Even the energy patch has a geek side, and these half-dozen companies represent the energy investments of the next generation, writes Michael Murphy of New World Investor.
The transition away from the oil-based economy is going to take decades, and there is a lot of new energy technology coming along to find more oil, use it more effectively, or replace it with alternative energy sources.
For example, the hybrid car is both a way to use oil more efficiently now through higher gas mileage, and to road-test the drivetrain for the hydrogen fuel cell motor, which is coming later. I’m interested in any part of the energy chain where applying new technology will make a major difference.
- Axion Power (AXPW) makes automobile batteries in which they replace the lead negative electrodes in a lead-acid battery with carbon electrodes. With that one change, they have created a third-generation lead-acid battery precisely suited for the start/stop or idle shutoff application, and competitive in hybrid cars and locomotives.
- Connacher Oil & Gas (Toronto: CLL) is a Calgary oil and gas exploration and production company actively producing oil from tar sands. Connacher trades on the Toronto Exchange, so the stock price and all the financials are in Canadian dollars. The company is in the process of being sold.
- Exide (XIDE) is a battery manufacturer recovering from a 2002-2004 bankruptcy filing. New management has rationalized the company, and the upcoming switch to stop-start microhybrids will create opportunities, as they have a technology agreement with Axion Power.
- Infinity Energy (IFNY) is a Denver-based oil and gas driller and producer, perpetually out of money. They own 100% of a 1.6 million-acre concession offshore Nicaragua, where I think there are five billion-barrel oil fields waiting to be discovered.
- Ocean Power Technologies (OPTT) develops and commercializes systems that generate electricity from ocean waves. The company has numerous patents on a wave energy converter, PowerBuoy, which turns the mechanical energy of a wave into low cost, clean electrical power. Its customers include independent power producers, public utilities and a variety of governmental organizations and agencies.
- Rentech (RTK) has patented technology to turn all US coal into oil. This “green” technology uses domestic resources to produce ultra-clean synthetic fuels from coal, natural gas, or biomass.