“Marine Energy: Power the Entire Globe” — Alternative Energy Speculator

By Travis Johnson, Stock Gumshoe, June 20, 2008

Here we’ve got a rerun for your Friday enyoyment — I’ll probably get to some more good stuff for weekend to keep you all Gumshoe-d up, but for now this might keep you busy, I’ve had a few dozen emails about it just in the last day so this particular ad campaign must be heating up again (the original writeup was about two months ago, I’ve added a few updates below).

This is about what they’re calling “marine energy,” which is yet another kind of renewable energy that’s getting some attention — though frankly, I heard more about these companies last year than I have recently, kind of the opposite of what you’d expect for a renewable energy technology during these times of skyrocketing oil prices. Remember when $70 a barrel seemed high? That was less than a year ago. Jeez.

But I digress. As usual.

Marine energy is essentially a way of generating power due to the action of either waves or tides. In many ways this is like geothermal energy, in that it’s essentially generating energy from a basic geological process (okay, hydrological — but you get the idea). It’s clearly nonpolluting and you can’t use it up — unless we somehow get rid of the Moon, I guess tides will remain fairly constant and predictable … and unless we get rid of wind, waves should always exist. Most of the companies that I’ve seen using this technology so far have some variation of a buoy that is tethered to the ocean floor, then buoyancy forces the buoy to move up and down against the tether and a generator turns that into electricity.

I probably don’t have to remind you that I’m just a simple Gumshoe, not an engineer, so there’s probably a better way of describing that. And indeed, some of the products are certainly more complex than others.

This particular teaser is for the Alternative Energy Speculator, from the folks who brought us Green Chip Stocks, and we’ve already looked at another offering from these folks in the relatively short life of this particular service (that was for the “Clean energy cash-outs” involving heavy truck LNG engines for California ports, in case you want to refresh your memory.

He mentions examples of a couple other similar projects — Ocean Power’s wave-generation work in Oahu and New Jersey, Verdant Power’s tidal generation projects in New York, and a couple others.

But the ad then mentions our little teaser …

“There’s also a small Canadian company that’s recently received its permit approval for a wave energy project in Oregon. Even better — the company has landed a 15- year deal with PG&E to deliver power starting in 2010.

“That’s less than two years away!

“You can find out more about this company by becoming a member of the Alternative Energy Speculator. To a new way of life, and a new generation of wealth…”

So, thanks to the careful sleuthing of reader John Sullivan, I can tell you that this one is …

Finavera Renewables (FVR on the Venture exhange up North, FNVRF on the Pink Sheets)

The CEO, Jason Bak, describes their strategy as two pronged: standard, low risk wind generation projects that generate returns now, and cutting edge projects like wave power that might launch them in the future. The wind projects are in Ireland and Canada, where subsidies are likely to be very helpful.

They describe it thusly on their website: “To balance its risk profile, Finavera Renewables strives to underpin its future investment in the development of new renewable energy technologies (wave) with assets that can generate income in the near future (wind).”

The wave projects are planned or in the very early planning stages for several areas — South Africa, Canada, Portugal, and offshore Washington State, but the big potential one so far is offshore Oregon, as teased.

They describe the technology as being buoy-based, not that different than I described above, and they would be clustered in “wave parks” that they say will be low profile but might look similar to a fleet of fishing boats. Ideally, I suppose, these would be close to large population centers where the power is needed.

John did a little digging and found a few good points to note here, as well: First, that the timeframe is a bit more extended than the teaser indicates, he said that the project looks like it’s four years out, not 2010 as indicated. Partly this might be because they had some significant problems with their initial test of one of the buoys, which was apparently destroyed by flooding (!!) and had to be written off as an asset. So that’s probably worth some consideration for you.

This is a very risky microcap that’s not making any money, of course (sometimes it seems like all the stocks we see are like that) — the shares were around 14 cents when I first wrote about this in April, down about 75% from their highs last Spring of about 60 cents — and though they’ve done well since, they’re still way off those highs of a year ago.

Ocean Power (OPTT), by the way, is certainly further along and has recently been the poster child for this kind of renewable energy, at least for individual investors — they got onto the Nasdaq a year or so ago, which got the folks who were holding the OTC shares very excited … but it’s been a rough ride since then, the shares hit $18 or so a couple times last year, most recently in November, but are now languishing near their lows below $11.

I can’t say that I’m all that excited about marine energy companies like this yet — this technology clearly still has a lot of folks concerned, whether it’s for sea traffic or interference with marine mammals or just for cost-effectiveness, and it’s going to be a while before we know whether this is a strategy that’s going to be feasible on any kind of scale that will make a difference to the world. Personally, with stocks like these that are tiny and unprofitable I’m usually more interested in waiting and watching than in investing — unless it seems like there’s a likely catalyst in the near term for the company’s development. I’m willing to miss out on some of the potential upside, since the downside seems still to be quite significant, and the upside in real income terms is likely to be many years away.

Then again, I’ve also been cautious about several of the heavily touted geothermal stocks, which made me miss out on a few nice returns and a couple stinkers, but at least geothermal generation is clearly a proven technology that’s been in use for decades, for those little geothermal companies it’s just a matter of raising capital, growing and making a profit. For the wave energy companies, the waves and tides will always be there, but the technology to turn them into power is certainly much, much more speculative than the basic technology of geothermal power … or wind power, for that matter. I do like to at least be able to see a profit at some point on the horizon before getting too involved in any companies like these, and I don’t see that yet for Finavera.

Maybe I’m just a fraidy-cat … I certainly could be wrong.

**UPDATE** So far, I’ve been wrong — this one was around .14 when I first wrote about the teaser ad, it’s now at about .22, so that’s a nice 50% run in two months, though much of it came directly on the heels of the newsletter recommendation (no big surprise there). Ocean Power is down another 10% or so, so it’s not just enthusiasm for the sector that moved this one up. I’d still guess that if there are fortunes to be made today in wave power, there will probably be similar fortunes to be made next year, and the year after, it still seems very, very early in terms of prospects for mass use of this technology.

But again, that’s from the guy who has been wrong so far. What do you think?


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33 Comments on "“Marine Energy: Power the Entire Globe” — Alternative Energy Speculator"

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Dawson Lodge
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Dawson Lodge
Am enjoying your site immensely, nice job Travis! At $100 oil (or $60 for that matter), I’ve been picking up energy technologies that seem to have long-term potential for the grandkids portfolio. Researching using “power” as a key word, I ran across that OPTT and picked up a taste. With new materials tech this will be a winner but who knows when. Have done the same with the geothermals and wish the government had brains for our benefit instead of crooks with constituents (the ethanol scam). Since Iceland geotherm guys are coming in I think there is great potential there,… Read more »
Steve
Guest
Steve

Byron King’s “Energy and Scarcity Investor” is currently touting five publicly-traded geothermal plays. Any idea which ones they might be? No teasers, just a sentence or two at the bottom of his DR article “Energy and Capital” (April 15).

Harvey
Guest
Harvey

Take a look at this
This is where these guys try to make more money by telling you how they write stuff that they are able to hose people with. They also sell programs that teach you to do the same so they can make even more money without ever investing in any stock market, Limited Partnership, Commmodity market Etc themselves
http://www.copywriting.com/internetcopywriting-course.html

Tor
Guest
Tor

I’ved teased out two of the Bakken Oil Formation as Northern Oil and Gas (NOG) and Brighram Exploration (BEXP) and the third could be Baytex Energy (BTE). This from Energy And Capital newsletter

Bill
Guest
Bill

Although OPTT has investor potential, I would call them the burgerKing to the Mcd’s of the wave power world. For manly sized wave generators see http://www.pelamiswave.com/index.php
Unfortunately, Pelamis is private.

Ray
Guest
Ray

Finavera chart looks bad. From 0.90 down to 0.15.
Looks like the tide went out on this one.

Mike Clee
Guest
Mike Clee

There is also an Irish company Open Hydro Group Ltd. they have a turbine that harnesses tidal power.Emera Inc.(EMA-TSX) bought 7.4 percent of Open Group for 15 million. Plan to use it as a demo project in the Bay of Fundy

Wayne
Guest
Wayne

All these ocean wave and tide powered things bring up half memories of the guy on the carnival midway trying to con and sell whatever is hot this season. Also, waves and tides seem so inadequate. Why not put something like big turbines or giant squirrel cage fans out in deep water down in steady flowing currents? Of course that would take real money and real national commitment. . . .

Big Mo
Guest
Big Mo

Gumshoe,

Just a quick note — you did a write-up on GBRC just last week when it was at $2.65. It hit $4.38 today. Thank you!

Brian E
Guest

I do believe this firm will make a go of it and successfully:

…entirely under water and in constant tidal flow situations. I don’t believe they are traded on the market yet, but are still able to raise funding…good sign, yes?

There is some parallel technology I’ve been following in marine propulsion field termed ‘rim drive propellers’:

I also picked up some ATN stock (natural gas energy) that has done real well over the past 3 weeks
<http://www.yachtforums.com/forums/technical-discussion/3961-rim-driven-propellers.html

Brian E
Guest

Oops screwed my posting
Here is the company I thought would do well:
http://www.openhydro.com/company.html

and here is the forum discussion on rim drive:
http://www.yachtforums.com/forums/technical-discussion/3961-rim-driven-propellers.html

rusty
Guest
rusty

I’ve had extremely good luck with ” Canroys”. I’ve been wanting to dabble in alternatives but I guess I’m a chicken when it comes to all these penny stock alternative energy guys. I did happen once upon a Canadian wind stock that was paying monthly dividends
but lost the name (it was only yielding about 8%). Anyone no the name?

assmo
Guest
assmo

I like turtles

destry
Guest
destry

Ocean power generation has a lot of companies
involved. No one seems to have made any money yet.
Great ideas, from wave generation, to ocean current generation…On the drawing boards are
river current generation types that promise to do away with hydro-electric dams…Any river having that many units wouldn’t be navigatable…
Except to foot traffic.

Brian B.
Guest
Brian B.

POPULAR SCIENCE; Has something similar in the back page ads. Way out there in the future for this one.

khunbill1
Member

Big Mo Says:
April 16th, 2008 at 4:43 pm
Gumshoe,
Just a quick note — you did a write-up on GBRC just last week when it was at $2.65. It hit $4.38 today. Thank you!

Big Mo,
I hope you sold it. GBRC is down to $3.09 and falling fast…

Ken Goldsboro
Guest
Ken Goldsboro

do you have any info on Lorel Langemeier and her Live Out Loud program??? Or about triplebackcash.com program???

Michael
Guest

Re: Solar energy stocks…you might want to take a look at SOL..

Ray
Guest
Ray
Having spent my entire working life in the power business, I have seen some rather dismal failures in wind, geothermal, solar and tidal. All suffer the same problem and that is that tremendous capital investment is required upfront, then expensive maintenance to keep them operating. As long as the govt. subsidies are there, it is a great idea. Take away that, and watch the owners of these devices start dissapearing. Imagine salt water and your steel car if you live on the coast, or salted roads in the snow belts. It can be made to work, but a lot of… Read more »
Ed Weil
Guest

Regarding ocean power schemes, remember that any object immersed in the ocean undergoes marine fouling. Ships have to be drydocked, scraped and painted from time to time. Marine power installations would require the same thing.
And, periodic destruction can be expected too. Ships can avoid storms by choosing their route or coming into harbor. An off-shore energy installation can’t. A high risk area.

Gravity Switch
Admin

Good points from both of you, Ray and Ed — certainly these are complicated devices that haven’t been proven on a large scale yet (it’s been proven that they work as far as I can tell, but not that they’ll be cost effective, or handle the environment for decades, or cope with the other concerns you’ve noted).

It does seem like this should be energy we could harness, but it’s certainly not the no-brainer that wind or hydropower is, or as advanced as solar.

Monnie
Guest
Monnie

Does anyone have a lead on a good agricultural commodity ETF? I’ve been thinking about DBA. Any ideas on that or others?

Flyfisher
Guest
Flyfisher

Highly recomend for your reading a book titled “Earth the Sequel: The race to reinvent energy and stop global warming” by Fred Krupp and Miriam Horn.

Chapter on energy from ocean waves and discusses Finavera’s project in Oregon.

destry
Guest
destry

Monnie,
After looking at all of them, I decided Van Eck’s
Agribusiness (MOO) etf, was what I liked the best.

Jerry
Guest

what about this?

simon
Guest
simon

there is an oil terminal in Luzerne county, PA that will go public soon. It should be the greatest investment ever. If anyone knows if they are doing a private placement please notify me. It is in Berwick. PA.They have interest from Chesepeake energy and range resources as well as being a major hub on the Marcellus Shale. Not to mention part of the Sunoco eastern seaboard pipeline. With the need for water to ‘frac’ the shale this is the only facility on the Susquehana river.

is new jerssey a community property state
Guest

Is it new jerssey a community property state?any ideas?

Big Mo
Guest
Big Mo

You bet I sold it!

BigA
Guest
BigA

GBRC ??? This is a joke. The CEO and CFO own over 50% of the stock and have played it like a musical instrument. $1.75 Pre-Hype $4.25 Post Hype $2.29 Today. Spent $10 million last year and NO SOLID research is visable. They do nothing but use others ideas and make the environment for real solutions more difficult. They have the best PR in this market I have ever seen.

Investorgirl
Guest
Investorgirl
so how about telling the people the truth about how the power[electric] companies bought all the solar out, and deliberately kept it expensive, and undeveloped, so they could keep the people in their hock? I think this is one of the most evil things the power industries can do. They cut their own throats by not promoting solar, their greed, and fear they have to buy back electric power, so they don’t want people to live free, they want to keep them in bondage a huge electric bills that a lot of families can’t afford! Sorry people they are. It… Read more »
cindy Schermerhorn
Guest
cindy Schermerhorn

In 1975 my phone bill was $4.50 a month. After they broke up Bell Telephone the prices SKYROCKETED! Today, my phone bill is $80.00 a month. Everyone’s phone bill went up 1,777% Who is the greedy one? Even if Bell Telephone hadn’t broken up, we would still have computers and cell phones and it would probably be cheaper. However, we have all heard rumors about things that power companies have done and people they have bought off to keep everyone else out of the power business and it it’s kind of scarry.

Larry Robinson
Guest
Larry Robinson

The company to invest in on the Bakken Formation is HESS. I should know as I work for them in ND. Take a look at what HESS has done this last year -ticker is HESS.

Bigg Fredd
Guest
Bigg Fredd

My phone bill hasn't doubled since 1975, and now includes 3mb DSL. In 1980, I paid $600 a month for a 15b teletype, and a good portion of that was for the phone line.

I remember when a US-UK call was $9 a minute, three minute minimum. What is it today, a dime?

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