Sam Hopkins - Angel Publishing

Australian Renewable Energy

The government of Australia is targeting four homegrown renewable energy companies with over US$214 million in assistance.

Petratherm, Geodynamics, Victorian Wave Partners, and Hydro Tasmania will all be able to use funding from the capital in Canberra to advance the country's renewable energy capacity. Australia has a national goal of generating 20% of its electricity from clean sources by 2020.

As it stands, clean means renewable. Even Australia—the largest coal exporter in the world—has not advanced clean coal technology to the point where it is a medium-term rival with wind, solar, and water-driven generation.

Petratherm (ASX:PTR) and Geodynamics Ltd. (ASX:GDY) are both Sydney-traded developers of hot rock geothermal energy, which Australian Prime Minister Kevin Rudd and many companies hope to turn into the country's premier non-exportable clean energy resource.

Geothermal energy can't be loaded onto a tanker or put in a pipeline, so steam turbines will sent power straight to local cities and consumers. Fine-tuning of the new clean energy generation buildout process will come at sites like the 25 MW geothermal power plant Geodynamics is building in the state of South Australia.

The other two companies to receive pieces of the A$235 million pie Canberra dished out on November 6 were Hydro Tasmania and Victorian Wave Partners. The success of those two points to the Australian government's commitment to wave energy and hydropower as part of the continent-country's energy mix and advance toward the "20x20" target.

Geodynamics (ASX:GDY) shares rose by nearly 10% on the day's news, and Petratherm (ASX:PTR) doubled that, with a more than 20% gain on Friday.

-Sam Hopkins

The U.S. Army's New Solar Power Plant

It's the same U.S. military that guards Persian Gulf oil routes.

And it's now becoming a force in renewable energy's worldwide expansion.

Far from the wars in Afghanistan and Iraq, the Department of Defense is setting its own target list to achieve energy independence for the Army's biggest bases.

First, California's Fort Irwin has just begun a multi-year march toward 1,000 MW in solar energy capacity and self-sufficiency from the desert sun.

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Fort Irwin Goes Solar

No one would think you were crazy if you thought Fort Irwin — the Army's biggest training camp — was a Middle Eastern outpost. As a matter of fact, the Mojave Desert complex plays host to a sort of mini-Iraq, where hundreds of Iraqi actors are employed by DoD to accurately play out urban fighting scenarios soldiers may encounter during deployment.

Its 1000+ square miles of barren landscape also make Fort Irwin an ideal place to test aircraft, artillery, tanks. . . and even solar power.

In this map from the National Renewable Energy Lab (NREL), you can see that Fort Irwin's location smack-dab between Las Vegas and Los Angeles also puts it right in the middle of the country's highest average daily solar radiation: over 7,500 Watt-hours per square inch.

Those conditions mean you've got to drink a lot of water during training exercises, and you can bet air conditioners are whirring all day long nearly year-round. . .

So the Army commissioned Irwin Energy Security Partners — comprised of Spanish energy and infrastructure company Acciona's solar power division and Virginia-based Clark Energy Group — to reduce the drain Fort Irwin exerts on local generators like Hoover Dam, and to bring a massive power supply improvement inside the base boundaries.

The Army's International "Green Coalition"

You may not expect to see Madrid-traded Acciona (MAD: ANA) on a roster of the U.S. ground force's top energy developers. But Acciona's North American operations, which include water desalination and wind power, give the Spanish company a firm domestic base that the Pentagon sees as favorable to its own efforts. Acciona North America has its headquarters in Henderson, Nevada, just outside Las Vegas.

For the Fort Irwin solar power project, Acciona has teamed up with Clark Energy Group, an energy services company based in Arlington, Virginia, just outside D.C.

Clark is able to navigate the bureaucracy and get Acciona's concentrating solar power (CSP) technology into the military power mix.

A combination of solar thermal power and photovoltaic (PV) technology will contribute 500 MW of capacity by 2022, at a cost of about $2 billion. That should make Fort Irwin energy-independent as far as electricity is concerned.

The Wall Street Journal is reporting that Army officials have hinted at selling some of that output to area grids — especially if the solar plant is expanded to a full gigawatt under the Army's Enhanced Use Leasing (EUL) program. The EUL is the military equivalent to Public-Private Partnership (PPP) arrangements that many emerging countries and cash-strapped cities have used to launch infrastructure improvements.

Under the EUL, which is administered in Baltimore, Irwin Energy Security Partners will lease Army land to install and operate the solar power plant. The consortium will cohabitate with the military with the goal of landing more contracts as the Pentagon shifts to sustainable energy on its bases.

Out in the brightest, driest reaches of the United States, more international clean energy companies with American HQs may find themselves involved in the Defense Department's "Green Coalition."

Israel's Ormat Technologies has its main North American offices in Reno, Nevada, just north of Fort Irwin. Ormat (NYSE: ORA) is already drawing steam from the ground to drive geothermal electricity generation throughout the West, and inclusion in Army energy plans could give another shot in the arm to Ormat shares, which are now holding just above support levels at $36.

Be it Acciona, Ormat, or another company that gains the most from the American military's forays into security through clean power, one thing is certain: the U.S. is now building an international coalition on renewable energy like none we've seen before.

We'll keep you up to date on which international green companies are set to benefit.

Regards,

Sam Hopkins

International Editor

P.S. Nick Hodge and I just issued another successful recommendation to Green Chip International subscribers. That's become the norm for GCI, as our current open positions now average a 45.9% gain. As for the ones we've closed out. . . they did even better — with a 58% payday. And we're working on more winners for you as we speak. Just take a look at this GCI special report today so you don't miss the next one: Profiting from International Clean Energy Expansion.

China Wind Power

United States Commerce Secretary Gary Locke said on Thursday that China is moving to allow more parts from foreign manufacturers to be included in the Middle Kingdom's domestic wind power projects.

As it stands, Beijing requires that 70% of the components in wind energy turbines erected around China be produced by factories within the country.

Locke couldn't say exactly when the rule would change, but after the 20th U.S.-China Joint Commission on Commerce and Trade, America's top industrial diplomat did indicate that a policy shift is on the way.

That will be a boon to American wind energy component producers like American Superconductor (NASDAQ:AMSC), whose stock rose by over 10% in the week from October 26, compared to a 3% decline for the S&P 500.

China's loosening of domestic manufacturing requirements for wind power is also part of a bi-national wind power exchange that involves companies of all sizes.

In Texas, a consortium just announced a $1.5 billion Sino-American joint venture between Shenyang Power Group, Cielo Wind Power, and the U.S. Renewable Energy Group, a private equity fund. That collaborative effort will bring turbines from China to the Lone Star State via Chinese turbine maker A-Power Energy (NASDAQ:APWR).

Look for more news soon on the growing exchange in U.S. and Chinese wind power infrastructure expansion and the wind power stocks that could profit.

-Sam Hopkins

China Wind Power

United States Commerce Secretary Gary Locke said on Thursday that China is moving to allow more parts from foreign manufacturers to be included in the Middle Kingdom's domestic wind power projects.

As it stands, Beijing requires that 70% of the components in wind energy turbines erected around China be produced by factories within the country.

China's loosening of domestic manufacturing requirements for wind power is also part of a bi-national wind power exchange that involves companies of all sizes.

Look for more news soon on the growing exchange in U.S. and Chinese wind power infrastructure expansion and the wind power stocks that could profit.

-Sam Hopkins

Veolia Environnement Stock

Publisher's Note: Green Chip's Sam Hopkins is in New Orleans this week, reporting on the city's pressing water and transportation needs, and the company behind its massive infrastructure overhaul...
— Jeff Siegel

—————————————————

More than 200 years after the Louisiana Purchase, the French are about to run New Orleans again.

The fleur de lis still graces everything from garbage cans to football helmets in this tropical American city, and as I've found in the past few days while looking for companies that are making the most of the Big Easy's post-Katrina renaissance, the famed fleur isn't the only nod to the area's erstwhile European rulers. . .

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French multinational conglomerate Veolia Environnement (NYSE:VE) is becoming the company that handles New Orleans' most basic water and transportation needs.

Veolia has been a major player in this sea-level city's water distribution infrastructure since the mid-1990s. Veolia Water North America built the largest water treatment plant in the United States here in 1992. Today, the company continues to operate and maintain filtration facilities near the Mississippi River, whose connection to the Gulf of Mexico gave New Orleans its historical strategic importance, as well as its fresh water supply.

Now Veolia, which trades on the Euronext Paris market as VIE, is taking control of the city's famous streetcars and buses from the New Orleans Regional Transit Authority (NORTA). NORTA has failed in its efforts to get public transportation back on track after Hurricane Katrina in 2005 (and Gustav and Ike in 2008), decimated the primary customer base for intra-city mass transit.

Veolia Takes Over Post-Katrina Transit

Consider this: the population of New Orleans is still about 30% lower than it was before Katrina, yet NORTA ridership dropped by 70% over the same period!

That's too low even for sea-level, and NORTA can't get the numbers up. So they're paying Veolia up to $600 million over the next decade to handle everything from payroll and pensions to network operation; security and timetables for the city system and its connections to surrounding parishes, as counties are called in Louisiana.

Perhaps most importantly, Veolia will take over the system's public relations, using lessons from Veolia Transportation's business in 70 countries to recover some of the 70% of customers NORTA lost.

To be fair, it's not all NORTA's fault. As you probably know, Katrina hit the poorest areas of New Orleans the hardest. The reason that many residents of places like the Lower Ninth Ward couldn't evacuate in time to avoid the storm and rising floodwaters is the same reason that NORTA ridership is down a full 40% more than the city's population. Those folks depended on mass transit to traverse the city and to escape it.

And we all remember the sight of entire bus fleets sitting chassis-deep in murky water, as the Superdome filled with panicked New Orleanians. As indelible as those images are to anyone who saw the disaster unfold on TV, the mental and physical scars of Hurricane Katrina are all the more apparent here.

Over four years after the storm and floods roiled, restaurants place post-Katrina recovery clearances in their front windows as if they were the standard bills of health. I've heard 10-piece bands sing songs about high water and helplessness, and I've seen signs saying, "Katrina broke our city and Capitalism isn't going to fix it."

But Katrina, among other things, demonstrated an epic failure of government at all levels to protect the citizens who bankroll it.

Veolia's job will be to prevent such breakdowns through effective disaster planning and management. If improvement comes through a "capitalist" five-year deal with an option to renew, so be it.

Beyond hurricane preparedness, Veolia is intimately involved in state and city-level efforts to bring federal stimulus money down to the Delta.

New Orleans: "Exhibit A" for Stimulus Funds

In February 2009, Newsweek called New Orleans "Exhibit A" for why a federal stimulus was not only needed to bring the world's richest country out of recession, but also to restore a basic level of service and civil life to one of its most precarious cities.

So far, 16% of Louisiana's federal stimulus money has been allocated to transit and water projects, according to the Louisiana Recovery Authority's website.

Transit and water projects are both right up Veolia's alley.

New Orleans is even seeking to expand Veolia's task by building three new streetcar lines. Estimated at around $150 million, the city wants federal stimulus aid to boost the project. Under the "Exhibit A" banner, New Orleans can legitimately say that by expanding service out to poorer areas, resettlement and reintegration into the local economy will be made possible for thousands of families now scattered all across the country.

Some of the currently un-served areas had older streetcar lines that were torn up, though the wealthier Uptown area kept its St. Charles conduit. So it's not an "If you build it, they will come" scenario, to paraphrase one of my favorite films. Instead, it's more a question of, "If we rebuild it, will they come back?"

People tell me this is the time of year to get work done in the Big Easy because you won't sweat too hard. It's not too muggy, and it's certainly not chilly enough for my temperate-zone bones to raise any objection. Veolia Environnement is bringing its international expertise and the weight of a conglomerate to New Orleans to rebuild old things and build new ones, too.

And as I reported a couple weeks back from California, Veolia is part of an expansive national consensus that infrastructure issues are paramount to economic vitality.

The market is looking wobbly right now, but if you want a piece of what Veolia is doing here and elsewhere, current levels around $32 give you a sound technical support base and an opportunity to start building a position in this water and transportation double-play.

As it happens, the Green Chip team is wrapping up a report on the newest addition to the Green Chip International portfolio. Like Veolia, it's a major force in some of the world's biggest markets for water services. But unlike Veolia, this is a country-specific play on an emerging market that investors are clamoring to get a piece of. This stock is a value investor's dream hidden by hype. You don't want to miss this winner.

Regards,

Sam Hopkins

Editor's Note: My colleague Nick Hodge will soon be attending GreenBeat 2009, the foremost event on the smart grid. Below are some details about the conference.

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Deadline to enter the competition is October 30, 2009. VentureBeat will name the top 10 innovations driving the future of the Smart Grid on November 19, 2009, at the GreenBeat 2009 conference. Keynotes include Al Gore and John Doerr.

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Niger Delta Oil Fighting Ends

A persistent threat to oil supplies and contributor to the risk premium that helped push oil prices up in recent years seems to be dissipating.

Fighting in Nigeria's oil-rich Niger Delta region has raged for years, as local militant group the Movement for the Emancipation of the Niger Delta (MEND) demanded greater control over local resources.

MEND conducted targeted bombing campaigns that attacked onshore and offshore oil infrastructure at its arteries—pipelines—and MEND warned away foreign oil companies that didn't meet the group's conditions for dealing with delta communities.

Most foreign firms deal with Nigerian oil industry captains nearer the country's main city, Lagos.

Now, President Umaru Yar'Adua is close to finalizing a permanent cease-fire and amnesty agreement for MEND and smaller groups whose fighters total around 8,000 men.

On Monday, October 26, MEND announced the truce from its side, and the move lightened fears that the Niger Delta would continue to fall short on potential output by 1 million barrels a day. That is the amount that was essentially held hostage by the fighters and in turn dented realized worldwide capacity.

Oil dipped below $80 a barrel on Monday as the cool-down in the Niger Delta made news.

~Sam Hopkins

Investing in Nokia Stock

If it bleeds, it leads. . .

Be it the local 11 o'clock news or an international corporate brawl, tussles get top billing.

Today, the financial press is screaming about Finland's Nokia filing a claim against Apple, Inc. in U.S. federal court, saying the iPhone represents a breach of ten Nokia patents.

But as an investor, you're making a mistake if you just go for the corporate gore and ignore the revenue brewing in Nokia's backyard. . .

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Broadband Internet Becomes a Civil Right

You see, Finland just became the first country in the world to make high-speed internet a legal right for all its citizens. And it's going to be a boon for Helsinki-based Nokia, which is already the world's largest mobile phone maker and has plans to become a force in global broadband access.

As of July 2010, all of Finland's 5.3 million residents will become part of a sweeping national plan to increase internet access and stimulate a high-tech economic recovery. Internet Service Providers (ISP) in Finland will be required to do everything possible to allow Finns access to a steady stream of data. They'll flesh out delivery infrastructure like fiber-optic cable and beef up security mechanisms to ensure that new connections are safe.

The new national broadband mandate won't just stimulate PC makers that profit as previously unserved Finnish consumers step into the PC market — Finland's Ministry of Transport and Communications is allowing for the service requirement to be fulfilled through mobile devices like Nokia's soon-to-debut N900 smartphone.

Some of the patents that Nokia is taking before a judge in the Apple case relate directly to Nokia's new high-speed internet push and the Linux-based N900. Specifically, Nokia says Apple co-opted parts of its technology for both traditional telephony and wireless internet access.

Nokia Moves from 3G to 3D

Nokia plans to release a small computer called the Booklet 3G, named for the fast-spreading wireless broadband network now accessible in many countries.

The drive to supersede other smartphone and even PC makers will extend from Finland all the way around the world. . . and it will take things from 3G to 3D, as PC World magazine recently reported.

If you're lost in new surroundings, or just trying to orient yourself (as I was plenty of times during a recent trip to San Francisco), a smartphone like the iPhone or the Research in Motion (NASDAQ: RIMM) Blackberry can turn you into a flashing blip on your handheld screen, complete with street names and compass directions.

But finding yourself inside isn't nearly as easy. . . and we're not talking about introspection or soul searching here.
We're talking about knowing in which part of the shopping mall, doctor's building, or even construction site you are.

And that's what Nokia is aiming to achieve, as it builds on the 2007 acquisition of Navteq, a navigation software developer that competed on its own with GPS giants like Garmin (NASDAQ: GRMN).

PC World recently noted that with Navteq now the core of Nokia's Location-Based Services (LBS) division, the parent company can move forward with next-generation 3D mapping initiatives. Essentially, Nokia's status as the world's largest handset maker means that each phone can become a freelance surveying device that helps piece together pictures of inside spaces for the Navteq/Nokia database.

As of Nokia's acquisition, Navteq already had the largest mapping database on the planet — and the Finnish company may soon hold the most comprehensive interior coordinate system around.

Now to the Numbers. . .

Big ideas aside, Nokia is a creature of the global consumer goods market. Telecommunication plays a major role in our social and financial lives — one that won't go away, unless some sort of Armageddon knocks out the world's telecom nerve centers.

But companies like Nokia can't assume their market leadership will last 'til kingdom come. . .

And it's certainly not good news that Nokia just reported its first quarterly loss ever. Since 1996, the company has been growing and growing, but the iPhone suit against Apple strikes many as a sour-grapes effort to climb back into a smartphone scene to which Nokia paid too little attention.

Apple and Nokia are now part of a flame war that will probably end out of court, but not before millions in legal fees are generated and Nokia potentially diverts important resources from the task at hand: getting back to profitability.

I watched Advanced Micro Devices (NYSE: AMD) doggedly pursue Intel (NASDAQ: INTC) in a similar way from late 2005 on, and AMD shareholders have nothing to show now but a share price that is down 64% over the past five years. Intel shares dipped into the red by 4% in the same time period, but we know who still holds the upper hand.

Nokia may be best off showing that Finland's tech economy (near Sweden, Denmark and Estonia, which gave us the highly successful internet phone software Skype and file-sharing service Kazaa), can be a template for a major worldwide expansion of broadband access. Nokia can take the helm of a global high-speed wireless web campaign through its existing consumer base — and the fact that its country is now a policy Petri dish for 21st century telecoms.

Nokia dropped by 16% in the month to October 22, while Apple gained nearly 10% — largely on the back of iPhone sales.

Frankly, Finland could be first in a long line of countries that will make broadband internet a civil right. Each nation that recognizes the importance of high-speed internet to economic growth will generate new momentum for profit growth at smartphone makers.

Whether on the desktop or laptop or in the pocket, you want to tap international broadband expansion in your own portfolio.

Regards,

Sam Hopkins

P.S. Smartphone patent disputes are one thing, but smart grid electricity development is leaving plenty of room for multiple companies to profit. . . from metering solutions to massive load monitoring systems that can shift a whole city's power balance and avoid blackouts. In rich and poor countries alike, progress means investment in new energy technology, and we're tracking a world's worth of spending in Green Chip International. To learn more, click here.

Solar Thermal Energy Companies

Siemens (NYSE: SI) is moving from country to country and from strength to strength in the renewables sector.

This month, the German engineering giant added Israeli solar-thermal company Solel Solar Systems to its Environmental Portfolio. Here, we'll see that Solel's recent progress and Siemens' green growth goals make this is a well-timed acquisition that points to further opportunities for large-cap clean energy investments.

Siemens shelled out nearly half a billion bucks ($418 million) for Solel, which has already established itself as a player in key clean energy markets.

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Solel currently operates 750 MW worth of installed capacity at 15 solar-thermal plants around Spain. The company got a $2.6 million grant from the Spanish government in September, meant to help the company finance Spain's first solar field component plant south of Madrid. There, Solel engineers will produce solar receivers that focus the energy generated at parabolic trough power plants.

Siemens will take on that project now, gaining a leg up in the country Ernst & Young ranks in the top 5 most attractive renewable energy markets in the world.

In Spain and elsewhere, Siemens will couple Solel's high-efficiency receiver production with its own market-leading steam turbine division.

Every bit of synergy helps Siemens push beyond its own advantageous German base — Germany is the #2 overall clean energy market in the world, according to E&Y's Q4 2008 All Renewables Index.

Globally, Siemens expects to take a big bite of the rapidly growing solar-thermal market, which it says will be worth 20 billion euros by 2020.

That's a figure that big companies can't say no to.

And the greening of Siemens, GE (NYSE:GE) and other industrial giants presents us with a new category of global mega-cap shares that are gradually becoming, well, Green Chip Stocks.

When Blue Chip Stocks Go Green

Now, being an industrial behemoth with a U.S. market cap of over $87 billion, Siemens dwarfs most pure plays on renewable energy. Some investors may like the underdog feel of clean energy stocks — after all, until the past few years, the mainstream media paid little attention to anything green. . . and oil prices didn't seem to justify high-dollar acquisition strategies like the one Siemens is currently pursuing.

Siemens isn't shelling out hundreds of millions for Solel on a whim. In fact, solar isn't even the primary motivation for this green grab, if you listen to Siemens CEO Peter Loscher. When the Solel deal was announced, Loscher said, "After the rapid and highly successful expansion of our wind power business, we now want to continue this success story in the solar sector."

Indeed, Siemens is bringing in wind turbine orders at an incredible clip for a recent market entrant. . .

On October 13, Siemens announced six new wind turbine orders in North America, worth over $900 million. A quarter of the 565 MW in turbines Siemens ships will head to Ontario, which has become the hub of Canadian wind energy market momentum. Wind-blown states like Wyoming, Oklahoma, and California (the nation's top renewable energy market), will get the rest.

This is big, and this is real. We've heard fair criticism of multinational firms that engage in "greenwashing," which means they put a ton of public relations money into magnifying relatively small moves towards sustainability. With emissions reductions mandates now being developed in national capitals ahead of the Copenhagen Climate Conference (COP-15) in December, even those baby steps by blue chips will evolve into long strides. So on one hand, Coca-Cola won't necessarily become a "green" company, but Atlanta executives will have to reevaluate their industrial logic like never before.

Siemens, on the other hand, is fusing its own in-house research and resources with valuable startups like Solel. Solar-thermal plant designers will now be able to source steam turbines and receivers from one company, which is huge. Easier procurement means economies of scale are achieved more quickly, costs come down, and more drawing-board plans move into the range of reality.

We've been keeping you up to date on the state of renewable energy finance throughout the credit crisis, and M&A is a major piece of the puzzle for keeping clean energy on track to provide more capacity and enable investors to profit (Wall Street-traded Siemens shares are up 67% in the past six months).

Rest assured, there's plenty more on the way when it comes to top-down industrial stimulus for clean energy stocks.

Regards,

Sam Hopkins

P.S. You've read about the evolution of clean energy and sustainability in Green Chip Stocks for years now. But there's another way to tell the story, and a new film highlights another area where the green shift is taking place. You can watch the whole video, Scraphouse, online right here.

Smart Grid Companies

The health care debate is hardly behind us, but Washington is starting to turn its policy-crafting attention to energy and climate issues. In fact, we are still near the beginning of a gradual shift in focus to debate that will favor smart grid companies in 2010.

Domestic and international political will are now decisively in favor of action to establish clean energy benchmarks every nation will be expected to meet.

The UN Copenhagen Climate Conference in December demands serious preparation to develop national goals, and the growing consensus among developed countries and even among U.S. states with renewable portfolio standards favors a 20% clean energy contribution to the worldwide energy mix by 2020.

States like Kansas that now have their own "20x20" mandates can't just start putting up wind turbines and slapping solar panels on roofs if they want to get to 20% renewables efficiently. . . first, smart states are looking into smart grid planning, and calling for some of the $4.5 billion in economic stimulus package funds available for extensive overhauls to electricity infrastructure.

Homeowners will be able to save money through off-peak consumption while potentially generating surplus that can be sold back to the grid. It's not a pipe dream, either.

On Tuesday, October 20, The New York Times featured Boulder, Colorado and its local utility Xcel, which claims to have made Boulder the "first fully functioning smart city in the world" through computerized household readouts and a nerve network of load monitoring sensors.

At the federal level, on October 16, the Senate approved a $33.5 bill to beef up the nation's clean energy and water resource infrastructure. Two days later, the Times highlighted the infighting now taking place among traditionally cohesive energy powers. As energy reform comes down the pike, it's coal vs. natural gas, natgas vs. oil, and all of them vs. renewables. . .

You know what rises above the fray, and can even unite them all? Smart grid companies! Their whole purpose is to balance multiple resource types as they patch into local grids.

No wonder we see such performance in smart grid stocks lately. EnerNOC (NASDAQ:ENOC) leads Comverge (NASDAQ:COMV), American Superconductor (NASDAQ:AMSC) and ABB (NYSE:LTD).

And all of them are beating the breakthrough Dow, even as it climbed 30% since late April.

Expect the smart grid market advantage to stay intact into 2010.

~Sam Hopkins

The Economist's 'Buttonwood Gathering'

Dear Reader,

Last week, while the Dow hit 10,000 and a wayward balloon captivated the American media, the newest member of the Wealth Daily team was in the thick of one of the world's most important economic conclaves.

Editor Adam Sharp attended the Buttonwood Gathering in New York to get a bead on where big money is looking to invest in 2010. Adam heard from White House Economic Adviser and former Harvard firebrand Larry Summers. He listened to hedge fund managers and finance ministers from around the globe, paying close attention as they spoke to each other in that club-like atmosphere.

They didn't think you were listening. . .

But Adam Sharp was taking careful notes and thinking of the best ways for you to stay ahead of the crowd when it comes to post-Buttonwood investing.

Enjoy Adam's insights, and prepare for plenty more hard-hitting, first-hand reporting like this in the weeks and months to come.

Sam Hopkins

—————————————————————-

The Economist's Buttonwood Gathering on "fixing finance" had no shortage of big names on stage. Speakers included Tim Geithner, Larry Summers, George Soros, Niall Ferguson, Robert Shiller, and Elizabeth Warren.

First off, assembling a conference with a slogan like "fixing finance" sets lofty expectations. And some of the speakers did offer realistic and sound ideas for reform. Elizabeth Warren, head of the TARP oversight committee, said we need "the toughest possible accounting standards," because "you can't trust anyone's books these days."

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Unfortunately, Mrs. Warren's position is toothless; her role has no enforcement authority, after all.

This would prove to be a recurring theme throughout the conference. The speakers who had the best ideas were usually not in a position to act on them. The power-players, like Summers and Geithner, said little of substance, dodging the best questions from the audience.

Judging by the comments of White House Chief Economic Advisor Larry Summers, Wall Street won't see real change anytime soon. (Keep in mind, this is the same former Treasury Secretary who was instrumental in the push for the deregulation in the repeal of the Glass-Steagall act.)

Ironically, his speech was on the topic of bubbles. His position was that bubbles are impossible to predict, so we shouldn't even try to pop them. We can only prepare ourselves for when they do pop. He laid out the White House's financial reform plan, which I'll cover in more detail later this week.

Investing Insights

Nearly all the hedge fund managers I talked with said the U.S. market is toppy and may be overbought at these levels. While it is undeniable that we're in a bull market, many are content with their gains. After all, markets are up almost 60% from lows. Some are taking profits, but most said they are not eager to get short.

One manager I talked to said experience has taught him to be cautious after run-ups like this. He noted that the VIX (also known as "the fear index"), is at new lows for the year. This indicates people are getting too comfortable. . . and the bull run may be getting long in the tooth.

Others I spoke with are worried about a possible double-dip recession. Questions surround the Federal Reserve and what happens if/when they stop pumping trillions of dollars into the markets. If they decide to keep providing liquidity after their current plans expire, how long can they keep it up? At some point, will America's creditors balk, and refuse to buy more debt?

Jeffrey Sachs, director of the Earth Institute at Columbia University, was bullish on green technology. He endorsed the green sector as America's best shot for stimulating growth and creating jobs.

The dollar was another hot topic. Most attendees and panelists seemed to think we would see continued weakness.

Billionaire investor George Soros noted that there has been "a general flight from currencies." When asked whether the dollar would lose its reserve status, he took a page out of Winston Churchill's book and quipped, "The U.S. dollar is the worst reserve currency, except for all the alternatives."

On the subject of growth, Mr. Soros offered a not-so-rosy outlook. He stated that world growth is bound to be "flat for a number of years," and that "the U.S. will continue to drag on the world economy."

There was no shortage of great quotes during the conference, and I'll share some of the best ones with you later this week in Wealth Daily.

Until then,

Adam Sharp

P.S. Soros, Sachs, and other Buttonwood brains have zeroed in on cleantech and other elements of a low-carbon economy to direct their economic outlook. As they know, not billions but trillions of dollars will churn based on emissions-reduction efforts. This December in Copenhagen, related investments will get a booster shot. To find out exactly why, check out this special report Nick Hodge and Sam Hopkins have prepared for you.

California Water Crisis

Editor's Note: Right now, Sam Hopkins is on assignment in San Francisco, where — ironically — the state has had record rainfall. . . and yet water scarcity is actually its most persistent resource problem. Sam wraps up his week of travels to Nevada and California by bringing you on-the-scene coverage of water policy in his new report below... and how it could affect your portfolio. Throughout the fall, Sam will be bringing you plenty more "off-the-Richter" opportunities from his travel and network of global green investors.

Enjoy,
Jeff Siegel

California is about to unleash a deluge of spending — right into your portfolio.

Right now, state lawmakers here are pushing forward with a $9.4 billion bond initiative that will make precious water resources more accessible and secure. . .

At the same time, representatives in Washington are helping turn a trickle of money into torrents going to water stocks and ETFs.

Why is this being done now, and why is there so much money at stake for investors?

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It's mainly because there is so much money at stake for the Golden State, and for the United States as a whole.

The World's 8th Largest Economy is Thirsty

Even when stacked up against entire countries, California has the world's eighth largest economy.

The Golden State generates more than 12% of America's GDP, and its agricultural output is twice that of any other state.

All that is worth much more than just the sale price of the produce and dairy products that California's farmers send around the nation — the California Department of Food and Agriculture says the state's $33 billion/year ag industry leads to triple that amount in total economic activity.

That's a multiplier effect Sacramento can't afford to ignore. So Governor Arnold Schwarzenegger has demanded a special session of the state legislature to change a dismal record of dawdling in the capital when it comes to water issues.

The Governator is calling for action on California's "crumbling water system," refusing to mince words about the status quo, since he knows that without water, nothing grows.

"Water is jobs for California, water is food, water is our future, water is our economy," he said in his weekly radio address.

We know that far beyond California, water infrastructure investments are now an essential part of any resource investor's portfolio.

$21 Billion and Counting in Water Upgrades

My colleague Nick Hodge has reiterated the reality and the inevitability of government-led water investment profits for years now. Most recently, Nick combed through pages of data from the federal stimulus package to pull out no less than $11.8 billion in commitments to water infrastructure upgrades across the country.

Include the pending $9.4 billion bond package currently being negotiated in California's State Capitol, and you've got over $21 billion within reach.

That's a big enough number to change the fortunes of dozens of companies, and you can capture bullish market movement easily via water ETFs.

Exchange-traded funds, like the First Trust ISE Water Index (NYSE:FIW), capture the performance of companies that operate from seaside to spigot.

FIW's holdings make money as they upgrade old pipes, filters, and irrigation setups, but they will do best developing brand-new systems to ensure water's flow through America's economic veins.

Of course, water is a worldwide issue. That's why FIW is tapping France's Veolia Environnement (NYSE:VE), whose reach lets you benefit from everything from San Francisco Bay Area projects to Abu Dhabi's $15 billion Masdar green city plan.

Whether you're reading this in the desert, on the coast, or at river's edge, you know how important water is to economic vitality and quality of life.

Why not make some money for yourself as governments spend to keep the H2O flowing clean and clear?

Nick Hodge and I are preparing a special report on what we think will be the most profitable water stock in the world over the next five years. It's based abroad, but it's as easy to invest in as IBM.

As a Green Chip International subscriber, you can get the first crack at this winner in just a few days, and of course you'll have access to a portfolio full of global growth stocks that harness cleantech, renewable fuels, and infrastructure stocks to keep your investment accounts from drying out.

Just click here to check out GCI for yourself, risk-free.

Regards,

Sam Hopkins

Wynn Macau Stock IPO

Investors aren't looking to Las Vegas for the ultimate "sin dividend" these days. . .

They're looking across the globe to the former Portuguese colony of Macau — "the Vegas of the Far East." Just across the water from Hong Kong and China, Macau is drawing the biggest casino developers in Sin City. Developers like Steve Wynn.

Wynn is building big in Macau, where gambling is legal and millions of nominally communist Chinese test fresh fortunes every year.

During a period of spectacular growth on the mainland, the number of visitors to Macau nearly tripled to 26 million in 2007 from just 9 million in 2000.

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Wynn Macau (HK:1128) debuted last week with the "first Las Vegas-style blended resort in Asia," drawing a 13% premium on its IPO price in the first several hours of trading.

That nearly equals the 14% one-year return on Wall Street's Wynn Resorts (NASDAQ:WYNN)!

It would be logical to say that Americans aren't apt to double down in uncertain economic times. . . but gambling is about anything but certainty.

And the fact is that Wynn's competitors like Las Vegas Sands (NYSE:LVS) have outrun Wynn during the current market rally. LVS is up 32% over the past year, including its own late '08 dive. With even chips on each a year ago, bets on LVS did a lot better than the same money on WYNN.

So, why didn't Wynn win?

Well, Steve Wynn built a new Vegas resort hotel called the Encore, just down the street from where I am right now. It bears the same signature flourish as his older Wynn hotel, and it looks pretty much the same. But the circumstances of Encore's opening could have led to disaster. . .

Bad Timing for an Encore. . . Better Timing for a Macau IPO

Encore opened just before Christmas 2008, right in the eye of the economic storm that hit late that year. Wynn kept his poker face, saying in January 2009 that he and his managers faced little more than a "room-pricing decision." The financial meltdown meant that instead of filling Encore with high rollers ("whales," as they call them here), you could get a $300 room for $179/night.

That's not just a room-pricing decision. . . that's a huge chunk of potential revenue left unrealized.

Things are looking up now, but Wynn Resorts (NASDAQ:WYNN) shareholders have been hobbled during the Wall Street rebound due to Encore's bad timing.

And as opposed to the inauspicious opening of Encore, Wynn Macau listed just after two positive developments for Macau casino companies:

First, the Chinese government relaxed travel restrictions on mainland residents and tour operators heading to Macau.

Then, after a dismal first half of 2009, September gaming revenue in Macau shot up by more 53% from the same month in 2008!

Now, Steve Wynn could have opted to channel new Macau money into WYNN to enhance his company's domestic market value. Instead, he opted to take Wynn Macau public in the market that gives international investors the most access to new Chinese wealth — the Hong Kong Stock Exchange.

And we now have a pure play on Wynn's Asian operations.

Wynn Macau's IPO and a planned LVS Macau listing should enjoy tailwinds propelling them — instead of stiff resistance holding them back. That momentum may even help those companies' respective U.S. listings, as well.

Of course, there is still plenty of money to be made here in Vegas and in Vegas-related shares on Wall Street. There is a strong contingent of the investing community that loves to tap "vice stocks" in gambling, alcohol, tobacco, and other sectors considered "adult entertainment."

In my time here in Las Vegas, I'm digging deeper — talking to everyone from bartenders to career slot technicians to find you the best ways to make money in Vegas without ever having to touch down in this decadent desert.

As for Wynn Macau, it's part of a much broader trend. More and more online trading sites and traditional brokerages like E-Trade now allow you to access superior profit opportunities that are only available on foreign exchanges.

Hong Kong is becoming a premier international market, and you can't afford to ignore it. Ask your broker, or check your self-directed account for details on tapping HK-traded shares.

Regards,

Sam Hopkins

P.S. Investing in Hong Kong gives you access to much more than tangential Chinese gambling plays. In fact, Warren Buffett recently turned a $1 billion profit by investing in a Hong Kong-listed battery maker. I put a buy out on the same stock. . . and am now up over 500%. Seeking out fast-moving international plays can be a boon for any investor's portfolio. You may have missed Buffett's battery play, but the next international money-making opportunity is just taking shape.

Clean Energy and the Dollar

The greenback has been in freefall over the past several months, as low interest rates and rumors of international reserve fund diversification drew confidence away from the U.S. currency. We see the PowerShares DB US Dollar Index Bullish ETF (NYSE:UUP) sagging steadily towards a 10% 3-month decline in the chart below.

Oil, which is traded in US dollars, has wobbled in the meantime, as reflected by the United States Oil Fund ETF (NYSE:USO).

What's especially interesting in this index race right now is the neck-and-neck coupling of the PowerShares Wilder Hill Clean Energy ETF (NYSE:PBW) with the broad S&P 500.

The S&P has roared upward on economic optimism and relatively strong earnings from industrial titans like Alcoa.

And both the S&P and PBW have drawn serious market premiums above USO since early September.

Should oil rise further on increased demand expectations, expect to see renewed separation of renewable energy ETFs from the U.S. benchmark.

As for the dollar's impact on clean energy funds, more investors are turning to international companies that do business in euros, yen and yuan to pad their energy portfolios agains the bottoming buck.

-Sam Hopkins

Canadian Wind Energy

There's a ton of money at stake in British Columbia.

Here's what I mean...

BC is the epicenter of a huge Canadian energy transformation.

Massive fossil fuel forays, like the Northern Gateway oil pipeline to the Pacific Ocean, are competing with several small clean energy developments for regulatory priority and public support. At the same time, a few intrepid traditional energy companies are stepping in to stake their claim on clean energy expansion.

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In fact, some of the Calgary crude kings are seeing the writing on the wall and signing deals to diversify into green power.

Two of the key players in this scenario are Plutonic Power and Enbridge. They're already familiar to Canadian energy investors. But soon, they'll be international names.

Here's what they — and you, as an investor — stand to gain in British Columbia.

Plutonic Power's Wind and Hydro Projects

In June, we looked at Plutonic Power Corp. (TSX:PCC), a Vancouver-based hydropower developer. Plutonic had just teamed up with General Electric's Energy Financial Services arm to push a run-of-river hydropower project in the Bute Inlet just north of Vancouver Island.

Elections in June put politics on Plutonic's side, as CEO Donald McInness told the Vancouver Sun: "It's not a given that our business plan advances, but without the Liberals winning, we certainly weren't going to advance at all."

Yet progress is slogging along for the Bute Inlet initiative, as environmental impact assessments continue and provincial utility BC Hydro considers and reconsiders Plutonic's proposals.

So in the meantime, Plutonic and the GE financing units are pushing forward with plans to tap a woefully underexploited resource in British Columbia: wind.

The pair plans to purchase the existing Dokie Ridge wind farm project from bankrupt developer EarthFirst Canada, adding a 144 MW array to their clean energy portfolios. The Dokie Ridge site can be expanded to 300 MW from its partially completed state. That would serve around 34,000 homes with 340 gigawatt-hours per year (GWh/yr), according to a press release.

If approved, Plutonic and GE will be 51%/49% financing partners, with the local firm taking the bigger stake in completing the 144 MW stage by early 2011.

What started as preliminary due diligence in June became a commitment to buy the Dokie Ridge project in late September.

Regulatory approval awaits, but the outlook is good.

Now Plutonic is on the way to establishing British Columbia's wind energy capacity. And as you can see in the map below from the Canadian Wind Energy Association, BC's wind output is currently next to nothing:

Even with GE on its side, though, Plutonic won't be the only company racing to bring BC's wind resource to life. . .

Enbridge Balances Oil Overrun and Wind Energy Options

Calgary's Enbridge, Inc. (NYSE:ENB) is a giant. Its U.S. market cap is $14.6 billion — dwarfing Plutonic's Toronto total of $161.19 million.

Enbridge's main business, as you might expect, is energy delivery. But right now the behemoth is scrambling to save faith in its biggest project, the Northern Gateway pipeline from Alberta to British Columbia's Pacific coast.

The Northern Gateway pipeline was initially backed by PetroChina (NYSE:PTR) in 2005. The subsidiary of national oil company China National Petroleum Company (CNPC) inked a memo indicating the Middle Kingdom's state-owned energy enterprises would be first in line to buy oil from Canada's Pacific Coast. Nothing official was ever finalized.

The oil in question would come primarily from the tar sands of northern Alberta, where petroleum-laden soil is essentially cooked to get crude.

On October 6 of this year, Enbridge admitted that costs to establish the Northern Gateway conduit will exceed drawing-board estimates. That overrun could be a lot or a little over the initial US$3.77 billion estimate, but the main concern is China — Enbridge hasn't had any formal talks with PetroChina since August, according to reports. We have to wait 'til later in the year, when regulatory filings come due, to get the real price tag on the Northern Gateway line.

It doesn't help matters that two parts of the TransCanada natural gas pipeline exploded in September. Enbridge may have an arduous uphill battle ahead of it before the Northern Gateway line gets approved and built.

So here's where home-country clean energy consumption comes into Enbridge's game plan.

If you scour Canadian Wind Energy Association installation lists, you'll see that Enbridge is actually a participant in Canada's wind energy industry, operating the 181.5 MW Ontario Wind Power farm installed in April of this year. All together, Enbridge operates four wind power projects totaling 260 MW.

That kind of energy doesn't go into a pipeline to China. . . it stays up in the Great White North where it belongs.

If wind weren't enough to convince you that Enbridge is diversifying away from oil and gas transport, consider this: Enbridge just announced its acquisition of a 20 MW solar power plant in Ontario from Arizona's First Solar (NASDAQ:FSLR).

That acquisition isn't an experiment or a way of throwing investors a corporate social responsibility (CSR) bone — Enbridge just bought the biggest solar power plant in Canada!

Combining for Cleaner Canadian Energy

BC Hydro bears its name for a reason: Canada's rushing rivers have long been known as a precious resource for mills, fields, fish, and energy.

As Vancouver Sun columnist Miro Cernetig wrote in June, "British Columbia is a laggard in harnessing the wind." Cernetig appeals to BC residents' sense of progressive provincial identity to make his case:

"Despite our efforts to be seen around the world as green, we make no commercial electricity from the wind. We are actually the only province with that status."

That is changing quickly.

2009 is already set to be a record year for wind energy development in Canada, and the first year with wind installations in every province, including BC.

No matter where you are, you can benefit. All types of listed energy companies are positioning themselves to profit from more record-setting years in Canada's clean energy expansion.

Regards,

Sam Hopkins

P.S. What we see in Canada today represents a broader worldwide trend that finds even petroleum titans like Chevron, Shell, and Enbridge moving into clean energy sectors. Whether they snap up existing projects or start their own, Green Chip International readers are hot on the money trail. To learn more about GCI and follow the next story like Plutonic Power to portfolio gains, check us out today.

Bioplastic Investments

The 2016 Olympics will deliver a shot of steroids to select Brazilian stocks.

Here's a sneak peek at the first gold medalist of the 2016 Rio Olympiad and a brand-new materials sector now emerging in Brazil: bioplastics.

Rio 2016's First Gold Medalist

Braskem (NYSE:BAK) trades on Wall Street as an ADR, but the Brazilian plastics producer gets little attention in U.S. press.

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That's changing, though, because this Latin American petrochemical giant is going green and picking up the pace to become the Usain Bolt of Brazilian stocks.

Today we buy about 2000 percent more plastic each year than people did a half-century ago. That's when Tupperware parties popped up in suburbs across the United States, so baked goods could stay fresh on long drives to potluck suppers, along roads that linked a new gas-guzzling middle class.

Bountiful cheap oil changed American cities and households. Now that oil is more costly, long commutes don't make as much sense, and neither do plastic production methods that require two pounds of petroleum for every pound of plastic output. And when black gold gets turned into Tupperware, the air you're trying to keep off those fresh-baked cookies gets dirtier too — each synthetic unit is worth six times its weight in CO2!

In 2007, Braskem unveiled the first plastics made entirely from locally grown sugarcane ethanol, which itself is nearly twice as efficient as U.S. corn ethanol.

Of course, outside industrial giants couldn't let the race to revolutionize plastic production go on uncontested. Braskem's breakthrough quickly drew in Dow Chemical (NYSE:DOW) as a competitor. Dow didn't have access to the ethanol/ethylene feedstock it needed to set up a bioplastics plant like the $300 million facility Braskem is building, so Dow teamed up with leading Brazilian ethanol producer Crystalsev.

Dow is focusing on end-to-end integration of sugarcane conversion into ethanol and then on to green plastics. A recent report published by the University of Pennsylvania's Wharton School of Business titled "The Brazilian Bioplastics Revolution" says Dow and Crystalsev will have a fuel and plastic production facility ready to go in 2011.

That's about a year after Braskem's 200-ton-a-year plant is expected to come online, but still five years ahead of the Rio Olympiad.

Pole Position for Braskem

Braskem execs are proclaiming their pole position and insist that first-mover advantage is the key to kick-starting a global upheaval in the way plastics are made.

They're targeting developed European countries and Japan, where Toyota has already joined Braskem in a distribution agreement for bioplastic car parts, and Braskem biopolymer project director Luiz Nitschke says Braskem "expects its biopolymer to sell for 50% more than the conventional petrochemical product."

That premium in wealthier countries could add up to big added revenue for Braskem.

Consumers from Tokyo to Frankfurt see environmental value in bioplastics. From ethylene pellets at the beginning of the plastic production process, used bioplastic products can be burned efficiently in waste-to-energy plants and avoid landfills.

For the purposes of hosting a successful Olympic Games, Brazil needs to maximize space and minimize waste while still generating a massive amount of material for everything from construction to promotion and souvenirs.

As for the athletes, they may end up playing unwitting salespeople for bioplastics. . .
Race car driver Felipe Massa was awarded a Braskem bioplastic trophy for his Formula 1 win in late 2008!

Here's how the race is being run right now:

Braskem is leaving the iShares MCSI Brazil Index and Brazilian national oil producer Petrobras in the dust. Dow Chemical is actually up 65% compared to Braskem's 75% in the same 3-month period, but it's not as pure of a bioplastics play; Dow does not have the first-mover advantage we've already looked at.

Dow is also folding its bioplastics into an existing brand, Dowlex, as opposed to Braskem, which will remind consumers on each bioplastic product they buy. And Braskem has already been promoting green plastics at sporting events. . . Hello, Olympics!

There's more to this story, too. Over the coming weeks we'll be exploring the momentum that companies like Braskem are gaining from December's COP-15 UN Climate Conference and emissions reduction targets. Plastics are a major source of CO2, so government mandates will combine with a more conscious consumer base to bring piles of fresh money into the booming market for bioplastics. In fact, Braskem is already being asked by international companies to ramp up to 300% of its current production!

This is a multi-year winner in the making.

Regards,

Sam Hopkins

P.S. Brazil's Green Revolution is real. I've seen it myself, and as a Green Chip International reader you can join me as I bring a world's worth of opportunities to you with on-site updates, exclusive video reports, and of course top stock plays. My colleague Nick Hodge and I have prepared a special report on the COP-15 summit to let you know how big the wave is that Braskem is riding. Click here to learn more.

Thomas Friedman Green China

It often happens that news items come up in the popular press that are, in fact, no news to us here at Green Chip Stocks.

Take China, for example. We've been talking about China's growing Green GDP and the slew of stock plays coming out of the country for years. I've even traveled to China and Hong Kong twice to see what's going on with my own eyes and get expert opinions on how to play it. The other day, I detailed a new Chinese "Green Business Academy" that aims to make China's manufacturing economy more environmentally friendly.

Alas, New York Times Columnist Thomas Friedman has added his take on China's Green Revolution to "All the news that's fit to print." We're confident that many NYT readers will make their way to www.GreenChipStocks.com and our assortment of newsletters to get the investment angles they need in order to profit from Friedman's piece.

Here's the full column, "The New Sputnik," at nytimes.com: http://www.nytimes.com/2009/09/27/opinion/27friedman.html?_r=1

While you chew on Thomas Friedman's words, though, we think you should keep the broader context in mind...

What's going on isn't just a high-tech revolution in the Middle Kingdom; it's a global transition to the low-carbon economy each and every country needs to guarantee its economic health.

This December's COP-15 Copenhagen Climate Conference will be the culmination of years of work on emissions control and clean energy re-industrialization, and we've prepared a full report on it here:

COP-15 and the $46 Trillion New Economy

Good investing,

Sam Hopkins

International Editor, Green Chip Stocks

China Green Business Academy

World Bank head Robert Zoellick says the U.S. dollar's reserve currency is in jeopardy, and that, "looking forward, there will increasingly be other options to the dollar."

Same goes for U.S. business schools, which have long been considered the top-notch places to hone one's entrepreneurial chops.

China is planning to draw 2,000 managers per year to its Institute for Sustainable Communities Environment, Health and Safety Academy, where execs at foreign companies—from Adidas to Starbucks to Honeywell—will learn how China is planning to cut its end-to-end manufacturing emissions.

Those top-tier participants in ISC programming will take home lessons about how the world's biggest emerging polluter plans to slash greenhouse gas output, and factory managers who complete ISC courses will help nix 5.6 million metric tons of harmful air over the next few years.

"For the first time this month China issued sovereign bonds to offshore investors in Yuan," Robert Zoellick added, to a gathering of graduate students who will no doubt see ascendant China as a fact of their professional lives.

And for businesspeople who plan to integrate into a low-emissions reality after this winter's COP-15 UN Climate Conference in Copenhagen, the need to recognize China's leading role will be essential as well.

-Sam Hopkins

Norway's Sovereign Wealth Fund

Norway has a problem any country wishes for. . .

What to do with its extra money.

Two weeks ago, Norwegians voted in a general election that put the future of the country's enormous sovereign wealth fund on the line.

But what most investors don't realize is that the oil money now starting to trickle out of Norway's national account will soon become a torrent of liquidity in renewable energy markets.

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That's right — Norway just announced a $4 billion foray into renewable energy shares. . . and that's just the beginning.

Voting for $400 Billion Fund Managers

Norway is the second-richest nation per capita; and with only about 4.8 million residents, it is also the world's sixth largest net oil exporter (eighth largest producer), and third largest net gas exporter.

The Norwegians aren't in OPEC and they aren't in the EU. The government isn't really beholden to anyone but its citizens.

And since 1996, Norway has been socking away revenue from its North Sea oil and gas production, which is led by the U.S.-listed StatoilHydro (NYSE:STO). To put it into better perspective, StatoilHydro controls approximately 80% of the country's oil and gas production. The company was created by the merger of Statoil and Norsk Hydro about two years ago.

Norway's sovereign wealth fund is now worth nearly $400 billion.

Not a bad setup, right?

Well, such a relationship between government and electorate means voting is more like choosing mutual fund managers than it is a process to elect officials to pave roads and fend off Swedish attacks.

Norway has managed to avoid the economic traps that caught neighboring Iceland and Latvia and severely damaged others in the region.

Nevertheless, Ole, a 53-year-old engineer, said before the election that Norway has weathered the recession well "because we have oil, not thanks to the government's policies."

Ole wants a change from the current left-wing coalition ruling parliament; a shift to the center-right could mean that more of the gigantic Norwegian Government Pension Fund goes to plugging gaps in the country's welfare state.

Whichever party Ole opts for, the reality is this: North Sea oil reserves are coming down. Crude output hit a plateau in the 90s, and peak production is now a full decade behind StatoilHydro and its peers, Scotland and Holland.

Opening Offshore Production

So what are the consequences of the election on September 14?

The win for the center-left coalition was just one obstacle in unlocking new offshore reserves. Specifically, it means opening up key areas like Lofoten and Vesteraalen. The Lofoten area is estimated to hold approximately two billion barrels of oil equivalent.

As the chief of Norway's oil industry association, Per Terje Vold, put it: " Oil and gas activity off Lofoten and Vesteraalen will be important for the further development of the welfare state and to create new line into the region."

But let's be fair. . . opening up those controversial waters is one of the only ways by which Norway can continue to enjoy their oil wealth. If nothing else, the election is a clear indication that sentiment is changing. After all, ever since the country began saving its oil revenue 13 years ago, this is the first government to win a re-election.

Also consider how increasingly difficult it is becoming to find oil; StatoilHydro's reserve replacement ratio fell to 34% in 2008. This year, production is expected to decline more than 9%.

It's only a matter of time.

Natural gas output is increasing, but that doesn't solve the problem that Norway's energy intensity (total energy consumption per unit of GDP) is the second-highest in the developed world.

Norway needs not just returns on its sovereign wealth fund investments, but also new ideas on how Norwegians can stay warm through the winter without putting a dent in economic productivity. . . not to mention a need for new sources of revenue, as the black gold dries up.

All countries rich in natural resources should aim to keep domestic consumption low in order to maximize exports. Norway's energy intensity is therefore a concern to those who want to keep the welfare system robust and the pension fund padded.

Like nomadic hunters that traverse the tundra looking for sustenance, Norway's leaders are tasked with bringing home returns to hungry stakeholders.

Not Only Norway. . . Billions Spread around the World

Norway's strategy for preserving and adding to the country's sense of fiscal well-being means looking at places like India, where Oslo is pumping $1.2 billion into 232 Indian companies involved in cleantech, emissions control, and energy generation.

Chinese shares are sure to be on the smorgasbord of emerging market green shares targeted by Norway's retirement fund. Even U.S. clean energy stocks have shown their advantage, compared to sticking with oil. Take a look at this comparison of the United States Oil Fund ETF (NYSE:USO) against the Power Shares Wilder Hill Clean Energy ETF (NYSE:PBW), since the beginning of 2009:

Even though oil has padded Norway's coffers for a good run, oil is actually being surpassed in potential returns by the very companies that are providing energy alternatives to global consumers.

Again, consider that just $4 billion of Norway's national wealth is being committed to green shares so far. That's just 1%. With each uptick in petroleum-generated resource wealth that pours into renewable energy shares, we see more validation and interest in our stock recommendation service Green Chip International.

And on our radar are not only Norway's billions, but also Beijing's $232 billion clean energy stimulus, Germany's world-leading solar power market, and the U.S. cleantech boom. They are all creating stellar returns — like over 446% in one Chinese cleantech company since last December.

Politics and profits are intertwined these days, no matter where you are. Don't miss the next vote that determines how billions will drive your investments. Check out Green Chip International right here to join us in following politics to profit.

Regards,

Sam Hopkins

Frontier Markets ETF

A whole new set of maps is being drawn for investors heading into 2010.

We were shown in 2008 that there are plenty of pitfalls on investment paths that have been beaten for generations. Investors saw just how dangerous it is to trust the old yellowed maps to fortune, as bulwarks like Lehman Brothers crumbled.

Right now, you already have more opportunities than ever to break away from the herd and reap higher returns by investing in select Frontier Markets.

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The most prominent is the Claymore/BNY Mellon Frontier Markets ETF (NYSE:FRN).

What is a Frontier Market?

A few key features traditionally define frontier markets:

difficulty of access for outside investors
high presence of risk factors (political and economic)
the potential for both whopping returns and crushing declines

Simply put, frontier markets are the last outposts of investibility. People in frontier markets remember hunger well, but unlike similar folks in emerging markets — the next step up toward developed economy status — their countries aren't making headlines with huge GDP increases or export volumes.

As a result, you've heard much more about China's growing momentum than, say, Poland, which I told you on September 21 is expected to be the sole European nation with GDP growth in 2009.

You can chalk that attention gap up to the 1.3 billion-strong Chinese consumer base and foreign markets' love affair with the Middle Kingdom's low-cost manufacturing.

But access to Shanghai A-shares through the Morgan Stanley China A-shares fund (NYSE:CAF) didn't develop overnight. Intrepid investment experts made their first forays into China in the 70s and 80s, looking for bright spots of comparative advantage and investor access.

Today, China is highly investible, meaning you can buy and sell shares of many China-based American depositary receipts (ADRs) and exchange-traded funds (ETFs) as easily as you can tap the success of U.S.-based public companies.

Poland, even as the lone economy in Europe to keep its head above water this year, can't even crack the SPDR S&P Emerging Europe ETF (NYSE:GUR).

There is another way to play Poland, though, and you'll find the Eastern European country there with its frontier market peers like Lebanon, Nigeria, Egypt and Colombia in the Frontier Markets ETF (NYSE:FRN).

Foreign direct investment (FDI) has been high for a number of years, with multinational corporations and financial institutions pouring money into everything from oil & gas exploration to telecommunications and tourism.

Only now are U.S.-based traders able to tap the churn of investment dollars brought by higher domestic consumption in frontier markets. Central European Distribution Company (NASDAQ:CEDC), a seller of premium alcohol in Eastern Europe, is just one example of the equity opportunities already delivering handsome gains. Colombia's Bancolombia (NYSE:CIB) and Ecopetrol (NYSE:EC) are also adding to the list.

Slowly but surely, these countries are opening up to us.

Frontier Market ETF Key Points

NYSE:FRN is comprised of mostly mid-cap companies (63%); the top country represented in the fund is Chile (33%), which ranked an impressive #11 in the recently-released 2009 World Index of Economic Freedom. Poland comes in second in ETF allocation (15%), followed by Egypt, Colombia, and Kazakhstan.

That's right: Kazakhstan! This fund takes you far from home, straight to where the money is fresh and flowing fast.

In its movement, the fund has borne out the high-risk/high-reward thesis of frontier market investors. . .

From deeper troughs during the downturn, the market rally since April has given FRN investors 60% gains versus just under 30% for the S&P 500.

Volume on FRN is light, which is typical of stocks and funds that are just too far off the paved roads Wall Street tells investors to stay on. Remember, though, that when we discover that the bridge is out and the heavy hitters neglected to let us know, going off the beaten path doesn't seem like a bad idea.

NYSE:FRN is currently trading at just around $18 per share, up from $11 on March 30.

Regards,

Sam Hopkins

International Editor

P.S. Along with frontier markets, more and more investors are benefiting from international renewable energy shares. In Green Chip International, we guided readers to 40% gains in an Indian renewable energy stock that today piled on another 25%! On the heels of the G20 Summit and ahead of this winter's COP-15 talks in Copenhagen, you want to make sure you're positioned to profit from clean energy shares heading into 2009. Learn more about GCI's COP-advance plays right here.

A123 Systems IPO

A123 Systems, Inc., a Massachusetts company that makes cells and systems for lithium-ion battery-powered electric vehicles, made its market debut on Thursday, September 24.

A123 Systems' IPO price of $13.50 had already been adjusted upward in September based on heavy interest in the EV battery sector, and the new stock rose to $17 per share by the NASDAQ market's morning open.

From there, it was off to the races. The newly minted ticker symbol NASDAQ:AONE gained 46% by midday.

The company received just over 10% of the total federal stimulus package money allotted to electric vehicle projects, and EV optimism at the White House is taking hold in equity markets. "The government is feeding the whole food chain for electric vehicles," Kaufman Brothers analyst Theodore O'Neill told Bloomberg.

Executives are also putting their money on EV advances—Duke Energy Corp. (NYSE:DUK) and FPL Group, Inc. (NYSE:FPL) just announced a $600 million investment in their electric car fleets.

They're not just talking about a few token EVs, either. Duke and FPL both want to overhaul their entire stock of vehicles to make them electric or plug-in electric (with backup hybrid batteries) by 2020. That likely won't mean retrofitting; it will mean new car and truck purchases, adding up to millions for companies like A123 Systems that develop the modules to keep a growing number of clean company fleets up and running. Of course, car companies that adopt leading EV systems will benefit as well.

You can read more about how battery and energy storage systems are evolving, and where you can invest, in this Energy and Capital archive article: Energy Storage Companies: Who's Leading the Charge?

-Sam Hopkins