JK: In the past few of the 20 years I've been going to this conference-and this year is no exception-it has become increasing difficult to pick up any prominent buzz, be it about a sector being red hot or be it about a major new discovery.

TGR: Why do you suppose that's happening?

JK: The reason is simple; this conference has become so big, so global. What in 1994 would have been the big Voisey's Bay's buzz that everybody was talking about or Bre-X in the following year, even if something like this did come along now, the collective size of 400 companies exhibiting would dwarf it. . .There are several hundred trade show exhibitors; numerous talks covering everything from country-focused issues to deposit models to new discoveries and so on. It's very difficult for any single thing to stick out.

Even worse, because it is now so large and dispersed, you do not have that intensity of networking of the past, the random networking where you would bump into people you hadn't seen for a long time and hear about this or that. By the end of the conference you had all these bits and pieces gelling in your head and you could say, "Oh, yeah, this was what was interesting." No, now it's more you know in advance what you're looking for; you make the sessions; you track down those companies, and you have the face-to-face you planned with these. So, the old aspect of serendipity of bumping into stuff and stuff floating to the surface just does not happen in this environment.

TER: Did you come away with any sense of how people are feeling about the economy?

JK: There was no irrational exuberance at all at this conference. In fact, it's a bit like a teeter-totter poised to go either way. There is hope that China will pull the global economy back on track and reinvigorate Europe and the United States. On the other hand, there also is concern that this will fall apart, and that as the fiscal stimulus packages come to an end interest rates start to rise that we will see a double-dip recession in the North American markets. And if that happens to coincide with a problem in China, which has been going hell-bent at an incredible pace thanks to its $585 billion fiscal stimulus program, there is concern that this could end very badly.

So we are almost in the eye of a hurricane, and everybody's wondering where we will be next year.

TER: Which way are you leaning?

JK: My own feeling is that if we come out of this with the global economy back on track and the disparate signs of life that we see in the North American economy are actually more than just flickers, next year we should see the supercycle that dominated the talk at this conference from '03 to '08. This time it will be taken seriously, and massive amounts of money will flow into the sector. But as I say, it all hinges now on where the global economy goes.

TER: Anything else that stands out from your PDAC experience this year?

JK: Quite a few of the rare earth companies were represented, there were several rare earth receptions and a whole morning devoted to talks about the rare earth deposits, geology, market and so on. These were surprisingly well-attended for a Wednesday morning, when traditionally 90% of the delegates are still in bed. So that is actually a pretty good indicator of the interest in this space.

Particularly with the assistance of one of the stocks listed going up during the days of the conference, I would say that the rare earth space is probably on the threshold of achieving a whole new level of serious attention from investors.

TER: Any companies in that space that you find particularly interesting?

JK: The interest has been a lot of talk and a lot of tire-kicking, but not really a lot of money going into the treasury. This may change in the not-too-distant future, though.

TGR: How so?

JK: I had an interesting meeting with a representative of Molycorp Minerals, who explained their timeline of activities. If I understand it correctly, we could see a Molycorp IPO before the summer. What the institutional market is missing in the rare earth sector is a vehicle large enough for serious investments. There has been incredible media buzz about the rare earth space. The Chinese are very clearly interested in seeing rare earth deposits developed outside of China to take the pressure off them to export what they consider a resource they need to hoard for the long term.

Having said that, nobody wants to buy stocks such as Quest Uranium Corporation (TSX.V:QUC) to any large degree. With these smaller players, there are so many uncertainties about whether the feasibility study will indicate a profit margin, whether they'll ever get a permit to get to production, or whether the metallurgical process actually will work. An aversion to investing in these very risky single-asset projects has inhibited the serious money coming into these plays. If a major company such as Molycorp does an IPO and lists on the New York Stock Exchange, though, it will validate the space and pull a lot of money into all the smaller companies. So I sense the timeliness for this improving over the next two or three months.

TER: Do you see any other companies besides Molycorp with an asset base that could actually pull off something as significant as an IPO and list a rare earth play on the New York or Toronto Exchange?

JK: A counterpart is Lynas Corporation Ltd. (ASE:LYC), listed on the Australian Stock Exchange. This company has a market cap of AU$815 million, and last year raised AU$450 million basically from institutional investors around the world after the Australian Foreign Investment Review Board said no to a Chinese proposal to put up debt and equity financing in exchange for majority control of Lynas. So this has already happened in Australia, but that market is not as liquid and popular as, say, the New York Stock Exchange.

I wouldn't be surprised if Lynas Corp. also seeks a New York Stock Exchange listing; however, the significance of Molycorp is that this is a home-grown, American deposit, and on April 1, we're supposed to hear the results of the RESTART bill proposal, an analysis of what America's vulnerabilities are to rare earth supply. If they decide that we have a problem here, the intensity of the hand-wringing about what to do about it would increase and companies such as Molycorp will receive a lot of attention as at least a major part of the solution to the problem. As you may know, Molycorp has been in the process of getting its Mountain Pass deposit back into production, and it also has the ability and the knowledge base necessary to acquire other projects elsewhere in the world to beef up its rare earth supply potential.

TER: Thank you, John. You also mentioned RESTART in a previous Energy Report interview a couple of months ago ("John Kaiser: Balancing Security of Supply Worries with Optimism on the R&D Front"). We recently saw a news release about this recently, and for readers who aren't familiar with it, RESTART stands for "Rare Earth Supply-chain Technology and Resources Transformation" (for more information, see below).

John Kaiser, a mining analyst with 25-plus years of experience, produces the Kaiser Bottom-Fish Report. It specializes in high-risk Canadian resource sector securities and seeks to provide investors with a framework for intelligent speculation. His investment approach integrates his "bottom-fishing strategy" with his "rational speculation model." After graduating from the University of British Columbia in 1982, John joined Continental Carlisle Douglas, a Vancouver brokerage firm that specialized in Vancouver Stock Exchange listed securities, as a research assistant. Six years later, he moved to Pacific International Securities as research director and also became a registered investment adviser. Not long after moving to the U.S. with his family in 1994, John cast his own line in the water, so to speak, with publication of the premier edition of the Kaiser Bottom-Fish Report.

******
Note: RESTART, proposed as a means of reviving a competitive rare earths industry in the U.S., has been put forward as potential legislation by an organization known as USMMA, the United States Magnet Materials Association. USMMA reported submitting this proposal, designed to create a path forward toward "a 'whole-of-government' approach to resolving the Rare Earth Elements (REE) supply crisis," to a number of federal entities-the U.S. Department of Commerce, U.S. Department Energy, U.S. Department State, U.S. Department of Defense, Office of the U.S. Trade Representative, and Office of Science and Technology Policy within the Executive Office of the President. The RESTART proposal calls for up to $1.2 billion in funding to reestablish domestic rare earth mining as well as U.S. facilities for refining, alloying, melting and production of rare earths and rare earth-based products.

USMMA said that it has already successfully advocated for inclusion of a congressionally-mandated study of the rare earth supply-chain in the FY10 National Defense Authorization Act. The organization was founded by three high-performance magnet producers and suppliers in 2006: Thomas & Skinner, Inc. (Indianapolis, IN), Hoosier Magnetics (Ogdensburg, NY) and Electron Energy Corporation (Landisville, PA) in 2006. U.S. Rare Earths, Inc. (a private company) joined the group in 2009.

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DISCLOSURE:
1) Sally Lowder of The Energy Report conducted this interview. She personally and/or her family own none of the companies mentioned in this interview.
2) The following companies mentioned in the interview are sponsors of The Gold Report or The Energy Report: None.
3) John Kaiser-From time to time, Streetwise Inc. and its directors, officers, employees or members of their families, as well as persons interviewed for articles on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise. John Kaiser, personally and/or his family is not paid by any of the companies mentioned in this interview.

Without the greenhouse effect to keep our world warm, the planet would have an average temperature of minus 18 degrees Celsius. Because we do have it, the temperature is a comfortable plus 15 degrees Celsius.

Other inconvenient facts ignored by the activists: Carbon dioxide is a non-polluting gas that is essential for plant photosynthesis. Higher concentrations of CO2 in the atmosphere produce bigger crop harvests and larger and healthier forests--results environmentalists used to like.

There are legitimate reasons to restrict emissions of pollutants into the atmosphere. Recycling makes sense and protecting the environment is good for everyone. But we should not fool ourselves into thinking we can change the temperature of the Earth by doing these things.

The Missing Effects of Global Warming
For the past decade, according to highly accurate measurements taken from satellites, there has been no global warming. Even though atmospheric CO2 has continued to accumulate-up about 4 percent in the past 10 years-the global mean temperature has remained flat. That should raise obvious questions about CO2 being the cause of climate change.Orbiting satellites gather temperature readings around the globe, accurate to 0.1 degree Celsius. Warming in the upper atmosphere should occur before any surface warming effect, but NASA's data show that has not been happening. Interestingly, in the 18 years those satellites have been recording global temperatures, they actually have shown a slight decrease in average temperatures. The images shown in Figure 6 reveal that the expected "fingerprint" of warming in the upper atmosphere is missing.

In spite of warnings of severe consequences from rising seas, droughts, severe weather, species extinction, and other disasters, the record shows little if any evidence of such effects. With scientific evidence being ignored, emotional arguments and anecdotal data are ruling the day. The media subjects us to one frightening image of environmental nightmares after another, linking each to global warming. Journalists and activist scientists use hurricanes, wildfires, and starving polar bears to appeal to our emotions, not our reason. They are far more concerned with anecdotal observations of such things as frozen sea ice inside the Arctic Circle than they are with understanding why it is happening and how frequently it has occurred in the past.

Real-World Observations
A report by a team of 40 scientists from a dozen countries, released in June 2009, found the following:

• "The average temperature history of Antarctica provides no evidence of twentieth century warming."
• "The results of several research studies argue strongly against claims that CO2-induced global warming would cause catastrophic disintegration of the Greenland and Antarctic Ice Sheets.
• "The mean rate of global sea level rise has not accelerated over the recent past. The determinants of sea level are poorly understood due to considerable uncertainty associated with a number of basic parameters that are related to the water balance of the world's oceans and the meltwater contribution of Greenland and Antarctica."
• "[D]espite the supposedly "unprecedented" warming of the twentieth century, there has been no increase in the intensity or frequency of tropical cyclones globally or in any of the specific oceans."

After warnings that 2007 would be the hottest year on record and a record year for hurricanes, we experienced, in 2008, the coolest year since 2001 and, by some measures, the most benign hurricane season in the Northern Hemisphere in three decades.

Even though recent changes in our atmosphere are all within the bounds of the Earth's natural variability, a growing number of people seem willing to throw away trillions of dollars on fruitless solutions. It's ridiculous to allow emotional appeals and anecdotal data to shape our conclusions and influence our expenditures when real science and technology are at our fingertips.

Based on the seasonal and geographic distribution of any projected warming, a good case can be made that today's temperature is not as beneficial for humans as a warmer world temperature would be.

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Walter Cunningham (walt@waltercunningham.com) maintains the waltercunningham.com Web site.

Claims of a scientific consensus regarding the causes, extent, or consequences of climate change are simply false. While climate scientists may agree that the Earth's temperature is always changing, there is tremendous disagreement and debate over whether humans are responsible for those changes.

Climatology is a new science, and there is great uncertainty about fundamental scientific questions, preventing scientists from knowing for certain what is causing current climate trends and accurately predicting future climate conditions.

A U.S. Senate Environment and Public Works Committee report identifies 700 prominent scientists who have publicly repudiated the alarmist position on global warming expressed by Al Gore and James Hansen. Their ranks include experts in climatology, geology, oceanography, biology, glaciology, biogeography, meteorology, economics, chemistry, mathematics, environmental sciences, engineering, physics, and paleo-climatology.

The scientists have signed a letter pointing out climate change is a well-known natural phenomenon and when changes are gradual, man has an almost infinite ability to adapt and evolve.

More than 31,000 scientists in the United States have signed a petition saying "there is no convincing scientific evidence that human release of carbon dioxide, methane, or other greenhouse gases is causing or will, in the foreseeable future, cause catastrophic heating of the Earth's atmosphere and disruption of the Earth's climate."

Debating Carbon Dioxide
The advocates of an anthropogenic global warming (AGW) crisis say the United States must impose a devastating tax scheme to force industry to emit less carbon dioxide, which will then reverse the warming trend, they say. This policy prescription is based on two assumptions: (1) that CO2 is the cause of changes in the Earth's temperature, and (2) that a warmer Earth would be bad for the planet's flora and fauna, including humans.

In reality, atmospheric CO2 has a minimal impact on greenhouse gases and world temperature. Water vapor is responsible for 95 percent of the greenhouse effect, while CO2 contributes just 3.6 percent. Since human activity is responsible for only 3.2 percent of the total CO2, we can influence only 0.12 percent of the total greenhouse gases. Some studies have found CO2 levels are largely irrelevant to global warming.

The true believers in AGW base their case on a broad and weak correlation between CO2 and global temperature in the last half of the twentieth century. However, they cannot be sure which is cause and which is effect. Looking at a longer period of history, it becomes clear that temperature increases have preceded high CO2 levels by anywhere from 100 to 800 years, suggesting higher temperatures cause CO2 levels to rise, rather than vice versa.

High CO2, Low Temps
There have been periods when atmospheric CO2 levels were as much as 16 times higher than they are now-periods characterized not by warming but by glaciations.

You might have to go back half a million years to match the earth's current level of atmospheric CO2, but you have to go back only to the Medieval Warming Period, from the 10th to the 14th centuries, to find an intense global warming episode, which was followed immediately by the drastic cooling of the Little Ice Age. Neither of those events can be attributed to variations in CO2 levels.

With CO2 being a relatively minor constituent of "greenhouse gases," and human activity contributing only a tiny portion of atmospheric CO2, why have alarmists made it the whipping boy for global warming? They know CO2 is a tiny player in the complex system we call "climate," but they also know how fruitless it would be to propose controlling the real drivers of global temperature: greenhouse gases, water, methane, and nitrous oxide. So they wage war on CO2, no matter how ridiculous it makes them appear.

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Walter Cunningham (walt@waltercunningham.com) maintains the waltercunningham.com Web site.

See more articles by Walter Cunningham

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There is a war going on between those who believe human activities are responsible for global warming and those who don't. Contrary to the way the debate is often framed by the media, those who believe in anthropogenic global warming (AGW) do not hold the high ground, scientifically. Their critics do.

Reason, Evidence Ignored

One reason for belief in AGW is the sad state of scientific literacy in the United States today. A 2006 National Science Foundation survey found 25 percent of Americans did not know the Earth revolves around the sun. Such widespread ignorance leaves our society vulnerable to the emotional appeal of AGW alarmists.

Among AGW true believers, advocacy has replaced objective evaluation of data, and scientific data--regardless of the authority of its source or importance in the debate-- are ignored and suppressed, or the messengers are attacked.

Global warming is a scientific question, demanding scientific data for understanding, but until very recently it appeared subjective opinion was winning. Thankfully, some scientists have been willing to risk their careers by speaking out against AGW dogma. Disclosures of scientific fraud by the leading advocates of AGW, along with new scientific discoveries and cooling global temperatures, have all helped bring the world back from the brink of adopting some utterly unnecessary and truly harmful legislation.

In the end, science will win--as it always does--but not without some painfully rude awakenings for Al Gore, President Barack Obama, and millions of others who can't handle the truth.

Warmer--Since Ice Age

Public debate should focus on what scientists know about the causes of global temperature changes and whether we can do anything to control or influence the planet's temperature. Is global warming a natural inevitability, or is it anthropogenic--human-caused?

Determining the temperature of the Earth, past or present, is a matter of collecting data, analyzing it, and coming up with the best explanation to account for it. Scientists have used proxy data to estimate the temperature of the Earth going back for millennia. (See Figure 1.) To say the Earth has been warming is to state the obvious. Since the end of the last Ice Age, Earth's temperature has increased approximately 16 degrees Fahrenheit.

That is certain and measurable evidence of warming, but since the warming started before any human impact, it is evidence of natural variability, not AGW.

Human Role Not Shown

Scientists have been unable to find a relationship between industrial activity or energy consumption and global temperatures. Carbon dioxide emissions have risen steadily since the start of the Industrial Revolution, but temperatures have risen, fallen, risen again, and more recently begun to fall again.

Correlation doesn't prove causation, but a persistent lack of correlation (as between human carbon dioxide emissions and temperatures) can disprove a theory of causation.

In contrast to their inability to find evidence in support of AGW, scientists have found an excellent correlation between fluctuations of solar activity and the Earth's temperature. (See Figure 2.)

'Climate Change' Natural, Continual

Science tells us the Earth has been warming and cooling for the past 4.8 billion years. Most recently, it has been warming--ever so slightly--but there is nothing unusual about that. Changes in the Earth's temperature have occurred many times in our climatic history, even since the Industrial Revolution.

Advocates of AGW have been working overtime to obfuscate the issue. When the best available temperature data (from satellites) began showing a leveling off and then a slight cooling trend beginning in the late 1990s, the alarmists began dropping "global warming" from their vocabularies in favor of "global climate change." Who can argue that the climate isn't changing? It's always changing!

Sure, climate change is occurring, but humans are not influencing the temperature of our planet to any measurable degree. Any human contribution to global temperature change is lost in the noise of natural terrestrial and cosmic factors.

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Walter Cunningham (walt@waltercunningham.com) maintains the waltercunningham.com Web site.

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Link to Republican Request for UN Investigation into Climategate

Washington, D.C.-Sen. James Inhofe (R-Okla.), Ranking Member of the Senate Committee on Environment and Public Works, released the following statement today in response to the United Nations' announcement that an independent scientific organization will investigate the policies and procedures of the Intergovernmental Panel on Climate Change (IPCC).

The UN's action comes nearly three months after 27 GOP Senators, including Sen. Inhofe, called on Ban Ki-Moon, the UN Secretary-General, to launch an independent investigation of the IPCC.

The UN's action also follows the 'Climategate' scandal and the disclosure of several flaws and intentionally misleading information found in the IPCC's Fourth Assessment Report-which provided a principal scientific basis for EPA's endangerment finding for greenhouse gases.  

"I welcome today's call by the UN Secretary General for an independent investigation of the IPCC's review process and procedures," Inhofe said. "Yet, this is only half the battle: if the investigation uncovers flaws in how the IPCC manages the process of compiling its scientific assessments, then those flaws necessarily will affect the quality and rigor of the science in those reports. Therefore, a legitimate inquiry must look back and examine the science in the assessment reports, and not just the mistakes that have been uncovered thus far.

"According to Phil Jones, former director of the Climatic Research Unit (CRU), 'there is some truth' to the charge that he failed to update and organize the raw data supporting the CRU temperature dataset, on which the IPCC relies in its reports to make temperature projections. Therefore, an independent, peer-reviewed examination of the CRU and other major temperature datasets must be part of this investigation.

"On December 8, I wrote a letter with 26 Republican Senators calling for an independent investigation of the IPCC and the science it produces. We demanded an investigation along the lines of the Volcker inquiry of the UN's Oil for Food Program. We stated, among other things, that the investigation 'must be conducted without political interference or manipulation from individual countries, non-governmental organizations, those within the UN, those who have contributed to the IPCC, those being investigated, or any closely related associates.' In addition, we said that 'in the interest of transparency, it is imperative that the US Congress have full access to all the documents, as well as transcripts and interviews, from the investigation, and that they be released to the public.' In order to be credible and transparent, the investigation must meet these basic criteria.

"Finally, until this investigation is complete, Congress should consider budgetary measures to ensure that taxpayer dollars are funding science that meets the highest standards of integrity and objectivity. This includes science produced by federal agencies as well as funding for the IPCC."

List of 27 Republicans who signed the letter to UN Secretary Ban-Ki Moon requesting an independent investigation.

Inhofe                                           Barrasso

McConnell                                    Lugar

Chambliss                                     Hutchison

Sessions                                        Thune

Kyl                                               Cornyn

Voinovich                                     Bunning

Brownback                                   Grassley

Hatch                                            Roberts

Johanns                                         Ensign

Enzi                                              Isakson

Coburn                                         Wicker

Bond                                             Burr

Risch                                             DeMint

The Energy Report

Rick Rule probably could draw an audience if he were talking about the weather, but combine his presence with knowledge, understanding, experience and a track record of success, particularly in the resource arena, and the crowd falls silent. Founder and chairman of Global Resource Investments, Rick recently made himself available for a brain-drain, the foundation of the piece that follows. . .

Economic Indicators

Lest you think the rallying stock market serves as a leading indicator that good times will soon roll again, along comes Rick Rule to rain on your parade. "The greatest bull market in history, beginning in 1982," he says, has trained people "to believe things will do well and get better"-training he considers lethal-and conditioned them to "buy the dips."

Furthermore, he adds, "The amount of liquidity being injected into the system is truly spectacular. A lot of the stock market rally has been liquidity-driven." Interestingly, he notes, that liquidity is short term; while banks are still avoiding long loans that they can't resell to the federal government, Rick sees plenty of short-term money, lots of margin, ample lending to hedge funds, capital markets firms and individual investors.

He considers the markets "seriously overvalued" with the economy in no condition to support the capitalization rates, but expects the rally to continue on the basis of those two reasons plus the gradual thawing of bank credit for merger and acquisition activity.

Bottom line, though, Rick calls it "a bear market trap, a real sucker rally. . .driven by liquidity rather than valuation. And when the inevitable shock to liquidity hits-from additional foreclosures, a collapse in commercial real estate, implosion of municipal markets or wherever-this bull market will be over in a tremendous hurry. He sees a variety of potential catalysts that could take this market down. There's no way of knowing when it will happen and how bad it will be, but he compares the likelihood of it happening to walking through a minefield. The odds are you'll step on a mine and it will explode. "This is a minefield that it would be helpful if you were extremely drunk to stagger through. I do not like the probability of us getting through this without a couple more ugly, ugly, ugly shocks. The idea that we're going to get through this unscathed just doesn't make any sense."

What could go wrong? Leveraged buyout loans in a weak economy. Additional reset loans in the residential market. Commercial real estate lending and commercial real estate capitalization rates. Municipal bond markets.

Rum to Treat Tequila Hangover

As Rick sees it, "The entire set of circumstances that led us into the crash 18 months ago is before us again. . .None of the underlying causes of the problem have been dealt with at all. We had a balance sheet problem; as a society we'd lived beyond our means and our liabilities exceeded our assets both in short and long term. As a society, we've decided to spend more and borrow more. We had too much collective debt, so we took debt from $2 trillion to $9 trillion. We've exacerbated the problem. It reminds me of a mathematical truism-you cannot add a column of negative numbers and get to a positive. That's not the way it works. This is the equivalent of trying to cure a tequila hangover by switching to rum."

Speaking of mathematical truisms, Rick referred to the "cashless earnings" recently reported by a major financial institution. Though he's much smarter than the average bear, Rick confesses that he has "a very difficult time understanding the concept 'cashless earnings,' but the idea that people are excited about it from a bank whose assets are largely ephemeral and whose deposit liabilities people believe are real-that seems very, very problematic."

The idea of ephemeral assets leads to the topic of the U.S. dollar. Isn't its recent strength an encouraging sign? Rick repeats a wisecrack he hears (and makes): "The dollar is in fact the worse currency in the world except all the others." He also alludes to Doug Casey's description of the dollar: "IOU Nothing" (and the euro "Who Owes You Nothing"). As Rick sees it, "currency crises in the last couple of years have always been kicked off by the dollar because people understand its counterfeit nature. For example, if one measure of value is scarcity, they've made the dollar substantially less scarce in the last 18 months by printing so many of them. But so has everyone else. The race to the bottom in the context of the debasement of currencies is a hotly competitive arena. . .the descent will be gradual but punctuated by air pockets. I can't tell you when we'll hit dollar or euro or yuan or peso air pockets, but I guarantee it won't be pleasant on the way down."

When it comes to the debate about whether the current environment is inflationary or deflationary, he thinks the coin falls in favor of inflation. "From a traditional economic viewpoint, you'd have to say the circumstances are deflationary. We are in the midst of a balance sheet recession. We have lived beyond our means and can't service our debts. The normal way to get out of that would be to stop consuming, start earning, paying down debt, defaults and foreclosures-that's clearly deflationary."

The Yield-to-Politician Factor

But ours is a political economy, he argues, and therefore "If you look at inflation-versus-deflation in yield-to-politician (which is what matters), you find a politician has no yield whatever from deflation. A politician who presides over foreclosures and unemployment will get kicked out of office."

Looking ahead to the effects of this economic climate on the resource sector, it's not too surprising to hear Rick say he anticipates a mixed bag. He does expect resource stocks to face some trouble, because "when liquidity is drawn out of the market, either intentionally or as a consequence of hitting an iceberg, there's no mercy. When speculators have to sell, they sell what they can, not necessarily what they want to."

For those reasons, Rick sees "extraordinary volatility. . .with a downward bias in equities markets in general" over the next 12 months. He's been increasing his energy exposure, though; even in a weak economy, "I'm attracted to all forms of energy."

Energy: Powerful Attraction

He describes his outlook on oil prices over the next five years as "very, very bullish." The primary reason is that major oil producers are busy "reducing supply while stimulating demand." Contrary to popular belief, Rick explains, the familiar names we see on the gas pumps aren't culprits here; the major producers are the national oil companies of the world. For an extended period of time, he says, many of the those companies have diverted too much cash flow to "politically expedient domestic expenditure, including starving the oil and gas businesses for reinvestment capital while at the same time subsidizing gasoline, kerosene and heating oil prices." Even if they change direction now, he adds, it's "already too late to forestall declines that are built into their production."

The upshot? "Important exporting countries, especially Mexico, Venezuela, Peru, Ecuador, Indonesia and Iran, could very likely cease to export any oil at all within five years. A market where export demand is growing at 1.5% a year and export supply falls by 25% is in very dangerous imbalance. So without the influx of substantial new production from only three jurisdictions-Saudi Arabia, Kuwait and Iraq-much higher world prices are inevitable."

Rick isn't worried that the oversupply of natural gas will be a serious dampener of the crude oil price in that timeframe. While the infrastructure investment necessary to substitute liquid natural gas for gasoline as a motor fuel is coming, he doesn't see it on the near horizon. In the meantime, "demand for motor fuel will pull up residual fuel oil prices, which will steady the natural gas price." That's as good as it gets for as an energy investor, in Rick's opinion: "Steadily rising prices with moderating costs of production."

Energy investors may also be interested in Rick's take on the future of Canadian income trusts. Although he expects tax law changes taking effect next year to lead to restructuring, he also expects some of the corporations that emerge to remain active in plays that have presented unusually good opportunities to recycle free cash flow. Although investors who purchased trust units for yield might not like it, Rick says, "In the context of energy prices I see five years from now, I forecast actually a relatively bullish future for these companies. In particular, companies with large land exposure in areas where new technology has led to the revitalization of historic plays will grow their asset base by recycling the cash that they would otherwise distribute to unit holders," he says. He specifies four such plays:

• The Viking light oil play in Saskatchewan, where the advent of horizontal drilling and multi-stage frac completion techniques are enhancing oil recovery.
• The Bakkan in southern Saskatchewan, where wells tend to produce upwards of 200 barrels a day of sweet, light crude oil with 41 degree gravity-higher quality than Saudi oil.
• The Cardium in central Alberta, which is somewhat similar to the Bakkan, and where-also similar to the Bakkan-companies are using new horizontal drilling technologies and hydraulic fracturing techniques to exploit the formation's light oil assets.
• The various shale gases-Horn River and Motney shales in the Deep Basin in British Columbia, for instance. The potential of the Deep Basin in western Canada, on the eastern flank of the Rocky Mountain foothills was recognized in the late '70s, but only a fraction of that potential has been realized, because gas prices didn't rise the way they had to in order to justify exploration and development spending. Now, escalating gas demand and rising prices-plus the widespread availability of the aforementioned advanced drilling and completion technologies-are changing the economics.

Speaking of economics, Rick foresees North American natural gas trading in the range of $4 to $8 or $8.50 per million BTU, with occasional spikes lower or higher "over an extended period of time." At the lower end, few of the North American shale plays can produce economically, so drilling and production will fall off dramatically when gas prices are low, spot shortages will result and prices will rise in response. The higher price will re-stimulate drilling and production because it would be economic once more, until the price drops to the lower end of the band again and the cycle repeats.

"If you assume the middle of that band ($6 per million BTU) and fully loaded that the industry will be able to deliver gas in the shales for $4.50," Rick says, "the recycle ratios-the ability to redeploy earned capital to grow reserves and production" should make the North American natural gas industry be very lucrative for 10 to 15 years for the most efficient producers.

Furthermore, he states that the "very stable nature of the supply. . .will lead to increasing utilization of gas in North America across a variety of activities, including peak power generation but also ultimately as a motor fuel. In fact, he expects that with "incredible increases" in transmission infrastructures-largely out of Russia and North Africa into Europe and for LNG-natural gas will come to substitute for oil, at least in generation and petrochemicals. "And I think you'll see within five years fairly widespread adoption of natural gas as a motor fuel."

Rick acknowledges that North America has a systemic oversupply of natural gas, but he calls this "a really wonderful thing-good for investors, good for consumers, good for producers, good for everybody."

In summary, he says, "I feel better about the oil and gas sector than I do any other resource sector, with the sole exception of alternative energy."

Size, Scale and Mass Matter

While Rick sees constraints on the supply side (particularly in crude oil) over the next five years, he also sees energy demand (particularly from emerging markets) continue to climb. Societies are now competing for energy supplies that didn't have the financial wherewithal to do so 20 years ago. The increasing demand for energy crosses the spectrum from traditional fossil fuels to renewable resources. Of course, as he points out, alternative energy has an advantage over conventional energy in being politically correct. "You can permit this stuff; there is social and political acceptance of all forms of alternative energy. Because credit delivery is increasingly controlled by governments that have bailed out banks), financing is available for alternative energy projects.

Rick divides the alternative energies into basically two camps-those that work in an economic sense and those that work only in a political sense. He puts certain hydroelectric projects and many geothermal propositions in Camp A. Solar and wind occupy Camp B.

He considers geothermal the best of the bunch for major utilities because it generates baseline power consistently. It provides 24/7 power. Other alternatives present challenges: "Hydro, which I also like, has problems during a drought, during the summer. It requires water flow. Wind requires that the wind blows, and places where wind is a very efficient energy source are lousy places to live-the plains of North Dakota. Solar has this overarching problem-night."

Compelling Economics

The economics factor in the equation is compelling, too. In the U.S., Rick says that geothermal practically locks in secure near-term internal rates of return. "Utilities are being forced to offer feed-in tariffs for alternative energy that makes solar and wind economic. And the economic threshold of geothermal is much lower, so the impact of those feed-in tariffs on geothermal companies is a huge explicit subsidy. The other subsidy is even more explicit: gifts and subsidized loans from the Department of Energy." Rick posits that a geothermal operator can earn a 22% internal rate of return with a cost of capital less than 5%-far better than returns generated by solar or wind projects. "Cost of capital as a consequence of subsidies in the 5% range while unleveraged project and IRR can exceed 20% seems like an opportunity too good to forego," he says.

Penalties, too, add weight to the geothermal case. While it appears that Washington has put cap-and-trade legislation on the back burner for the time being, Rick says that penalties on coal are coming to the U.S. "Despite the political strength of senators and representatives from the coal states, who are doing whatever they can to forestall it, it is absolutely inevitable. And when it comes, major power producers who generate a lot of power from coal will need to diversify their energy sources to non-carbon-generating production. The best baseline non-carbon generating production out there, at least in the alternative sphere, is geothermal."

The economics are convincing enough that Rick says geothermal companies of "the correct size, scope and scale should focus most of their near-term activity in the U.S. while at the same time providing a pipeline in other areas of tertiary volcanic activity that will give them growth three to five years out. "In terms of security of cash flow and ease of financing, the low-hanging fruit is in the U.S.," he says. "The chances for quantum improvements, however, come in parts of the world where the geothermal resource has been less thoroughly explored and exploited. There are gigawatts of energy to be discovered and exploited in places like the Philippines, Indonesia and in particular Chile."

In his opinion, the geothermal arena does not appear to favor small players. Consolidation makes sense, at least in the U.S., and Rick says that's largely because the combination of the direct subsidies and incentives the utilities offer via power purchase agreements to meet government mandates put a premium on organizations with experience in financing, developing and operating plants. They have to attract management teams that have done it in the past and can do it now. Obviously, according to Rick, this doesn't lend itself well to market capitalization of $50 million or $100 million. "Size, scale and mass matter." For that reason, from economic point of view, small geothermal operators that can't raise money in $100 million and $200 million chunks are nonviable. As he sees it, "The only thing that could change the equation for the small entrants would be a real near-term boom in alternative energy stocks, that sort of rising tide that floats all ships."

Absent that rising tide, the thinks the consolidation up the food chain would be rational: "the micro-juniors absorbed into the mere juniors and the juniors themselves absorbed either by utilities or global power producers" until the whole sector is ultimately "upstreamed into the power generation sector, which is a very large, global, multi-billion dollar sector."

A potential geothermal spoiler arose in December. The day after the Swiss government permanently shut down a geothermal project in Basel blamed for causing earthquakes, a supposedly similar California project that was part of the administration's geothermal development program came to a halt. Although the two were not linked explicitly, the timing led to speculation that the California project ended for the same reason.

"People get cause-and-effect back-asswards," Rick states. "Geothermal activity that works engages in areas of tertiary volcanics and very young volcanic rocks. Young volcanic rocks are there because the areas are tectonically active. They have earthquakes. Apparently you can create micro seismic activity by changing the flow of water through subterranean rocks," he adds, "but the idea that a 12,000-foot hole 6 or 8 inches in diameter will be the catalyst that unlocks the San Andreas Fault is one of the silliest scientific rumors I've been exposed to in my life."

Unfortunately, he goes on, "Given the fact that our society seems to make all kinds of decisions based on how they feel as a substitute for having to think, I guess I can see this being a political issue. People tend to lend a lot more credence to the easy thing rather than spending 10 to 15 hours acquainting themselves with the basic tenets of geology or even thinking about how much 12,000 feet of strata weighs on top of a zone that might be impacted by the withdrawal of water. Ninety-nine percent of the people don't reflect. They react."

Still, the geothermal space holds great appeal for Rick and he thinks it remains politically correct. "It's useful to see that a major U.S. utility got an $8 billion subsidy from this administration to build nuclear plants in Georgia. If nuclear is going to be politically acceptable, I cherish the thought of well geothermal producers will be regarded."

Run-of-River Works, too

In addition to geothermal, run-of-river hydroelectric projects constitute the other alternative energy that works for Rick. Conventional hydro means building great big dams that not only cost a lot but do a lot of environmental damage. "In run-of-river hydro," he explains, "you are allowed, to store no more than 24 hours' flow, which means you don't do a lot of damage to the riparian environment."

Because run-of-river projects require cascading water to work, the best places are (not surprisingly) mountainous, such as North America's West Coast, with the Sierras and the Rockies, works well, as do the Andes in South America, the Himalayas in Asia, the Central African Rift. "You're taking water out of the water course in a cascade and returning it to the river at the bottom of the cascade. This doesn't impact fish life, either, because they don't live in places where the water pressure is so great," Rick says.

"There are many, many gigawatts of undeveloped run-of-river hydro projects around the world. The financing to put them in production is available, the technology is off-the-shelf, the engineering talent to build and operate these things is freely available." He expects junior companies to be able to build themselves over a period of eight to ten years, and when they reach critical mass because of the incredible stability of the cash flows they exhibit and the incredible ease of obtaining project financing, these companies will be sold at good multiples to power users."

Sounds a bit like a no-brainer, but Rick finds that it doesn't appeal to speculators. "The idea that somebody would put money in the face of a rational rate of return over an extended period of time in a bull market rather than gamble wildly to try and discover which penny stock the tooth fairy's going to alight on, sadly pulls capital from run-of-river toward tooth fairies. For me, that's wonderful. That I can buy stabilized internal rates of return more cheaply is a very good thing."

If? Or When?

According to Rick's analyses and observations over the years, "In bull markets at least, most speculators prefer 'if' questions. 'If' questions regard a fundamental speculation as to whether there will be a return of capital rather than a return on capital. So to the extent I can involve myself in undervalued speculations that have 'when' rather than 'if' answers, I prefer those. I consider a run-of-river project in terms of a 'when' question. When will project financing occur? When will the project go into production? Having gone in production, when will somebody else pay more for the cash flow that the company's current shareholders are paying?

Rare Earths: Too Much Ado?

Rick considers rare earth metals the latest of a fairly interesting, basically North American phenomenon, sector rotation. In a bull market, where sectors get ahead of themselves, promoters make money dreaming up new stories, and stories in a sector where people haven't been burned before are the easiest to sell. "Nobody had ever lost money in niobium or gallium or germanium because nobody could pronounce them or spell them" until these stories came out, he notes. "I think this is an enormous bubble that's going to crash. I have been delivering a lecture at some conferences about the real emerging minerals in this market-storium, fraudium, scamium, or for those who saw Avatar, my new favorite, unobtainium."

'"Yes, this stuff can be used in cell phones (in miniscule amounts). Yes, lithium has some future in batteries." But the fact is, Rick says, the worldwide market for rare earth elements is about $2 billion. As he works out the math, it doesn't work. "If you assume a 30% margin (which I don't know is reasonable number)," he figures, "you are talking about $600 million in EBITDA. At a 10 times EBITDA number, you're talking about a $6 billion prospective market cap of that industry."

He cites another mystifying bit of math. "The largest lithium producer in the world is now down to 140 years' supply of lithium. The only reason they don't have a bigger supply is there's no particular sense spending money now to develop resources that you'll need in 150 years."

Urani-Mania Rerun

In contrast to the rare earth elements' tale, Rick believes that the uranium story that fed the mania three years ago remains credible. In fact, he says, "Everything that was true in the uranium story three years ago was 10 years ago and it's all true today, but it's been priced differently." That's because uranium-which first captured his attention in the early 2000s when it was pretty unpopular, trading below $10 per pound and bottoming out at $7.10 on December 25, 2000-"is a strategic fuel that has a great place in the world's energy mix. The world is consuming more uranium than it produces. . .the above-ground supply will eventually go away and there will be shortages."

He lost interest during the manic period of 2007, when the uranium price peaked at nearly $138 per pound, but is looking at uranium stocks again, with yellowcake prices pretty much confined to the $40 to $50 band since the end of 2008. Because we consume more than we produce, we will have shortages, and the competition among users who need it will drive up prices, he reasons. "Many countries are staking their energy future on uranium. I don't believe all of the plants that are planned and talked about now will be built, but enough will be built that there will be severe supply shortages. The uranium price has to go up to reflect that," he says, "and more importantly, it can go up. The price of uranium is a fairly small component of the cost of the electrical production from a nuclear power plant; the price could double and still not have too measurable an impact on the power price that comes out of the reactor."

As he surveys the uranium landscape, Rick sees a world that "hadn't looked for uranium for 20 or 25 years as a consequence of the fact that they were losing so much money on the uranium that they had found. When uranium prices rose and the uranium companies were able to attract cheap capital and deploy it to exploration, there was an amazing amount of low-hanging fruit because for all practical purposes it was a new activity. There have been some very attractive recent discoveries that haven't been rewarded with the escalation of market capitalizations that you would have seen with a discovery of equivalent value in the gold business," he adds.

A new twist to the uranium story makes it even more compelling than before, in Rick's view. "In the past, the development of a uranium mine was really the sole province of a major or a super-major," he observes, "but increasingly-due to the strategic nature of uranium deposits-juniors that discover major uranium deposits will have financing options open to them that were not open in the past." He explains that lenders increasingly are requiring plant operators to lock in supplies of uranium over the entire amortization period of the loan. For example, if an operator were to build a new reactor in for $6 billion and borrowed $4 billion over 30 years to finance it, the bank would require them to lock in a million pounds of uranium a year for 30 years. Given that there are well over 100 reactors planned for the next 10 years, probably 50 of which will be built, I believe there will be incredible demand to lock in supplies. Those off-take agreements can be used by fairly small companies to finance the construction of uranium mines."

Make Volatility Your Ally

The "extraordinary volatility" Rick foresees in the equity markets might scare some investors away, but he argues, "Volatility's good if you use it as opposed to being used by it. It allows you to pick up assets on the cheap. I don't try to mitigate volatility. I think volatility is a tool. I try to enhance it. I have learned to react with absolute delight when a stock I think is worth a dollar falls to 50 cents. I buy the hell out of it at 50 cents. I seek to profit from volatility rather than to guard against it."

Rick Rule, founder of Global Resource Investments, began his career in the securities business in 1974, and has been principally involved in natural resource security investments ever since. He is a leading American retail broker specializing in mining, energy, water utilities, forest products and agriculture. Rule's company has built a national reputation for its specialist expertise in taking advantage of global opportunities in the oil and gas, mining, alternative energy, agriculture, forestry, and water industries.

Key to their successful efforts to pass A.B. 32 - the Global Warming Solutions Act of 2006 - legislative proponents and the California Air Resources Board promised state residents the bill would have a net effect of creating jobs.

According to the Legislative Analyst's Office, however, A.B. 32 will have a net effect of killing jobs for as far into the future as LAO can predict.

Additionally, A.B. 32 will "almost certainly raise" prices of electricity, gasoline, and other energy sources for as far into the future as LAO can predict.

LAO has been providing fiscal and policy advice to the Legislature for more than 65 years. It is overseen by the Joint Legislative Budget Committee (JLBC), a 16-member bipartisan legislative committee. LAO currently has a staff of 43 analysts and approximately 13 support staff.

[Apparently California took Al Gore seriously . . . . more from James W. Taylor]

Al Gore Ratchets Up the Namecalling

Is Al Gore out of touch with reality, or just plain mean? In an editorial Gore published in yesterday's New York Times we got a rare peek - now that another long, cold winter has driven the alarmist AWOL for several months - into the mind of the man who for the past 22 years has been crying "the sky is falling!" What we saw yesterday was not pretty.

While calling television commentators who disagree with his alarmism as "showmen masquerading as political thinkers who package hatred and divisiveness," Gore embodies the very definition of such hatred and divisiveness, perjoratively calling skeptics of his alarmist theories "deniers" who will be remembered as "a criminal generation."

Throughout his editorial, Gore adheres to his predictable, misleading propaganda points that by now we all know by heart. For example, he again refers to his alarmism as embodying "the overwhelming consensus," yet even disgraced global warming alarmist Phil Jones - the central figure in the Climategate scandal - has acknowledged there is no overwhelming scientific consensus that "the debate is over." Indeed, Jones himself, who is among the most prominent and activist scientists pushing Al Gore's alarmism, admitted he personally does not think the debate is over, either.

After 22 years of Al Gore leading an onslaught of name-calling, labeling, and ridiculing of scientists at the world's most prestigious institutions of research and higher learning who disagree with the career politician's Hollywood-embellished alarmism, Gore has the audacity (or dementedness) to excuse the data-destroying activities of the Climategate figures as the result of being "besieged by an onslaught of hostile, make-work demands from climate skeptics." In Al Gore's world, a skeptical scientist who notices apparent flaws in the research of a scientist/advocate and politely requests access to the raw data to verify the hypothesis (i.e., The Scientific Method) is engaging in "hostile, make-work demands." By contrast, in Al Gore's world career politicians are engaging in no such hostile, divisive activity when they belittle science professors and research scientists at prestigious institutions such as Harvard, Yale, Princeton, MIT, and NASA as "flat earthers" believing in a "staged moon landing" simply because they see compelling scientific reasons why we are not facing the type of global warming crisis advocated by Al Gore.

If Al Gore is interested in objective, truthful scientific discussion, he should cut the shrill demonization of scientists who disagree with him and accept one of the many offers extended by the Heartland Institute and others to publicly debate the science he claims is so settled.

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The subtext of the war is the deliberate destruction of human life on the planet on a mass scale.

9 Mar 10 - (Excerpts) - Right now the world is engaged in the latest battle of a "climate war" that has been going on since the 1970s when the Club of Rome concluded in a report titled, "The real enemy then, is humanity itself", that the world's population had to be reduced.

Whereas wars in the modern era have killed millions and communism as practiced in the former Soviet Union and the early decades of Red China under Chairman Mao killed millions more on a scale with which war could not compete, the advocates of population reduction rival the worst despots to have ever walked among us.

Billions are at stake so far as the "climate scientists" are concerned. They have received millions for their research in the United States and in England. Presumably other nations, too, have provided such grants and the result of the research must always be a continuation of the "global warming" fraud. Beyond the scientists are those who profit from the sale of "carbon credits" to permit "greenhouse gas emissions", and the millions that environmental organizations such as Friends of the Earth, the Sierra Club, and others rake in.

It is no surprise, then, that those who have been victimized by the fraud will see a coordinated campaign of opinion editorials in newspapers, advertisements, and other means to keep the "global warming" fraud intact. These efforts have been renamed "climate change", but therein lies the utter mendacity of the campaign because the Earth has always passed through cycles of climate change and always will.

On February 15th, the Boston Globe published an opinion editorial by Kerry Emanuel, the director of the Program in Atmosphere, Oceans, and Climate at the Massachusetts Institute of Technology. It was filled with the usual "global warming" themes; the repetition of the lie that carbon dioxide and other minor atmospheric gases are causing a huge shift that is warming the Earth. Smoothly, the inaccuracies of climate computer models are dismissed as "uncertainties" resulting in "divergent predictions."

At best, if your local weatherman can accurately predict what will occur in the next two to four days, he's doing fine.

Predicting what the climate-not the weather-will be decades and even centuries from now is pure fiction. It is the claim that is central to "global warming" and/or "climate change."

In a rebuttal to Emanuel's opinion editorial, Bill Gray, Professor Emeritus, Colorado State University, noted that "A high percentage of meteorologists and/or climate scientists do not agree that the climate changes we have seen are mostly man-made. Thousands of us think that the larger part of the climate changes we have observed over the last century are of natural origin." He added, "Over 31,000 American scientists have recently signed a petition advising the U.S. not to sign any fossil fuel reduction treaty."

Myron Ebell, director of the Competitive Enterprise Institute, has just released a statement based on the release of still more emails between desperate "climate scientists" whose careers depend on the "global warming" fraud.

"According to recently disclosed e-mails from a National Academies of Science listserv, prominent climate scientists affiliated with the U.S. National Academies of Science, have been planning a public campaign to paper over the damaged reputation of global warming alarmism."

The emails explored the ways the public could be distracted from the revelations of Climategate and enticed back to believing that "global warming" is based in real science and occurring. Among the suggestions were "Op eds in the NY Times and other national newspapers would also be great."

Referring to this as a climate war is no exaggeration.

What the public has never grasped is that this is not a science-based war. It is entirely political in nature and the Green's enemy has been the resource industries, oil, natural gas, and coal, that provide the means by which energy is generated for industrial use and for societies that depend on electricity to function. The subtext of the war is the deliberate destruction of human life on the planet on a mass scale.

That explains why it is especially troubling that President Obama continues to refer to global warming as real, and advocates "cap-and-trade" legislation, the largest tax on energy use in the history of mankind. It is the reason he continues to divert millions to "clean energy" and "green jobs", neither of which have ever proven to equal traditional energy sources or provide sufficient employment to merit support.

So now the climate wars shift into a new phase, one intended to obfuscate and confuse the public again in the quest to foist the greatest fraud and attack on mankind in human history.

----------------------------------------

Editor's Note: For further insight, read Dr. Tim Ball's commentary :

To learn why the world's glaciers are not melting and the seas are not rising, click here:

© Alan Caruba, 2010

See entire article:
http://canadafreepress.com/index.php/article/20836
Thanks to Alan Caruba for this link

After two studies refuted President Barack Obama's assertions regarding the success of Spain's and Denmark's wind energy programs, a Freedom of Information Act (FOIA) request reveals the Department of Energy turned to George Soros and to wind industry lobbyists to attack the studies.

Via the Freedom Of Information Act request, the Competitive Enterprise Institute has learned that the Department of Energy - specifically the office headed by Al Gore's company's former CEO, Cathy Zoi - turned to George Soros' Center for American Progress and other wind industry lobbyists to help push Obama's wind energy proposals.

The FOIA request was not entirely complied with, and CEI just filed an appeal over documents still being withheld. In addition to withholding many internal communications, the administration is withholding communications with these lobbyists and other related communications, claiming they constitute "inter-agency memoranda." This implies that, according to the DoE, wind industry lobbyists and Soros's Center for American Progress are - for legal purposes - extensions of the government.

This is a defense commonly employed against FOIA requests when seeking to withhold certain communications with, for example, paid consultants.

As candidate and president, on eight separate occasions Barack Obama instructed Americans to "think about what's happening in countries like Spain [and] Germany" if they wanted to know what successful "green jobs" policies look like, and if they wanted to know what we should expect here in the U.S. from his agenda.

Some European economists took a look. In March, a research team from Madrid's King Juan Carlos University produced a detailed, substantive, heavily sourced, two-method paper: "Study of the Effects on Employment of Public Aid to Renewable Energy Sources." The paper concluded that Spain's "green jobs" program was an economic failure, in fact costing Spain many jobs.

The president of Spain's renewable energy association - along with a Communist Party affiliated trade federation - decried the paper's lead author as being unpatriotic.

The former wrote in Spain's leading paper, El Mundo, slamming the research paper. However, he did not critique the paper itself - he agreed with its conclusion. He was furious only that the study was publicized. By revealing the truth about Spain's increasingly mythologized "green jobs" and renewable energy experience, the revealed study threatened the prospects for Spain's companies to be bailed out by the U.S. repeating these mistakes.

Incidentally, this became a common refrain. After the Spanish study embarrassed the White House, prompting substantial media attention and even questioning at a press conference, Obama swapped out Denmark for Spain for later references to an enacted "green jobs" program.

Soon, Denmark produced a study ("Wind Energy: The Case of Denmark") through the think-tank CEPOS. This paper also revealed tremendous costs, and that Obama's claim about Denmark's "renewables" experience was also steeped in mythology.

The response from windmill advocates in Denmark was similar: such studies threaten Danish industry by reducing the chances that the U.S. will serve as the hoped-for massive new market to make inefficient energy sources profitable for their foreign manufacturers (Danish Radio TV News, Thursday, February 25, 2010).

Back in the U.S., the American Wind Energy Association - the lobby for "Big Wind" in Washington, D.C., which includes a few Spanish wind giants - also attacked the publication of the Spanish paper.

Soon, the Obama administration published a five-page talking points memo assailing the economic assessment - written by two young, non-economist, pro-wind activists from the National Renewable Energy Laboratory (NREL) in Boulder, Colorado.

NREL is an extension of the Department of Energy's Office of Energy Efficiency and Renewable Energy (EERE). EERE is run by Assistant Secretary of Energy Cathy Zoi, who, until assuming this post, served as CEO to Al Gore's Alliance for Climate Protection. Zoi is responsible for many millions of the "green jobs" stimulus dollars pushed for and designed by Van Jones (this according to Jones himself).

The Obama administration's criticisms - drafted in often personal terms - distilled to two main points, which we now know were politicized, lobbyist-assisted complaints. These were:

- The Spanish paper suffered from a "lack of rigor."

- The Spanish paper applied "consensus economics."

NREL made the most noise regarding the latter, upset that the Spaniards refused to use the input-output (or Leontief) methodology designed for central planning, in which all is assumed to be knowable, controllable, and static. This method has been discredited outside of social democratic government agencies and select associations. Instead, the Spanish study relied upon methodology employed by real-world businesses in competitive fields when deciding how to deploy resources - which is not "non-traditional," as claimed by NREL.

When the two studies had appeared, I wrote:

In the face of some recent pushback - for example, from the studies out of Spain and Denmark referenced in this space on numerous occasions - the windmill welfare queens over at the American Wind Energy Association (AWEA) have been cranking up the snivel volume to eleven.

Reading the group's press releases it does seem that they even had a hand in getting the president of the United States to sic a taxpayer-funded agency on a foreign academic study about a foreign country's experience with its own policies, because said academic team and its writings threaten the welfare if the word gets out.

Thanks to the Freedom of Information Act, we now know that the assertion was correct. The Obama administration produced this denunciation at the behest of, and with the active participation of, the wind energy's lobby.

The first sign that something improper had occurred came when NREL responded to media inquiries claiming that the paper was entirely the DoE's idea, while the DoE's Office of Congressional Affairs wrote to a Senate oversight office to claim that it was all NREL's doing.

As I noted in my FOIA requests to both DoE and NREL:

We note that one of two co-authors of the above-cited NREL paper, which paper attests that "This report was prepared as an account of work sponsored by an agency of the United States government," is on record in an E&E News story announcing of the project, "DOE requested the analysis be performed."

However, DOE Congressional Affairs is on record saying the following:

NREL initiated the report on their own as part of their on-going analytical role to assess emerging issues and monitor external studies and develop internal memos or external documents to address research that is at odds with DOE/EERE scientific understanding.

We therefore seek documents revealing the origins of the effort and clarifying the alternating, mutually exclusive claims of NREL saying DoE told me to do it and DoE telling Congress that it was all NREL's idea, fully aware of of DoE's extant protestations to congressional offices that the above-cited paper is of like kind with other NREL products (noting here that no paper DoE cites is comparable on any level [citations omitted]).

The question "which time are you lying?" came to mind, though it was not at all clear that the answer could not be "both." The FOIA documents - 900 pages, so far - show great internal concern among high level DoE political appointees when this question was pressed, and a resistance to put the answer in writing.

The provided documents conclude with emails citing late-night phone calls to get the story straight, and calling - with "high importance" - a meeting at 9:00 a.m., September 22, 2009, in the office of Ms. Zoi's chief operating officer, Steven Chalk. The meeting was called to "huddle up" face-to-face to put things straight.

Congressman James Sensenbrenner wrote to Ms. Zoi two days later, asking five specific questions about how and by whose instruction this NREL paper was produced. On January 6, 2010, Zoi wrote back with a one-paragraph reply which either failed or refused to provide answers to any of the queries.

We now know that the prospect of such answers seeing the light of day was clearly of great concern to the DoE. This raises the question of whether, by refusing to share information sought by the ranking Republican on the House Select Committee on Global Warming, Ms. Zoi lied to or misled a member of Congress exercising his legitimate oversight function.

Over the coming days I will produce specifics of these internal emails and emails between the administration and the windmill lobby (think numerous European companies, not merely a few utilities and GE).

--------------------------------------------

Chris Horner - Science & Public Policy Institute acknowledges as Source:  Pajamas Media

Both parts of Gore's statement are false.

Never mind that Mr. Gore makes only passing reference to the IPCC's fraudulent claims that the Himalayan glaciers will all melt by 2035. ("A flawed overestimate," he explains.)

Never mind that Mr. Gore dismisses the IPCC's fraudulent claims that the oceans are rising precipitously. ("Partly inaccurate," he huffs.)

Never mind that Mr. Gore completely ignores the admission by the CRU's disgraced former director Phil Jones that global temperatures have essentially remained unchanged for the past 15 years.

I'll let someone else dissect Gore's lawyering comments, and concentrate on just the one sentence about melting ice, because neither part of that sentence is true.

Contrary to Gore's assertions, almost all of the ice-covered regions of the Earth are growing, not melting - and the seas are not rising.

Let's look at the facts.

If you click on the words "are melting" in Gore's article, you're taken to a paper by Michael Zemp at the University of Zurich. Mr. Zemp begins his paper by warning that "glaciers around the globe continue to melt at high rates."

However, if you bother to actually read the paper, you learn that Zemp's conclusion is based on measurements of "more than 80 glaciers."

Considering that the Himalayas boast more than 15,000 glaciers, a study of "more than 80 glaciers" hardly seems sufficient to warrant such a catastrophic pronouncement. 

Especially when you learn that of those 80 glaciers, several are growing.

Growing. Not melting.

"In Norway, many maritime glaciers were able to gain mass," Zemp concedes. ("Able to gain mass" means growing.)

In North America, Zemp also concedes, "some positive values were reported from the North Cascade Mountains and the Juneau Ice Field."  ("Displaying positive values" means growing.)

Remember, we're still coming out of the last ice age. Ice is supposed to melt as we come out of an ice age. The ice has been melting for 11,000 years. Why should today be any different? I'm guessing that most Canadians and Northern Europeans are very happy that the ice has been melting.

Unfortunately, that millenniums-long melting trend now appears to be changing. No matter how assiduously Mr. Gore tries to ignore it, almost all of the ice-covered regions of the Earth are now gaining mass. (Or, displaying positive values, if you will.)

For starters, let's look at those Himalayan glaciers. In a great article, entitled "World misled over Himalayan glacier meltdown," Jonathan Leake and Chris Hastings show that the IPCC's fraudulent claims were based on "speculation" and "not supported by any formal research."

As a matter of fact, many Himalayan glaciers are growing. In a defiant act of political incorrectness, some 230 glaciers in the western Himalayas - including Mount Everest, K2 and Nanga Parbat - are actually growing.  

"These are the biggest mid-latitude glaciers in the world," says John Shroder of the University of Nebraska-Omaha. "And all of them are either holding still, or advancing."

And get this. Eighty seven of the glaciers have surged forward since the 1960s.

So much for Mr. Gore's "more than 80 glaciers."

(I don't know how many Himalayan glaciers are being monitored, but my guess would be fewer than a thousand, so it's possible that hundreds more are growing. There aren't enough glaciologists in the world to monitor them all.)

But we don't need to look to the Himalayas for growing glaciers. Glaciers are growing in the United States.

Yes, glaciers are growing in the United States.

Look at Washington State. The Nisqually Glacier on Mt. Rainier is growing. The Emmons Glacier on Mt. Rainier is growing. Glaciers on Glacier Peak in northern Washington are growing. And Crater Glacier on Mt. Saint Helens is now larger than it was before the 1980 eruption. (I don't think all of the glaciers in Washington or Alaska are being monitored either.)

Or look at California. All seven glaciers on California's Mount Shasta are growing. This includes three-mile-long Whitney glacier, the state's largest. Three of Mount Shasta's glaciers have doubled in size since 1950.

Or look at Alaska. Glaciers are growing in Alaska for the first time in 250 years. In May of last year, Alaska's Hubbard Glacier was advancing at the rate of seven feet (two meters) per day - more than half-a-mile per year. And in Icy Bay, at least three glaciers advanced a third of a mile (one half kilometer) in one year.

Oh, by the way. The Juneau Icefield, with its "positive values," covers 1,505 square miles (3,900 sq km) and is the fifth-largest ice field in the Western Hemisphere. Rather interesting to know that Gore's own source admits that the fifth-largest ice field in the Western Hemisphere is growing, don't you think?

But this mere handful of growing glaciers is just an anomaly, the erstwhile Mr. Gore would have you believe.

Well, let's look at a few other countries.

Perito Moreno Glacier, the largest glacier in Argentina, is growing.   

Pio XI Glacier, the largest glacier in Chile, is growing.

Glaciers are growing on Mt. Logan, the tallest mountain in Canada.

Glaciers are growing on Mt. Blanc, the tallest mountain in France.

Glaciers are growing in Norway, says the Norwegian Water Resources and Energy Directorate (NVE).

And the last time I checked, all 50 glaciers in New Zealand were growing.  

But this is nothing. These glaciers are babies when you look at our planet's largest ice masses, namely, the Antarctic and Greenland ice sheets.

Contrary to what you may have heard, both of those huge ice sheets are growing.

In 2007, Antarctica set a new record for most ice extent since 1979, says meteorologist Joe D'Aleo. While the Antarctic Peninsula area has warmed in recent years, and ice near it diminished during the summer, the interior of Antarctica has been colder and the ice extent greater.

Antarctic sea ice is also increasing. According to Australian Antarctic Division glaciology program head Ian Allison, sea ice losses in west Antarctica over the past 30 years have been more than offset by increases in the Ross Sea region, just one sector of east Antarctica.

The Antarctic Peninsula, where the ice has been melting, is only about 1/50th the size of east Antarctica, where the ice has been growing. Saying that all of Antarctica is melting is like looking at the climate of Oregon and saying that this applies to the entire United States.

There was not any evidence of significant change in the mass of ice shelves in east Antarctica nor any indication that its ice cap was melting, says Dr. Allison. "The only significant calvings in Antarctica have been in the west." And he cautioned that calvings of the magnitude seen recently in west Antarctica might not be unusual.

"A paper to be published soon by the British Antarctic Survey in the journal Geophysical Research Letters is expected to confirm that over the past 30 years, the area of sea ice around the continent has expanded."

What about Greenland?

Greenland's ice-cap has thickened slightly in recent years despite wide predictions of a thaw triggered by global warming, said a team of scientists in October 2005.

The 3,000-meter (9,842-feet) thick ice-cap is a key concern in debates about climate change because a total melt would raise world sea levels by about 7 meters.

But satellite measurements show that more snow is falling and thickening the ice-cap, especially at high altitudes, according to the report in the journal Science.

The overall ice thickness changes are approximately plus 5 cm (1.9 inches) per year or 54 cm (21.26 inches) over 11 years, according to the experts at Norwegian, Russian and U.S. institutes led by Ola Johannessen at the Mohn Sverdrup center for Global Ocean Studies and Operational Oceanography in Norway.

Not overwhelming growth, certainly, but a far cry from the catastrophic melting that we've been lead to believe.  

Think about that.

The Antarctic Ice Sheet is almost twice as big as the contiguous United States.

Put the Antarctic and Greenland Ice Sheets together, and they're one hundred times bigger than all of the rest of the world's glaciers combined.

More than 90 percent of the world's glaciers are growing, in other words, and all we hear about are the ones that are shrinking.

But if so many of the world's glaciers are growing, how can sea levels remain the same?

They can't. The sea level models are wrong.

During the last ice age, sea levels stood some 370 feet (100 meters) lower than today. That's where all of the moisture came from to create those two-mile-high sheets of ice that covered so much of the north.

And just as the ice has been melting for 11,000 years, so too were sea levels rising during those same years.

But the rising has stopped.

Forget those IPCC claims. Sea levels are not rising, says Dr. Nils-Axel Mörner, one-time expert reviewer for the IPCC.  

Dr. Mörner, who received his PhD in geology in 1969, is one of the greatest - if not the greatest - sea level experts in the world today. He has worked with sea level problems for 40 years in areas scattered all over the globe.

"There is no change," says Mörner. "Sea level is not changing in any way."

"There is absolutely no sea-level rise in Tuvalo," Mörner insists. "There is no change here, and there is zero sea-level rise in Bangladesh. If anything, sea levels have lowered in Bangladesh."

"We do not need to fear sea-level rise," says Mörner. "(But) we should have a fear of those people who fooled us."

So there you have it. More falsehoods from Al Gore, the multimillionaire businessman who some say is set to become the world's first carbon billionaire.

Our glaciers are growing, not melting - and the seas are not rising.

I agree with Dr. Mörner, but I'd make it a tad stronger. We should have a fear of those people who have conned us.

-------------------------------------------------

Robert W. Felix is author of Not by Fire but by Ice, and publisher of www.iceagenow.com/.

You can get an insider's view of part of the English Parliament's investigation of scientific misconduct at the University of East Anglia's Climatic Research Unit (CRU) by reading this written submission of evidence to that investigation by Dr. Ross McKitrick , a professor of environmental economics at the University of Guelph, Ontario, Canada, and contributor to the Cornwall Alliance's A Renewed Call to Truth, Prudence, and Protection of the Poor: An Evangelical Examination of the Theology, Science, and Economics of Global Warming. If anybody tells you the emails and computer code released from CRU last November are a tempest in a teapot and seem significant only if taken out of context, send him to this. The case for intentional deception is overwhelming.

A few highlights:

• Right at the start, McKitrick demonstrates that two of the five members of the Parliamentary investigating committee were hopelessly biased by their own previous statements and activities to find in favor of the CRU and its erstwhile director, Phil Jones. (One of them resigned under pressure. The other remains. How probable is it that, by accident, two members with strong bias in the same direction were appointed to an investigative panel of only five members despite there having been strong safeguards written into the selection process?)
• Farther along, McKitrick explains exactly why the word "trick" in one famous email is completely irrelevant, but the phrase "hide the decline" is enormously important, exposing intentional effort to hide evidence that undermines the IPCC's entire case that late 20th century warming is historically unprecedented, and therefore the need for any reference to human activity to "explain" it.
• And later still, McKitrick demonstrates, with precise documentation, how Jones and other IPCC authors corrupted the peer review process to keep contrary evidence out of the 2007 Assessment Report.
• And don't miss Appendix B, a refutation of the IPCC's 2007 Assessment Report's claim that atmospheric "arctic oscillations" explained away the large fictitious warming signal from urban heat island effect and other land use changes.

Full Report HERE

Redundant File

The Energy Report: Let's start with your quick macro overview of the various energy sectors-would you be in oil, gas, uranium? Then we'll drill down into what you see as some opportunities.

Marin Katusa: Sure, I'll start with natural gas. As I've told Energy Report readers before, natural gas is a very localized market. It's very geographic-dependent, based on varying infrastructures. With that as a backdrop, we see North American natural gas going sideways or down near term. We don't see it going to $10, and in fact, expect it to stay under $6.50, even maybe below $6 over the next six months. I discussed our main reason for that view in an article called "The Hidden Supply of Natural Gas in the U.S." Thousands of wells have been drilled, waiting for to be completed. Any of them could come on stream within 72 hours, so that's a lot of supply.

TER: What do you think about uranium these days?

MK: Again, I am going to sound like a negative guy. Uranium is going sideways to down. The long-term spot will stay where it is-sideways to down-but that doesn't matter. Five years ago, when uranium was at $15, if you had asked uranium companies how they would feel about $40 uranium, they would have been ecstatic. This just proves to people that you want to be investing in companies that are real. In the uranium world, that means ISL (in situ leaching) in the U.S. or the Athabasca Basin where grade is king and where $40 is economic for certain deposits.

TER: And oil?

MK: I believe $80 oil has a lot of weakness. Even though there's a lot of speculation, I don't see oil popping to previous highs in the near term (within six months), because people are looking for tangible assets. We use $45 per barrel for our numbers. That's proving very successful in our newsletter because you only invest in the most undervalued and best companies that can actually return a significant profit at $45.

TER: The markets have run up since the March lows last year. What are you telling subscribers in terms of whether they should commit more capital to this market?

MK: Let me set a bit of context here before I answer that. When we introduced the Casey Free Ride formula in the June 2008 issue, I went on TV and radio, and I was ridiculed for telling investors to take a "Casey Free Ride." People were emailing and phoning. Brokers in the streets were saying, "You've lost your mind; you should go back to teaching calculus at the university. How do you not understand this is the greatest bull market of our career? How could you be selling these stocks?"

That's because the Casey Free Ride is all about taking profits off the table when a stock you hold has appreciated by a certain percentage or amount. People fall in love with stocks. The companies get angry at you for selling their stocks. It's a very small world here in Vancouver, so I've become very unpopular for selling these junior companies. Do I care? No, because I make our subscribers money. This is the real world; selling stocks is how you make money. If your broker gets upset with you for selling a stock because he's friends with management or he sees an upside, fire that broker. He is not working in your best interest. It's about making money.

So I introduced the Casey Free Ride in mid-2008. We all know what happened four months later. Was I a little bit early? Sure. Did we nearly get the top? Yeah. So, was it a great call? It was a fantastic call when we mentioned to take a Casey Free Ride in the June 2008 Casey Energy Report.

It's funny when I think back to the summer of 2008, for two months people were laughing at me, but subscribers who followed that advice did very well. We put five buy recommendations in the November 2008 issue; that's a very rare newsletter with five recommendations in. And those produced potentially up to more than 10 times your money, depending on if you bought, if you went in. In this game, you only get profits when you sell.

So what are we telling subscribers? We're telling people to make sure they have zero-risk capital in the game. If you invested $10,000 in a stock and it's trading at $16,000, pull out that $10,000. The liquidity of these junior stocks is so brittle. In an environment where a junior's trading at four, five, 10 times its average volume, you have to sell. We've all seen these markets go zero bid or illiquid and then you can't sell your stock. So, that's what we've told our subscribers.

So why do I say that? Number one, I want people to book gains and have their powder dry when the market correction hits. One of the most important lines you'll hear in this report is "keeping your powder dry"-that's keeping cash on the side. The Rockefellers were famous for saying, "Buy when there's blood in the streets." You can only do that if you have cash when there's blood in the streets. You have to be forward-thinking.

TER: And how's that working for you now?

MK: In the last issue of the Casey Energy Report, we basically said we cut a third of our companies and closed the positions. It was a tough thing to do as you like holding the winners, and its psychologically difficult to sell, but you must stay disciplined and sell. We've used the Casey Free Ride Formula on almost 75% of the portfolio and we have closed a little over 35% of all the stocks in our portfolio. We've had fantastic runs. We've had stocks return over 10 times.

Our portfolio has done fantastic; we're sitting here on the sidelines; we've got a lot of cash, and we're waiting. We've not just been watching the Olympics every day. We're actually doing our homework, interviewing companies, running our database models. And we're waiting for companies that I like that are overvalued right now so they hit our price targets. We run fundamental values. When I introduce the stink bids I get a lot of negative feedback, but that's a psychological reinforcement confirming that the market is overvalued right now.

TER: What are some of these overvalued stocks that you're watching and waiting for to hit your price targets?

MK: A perfect example would be Ram Power Corporation (TSX: RPG). One of my very close friends and mentors is one of Ram Power's largest investors in that, Rick Rule. Rick will work his book, and, you know, God bless his soul, he's a great man. But I crunch the numbers on it; I think it's a good buy under $3. This stock has gone over $4, and it hit a low recently of C$2.91. I got hundreds of emails asking, "Hey, it's C$3.06, should we go buy it?" I said, "Let's hold tight. If it hit C$3.06, it's probably going to hit C$2.96." And it went to C$2.91, and our subscribers got in, and it took many months to do so. Discipline is the name of the game. Unfortunately for the buy side, from that C$3.06, it ran to over C$4, but then it came back. Just be patient. And this is a PERFECT example of how it came back from C$4 to C$2.91 and our subscribers got filled. So, that's a perfect example of a company I really like and I really like their investors. It will take only one or two funds to blow up to get that stock down to C$2.75 or C$2.50 or even C$2.90; so, be patient.

TER: And patience will pay off.

MK: Another perfect example is another company I really like. In our Casey Energy Confidential alert service, we told subscribers to be patient and wait and buy under C$1.50. It got there, and traded millions of shares under C$1.50. Within three weeks we had over 25% profit, and we told subscribers to take the risk capital out-take the Casey Free Ride. Then about a month later, I said the exact same thing in the Casey Energy Report. It hasn't hit our price target, but it came down to a $1.54.

TER: Which company is this?

MK: Magma Energy Corp. (TSX:MXY); that's where Ross Beaty is the Chairman and CEO. We have the utmost respect for Ross Beaty; Doug Casey calls him the "broken slot machine" because he's delivered nothing but profits for its people. Am I being Scrooge being very picky for a few pennies here and there? Probably, but there's no rush to own these stocks. That's the type of market we're in now.

TER: So, where would you buy Magma?

MK: Under C$1.50.

TER: I can see where Magma might not like that.

MK: You know, it's difficult, but I'm not paid by the companies. I am not paid by the promoters. I am paid by my subscribers, and I have to do the most prudent and right thing for them. The reason we have so much clout in the market is because they know that we're out there pounding the streets for them. You treat your subscribers well, and they'll treat you well.

TER: Any other geothermal companies on your radar?

MK: Breaking it up by risk level, what I call the Cameco Corporation (NYSE:CCJ;TSX:CCO) of the geothermal world is called Ormat Technologies, Inc. (NYSE:ORA). That is as vertically integrated a geothermal company as you can get. They build the geothermal plants; they explore and develop geothermal plants; they run other people's geothermal plants. This is as good a geothermal company as you can get.

Suppose you're in your 60s and don't have an appetite for risk, Ormat is not going to quadruple. It won't have the potential of a Magma or a Ram Power, but it's a solid company that makes money, has great production-more than 500 megawatts of production-and it's without a doubt the leader of the geothermal sector. However, the company has got into some trouble with some violations in their financials, and they may have a lawsuit on their hands. If everything clears out, I really like this company, but would wait and see what happens in the weeks to follow and pick some up after the smoke clears.

TER: Any others?

MK: As you know, Louis James runs the mining side of our Research Department. This guy lives on the road, and no one kicks more rocks than Louis. He is as critical and smart as they come. He went out to Serbia (both Louis James and I have been to Serbia many times), and I got excited when I read his report, because I know how conservative Louis is. Reservoir Capital Corp. (TSX.V:REO) is one of those companies-and I agree 100% with Louis-that you will look back in five years and go, "Why did I not buy that?" It could definitely trade at multiples. We're not talking a two or three-bagger. I believe Miles Thompson (Reservoir CEO) will be in my 10-bagger club within five years. He was a very well-respected management teams, and we're not just talking about respect from the Casey crew. Rick Rule keeps him in high regard; a lot of the European funds, people know that Miles Thompson is going to deliver. It's been a huge run for us on the energy side, because we were buying it all day long. We had it as a best buy under 25 cents.

TER: Is it time for a Casey Free Ride?

MK: So, would we sell it here? To be prudent and follow our discipline, if you bought under 25 cents, yes. The smart thing would be to take your initial capital off the table. However, Reservoir Capital is one stock that you want to own. I can't be more bullish about a run-of-river project. This company accumulated some of the largest geothermal potential in the Balkans. If you know the geography, the geothermal and run-of-river potential in the Balkans is very high. Miles and his team are very connected in that region, and I know that region very, very well.

So for a junior with a 10-bagger potential, I have no doubt that Miles will deliver. We own the stock; we have not sold the stock and we want to own more of it. We're actually looking to buy more on weakness. Rick Rule said something that's resonated with me for a long time. "I want to own a deal that the president of the company is willing to sacrifice his life for five years to make a fortune." I believe that Miles Thompson will follow Ross Beaty's footsteps and become a broken slot machine (which means delivering returns time after time for shareholders).

TER: Anything else in alternative energy arena?

MK: For the alternative side, in the geothermals, you have to be careful that you're in the right ones that are capitalized and run by people who can actually run these projects, not just another "me, too" geothermal company.

TER: Any other stocks that fit your pattern of good stocks that are undervalued?

MK: CBM Asia Development Corp (TSX.V:TCF;Fkft:IY2) is a company we really like. We bought a lot of it in our Alert Service for our subscribers and ourselves personally. We bought it at 30 cents in a private placement, and then actually went into the market and followed our own advice after giving our subscribers three days' head lead, when we bought a lot of stock under 25 cents.

This is an example of a company that the stock came free trading, and there was overselling. This is exactly the type of market that you want to go and take advantage of that type of opportunity. CBM Asia is drilling in Indonesia, within 30 kilometers of the second largest liquefaction plant in the world. The company has the potential of being one of the largest land owners in the Kutai Basin, and I can't overemphasize how strategic this land play is.

TER: Why is that so important?

MK: Land ownership is very fractional in the oil and gas sector, and if CBM Asia can consolidate and become one of the larger land holders in the Kutai Basin, I have no doubt you will see a major company from Japan, or the French, or maybe even some of the U.S. majors knocking on the door because of the multi-billions of dollars of infrastructure sitting there. InterOil Corporation (NYSE:IOC;TSX:IOL) has had huge success in Papua New Guinea, but the infrastructure is not there. Indonesia does have some geological risks, and CBM Asia does have to drill up the project, but its infrastructure risk is much less. And taking out that infrastructure risk is so important for a lot of these projects. That is your highest cost, your largest capex.

TER: You mentioned a consolidation play in oil and gas, isn't that the same in the mining sector?

MK: Exactly the same. That's why for years I've been banging the drum about the Copper Mountain Mining Corporation (TSX:CUM) story. Open disclosure: I'm a director of Copper Mountain and have a lot of my personal money in it, but this company has up to a quarter billion dollars worth of infrastructure already built on OPM. That's a famous Casey line, OPM-other people's money. It's ideal to build your net worth on an already existing infrastructure. Raymond James has a "strong buy" on Copper Mountain with a C$3.50 price target, and one of reasons why is that they've got $300 million of infrastructure sitting there already built. So, definitely, consolidation is key in mining, and also on the energy side. It's very important to know that angle when investing. With a lot of uranium mines, for example, although they have uranium, it may not work when you calculate the cost of bringing in the infrastructure.

TER: Switching gears a bit, I imagine you know called Salares Lithium Inc. (TSX-V:LIT).

MK: This is an undervalued story. We are Salares Lithium shareholders. We like the story. The potential of their salares are very, very high. There's a side of junior exploration stories that people don't talk about. You're only as strong as the shareholders you have, and Salares Lithium's shareholders reads like the Who's Who in the Vancouver investment banking scene. These people will write checks to develop the story and help support Todd Hilditch (Director, President and CEO) on his mission.

Although the lithium space, in general, got a little bit too excited, there are a few gems. Salares Lithium is a great story. There's one run by Patrick Highsmith-Lithium One Inc. (TSX-V:LI)-is a great story. I have known Patrick for a few years. So, there are gems out there, and, again, what you want to worry about in the lithium story is I'm hesitant about buying a lithium story that is conventional because of the capex.

TER: They can't produce lithium economically.

MK: Absolutely. If you break it down, I believe FMC and SQM are producing at about 70 to 80 cents per pound. You can't go in the game and try to produce at $2.50 to $3? It ain't going to happen. That's why you go with the salares, and that's where Lithium One and Salares Lithium have positioned themselves very well. They can compete with the big boys. And the lithium market is-people don't realize that three companies produce-what is it?-80% or even more of all the lithium. It is almost like an oligopoly. I worry about investors rushing to conventional, high-cost operations; that's my warning to shareholders is "be careful where you're investing in the lithium market." There are gems, and the ones we went with-Lithium One and Salars Lithium.

TER: How many of the lithium companies own 100% of their land?

MK: Very, very few. A lot of these companies are earning in, there are option payments, JV agreements. In South America, where probably the best brines really are, I believe Salares Lithium owns 100% of its land, and Lithium One owns 100% of its portion of the salar, but it's one large salar, so they don't necessarily own the whole salar.

The Toyotas and the Magmas of the world are looking for a lithium supply. When you're a 100-percent owner, you've got a lot more to work with than if you're a 40% owner or earning into a 60% option. That's another reason why I really like Salares Lithium and Lithium One. Again, it's a consolidation issue.

TER: It's important for investors to understand that lithium is almost like a lake, and if you don't own 100%, somebody else can put a straw in on the other side and be taking your lithium.

MK: Another big problem there is the legal angle. The lake is a good way to visualize it. You're producing on your side of the lake. Someone's going to pop in a straw on the other side. You're not going to allow that, so you'll go to court and it will be in litigation for years. So investors have to be careful about that.

TER: Okay. Any other opportunities that you see on the horizon?

MK: We've been following Utica Shale plays for two years, and I could see a big push happening in that space. A few rumors are going down with the landowners in the Marcellus Shale that the American environmentalists are saying that shales are polluting the water and all that stuff. That's complete nonsense. Geologically, scientifically, it doesn't happen. So, about two years ago, with $6 gas, we wrote up the shale gas story in the energy reports saying, "These are the companies we really like but right now these stocks are trading at unrealistic values. You'd need $12 or $13 gas for these numbers to fly." These stocks have now corrected and we've written them up in our Alert Service. We're working on a full feature on Utica Shale plays, and I think the area's going to get a lot of excitement. We're working on an Eagle Ford Shale report, too. The report of this year for me personally shows an area where we're ahead of everybody and it's an untold story. I've been banging on the drum for three years about this. It's a European shale story; it is just starting to get hot.

When you have

 Gazprom (LSE:OGZD; Fkft:GAZ;RTS/MICEX:GAZP;OTC:OGZPY) come out and say, "Shale gas is bad; it's going to pollute all of the water of Europe, and our gas projects are economic comparably to the shale," you know that Gazprom is scared that they're going to lose their dominance in the European gas scene.

This is just starting, and the irony-there are fewer than 25 frac sets in Europe; that's to drill, frac and complete a shale gas well. On top of that, only three are modern. There are something like 2000 in the U.S. You'd want U.S. expertise there, with a management team that has drilled thousands of wells. So, again, I caution investors. If you're going to jump into European shale, get answers to a few critical questions first. Who is going to develop these lands? Where are these shales? What are the royalty rates? We have our top pick, and we warn subscribers and investors to be careful of what they're doing because Europe is a very fragmented sector, a very difficult place to get things done. So European shale, which no one's really talked about it yet, will be coming up in our next report, and I'm very excited about that.

TER: I understand you're planning another conference, too.

MK: We are. It's Crisis Investing Opportunities and it's going to go from April 30th through May 2nd in Las Vegas. Doug Casey, Louis James, Bud Conrad, Alex Daley and Rick Rule-we have a whole list of characters coming out, some big names, the best in the mining, energy and tech sectors. We have a panel, with everyone giving three top picks. After the last conference in Denver, everyone's picks at least doubled. Mine gained an average of 500%. And the companies we like will be there, some virtually unknown in the market. It's going to be an exciting show, and I look forward to it. This is definitely a show you want to see.

TER: We'll see you there.

Investment Analyst Marin Katusa is the senior editor of Casey's Energy Report, Casey's Energy Opportunities and Casey's Energy Confidential. He left a successful teaching career to pursue what has proven an equally successful-and far more lucrative-career analyzing and investing in junior resource companies. With a stock pick record of 19 winners in a row-a 100% success rate last year-Marin's insightful research has made a great deal of money for his subscribers. Using his advanced mathematical skills, he has created a diagnostic resource market tool that analyzes and compares hundreds of investment variables. Through his own investments and his work with the Casey team, Marin has established a network of relationships with many of the key players in the junior resource sector in Vancouver. In addition, he is a member of the Vancouver Angel Forum, where he and his colleagues evaluate early seed investment opportunities. Marin also manages a portfolio of international real estate projects.

Want to read more exclusive Energy Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Expert Insights page.

DISCLOSURE:
1) Gordon Holmes of The Energy Report conducted this interview. From time to time, Streetwise Inc. and its directors, officers, employees or members of their families, as well as persons interviewed for articles on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.
2) The following companies mentioned in the interview are sponsors of The Energy Report or The Gold Report: Ram Power Corporation, Reservoir Capital, CBM Asia, Salares Lithium
3) Marin Katusa-I personally and/or my family own shares of the following companies mentioned in this interview: Reservoir Capital, CBM Asia, Salares Lithium. I personally and/or my family am paid by the following companies mentioned in this interview: None.

(March 3, 2010, Washington, DC) - With unemployment hovering around 10% nationally and the economy remaining shaky, a bi-partisan group of more than forty senators is cosponsoring a joint Senate and House resolution to prevent unelected bureaucrats at the Environmental Protection Agency from using the Clean Air Act to enact costly regulations of carbon dioxide.

Some Green lobbyists are upset by the resolution.  According to NoDirtyAirAct.com, "We must stop this attempt to turn back the clock on the Clean Air Act - a law with a nearly 40-year track record of cutting dangerous pollution to protect human health and the environment and spur innovation."

But the Cornwall Alliance for the Stewardship of Creation says that the group has its facts wrong.  "The forty-year alarm is pure fantasy," says Dr. E. Calvin Beisner, National Spokesman for the Cornwall Alliance.  "The resolution disapproves only the EPA's intent to regulate carbon dioxide emissions based on an EPA 'endangerment finding' that stretches all way back to December 7, 2010," he says.

The self-described "progressive" American Values Network (AVN), set up and run by Burns Strider (a former Senior Advisor and Director of Faith-Based Outreach for Hillary Clinton's presidential campaign), is busy running ads in key swing states (Alaska, Arkansas, Indiana, Missouri, and North Dakota) to oppose the Murkowski Resolution.  Unfortunately the ads, just like NoDirtyAirAct.com, do not tell the truth regarding the legislation.

Beisner states, "The ads claim that the resolution 'guts America's clean air laws.' But there aren't any laws already restricting carbon dioxide.  The resolution prohibits the EPA from making new regulations.  It doesn't require it to dispense with already existing ones."

A Louisiana ad sponsored by the left-wing group Catholics United claims that the resolution would "roll back the Clean Air Act - a law that protects us from polluters putting poison into the air we breathe." But the only emission the resolution addresses is carbon dioxide, which isn't already regulated (so there's no roll back) and isn't poisonous except at a level of about 50,000 parts per million in the air we breathe.  That's 130 times the present level.  At today's rate of increase (about 1.75 parts per million per year) it would take about 28,000 years to reach that level.

According to Beisner, "Not only is carbon dioxide not poisonous and not a pollutant, it's vital to life.  Insects, animals, and humans inhale oxygen and exhale carbon dioxide, while all plants take in carbon dioxide and emit oxygen in photosynthesis.  It's an essential part of how they produce fiber.  And all insects, animals, and human beings depend on plants for sustenance."

Whether they like or hate Murkowski's resolution, those who discuss it have a responsibility at least not to lie about it.  That's what NoDirtyAirAct.com's, AVN's, and Catholics United's ads do.

AVN has tried before to fabricate the appearance of strong evangelical support for policy to fight global warming by costly cuts in carbon dioxide emissions.  The appearance was illusory last year, when it campaigned for the Waxman-Markey cap-and-trade bill.  And it's illusory now.

Where do America's religious leaders really stand on climate change and the attempt to fight it with drastic cuts in carbon dioxide emissions?

A good place to begin would be with the Evangelical Declaration on Global Warming, released in December and already signed by over 500 people including hundreds of pastors, theologians, college presidents, policy experts, and other leaders.  Based on a landmark study by twenty-nine evangelical scholars, the Declaration denies that carbon dioxide is a pollutant and warns that attempts to cut emissions will harm the poor by driving up energy and all other costs.

Drastic reductions in carbon dioxide emissions would cost the country hundreds of billions of dollars, make millions jobless, and drive up prices for energy and everything else people buy.  They would hurt the poor worst of all.  No wonder support for Murkowski's resolution is bi-partisan and strong.

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The Cornwall Alliance for the Stewardship of Creation is a national coalition of clergy, theologians, religious leaders, scientists, economists, and policy experts committed to bringing a balanced Biblical view of stewardship to the critical issues of environment and development. An Evangelical Declaration on Global Warming (http://www.CornwallAlliance.org/evangelical-declaration), and thousands of pastors, evangelical leaders, and laymen have joined major Christian organizations in the WeGetIt.org campaign (http://www.WeGetIt.org), in which Cornwall is a partner.

Since 2005, the Cornwall Alliance has emerged as the go-to voice for the mainstream evangelical perspective on issues of environmental stewardship and development.  Over 500 people-including hundreds of pastors, theologians, college presidents, policy experts, and other leaders-have signed

According to the United Nations Governing Council of the UN Environmental Programme (UNEP),  "our dominant economic model may thus be termed a 'brown economy." UNEP's clearly stated goal is to overturn the "brown economy" and replace it with a "green economy":

"A green economy implies the decoupling of resource use and environmental impacts from economic growth... These investments, both public and private, provide the mechanism for the reconfiguration of businesses, infrastructure and institutions, and for the adoption of sustainable consumption and production processes."  [p. 2]

(Other August Review Topics)

This paper will now address the strategy, tactical requirements and PROGRESS of establishing an energy-based Technate in North America. "Technate" is the term used to describe the geographic region operated according to Technocracy. Thus, a North American Technate would include Canada, Mexico and the U.S. and they would all be under common control. The Technocracy Study Course, written by Howard Scott and M. King Hubbert in 1932, established a detailed framework for Technocracy in terms of energy production, distribution and usage. According to Scott and Hubbert, the distribution of energy resources must be monitored and measured in order for the system to work -- and this is the key: monitoring and measuring. - August Review

Dominant Social Theme: Technocracy is modern progress?

Free-Market Analysis: The August Review is back with another in-depth analysis of Technocracy and its applications entitled "Smart Grid: the Implementation of Technocracy?" As a result, we again depart from our usual format of analyzing mainstream media articles from both an elite promotional and free-market point of view in favor of this latest white paper. Those at The August Review have done readers a service by revealing the depth and breadth of the modern Technocratic movement and elaborations thereof. It seems, today, far advanced in certain European countries. In America, there is still time to stop it. Americans have done so before - back in the 1930s it turns out.

In a previous August Review white paper, (on which the Daily Bell was also pleased to report), the point was made that global warming was not merely going to create tax or trade opportunities but was likely intended to lead to an entirely new CURRENCY. You can read that article here: Incredible Real Reason for Carbon Trading. That article contains a link to the August Review's white paper, which was most well received. This one deserves a similar reception. It is not simply reporting what could be, it is sounding the alarm over what is happening NOW.

Technocratic plans, this latest Review white paper seems to show, have actually penetrated America and the West under other guises and are in some cases far advanced. The evidence is fairly clear and is reported in a clinical but unambiguous way. The paper begins by describing what is necessary to implement the Technocratic system, as follows:

The Technocracy Study Course, written by Howard Scott and M. King Hubbert in 1932, established a detailed framework for Technocracy in terms of energy production, distribution and usage. According to Scott and Hubbert, the distribution of energy resources must be monitored and measured in order for the system to work -- and this is the key: monitoring and measuring.

They wrote that the system must do the following things:

- Register on a continuous 24 hour-per-day basis the total net conversion of energy

- By means of the registration of energy converted and consumed, make possible a balanced load

- Provide a continuous inventory of all production and consumption

- Provide a specific registration of the type, kind, etc., of all goods and services, where produced and where used

- Provide specific registration of the consumption of each individual, plus a record and description of the individual. [Scott, Howard et al., Technocracy Study Source, p. 232]

In 1932, such technology did not exist. Time was on the Technocrat's side, however, because this technology does exist today, and it is being rapidly implemented to do exactly what Scott and Hubbert specified: Namely, to exhaustively monitor, measure and control every ampere of energy delivered to consumers and businesses on a system-wide basis.

Having established the above, the paper turns to defining the Technocrat vision as it exists presently. It turns out that this vision not only remains viable, it is actually EXTANT and has been repackaged into something called Smart Grid, as follows:

Smart Grid is a broad technical term that encompasses the generation, distribution and consumption of electrical power, with an inclusion for gas and water as well. America's aging power grid is increasingly fragile and inefficient. Smart Grid is an initiative that seeks to completely redesign the power grid using advanced digital technology, including the installation of new, digital meters on every home and business in the U.S.

These digital meters provide around-the-clock monitoring of a consumer's energy consumption using continuous 2-way communication between the utility and the consumer's property. Furthermore, meters will be able to communicate with electrical devices within the residence to gather consumption data and to control certain devices directly without consumer intervention.

According to a U.S. Department of Energy publication:

"The Department of Energy has been charged with orchestrating the wholesale modernization of our nation's electrical grid... Heading this effort is the Office of Electricity Delivery and Energy Reliability. In concert with its cutting edge research and energy policy programs, the office's newly formed, multi-agency Smart Grid Task Force is responsible for coordinating standards of development, guiding research and development projects, and reconciling the agendas of a wide range of stakeholders." (See The Smart Grid: An Introduction)

This is a relatively new initiative, but it is racing forward at breakneck speed. The Office of Electricity Delivery was created in 2003 under President George W. Bush, and elevated in stature in 2007 by creating the position of Assistant Secretary of Electricity Delivery and Energy Reliability to head it.

It is not clearly stated who "charged" the Department of Energy to this task, but since the Secretary of Energy answers directly to the President, it is assumed that it was a directive from the President. There certainly was no Congressional directive or mandate.

And what of the IMPLEMENTATION? The Review comments on that as well:

On October 27, 2009, the Obama administration unveiled its Smart Grid plan by awarding $3.4 billion awarded to 100 Smart Grid projects. According to the Department of Energy's press release, these awards will result in the installation of: more than 850 sensors called 'Phasor Measurement Units" to monitor the overall power grid nationwide:

- 200,000 smart transformers

- 700 automated substations (about 5 percent of the nation's total)

- 1,000,000 in-home displays

- 345,000 load control devices in homes.

This is the "kick-start" of Smart Grid in the U.S. On January 8, 2010, President Obama unveiled an additional $2.3 billion Federal funding program for the "energy manufacturing sector" as part of the $787 billion American Reinvestment and Recovery Act. Funding had already been awarded to 183 projects in 43 states, pending Obama's announcement. One such project in the northwest is headed by Battelle Memorial Institute, covering five states and targeting 60,000 customers. The project was actually developed by the Bonneville Power Administration (BPA), a federal agency underneath the Department of Energy. Since it is pointedly illegal for a federal agency to apply for federal funds, BPA passed the project off to Battelle, a non-profit and non-governmental organization (NGO), which was promptly awarded $178 million.

But Smart Grid is not simply an American phenomenon. The August Review white paper traces the movement abroad:

The UNEP report mentioned above reveals that "15 percent of the fiscal stimulus funds committed for 2009-2010, which exceed $3.1 trillion, can be regarded as green in nature... most green components are oriented towards energy efficiency and renewable energies in a variety of sectors." A BusinessWeek article, "How Italy Beat the World to a Smarter Grid," stated on November 16, 2009 that "After several false starts, 2010 finally could be the year when smart meters go global." Indeed, it is:

- Italy has already implemented Smart Grid technology in 85 percent of its homes nationwide

- earth2tech.com reports that Smart Grid will generate $200 billion of global investment in the next few years

- The International Electrotechnical Commission (IEC) has laid out a global roadmap to insure interoperability of Smart Grid systems between nations

- Global companies are rushing to gain their share of the global Smart Grid market: IBM, Siemens, GE, Cisco, Panasonic, Kyocera, Toshiba, Mitsubishi, etc.

- China is spending $7.32 billion to build out Smart Grid in Asia

- Other countries with Smart Grid pilot projects already launched include Germany, France, England, Russia, Japan, India, Australia, South Africa and a host of others. Regional organizations such as SMARTGRIDS Africa have been set up to promote Smart Grid in smaller countries.

Thus, the global rush is on. In every case, Smart Grid is being accelerated by government stimulus spending. As is the case in the U.S., there was little, if any, preexisting or latent demand for Smart Grid technology. Demand has been artificially created by the respective governments of each country.

Having established the history, existence and implementation of Smart Grid, the August Review places it in chilling context in a lengthy and provocative conclusion:

Smart Grid meets 100 percent of the Technocracy's original requirements as described above. In other words, it will monitor and control both delivery and consumption of energy and other green resources such as water and gas. The Smart Grid initiative was developed and funded by government agencies and NGO's. It was the Energy Department's Bonneville Power Authority that invented the concept in the 1990's. It was the Department of Energy's Pacific Northwest National Laboratory that invented the Grid Friendly Appliance Controller. It was the Federal Administration that showered billions of dollars over the private sector to jump-start the nationwide initiative to implement Smart Grid in every community.

If the Federal government had not been the initial and persistent driver, would Smart Grid exist at all? It is highly doubtful. Following the same pattern as the U.S., many other industrialized nations are implementing Smart Grid at the same time, using their own stimulus money. This synchronized implementation is certainly by design, and as such, it implies that there must be a designer. Who might be providing such top-down coordination on a global basis must be saved for another paper. One thing is certain: The technology being purchased world-wide all originated in the United States and is being marketed by the same global corporations as mentioned above.

Lastly, there is an assumption throughout Smart Grid literature that the Federal Administration will have full visibility of all data within the Smart Grid, even down to the individual household. They will also be in a position to set national, regional and local distribution and consumption policies, such as your "fair share" of available energy, gas and water. International standards created for Smart Grid will also enable the U.S. Smart Grid to be connected seamlessly with Canada and Mexico, thus providing a comprehensive North American energy management and distribution system.

There are differences between the August Review's perception of the elite and our own. But there is without a doubt a group of individuals (Anglo-American-based) implementing a broad gamut of strategies intended to control as fully as possible the lives and fortunes of Western citizens - certainly to begin with. But this "elite" likely does not intend to stop at energy, or so The August Review shows us. The idea, apparently, is to monitor (and control) the consumption of all items necessary to survival.

The dominant social themes that have been flogged throughout the 20th century - overpopulation, peak oil, the scarcity of potable water - all are intended to justify an upcoming technology-driven regulatory scarcity. Naturally, there will likely be taxes involved but there may also be (or so it is intended) a level of criminalization when it comes to even basic necessities. It is most unfortunate that this vision now dovetails apparently with that of the leaders of China whom, it would seem, enthusiastically endorse the technocratic vision, which means the movement (and its implementation) is truly global.

We can't resist pointing out as we have before that M. King Hubbert, the initial author of the "peak oil" meme, turns out to be a driving Technocratic force. We would hope this would be enough to discredit the fear-based peak oil meme once and for all. He very obviously had an ulterior motive for advertising potential energy scarcity. His speculations were intended to provide a rationale for metering and measuring energy consumption and to otherwise advance his strange economic theories - including "non-market economics." ("This includes unilateral giving such as gifts and bilateral giving, meaning a person gives a gift expecting to be repaid at some unspecified time." - Wikipedia)

While such plans as that of the Technocrats are real and, in some cases, fairly well advanced, we will end our summary of this latest August Review white paper by pointing out that you, dear reader, would not be aware of it, or us, or them, without the Internet. The Internet, in our opinion, is a great equalizer for citizens of the West when it comes to those who would impose such plans as those presented above. It is a wonderful knowledge-spreading device. It likely is not so controllable as some fear. It is making a difference. It is derailing or at least making more difficult much of what seems to have been intended.

Conclusion: We would hope that those concerned by the re-emergence and implementation of Technocracy would help spread the word. Smart Grid would seem to be one more initiative by the current American administration that needs to be confronted. In fact, the Obama administration's involvement in the implementation of the major strategic goals of an obscure 70-year-old movement is apparently one more indication of powerful and devious currents swirling deeply beneath American politics in the 21st century. Things are not necessarily as they seem.

The entire August Review white paper may be read here: Smart Grid: The Implementation of Technocracy?

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