Seeking Alpha

Michael Fitzsim...'s  Instablog

Michael Fitzsimmons
Send Message
I focus on investments in the oil & gas sector with an eye for dividend income and long-term capital appreciation. I typically allocate a portion of my own portfolio and devote some of my Seeking Alpha articles to small and medium sized companies offering compelling risk/reward propositions.... More
My company:
Independent Investor
My blog:
The Fitzman
  • The Big Picture 22 comments
    Oct 2, 2009 10:26 AM | about stocks: BP, COP, STO, PBR, XOM
    The Big Picture
               
                The more things change, the more they stay the same. After much rhetoric of “change”, the Obama administration is not only continuing, but in many cases expanding, wrong-headed policies initiated by the Bush administration. The Ivy League’s apparent lock on the White House seems destined to pave the road to a “New World Order” by weakening the U.S. in any and every possible way. What does this mean for U.S. investors? To adequately answer that question we need to step back and look at the big picture. Not surprisingly, the big picture is still dominated by oil supply/demand fundamentals, American dependence on foreign oil, and the ancillary geopolitical effects as a result.
                In August of 2009, the U.S. imported 355 million barrels of oil (60% of total consumption) at a cost of $25.2 billion, an annualized rate of over $300 billion assuming oil prices remain in August’s range. Most of my readers are very familiar with my belief that foreign oil addiction is at the root of American economic weakness as I often write about the economic, environmental, and national security issues at stake due to America’s inability to significantly reduce its dependence on foreign oil. So, now that Obama has settled into the Presidency, let’s revisit these important issues.
     
    Economic Impact of U.S. Foreign Oil Addiction
     
                U.S. policymakers in Washington continue their wrong-headed attempts to deal with a commodity based problem (oil) with fiscal and monetary policies. As a result, Americans are suffering from skyrocketing budget deficits combined with further U.S. dollar weakness. In the 3rd quarter, the buck dropped 4.1% against the Euro and 6.8% against the Yen. Countries including Russia, China, Brazil, and even Germany and France are clamoring for a more stable world reserve currency. Americans would be arrogant to assume this cannot happen. In fact, there may be very little the U.S. can do to prevent this movement considering its indebtedness.
                There has been little to no progress on financial regulation initiatives. In spite of a near complete financial meltdown and talk by U.S. officials about the need to protect the system from “too big to fail”, their policies have caused consolidation in the banking sector creating huge firms while smaller banks will continue to be shuttered. The Obama administration has winked at, and continued, the funneling of tax-payer money to corrupt corporate executives started under President Bush. The government continues to promote poor and ineffective financial regulators like Tim Geitner and Mary Shapiro to ever higher positions of authority. As a result, despite trillions of dollars in wealth evaporation, there has been a noticeable lack of arrests and jail terms. Meantime, the fascist economic policies continue in the financial, health care, and energy sectors insuring U.S. wealth trickles to fewer and fewer people. No country can be strong if it does not have a strong middle class.
    Factor in a U.S. government which seems intent on weakening U.S. financial strength in order to enable the “new world order”, and it appears a non-dollar world reserve currency is part of the “grand plan”. It will probably happen sooner than most people believe possible. Meanwhile, the U.S. does everything possible to enable debasing its currency by sending its wealth overseas to purchase energy instead of utilizing its domestic natural gas resources. Does anyone believe China, if it had the 2.3 million miles of natural gas pipeline distribution network the U.S. has, would waste that precious resource? Not on your life. That is because the Chinese government is dominated by engineers, and the US governent ids dominated by lawyers and elitists. As Jim Cramer said on Mad Money last night, China in many ways is now more capitalistic than is the US. 
    Regardless, to make up for this wealth outflow to pay for foreign oil, the U.S. simply turns on the printing presses and increases the number of U.S. dollars.
     
    Environmental Impact of U.S. Foreign Oil Addiction
     
                The Obama administration, along with environmental “purists” as I refer to them, have yet to figure out using electric cars prior to building out adequate wind and solar infrastructure to recharge them is effectively putting little coal-fired CO2 and toxic particulate generators on the highway. Further, Obama and Energy Secretary Chu do not seem to understand the only way “clean coal” is realizable is to leave it in the ground and that the best “carbon sequestration” policy is to generate less CO2 to being with (duh)! That is, replace all coal-fired electric generating plants with natural gas fired plants and immediately reduce C02 emissions by 50%, not to mention toxic particulate emissions by 100%. However, natural gas transportation in any sector other than large trucks appears to be going nowhere. This makes sense in the new double-speak world of 21st century America because natural gas is precisely the only domestic fuel that can be scaled up to significantly reduce foreign oil imports! Exxon does it part by running commercials about algae research, and it seems the Wall Street Journal has an article a week about wrong-headed biofuels research and mandates, which begs the question: why on Earth is all this money being spent on biofuels research when we have abundant, clean, and cheap natural gas and a proven and mature technology (NGVs) to replace gasoline powered cars and trucks? It’s truly amazing is it not? The answer, of course, is that biofuels (which also suck up precious water resources and feeds food inflation) are simply an excuse to stay addicted to liquid fuels (i.e. gasoline) and distract people from the real solution (natural gas transportation). Meanwhile, their strategy is working and it appears we’ll continue spewing gasoline and coal generated CO2 and particulate emissions into the atmosphere instead of utilizing natural gas in the power generation and transportation sectors.
     
    National Security Impact of U.S. Foreign Oil Addiction
     
                Nothing is more indicative of decades of failed pentagon/petroleum based foreign policy than the oil wars in Iraq and Afghanistan and the current Iranian nuclear crisis. America’s indebtedness to China (in large part to finance its oil addiction and to fund its vast military requirements to secure oil access and transport) has left them in the catbird seat. Chinese companies seem to sign new oil and gas deals every day in places such as Nigeria, Venezuela, Brazil, Russia, Australia, Canada, and Kazakhstan. As countries around the world embrace natural gas transportation (many are oil exporters such as Brazil and Iran), the U.S. continues to bank its future transportation requirements on foreign oil imports. This is a strategic error. Nothing undermines American national security more than its addiction to foreign oil and the subsequent economic and geopolitical weakness as a result.
     
    Is there a Solution?
     
                In a word: yes, but time is running out. U.S. natural gas reserves are abundant and enough to fuel home heating, electrical power generation (including replacing all coal-fired plants), and half of American cars and trucks for at least the next 75 years. By converting half its cars and trucks to run on natural gas, the U.S. could reduce its foreign oil imports by 6-7 million barrels a DAY. This equates to 2.4 billion barrels of oil per year, or nearly $170 billion a year with oil at $70/barrel. This is money that would stay in the country and make it way to farmers and landowners in terms of royalty payments. It would create well-paying industrial jobs in the energy and automotive industries. It would reindustrialize the U.S. by building out a CNG refueling infrastructure that could be hydrogen ready if done intelligently. It would clean up our air and our water. It would put billions of dollars back into American consumers’ pockets as natural gas is a cheaper fuel. Embracing natural gas transportation as the focal point of a strategic long-term comprehensive energy policy http://thefitzman.blogspot.com/2008/08/strategic-long-term-comprehensive-us.html could usher in an era of American prosperity few can envision in today’s fragile economy based on addiction to foreign oil. In a future where worldwide oil supply won’t keep pace with worldwide oil demand, what pragmatic and viable alternative is there to natural gas transportation?
     
    Will the U.S. Embrace Natural Gas Transportation?
     
                Answer: not with Obama and Chu in charge. They have apparently bought into the combined myth of “clean coal” and electric vehicles as the solution. The administration has apparently supported carbon emission credits which will be very favorably dished out to coal utilities (!?). Obama has never, to my knowledge, even uttered the words “natural gas transportation”. Unfortunately, Energy Secretary Chu has…and he is “agnostic” on the idea. While Obama has traveled in Air Force One to back the Chicago Olympics initiative, he has yet to visit Kingston, TN to view how his “clean coal” has devastated the Tennessee River valley for generations to come.
                Meanwhile, the U.S. is simply awash in natural gas as storage is at record highs. Instead of experiencing an economic bonanza by embracing cheaper natural gas transportation, the natural gas well count was reduced by half, unemployment is rising, and Americans continue to send their energy dollars out of the country. How sad is that?
                My biggest hopes for change, the development of a natural gas lobby and pending HR 1835 legislation have both been disappointing. The natural gas lobby recently took out multiple full page ads (at great expense I am sure) in the Wall Street Journal only to have a picture of some guy saying “Eureka!” How poor is that? No table comparing and detailing the obvious superiority of natural gas emissions to that of coal or gasoline. No mention of Toyota’s natural gas/electric concept vehicle (let alone an agreement to work with Toyota on making such  a car a reality!); no mention of Fuel Systems Solutions “Phill” home garage natural gas refueling appliance. Just plenty of empty space. Man, do I wish someone would give ME two full pages in the WSJ!! At a minimum the average looking guy should be replaced with a bikini clad blonde bombshell. That may be female exploitation but there would definitely be more buzz around office coffee machine. The natural gas lobby reminds me of the Democrats – all the data is on their side, but they seem incapable of playing hardball and making the case to the American people in such a way to affect policy. And that is what the nat gas lobby must do: inform and educate Americans. We know Congress and the Obama administration is bought off by those wanting to keep America addicted to failed 20th century liquid and solid fuels. The only way to enable a transition to a cleaner more economically sustainable gaseous future is to take the case directly to the American people! We must shame Congress into action by threat of voting them out of office unless they support legislation like HR 1835, which is apparently still wallowing around in the various committees of an ineffective Democratically controlled Congress. Most Seeking Alpha readers are fairly well-read, but the average American has no idea of the possibilities of refueling a natural gas/electric hybrid in their garage. The natural gas lobby needs to understand that educating Americans about this fundamental capability is job #1.
     
    Investment Advice as a Result of Continued American Foreign Oil Addiction
     
                As always, I continue to suggest American investors stick with long-term holdings in oil producers such as BP, Chevron (NYSE:CVX), ConocoPhilips (NYSE:COP), Exxon Mobil (NYSE:XOM) and foreign producers such as Petrobras (NYSE:PBR) and StatOil (NYSE:STO). Just collect your dividends and wait until the next oil price spike, because it is coming. I continue to believe the U.S. dollar will weaken further as the Yale and Harvard leadership toil endlessly (and effectively) to enable the “new world order” they desire and which will require a world reserve currency not based on any single country. As a result, I would increase exposure to gold bullion and precious metals. Gold was up 9% in the 3rd quarter, and traded over $1000 for six trading days in a row – the longest such streak ever.
                Unfortunately, the outlook for natural gas is weak. Industrial demand in the U.S. will continue to be sluggish as a result of the deindustrialization of America. Domestic nat gas supplies are abundant with many diversified independent producers. Storage is at record highs, and not even a cold winter will change the dynamics in the natural gas market. That said, I would be very bullish on this sector (and the country as a whole) if the U.S. embraced natural gas transportation as part of a long-term strategic and comprehensive energy policy to fix the economic foundation of the country and usher in a new era of a cleaner and prosperous future based on energy gases.
     
    Disclosure: the author owns COP, PBR, and STO.
    Themes: Energy Oil Gold Stocks: BP, COP, STO, PBR, XOM
Back To Michael Fitzsimmons' Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (22)
Track new comments
  • longoil
    , contributor
    Comments (764) | Send Message
     
    Fitz,

     

    You make the same mistake as Robert Hefner III.
    (By the way, I did buy his recent book (The GET) and enjoyed it very much.)

     

    An infrastructure that is used for natural gas CANNOT be used for hydrogen.

     

    1) CH4 (methane or natural gas) is a huge molecule in comparison to the hydrogen atom. Existing NG infrastructure will easily contain natgas, but hydrogen would leak like crazy .

     

    2) Furthermore, hydrogen is very reactive with most metals especially at low temperatures and would destroy infrastructure designed for natgas.

     

    I agree with you on widespread natgas usage, but reusing existing natgas infrastructure for hydrogen is not feasible . A whole new infrastructure (estimated at more than 1 trillion dollars) for United States would be needed. The Hydrogen economy is a fairy tale.
    2 Oct 2009, 04:20 PM Reply Like
  • bluesmoke
    , contributor
    Comments (793) | Send Message
     
    Fitz, another good article.

     

    I have some friends visiting from England. They've been driving diesel vehicles for years and get upwards of 50+ mpg. Diesels can also "turn the clock" three times. That means the odometer resets 3 times! No problems starting in cold weather either. When they asked me the other day why the US hasn't shifted their energy policy in this (or any) direction that is more constructive, I don't have an answer. It's a very sad reflection of a schizophrenic energy policy controlled by special interests. Instead of forward thinking, everything is ass-backwards.
    3 Oct 2009, 11:18 AM Reply Like
  • Freya
    , contributor
    Comments (2343) | Send Message
     
    bluesmoke: Good post. Thumbs up.

     

    "I have some friends visiting from England. They've been driving diesel vehicles for years and get upwards of 50+ mpg. Diesels can also "turn the clock" three times. That means the odometer resets 3 times! No problems starting in cold weather either. When they asked me the other day why the US hasn't shifted their energy policy in this (or any) direction that is more constructive, I don't have an answer. It's a very sad reflection of a schizophrenic energy policy controlled by special interests. Instead of forward thinking, everything is ass-backwards. Oct 03 11:18 AM".

     

    Diesel is an Answer whose time has come. It doesn't require an Infrastructure build up, all it needs is more engines built to operate on it. The Transportation Industry has operated for decades on diesel. Imagine the mileage increase of a Hybrid Diesel if your English visitors already get 50+ mpg.

     

    Coal Diesel Technology is available right now. US Coal Reserves are the largest in the world. Oil Independence is within our grasp, Now, not sometime in the future waiting for an Infrastructure to be built.

     

    Obama wants to Force-feed Health care down our throats.

     

    I say give the American People a Choice, Do not Force them into another Trillion Dollar outlay.

     

    The following is a Huckabee link to protest to Congress on Balancing the Budget, our vote was number 88,443.

     

    balancecutsave.com
    4 Oct 2009, 04:22 AM Reply Like
  • Michael Fitzsimmons
    , contributor
    Comments (9048) | Send Message
     
    Author’s reply » longoil: i have never said that ALL existing natural gas infrastructure could be used with a future hydrogen economy. i certainly never said that all existing natural gas pipelines could carry hydrogen. what i have said is that we could build CNG refueling stations to be compatible with hydrogen delivery and we could most certainly build future natural gas delivery systems capable of delivering both fuels. we have had this discussion before haven't we?
    6 Oct 2009, 08:33 AM Reply Like
  • longoil
    , contributor
    Comments (764) | Send Message
     
    Fitz,

     

    My point is why would you build a pipeline that can carry both natural and natgas? A hydrogen pipeline costs ten times that of a natural gas pipeline. So why would you want to carry natural gas over a hydrogen compatible line ? The analogy would be like having a discount courier service where all the drivers are equipped with Rolls Royce's. The hydrogen economy is nice in theory, but uneconomical to build on a large scale.

     

    I think you would agree with me that money destined for hydrogen infrastructure is better spent on technology for extracting unconventional natgas like shale gas, chalk gas, tight gas or even methyl hydrates.
    6 Oct 2009, 09:01 AM Reply Like
  • Michael Fitzsimmons
    , contributor
    Comments (9048) | Send Message
     
    Author’s reply » longoil: i don't think we're communicating. first, i have never said we should use existing natural gas pipelines to deliver hydrogen, that was your assumption. what i *have* said is that, if we are going to build out a natural gas refueling infrastructure (and i think we should), we should, when and where it makes sense, make that infrastructure compatible with hydrogen. i agree completely with hefner, who, like myself, has an engineering background, on this issue. you seem to have the impression that these two gases are very dissimiliar, and they aren't: hydrogen's chemical symbol is simply "H" and natural gas (methane) is simply CH4 (one carbon for every four hydrogen). so, while the molecular structure of methane does indeed give it differing properties than that of pure hydrogen, their physical characteristics have much more in common than not. for instance, it would be stupid to design and build a CNG refueling pump to deliver natural gas but not be able to deliver hydrogen. i think the incremental cost would be negligible compared with having to design an entirely new pump for hydrogen! it would also be stupid in many cases to build CNG storage tanks which cannot handle liquid hydrogen. i can use this argument all along the energy infrastructure. so, instead of focusing on existing pipelines and making your conclusions based on an wrong-headed beginning assumption, step back and view the big picture and realize we are talking about building new "gaseous" infrastructure and why on earth would we do that and not take into account what we all strongly suspect will be a future energy economy based on hydrogen, a very similar "gas".
    6 Oct 2009, 05:29 PM Reply Like
  • Michael Fitzsimmons
    , contributor
    Comments (9048) | Send Message
     
    Author’s reply » one correction above: "liquid", LNG, and liquid hydrogen: i did not mean to compare CNG with liquid hydrogen,
    6 Oct 2009, 05:31 PM Reply Like
  • pockyclips 2020
    , contributor
    Comments (629) | Send Message
     
    I also laugh at all these exotic "solutions" to our energy problems. We refuse to use the stuff we have in favor of stuff we don't. Hydrogen won't work for personal transportation because of the large and expensive tank required to carry a usable amount of fuel. A tank big enough to run my F-150 450 miles would take up the entire bed!

     

    Why no mention of methane? With our status as the biggest waste generators on the planet, this looks to be a more practical follow-on to natural gas. The changeover from CNG to methane would be minimal.
    7 Oct 2009, 09:03 AM Reply Like
  • ripskii
    , contributor
    Comments (336) | Send Message
     
    Fitz: Your pretty much spell out the dilemma facing our country regarding implementing a coherent national energy policy. Unfortunately your list of policy failures is long and often unbelievable in any rational context. The history of the IFR nuclear reactor development reads a lot like the current NG debacle. Incredibility short sighted and stupid decisions made by incompetent persons to the detriment of achieving efficient energy independence. It seems that we are incapable of working toward a sensible long term solution to most of out rather obvious problems. Last time I checked this oil/energy problem was well over three decades old and we still don't seem to have a plan to deal with it. We can look at Brazil as an example of a country that woke up after the 1973 oil embargo, made a plan to solve their imported oil problem, executed it and are now completely free from imported oil. It is just a coincidence that they are now one of few the growth economies in the world currently?

     

    Note that Europe is using diesel fuel for cars because they are so much more efficient. $7-9/gal fuel prices makes efficiency much more valuable to consumers. Honda builds a European diesel car (Accord) that achieved 90 mpg in test runs and it wasn't a hybrid either. The engine was designed by their famous race engine designer who was given a free hand at his request to build an advanced engine. Note this engine doesn't require urea to meet all the clean air requirements using the low sulfur diesel fuel. Imagine what they could accomplish do if they applied this approach to a hybrid NG design.
    8 Oct 2009, 12:49 AM Reply Like
  • Michael Fitzsimmons
    , contributor
    Comments (9048) | Send Message
     
    Author’s reply » pockyclips: methane (CH4) IS natural gas...

     

    ripsky: you are exactly right about Brazil and i saw Boone Pickens once mention that. of course then the right wingers on CNBC put Brazil President Luiz InĂ¡cio Lula da Silva in the "communist/socialist looney bin" and i haven't seen Pickens use this example since. but yeah, there was a country who had a problem, figured out a solution, made a plan, and did it! now we are lending them money to drill for oil we need - how STUPID is that? interesting about the diesel story - i had not heard that. however, diesel still comes from oil, so i can't favor that over natural gas, although surely the efficiencies would save some oil, so i favor it over gasoline! anyhow, thanks for your comments. i was expecting you to think i was in the looney bin myself with the yale/harvard comments. you might still think so, and just be too much of a gentlemen to mention it.
    8 Oct 2009, 09:43 PM Reply Like
  • Michael Fitzsimmons
    , contributor
    Comments (9048) | Send Message
     
    Author’s reply » rip: btw, i still owe you an article on nuclear reactors as i promised. why can't i find time to do that?? i have all the information and references you sent me, i have just been swamped with stuff to do lately. anyhow, i see no hope for us if we plan on building EVs without nuclear. we'll be simply swamped with coal ash and all our water will go to sh*t.
    8 Oct 2009, 09:46 PM Reply Like
  • Freya
    , contributor
    Comments (2343) | Send Message
     
    Michael, In your comment to longoil, you said the Following:

     

    "longoil: i don't think we're communicating. first, i have never said we should use existing natural gas pipelines to deliver hydrogen, that was your assumption. what i *have* said is that, if we are going to build out a natural gas refueling infrastructure (and i think we should), we should, when and where it makes sense, make that infrastructure compatible with hydrogen."

     

    To my knowledge, longoil is the one who pointed this Flaw out to you in one of your Recent Articles. But since you are Now saying that you have promulgated the Following:

     

    "what i *have* said is that, if we are going to build out a natural gas refueling infrastructure (and i think we should), we should, when and where it makes sense, make that infrastructure compatible with hydrogen."

     

    When, Where, what Article? I hope to the Heavens that you go and alter One of Your Instas to include this statement.
    9 Oct 2009, 02:55 AM Reply Like
  • Freya
    , contributor
    Comments (2343) | Send Message
     
    ripskii:

     

    " We can look at Brazil as an example of a country that woke up after the 1973 oil embargo, made a plan to solve their imported oil problem, executed it and are now completely free from imported oil. It is just a coincidence that they are now one of few the growth economies in the world currently."

     

    What did Brazil do to free themselves from imported Oil?

     

    They didn't have any oil fields to speak of, They did not have any Nat. Gas Fields either. Just how did they achieve their Independance?
    9 Oct 2009, 10:31 AM Reply Like
  • H. T. Love
    , contributor
    Comments (18033) | Send Message
     
    If I remember correctly, MF *did* say that existing infrastructure could be used for hydrogen. I pointed out, as others have in other posts, that the size of the H molecule makes it very elusive and that the existing infrastructure would not be suitable without extensive rework.

     

    Another also pointed out that H is extremely corrosive to metals (all or just steel? I can't recall) at low temperatures.

     

    If you need support, I could undertake a search of my comments to see if I recall correctly.

     

    HardToLove

     

    On Oct 09 02:55 AM Freya wrote:

     

    > Michael, In your comment to longoil, you said the Following:
    >
    > "longoil: i don't think we're communicating. first, i have never
    > said we should use existing natural gas pipelines to deliver hydrogen,
    > that was your assumption. what i *have* said is that, if we are going
    > to build out a natural gas refueling infrastructure (and i think
    > we should), we should, when and where it makes sense, make that infrastructure
    > compatible with hydrogen."
    >
    > To my knowledge, longoil is the one who pointed this Flaw out to
    > you in one of your Recent Articles. But since you are Now saying
    > that you have promulgated the Following:
    >
    > "what i *have* said is that, if we are going to build out a natural
    > gas refueling infrastructure (and i think we should), we should,
    > when and where it makes sense, make that infrastructure compatible
    > with hydrogen."
    >
    >
    > When, Where, what Article? I hope to the Heavens that you go and
    > alter One of Your Instas to include this statement.
    9 Oct 2009, 12:25 PM Reply Like
  • H. T. Love
    , contributor
    Comments (18033) | Send Message
     
    On Oct 09 02:55 AM Freya wrote:

     

    > Michael, In your comment to longoil, you said the Following:
    >
    > "longoil: i don't think we're communicating. first, i have never
    > said we should use existing natural gas pipelines to deliver hydrogen,
    > that was your assumption. what i *have* said <snip>

     

    Here he suggest that the NG infracstructure can be used for H

     

    seekingalpha.com/artic...-

     

    My reply here
    in-america?source=comm...
    seekingalpha.com/autho...

     

    HardToLove
    9 Oct 2009, 01:27 PM Reply Like
  • H. T. Love
    , contributor
    Comments (18033) | Send Message
     
    Link to my reply to MF scrogged trying again

     

    seekingalpha.com/artic...

     

    On Oct 09 01:27 PM H. T. Love wrote:

     

    > On Oct 09 02:55 AM Freya wrote:
    9 Oct 2009, 01:29 PM Reply Like
  • Freya
    , contributor
    Comments (2343) | Send Message
     
    He's been making a Big Deal of how Compatible all of those Millions of Miles of In place NG pipelines could be used to link to all those homes with a Phill attachment to make it all viable. All those connections Including Phills would be Totally useless in a Hydrogen environment.

     

    ripskii, What did the Brazilians use? Don't want to tell me, don't know, don't want to know?

     

    Use the Wikipedia to look up what Brazil had in the way of Fossil Fuels prior to the present PBR find. Zippo, Nada, close to nothing.

     

    But they had a lot of Sugar Cane and it grew really, really fast. Ethanol galore, but it couldn't be used until the engines were built to handle the Mix. So They Built Multi-Fuel engines that would be able to use anything they had available and slowly over the years, every car had a multi-fuel engine and they were Fossil Fuel Independant if they wanted to be. Who really knows whether they will continue to use Ethanol, with all of the Oil coming down the Pike, But one thing is Damn sure, those engines are what saved them.
    9 Oct 2009, 02:58 PM Reply Like
  • H. T. Love
    , contributor
    Comments (18033) | Send Message
     
    Being they were smart enough to get the local resource (sugar cane) used to make a fuel, and smart enough to get to multi-fuel status for their vehicles, I'd bet that they use as much of their oil as possible for export to bring in cash, generating a *huge* balance of payments surplus.

     

    This will allow them, under continued wise decision making, to dramatically raise the standard of living, generate an ever-growing middle class and provide an on-going political stability that can be quite rare at times.

     

    The reason I believe this is that people often demonstrate long-term traits but the path they have followed in the recent past.

     

    With all the problems they do have, as one is solved I would expect to see them tackle the next, and then the next, ...

     

    My Humble Opinion,
    HardToLove

     

    On Oct 09 02:58 PM Freya wrote:

     

    > He's been making a Big Deal of how Compatible all of those Millions
    > of Miles of In place NG pipelines could be used to link to all those
    > homes with a Phill attachment to make it all viable. All those connections
    > Including Phills would be Totally useless in a Hydrogen environment.
    >
    >
    > ripskii, What did the Brazilians use? Don't want to tell me, don't
    > know, don't want to know?
    >
    > Use the Wikipedia to look up what Brazil had in the way of Fossil
    > Fuels prior to the present PBR find. Zippo, Nada, close to nothing.
    >
    >
    > But they had a lot of Sugar Cane and it grew really, really fast.
    > Ethanol galore, but it couldn't be used until the engines were built
    > to handle the Mix. So They Built Multi-Fuel engines that would be
    > able to use anything they had available and slowly over the years,
    > every car had a multi-fuel engine and they were Fossil Fuel Independant
    > if they wanted to be. Who really knows whether they will continue
    > to use Ethanol, with all of the Oil coming down the Pike, But one
    > thing is Damn sure, those engines are what saved them.
    9 Oct 2009, 03:15 PM Reply Like
  • 437339
    , contributor
    Comments (129) | Send Message
     
    Re

     

    Great article Michael . Don't forget Total SA in your list of oil producers . Great dividend as well . Doesnt Covantra work on producing fuel from methane Ie garbage ?
    9 Oct 2009, 10:18 PM Reply Like
  • 437339
    , contributor
    Comments (129) | Send Message
     
    Re above

     

    It is Covanta hldg LLC that is doing waste to fuel , Actually doing it . AND I just read on E-Trade , can't beat them for info ,That Soros Fund management LLC + morgan Stanley are long this stock ! HELLO . Ticker = CVA
    9 Oct 2009, 10:35 PM Reply Like
  • 437339
    , contributor
    Comments (129) | Send Message
     
    LEAPS anyone on CVA ?
    9 Oct 2009, 10:36 PM Reply Like
  • Freya
    , contributor
    Comments (2343) | Send Message
     
    437339: CVA is a Pure Play. Get paid to haul garbage out of the city, instead of dumping it somewhere, they haul it to one of their plants, Burn it and sell the Generated Electricity Back to the City.

     

    That's all they do. Income In, build, more income. Slow and Steady.

     

    We sure as hell aren't going to run out of garbage.
    10 Oct 2009, 02:04 PM Reply Like
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Most Commented
  1. How I Retired At 45 (61 Comments)
  2. The Big Picture (22 Comments)
  3. John Hess' comments in Copenhagen (16 Comments)
  4. It's Going to Get Ugly (11 Comments)
  5. August Foreign Oil Bill (8 Comments)
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.