Bullish news for Alternative Energy Stocks?

It sure doesn't seem like it today, with red ink running in the Street like blood, but check this out ...

Amid bluster over energy, Senate cuts a deal
Over the summer a group of five GOP and five Democratic senators, dubbed the Gang of 10, hammered out a comprehensive energy proposal. And now, after taking withering heat from both left and right, the idea is gaining support.
The proposal contains some items on the Republican wish list, such as opening areas of the Outer Continental Shelf to drilling and boosting nuclear power. The Democrats get incentives for wind, solar, and other renewables along with energy efficiency measures — and pay for much of the projected $84 billion cost by eliminating tax breaks on the oil and gas industry.

In other news today ...

OPEC consensus building for supply cut
Consensus is building within OPEC on the need to reduce oil output to prevent a supply overhang and prop up prices, analyst PFC Energy said in a report.
The focus of debate among OPEC ministers gathering next week in Vienna will not be whether there is a need to cut crude oil production, but rather when," analyst David Kirsch wrote in a note, dated Wednesday, for the Washington-based firm.
"Though Riyadh will not be 'bullied' into agreeing to a production cut, the near-consensus within the group that some reduction in volumes is needed -- either through a formal target cut or just a reduction in 'over-production' -- raises the distinct possibility that the final communique in Vienna will announce an output reduction."

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News You Can Use for Tuesday

Waiting for Gustav

Hurricane Gustav grew stronger as it moved on a path projected to take it over Haiti on Tuesday and just south of Cuba on Wednesday, according to the National Hurricane Center.
Forecasters say they believe Gustav will strengthen into a "major hurricane" and move into the central Gulf of Mexico by Sunday, but there is little certainty about where it might go from there.

CRUDE OIL

Oil Companies Win $1 Billion Reimbursement Over Drilling Leases
Devon Energy Corp. and Anadarko Petroleum Corp. were among a dozen oil companies that should be reimbursed more than $1 billion they paid the U.S. for leases to drill off the California coast, an appeals court ruled today.

XX Sean’s note – Anadarko was recommended in my Running on Fumes energy report and Devon was recommended in my Energy Panic of 2008 report. So, if you have those reports, this is a heads-up. Also, a heads-up on Petrobras.

OPEC likely to keep output steady in Sept.
OPEC is likely to keep oil output policy unchanged at its meeting in September as prices remain high despite a sharp fall from July's peak, an OPEC source said on Monday.
U.S. demand fell 800,000 barrels per day (bpd) on the year in the first half of 2008, the steepest fall in 26 years. But in the long-term, fundamentals looked tight, the OPEC source said.

Foreign oil producers have U.S. over barrel
AGRICULTURE

The Grain Markets Are Getting Ready to Rip
Corn just flat isn’t going to make it. “It’ll run headlong into problems with frost. In addition, though, it’s dry not only in the eastern Corn Belt, but the entire Corn Belt. As a result, corn prices will continue to go up. The harvest lows are already over—and we haven’t even gotten to harvest yet!” Woolverton says.

XX Sean’s note: And yet …

Wheat Futures Decline on Dollar Gain, Production Outlook; Soybeans Tumble Wheat declined for a third day as the dollar strengthened, making U.S. grain less attractive to buyers overseas, and on speculation favorable weather in major producing countries will help increase harvests. Soybeans dropped.

WIND POWER

US becomes top producer of wind power
The U.S. wind industry now tops Germany in terms of how much energy is being produced from wind, the American Wind Energy Association (AWEA) said.

Germany still has more installed capacity -- 22,000 megawatts vs. 17,000 in the United States at the end of 2007. But the average wind speed is stronger in the United States, which means more energy is being generated, the group said. This year, Germany will add only about 1,600 megawatts of wind energy, while the United States will add more than 6,000 megawatts, said Randy Swisher, executive director of the association.

Wind, solar projects race to finish before tax credit expires
A congressional stand-off that has blocked extension of federal tax credits for renewable energy projects is setting off a boom in the wind and solar industries. Developers and customers are racing to install systems by year's end to qualify for the credits, which can cut the cost of a large commercial system by 30%.

US DOLLAR

Dollar's `Unprecedented' Gain Has Further to Go, Lehman Says The dollar's rally over the past month is ``close to unprecedented'' in the 35 years since the currency was decoupled from gold and will have room to rise on bets the European Central Bank will begin cutting borrowing costs, according to Lehman Brothers Holdings Inc.

URANIUM

Paladin Energy Says That It Is Set to Expand Uranium Production in Africa Paladin Energy Ltd., the Australian producer of uranium in Africa, said an expansion of its mine in Namibia is due for completion at the end of the year, while a project in Malawi will start operating in January.

MINING

Rio Tinto Earnings Double as Iron-Ore Miner Fights $142 Billion BHP Offer Rio Tinto Group, fighting a $142 billion hostile offer from BHP Billiton Ltd., posted first-half profit that beat analyst estimates on increased aluminum sales and record iron ore prices.

GOLD

U.S. Mint resumes gold coin orders on limited basis
The Mint said that it will equally divide its Eagles inventory available for sale each week into two equal pools, with the first allocated equally among all authorized dealers, and the second pool distributed according to the dealers' past sales performance

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News You Can Use for Wednesday

What I’m reading today …

The New Face of Oil ETFs

MacroMarkets new paired oil ETFs launched last week, replacing the previous oil ETFs (UCR and DCR) that were liquidated in June after reaching their termination triggers. Unlike the popular United States Oil (USO), these paired ETFs hold cash instruments and transfer funds between each other, instead of holding oil futures contracts. The paired ETFs will track the price of crude on the NYMEX, and will transfer funds dollar-for-dollar with the price of crude. The securities will use a “reference price” of $100 crude, and the funds NAV at inception is one quarter of the reference price. The funds have a 95 basis point expense, for essentially holding cash.

What People Spend Their Tax Rebates On When They’re Too Broke to Drive

This isn’t “new” news – I’ve seen it around for a bit – but I find the analysis by the “Economics and …” blog pretty interesting.

Five phases to the current down-cycle
David Rosenberg, North American Economist for Merrill Lynch, has a fascinating analysis. I’ll give you the Cliff’s Notes version …

1. The first wave was the end of the housing cycle when starts peaked and began to roll over in the first quarter of 2006.
2. The second wave was the end of the home price bubble when the Case-Shiller index began to deflate in the first quarter of 2007.
3. The third wave was the end of the credit cycle when the interbank market froze in August 2007.
4. The fourth wave was the employment cycle, which peaked when payrolls did in December 2007, prompting the Fed to reluctantly embark on an aggressive policy easing course.
5. The fifth wave will be the end of the consumer cycle and the beginning of what may well prove to be the most significant recession since the mid-1970s, and while delayed by the tax rebates, this phase seems to have commenced in June when U of M consumer sentiment collapsed to its lowest level in 28 years.

U.S. gasoline prices won't peak until November: Energy agency

WASHINGTON — U.S. drivers can expect to shell out more than $4 (U.S.) a gallon, on average, for gasoline for the rest of 2008 and prices will keep rising until November, the U.S. Energy Information Administration said Tuesday.

Horse sales slow to a trot
The rising cost of equine ownership from high feed, fuel and hay prices is causing a bumpy ride for those who sell the animals

Map of U.S. Wind Energy Projects

Click on your state and find out what’s going on. Cool beans!

Cheer Up: Hedge Funds Had a Lousy First Half, Too

What is a little different about today's hedge fund sighting from Bloomberg isn't that certain funds or certain styles are faring poorly (remember the quant disasters of last August?) but hedge funds on average lost money the first half. And that was before fees. Nevertheless, this lackluster showing has put only a dent in their popularity. leading investors to switch managers rather than withdraw from the sector.

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T. Boone Pickens' Energy Plan ...

... sounds pretty good to me.

Texas Oilman T. Boone Pickens Wants to Supplant Oil With Wind

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More News You Can Use

Cameco unlikely to meet 2011 Cigar Lake target

Cameco jumped a hurdle last week when it got a two-year permit extension for overhaul of its flooded Cigar Lake uranium mine in Canada, but analysts say the miner's forecasts of output by 2011 are too optimistic.

With the mine expected one day to supply over 10 percent of the world's mined uranium, any further delays starting production would put upward pressure on uranium spot prices that have already hit a record high earlier this year.

Giant Offshore Wind Farms to Supply Half of UK Power

John Hutton, the energy secretary, will this week announce plans to build enough turbines to generate nearly half Britain’s current electricity consumption. He will open the whole of Britain’s continental shelf to development, apart from areas vital for shipping and fishing ... Hutton will announce at an energy conference in Berlin tomorrow that he wants to see this target raised to 33GW-worth of wind turbines installed in the seas around Britain by 2020.

New Uranium District in Texas?

Austin, Texas-based Uranium Energy Corp. said it is exploring a new uranium find. The company said it believed the discovery could "constitute a new uranium district in Texas."

Uranium price correction may hurt prospects for new discoveries

Haywood Securities Investment Banker Nicole Adshead-Bell Wednesday asserted that the recent correction in the price of uranium "is likely to lead to a reduction in the speculative capital" for high risk uranium exploration, as well as decrease the possibilities for new discoveries.

Only five mines now supply 51% of global primary uranium production, according to Haywood Securities.

Global challenges are putting pressure on 103 million pounds of uranium production, Adshead-Bell suggested. For instance, rebel activity and increase in government ownership issues in Niger are putting pressure potentially on nine million pounds of uranium production. Indigenous landowner issues and uranium mining bans could impact up to 46 million pounds of uranium production in Canada and Australia.

Meanwhile, Adshead-Bell asserted that 14 new uranium mines must come on quickly to help mitigate the impacts of potential supply disruptions in uranium.

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