I recently paid my electric bill and was putting the inserts
into the recycling bin when I saw one detailing where all my
electricity comes from. I was surprised to see that my utility,
National Grid, sources 74% of my electricity from what I'd term
Green resources: 34% natural gas (considered transitionally Green
because it burns cleaner than oil and coal), 27% nuclear, 6%
trash-to-energy, 3% large hydroelectric, 3% biomass and 1% wind.
Another 12% was imported power, almost certainly hydropower from
Quebec (which, if true, would bring the Green energy total to
86%), while 9% was coal and 5% oil.
That surprised me, because the average American gets a lot less
of their energy from Green sources. Of course, in the short term
we have little choice in the matter unless we put solar on our
roof or install geothermal. But most of us are locked in to what
our utilities source.
If you include non-electric use of energy too-mainly our cars,
trucks and planes-total energy usage in the U.S. looks like this,
according to the Energy Information Agency (
): 37% is liquid fuels like gasoline, oil and other petroleum
products, 23% is natural gas, 20% is coal, 8% is nuclear and 6%
is renewable. That only adds up to 94%; the missing 6% can be
found in rounding in the subsectors and the fact some fuels like
gasoline and residential oil, were delivered in the year prior to
when they were used. So count that missing 6% as fossil fuels.
That means nearly two-thirds of our energy comes from fossil
fuels, excluding natural gas.
That's why it's such a big deal President Obama is calling for
80% of U.S. energy to come from "clean" sources by 2035. If you
missed it, in his State of the Union address, President Obama
called our national lagging in utilizing Green energy "our
generation's Sputnik moment," where we need to respond to catch
up. He continued: "I challenge you to join me in setting a new
goal: By 2035, 80% of America's electricity will come from clean
energy sources. Some folks want wind and solar. Others want
nuclear, clean coal and natural gas. To meet this goal, we will
need them all."
That's a pretty bold goal, especially considering the EIA sees
the percentage of oil and coal rising to 66% of U.S. energy
sources by 2035 based on current planning and trends. And if you
drill down into our existing Green energy data, the president's
goal is even more audacious.
The vast majority of what the EIA terms renewable is from large
hydroelectric projects, like the Niagara Falls power project my
father worked on in the 1950s. There are two things to know about
hydro power: It's great and there isn't any more of it
coming-there are few good sites left and with additional fish,
but wildlife concerns, no Western nation even has a hydro project
on the drawing board.
As far as nuclear, consider that we have 104 nuclear reactors in
the U.S. For the first time in 30 years new plants are being
built. But only another four are expected to come online by 2018,
so as a percentage of energy, nuclear will grow, but not enough
to more than double America's clean energy.
Even if political wrangling means we only aim for half of Obama's
80% mark, with nuclear and hydro producing slow growth at best
domestically, it means solar, wind, geothermal and every other
clean energy technology you've heard of have to grow
exponentially in coming years to help meet clean energy goals.
That means more jobs of course, through domestic research and
manufacturing as well as bolstering our exports to other nations.
It also means huge profits for investors.
Consider this: Last year Cabot Green Investor subscribers enjoyed
the newsletter's portfolio gains of 24%, the best of all the
clean-and Green-stock newsletters and far better than alternative
energy exchange-traded funds, green mutual funds and the broad
market-and that was in a market backtracking from a recession,
government funding cuts and flops in expected international
Think of what Green will provide as the economy steadies on its
feet, the market improves and governments worldwide begin
refocusing on their energy independence.
Let me give you a hint: It has already started and right now my
subscribers are enjoying huge gains, including nearly 150% in
, 50% in a company that makes solar wafer processing equipment
and 50% in an organic food maker whose shares are being gobbled
up by a hedge fund legend. Plus double-digit profits in a company
key to the stunning growth globally in nuclear power, a cutting
edge biofuels stock that surged 17% in one day last week, a firm
that installs wind turbines and photovoltaic farms, and more.
The full portfolio is available only to Cabot Green Investor
subscribers, but I do have one low-priced stock to recommend
today that I expect to surge based on another country's clean
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This small stock is a play on a key driver to the worldwide boom
in Green energy I haven't yet addressed. And it is perhaps the
most important one to politicians: energy security. For one, it's
getting harder to find oil-it was reported this week the world's
largest oil company,
, has found only 95 barrels of oil to replace every 100 barrels
it sold in the past decade. That's a problem, since it means
there's less oil around.
Secondly, world demand for oil is booming, thanks to China,
India, Indonesia and nearly every other nation. Demand is so
great that the International Energy Agency strongly warns that by
2035 the world needs to find the equivalent of FOUR Saudi Arabias
to simply sustain today's demand levels! ExxonMobil's problem
with finding oil is ultimately our problem-and a reason to go
There are a number of astonishingly large alternative energy
programs recently put in place in areas like China and the
European Union, but today I want to focus on a major, but often
overlooked economy: South Korea. Korea is the world's 15th
largest economy with annual GDP of $1.5 trillion-the 11th largest
user of energy. It is, obviously, a major trading partner with
the U.S., as attested by the prevalence of Hyundais on the road
and Fila sportswear at the gym (Italian origin, yes, but Korean
Korea also imports a jaw-dropping 97% of its energy.
It's lacking in natural energy resources, so the country has no
choice but to go Green. Right now it gets just 1% of its energy
from renewable resources, a reason the government has just
enacted an aggressive national plan to get Greener.
Right now the mandate is to quintuple the amount of renewables in
the country by 2015, to 5% of national energy usage, raising that
sharply in subsequent years. One additional problem for Korea,
though: The peninsula doesn't have very good prospects for solar
and wind. Korea's solution: fuel cells.
A fuel cell is an electrochemical device that draws energy
from an input through electron transfer via oxidation. That in
itself is pretty amazing-after all, combustion is the dominant
method of powering everything and the biggest reason global
warming is such an imminent threat.
The byproduct of the fuel cell? Heat and not much else. If you
use the heat emitted for an obvious purpose, like heating a
building or its water, you end up with a manner of consuming
fuels that can claim efficiency of over 70% and in some cases
80%. A typical fossil fuel power plant operates at about 35%
conversion efficiency-and of course emits acid rain-type and
greenhouse gas-type particles.
My stock recommendation is a Connecticut firm called
FuelCell Energy (FCEL)
that has been researching fuel cells for decades, and has been
selling them the past decade.
Clients are institutions looking to reduce their carbon
footprint, like Yale University, convert waste product into
energy, such as Gills Onion, one of the nation's largest onion
processors which uses as much as 300,000 pounds of onion waste to
run its fuel cells, to industrial users looking to maximize their
efficiency, such as natural gas pipeline owner Enbridge, which
uses fuel cells to use natural gas ordinarily released from
pipelines to relieve pressure.
Korea has established fuel cells as the top tier candidate for
renewable energy credits in its national Green plan. By 2030, the
plan is to have the capital of Seoul generating 48% of its clean
energy via fuel cells.
FuelCell Energy has the inside track on selling fuel cells to
Korea. For one, the major Korean conglomerate Posco, one of the
world's largest steelmakers and a major power utility in Korean,
owns over 10% of FCEL shares and is an existing customer. For
two, no other company makes fuel cells as powerful as FuelCell
For the current year, look for FuelCell to post all-time high
revenues around $111 million while narrowing its net loss to 40
cents. Shares are low-priced, a 2, and with the prospect of major
Korean orders to be announced, a possible home run.
We're following FCEL closely in Cabot Green Investor and will be
featuring more low-priced, high-growth companies in the months
All the best,
For Cabot Wealth Advisory
Editor's Note: Brendan Coffey is the editor of Cabot Green
Investor, which ended 2010 with a 24% return, easily trumping its
benchmark, the WilderHill Clean Energy Index, which fell 7%! And
that's merely the beginning. The high-potential socks Brendan
recommends have even further to go in the weeks, months and years
ahead. Don't miss another recommendation.
Get started today!