Commander Planet – Evil Ethanol
Watch out! Commander Planet’s arch nemesis is lurking nearby in an attempt to pick your pocket. Find out why the Commander thinks ethanol is a green trade turned rotten!
Following is the report filed by Fast Money’s Trading Superhero, Pete Najarian. (In case you’re wondering, yes it’s supposed to be a little tongue in cheek.)
I am Commander Planet. All week I have scoured the globe looking for the best green energy plays. And tonight, for my final mission, I fight the evil power of ethanol.
Derived from corn this energy source appeals to environmentalists because it is a completely clean burning fuel. Growth of ethanol was slow until a 2005 energy law mandated ethanol use. And now ethanol prices are booming as the biofuel is mixed in with most of our gasoline supplies.
But ethanol still has a long way to go before becoming a primary energy source. Rising prices have made ethanol less cost effective when compared to oil. And there’s also debate about its environmental impact. The boom is leading to the destruction of carbon-rich forests which are cleared and replaced with acres and acres of corn.
I am Commander Planet. And I say there’s better and cleaner ways to place your alternative energy bet than ethanol.
Seriously Pete how are you trading it?
Look at Monsanto for genetically engineered seeds, Eastman Chemical and Sasol for “gasification” (a way to turn coal into a liquid that’s burns more cleanly) and railroads such as Burlington Northern because they transport the commodities, says Najarian.
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Trader disclosure: On Apr. 24, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Macke Owns (YHOO), (MSFT), (INTC); Pete Najarian Owns (AAPL), (NOK), (TSO), (XLF), (YHOO); Pete Najarian Owns (CHK) Calls, (DD) Calls, (MSFT) Calls, (POT) Calls; Finerman Owns (GS); Finerman's Firm And Finerman Own (HD); Finerman's Firm Owns (MSFT), (SUN), (TSO), (VLO), (WMT), (YHOO), (MO), (PM), (JCP); Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY), (COF); Charles Schwab Is A Sponsor Of "Fast Money"