Black Gold... Green Oil
By Marin Katusa, Senior
October 21st, 2009
This summer, there's been a flurry of new green announcements from the world's major oil firms. ExxonMobil, Chevron, Valero, Statoil, Marathon, and Sunoco have all thrown their hats into the green ring.
According to an article published September 19, 2009, in Newsweek:
The list [of Big Oil investors] goes on. And this time it's the real deal. It's not just that these projects involve bigger money... it's that companies are actually beginning to think about alternatives not just as a tool for greenwashing (throw up a few solar panels here, sponsor a conference on wind energy there) but as real businesses that might turn real profits - or at least help make fossil-fuel production more profitable. The catalyst is that governments are moving to force industry to cut carbon emissions, creating a new "long-term regulatory reality" that favors alternative energy, says PFC Energy Chairman J. Robinson West. Meanwhile, President Obama's green-stimulus efforts and China's massive investment in alternatives have created a serious market for green technologies.
The fact that nations like Russia and Venezuela are pushing out big oil companies also gives CEOs an incentive to consider green alternatives. So does the fact that oil companies are among the world's biggest energy users, and will ultimately need to offset emissions. "I believe the large integrated oil firms will eventually become major players - perhaps even the dominant players - in alternative energy," says Don Paul, a former Chevron executive who now runs the University of Southern California's Energy Institute.
Big Oil is taking a closer look at how [renewable energy]might be used to increase efficiency internally, or to free up increasingly profitable fossil fuels, like natural gas, for commercial sale. When you consider that the top 15 oil and gas companies have a market capitalization of $1.9 trillion, it's clear that these firms themselves have the potential to be major renewable customers.
Oil companies are also taking a harder look at how to make their own business models work in the alternative sector. Companies like Chevron are capitalizing on geological expertise to build large geothermal businesses.
Big Oil is going to be an increasingly important investor in alternative energy. Venture-capital money has dried up. But with oil at $70 a barrel, the internal venture arms of the major oil firms are increasing the amount and percentage of investment going to alternatives. Historically, when Big Oil spends a dollar on research, it will spend many hundreds more to bring a product to market. If the new projects coming online this summer are any indicator, alternatives may soon be awash in black gold.
That would explain the interest Big Business has in the sector.
- Another member of the oil community, Statoil, has formed StatoilHydro, to focus on advanced geothermal development.
- Google.org - the charitable wing of the search engine giant - has become the largest funder of enhanced geothermal research in the country, outspending the U.S. government.
- Alcoa, the world's largest producer of aluminum, is actively participating in the geothermal Iceland Deep Drilling Project (IDDP).
And then there's the mining industry.
- Lihir Gold has already used geothermal resources to build a power plant, which today provides green electricity for the company's mining operation in Papua New Guinea.
- BHP Billiton is currently investigating the potential for using geothermal heat in the Olympic Dam region of Southern Australia.
The smart money likes geothermal.
Investing in the growing green bubble could earn you very handsome returns, if you know which companies to choose. Marin Katusa, Casey's energy strategist, does. Every single one of his 22 latest picks has been a winner, with gains from 44% to 860% - that's a 100% success rate. To find out how you can profit from winner #23, click here.
Marin Katusa is a math prodigy and the chief investment
strategist of Casey Research’s Energy Division. At the age of 31, he is one of
the youngest self-made multimillionaires in Canada… thanks to an algorithmic
system he developed that alerts him when a company with sound fundamentals has
become so undervalued that it’s a screaming buy.
For years, Marin has been advising Casey subscribers on the
best energy picks, generating extraordinary returns. Learn how you, too, can
profit from his “secret system” – click
here to read more.
By Marin Katusa, Senior
October 21st, 2009