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