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