Wood-the new energy

Last Thursday, Pelosi used the phrase again. And to emphasize her point, she actually held up a baseball signed by Bobby Thomson as she said it.

Pelosi's new "shot heard around the world" is a law called the Energy Independence and Security Act of 2007, it passed through the House of Representatives last week. This law – if stamped by the Senate – will have huge consequences on our investments.

Let me give you the details:

1. Fuel economy standards for both cars and light trucks will be raised to 35 miles per gallon by 2020. Fuel economy standards for cars haven't been altered since 1975. That's such a big change, I wonder if it's even possible. Right now the fuel economy standard is 27.2 mpg for cars and 22.2 mpg for light trucks.

2. Twenty-one billion dollars will be revoked in tax breaks to oil companies.

3. Electric utilities will be required to get 15% of their energy from renewable sources by 2020.

4. The United States will have to use 36 million gallons of biofuel per year by 2022, up from 9 million today. It can't be just ethanol either. Twenty-two million gallons must come from other "advanced biofuels," not ethanol.

5. Nine billion dollars in tax incentives will be offered to the biofuel and renewable energy industries like wind, solar, biomass, geothermal, small irrigation hydropower, ocean tides, landfill gas, and trash combustion energy.

This bill still has to pass through the Senate. Frankly, it probably won't pass in its current form. Also, President Bush has said he'd veto this bill. So there's a long way to go before it becomes law. Nevertheless, it does show the direction this country is heading in. And I want to profit from this new direction.

My favorite "green energy" investment is wood.

Most people don't realize that wood is an important source of energy. Solar, wind, and ethanol get all the attention. But the fact is, wood was the world's main source of energy until the mid-1800s. And even today, wood waste still fills about 2% of the United States' energy needs.

Last month, the Minister of Energy in Great Britain announced he was going to build the largest bio-energy power plant in the world. They will build the plant in Port Talbot, in Wales. The plant will generate 350 megawatts of power. That's enough electricity to power half the houses in Wales. This plant will run on wood chips. North America will supply these wood chips.

Producing energy from wood chips is also a priority for the U.S. democratic party. Representative Edward J. Markey, a Massachusetts democrat, specifically mentioned wood chips as a destination for the subsidies the democrats want to take away from the oil companies.

Right now, there are millions of dead pine trees all over Colorado and British Columbia as a result of the massive infestation by the Mountain Pine Beetle. This wood is useless to the forestry industry, but it's a huge fire hazard if it's left standing in the forests.

If you can figure out how to move this dead wood from the forest to the wood-fired power plants in Europe, you'll make a fortune... especially if you get Nancy Pelosi and her new "shot heard around the world" legislation to subsidize you...