Well that’s something we’re willing to take a look at before making up our minds. Penny Sleuth’s Mark Louie has done some of the work for us. Take a look at what he’s come up with. Does this shake your opinion on ethanol?

Corn ethanol does nothing but bring the bushel price to an all-time high, vaguely put a dent into our energy demand, pollute lands with pesticides and drink up a limited water supply… Bottom line is, corn is a food, not a fuel.

Well there’s a new ethanol in town and by the looks of it, it’s here to stay…cellulosic ethanol.

This technology will ultimately help environmental problems, diminish the U.S.’s dependency on oil, boost the economy, increase food supply and even put an end to controversial wars…

Cellulosic ethanol, made from cellulose — the most common organic compound on earth — is potentially produced from your lawn trimmings, switchgrass, wood chops, paper sludge, corn stalk, stems and even manure and sewage.

Cellulosic ethanol differs from corn-based in so many ways. It’s by far much better in every aspect. The fact that it will be cheaper, more efficient, more abundant and environmentally cleaner than corn-based is enough to raise an eyebrow.

A Solution for America’s Oil Dependency

Studies have shown that the maximum amount of corn ethanol the U.S. could possibly produce without completely taking over the food supply is 15 billion gallons a year. That’s less than 10 percent of the crude oil America will use today.

The U.S. Departments of Agriculture and Energy did a joint study showing that the U.S. could grow 1.3 billion dry/tons of biomass while keeping forestry and agricultural lands sustainable. That could produce over 150 billion gallons of cellulosic ethanol, which has the energy equivalency to over 100 billion gallons of gasoline. That could drop total U.S. oil imports by over 80 percent.

With fuel-efficient cars and energy conscious attitudes, we can completely do away with all oil imports. We won’t have to worry about OPEC jacking up prices and protests in Venezuela anymore.

Cleaner Than Corn

For the 21st century, it appears “green” is the way to go. It just so happens that cellulosic ethanol is environmentally sound.
Cellulosic ethanol emits 85 percent less CO2 than gasoline while corn-based only emits 30 percent less than gasoline. It has actually proven to have net negative emissions because the plants would absorb more carbon than they emit when used as fuel. It also emits less sulfur.

The leading candidate for cellulosic ethanol, switchgrass, needs 75 percent less water, 70 percent less fertilizers and pesticides than corn. On top of that, switchgrass is a cheaper and more abundant resource.

Switchgrass yields twice as much ethanol per/acre than corn, has a short growth time and requires a lot less maintenance while lessening erosion. It also easily adapts to its environment and is very resistant to droughts and disease.

Switchgrass already has amazing benefits… It’s hard to imagine the capabilities of this plant will have once scientist start genetically altering the crop…

Following the Big Money

Switching to cellulosic ethanol will create thousands of domestic jobs and keep billions of dollars from jumping overseas for oil imports.

Currently, many U.S. farmers are struggling and relying on government subsidies for survival. Cellulosic production would increase rural incomes by 200 percent.

One economist estimated that cellulosic ethanol could increase the U.S. GDP (Gross Domestic Product) by $1.7 trillion from 2008-2022. With a majority of that money staying within the U.S., imagine the economic boom that we would witness…

The only draw back to cellulosic ethanol is that it’s not commercially mass-produced yet. Cellulosic ethanol is still in its developing stage…

To make the fuel, you first extract the cellulose through a heating process. Then, you break the cellulose down into sugar using enzymes. After that, you ferment the sugar into alcohol. Last, distill the alcohol into fuel. On paper, the process sounds simple, but there are some important screws that still need be tightening…Scientists have yet to find the most efficient and least expensive way to produce the fuel. The biggest problem is developing enzymes that could break down the cellulose rapidly on a large scale.

Currently, cellulosic ethanol can be made around $1.50-$2.50 per gallon depending on the process and type of material. There’s estimates that ethanol will be able to be mass-produced at less than $1 dollar a gallon.

There are several pilot-plants running and proving to be successful. Range Fuels is currently constructing the first commercial plant estimated to produce 20 million gallons/year.

The U.S. Government is also getting highly involved. The Energy Independence and Security Act of 2007 mandates heavy increases of ethanol. Some states are requiring ethanol-mixed gasoline.

The Renewable Fuel Standard Program headed by the U.S. government is requiring the production of 36 billion gallons per year of biofuels by 2022. Even if the U.S. reaches the maximum corn ethanol prodcution of 15 billion gallons, the majority of the quota will come from celluloic ethanol.

The European Union, and countries like Venezuala, Brazil, Columbia, India and China are all instituting similar programs…

Profiting from the Cellulosic Revolution

Unfortunately, the cellulosic industry is way too premature to predict the biggest gainers.

Whoever discovers the most efficient way to produce ethanol or whichever chemical/biochemical company finds the best enzymes will be a winner.

Venture capitalists own a majority of the current cellulosic companies…but at the magnitude and potential of the cellulosic industry, it’s likely we will see many of these companies go public. Those that already have are still small-caps. Here are a few out there right now:

Verenium Corp. (VRNM: NASDAQ)
SunOpta Inc. (STKL: NASDAQ)
Abengoa S.A. (ABG: MCE)
BlueFire Ethanol Fuels (BFRE.OB: OTC BB)

While these would provide you with a slight interest in cellulosic ethanol, we wouldn’t recommend any of them. This technology is still too premature.

Beyond these emerging ethanol companies, keep an eye on agriculture companies, chemical companies, equipment suppliers, transportation companies and even automobile companies that will be producing flex-engine cars that can run on ethanol.

Even industries such as cattle, meats, animal feed and various packaged food companies will all benefit because of much larger grain supplies.

When something has the potential to impact the world’s governments, environments and economies…it’s worth a look at…

Regards,
Mark Louie

Greg’s Endnote: For now, the ethanol debate is still just that, a debate. The reality is, most Americans still need traditional gas and oil for their automobiles. The problem is, it’s just too expensive. Oil is climbing toward $150 while gas is threatening to reach $6 by the end of the summer. And people still aren’t completely sure what’s causing the price hike. Well here’s an idea, and we don’t think it’s getting enough attention. Click here to find out the dangerous truth…

Source: Can the Corn

We received some absolutely brilliant news from a far corner of the world yesterday. Exciting moves are afoot on the island of Bougainville in Papua New Guinea.

We’ve got a brilliant copper and gold mining play on the island… so far we are up by 122% on this investment and the news just keeps on getting better. The international media is taking a much greater interest in the Bougainville story… which means that our gains could be looking to jump up even further.

The mine shut down nineteen years ago due to civil unrest – but these problems have been sorted out, and money is now rolling in the direction of our investors.

Yesterday, Pacific Magazine ran an article on the improving situation on the island. The crucial bit was an interview with the Vice-Chairman of the local Landowners’ Association (PLA). He said that the PLA fully supports the re-opening of the mine after the feasibility studies are completed. “We are content with the way negotiations are going on and we fully support the initiative taken to restart the mine.”

Which is excellent, because it means that there will be no local disruption to the re-starting of the mining operation.

But there’s more to this story…

Our contact in Bougainville has sent us the latest version of the so-called “landowner’s proposal” which gives details on what the revised Bougainville Copper Agreement (BCA) might look like. No other financial publication has reported on it yet. So my Profit Hunter readers are probably the first ones to receive exclusive information.

The four-page-long document written by a long-time adviser to Bougainvillean landowners is supposed to provide the basis for an update of the BCA. It aims for a fairer division of future earnings than the old agreement – especially for local landowners.

It was the unfair distribution of profits that led to rebels attacking the mining site and forcing the closure of the mine. You can’t really blame them. Under the old agreement, local landowners received only 0.2% of profits between 1972 and 1989. The new proposal suggests paying them a royalty of 3.5% of sales.

It also suggests splitting taxes at the ratio of 50:50 between the Autonomous region of Bougainville (ABG) and the National Government.

Of course we would be happy to see the local population get a better deal than the old one. But what really grabbed our attention is the value that the proposal places on our plays mining shares should the mine re-open soon.

The proposal’s calculations are based on the following assumptions: the current price of copper is US$3.88 per pound and the price for one troy ounce of gold is $878; US$1.5bn capital investment is needed to reopen the mine, repayable at an interest rate of 7.5% over 7 years; there will be no issue of additional ordinary shares by the company; The company gets a tax free status for the first two years of production; there will be no dividend withholding tax; the tax rate will be 30% from year three on; there will be a royalty payment of 3.5% of sales to landowners.

We could be looking at a 2,414% gain

Assuming that the mine produces the same amount of copper and gold it did in 1987, total sales per annum would amount to US$1,948m. Even after the operating costs, loan repayment, royalties and taxes, the company would be left with a total profit after tax of US$1,157m, or US$2.49 per share.

On a conservative price earnings ratio of 12, that would value the shares at US$29.88 or A$31.17. That target is a lot higher than we had estimated and translates into a potential gain of 2,414% on the price of A$1.24 at the time of writing! And the company owns several additional licences on the island as well – so there could be additional upward potential beyond that.

This isn’t going to happen overnight though. And nothing is ever guaranteed – especially in Bougainville. But if things play out as we believe they will, we could bank the biggest gains that we have ever made in Profit Hunter’s history.

Our contact tells us that there is now a three-step plan in effect. Step one aims to get all, or most, of the 510 local landowners to sign the proposal. Secondly, to win support for the draft from a majority of ABG MPs. Finally, to attend the planned joint supervisory board meeting in July and win backing for the proposal. They have obviously got their work cut out for them…

The coming months are going to be very exciting for everyone who holds shares in this company. Reaching each off those three milestones should provide a further boost to the share price. And the mid- to long-term potential on this share remains huge.

As a subscriber to Profit Hunter you would have access to this and all our other investment recommendations.

At present we’re looking at one African company we think can do very well as it involves a small company that holds all the cards in a huge oil deal – involving the biggest super-powers and billions of dollars…

If gains of 122% (and that’s just for starters) are of interest to you… learn more about Profit Hunter opportunities right now

Regards,

Manraaj Singh
Editor
Profit Hunter

Source: Our Bougainville Gold and Copper Mining Play Is Way Up, And Climbing