Categories

Investing Observation & Opinion

Tools

  • Economy & Politics
  • Investing
  • Personal Finance
  • Related Posts


    Retailing’s Black Friday Hoax
    Tech Bubble Won’t Burst In 2015. 2016?
    Companies Are Squeezing Finance Department Budgets, And That’s Actually Good News For CFOs
    American Oil Will Restore American Greatness
    The Mystery Of Surging Q3 GDP And Why Americans Are Suddenly $80 Billion “Poorer”
    OPEC’s Prisoner’s Dilemma
    US “Secret” Deal With Saudis Backfires After Oil Minister Says US Should Cut First
    Two FBI Agents Shot Near Ferguson Protests
    Who Will Benefit From Digital Currency? Bitcoin Experiment Gives A Glimpse
    There’s Money To Be Made With Tech’s Second Acts
    Wall Street Opens Little Changed, Energy Weighs
    U.S. Consumer, Business Spending Data Point To Slowing Growth
    Deere Says Equipment Sales To Fall Further As Farm Incomes Drop
    Goldman, BASF, HSBC Accused Of Metals Price Fixing
    Bitcoin Exchange Kraken To Help In Mt. Gox Bankruptcy


    The Biggest Energy Market Breakthrough Since Hydraulic Fracturing

    Today, I’m zeroing in on the baloney that renewable energy sources promise to put an end to our use of coal in the United States.

    The extreme tree huggers in the bunch — who routinely spit in the face of perfectly logical, economic arguments — insist that we have no choice but to abandon using it. Stat!

    Why? Because coal is dirty. It generates too many darn pollutants. And it threatens to do irreparable harm to the Earth.

    The reality? The situation is hardly that dire. Here’s the proof.

    Just the Facts, Ma’am

    If we look at the hard data, it turns out we’ve actually been rolling back the “carbon clock” for years.

    Last year, carbon dioxide emissions from coal specifically fell to a 26-year low. Total U.S. energy-related carbon dioxide emissions fell to a 20-year low. And if we adjust for population, carbon dioxide emissions per capita nearly hit a 50-year low.

    Voila! We’re right back to the year 1997.

    http://www.wallstreetdaily.com/wallstreet-research/charts/0813_Pollutants.png

    “There is rich irony here,” says The Wall Street Journal’s Matt Ridley. He’s not kidding, either.

    As we all know, reducing emissions remains environmentalists’ raison d’être. And yet, they’re getting what they want, thanks to one of the “technologies [that’s] most reliably and stridently opposed by the environmental movement,” as Ridley puts it.

    He’s talking about hydraulic fracturing, of course.

    It’s single-handedly responsible for unleashing the natural gas glut in the United States, which drove down market prices. In turn, utilities couldn’t resist the temptation, economically speaking, to increase their use of natural gas and reduce their use of coal for electricity generation. And voilà!

    Since coal emits about twice as much carbon dioxide as natural gas, emissions were all but guaranteed to decline. And they have done exactly that.

    As I pointed out about a month ago, though, this isn’t a permanent transition. It’s a result of what the U.S. Energy Information Administration (EIA) calls the “elasticity of substitution.”

    In layman’s terms, utilities merely use the most cost-effective power generation source. That means that as market fundamentals move in favor of coal again, they’ll ramp up usage.

    Guess what? That’s starting to happen, based on recent comments from Peabody Energy (BTU) Chairman and CEO Gregory H. Boyce.

    However, that doesn’t mean carbon dioxide emissions are bound to reverse course and increase uncontrollably as coal usage rebounds.

    Based on the research I’ve been doing on various disruptive technologies for MicroCap Tech Trader subscribers, I’m convinced that we’re on the cusp of another technological breakthrough — one that’s relevant to our discussion today.

    Out of fairness to paying subscribers, though, I can’t share all the details.

    Instead, I’ll simply say this: If a particular company’s combustion technology proves to be as effective in increasing efficiency in coal-burning applications as it has already demonstrated in natural gas applications, look out.

    Suddenly, coal won’t be so dirty anymore.

    Yes, I’m saying that the future of coal rests on a technological breakthrough that dramatically reduces pollutants—and, thereby, eliminates the pressure to abandon its use.

    Before you chalk that up to an impossible technological feat and summarily dismiss my argument altogether, realize this.

    The future for renewable energy sources rests even more heavily on our ability to innovate. Not only do we need to come up with a viable storage solution, we also need to dramatically reduce costs.

    As I’ve pointed out before, renewables remain too darn expensive. Even with heavy government subsidies. And the government knows it, too.

    More Double Talk From Washington

    President Barack Obama wants to move on from fossil fuels and coal in particular. He considers them “energy sources of the past.” The only problem? The U.S. Department of Energy is broadcasting a dramatically different plan for the future. (Nothing like the government talking out of both sides of its mouth, huh?)

    Through 2040, the Department of Energy expects fossil fuels to still serve as the dominant energy source at 80.1 percent. As for renewables? Well, their contribution barely makes it into the double digits at 10.8 percent.

    http://www.wallstreetdaily.com/wallstreet-research/charts/0813_Renewables.png

    That’s pathetic, considering that more than $2 trillion has been invested in renewable energy projects over the past 20 years, according to the IEA. Instead of increasing renewables usage, however, those funds led to a decline from 9.3 percent in 1948 to 7.5 percent in 2012. (Can you say “negative return on investment?”)

    Bottom line: I’m monitoring technological developments throughout the energy sector. So far, I haven’t seen a noteworthy innovation that could make renewables dramatically more affordable. But I am seeing compelling developments on the coal front.

    So for right now, renewables don’t stand a chance at snuffing out coal. And if the company I’m tracking makes clean-burning coal a reality, renewables might never stand a chance of dethroning coal. So stayed tuned, as we could be on the brink of the biggest energy breakthrough since hydraulic fracturing.

    I promise to keep you updated on the situation in the months ahead.

    Ahead of the tape,

    — Louis Basenese

    Louis Basenese Co-Founder, Chief Investment Strategist for Wall Street Daily. A former Wall Street consultant and analyst, Louis helped direct over $1 billion in institutional capital before founding Wall Street Daily where he serves as Chief Investment Strategist. In addition to being an expert on technology and small-cap stocks, Louis is also well versed in special situations, including Mergers & Acquisitions and spinoffs.

    | All posts from Louis Basenese

    Discuss this Story:

    Comment Policy: We encourage open discussion. Comments including racist statements, profanity, name calling or spam will be removed at our discretion. We use filters for spam protection. If your comment does not appear it is likely because it violates the policy.

    British Insurer Aviva To Shut $2 Billion Fund Of Hedge Funds Unit
    HP Fourth-quarter Revenue Drops On Weak Enterprise Demand
    Saudi, Russia Pre-OPEC Talks Yield No Oil Output Cut
    Samsung Electronics To Buy Back $2 Billion In Shares
    Another Day, Another Stock Market Record
    The Retailers That Will ‘Win’ The Holidays
    Here Comes France: Right-Wing Leader Marine Le Pen Demands Central Bank Repatriate French Gold
    Futures In Fresh Record Territory As OECD Cuts Global Growth Projections Again
    Global Business Confidence Collapses To Post-Lehman Lows
    Deutsche Bank’s Modest Proposal To Central Banks: “Purchase The Gold Held By Private Households”
    Currency Wars Reignite As Yuan Tumbles Most In 2 Months And Chinese Bond Market Freezes
    Who’s Ready For $30 Oil?
    Could Digital Currency Make Our Money More Secure?
    Why These Two Stocks Could Gain As Much As 60 Percent
    Acting More Like A Start-Up Makes Microsoft A Better Investment
    Futures Point To Higher Open After Strong GDP Data
    In Wake Of China Rejections, GMO Seed Makers Limit U.S. Launches
    U.S. Prosecutors To Interview London FX Traders
    United Tech CEO Steps Down, Replaced By CFO In Abrupt Change
    Strategist Bernstein Sees More Equity Gains, Likes High-yield Munis
    Stocks To Be Thankful For This Thanksgiving
    Tiffany Q3 Sales Fall On Weak Demand In Japan
    11 Brands You’re Paying A Big Price For
    Honda Underreported Deaths, Injuries To Feds
    Apple Makes A Run At $700 Billion
    The Seven Retail Stocks To Watch
    Oil, Gold, And A Real Flying Car
    Walmart Workers Increasingly Rely On Food Banks, Report Says
    Amazon Keeps Cutting Grocery Prices — But Does It Care About Profits At All?
    Brace Yourself For A Below-average Christmas
    Read more from Investing...

    Liberty Investor Digest

    Get today's most important
    financial headlines all in
    one place by email!



    Sources


    close[X]

    Sign Up For Liberty Investor Digest™!

    Get Liberty Investor Digest FREE By Email!

    Input your name and email address in the fields below and get today's most important financial headlines sent straight to you inbox!

    Privacy PolicyYou can opt-out at any time. We protect your information like a mother hen. We will not sell or rent your email address to anyone for any reason.