Invest in ethanol
James Woodburn - Mon 27 Mar, 2006
... Looking five years down the road, I could easily be convinced that the biggest profit-taker of the next gas boom could be the mammoth agricultural companies...my reasoning comes down to one word: ethanol. That's right, ethanol, the grain alcohol that went into 'gasohol' in the 1970s to help the world get over the Arab Oil Embargo...
Invest in ethanol
Looking five years down the road, I couldeasily be convinced that the biggest profit-taker of
the next gas boom could be the mammoth agricultural
companies, like Monsanto for example.
Hard to believe? You betcha.
But my reasoning comes down to one word:
ethanol. That's right, ethanol, the grain alcohol
that went into 'gasohol' in the 1970s to help the
world get over the Arab Oil Embargo...
But I'd like to come back to it because today, thanks
to a number of biotech breakthroughs, it's not only
possible to run cars on ethanol, but ethanol costs
less than petrol to produce... produces fewer
emissions and comes from the friendly heartland of
America - not the Middle East.
Some of you probably heard all this 30 years ago. But
what you don't know is that more than 5 million US
cars have already been fitted with flex-fuel engines
that can run on ethanol.
And I'm not talking about obscure cars, either...
..But Ford Tauruses, Crown Victorias and
Rangers. I'm talking about GM Chevy S-10s, Dodge
Durangos, Chevy Tahoes, GM Yukons, Dodge Caravans,
Nissan Titans and Mercedes-Benz C240s - to name a
few.
Invest in ethanol: 'the big agricultural companies'
So what's that got to do with the big agricultural companies?
Plenty!
You don't drill a well to produce ethanol, you grow
it! Because ethanol is grain alcohol produced from
corn. And using the example I gave above, Monsanto is
the world's largest supplier of corn seeds... those
companies are like the Saudi Arabia of the ethanol
industry.
That's no exaggeration, either. You see, Monsanto's
chemically engineered corn seeds produce higher corn
yields that create a greater output of ethanol.
That's because their seeds produce a higher level of
starch that - in turn - produces a greater amount of
ethanol.
With the West fed up with Middle East oil politics
driving up the cost of petrol, experts like Kevin
Kerr estimate that you could easily see ethanol go
from a fringe fuel to a significant energy solution
over the next 5 years.
"One government report I read believes that by the
year 2030, ethanol will fuel 30% of America's
vehicles," said Kevin today.
"Of course, none of this will take place
overnight. But the groundwork is being laid. If you
position yourself correctly now, you could
potentially make money hand over fist with every
single seed of corn that's planted to produce
ethanol."
Regards,
James Woodburn
for The Daily Reckoning
post a comment
Back to top comments
No comments added
Related Emerging Market Investment Articles
10 Sep, 2008The Whole USA is a Subprime Borrower
12 May, 2008China: Land Of Superlatives
17 Apr, 2008Is Zimbabwe a Buy?
16 Apr, 2008Oil $114: Good News for Brazil
Most Popular Articles
03 Oct, 2008 An irony-induced Coma: Bailout Bill Historic Vote06 Oct, 2008 Inflation is going away. Prosperity is just around the corner.09 Aug, 2006 Reasons for an impending US economic recession14 Oct, 2004 The current US economy status09 Oct, 2006 What should you do if the real estate bubble bursts?
Recieve Articles like this by email
