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Investors
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We can design a portfolio of energy and natural resource investments for growth or income.  We can save you time, money, research and costly mistakes.  The information below provides an overview and educational information on various natural resource investment choices.  For latest Commodity Prices and Charts, visit our Commodity Prices page (wait for chart data to load).

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Fourth Annual Energy Forum & Expo
coal, natural gas, oil shale, uranium, wind, solar, alternative energy
Learn the latest information on energy in Western Colorado
Friday, February 26, 2010, 8 am - 4:00 pm
Two Rivers Convention Center, 159 Main St, Grand Junction, Colorado 81501
FREE ADMISSION to the public
Agenda

Diversify with Natural Resources.  A well-diversified investment portfolio should include a variety of investment types such as stocks, bonds, cash, real estate and natural resources.  Natural resources include various commodities such as oil and gas, coal, precious metals, industrial metals, and agricultural commodities such as crops, livestock and timber.  Water is also a valuable natural resource.   The four broad groups are ENERGY (oil, natural gas, coal, uranium), FOOD (corn, wheat, soybeans, oats, rice, livestock, coffee, sugar, cocoa, orange juice) METALS and MINERALS (gold, silver, platinum, copper, aluminum, lead, nickel, zinc) and RAW MATERIALS (lumber, steel, cotton, wool, rubber).

There are several ways to invest including commodity futures, managed commodity funds, natural resource stocks and mutual funds, limited partnerships, and commodity-linked securities such as bonds or ETFs backed by gold, silver, oil, natural gas, gasoline, agricultural commodities and others.  

Often, hard assets such as natural resources are going up in value when stocks or bonds are doing poorly.  Adding natural resources to your portfolio provides better diversification and another opportunity to profit under changing economic conditions.

We have done research into various investment alternatives including natural resource stocks, royalty trusts, mutual funds, ETFs and commodity-linked securities.  There are investments for growth or income or both.  Some investments also provide tax benefits.

Oil & Gas.  In 2000, Colorado ranked 10th of all states in crude oil production, 6th in natural gas production, and 1st in coalbed methane (CBM) production  Oil and gas wells are located in 42 of Colorado's 63 counties. The top three counties in oil production are Rio Blanco, Weld and Cheyenne. La Plata, Weld and Garfield counties lead the state in natural gas production.  Two refineries operate in Colorado, both in Commerce City.  We have researched oil and gas companies operating in the following regions of Colorado as well as other areas in the USA and offshore:

  • San Juan Basin (southwest Colorado)
  • Raton Basin (southeast Colorado)
  • San Luis Basin (southwest Colorado)
  • Park Basin (central Colorado)
  • Denver-Julesburg (DJ) Basin (northeast Colorado)
  • Sand Wash, Piceance, Paradox, Vermillion and Green River Basin (northwest Colorado)

    (For tourists, Sand Wash Basin is the home for a herd of about 200 wild roaming horses
    For investors, you can buy beautiful alpine valley real estate with wildlife, hunting, fishing, clean air, mountain and lake views and wild horses at Melby Ranch Wild Horse Mesa near sunny, historic San Luis, Colorado (oldest town in Colorado) and Lake Sanchez, close to the famous Rio Grande River and Taos, New MexicoContact us for more information on investing in land in Colorado and New Mexico.  You can buy land in your IRA account.)

If you have ever seen oil and gas wells while driving in Colorado or  elsewhere, you may have wondered who owns them.  The Southern Ute Indian Tribe is a big owner of natural gas wells on their reservation in southwest Colorado near Durango.  (along with the Sky Ute Casino and lodge)  (You can listen to their radio station on the Internet at www.KSUT.org)



Top oil producing states
in September 2007, figures shown are thousand barrels of oil per day (BOPD):  1. Louisiana- 1,417, 2. Texas- 1,251, 3. California- 679, 4. Alaska- 663, 5. Oklahoma- 166, 6. New Mexico- 159, 7. Wyoming- 142, 8. North Dakota- 121, 9. Kansas- 102, 10. Montana- 87
, 11. Mississippi- 51, 12. Utah-50, 13. Colorado- 48.

In Texas, the major oil and gas regions are:

  • Permian Basin, Midland, Delaware, Val Verde Basins- (west Texas) 
  • West Texas Overthrust (WTO), Piñon Field, Pecos/Terrell counties- (west Texas)
  • Anadarko Basin, Palo Duro Basin (Texas panhandle)
  • Offshore- Gulf of Mexico
  • Barnett Shale- Fort Worth Basin (north central Texas)
  • South Texas
  • Cotton Valley, East Texas

In Wyoming, the major oil and gas regions are:

  • Greater Green River Basin (southwest Wyoming)- Jonah, Pinedale, Mesa Unit, Lost Soldier Fields
  • Overthrust Belt (southwest Wyoming)- Fogarty Creek Field
  • Powder River Basin (northeast Wyoming)- PRB Coal Bed Field
  • Big Horn Basin (northern Wyoming)- Elk Basin, Oregon Basin Fields
  • Wind River Basin (central Wyoming)- Madden Field

In New Mexico, the major oil and gas regions are:

  • San Juan Basin (northwest New Mexico)
  • Permian Basin (southeast New Mexico)
  • Raton Basin (northeast New Mexico)
  • Galisteo Basin (controversial new development near Santa Fe)

Other major oil and gas producing states are Louisiana, Oklahoma, California and Alaska.  North Dakota is rapidly increasing oil production from the Bakken shale region, which extends into Montana and Saskatchewan.

The U.S. Strategic Petroleum Reserve (SPR) was created in 1975 in response to the Arab oil embargo of 1973-74.  Crude oil is stored at 4 sites in salt domes (caverns), from 2,000 to 4,000 feet underground, along the Gulf of Mexico in Texas (Bryan Mound 226M bbls, Big Hill 160M bbls) and Louisiana (West Hackberry 219M bbls, Bayou Choctaw 72M bbls).  In November 2001, President Bush ordered the Department of Energy to fill the SPR to capacity and it is now full.  Total storage capacity is approximately 700 million barrels, about 53 days worth of crude oil.  The SPR may be expanded to 1 billion barrels in the future.  In addition, large underground reserves of oil and gas are located in the National Petroleum Reserve- Alaska (NPRA) and in section 1002 of the Alaska National Wildlife Refuge (ANWR), both located on the North Slope near Prudhoe Bay on the Artic Sea.

You can own shares of oil and gas wells as an investor.  

Click here for oil and gas investment advice
.


Coalbed Methane (CBM) Well Lifespan


Drilling rig components illustrated glossary from US Department of Labor, OSHA.

Glossary of oil and gas drilling and operating terms from Petex and University of Texas, Austin

Gas Hydrate. 
Gas hydrates are a crystalline solid (clathrate), consisting of compressed gas molecules, usually methane, trapped by a cage of frozen water molecules.  There is a huge amount of gas hydrate in the oceans, deep lakes and artic permafrost regions, but it is not commercially producible safely at this time.  Due to the compression, methane hydrate (also known as ice that burns) has about 200 times the energy density of methane gas, making it an attractive energy source.  Research is under way to determine safe, economical production techniques.  Commercial production is about 10 years away.  Gas hydrates in the North Slope region of Alaska may out produce the conventional gas in the Prudhoe Bay region.  Production of just 1% of the world's known gas hydrate resources would meet US natural gas demand for the next 100 years.  Global warming could cause gas hydrates to "burp" massive amounts of methane into the atmosphere, accelerating the global warming process.  

Oil Supertankers.  Another opportunity is in ocean-going, double-hulled, oil  cargo supertankers.  The largest are known as ULCC and VLCCs (Ultra/Very Large Crude Carriers).  Smaller sizes are known as SuezMax, PanaMax, AfraMax and  HandySize.  Several companies own fleets of $60 million oil tankers and rent (charter) them to major oil companies and governments for over $50,000 per day on guaranteed contracts for up to 7 years.  Other tankers are available at the current tanker market rate (spot rate) which fluctuates widely based on tanker supply and demand.  You can own shares in oil tanker companies and receive quarterly dividends.  Part of the dividend is tax-free.  

 

Other tankers.  Other companies own insulated ocean tankers designed to transport cooled liquefied natural gas (LNG).  Natural gas (methane) is cooled to minus 260 degrees F, which causes the volume of the gas to be reduced by 600 times, making it economical to store and transport in liquefied form.  LNG is not explosive in its liquid state.  Special LNG terminal ports (liquefaction plants and regasification plants) are needed and more are being constructed.  Major suppliers of LNG are Algeria, Indonesia, Trinidad, Tobago, Nigeria, Qatar, Oman, Russia and Australia.  Some LNG is produced in Alaska.  Some companies own oil tanker barges that transport oil in shallow water, or product carriers and ships that carry refined products such as gasoline, diesel, jet fuel, aviation fuel, kerosene or heating oil.  

Click here for our FREE REPORT on: Oil Tanker StocksOil Tanker NewsletterVLCC Tanker Monthly Spot Rates Data.  The Louisiana Offshore Oil Port (LOOP), south of New Orleans, is a vital deep water port for unloading oil tankers, and was affected  by Hurricane Katrina.  Click here for investment advice on oil tanker stocks.


Oil Shale and Gas Shale.  

Click here for our FREE REPORT on: Oil Shale.

HUGE oil shale deposits are located in the Uinta Basin in northeast Utah, and the Green River Basin in southeast Wyoming and Piceance Basin in northwest Colorado near Parachute, Rifle, Battlement Mesa and Grand Junction, with high concentrations in Rio Blanco, Garfield and Mesa counties, containing 1/2 to 1 barrel of oil per ton of shale, and 1 million barrels per acre.  Total recoverable deposits are estimated at 800 billion barrels of oil.  Smaller oil shale deposits are found in the San Juan Basin of northwest New Mexico.  Eastern oil shale deposits are in Kentucky, Ohio and Indiana.  

Bakken Shale deposits are located in the 25,000 square mile Bakken Formation, with 2/3 in western North Dakota (Williston Basin, Parshall Field, Mountrail County), near Stanley and Minot, and the rest in eastern Montana (Elm Coulee Field), Saskatchewan and Manitoba.  Bakken Shale accounts for half of Montana's oil production.  Due to Bakken shale oil, North Dakota oil production is reaching new record levels.  North Dakota is now ranked #8 in US oil production.  The state oil industry expects to need 12,000 new workers by 2010.  Bakken oil recoverable reserves are estimated at 4 billion barrels, plus 1.85 trillion cubic feet of natural gas and 148 million barrels of natural gas liquids.  (Note: The Arctic National Wildlife Refuge in Alaska, ANWR, holds an estimated 10 billion barrels of oil, but drilling is not allowed under current law.)  Bakken oil wells cost about $6 million each and are drilled about 10,000 feet vertically plus another 10,000 feet horizontally.  The shale rock is fractured using water and sand or ceramic, releasing light, sweet crude oil from microscopic pores.  New technology and high oil prices make it economical to drill deeper for oil, as long as oil prices are above $50 per barrel.  An oil refinery is under development on the Fort Berthold Indian Reservation.

With higher oil prices, and improved technology, there is a renewed interest in Colorado oil shale.  Small scale research and production operations continue, at Shell's Mahogany Research Facility near Rangely, Colorado, 25 miles southwest of Meeker, using underground refrigerated "ice walls" (freeze walls) and electric heaters lowered into well bores to heat ground sections to 700 degrees, for 3 to 4 years, to release oil and gas (In-situ Conversion Process or ICP), essentially speeding up the process which requires millions of years in nature.  Other in-situ heating methods include using underground fuel cells, microwave radiation, heated pipes, and hot gas injection.  Recent government incentives encourage speeding up large scale commercial development.  Environmental assessments are under way.  Projects are located on federal and private land, operated mostly by large oil and gas companies and a few small firms.  Some small companies could be very big winners.  Large scale commercial production of crude oil from shale would bring thousands of direct and indirect jobs to the region.  US Department of Energy (DOE) forecasts predict initial production of 200,000 barrels per day by 2011, growing to 2 million barrels per day by 2020 and later to 10 million barrels per day.  Skeptics view the forecasts as overly optimistic hype regarding both the timeframe and production amounts.  Others expect clean diesel fuel made from coal (synfuels from liquefaction) will win and be used by new diesel hybrid vehicles.

The new extraction methods can extract up to 10 times the old "retort' (kiln) method of mining and heating the rock.  Energy is required to heat the ground, with new coal power plants, extracted oil and gas, and fuel cells as potential energy sources.  The Energy Policy Act, passed in August 2005, mandates the Bureau of Land Management (BLM) to offer public land for commercial leasing for oil shale development by the summer of 2007.  Huge open pit mines are also being studied.  Beware of get-rich investment hype on Colorado oil shale.  As one saying goes, "Oil shale is the fuel of the future, and always will be."  Abundant coal or uranium may be a better investment choice.  Bakken oil shale is already in production in Montana and North Dakota.

Barnett Shale and Woodford Shale natural gas deposits are in the Fort Worth Basin, Texas.  Fayetteville Shale is in the Arkoma Basin in northwest Arkansas.  Baxter Shale is in northwest Colorado.  Floyd Shale is in Mississippi.  Marcellus Shale is in the Appalachian Basin in New York, Pennsylvania and Kentucky.  Haynesville Shale is in northwest Louisiana.  Monterey Shale is along the California coast.  Canada has oil shale deposits in central Saskatchewan and gas shale in Nova Scotia, Quebec and British Columbia.  Israel also has oil shale.   Click here for advice in choosing oil shale and gas shale investments.

Oil Sands (tar sands).  Several companies are exploring and mining the huge oil sands (tar sands) deposits (bitumen) in northern Alberta and Saskatchewan, Canada, in the Fort McMurray, Athabasca (80%), Cold Lake (12%), and Peace River (8%) regions.  Open pit mining is used for deposits less than 250 feet deep.  In-situ extraction operations, such as steam-assisted gravity drainage (SAGD) are used for deeper deposits.  Oil sands contain sand, clay, water and bitumen, a heavy, tar like form of crude oil.  Trace moisture in the gooey oil sands aids in the heat extraction process to produce synthetic crude oil.  Current production is about 1.2 million barrels of oil per day (BOPD), from Alberta.  Total recoverable deposits exceed 315 billion barrels.  Future oil sands production is expected from Saskatchewan.  Eastern Utah has tar sands resources estimated at 12 to19 billion barrels of oil (see map). Vernal, Utah (Asphalt Ridge) has a pilot tar sands project.  Lead times are generally 7 to 10 years from initial exploration and discovery to commercial production.  Oil production from politically stable regions is more valuable than from politically unstable regions or countries impacted by fighting and terrorism.  Click here for advice in choosing oil sands investments.



Royalty Trusts. 
Oil, gas, coal or iron ore Royalty Trusts pay you monthly or quarterly dividends (royalties), based on the prices paid for their already discovered natural resources.  A few companies pay dividends from royalty interests in gold mining operations.  There is no exploration risk.  Separate operating companies are contracted to produce, market and sell the resources.  Some may also pay you Section 29 Tax Credits if they are producing Fuel from Non-conventional Sources (FNS) such as coal seam gas (coalbed methane or CBM) and other fuels such as biomass methane from waste landfills or livestock manure.  The tax credits can be used to reduce your tax bill from any source of income: active, passive, earned, unearned, dividends, interest, rents, IRA and pension withdrawals!  Some income programs enable you to buy direct ownership of an oil and  gas Royalty Interest or Working Interest as a Tenant In Common owner. They may also qualify for a Section 1031 exchange for investment real estate.  Click here for advice on Royalty Trusts.

Click here for our FREE REPORT on: Royalty TrustsBeware of differences between US and Canadian royalty trusts, tax considerations, suitability for IRAs, changes in Canadian tax laws and depleting resources causing the trust to terminate.  Click here for assistance and investment advice on Royalty Trusts.

Private Oil and Gas Properties For Sale: 
Working interests and royalty interests in oil and gas properties in many states are available for sale from about $10,000 and up, and they can be used to swap for real estate in a 1031 exchange.
  (View article on oil and gas 1031 exchange.)  Oil and gas properties can provide excellent tax benefits, high return on investment and monthly cash flow.  Tax benefits can reduce your taxes and shelter income from your salary, stock trading, etc.  Exploration, wildcat, developmental and producing properties are available to suit your needs and risk tolerance.  Click here for assistance and investment advice on 1031 exchanges.

Oil & Gas Pipelines.  In addition to transporting oil by supertankers, there are major pipeline companies (some organized as Master Limited Partnerships or MLPs) that generate steady income distributions to investors from the fees (tariffs) they charge for transporting oil and gas, under long-term contracts with major energy producers.  Pipelines are usually the cheapest form of transportation, have a long lifespan, low maintenance costs and produce income based on their volume usage, rather than the price of oil and gas.  Distributions to investors have tax advantages, with 70% to 90% not taxable as income, but rather treated as a return of capital.  Click here for advice on pipeline investments.

Refineries and Storage Terminals.  Crude oil is transported to refineries where it is refined using separation, distillation, conversion (cracking), treating, combining and reforming into various commercial products.  The primary products are transportation fuels.  Typical refinery production might be gasoline (46%), diesel fuel (21%), aviation gasoline, jet fuel (11%), heating oil (7%), kerosene (0.5%), propane, butane, asphalt (3%), coke (4%), waxes (0.1%), lubricating oil (1%), sulfur, feedstocks and other products.  There are not very many refineries in the USA, and new refineries have not been built in many years.  More of the crude oil being produced is now "sour",  meaning high in sulfur (> 0.7%).  Few refineries are equipped to process sour crude, which is cheaper to buy than "sweet" crude (low sulfur).  Ethanol plants (See Ethanol refinery map) and biodiesel plants are also in operation and many more are under construction to provide fuel from renewable energy sources such as crops and cellulose.  There is a growing distribution system for these fuel products and a growing number of vehicles that can operate on these fuels.  Bio-fuel vehicles and future electric cars will eventually reduce demand for gasoline.

Click here for our FREE REPORT on: US oil refineries and the companies that own and operate them.  Many are along the Gulf of Mexico and can be affected by hurricanes.  Some refineries are owned by small independent companies and other refineries are owned by major international oil companies.  (In Canada, the major oil refiner is Imperial Oil Limited, with refineries in Alberta, Ontario and Nova Scotia, and its refined products distributed through over 2,100 Esso retail gas stations.)  Storage terminals store oil and gas in tanks or caverns for the operator or for customers for a storage fee.  Storage is used to help buy oil and gas when prices are low and supplies are plentiful, and sell it when prices are high due to supply shortages or high demand.  Storage terminals may be located at refineries or at separate storage locations.  Click here for advice on refineries and storage terminals.

Oil and Gas ServicesOil and gas service companies provide oil and gas equipment and services such as exploration, drilling rigs, drilling services, working crews, pipe, pumps, compressors, meters, deep-water drilling and pipe-laying ships, offshore platforms, transportation, seismic and geological services, fire prevention and fire extinguishing services, consulting and other related services.  Click here for advice on oil and gas services companies.



CoalCoal is used to generate over 55% of the electricity in the U.S.  There is plenty of coal available for many decades.  Many power plants and some manufacturing and industrial plants use thermal coal (steam coal) to generate heat or electricity and steel mills use coking coal (metallurgical coal) in blast furnaces.  Growing demand from China, India and other developing countries is boosting coal prices.  You can invest in coal royalty trusts, MLPs, coal mining companies or railroads, dry bulk ships and barges that transport the coal, or heavy earth-moving equipment used to mine the coal.  There are also a few companies that convert coal or coal waste into gas (gasification) or into liquids (liquefaction), including gasoline and diesel fuel, known as synthetic fuels or synfuels.

The leading coal producing states are 1) Wyoming, 2) West Virginia, 3) Kentucky, 4) Pennsylvania, 5) Texas, 6) Colorado, 7) Montana and 8) Indiana, 9) Illinois and 10) Virginia.  Eastern coal mines are mature, generally underground and produce high sulfur coal.  Western coal mines, such as the large Powder River Basin fields in Wyoming, are younger and growing in production, using more economical surface mining methods to produce low sulfur coal.  However, Western coal mines are further from major population centers and must pay more for transportation costs.  (I grew up in a coal mining town in western Pennsylvania, Appalachia.)  Lignite is a low quality, low energy density brown coal, compared to black coal.  Major lignite deposits are in western North Dakota and eastern Montana.  Oil shale has about the same low energy density as lignite.  Click here for advice on coal investments


Alternative Energy.  Major oil companies have money invested in alternative and renewable energy sources such as solar energy and wind power.  A few smaller companies offer products and conduct research and development in this growing area.  Biomass energy, bio-methane gas from livestock manure, fuel cells, and more efficient batteries, using lithium, are being developed.  

 

Lithium.  Increasing use of lithium-ion batteries for consumer electronics and hybrid and electric vehicles should help boost profits at lithium mining companies and battery manufacturers.  Some mining companies use expensive open pit mines requiring heavy machinery.  Other mining operations extract lithium from salt lake brine deposits, are quicker to get licenses and permits approved and mines into production, have little environmental impact, and are less expensive to operate (lower overhead) helping to increase mining profits. Prices for lithium carbonate (Li2CO3) in the last 10 years have ranged from $1800 to $6600 per ton.  Demand for lithium-powered vehicles is expected to increase fivefold by 2012.  Over 60% of cell phones and over 90% of laptop computers use lithium batteries.  The global market for lithium batteries is estimated at over $4 billion per year and growing rapidly.  Contact us about investing in lithium mining stocks.


Hybrid vehicles and electric vehicles (see Tango 2-seater electric car) are available and back-ordered.  Zap (Zero Air Pollution) produces electric cars, sports cars, trucks, bikes and scooters.  Orders are backlogged due to growing demand.  For comparison, in the USA there are about 800 vehicles per 1000 people.  In China and India, there are only about 10 vehicles per 1000 people, but vehicle ownership is growing rapidly.  This puts increasing demand on oil and gasoline, driving up prices as more vehicles require fuel.  Rising gas prices cause consumers to shift to smaller, fuel-efficient vehicles, car pooling, reduced travel, public transportation, electric cars, motorcycles, scooters, bicycles, electric bicycles, telecommuting and web conferencing.  Mercedes is producing several models of the small 2-seater gasoline Smart car. 

New Mexico has a lot of sunshine and is becoming a leading alternative energy state with incentives for the use of alternative energy.  Governor Bill Richardson is a former Secretary of Energy.  Tesla Motors is now producing the Tesla Roadster electric car in Albuquerque, with the WhiteStar sports sedan model to follow.  The world's largest solar panel farm, 3200 acres, with a capacity of 300 megawatts, enough to power 240,000 homes, is proposed to be built by 2011 near Deming, New Mexico, with 350 days of sunshine a year.  

The New Mexico Wind Energy Center, 170 miles southeast of Albuquerque, in House, 20 miles northeast of Fort Sumner, can produce up to 200 megawatts, from windy eastern New Mexico.  It has 136 turbines, each 210 feet high, and is one of the largest wind generator farms in the USA.  Oil tycoon T. Boone Pickens' Mesa Power is now building the largest wind farm in the world, 4,000 megawatts, equivalent to four large coal-fire power plants, in Pampa, 60 miles northeast of Amarillo, in the Texas panhandle.

Fuel Cell Vehicle- Honda is now manufacturing the FCX Clarity car that uses an electric motor, powered by a generator driven by hydrogen fuel cells.  It is only available in southern California, where there is a network of hydrogen refueling stations.  Driving range is about 280 miles.

Biodiesel fuel is made from oilseed crops, such as canola, rapeseed and jatropha, a drought-resistant tropical shrub, and from soybean oil, mustard, peanut, sunflower, coconut and palm oils, and from algae.  Biodiesel fuel can be used in most diesel vehicles with no modifications.  The original diesel engine was designed to run on peanut oil biodiesel.  Due to tax incentives, US biodiesel production is expected to grow rapidly from 30 million gallons in 2005, to 80 million gallons in 2006, and up to 200 million gallons in 2007.

Ethanol.  Unleaded gas mixed with ethanol (E-10 and E-85) made from corn is available at many gas stations.  There are about 100 ethanol refineries, with about 40 more under construction.  (See Ethanol refinery map.)  E-10 (gasohol) contains 10% ethanol and can be used in most modern vehicles.  Fuels with higher amounts of ethanol (E-85) can be used in Flexible Fuel Vehicles (FFVs), however, only about 1,000 US gas stations (0.6%) out of 170,000 total offer E-85 fuel, mostly in the Midwestern farming states.  FFVs, mostly fleet vehicles, represent only about 8% of all vehicles on the road.  Ethanol fuel provides more power due to its higher octane rating (100-105) but has lower fuel economy than gasoline, so more fuel is needed.  

Corn is a thirsty crop, so other starch and sugar crops are also being developed for ethanol production including sugar cane, sugar beets, apples, peaches, grapes, melons, sorghum, wheat, barley, rye, potatoes, and maize.  Sugar cane produces about 7 times more energy than corn, and Brazil is powering most of its vehicles on sugar cane ethanol.  Cellulosic ethanol is made from cellulose biomass, including some agricultural and forestry waste products, grass, switch grass, rice straw, straw, corn stalks, wood chips, and fast growing trees like willow and poplar.

US gasoline consumption is about 140 billion gallons per year.  US ethanol production is expected to grow rapidly from current levels of about 4 billion gallons per year, to about 12 to 14 billion gallons per year maximum (for E-10 demand).  More E-85 ethanol vehicles and fueling stations are needed for ethanol to become a significant replacement for gasoline.  Wal-Mart is planning to add E-85 fuel pumps starting in 2008, after UL testing is completed to allow safety certification of the pumps.  There are some E-85 corrosive effects on metal (aluminum) and rubber (fittings and hoses) that need to be tested.  Ethanol attracts water and cannot be transported by pipeline.  Most ethanol is currently produced in Iowa, and other sparsely populated Midwest farming states, and must be transported by truck and rail to more populated areas, adding to the final cost at the pump.  Some hobbyists and small businesses are making ethanol from apple juice using homemade stills.  In 1908, the original Ford Model T automobile ran on ethanol.

Renewable Fuels Standard.  The Energy Independence and Security Act of 2007 amended the Renewable Fuels Standard of 2005 to increase the use of renewable fuels, to reduce foreign oil dependence and reduce greenhouse gas emissions.  It defines phase-in period annual production goals for conventional biofuel (corn starch ethanol), advanced biofuels (cellulosic biofuel and biomass-based diesel).  Initial goals are 9 billion gallons of corn starch ethanol in 2008, peaking at 15 billion gallons in 2015.  Advanced biofuel production begins at 0.6 billion gallons in 2009, increasing production rapidly, and matching and surpassing corn starch ethanol with 15 billion gallons of production by 2020.  Gasoline will remain as the primary transportation fuel for many years as electric, hybrid and alternative energy vehicles ramp up production and lower their costs.

Some utilities use nuclear power, wind generators, hydroelectric dams or geo-thermal energy.  Coastal areas may use tidal energy.  High oil and gas prices and tax incentives will drive more use of alternative energy.  Thermal coal (steam coal for power plants), coking coal (metallurgical coal for making coke to make steel in blast furnaces) and PCI coal (pulverized coal injection, a substitute for coke) and uranium mining, milling, processing and exploration companies also benefit from increasing energy demands.  There are 441 operating nuclear power plants worldwide, with another 140 nuclear plants in planning or under construction.  These plants currently require 180 million pounds of uranium (U3O8) per year.  Mining companies are only producing about 100 million pounds per year, with remaining demand currently met from limited secondary sources such as recycling.  

More uranium is needed from mining operations.  A uranium shortage has been driving up uranium prices to record levels.  Typical uranium ore deposits contain 1 to 4 pounds of uranium per ton (.05% to .20% U3O8).  It takes about 5 to 10 years (3 to 6 years for permits) to develop a newly discovered uranium deposit into a producing mine!  Some jurisdictions are more mining friendly and have faster approval procedures.  In-situ mining is less expensive and more eco-friendly than open pit or hard rock mining.  [Keywords: uranium oxide, U3O8, uraniferous ore, yellowcake concentrate, uranium hexafluoride, UF6, uranium dioxide, UO2, isotope, U-235, U-238, low enriched uranium, LEU, separative work units, SWU]  Thorium, a silvery white metal extracted from the phosphate based mineral Monazite, is an alternative to uranium, and has safety and environmental advantages when used in nuclear power plants.  A "Clean Energy" mutual fund is now available.  

C
lick here for advice
on uranium stocks and alternative energy investments.


Gold, Silver & Platinum.  We follow gold, silver and platinum precious metals investment opportunities.  We can assist you in selecting stocks of gold, silver and platinum mining exploration and production (E&P) companies, penny stocks, royalty income companies, gold mutual funds, ETFs and bullion bars.  Click here for advice on gold and silver investments.  



Water.
  Water is a precious resource due to growing world population, especially during periods of drought, emergencies and disasters.  In some areas, underground aquifers are being depleted.  In other areas, water has been polluted by fertilizers and industrial chemicals.  Over 80% of water use is for agriculture.  There are investment opportunities in water rights, water resources, utilities, pumps and equipment, filtering, bottling, desalination and recycling.  Frozen water flakes (snow) is a valuable resource for the skiing industry.  Click here for advice on investing in water resources.

Food & Agriculture.  There are investment opportunities in food, agriculture, and livestock.  Shortages caused by drought, bad  weather or other factors can cause prices to rise, and there is increasing demand for food and commodities from China.  

Information and updates on Mad Cow Disease can be found at the USDA website.  Mad Cow Disease creates investment risks and opportunities in US and foreign beef suppliers, processors, agricultural equipment, restaurants, steakhouses, organic food, other protein foods such as poultry, fish and goat meat, animal tracking systems, and disease testing.
 

Bird Flu and Swine Flu.  Avian influenza (H5N1 virus), or bird flu, has affected the poultry industry, with millions of birds being killed to prevent the further spread of the disease.  Fear of the bird flu also spread and affected some consumer behavior, such as avoiding eating chicken, buying face masks and stocking up on flu medications and emergency supplies.  Similar reactions occurred due to swine flu in pigs, initially reported in Mexico.  We encourage you to read more about swine flu (H1N1 virus) and bird flu to educate yourself and to be prepared.  We recommend preparation, not panic.  Swine Flu Brochure

Contact us for information on investments and strategies related to bird flu or swine flu.

Bird Flu Pandemic: Threat or Over-Reaction?
What the Experts on Both Sides Aren’t Telling You


A United Nations health official warned a flu pandemic could happen any time and kill between 5-150 million people. A Bush administration report warned the U.S. is woefully unprepared for what could become the worst disaster in the nation’s history. Skeptics challenge this as media hype and potential for boon to vaccine manufacturers. Learn the facts and how we can prudently use natural medicine to reduce risk. Homeopathic medical literature contains numerous reports of successful treatment of a variety of diseases with homeopathy. There is evidence that patients fared better in homeopathic hospitals than in traditional ones during epidemics such as the 1918 flu pandemic. Learn what the homeopathic approach has to offer. After 22 years of holistic family practice integrating homeopathic medicine, clinical nutrition, and stress management, Bill Bergman, MD, now maintains a stress management practice in Denver and is executive director of the public, non-profit Rocky Mountain Resource Network.

US: Banks should prepare in case bird flu spreads
Wed Mar 15, 2006 11:28 AM ET - WASHINGTON (Reuters) - U.S. bank regulators on Wednesday advised financial institutions to have contingency plans in place in case avian flu becomes pandemic. "Financial institutions and their service providers supply essential financial services and, as such, should consider their preparedness and response strategy for a potential pandemic," the Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Office of Thrift Supervision said in a statement.

You can buy books about Bird Flu in our Book Store.

Click here to check the common flu and avian bird flu status for your zip code and information on Tamiflu.   

Find more bird flu information at PandemicFlu (official government website with news, maps, information, planning and preparation checklists for individuals, families, businesses and communities), the Centers for Disease Control (CDC) and the US Department of Agriculture.

Boer goatsWe have also done investment research on the fast growing demand (30% per year growth rate) for goat meat for the ethnic, Halal and health food markets.  Boer goats, from South Africa, are meat goats, not dairy goats, and are raised mostly by small scale family operations.  We have found publicly traded stocks that are raising goats on a large scale.  Contact us for investing advice.  More information on goats at BoerGoats.  Look for goat meat (cabrito or chevon) at your local meat market or Mexican or Middle East restaurant.  Goat milk and cheese from dairy goats is readily available in grocery stores.

Click here for advice on food and agricultural investment opportunities. 

Timber trusts are available which pay dividends, based on the prices paid for timber.  If you don't sell the timber now, it keeps growing and you have more to sell later.  Larger diameter trees are more valuable.  Click here for advice.



Commodity Index Comparison.
   Click here for our FREE REPORT on: Commodity Funds, showing a comparison of the composition of several diversified commodity funds and indexes. Some mutual funds invest in commodity index linked notes tied to the rise and fall of commodity prices.  We include information on the Rogers International Commodity Index (RICI) fund created by famous investor, author and world traveler Jimmy Rogers.  You can buy his book "Hot Commodities" in our Book Store section.  Click here for advice on commodity related investments.

Master Limited Partnerships (MLPs). Click here for our FREE REPORT on: MLPs including oil, gas, pipeline, propane, coal, minerals, timber, agriculture, real estate and others.  MLPs generate income and offer tax benefits. They are not well-suited for IRA accounts because earnings above $1,000 will be considered unrelated business taxable income (UBTI) by the IRS.  Several new funds are available that invest in many MLPs for diversification.  Click here for advice on MLPs.

Click here for a Free Consultation on investment opportunities in Oil, Gas, Gold, Silver and Natural Resources.  
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