A Natural Gas Stock That Could Clean Up
08/03/07 - 06:02 AM EDT
Jon Markman
It doesn't hurt Pickens' position that other alternative fuels have experienced setbacks, as detailed in a recent WR Hambrecht analyst report.
Corn-sourced ethanol is struggling to account for 10% of the nation's fuel supply and has already inflated grain, meat and dairy prices. There are a lot of questions whether ethanol is even an alternative energy, since so much fossil fuel is required to grow and refine corn. Biodiesel could work, but it still produces a lot of nasty nitrous-oxide emissions, and it is not likely to pass stringent new federal clean-air regulations set to arrive in force in 2010. Electric and gasoline hybrid engines remain expensive, and battery-life issues are unsolved. Hydrogen, while promising, remains in the pie-in-the-sky category, and it requires a lot of natural gas as a base fuel. Efforts toward energy independence also help point the way toward natural gas. The U.S. imports three-fifths of its crude oil, and 90% of it is used in transportation. Natural gas is hard to transport overseas, so most of ours comes from domestic, Canadian and Mexican sources. According to the U.S. Bureau of Transportation, there are 7.5 million fleet vehicles operating across the nation. Considering that three-quarters of them operate on a "return-to-base standard," Clean Energy's target market is potentially worth $20 billion per year in revenue.
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