Lots of folks have been asking about Dave Forest’s ad for Brandt Oil, which is apparently in every email inbox in the land this week… the ad is for Casey’s International Speculator, which is apparently helmed by Forest now, and for which they’d like to receive $1,995 from you for a year’s subscription (no refunds, as seems to be the case with most of the “premium priced” letters these days).
It’s the ultimate in foolishness to spend $2,000 to learn about a hot stock tip, of course — that predisposes you to actually believe the hype in the ad, and you’re committing to a long-term advisory service on the basis of one over-inflated idea. So go ahead and subscribe to Forest’s letter if that’s the kind of thing you like, and if your portfolio’s big enough to justify a $2,000 annual payment to get advice on one small portion of that portfolio (assuming, of course, that you only allocate a small part of your portfolio to speculative natural resources stocks)… but let us dig into the ad for you first, explain what this “Brandt Oil” is, and get you the name of the stock. That way, at least, you can think for yourself a bit.
Here’s a bit of the ad that entices us:
“Trump’s Executive Order Unleashes Nationwide Hunt for “Brandt Oil”
“New oil grade—set to replace Brent Crude—has already shown investors returns of 3,750%, 1,600%, 4,628% and 2,343%
“An estimated $1.03 billion reserve of this new fuel is the first and only U.S. deposit with near-term production… and 100% owned by a tiny $2 company.”
This argument is all built on an executive order that President Trump apparently signed over the winter…
“President Trump quietly signed what may go down in the financial books as his most significant executive order.
“It states that within 180 days (which started on February 16th, 2018), the Department of the Interior… along with the U.S. Geological Survey…
“Must submit to the White House, a plan to improve the most advanced topographic, geologic, and geophysical data for the entire United States (excluding only national security locations like Area 51, military bases etc).
“The ultimate goal…?
“To identify and unlock over 1 million tons of a new “super-fuel” and other mineral resources on U.S. soil.”
That’s true, though a plan to improve the US understanding of a bunch of strategic minerals is not exactly a new thing — the government has gone through waves of caring deeply about this kind of stuff before, from uranium and rare earth minerals to regular old crude oil, and while the current interior department is more likely to spend money on helping these resources to get identified, and perhaps less likely to be an impediment to mining operations in environmentally sensitive areas, this does not necessarily mean that we’ll be bulldozing all the national parks to find more “Brandt Oil” starting on August 18. Here’s the Federal Register notice about that Executive Order, by the way, if you’d like to see the plain info.
More from the ad:
“America could soon switch to a new, more advanced higher grade of fuel.
“We call it “Brandt Oil,” and it’s quickly becoming the new standard for fuel.
“And while “Brandt Oil” is NOT a hydrocarbon or a direct fuel source like gasoline or coal, it can help power everything we use—cars, homes, buildings and machinery…
“…Without any form of pollution, global warming emissions or noise. Plus, it creates no spilling hazards.”
Sounds miraculous, eh? A miracle fuel that doesn’t pollute? Whatever could it be?
(Yes, I hear you sniggering in the back of the room… cut it out! Please wait for the rest of the class to catch up.)
It gets even more science-fiction-y as we go…
“Less than the equivalent of two gallons’ worth of “Brandt Oil” contains enough raw energy to power your house for 9 years.Are you getting our free Daily Update
"reveal" emails? If not,
just click here...
“Based on advancing technology, a single barrel’s worth could soon be capable of unleashing more than enough energy to power 20,000 homes for a decade.”
“The Department of Energy already ponied up $68 million in federal funding to enhance ‘Brandt Oil’ applications across the country.
“At the state level, governors from Colorado, Utah, New York, California, Nevada and Wyoming are collaborating with one goal in mind…
“To install ‘Brandt Oil’ service stations along 5,000 miles of interstate highways, reports the Denver Post.
That Denver Post article is here, if you’re curious… and the ad also quotes several other articles… one of them about Shell buying a “brandt oil” company, which make it clear that yes, this is all about electric car charging stations.
So if electric car charging stations are a key “Brandt Oil” application, what the heck is “Brandt Oil” itself?
Apparently it’s exciting enough that Saudi Arabia is also getting on board…
“It’s only a matter of time before Saudi Aramco—the state’s national oil company—begins to embrace the shift as well…
“So where does that leave OPEC?
“OPEC countries don’t own a single drop of this new super fuel. This cartel is set to face total isolation in a “Brandt Oil” world.”
Huh? What’s the story here? What are they actually talking about?
I’ll give you a hint… a Swedish chemist named George Brandt was the first person to discover and isolate cobalt… almost 300 years ago, way back when it was still controversial that he had given up on alchemy and the dream of turning stuff into gold.
So yes, “Brandt Oil” must be cobalt… a relatively rare metal that is used, among other things, as a cathode in lithium-ion batteries, mostly to make them safer (controlling oxygen production, which is a fire hazard) and more durable while degrading relatively slowly.
There are lots of different battery chemistries, and plenty of materials science work is being done to make it possible to use something other than cobalt (or to use less cobalt) in vehicle batteries, but breakthroughs appear to be fairly slow in this space. If you want a fairly plain-language explanation of why cobalt is important in a lithium ion battery, I found this one pretty useful.
Batteries are not fuel, of course — they’re a storage mechanism. I guess you could say that gasoline is a storage mechanism, too, in that the potential energy is stored underground in hydrocarbons and is released when those hydrocarbons are burned in a combustion engine, but in practice it’s a consumable fuel. Batteries still need to be fed with energy, so there’s still also some energy production that needs to take place along with this “Brandt Oil”, even beyond the energy consumed in mining the lithium and cobalt and graphite and building the batteries… it might come from windmills, I suppose, or from nuclear power plants or solar panels, but most if it still comes from burning coal or natural gas.
But anyway, we know that — Cobalt is not a miracle fuel, but it is an essential component in modern rechargeable batteries, and (arguably) will remain so for a long time… and it’s in relatively short supply. Most cobalt comes from nickel and copper mines, so if nickel or copper see low prices the production of cobalt also slumps, and almost 2/3 of the current global cobalt supply comes from one of the countries that most multinational companies don’t particularly want to be associated with, at least in the public eye: The Democratic Republic of the Congo (DRC).
So that’s the situation, just to catch you up — most electric vehicle forecasters believe that we need a much larger supply of cobalt than is currently being mined, and a lot of production comes from a place that brings to mind the “conflict diamonds” of Angola a decade or two ago.
Let’s get back to the ad and see how it is we’re supposed to get rich from this “Brandt Oil” ….
“… while we have an estimated 1 million-tonne reserve of this raw super fuel in the U.S., most Americans have no idea it exists.
“It’s been nearly half a century since we last made any attempts to drill for ‘Brandt Oil.’
“Today, as we make the switch to ‘Brandt Oil’, the U.S. must import its supplies for now…about 12,000 tons a year…
“…Most of it comes from deposits in China, Africa, Russia and Norway, according to a report from the MIT Review.”