Byron King, with a few notes on geothermal energy...

We have finished Day 2 of the Geothermal & Investment Summit. It was an information-dense set of presentations from some of the leading lights of the renewable energy development and finance community.

The utilities of the US, if not those in many other parts of the world, have pressing needs not just to supply power to energy-hungry consumers. But more than that they must meet both public and political pressures for using renewable energy sources. Apparently heedless of the impact to the environment of the Middle Kingdom and abroad, China commissions a new coal-fired plant every 5 days. Yet in the US there has not been a new coal-fired power plant permitted in about a year. So over time in North America, the older systems are passing away. The question is, what will take their place?

To the extent that the public envisions renewable energy systems, the image it holds is of tall poles with windmill systems on top with blades turning. Or there is an expectation of solar systems mounted on rooftops, facing the sun. But these are intermittent sources of energy production. Some of the time - most of the time, really - the wind does not blow. And at least in the nighttime, the sun does not shine. So for each Megawatt of power that moves through the grid, down to meet the load, the requirement is for three megawatts of installed capacity of wind and solar. Build three, get one. In the big picture, this is not a good use of resources.

But not so with geothermal, which has demonstrated the ability to meet base load power requirements. Geothermal offers the prospect of heat energy from the bowels of the earth, 24/7/365. The fuel is, as the saying goes, "free." Or at least, the heat energy of the earth will last a long time, such as at Locarno in Italy, which has been producing steam since 1904, good times and bad, in war as in peace. And with a geothermal plant, consider what is not there. No rail line, for the trains hauling coal from the mine. Come to think of it, no trains. No mine. No mountain top removal in West Virginia. No yellow gear, pushing piles of spoil. No valleys filled with that spoil. No
carbon dioxide going up a stack. No stack, even. No NOx. No SOx. No particulates. The air is cleaner. You can smell it.

On a large scale, geothermal will change t! he entire energy equation of our culture. And as much of the fossil-fired infrastructure from decades past has reached the end of its planned service life, geothermal offers a new way forward. There is little choice. We have to take this road.

But then again, is geothermal a story that is too good to be true? We won't say it in those words exactly. But what are the limitations? They are many. At the geothermal conference, the room is full of people over age 50, and people under 30. An entire generation is missing, simply not part of the industry. This is a legacy of two decades lost to under-investment, a long procurement holiday, a time when few were hired and many were laid off. And there is a serious lack of the right kind of rigs, of pipe, of bits, of skilled personnel who understand how to bring hot water and steam out of a hole in the ground. There is a lack of turbine systems, and valves, and insulation materials. And prices for everything, from concrete to galvanized steel, have been moving up along with the world construction boom.

Really, at the level of boots on the ground the geothermal industry is maxed out. It is growing, to be sure, but the growth is constrained because barriers to entry are high. You actually have to know what you are doing to make a geothermal well, and to put a system together. You need real equipment, sturdy and well-built and designed from the inside-out to function in extreme environments. There is no faking it.

That is why we are here, of course. We are meeting the players, and taking notes. We are taking lots of notes.

[Joel's Note: Okay, here's what you need to know about this whole geothermal buzz.

1. Senate Bill #107 has forced the Californian government to derive 20% of its total energy needs from renewable sources just like geothermal by the year 2010.
2. That means huge investment that will light a fire under many "under-the-radar" companies skirting the fringes of the industry at present.
3. Byron King, of Outstanding Investments fame, will be sending a report in less than 36 hours detailing his 5 favorite penny stock plays in this very sector.
4. Due to the nature of the companies, in particular their tiny size and massive profit potential, the reports are limited to a strict number of recipients.
5. Already a third of these reports are spoken for.
6. And this is the most important one, the ONLY way you can ensure you are on the list and poised to profit is by following this link: