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