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Earth Day Investment Ideas

I’m about to do something very controversial and I will probably get some hate mail in the process. As a personal finance blogger, I feel the responsibility to advocate that we profit from Earth Day and the coming environmental changes it may bring.  Make no mistake about it, whatever your stance on climate change, there are going to be some radical changes in energy and transportation.   And, investors are very important for making this happen.  I’m not just posting about this subject, I have already invested my hard-earned money in green technology and I hope it pays off.  I will also be buying many of these new products, as soon as they are economical.

Happy Earth Day

Earth Day 2010

The original Earth Day was held in 1970 and this year marks the 40th anniversary.  The origins of Earth Day date back to 1969, when the Cuyahoga River in Ohio caught on fire.  This was a source of embarrassment for Ohio and for the entire United States.   So, Earth Day was born and it is now the largest non-religious holiday in the world.  And, environmental legislation was passed to clean up many of the most polluted sites in the country.  We’ve come a long way.

Personally, I’m not convinced of the coming cataclysm from manmade pollutants.  Climate Change, which is often called Global Warming in the summer, is an emotional subject, based on some curious scientific models.  I got a big kick out of watching the Day After Tomorrow movie, which is about as realistic as the 2012 and Y2K movies.

However, I am a huge fan of clean air, clean water and a reduction of pollution of all types.  I see no good reason to poison our world, just to make a few greedy people rich.  There are much better alternatives for energy and transportation.  I was born in one of the smoggiest places in the nation. And, I have seen the incredible changes just from switching to unleaded gas and catalytic converters.  When we finally stop burning things to produce energy, we will be living in a beautiful future.  Now, is the time to start.

Technologies to Watch

Electric Cars – This is the year electric cars become a reality.  Nissan started accepting $99 reservations for the Leaf on Tuesday and they had to extend the deadline by four hours, so everyone could get their orders in.  The Leaf costs around $32,000 ($25,000 or less, after incentives), so it is affordable for the masses.  Next year, Ford is expected to release an electric version of the Focus, which should also be affordable.  There are a number of key reasons I think electric cars will succeed, despite their cost and range limitations.  They are simpler than gasoline powered cars and at some point they will be cheaper to produce.  Plus, they are much cheaper to operate and maintain.  As battery technology improves and oil prices rise, they will be hard to resist.

DME –Dimethyl Ether is a clear gas that can be used as a fuel in modified diesel engines.  There are three important reasons why DME could be the way of the future.  1) It costs about half as much as diesel fuel.  2) It burns clean and is low on NOx, soot and CO2.  3) It can be made from many abundant sources, including natural gas, gasified coal, organic waste and biomass. So, instead of burning our food for energy, we could burn DME.   The down-side of DME is that trucks and fueling infrastructure would have to be modified.  But, the upside is that our economy won’t grind to a halt when peak oil arrives and the cost of diesel fuel skyrockets.  The military is also evaluating DME.

Self-Generation – I like to call this personalized energy.  Others call it the Micro Grid.  There are a lot of people who would like to leave the energy grid and generate their own power.  Unfortunately, this is currently only affordable to millionaires and Hollywood types.  But, in the near future, I believe wind and solar products will become affordable and self-generation will become a reality.  The real key is an effective energy storage device.  Imagine a fuel cell the size of a washing machine that could power your house for days.  They are working on it at MIT right now.  When that arrives, wind and solar will take off and the cost of all these technologies will drop dramatically.

Micro Turbine – These ingenious devices are simple, clean and efficient generators of electricity.  They can run on virtually anything from diesel, kerosene and natural gas, to biomass and methane from landfills.  Currently, they are used on oil rigs and for backup power for data centers.  But, I think they could have a much bigger role to play.  1) They would make an ideal range-extender for series hybrid cars, like the Chevy Volt.  They weigh half as much as a piston engine and only have one moving part.  2) They are ideal for backup power for people who want to unplug from the electrical grid.  After the sun goes down and the wind stops blowing, people still need power.

Disclosure:  I own shares of Ford (F), Capstone Turbine (CPST), Energy Conversion (ENER), Alternative Fuel Technologies (AFTC) and some uranium mining stocks (FRG, TEUFF, PNPFF, MGAFF and LMRXF).  I don’t recommend these types of stocks to anyone with a low risk tolerance.  I’m pretty happy with my investment in Ford.  The uranium stocks, not so much.

The Bottom Line

The bottom line is a tectonic shift is coming in the field of energy.  Petroleum and coal, at some point, are headed the way of whale oil and kerosene lamps.  Nobody knows for sure when we will hit peak oil or if the globe will warm rapidly.  Everyone knows there are better ways to power our world.  There will be the early adopters.  There will be those who are stuck in the past.  And, there will be those who profit from these changes.

“We do not inherit the earth from our ancestors, we borrow it from our children.”

Native American Proverb

Recommended Reading

The Economics of Energy

This post was featured on the Carnival of Money Hacks. This is a wonderful collection of articles and I am honored to be posted among such a talented group of bloggers.

15 comments to Earth Day Investment Ideas

  • We’ve come a long way in cleaning up our environment, Bret.

    When I was a kid, I remember my chest hurting after an hour or two of playing organized sports like baseball, or even being outside and playing with the neighborhood kids.

    I also remember my cousin coming out to live with us one summer for three months and because the smog was so bad she never once saw the mountains to the north of us – even though we lived maybe 8 miles from the base of the foothills!

    Thankfully, those days are long gone.

    All the best,

    Len
    Len Penzo dot Com
    .-= Len Penzo´s last blog ..Buying Prescription Glasses Online: Debunking The Four Biggest Fears =-.

  • “Petroleum and coal, at some point, are headed the way of whale oil and kerosene lamps.”
    Petroleum only due to limited supply. As the price rises and it will, we will have to find alternatives. 100 years ago many of our cars were electric and our trains ran on coal. The past may be the future.
    .-= Daddy Paul´s last blog ..The best taxable bond mutual funds =-.

    • @Daddy Paul,

      When I was conducting research for this post, I looked at all of the production drops in the world’s major oil fields and it was scary. I’m not an alarmist, but we may be closer to peak oil than most people realize. If the Kuwatis are right and we hit peak oil around 2015, there will be a lot of scrambling, speculating and gouging. Life is going to get really expensive and economies are going to suffer.

      There is no way we can quickly replace that much oil with alternative fuel. Electric cars are the only thing that makes sense. And, they are only ideal for short-range driving. Supposedly, we have 100 years of natural gas. But, burning it in cars, as Pickens suggests, would be pretty short-sighted. And, supposedly, we have 400 years worth of coal. But, flattening mountains and sequestering CO2 doesn’t make any sense. That’s why I figure we are going to need something like DME or biodiesel from Camelina.

  • “The origins of Earth Day date back to 1969, when the Cuyahoga River in Ohio caught on fire.”

    I was not around during those days, so it’s a bit hard to imagine that the pollution was once so bad, but I am glad that things have been cleaned up a lot since those days.

    However, I think the biggest concern now is in the developing world. Over there, there are worse concerns than rivers catching fire; there are people living in virtual garbage dumps and there are cities where the air pollution is worse than it ever was here. I believe there are cities in China where you cannot open the windows; otherwise, your windows will turn black. There are cities in Vietnam where you cannot venture into the streets without wearing a mask, because it is like putting your mouth on the tail of an exhaust pipe.

    To solve these problems we will need to keep improving technology and improve it to the point where clean technology is available to the billions of people on this earth that cannot afford it at today’s prices.
    .-= Kevin´s last blog ..Chargebacks: A Handy Weapon in the Fight Against Unscrupulous Merchants =-.

    • Kevin,

      Pollution in the devloping world is pretty scary. I always see visions of those poor people burning our techno trash and poisoning their village, just to get the little bits of gold. Man, it’s sad and we aren’t helping in any meaningful way.

      I am optimistic about one thing though. I think the electrification of cars, scooters and motorcycles are going to benefit the third world as much or more than us. The reason is, once the mass production of EVs takes hold, they are going to be much cheaper to buy and operate then internal combustion vehicles. Six dollars is a lot of money for a gallon of gas to someone in Indonesia. Hopefully, they will recycle the batteries properly.

  • Hey Bret,

    I really like the thoughtful industry picks. How do you know so much about energy/alternative energy products?
    .-= Mike´s last blog ..How to Invest in the Economy: The Best Investments for Each Business Cycle =-.

    • Mike,

      Thanks for your question.

      I have been following alternate energy sources and products ever since I read about the Chevy Impact (GM EV1) in Popular Science. I thought immediately that EVs were the way of the future. They have a simple design, low operating costs, low maintenance and no pollution. Unfortunately, California whimped out on their EV mandate, GM crushed up the EV1s and we lost 10 years of progress. But, EVs are back and better than ever. I intend to buy a Ford Focus EV when they become available next year. The Nissan Leaf is also nice and affordable.

      I follow three blogs daily to keep up with the technology, All Cars Electric, Autoblog Green and Gas 2.0. And, the more I read and learn about EVs, the more I realized that it’s just the beginning. Once people start to drive EVs, they will also want solar panels and other alternate energy products. I keep thinking the changes in energy could be the next big thing, just as computers and the Internet were in past decades. It has been slow to develop, but I am positioning my investments anyway. Between the pollution issues, developing nations and peak oil, something has to change. We can’t have 5 billion people driving gasoline powered vehicles.

  • klapauzius

    Hi there,

    as a longtime investor (and believer) in CPST and its amazing technology I’d just like to add that the microturbines are not only used on oil rigs and data centers but also

    – in Hybrid electric busses made by DesignLine operating in NYC
    – in Wastewater treatment plants to produce energy from the waste gas
    – as an addon to Wesco boilers to increase their efficiency
    – as of today in maritime applications to generate the energy in ships

    and the list goes on and on.

    Just check out their website at http://www.microturbine.com

    Disclaimer: I hold shares in CPST, do your own DD before investing in this (as of now) speculative stock

    • @Klapauzius

      I read a couple of days ago, they put one in a high-end meat processing plant in Italy. The combined heat and power is going to save them a fortune.

      It’s an interesting technology, because it is so versatile. And, that is the future of energy, versatility in sources. That’s why I think electricity, DME and microturbines are attractive. If one energy source becomes scarce or expensive, you can easily switch to another source.

  • Good article

    This year I decided to try organic weed and feed (66% was corn meal), but I had mixed results with it.

    I believe it was corn meal or glutton, it primarily works as a crab grass prohibiter.

    I didn’t know that the Cuyahoga catching on fire was the start of Earth day! Interesting!
    .-= Money Reasons´s last blog ..BP Oil Spill, Selling On Bad News =-.

    • We tried some chlorine-free bleach and my wife was really unhappy with it. But, I have switched to all natural hygine products (shampoo, deodorant, toothpaste and soap) and I am thrilled with them. Not only do they smell and work great, but I no longer put alluminum under my arms or chemicals on my head. And, they cost a similar amount.

  • Trish

    It’s past time to stop using foreign oil! Maybe we will always need some oil, but we just have to stop depending on Middle East oil. There are 3 fairly easy things that all of us can do now to make a difference. 1- Stop pumping gas into your car! If you have a gas guzzler now, convert it into an electric car (see this blueprint for example). No more gas! 2- Stop using electricity off the electric grid! Either build solar panels (like this one), or build a cheap magnetic generator (like this one). Not very hard! 3- Learn to bike or walk! If you are only going a mile to the shop, walk or bike there. My 2 cents.

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