For quite some time, complacency and fuel economy have gone hand in hand.

Admittedly, vehicles have become more attractive, faster and more technologically advanced. But when it comes to fuel efficiency, it just never seemed to matter. Gas was cheap and always would be cheap, so what was the point?

But now we have this triple threat: Oil prices are high (and probably going higher soon), a global-warming scare and Middle East tensions. And what have the big car manufacturers done for us lately?

“To these circumstances, automakers have responded with a fleet of cars that averages 21 miles per gallon, about 4 mpg worse than the Model T,” according to a recent Popular Science article.

Major automakers sit on their hands, producing vehicles that only slightly improve on gas mileage. It’s the smaller companies that are taking the lead in building concepts that will break the 100 miles per gallon (mpg) milestone.

According to the Popular Science article, the X Prize Foundation is set to announce a prize for the first car that breaks 100 mpg and sells a certain number of units. You may recall this is the same group that sponsored the $10 million competition for the first group to invent a private spaceship. Reportedly, the winner will receive upwards of $25 million.

A fascinating small company that’s working on this task is StarRotor Corp.

The company is attempting to improve engine efficiency by recovering some of the heat it produces and turning it back into energy to power the vehicle. This can’t be done with a regular four-cylinder, so the company is in the process of developing an engine using jet technology.

The concept has promise because, unlike hydrogen fuel cell technology, this engine would be cheap enough to mass-produce. As an added bonus, this engine concept would produce minimal pollution, since the combustion process is more advanced.

And what about the potential fuel economy?

The inventors predict that the StarRotor engine will be at least 45% to 60% efficient. This is quite impressive, considering that your car’s conventional engine is only about 15% to 20% efficient. Therefore, a regular economy car that now gets 40 miles per gallon could get approximately 120 with a perfected StarRotor.

120 miles per gallon would blow the competition away…and is definitely enough to claim the big-money prize.

StarRotor isn’t a public company, and is just now starting to generate interest and a few orders for its compressors. Keep in mind, this is still very early in the game for StarRotor. No venture capital money has been announced for this infant company, and very little in the way of news is available.

You can check out StarRotor’s website: www.starrotor.com. It’s got a lot of tech talk, but also some interesting diagrams and descriptions of the engine concept. As always, we’ll keep you updated on any useful news.

Also, we’ll be on the lookout for some interesting public companies that are exploring alternative ways to get the most out of your gas money. Stay tuned…

Best,
Gunner
March 19, 2007

P.S.: Wall Street claims two ethanol stocks are the best energy investments you can buy right now. But they won’t make you any money…let alone give you better gas mileage.

Greg Guenthner

Greg Guenthner uses his experience as a former journalist to dig up the hard-to-find headlines that could lead to big gains for your micro-cap portfolio. Greg offers his readers the scoop on topics ranging from alternative energies to biotechnology, digging up the best penny stock opportunities before they’re discovered by the mainstream media. On top of contributing to Penny Sleuth, Greg also heads Penny Stock Fortunes and Bulletin Board Elite. Special Report: Imagine Getting Rich as Ignored Stocks Soar - You could turn $200 into $1.2 million!

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