipe for a market ready to embrace conventional hybrids and those new electric vehicles that are coming in 2011.
And if you're unsure of this, consider that when gas hit $4.00 a gallon, there was a rush on Toyota Priuses. Dealers couldn't keep them in stock, and consumers were paying above sticker price to get them.
Toyota was clearly rewarded for their forward thinking, while thousands of gas guzzlers collected dust and bright neon signs offering massive “inventory reduction” discounts.
And keep in mind, when Toyota first started peddling Priuses, there was no meaningful energy legislation in Washington...
So even though we're about to see a half-assed energy bill (as Senator Lindsey Graham recently called it), to assume that alternative energy opportunities are going to disappear is not a safe assumption to make.
Rest assured — there's still a ton of money to be made in alternative energy.
And we're going to continue to make it.
To a new way of life, and a new generation of wealth...