| The oil market is not the only one looking up. | | | | enough to make it just as clean as other fuels. Shrewd |
| Alternative fuel stocks are also attracting many | | | | investors could buy shares in U.S. coal producers, |
| investors. Because oil and gas are expensive, | | | | including the two biggest, Peabody Energy Corp. and |
| Americans are looking for cheaper nonfossil fuel and | | | | Arch Coal Inc., both based in St. Louis, Missouri. Coal |
| that demand is boosting the alternative fuel stocks as | | | | companies have profited from the current oil |
| well. This is especially good for anyone who cares for | | | | boom.Investing in coal doesn't mean that Big Oil isn't |
| the environment -- the greens. If you consider yourself | | | | safe anymore. It only means that you are on much |
| an environmentalist or a preservationist, this is perfect | | | | firmer ground when you have a diversified portfolio. If |
| for you, for you are now able to support efforts to | | | | you look at both types of stocks, the difference isn't |
| preserve the environment while at the same time | | | | large. Exxon Mobil, for instance, returned 36 percent to |
| profiting from those efforts. It's a win-win situation. | | | | its shareholders in market appreciation and dividends in |
| Consider this: Pacific Ethanol Inc., a small | | | | 2005 and BP returned 21 percent. Peabody Energy |
| ethanol-producing company started in 2003 by Bill | | | | stockholders, meanwhile, did far better in the same |
| Jones, the former secretary of state for the state of | | | | time period. They more than doubled their money, and |
| California, has trebled its stock price on NASDAQ to | | | | Peabody shares have risen more than three and a |
| about $30 a share within a year of going public in | | | | half times since the company's initial public offering in |
| March of 2005. Like many other similar renewable fuel | | | | 2001. Arch Coal stock returned 65 percent in 2005 as |
| start-ups, millions of dollars in private equity money are | | | | well.Coal producers have benefited from increased |
| being thrown at Pacific Ethanol like the world is coming | | | | demand from power plants and steelmakers in the |
| to an end. Billionaire Bill Gates, the chairman of | | | | United States, China, and India. Massey Energy Co. of |
| Microsoft, is one of those investing in renewable fuel | | | | Richmond, Virginia, for instance, said its average selling |
| stocks. Gates' investment company, Cascade | | | | price for coal used in steel-making jumped 38 percent |
| Investment, has agreed to pump $84 million in Pacific | | | | in 2005. Consol Energy, Inc. of Pittsburgh, the third |
| Ethanol.The U.S. government has recognized | | | | largest U.S. producer, plans a $500 million mine |
| alternative fuel as the fuel for the future and has | | | | expansion to keep up with orders.Soaring prices for |
| included a number of tax incentives in the Energy | | | | natural gas have given coal demand another lift. Many |
| Policy Act of 2005, the energy law signed in the | | | | electric power plants have switched from gas to coal, |
| summer of 2005, to spur growth in the alternative fuel | | | | which costs about half as much. In the spring of 2006, |
| sector. If you haven't already, you should give | | | | Duke Energy Corp. closed on a deal purchasing |
| alternative stocks a try as it will make you feel morally | | | | Cinergy Corp. for about $9 billion, in large part because |
| stronger. It's been nearly three decades since efforts | | | | of Cinergy's coal-fired plants.Back to oil, we've also |
| to promote alternative fuel floundered after the 1973 oil | | | | seen that the market has been good to minnows as |
| crisis, but it's making a comeback. Still, alternative fuel | | | | well. In fact, some smaller oil companies also have |
| remains a small industry, with small cap companies | | | | outperformed the giants. For instance, Apache Corp. |
| dominating. Since 2005, 15 of the 36 companies in the | | | | of Houston produced a 12-month total return of 51 |
| WilderHill Clean Energy index have made huge profits. | | | | percent for its stockholders, helped by increased |
| That includes hydroelectric power and wind energy, | | | | first-quarter selling prices of 51 percent for crude oil |
| solar energy, and fuel cells.Some of the most | | | | and 11 percent for natural gas. Apache recently bought |
| successful companies in the renewable fuel sector are | | | | property from Shell, BP, and Exxon Mobil and its profit |
| huge conglomerates, like General Electric and | | | | rose tremendously in 2005. Oil transport companies |
| Germany's Siemens, and also big oil companies, like BP, | | | | have not been left behind. Overseas Shipholding Group |
| that are hedging their bets. Investing in these | | | | of New York made an acquisition in 2005 that made it |
| companies offers a chance to own a clean energy | | | | the world's second-largest oil tanker company. The |
| stock. Here's some information about GE worth | | | | bigger fleet, combined with higher tanker rates, |
| knowing: It made close to $2 billion in sales from | | | | boosted the company's 2005 earnings by about 40 |
| production of wind-powered turbines in 2005, treble | | | | percent. The world's biggest owner of oil tankers, |
| what it made from that business unit in 2002. | | | | Teekay Shipping Corp. of Vancouver, Canada, |
| However, that's only 1 percent of GE's | | | | capitalized on high energy prices in yet another way. In |
| revenues.There's a lot of hope that alternative fuel | | | | the fall of 2005, Teekay raised $132 million through the |
| technologies developed by some of the smaller | | | | public sale of a 20 percent interest in Teekay LNG |
| companies will become commercially viable and help | | | | Partners LP, whose ships carry liquefied natural gas |
| support the sector. As a result, stocks for these | | | | and crude oil.Is it too late to buy energy stocks, large or |
| companies are expected to soar. WilderHill Clean | | | | small? BlackRock, Inc., which manages $391 billion, |
| Energy Index gained 26 percent in the past 12 months | | | | doesn't seem to think so. It reported to the SEC in late |
| alone, compared with 50 percent for oil. That's not bad, | | | | summer of 2005 that after $870 million in purchases, it |
| considering this is not an established sector in the | | | | owned stakes in Peabody, Arch, Consol, and Massey |
| United States.Moreover, since continued oil supply is | | | | ranging from 3.3 to 8.8 percent. The money manager |
| uncertain, a lot more consumers are going to turn to | | | | also has a 4.7 percent stake in Newfield Exploration |
| coal, which is abundantly available in the United States, | | | | Co., an oil-and-gas company that returned 49 percent |
| China, and India. Coal used to be frowned upon | | | | to its shareholders in 2005. |
| because of its dirt, but technology has improved | | | | |