Powering up for Geothermal Profits

Powering up for Geothermal Profits
Wednesday, December 07th, 2005
Baltimore, MD * Jackson, WY * Missoula, MT

In this Issue...

* Neoreality
* Geothermal Profits
* They must hate money!

Quote of the Day

"Geothermal technology offers a clean, sustainable energy created by the
harnessing the Earth's heat."

- U.S. Senator Kay Bailey Hutchison

Dear Wealth Daily Reader,

Before you read Jeff Siegel's weekly contribution to Wealth Daily, take
a moment to read what I consider to be one of the most honest articles
on Peak Oil and Iraq. and how they're related.

As you know Wealth Daily has wrapped itself in the Peak Oil blanket.
We're believers in the thesis. And like many of the peak oil proponents
such as Matt Simmons and Colin Campbell, we believe peak oil is at hand.

We don't believe it's a coincidence that, with Matt Simmons an energy
advisor to the White House, that the Bush Administration conducted a
study this past summer on the effects of $4 a gallon gasoline would have
on the US economy.

We also don't believe that the invasion of Iraq and Peak Oil are
separate, isolated events. They're connected at the hip.

In other words, we believe the Bushies are well-aware of, and probably
believers in, Peak Oil.

Below is an excellent article from Bill Henderson regarding this very
subject. Please take the time to read it.

Brian Hicks

Neoreality: Peak Oil And Iraq

What level of American casualties should be spent to keep America from
economic and social collapse?

By Bill Henderson

12/05/05 -- -- A dispassionate observer from the outer space may watch
with amazement how an incredibly complex and resourceful society of Homo
economicus, armed with the most advanced technology and all of the
knowledge amassed through their entire history, that is voluntarily,
with determination, even enthusiastically painting itself into a corner
and reduces its future options to what in the game of chess is termed
zugzwang (compulsed move) -- by deferring the recognition of the
Universe's challenge until the crisis that is currently clearly visible
on the horizon becomes detectible through economic and monetary
mechanisms, signals from which in this particular peculiar civilization
apparently take precedence over the other six senses.
- Dmitry Podborits

It is perfectly reasonable that American military casualties are the
American public's prime concern in Iraq but quite clearly there is much
more at stake.

If Saddam's Iraq really did threaten even one more 9/11 scale terrorist
attack then present American casualties preventing such an attack -
2,100 dead, 16,000 wounded - would be considered a reasonable use of
American soldiers.

But much more to the point, what level of American casualties should be
spent to keep America from economic and social collapse? What is the
real game going on in Iraq?

Prescient Canadian peak oil and politics commentator Jeff Berg explains
the necessity of casualties in Iraq this way

"(I)t will take much more than the death of a few thousand soldiers and
the addition of a few hundred billion to the U.S. government debt (200B
adds 2.5% to America's debt load) to make them walk away from access to
the hundreds of trillions of dollars, at current prices, worth of
hydrocarbons that the region will extract over the next 50 years.
(likely thousands of trillions at future prices)

Their financial if not moral calculus becomes even more understandable
when you consider that even this amount is literally tiny when you
compare it to the economic multiplier effect that having oil and gas
allows to the industrialized world. The money multiplier is nothing to
it. Consider. By some calculations every barrel of oil carries the
equivalent of 23,200 man hours of work in the physics sense of the term.
Oil and natural gas are like air, water or soil, in that they are easy
to take for granted until you lack them.

Oil is the very lifeblood of the now globally franchised American Way.
60% of the world's reserves are located in the Middle East. And oil,
cheap conventional oil (and natural gas if not coal), looks increasingly
like a peaking then rapidly depleting resource. Even an oil price spike
to $100 a barrel could be the end of civilization as we know it if
enough bubbles burst. As James Kunstler has pointed out there is no
O-I-L in WITHDRAWAL.

"There has, as yet, been no candid debate in the mainstream U.S. media,
still less in Congress, on the controversial question of America's war
aims. Why did the U.S. make war on Iraq? The official reasons - Iraq's
alleged possession of weapons of mass destruction and its links with
Al-Qaeda - have now been shown to be lies. What then were the real
reasons?

"It would seem that men like Vice President Dick Cheney, Defense
Secretary Donald Rumsfeld, and Bush himself - advocates of using
military power to shape the world to America's advantage - were
persuaded that Iraq presented a tremendous prize. Its oil reserves were
equal to those of Saudi Arabia; its reconstruction was estimated to be
worth tens of billions of dollars to American firms; while its strategic
position made it an ideal place from which to project U.S. military
power to the oil-rich Gulf and to a vast region beyond. Seizing Iraq and
turning it into a client state was a tempting goal.

Peter Seale

Commentators have been focusing on John Mueller's analysis of the ratio
of body bags to domestic polls in previous American wars, but Iraq isn't
Vietnam and the US can't withdraw from the mess the 'geopolitical
fantasists' have made in the Middle East with their cynical aggression
in Iraq. There's no retreat possible and watching a delusional Hillary
Clinton and the Dems trying to find a winnable position on Iraq and
winnable ways of saying get our boys home soon is pathetic.

We can't go back to decades old market control of oil with American
forces ensuring a calm Persian Gulf. There's no going back. Cheney and
Co stuck a stick in a hornets nest but the territory is far too
important, far too crucial for America's future to leave. And so some
are going to get stung and the dead in Iraq will, in all probability, be
just the first casualties on the resource war path that no reasonable
American would have chosen.

A Pandora's box has been opened. The future of the world is at stake
here because this region, Iraq, is the defining challenge of our time
.. We need to close this in a way that does not produce huge problems
down the road, that ultimately produces isolationism at home and a world
with far more security problems than at present.
- United States Ambassador to Iraq Zalmay Khalilzad

Peak oil is the looming reality and the Bush Admin couldn't resist the
temptation to seize Iraq and American soldiers aren't leaving. Zugzwang.
And all of us aware of the bigger picture, of our serious situation -
all of us blue-staters, North American 'friends' and former members of
what was once The West, all of us globally that have no power but will
be perhaps terminally effected - just watch and wonder if waking up is
possible.

-End of article

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Powering up for Geothermal Profits

A few weeks ago I wrote an article about how the oil companies have been
strategically building a solar energy infrastructure over the past
decade - despite years of misinformation campaigns about the energy
source. And again, this is not me calling bullsh@% on them.merely an
observation of modern capitalism and a competitive advantage.

Nonetheless, the oil giants aren't in the renewables game to make the
World Wildlife Federation happy. They're doing it because this stuff is
profitable. In fact, BP is on track to deliver more than $1 billion in
revenues from its solar division by 2008.

But the oil companies haven't put all their renewable eggs in one solar
basket either.

Last June, BP opened a new windpark at its oil terminal in the port of
Amsterdam. The total energy output at the terminal is enough to power
5,000 homes.

And just last week, Chevron Corporation announced that it will be
expanding its geothermal power plant in the West Java province of
Indonesia. The 110 MW project is the fourth geothermal project Chevron
has constructed in the area.

Of course, despite Chevron's appetite for geothermal.the oil giant
hasn't even begun to tap its potential.especially in the U.S.

This past August, the Geothermal Energy Association released data that
identified nearly 100 undeveloped, geothermal power sites in the western
portion of the U.S. - with a total production potential approaching
25,000 MW of electrical generating capacity.

That's enough to meet more than 70% of all of California's electricity
needs.

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Digging for steam

Last year I uncovered a geothermal company that hasn't let us down yet.

Since the beginning of the year, the company's stock is up 63.75%! And
it just landed another deal in Central America.

But while the international markets for geothermal - especially in parts
of Central America, China and India is growing - the U.S. potential is
already quite impressive.

In fact, there are currently more than 2,800 megawatts of geothermal
capacity being used in the U.S. to power corporate office buildings,
warehouses, industrial parks and government buildings and utilities.

And nearly all of this energy is coming from two types of geothermal
power plants:

* Steam - Steam plants use steam and hot water resources
(Generally at more than 300 degrees Fahrenheit). The steam either comes
directly from the source, or extremely hot, high-pressure water is
depressurized (flashed) to produce steam. The steam then turns the
turbines which drive generators that produce electricity. Currently,
energy produced this way costs about 4 - 6 cents per kWh and produces
nearly 50 times less carbon dioxide, nitric oxide and sulfur emissions
than traditional fossil-fuel power plants.
* Binary - Binary plants use lower-temperature hot water
resources. (Between 100 degrees Fahrenheit and 300 degrees Fahrenheit)
The hot water is passed through a heat exchanger in conjunction with a
secondary fluid with a lower boiling point (usually a hydrocarbon). The
second fluid vaporizes, which turns the turbines that drive the
generators. The remaining secondary fluid is recycled through the heat
exchanger.

But just like other renewable energy technologies - it's always
changing, evolving and improving.

And while U.S. geothermal companies have been quite successful - over
the last few years especially.a number of other countries are now
starting to pick up the pace.

In fact, one of the latest geothermal resources is now coming from
Australia in the form of 'hot rocks.'

Engineers have now identified ways in which they can tap into the
natural heat stored in vast beds of underground granite, and use it to
generate electricity.

An Australian geothermal firm called Geodynamics (GDY:ASX) announced
last summer that their engineers have identified enough usable energy in
a 1,000 square kilometer section of rocks in South Australia's remote
Cooper Basin to replace 50 billion barrels of crude oil - or around 12
times as much oil there is in the country's largest proven oil reserves
in the northwest shelf off the tip of Western Australia.

In November, Geodynamics completed its second 2 �-mile well. And based
on test results, the company could make an investment decision on its
first power station as soon as next month.

And back in July, Chinese officials announced that since 2000, shallow
geothermal collection facilities have allowed parts of Beijing as much
as a 75 percent energy savings.

Shallow geothermal energy is the low-temperature heat in the soil and
water nearly 100 meters underground.

China's proven geothermal reserves equal 3.16 billion tons of standard
coal. Though theoretical reserves amount to more than 135 billion tons.

Nonetheless, China is still starved for energy. Couple that with the
country's renewable energy requirement of 15 percent renewable energy
capacity by 2020, and geothermal plant construction is sure to
increase.along with solar and wind as well.

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They must hate money!

There's no doubt that solar is king in renewables right now. But any
savvy renewable energy investor knows that diversification is key in
this market.

You see, demand for renewables is at an all-time high. But many of these
companies are still relying on government subsidies to help build the
industry's infrastructure. And while I don't see these subsidies
disappearing anytime soon, it doesn't take much for a politician to move
a chunk of money from one renewable market to another.

In other words, just like anything - you have to cover all your bases.

Geothermal energy is efficient. It's a clean, domestic energy source,
available 24 hours a day.

Moreover, the average geothermal power plant produces electricity 90
percent of the time, compared with 65 percent to 75 percent for coal and
nuclear-powered plants.

Sure, it may not have all the bells and whistles of a photovoltaic
installation.but that's what makes it even more attractive to savvy
energy investors.

Like I said, our top geothermal play is up 63.75% for the year. And this
is a company that a number of solar chasers laughed at last winter when
I first started touting it.

Though it still surprises me that so many renewable energy investors
continue to ignore geothermal - despite the consistent profits that many
of these companies have been racking up over the past few years.

I don't know. Maybe they just hate money.

But in the meantime, a number of green chip investors will continue to
profit from geothermal well into 2006 and 2007.

Of course, if you're not completely convinced that there's definitely
some money to be made in the geothermal sector.at least keep your eyes
peeled for new geothermal installations in the western portion of the
U.S.

As oil supplies dwindle and electrical grids keep getting pushed to near
capacity, the appeal of fully-functioning geothermal plants within the
energy infrastructure of the U.S. will continue to gain momentum.

Until next time.

Jeff Siegel
Editor, Green Chip Stocks

P.S. Note from the Publisher

I've known Jeff for nearly 12 years now. We both started at Agora
Publishing in 1994, fresh out of college. Little did we know that our
education was just beginning. In those early days at Agora, we learned
the art of financial analysis, contrarian thinking, and stock
speculation from masters like Bill Bonner, Mike Schaefer and Doug Casey.

A few years later I launched The Cutting Edge, an investment service
dedicated to uncovering high-profit opportunities in the high-flying
world of microcaps. I had a lot of success. And Jeff was right there
with me, helping me find promising trends and stocks.

Two years ago I left Agora to start my own financial outfit with Mike
Schaefer and the Phantom Trader. When I left, I asked Jeff to come with
me.

He did.

But with one condition: He wanted the freedom to start his own
investment letter focusing on what he considered to be one of the
biggest trends of the 21st Century. the Green Movement.

I have to be honest, I was more than a little skeptical. After all, when
somebody says "Green" or "organic" to me, I automatically think of
hippies. The stock market and capitalism are the last things that come
to mind.

But Jeff convinced me otherwise. He showed me a 10-year chart of Whole
Foods, the biggest organic food grocery store stock in the world. To say
that I was shocked would be an understatement.

Still, I wasn't totally on-board with the idea. I mean, Whole Foods is
one stock out 9000 publicly traded companies.

So I was still apprehensive. Until, that is, Jeff started picking stocks
in the areas of natural food and renewable energy.

Nothing changes the mind of a skeptic than good old fashion profits.

And that's what Jeff has been doing this year. His Green Chip portfolio
is up 41% for 2005.

His latest play, a company that's created "solar glass" is up nearly
100% in the past 2 weeks.

Jeff believes the stock has a chance to go from its current price of 60�
to over $5. Why?

You'll see. Please take a moment and read Jeff's latest report on this
situation: Endless Energy http://wealthdailymail.net/cntdir.asp?num=171

- Brian Hicks