Categories

Investing Observation & Opinion

Tools

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


    14 Stocks That Hold Up Best At Market Highs
    Gold & Bond Yields Slide As Stocks Continue Hawkish Surge
    New York Fed: ‘Could The Dollar Lose Its Reserve Status?’
    China Push For Gold Pricing Power Continues, Grant 3 New Import Licences
    The Secret Reserve Currency Life Of The Renminbi
    Free Money For Germany Is Bad News For Euro
    Target’s Troubles Go Deeper Than Data
    The Investor’s Definition Of Insanity
    DLTR, SHLD Top Thursday’s Hot Stocks To Watch
    The Apple-IBM Deal Has One Clear Winner: You
    U.S. Jobless Claims Fall, Bolster Labor Market Outlook
    Family Dollar Rejects Dollar General Offer On Antitrust Worries
    After Russia Targets McDonald’s, Businesses Wonder Who’s Next
    Fed’s George Says U.S. Economy Is Ready For A Rate Hike
    Futures Edge Higher Ahead Of Jackson Hole Meeting, Data


    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.

    Sears Posts Loss For 9th Straight Qtr As Sales Fall Again
    Euro Steadies At 11-month Low As Dollar Reigns
    Business Growth Slows In China And Europe, Russia Sanctions Still To Bite
    China Taps South Korea For Ideas In Qualcomm Antitrust Case
    China Economy Fears Deepen As August HSBC Flash PMI At 3-Month Low
    Icahn Reveals Stake In Hertz, Plans To Push Management
    Growing Up Poor Affects Adults’ Sense Of Control, Impulsiveness When Faced With Economic Uncertainty
    China Becoming Global Gold Hub And Gold Price Discovery Center
    China Bond Default Risk Reignites, Despite “Never Anticipating Any Risks”
    Gold’s Sudden Ignorance Of Geopolitical Risk
    Why So Much Anger In Ferguson? 10 Facts About The Massive Economic Gap Between White & Black America
    Jack Lew’s Worst Nightmare: China’s Currency Should Be 20 Percent ‘Weaker’
    Fed Fueled M&A Destroys Capital
    Market Snapshot: U.S. Stocks: S&P, Dow Edge Lower Pre-Fed Minutes; Target Drops
    Americans Pay Too Much For Bad Data Plans
    U.S. Mortgage Applications Rise In Latest Week
    Staples Says Weakness In Core Office Supplies Hurting Sales
    Home Improvement Chain Lowe’s Cos Cuts Sales Forecast
    Citigroup Seeks To Exit Japanese Retail Banking
    Global Stocks Halt Rally, BoE Jolts UK Markets
    China Fines Japanese Auto Parts Makers Record $201 Million For Price-fixing
    Amid Investor Pressure, PetSmart Says To Explore Sale
    ISIS Gets Angrier At America: ‘We Will Drown All Of You In Blood’
    Housing Permits, Starts Surge Driven By Renewed Rental Housing Scramble
    A Brief History Of US Money
    Starting This Year, Minorities Will Outnumber Whites In U.S. Public Schools
    Is Your Airline Poisoning You?
    What To Look For In Dueling Autopsies Of Michael Brown
    How To Profit From The World’s “Scariest” Stock Exchange
    Biogen Idec Gains On FDA Approval Of New MS Drug
    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.