The Technology That Will Replace 148 Billion Barrels of Oil

As much as we talk oil here, I wanted to bring in an outside source to give you some insight into what he thinks is the replacement (potentially) of oil, and what might be a great play for you very soon. That expert is Horacio Marquez, Editor of the Money Map Report. Please enjoy the article, comment below, and check out Horacio's site for more info!

Most investors didn’t notice when, in September 2008, Warren Buffet paid $230 million for a 10% stake in Hong Kong-based battery maker BYD Co. Ltd. (HKSE:1211.HK).

Now, of course, we all wish we’d been paying attention…

In the 18 months since, BYD share price has increased by upwards of 900%, from $8.01 before the announcement to $75.05 today. And the value of the investing icon’s portion of shares increased to $2 billion.

But Buffet’s interest in this little-known Chinese stock isn’t the main story here. He simply helped to focus a beam of light onto an industry that could serve as a major profit play for years to come.

The real story is a technology market that’s heating up in a big way: batteries. The market for rechargeable batteries alone is expected to zoom to $51 billion by 2013.

And yet the battery gets far less attention than solar and wind power, its higher-profile (but less technologically advanced) cousins.

Modern battery technology is the keystone of the global push to find an energy alternative to oil. In fact, one specific new category of rechargeable batteries is a breakthrough technology with the potential to replace as much as 148 billion barrels of oil over the next 50 years, a savings of $10.4 trillion – even at current prices.
And as supplies diminish, we’re certain to see oil prices blast well above the current level of $82.08 a barrel.
What these numbers don’t tell you is that there’s a powerful catalyst at work, one that’s behind the big push to achieve energy independence: the electric – or “hybrid” – car.

Billions Bet on “Third Element” Technology

The July 2008 record oil price of $147 a barrel served as a wake-up call for the car-driving consumer. But it was also the jolt that shifted the plug-in-auto industry into high gear.

In response to surging oil prices, U.S. President Barack Obama promised to invest at least $150 billion into alternative energy during his term of office. And a big chunk of the $787 billion stimulus bill will finance development of new, rechargeable battery technology for Plug-in Hybrid Electric Vehicles (PHEVs).
The technology in question is lithium-ion.

Sometimes referred to as the “Third Element” – because of its No. 3 position on the Periodic Table of Elements – lithium is the lightest metal in existence. Scientists believe it was one of the few elements synthesized in the “Big Bang” that created the universe.

Lithium carbonate is a very refined form that packs four times the energy punch of lead-acid batteries and twice that of nickel-metal hydride batteries. Until recently, it was a minor commodity used mostly in glass and mood-stabilizing drugs.

But not anymore.

Now it’s a key ingredient of the new class of rechargeable batteries needed to jump-start the plug-in car market. The other ingredient, of course, is capital.

President Obama’s American Reinvestment and Recovery Act allocates $2 billion to the development of battery systems, components and software for advanced lithium-ion batteries and for hybrid electric systems. Another $300 million will support a pilot program for Alternative Fueled Vehicles.

And that’s just a down payment.

The $25 billion Advanced Technology Vehicles Manufacturing Loan Program will make sure the industry itself continues to develop.

While these allocations will nurture the development of lithium-ion technologies, other programs will make the hybrid-vehicle market bloom.

You see, hybrid and electric vehicles currently cost more than gas-guzzlers, due to expensive and heavy batteries and multiple engines.

So starting this year, U.S. buyers of commercial PHEVs are eligible for a federal tax credit of up to $7,500, plus a separate $2,000 credit for installing a home charging unit.

There’s growing investment at the state level, too: The California Air Resources Board just announced $3.7 million in rebates for buyers of zero-emissions and hybrid auto purchasers.

That should help cut down fears about affordability... and just in time, too.

According to a report by Pike Research, the lithium-ion transportation battery industry will grow from $878 million in 2010 to nearly $8 billion by 2015.

Automakers have seized lithium-ion battery technology as the road to the future. Right now, nearly every automaker on the planet is gearing up to flood the market with some form of electric-powered car:

•    Daimler AG (NYSE:DAI) launched a hybrid version of its S-Class sedan last year, and the entire Mercedes lineup soon will be available in hybrid. Daimler is teaming up with BYD to develop electric cars for the flourishing Chinese market.
•    Nissan Motor Co. Ltd. (OTC:NSANY) retooled its Smyrna, Tennessee, factory to produce pure electric vehicles. Nissan expects to sell as many as 50,000 units of the hybrid 2010 Altima in its first year. But what’s got everyone talking is the Nissan Leaf, its first lithium-ion car. The hatchback will debut later this year in Japan, Europe, and the U.S.
•    Ford Motor Co. (NYSE:F) is rolling out the all-electric Transit Connect commercial fleet van in 2010 and plans to invest $550 million to retool a Michigan truck plant to manufacture an electric Focus in 2011.
•    General Motors Co. (OTC:MTLQQ) is counting on lithium-ion batteries to power the Chevy Volt, its revolutionary and much-hyped PHEV, set to debut in November 2010. The vehicle will cost about $40,000.
•    Toyota Motor Corp. (NYSE:TM) plans to begin retailing a lithium-ion powered plug-in Prius in late 2011 and a short-distance all-electric car in 2010.
•    Mitsubishi Motors Corp. (TYO:7211) has been developing EV technology since the 1970s. Its environmental-award-winning i-MiEV will be available in April for about $51,000.
•    Honda Motor Co. Ltd. (NYSE:HMC) just announced plans to introduce a lithium-ion powered hybrid Civic within the next several years, as well as Acura luxury cars and other models. February 2010 sales of the Honda Insight and Civic Hybrid increased 54% and 37% over the previous month.
•    Even Volkswagen AG (VOW.DE), which has stayed out of electric vehicles, plans to convert 3% of sales by 2018.

A Global Power (and Profit) Play

For further confirmation that PHEVs are more than just a passing fad, look at the dozens of governments across the globe pouring massive amounts of capital into related markets.

The British government just stated it will extend $581 million of grants and loan guarantees to Ford and Nissan for green auto plants and operations in Britain. Not to mention cash payments to consumers to offset the relatively high price of electric vehicles.

In France, Renault is partnering with a utility company to build a nationwide network of automobile charging stations. The French government pledged to contribute 400 million euros to the project.

Even the Middle East is getting involved. Aabar Investments PJSC, an investment company wholly owned by the Abu Dhabi government, recently became the largest shareholder in Daimler AG. With Abu Dhabi Water and Electric Authority, it plans to set up charging points for electric-powered cars.

And here’s the real kicker: Aabar Investments is using Abu Dhabi oil revenue to finance its foray into lithium-ion battery technologies.

Worldwide demand for batteries of all types – both standard and rechargeable – is projected to advance at roughly a 7% annual clip through 2010, reaching $73.6 billion, according to a study published by market research firm The Freedonia Group.

The “World Batteries” study, not surprisingly, predicts that China will post the largest gains, while also expecting strong sales increases in India, Indonesia, South Korea, Poland, South Africa, Brazil, and Russia.

But it’s the China market that promises to put a real charge into the global battery business.

On the home front, Beijing is pushing its assault on battery power through its “20% by 2020” campaign – in 10 years, 20% of China’s power needs will be served by renewable-energy technologies.

From a global standpoint, China is using its big advantage in labor costs to establish a leadership position in the worldwide battery market. It already has more than 50 factories cranking out product.

It’s an aggressive plan, to be sure, but it’s also cohesive and complete. And Beijing has the cash to make it happen.

By Horacio Marquez
Editor, Money Map Report

[Editor's Note: Although it's a new technology, there's a clear leader in the lithium-battery-technology market. One company's profit potential is stunning and contributing Editor Horacio Marquez has found it.
You can still get in ahead of the masses on this astonishingly profitable trade. To learn more about the company and Marquez's Money Map Report, please click here.]

13 thoughts on “The Technology That Will Replace 148 Billion Barrels of Oil

  1. I'm a heating oil dealer in Massachusetts. Starting in July of this year we have to meet a 2% Biofuel mandate with our heating fuel. Ultimately, we hope that we can meet a 20% goal in the future. Some of this bio will come from virgin stock - palm and soy, but much will come from waste products. In the future, algea and non-food stock like jatropha will do the job. The cost is in no way near what wind and solar is and has been proven to work in all applications. It's clean and renewable, and will, as the market shows it's utility and profitability, prove to be abundant as well. It's an alternative that is here NOW, as opposed to wind and solar, that may be here someday, if at all.

  2. Hi Dean;

    It is great to hear a report from someone who has actually tried some of these things. Industry promoters always push the most ridiculous stats to scam people for their money. Beware the words "up to". My solar projects yield only moderate output in good weather for 3 months of the year. The rest of the time, sure, it's there but at way too low a level to use. There is no practical use for energy that quits whenever it wants to. Wind machines are plagued with downtime for inspection and repair(lightning, ice damage, overspeed). The manufacturers never allow for this in their output ratios. Real world is less than half.

    Batteries need to chemically reactive to to be light and powerful. The side effect is that they eat themselves over time. Nothing is worse than an old battery that you charge and charge and goes dead whenever you need it.

  3. We don't generate electricity with oil in the U.S. We use coal, natgas, nuclear, hydroelectric and a bit of geothermal. So if we move a significant amount of our car fleet to electricity, we will need a more robust grid and a great deal more coal, natgas and nuclear. The contribution of wind and solar is less than 3% now and it is very expensive compared to coal and natgas. Double the amount of solar and wind generation and it is still a small piece of the pie. Solar and wind sources require backup generation for those periods when the wind isn't blowing or the sun is blocked. Those backup plants are likely to be natural gas fired. It makes more sense now to move transportation to compressed natgas, biodiesel and diesel from coal.

  4. Hank;
    That SCiB sounds great. It will be available in 2008, er 2009, maybe 2011 or maybe? If you are rich you can get the servants to push the car until it arrives.
    It seems to be more of a capacitor than a battery. That explains the cycling characteristics. No mention is made of voltage stability. Voltage of a capacitor is directly proportional to charge. Most equipment will not operate with wildly varying voltage. It's great for flashbulbs and spark plugs. Moly Energy brought their battery to production but could not sell it due to its sloping voltage output.

    It will be nice to be able to charge up with your solar-thermal plant. What is you annual kw-hour output?

    It is a good thing that the internet was built with proven telecom technology or we would still be waiting for the parts.

  5. How stupid do you think we are? Batteries are not an energy source at all. No oil will be replaced. These batteries are so expensive and short lived that gasoline will have to be over $50/gallon just to cover the battery expense. I have never heard of batteries or power equipment getting cheaper, prices only go up.
    As for charging, wind and solar take much more energy to build than they produce. They also have only about a 20 year life. Just a short term non solution. The only power produced is political.

    1. Wow Rudy, you sure do know a lot--what is your Phd in? I don't think it is true that the prices of batteries only go up...but what is true is that the efficiencies of batteries go up as new technologies are found, so that alone would make them more economical (i.e. bang for the buck). Also, I don't know where you make up your information, but even at current prices, you will save money over the lifetime of the batteries in many of these cars (assuming electricity doesn't double in price). While it is true that current wind and solar technologies are costly and have a ~20 year should try reading MIT's Technology Review to see some of the technologies that people are working on. Some of the new technologies lower the cost significantly, others increase the efficiencies....we'll have to wait and see which ones make it. And I'm not talking about 50 year research, but 5-10 year research.

      1. Hi Hank;
        In the olden days you could learn to read and do simple arithmetic in elementary school but now it takes a PHD. The Mistsubishi electric costs $51,000 for a car not as good as a Honda Fit. The President of Toyota Canada stated on BNN that the life of an electric would be about five years as the battery would way too expensive for a car that old. Nissan will sell the Leaf without the battery because the battery is worth more than the car. Probably $30,000 with taxes.

        So, $51,000 plus taxes will cost about a thousand a month not counting interest or the value of my money until the car hits the junkyard. I don't spend nearly that on gasoline. You can't use much gas driving as far as the electric goes. Drive the Honda for ten years and it will still have resale value. I really can't see the cost saving and I haven't even allowed for electricity cost.

        Available articles indicate a 4-5 year life for lithium-ion batteries. Life can be extended if you keep it in the fridge with a 40-60% charge but that would pretty well rule out any driving. Like all batteries they have a limited shelf life. They begin to age the day they are made. If you buy one that has been in the warehouse for some time it will not have its rated capacity and will not last as long as a fresh one. Range figures are "up to". That means fresh battery, level road, no wind, ideal temperature, no traffic, ideal speed, no stop signs. Lithium is not more efficient but has the highest energy density per pound, not per dollar spent. It is also the most fragile battery by far.

        As for the future I'll believe it when I see it. Estore has promised their battery every year for seven years but still doesn't have even a prototype. Every PV solar maker has been promising 20% efficiency for the last five years but can only deliver 9%. Toshiba just claimed 14% for a prototype but that does not mean it can be manufactured for sale.

        1. I guess we're just very different in our thought processes. You have cynically chosen all of the worst historical data to support your negative opinion, while the optimist & engineer in me looks for what is technically possible in the future (the internet would not exist if cynics and pessimists were the ones deciding if it was possible to connect everyone around the world)

          For example, you say that "available articles indicate 4-5 year life for lithium-ion batteries." It may be true that such articles exist, yet the first Google search I make links to the following 2007 article discussing a 10 year life:

          A 10-12 year life is what some are expecting from the Chevy Volt battery. However, the battery doesn't just vanish from the planet at 10-12 years--you can continue to using it in a diminished state or recycle it (which will still have some value). Technological advances can only improve the situation.

          Regardless, a dollar figure isn't the only cost/benefit calculation. Other things to remember are that oil is not a infinite supply, we've lost many lives and spent billions of dollars in military costs associated with oil. If cost/benefit was the only thing buyers considered, there wouldn't be stores selling $100 jeans right next door to stores selling $30 jeans and I wouldn't be driving a $40k vehicle. There wouldn't be $3,000 LED televisions being sold next to $700 LED televisions...which were themselves $3,000 a few years ago. Sure, low income people may never own an electric car...but that shouldn't prevent them from being sold.

          As for solar...PV does mean solar, but solar does not mean PV. I will say that the efficiency of a panel doesn't matter as much as the price per watt--however, the solar tech that I'm more interested in is solar thermal power. Try finding a negative article about eSolar.

    2. RUDY you are right except that wind generation has a much shorter life span maybe 2-3 years before expensive repairs are needed. Solar panels are good for 20 years but kind of useless at night.
      As far as battery advances I am still waiting. What is on the market right now lead acid is the most efficient still. They are just heavy. There is NO battery made that can be discharged daily and last 3 years. NONE. That is the sad truth. So if you have and "electric" car it must have another source of energy to charge the batteries or have a very very limited range.
      Oh and I have a real world education. Had a wind turbine here at my house and and it was noise, inconsistent due to no wind and well it fell apart. The sun deteriorated the blades after 3 years. I also have $5000 dollars of solar panels that work but the make about 50 cents an day worth of electricity on sunny days.
      We have a renewable fuel source if we would just drill its called oil. More oil leaks into the gulf of Mexico that the U.S. consumes.
      The way oil became a fuel source was it was seeping out of the ground so we had to do something with it.

  6. Hello everyone,

    Being a 'new' member of 'our family' & not knowing how to send the greetings, I'm using 'this way' to wish everyone happy, healthy & very enjoyable Easter time.
    Take care & the best.

    Adam S

  7. I read this article and it will try and sell you a report for $49. However----here is a link to Byron Securities:

    which will give you the names of lithium miners you can profit on--with a detailed analysis of the industry in a nutshell. This investor site also notes that there is an unlimited worldwide supply of lithium....the real issue is getting it out of the ground cheaper and this link will discuss more issues than you could possibly want to know about lithium and its suppliers--not many of them. Good luck. BTW, anyone have any guess as to how low AONE stock (a U.S. battery maker) will go before it turns around?... I like this company--and it is also selling truckloads of batteries to the utilities companies so they can store electricity on site rather than renting out another whole utility company. Batteries will be interesting in the near future.

  8. And who, pray tell, is going to supply the electricity for these rechargeable batteries??? HJ

    1. Probably the same suppliers who provide all of the electricity used today in the production of oil. Or, if you have a home plug-in unit for your PHEV, you could power it with solar.

Comments are closed.