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Profit From the Nat Gas Revolution: The Reformed Broker

Jeff Macke
Breakout

Josh Brown, The Reformed Broker, popped into Breakout to make the case for natural gas as the solution to America's "reliance on foreign energy" problem. For those who've heard the natural gas solution proposed, then ignored, for years, you're pretty much in Nesto's and my camp. As Josh is no shrinking violet himself, and since the best investing decisions often come from vigorous debate, we launched right into it.

Brown makes his bullish case, citing Natural Gas Act legislation, which could light the fuse on the long overdue explosion in relatively clean burning propellant. Brown offers that the act would, in effect, "kill four birds with one stone." First: Natural gas would, after vehicle modification, cost $1 per gallon less than diesel. Second, the act would create jobs in America (the "Saudi Arabia of natural gas"). Third, the government would be spending money in the states for a change. Finally, while quick to distance himself from environmentalists, Brown notes that natural gas does burn incrementally cleaner than gas or diesel.

Here's where the debate begins in earnest. Nesto says that Brown's argument would "blow up," due to the propensity of natural gas to do the same. I feel that the government spending on natural gas as a replacement fuel would put at risk the ingrained ethanol lobby. The exact dollars spent by the U.S. government to subsidize corn growth to create fuel is somewhat fuzzy, but somewhere well north of $7 billion is likely in the right 'hood. As Brown himself pointed out in an earlier segment with Breakout, U.S. elections begin in Iowa, creating a substantial hurdle for the natural gas movement.

Brown brushes aside our concerns and offers ways that natural gas enthusiasts could profit, regardless of the ever- gaseous winds emanating from DC. He eschews investing in natural gas itself, noting an almost unlimited, relatively untapped supply. Instead he's focusing on Westport Innovations (WPT), a company working in a joint partnership with Cummins (CMI) to produce natty gas engines. Another name Brown likes is Clean Energies Fuel Corp. (CLNE), a provider of fuel stations for all the previously discussed engines.

We want to know what you think. Drop us a line at Breakoutcrew@yahoo.com, or comment below.

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