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U.S. Energy Crisis

Written By Brian Hicks

Posted May 24, 2008

In recent weeks, the editors of SC Trading Pit have revealed two of the most profitable picks to own, long-term. And they both remain buys.

The team mentioned the potential for a wind energy boom, and the possibility that wind energy could produce 20% of America’s electricity. In fact, they bought Western Wind Energy (WND.V) at $2.18 on the potential, only to watch it run to $3.50.

But the run is far from over. With a $10 forecast, SC Trading Pit is looking to walk with at least 350% gains, near-term.

And while T. Boone Pickens isn’t a WND.V buyer, it’s no surprise that the billionaire investor is lining up for a piece of the coming boom, too.

The Green Billionaire

Don’t think for a second that wind energy is about slow down…

Since 2000, wind power production has increased fivefold. Remember that during that period, oil prices have grown nearly that amount. Now that peak oil is starting to get under the global spotlight, we can expect to see a massive interest in renewables like wind energy.

We’re talking about a source of energy that is renewable, clean, has a low operating cost and has technology that’s been around for over century (the first power producing windmill was created back in 1887).

But it isn’t just the past growth that we’re impressed with. Over the next two years, the Global Wind Energy Council (GWEC) predicts that the world’s installed wind power capacity will practically double to 149.5 GW. If you notice, the installed capacity in 2007 was 94,000 MW-which was higher than originally forecasted!"

Even Pickens will tell you that, "Oil fields have a declining curve – you find one, it peaks and starts downhill, you’ve got to find another one to replace it. It drives you crazy! With wind, there’s no decline. You need a giant plan for America," he says. "Not the pissant 83 megawatt [windfarm] deals being stamped all over the country. There needs to be a huge plan from someone with leadership. It’s going to take years to do, but it has to start now."

iDcentrix Inc. (IDCX.OB)

The team even revealed IDCX.OB on the heels of the Real ID Act.

The stock may have pulled back, but it’s still an SC Trading Pit buy.

As we said in early May 2008:

Soon Federal law will require that most people carry these cards if they want to fly on airlines, or even enter a federal building- strict new security measures to protect us from the next 9/11.

Reports show the White House is in the process of bringing in consultants to help figure out how to set up the Real ID distribution process, as well as how to implement new security measures.

Sure, the Real ID Act won’t fully kick in until 2011, but the White House needs to jump on the process "that will take a while and cost a lot." It’s a process that could soon splash the iDcentrix name across national newspapers.

Causing quite a Congressional uproar, the Real ID Act, passed in 2005, is about to become the first real move toward what we’ve feared for years – The National ID Card.

The team has a $5 price target on IDCX.OB – a possible 327% gain from the current $1.20 price.

But we can do better…

In fact, every time the lights go out this summer, you could bank up to 50%…

California’s energy consumption efforts have done little to prevent blackouts. From 1979 to 1999, California residents jumped from 23 million to 33 million. Today, there are 38 million and expectations for 45 million residents.

In the long, hot, sticky days of summer, there will be blackouts. Greater electrical dependency from a larger population makes it difficult to say everything will be fine.

The California Independent System Operator has already warned that the "likelihood of going to a Stage 3 power emergency is 10 percent compared to 3 percent last year." Stage 3 allows the state to cut power to certain customers to prevent power system failure.

San Diego Gas and Electric saw record electricity demand in 2006. That record was then broken in 2007. And while the company has taken measures to reduce 2008 blackouts, the only way to prevent blackouts is voluntary conservation and "on-call interruptible loads."

And when the power grid can’t take the pressure this year, we’ll see widespread power failures.

How many people will voluntarily shut down power on a blistering hot day?

Fortunately, there’s one stock that’ll run, like it has with other power failures. And we’re looking to bank at least 50% every time it happens.

On August 14, 2003, a power failure in the northeastern USA and central Canada hit 50 million people. One stock popped from 25 cents to $1.25.

On September 19, 2003, Hurricane Isabel destroyed electricity for 4.3 million people across the United States and part of Canada. One stock popped from 60 cents to more than $1.

On September 4, 2004, five million people in Florida lost power after Hurricane Frances. One stock ran from 25 cents to 75 cents.

On August 26, 2005, 1.3 million people in Florida lost power because of Hurricane Katrina. One stock ran from $1 to $5.

In 2006, we witnessed the Queens blackout that affected more than 174,000 people. The problem first began with failures on feeder cables, circuits that carry 27,000 volts and power neighborhoods. While designed to compensate for failures (if one goes down others pick up the load) that didn’t happen. Instead, 10 feeder cables went down.

The stock ran slightly.

The stock ran again in 2007 from 75 cents to more than $2.20 around the time that power interruptions shut down some of the Internet’s biggest sites. A spokeswoman later said, a "major power event … impacted business operations for many San Francisco based companies, including 365 Main’s San Francisco data center." Officials were running on emergency generators and operations at the co-location site have since been fully restored.

Listen, I could go on with the reasons why I like it as a seasonal trade, but I also like it for potential profitability.

These are the guys can buy power from the grid at cheaper costs and sell it at higher cost.

Just last week, they were awarded a $300,000 contract to provide energy storage system to support a California Energy project. And just the other day, they received environmental approval to assemble their energy storage system in New York.

But while the stock ran up more than 20% on the news, the run is far from over. We’re just nearing the hot, sticky months of summer where blackout news could be commonplace.

SC Trading Pit just revealed the stock here.

Good Investing,

Ian L. Cooper


In case you missed our other investment opportunity highlights, here’s what we covered in Wealth Daily, Gold World, Energy and Capital, and your free blogs for the week of May 19, 2008.

Gold Investment Advice: Play the Market, Don’t Get Played
There are two types of investors, those who play the market and those that get played by the market.

Plug-In Hybrid Electric Vehicles: GM’s Future: See It With Your Own Eyes
Over the past few years especially, I’ve had little sympathy for some of the major auto-makers that have been losing loads of cash. The way we see it, they brought it on themselves by trying to force the market, instead of supplying it properly. Especially General Motors…

Haynesville Natural Gas: 1 of the Biggest Natural Gas Fields in the U.S., and The Stock Play Behind It
On Saturday, my colleague Ian Cooper talked about the upcoming boom in wind energy. As you know, Boone has been one of the biggest supporters of wind energy. But wind isn’t the only energy source praised by Pickens. In the wake of record crude oil prices (reaching as high as $129.60 during trading today), natural gas has followed suit.

Renewable Energy Companies: How NASA and Eggs are Hatching Spring Profits
What we’re seeing, as I hinted at earlier, is climate change prevention spending finally trickling down to the individual company level.

Little People Mean Nothing: "This is unbelievable. Disgusting," says Mozilo.
You’d think that after making millions by brilliantly running a company into the ground with an army of attorneys at your side, Mozilo would know the difference between "Reply" and "Forward."

Alternative Energy Investments: How To Turn Record Oil Into Record Profits
So far this year, Americans have purchased 1.7% less gas than they did last year.

Let’s Sue OPEC: Can you imagine the Chavez reaction?
Yep, the House wants to sue OPEC for "limiting oil supplies and working together to set crude prices." The bill, if passed, would subject OPEC oil producers, including Saudi Arabia and Venezuela to the same antitrust laws that U.S. companies follow. Can you imagine the Chavez reaction?

Peak Oil and the Bakken Formation: President Admits to Peak Oil
As oil prices continue their endless northern trek, those of us "in the know" knew this day would come. The peak oil argument is no longer open for debate… It’s here. We just need to figure out how to deal with it.

Uncle Sam’s Phony Economic Numbers: The Fix is In
In case you haven’t noticed lately, there is something of a gigantic disconnect between the realities that consumers face every day and the statistics on inflation that the government is kind enough to provide us with.

Investments in Vietnam: Economic Growth in Vietnam and China
You can see it all over the Middle Kingdom-old government-run department stores with bare shelves and outdated styles have given way to western-style showcases of modern fashion and technology-often in the same building.

How to Profit from LED’s Powerhouse
We’re not talking about small industry growth either. In 2005, the LED industry was valued at $205 million. By 2011, it could be valued as high as $1 billion—388% growth in six short years.