This ad is a little bit less relevant now than it was when DeHaemer and his copywriters first wrote up the ad, presumably a few months ago, but the ad is circulating heavily and I’m getting questions about it today — and it is, in truth, an interesting idea that I thought you might like to discuss — so we’re getting an answer out for you now.
The tease is all about “gas to liquids” — which has been a popular area for investor hype for a decade or more, and has been aggressively pushed by Sean Brodrick at the Oxford Club for a little over six months as a “gasoline without oil” idea.
That spiel was touting Sasol (SSL), the giant South African energy company that has pioneered large-scale gas-to-liquid and coal-to-liquid plants out of political and economic necessity, and the ads are still running now even though that “real gas without oil for $1.71 a gallon” sounds a lot less dramatic now, with gas right around $2 a gallon, than it did back in July when gas was pushing $4. (And given that economic reality now, it’s no surprise that Sasol has put the brakes on their massive Louisiana facility that was being teased in the ad — they haven’t scrapped it, but they’re taking their time.)
But this ad (and teaser target) is different — DeHaemer isn’t touting Sasol, he’s talking about a (much) smaller gas-to-liquids company that does something a little different. Here’s a little taste from the ad:
“The Air Force alone spends roughly $10 BILLION on jet fuel PER YEAR.
“That’s why the Air Force is betting on a revolutionary kind of fuel to change that…
“It’s NOT oil, ethanol, algae, or natural gas.
“The goal of this initiative? To wean itself off expensive foreign oil producers who supply half of the military’s fuel supply.
“The Air Force hopes this fuel will make up its entire supply by 2030.
“It’s already been tested in the B-52 bomber planes… with excellent results.
“‘We’re seeing very little difference in the plane’s performance,’ says the Air Force’s lead engineer, Chris Stroh.
“And now it’s getting ready to replace traditional gasoline here in America.”
That quote from the Air Force Engineer is from back in 2006, when the Air Force was first testing synthetic fuel — and yes, at the time they were testing a fuel made by a gas-to-liquids company called Syntroleum, but that company is no longer independent. They were bought out/rescued by Renewable Energy Group (REGI) last year, and that’s not the company being teased, either (REGI is primarily a biodiesel company, I don’t know much about that business but it doesn’t look like it’s very likely to grow without a big government push).
So what is the stock being teased? Stick with us and we’ll get some answers (assuming, of course, that you don’t want to cough up $499 to subscribe to Crisis & Opportunity and get DeHaemer’s actual report). More from the ad:
“I’ve discovered one company that’s not only exploiting this new fuel technology but also revolutionizing it…
“It’s trading for around $3 a share right now. But I don’t expect this hidden gem to remain under wraps much longer….
“What I’m telling you isn’t conjecture or wishful thinking… this fuel is already PROVEN.
“Two international airline fleets are using it right now to help power their jetliners.
“It’s being produced at facilities around the world. There’s a mammoth plant in Qatar that’s producing 140,000 barrels of this fuel per day.
“And now the development of new facilities is underway here in the United States…
“For instance, a large-scale $14 billion plant is being developed right now in Louisiana, and it’s set to produce 96,000 barrels of this new liquid fuel per day… enough to fuel over 10 million automobiles.