To be honest, I’m not really sure what to think of T. Boone Picken’s “plan”.  He’s been showing up fairly frequently on T.V. as of late pushing his plan for energy independence.

A noble cause, to be sure, and I don’t think he’s too far out of line here.  At least on the surface.  But look a little bit deeper.

Mr. Pickens is a business man at heart and he’s certainly done well for himself as an oil man.  Now he’s looking to capitalize on the alternative energy push.

Why does he want you to buy into his plan?  Because he’s got a ton of his own money dumped into wind energy.  And I’m talking billions of dollars going towards wind farm development in Texas.  Then there’s drilling for water in West Texas and shipping it to Dallas via pipeline, all funded by, you guessed it, Pickens himself.  So the real incentive for Pickens plan is to make money.  Naturally.

If he can get you on board, he certainly reaps the benefits.

As I mentioned, PickensPlan (on the surface) is a good step in the right direction, and we can all certainly benefit if we gain an independence from foreign oil.  However, all you have to do is follow the money to find the true incentive behind the message.

Of course, this should all sound eerily familiar.  Remember Sir Al Gore, Nobel Prize winner?

I believe his message went something like this:  Man has caused global warming, global warming is melting the ice caps, will flood the shorelines and cause drought and famine all across the world…

And oh by the way, be sure to see my movie on this topic, buy carbon credits from my company, and try and look past the fact that I consume more energy in one month than you do in seventeen…

Alternative Energy, Energy Alternative Energy, Pickens Plan, T. Boone Pickens

My good buddy MJ over at Dyslexic Research forwarded me an article on how President Bush signed a bill to increase fuel efficiency standards to 35 MPG by the year 2020. Also lumped into the bill was a required ramp-up of the use of ethanol at refineries from about 6 billion gallons a year this year to 36 billion gallons by 2022 and additional mandates that by then at least 21 billion gallons are to come from feedstocks other than corn.

I like the fact that we’re raising fuel efficiency standards, finally. However I don’t think we’re exactly pushing technology with 35 MPG. Why don’t we shoot for something a little higher? Why not 40 MPG, or even better, 45 MPG?

We’re 12 years away from the new legislation being put into place, I’d like to think that the big three could ramp up R&D to meet a higher standard than 35 MPG in 12 years.

I like the push for ethanol, even though I think it’s still a farce. If we can figure out a way to produce ethanol with a net energy gain, I’m all for it. I also think it’s smart to require an increasingly larger percentage of ethanol be produced from something other than corn.

All in all, I like the concept, but I have to wonder how serious this move really is. Is the President signing this to appease Democrats and empower Republicans in an election year, or does he really think this is good for the United States, all politics aside.

Alternative Energy, Energy, Politics ethanol farce, fuel efficiency, fuel standards, MPG, President Bush

Recently our good buddy Winston mentioned a few stock ideas in a discussion about Walgreens. He mentioned that Archer Daniels-Midland (ADM: chart, web, Y!) was his buy-it and forget-stock. So I thought I’d dig into the numbers a bit to see if I agree.

Archer Daniels procures, transports, stores, processes, and merchandises agricultural commodities and products primarily in the United States. They operate in three segments, namely oilseeds and corn processing, and agricultural services. Effectively they refine seeds and beens into vegetable oils for the food (i.e. salad dressing) and feed industries.

The AG-services side of the company engages in buying, storing, cleaning, and transporting agricultural commodities, such as oilseeds, corn, wheat, milo, etc, and reselling these commodities to the agricultural processing industry.

An interesting, yet lightly publicized aspect of Archer Daniels is their interest in processing corn. For those of you who regularly read The Corner Office Blog, you know that I view the ethanol boom as nothing more than a farce. However, if you can make money in the face of a farce, by all means, run with the bulls!

Financial Summary

For the most recent quarter, Archer Daniels first quarter (FY08) net sales increased to $12.83 billion, up 35.8% from $9.45 billion for the same quarter in FY07, stimulated by commodity prices, and strong product demand in processing and AG-services segments. Oilseeds Processing sales increased 42.4% to $4.61 billion, boosted by higher prices and volumes due to strong demand for vegetable oil and soybean meal, and the higher average selling prices of fertilizers and oilseeds exported from South America. Corn Processing sales increased 12.6% to $1.52 billion, due to higher average selling prices in sweeteners and starches despite lower sales volumes and lower average selling prices for ethanol, whose current capacity exceeds customer demands.

Read more…

Alternative Energy, Stock Thoughts ADM, archer daniels, food and grain, grain processing, Stock Thoughts