In a vial, it's as clear as water. It has no smell.
Yet it packs enough punch to fuel every single truck, car and diesel engine train in America for the next 811 years.
And I believe the company that makes it could very well be the best energy stock for you to own, now and for the next 10 years.
This company is no overnight startup. It's a major player, a recognized giant of industry, a blue chip that's bigger than some, but deserves to be even bigger.
Even BusinessWeek says this company "is not a household name, but maybe it should be."
I'd call that the understatement of the century.
What this company does is make fuel. A special kind of "designer fuel" that's, molecule for molecule, just as good as conventional gasoline, diesel fuel, oil, even jet fuel.
You can burn it in any car or other vehicle. This company can make it at about half the cost of conventional oil. And here's the only big difference: It burns much cleaner than either conventional fuel or even ethanol.
The company I'm telling you about isn't making this up. It sells it already, on the open market. In fact, last year, it made a net profit of over $2 billion...just selling this stuff and its valuable chemical byproducts.
The "alternate fuel" we're talking about isn't something quirky. It really is normal gasoline. And normal diesel fuel, jet fuel or real crude oil, too. But acquired in a very unconventional way. Without dropping a single well or kissing up to a single Saudi sheik.
How? I'm sure you've heard of tar sands, oil shale and even biofuels. Well this isn't any of those. In fact, it's much cheaper than each of these alternatives. And easier to come by too...and about half the cost of today's barrels of conventional oil! Shell, ExxonMobil, ConocoPhillips, Marathon, and Chevron have already pitched major deals at this company, in exchange for its patented fuel-making technology. China, India, Europe, South Africa...they're all moving in.
Biofuels look good at about $80 a barrel. Oil shale around $55. Ethanol can work with oil at $50, sometimes. And tar sands with oil as low as $40. But only this very accessible fuel substitute can make sense when oil sells for half of what it does right now.
Elsewhere, like in Europe, gas already sells for more than $7 a gallon. That's the price in Amsterdam. Here's something else you might not know.
Alternative fuels like the one I've been telling you about already thrive in areas that have no easy access to cheaper gas. In fact, in one of the world's most successful economies, hundreds of thousands of cars already run on this alternate fuel.
But maybe it's time to let the cat out of the bag.
This secret fuel is, if you haven't guessed it yet, coal.
See, the Middle East might have all the oil. But it has virtually zero coal. Meanwhile, China, Australia, India and South Africa are all filthy rich with coal reserves. Even Poland is loaded with coal. But nobody has more than the U.S. - with better than 26% of the world's total coal reserves.
Imagine.
If we tap this liquid coal technology I'm telling you about, we could very quickly have more than 12 times the fuel energy than the entire oil holdings of Saudi Arabia! All we need is the know-how to make it happen. And that's what this company I'm telling you about can provide.
As you read this, the coal-rich states of Wyoming, Montana, Alaska and Illinois are all competing to win a contract on $5 billion worth of investments to bring in this company's technology...build the plants that can do this...and start converting their vast coal reserves into this baggage-free, lucrative liquid fuel.
First, you've got to understand, ethanol isn't fuel like gasoline. It's alcohol. Literally 200 proof moonshine. Yes, it burns. But anywhere from 20-30% less efficiently than real gasoline, says Motor Trend magazine.
And that's only the first "hidden hurdle."
See, to get ethanol, you also need heat to convert the corn. Or the sugar cane. Or whatever plant it is that you're using. That takes water, gallons of it. It also takes heat, using already precious fossil fuels.
One researcher, from Cornell University, claims it actually costs you more energy to MAKE ethanol than you actually get back from the product. As much as 29% more with corn...and as much as 50% net energy loss when making ethanol from saw grass.
Imagine paying back your boss all of your salary plus 50% more, just to keep your job. Imagine walking backward 50% more often than you walk forward and expecting to get where you want to go. Not a good strategy.
Of course, the ethanol industry wouldn't even exist without government subsidies to the corn industry. Over $37.3 billion, just in the last eight years. It's like gasoline on welfare.
Out of 187,097 retail gas stations in America, only about 500 can even safely SELL ethanol. The other 186,597 aren't equipped. To get there, we would need to spend as much as $60,000 per station.
You can't keep these hidden costs away from the pump forever.
Even if we were to forget all of that...let's suppose we STILL managed to double our ethanol use by 2010 as a nation. That's the Bush projection in his 2005 energy bill. That would put us at 8 billion gallons of ethanol per year. It might sound like a lot. But it's barely a whiff of fumes on the air, compared with the conventional gas we'd still need to get by. At those levels, our total oil dependency would only drop by 5%.
Just to give you some idea, there's another coal-to-liquid company, Rentech (RTK:AMEX), here in the U.S. Being local, Wall Street picked up on one of its press releases last year...and Rentech quickly saw its shares skyrocket 286%.
Even without producing a drop of liquid coal.
Meanwhile, this company's technology is far superior. And already productive. It currently churns out over 160,000 barrels of this "designer fuel" per day...feeding an amazing 30% of the gasoline and oil needs of one of the world's most successful economies...with facilities under development to churn out another 540,000 barrels daily.
