Cramer's 'Mad Money' Recap: Red China's Black Gold

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It's time to stock up on the "Tyrannosaurus Rex in the room," the stock no one is talking about, even though its presence is undeniable, Jim Cramer told viewers of his "Mad Money" TV show Friday.

He was talking about PetroChina(PTR Quote), the big oil company that "gets the total cold shoulder in America."

PetroChina has its hands on oil everywhere, and it drills like oil is worth the high price that we pay for it, he said. Plus, it has the full weight of the Chinese government behind it, which means that it has near-infinite financing with which it can make acquisitions.

The stock is unloved in America because we've always been wary of whether Chinese companies are cooking the books, Cramer said. But Warren Buffett bought PetroChina much cheaper, and his firm now owns a major stake of the company, he added.

China is driving this tight oil market and the company is buying oil everywhere; and Cramer noted that PetroChina isn't afraid to drill in communist countries or in places torn apart by genocide like the Sudan. It pays a decent dividend to investors and it's in China, a country whose economy is on fire, he said.

Finally, Cramer believes that it could replace Exxon Mobil(XOM Quote) as the granddaddy of oil companies.

Coal-to-Oil Alchemy

Cramer said that U.S. News and World Report recently wrote a great story about alternative energy, and the magazine reported that the most promising technology we have is not solar or wind.

Instead, it's something called the Fischer-Tropsch process, which turns coal into gas.

The technology has been around since the 1920s, but it's still the most promising alternative-energy play, Cramer said. And the U.S. Energy Administration believes that the Fischer-Tropsch process is economically viable once oil rises to $45 a barrel.

We hit that level a long time ago, Cramer said. And he said that it can be profitable for viewers if they take a look at Rentech(RTK Quote).

Cramer said that he has liked Sasol(SSL Quote) for a long time, but that the small-cap Rentech is a better speculative play.

"Sasol is lumbering giant ... Rentech is our bantamweight coal-to-oil company," he said. This is because when small-cap companies are in a bull market, they tend to go up more.

However, he also warned that these small stocks are very volatile, and that this is a very speculative stock. Rentech has its own process, based on Fischer-Tropsch, that converts coal to gas, and gas to clean-burning liquid fuel.

In coal scrubbing, Cramer said he likes URS(URS Quote), which he owns for his Action Alerts PLUS charitable trust portfolio.