Will “Blue Gas” be the “Tesla Killer?”

What's the "little known stock" that Jimmy Mengel teases "may have made electric cars obsolete" in teaser ads for The Crow's Nest?

By Travis Johnson, Stock Gumshoe, January 29, 2020

The most-requested teaser to start this fresh new year is probably the Blue Gas/Tesla Killer one from Jimmy Mengel, in an ad for The Crow’s Nest ($99/yr) — and today I’m finally getting to it. If you’re keeping track, we first saw these “Blue Gas” iterations of the ad around December 18 (though different “Tesla Killer” ads for different kinds of batteries or motors have cycled through our stories here several times over the past few years).

The spiel is all about something he calls “Blue Gas”, and it’s a little bit reminiscent of all the natural gas vehicle teaser pitches we saw eight or ten years ago… but the technology is a little different. The ad starts out with Mengel’s visit to California to try out a “blue gas” car in person, in a place where it’s poised to, he implies, take over the trucking industry…

“On the road out here you’ll see more Priuses and Teslas than in any other city in America. But this has nothing to do with either.

“In fact, here at this unknown site, salt-of-the-earth truck drivers are making the carbon-free energy revolution possible.

“You see, this gas station is at the epicenter of a $2.5 trillion revolution in energy.

“One that involves a weird form of fuel known as ‘Blue Gas.'”

So what is this magical blue gas?

“It doesn’t involve lithium or batteries or rare earths.

“It doesn’t involve solar, wind, water, biofuels, or any other form of renewable energy you’ve heard of.

“And of course it doesn’t involve oil, coal, or any other fossil fuel.

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“Best of all, it’s 100% emissions free…

“It takes moments to fill up…

“And it’s 300% more powerful than oil.”

So that sounds perfect, right? No long recharge waits like for an electric car, not dirty like oil or gas. Magical!

How, then, does one make money from this technology?

“My research shows that one $3 stock at the epicenter of the ‘Blue Gas’ revolution is set to trade higher than Tesla.

“Delivering earth-shattering gains of 11,666%.

“Not nine years down the road. Or even five years.

“A massive catalyst in the next few months, that I’ll reveal today, is ready to launch its share price vertical.”

Drooling yet? Don’t worry, that’s mostly the marketing — these gains never, of course, show up overnight… and, sadly, such information is never held solely in the hand of one dude who’s selling a newsletter for 99 bucks.

Which doesn’t mean it won’t be a worthwhile investment to consider, of course, just that we should get the daydreams of 11,000% returns in a few months out of our heads first.

How about some more clues to lead us to the prize?

“The ports of Long Beach and Los Angeles, two of the nation’s largest shipping points, are now deploying a fleet of “Blue Gas” trucks…”

So at this point it’s pretty clear that Mengel is talking up hydrogen fuel cells… which he does “reveal” later on. Fuel cells are not particularly new technology, but they have made some jumps forward in recent years.

And like all new transportation fuels or strategies, the easiest way to start is with local fleet vehicles — garbage trucks, delivery trucks, and other vehicles where fuel is a major cost and where they travel in a small enough area that they can depend on a very limited refueling infrastructure.

And this is positioned as competition for electric vehicles, and particularly for Tesla….

“The Budweiser company Anheuser-Busch is now planning a complete makeover of its truck fleet. It wants to be completely emission-free in the next few years.

“And it’s using ‘Blue Gas’ to make that transition possible.

“That’s why the beer giant recently bought 800 tractor trailers fueled by ‘Blue Gas.’

“That’s almost the entire company’s shipping fleet.

“Just to round it out, it purchased a mere 40 trucks from Tesla….

“When it comes to heavy-duty trucking power, ‘Blue Gas’ beats Tesla hands down.”

But it’s not just big fleet trucks that are going to switch over…

“Today there are only 11,000 vehicles powered by ‘Blue Gas.’ We’re on the ground floor.

“But according to the big car giants…

“There will be over 10 million ‘Blue Gas’ vehicles on the road in the next few years.”

I wouldn’t say that’s the stance of the “car giants” … but it is the goal of some governments and other bodies that are pushing for fuel cell adoption — the last conference included that 10 million vehicle “pledge” (in ten years).

And apparently there is some progress in building out the infrastructure…

“Just a few years ago, there were virtually no “Blue Gas” stations. Today, there are 300 worldwide.

“But as more gas stations switch from serving oil to “Blue Gas”…

“That number is projected to surge to over 5,000 in a few short years.”

That same International conference included the goal of 10,000 fueling stations to serve those ten million vehicles, with a real push from Japan… not surprising, since Toyota is the major automaker that’s most invested in hydrogen fuel cells.

And he goes into why hydrogen fuel cells are a better option…

“Unlike batteries… the engine technology behind ‘Blue Gas’ is:

“Safe and non-explosive.

“Takes under five minutes to refill.

“Lasts days or even weeks.

“And it’s incredibly lightweight.

“In the race for clean trucks, trains, and buses, “Blue Gas” is second to none.”

A big part of the reason why he thinks it’s going to be big is that China is pushing fuel cell tech forward…

“China’s ‘Elon Musk.’ recently made a stunning announcement…

“In short, he called for a complete shift in China to ‘Blue Gas.’

“And when this guy speaks, the Chinese government acts.

“After all, he was responsible for the country’s electric car revolution to begin with.

“The Chinese are committing a stunning $66 billion to back ‘Blue Gas.’

“In fact, the world’s largest ‘Blue Gas’ station just opened in Shanghai.”

And what’s the stock? We finally get a few clues…

“… the $3 tech stock that first began this revolution 40 years ago.”

And some hype, for good measure….

“This Is More Lucrative Than Any Pot Stock I’ve Recommended

“Even more than Bitcoin and other cryptos…

“That’s because it’s moving to the epicenter of the trillion-dollar electric vehicle revolution…

“A historic trillion-dollar energy shift that’s already transforming the way that millions power their cars…”

That “40 years ago” bit is relevant, this company is somehow connected to the “father of fuel cells”…

“… except for a few ‘niche’ markets like submarines or spacecraft, fuel cells weren’t used much.

“They simply weren’t inexpensive and small enough for everyday cars and trucks.

“In 1987, everything changed.

“One energy legend, now known as the ‘father of fuel cell technology’, made a historic discovery that put…

“Fuel Cells on the Inevitable Path to Energy Dominance”

And he talks about some fuel cell stocks that surged last year, Plug Power (PLUG), Proton Power Systems (PPS on the AIM in London), and Hydrogenics… and Hydrogenics was bought by Cummins (CMI), which leads Mengel to anticipate a “buyout surge” that will lead to a takeover frenzy for his favorite secret stock…

“A buyout frenzy is underway on small companies that are deploying the technology.

“And I’ve identified the next big takeout target…

“The tiny $3 stock I mentioned today, the one founded by the innovator behind the fuel cell revolution.”

Other clues about this one $3 stock? We get this…

“… after signing $200 million worth of deals with China’s largest engine and auto parts companies…

“It’s the frontrunner for the world’s biggest fuel cell market…

“In Shandong province alone, it’s rolling out 2,000 fuel cell buses.

“And this company is supplying it all.”

So who’s our little target? What’s “the $3 tech stock that first began this revolution 40 years ago?”

This must be little Ballard Power Systems (BLDP)… which is not a $3 stock anymore, and hasn’t been for more than six months (it was right around $7 the first time I saw this teaser ad, about six weeks ago), but it is connected to (the late) Geoffrey Ballard, the father of the fuel cell and founder of the company… and it would not be surprising if they just repurposed the spiel from a recommendation that was made a few months earlier to Jimmy Mengel’s subscribers (that’s just a guess, but it’s pretty common practice for newsletter ad copywriters).

Geoffrey Ballard left active management at Ballard Power almost 20 years ago, and, in fact, formed another company that was subsequently sold to Plug Power, another oft-touted fuel cell company, but he certainly left a legacy at BLDP.

And yes, China is a big market for fuel cells (and everything else, pretty much), and Ballard does have an “in” thanks to the fact that they sold out part of the company to form a Chinese joint venture with Weichai Power.

All of the fuel cell stocks have gone bonkers at one point or another in the past few months, driving this particular one up above $10 for a while (the stock touched $12 last week, though it’s below $10 again now)… so what’s the story?

Well, frankly, the most obvious thing you note upon a quick look at the financials is that Ballard is trading like one of the crazy cloud software stocks — at a valuation of $2 billion, it’s trading at more than 20X sales, is nowhere near profitability, and is expected to grow sales at about 35-40% a year as they sell fuel cell stacks into their buses/trucks joint venture in China as well as for existing markets (backup power, forklifts).

The future is very much lined up with China and their technology transfer to their Weichai joint venture (agreed to in early 2018), which is causing some fears and also some profit lust — which probably explains some of the surge in the past few months, as trade war fears have ebbed a bit and the stock has more than doubled in the past six months.

Not for the first time, I should note. The stock has been teased in the past as fuel cell excitement has heated up, and it has surged a few times before — particularly in 2014 and 2017. So the warning signal for investors is that things didn’t work out very well for those who bought Ballard Power the last couple times it surged quickly higher like this.

As with Plug Power and Fuel Cell and the rest of the industry, presumably a lot of the future for Ballard depends on what governments or larger companies do to push forward with hydrogen fueling stations… either in China or the US, or elsewhere… and whether alternative energy makes it far enough that generating, storing and transporting hydrogen ends up being efficient and feasible on a large scale (the government lays out some of the challenges here, in case you’re curious).

There’s some interesting bigger-picture thinking here from a couple years ago that makes some sense to me, though I’m far from being an expert on the science. Hydrogen is a challenge both because of the energy cost to create it, and because it can be challenging to store and transport safely (though natural gas and gasoline are also a challenge on that front, to be fair, and, yes, lithium batteries pose fire risks).

So the dream is that refueling stations will create their own hydrogen from electrolysis instead of having to set up a transportation infrastructure of pipelines or trucks for liquid hydrogen, and that hydrogen generation would take a lot of electricity — hopefully, for the sake of reducing reliance on fossil fuels, electricity from solar and wind and other relatively clean sources… though there are other ways to generate hydrogen as well, of course, with probably the most likely first wave using natural gas as a feedstock and fuel. Though the real hope for the next few years is not from hydrogen-powered cars, it’s all about those predictable and restricted fleet vehicles like port trucks and delivery trucks and buses — which should ring a bell for those who hoped for great riches from the natural gasification of trucking fleets a decade ago.

As an aside… remember Clean Energy Fuels (CLNE) and Westport (WPRT), the standard bearers of the natural gas transportation revolution that was heavily talked up just after the global financial crisis? They’re still around, and still generally growing revenue, but their share prices are down ~90% from their story-driven highs of early 2012, and I’d be surprised if they regain those highs in my lifetime.

So maybe hydrogen ends up being a better solution for a battery-powered fleet (hydrogen fuel cells are essentially batteries that get their charge from hydrogen, with the real advantage being that fuel cell refueling is faster than recharging, and the fuel cells have longer useful lives)… though the established electricity infrastructure (power lines, etc.) and lack of a hydrogen infrastructure means that hydrogen would also presumably have a pretty short time period in which it could “win” over batteries (assuming, of course, that battery technology continues to improve).

Ballard’s latest quarterly presentation is full of future promise but not terribly inspiring on the financial front. Yes, the promise is real, things could work out well… but right now, they aren’t. There’s an interesting Bloomberg interview with Ballard’s CEO Randy MacEwen here, essentially pointing to 2021 or 2022 as the first time investors begin to envision a future profit for BLDP, and 2025 as the forecasted beginning of the rapid growth trajectory that he envisions.

So, again, this is buying the future — or, more specifically, buying one future in which hydrogen fuel cells build on their early success in forklifts to take a huge market share in heavy trucks and buses, and hoping that Ballard will lead in this future. That’s been promoted many times in Ballard’s history, and past dreams haven’t materialized, but that doesn’t mean it’s impossible this time… just that we should check our assumptions and be skeptical of the promotions. I don’t know whether this hydrogen fuel cell future will come, or if Ballard will remain a leader, but I’d bet on it continuing to be a very volatile ride.

Thoughts, comments, questions? Let ’em loose with a comment below… and thanks for reading!


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frankw17
Member
👍1307

Good article Travis. We have all read about hydrogen powered vehicles for years, but no one, to my knowledge, has even come close to determining how they are going to provide hydrogen on an economic basis. Furthermore, EV’s and natural gas powered vehicles haven’t dented the ICE market either. BLDP has been in business for more than 20 years and they still don’t have a viable product. So as they say on Shark Tank, for those reasons, I’m out.
Regards,
Frank

lupus1
Guest
lupus1

With the advent of new battery technology, I believe there will be huge competition for this technology. Here is a link to an article “Lithium-Ion Battery Inventor Introduces New Technology for Fast-Charging, Noncombustible Batteries” John Goodenough, the inventor of the lithium-ion battery and his team have developed the first all-solid-state battery cells that could lead to safer, faster-charging, longer-lasting rechargeable batteries. The positive changes include for example longer range for automobiles (one fill-up gets you from New York to Florida) and quicker fill-up time (no longer than the current time to fill your gas tank at a gas station). And… Read More »

Roger
Guest
Roger

CWR.L and ITM.L are fuel cell companies in the UK and going absolute gang busters. CWR has just had a further stake in it bought by the German mega company BOSCH. I’m invested in CWR.

Anthony Williams
Guest
Anthony Williams

We still have the fundamental issues:-
1. It is much more efficient to use electricity to charge a battery and then use it to drive a car than it is to use electricity to generate hydrogen which is then used to convert it back to electricity which is then used to drive a car.
2.The electricity/battery infrastructure is much further developed than the hydrogen infrastructure.
3. The economics are and always will favor the battery approach.

Zeflik
Member
👍47

Absolutely correct. Therefore , most of the experts agree that fuel cell based transport will be applied to the heavy freight transport like huge trucks, ships, trains replacing diesel driven engines and even airplanes.

convenient_myths
Irregular
👍47
convenient_myths

Hi Travis,
This comment is just about the principle of “hydrogen fuel cell cars” and not about the specific companies.
As I published already years ago, the “hydrogen-highway” is and will remain a pipedream (see, for example, my 2013 article at https://principia-scientific.org/hydrogen-powered-cars-a-pipedream/ ).
Ballard and others claimed 20+ years ago, that this technology was just about to be perfected and such cars “to be in the showroom, ready to be driven away” by 2001.
The physical properties of (elemental) hydrogen are simply too extreme to allow its use as a common energy carrier.
Cheers,
Klaus Kaiser

Bernie
Guest
Bernie

Don’t think the Blue Gas Company he’s talking about is Ballard Power. After reading his spiel I did some research and I believe Clean Energy (CLNE) is a much better match. After doing the homework I actually bought some.

1100y6731
Irregular
👍24

The teaser is for Ballard. I paid the $99 and then found out the stock was triple the $3 price he claimed. I got a total refund of my $99.

Inevitable
Guest
Inevitable

CLNE is a natural gas venture the bye products of combustion are not just H2O, it appears you were mainly looking at stock price .

hullevad
Member
👍50

A danish company is building a factory for fuelcells, fiirst order is for 50.000 fuelcelles! So the fuelcelle is npt dead.

Philip Damask
Guest
Philip Damask

Travis,
Just wondering how a lot of cheap excess solar and wind energy could impact the situation. There is going to be a major push into energy storage in the years ahead.

Donald J. Armstrong
Guest
Donald J. Armstrong

If energy was economically available from hydrogen fuel stations. It would be much easier to convert conventional ICE (Internal Combustion Engines) powered cars to use it than deal with all the issues of fuel cells. Why try to build fuel cells to convert the chemical energy to electricity and then use electric motors and expensive electronic controls to convert the electrical energy to mechanical energy to move vehicles around, when you can just use the (well known and low cost) ICE to convert the chemical energy directly to mechanical energy. Over all the fuelcell system would offer very little advantage… Read More »

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3866
Doc
Irregular
👍4
Doc

Apparently, H2 is still a product of fossil fuels as per experts to be competitive fuel. (Does not mean has to continue). The auto-sector collision with technology is driving in the direction of unsustainable auto sector with MEGA corporations running it. Recent stat that car remains idle 95% of time, driverless cars and uber, Lyft and their country based local derivatives like Ola in India, are probably tell us demise of large scale auto manufacturing. Uber rides in India are apparently so cheap, that for price of small size car interest earned on that principal would pay for uber rides.… Read More »

Dave S.
Guest
Dave S.

India must be delivering substantially more interest on saved cash than is the USA.

Thor
Guest

The part that I don’t get is “why is hydrogen better than CNG or LNG”?
CNG has done a whole lot to clean up a number of CA ports and there is a LNG UPS truck system between LA and SF (you don’t get enough fuel density to make the trip with CNG, so you have to do cryogenics)…

For now… most hydrogen is made via steam reformation of CH4 (the NG part of CNG/LNG), and you don’t have to worry about hydrogen embrittlement, etc.

OTOH, Hyster and a few others are now playing with fuel-cell forklifts… but I wonder why…

vivian lewis
Guest

we used to recommend Ballard Power when Mr Ballard was still on board, but then our Austrian environmental specialist Max Deml who publishes Eco-invest (in German) talked me out of it.
He know green like nobody else as his whole investment focus is on this
vivian lewis

user7849
Member
👍4
user7849

I was pondering if there was another way to hedge a position in hydrogen before buying into emerging hydrogen cell companies. The pipeline companies with liquid and gas rated infrastructure… in the short term could we see more demand for natural gas until better hydrogen manufacturing technology becomes cost effective; and at that point could we see that same infrastructure slightly modified being used to carry hydrogen gas?
Is this a picks and shovels approach or is my lack of technical expertise painfully evident?
Thanks for any thoughts shared,
-jeff

Guest
Guest
Guest

Many have forecast hydrogen fuel cells becoming a big factor in new vehicle sales within 5 years for at least the last 30+ years.

bdwolfhound
Guest
bdwolfhound

While the theoretical advantage of hydrogen fuel cell vehicles is undeniable, the practical realities are another matter entirely. Nevertheless, it is interesting to see the car companies getting a foot in the water, so to speak. Hyundai in particular has publications going back years on generating hydrogen via catalyzed hydrolysis using sunlight. The main energy cost then is that of compression. There’s lots of seawater and lots of sunlight out there, but no, I don’t expect a hydrogen revolution any time soon. Sticking with close environments forklifts and high traffic density short haul vehicles make sense, but they are not… Read More »

JayBee1
Guest
JayBee1

I own stock in Hydrogen Engine Center (HYEG), which now goes by the name of HEC-TINA. The guy that started the company had all sorts of grandiose dreams – kind of a minor league Elon Musk – and even made a hydrogen-powered farm tractor. His biggest problem was that he had too many ideas, and never really just focused on one main product. Then along came the Spanish Knight, Pedro Blach, and he seems to have stolen the company away from the founder. Now I’m not sure what the company is up to. The last I had heard they were… Read More »

david spencer
Guest
david spencer

In the mid 90s, Geoff Ballard and his wife were living on Saltspring Island ,British Columbia as I believe he was semi-retired. He was very generous with his time, speaking to high school physics and science classes. When he spoke to the local rotary club, the share price was approx. $7 cdn. Some members did buy in at that level and possibly kept it until it peaked at approx. $195. Was invited to the meeting but didn’t attend. Another what-if scenario! Mind you I also read about Bre-X at $1.43. Must be a moral there somewhere. On a sad note,… Read More »

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3866
jdb123
Member
👍2
jdb123

Presently when you pull up to the pump at the blue gas station that was pictured in the pitch for blue gas, you see a pump with two nozzles labeled H35 and H70. The H35 refers to pressure the gas being pumped which is short for 350 Bar H70 is short for 700 Bar. That’s right, the H35 hose is pumping hydrogen gas at 5,145 Pounds/(Square Inch) and the H70 hose is pumping hydrogen gas at 10,290 Pounds/(Square Inch). I remember when I was teenagers owning a car back in the seventies that had an unsafe fuel nozzle right behind… Read More »

big tuna
Member
👍102

10,000 PSI of explosive gas- nothing wrong there.

bradyoung
Irregular
👍9
bradyoung

Don’t forget Thorium or molten salt nuclear reactors for the future energy picture!

Gambini
Guest
Gambini

The very mention of CLNE elevated my blood pressure! I invested a sizable $ on brother in law suggestion (I knew better!). But, he was a superintendent in construction as fueling stations were being built and it just had to go vertical! Well, that was 10 years ago; you know the rest of the story. I’m not concerned about the door hitting my seating area as I exit.

4geoff2
Member
👍9
4geoff2

I didn’t see anybody mention HYSR. Hypersolar. They look great, but OMG is it ever early. But you maybe pick up 1/2 mil shares for…

Alan Bryce
Guest

One point needs highlighting: Methanol is the ideal hydrogen carrier. Nobel laureate George Olah knew this quite some time ago when he conceived of the methanol economy. Methanol can power methanol fuel cells, or be reformed into hydrogen for hydrogen fuel cells. And methanol can be made renewably by combining hydrogen with carbon dioxide. Methanol has a bright future in the transportation sector.

tanglewood
Irregular
👍467

If the Hydrogen Fuel cell car emits water/water vapor, won’t this be a problem for vehicles running when temperatures are below freezing

Triple8
Guest
Triple8

Toyota seems to have won the car contest with their new cell. Revolutionary in the fuel cell industry with no coolant and very little degredation of the cells over 5000hrs. In the standard fuel cell freezing has yet to be over come. Cold starts being most of the problem. Contamination is also a major issue any iron, copper or CO that gets into the cell will kill it. Platinum is at the heart of the cell, even with the lower ratios now, they are still expensive and with the amount of platinum needed for mass production highly doubtful they will… Read More »

aneltomir
Guest
aneltomir

Excellent point

Dan
Guest
Dan

Matt Badiali just gave Travis a shout-out on his Real Wealth podcast when he was responding a reader’s question on the Blue Gas tease. He directed his subscribers to the Stock Gumshoe website because he said Travis does a great job with the sleuthing. He even said he has respect for Travis because he is very fair with his analysis.

Great job Travis.

armengaro
Member
👍2
armengaro

I concur.

Joemarko
Guest
Joemarko

I lost 100% on wort and am out 98% on clone. Presently only out 75% on below, and personally, I would like to see a 1000% gain on this one.

Otis Arron Schmakel
Guest

just don’t be fuel-ish…

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Nancy
Guest

Yes I did get my spouse a science smartie to buy 100 shares on his “retired mutual fund” Fidelity account! The thing is the technology us not new! 50 years old…purportedly suppressed by the highway gasoline internal combustion engine lobbies! I do not think the refueling duration, and staying power is perfected yet. Then that non-optional charge process also had to carry the high weight of its own mobility mechanism! So it surely bears an unavoidable heavy payload! Note “lead” batteries, have concept limits, as they are actually using re-cycled stored up already combusted energy then delivered and inserted into… Read More »

Thomas Claridge
Guest
Thomas Claridge

The BIG LIE about Hydrogen is that it is everywhere part of almost every chemical or mineral. That is only 1/2 true as it is also COMBINED chemically with all these many possible sources. It has to be separated from the mineral usually requiring energy or power od some kind. EXAMPLE: The simple chem lab experiment of taking a quantity of clear water (H2O) and running an electric current through it causing it to separate into it’s parts of two parts Hydrogen (H) and one part Oxygen (O). So now you have the “Blue Gas” (happens to be clear not… Read More »

mrroberts
Guest
mrroberts

35 Years ago I was affiliated with the Hydrogen Research Institute (NYC&NJ) as an adjunct of Fusion Energy Corporation at Princeton NJ (Dr. Bogdan Maglich). Hydrogen cars for the many will remain a dream until economical means of producing (and distributing) hydrogen are developed. While solar energy is promising, real lift-off will come when FUSION energy is practical , and fusion has always been “20 years in the future”…