Nine grand is how much it would probably cost you to buy a used Volkswagen Jetta TDI with about 150,000 miles on it.  Then for a mere $2,000 you could equip the diesel burning engine with a contraption that allows you to fill up a separate tank (stored in your trunk, by the way) with used vegetable oil.

You still need to fill up with diesel fuel, since the car needs it to start the engine, and then flush it clean of veggie oil before it’s shut off. And you also need to secure a fuel source. Experts in the field recommend going to an upscale bar & grille, since better restaurants usually use higher quality oils to fry their foods. Restaurateurs are usually eager to get rid of their used oil, since they pay a disposal fee to have it removed.

 The most prominent company that sells this equipment is a privately owned firm called Greasecar (more info at http://www.greasecar.com/). The company has conversion kits for diesel cars and trucks, and claims that the veggie oil doesn’t harm the vehicle’s engine. In fact, you can get 45 miles per gallon running on 100% recycled oils that you picked up for free at your neighborhood watering hole.

That’s a pretty good deal, since the only thing you’re losing is a bit of trunk space.

And it’s also refreshing to see an independent group of people do something that the government and major car manufacturers haven’t been doing: make a regular car run (almost) completely on non-petroleum-based fuel.

The only problem is that, according to most polls, Americans won’t go to the trouble of using an alternative fuel if it becomes more widely available. While a majority of people support efforts to develop alternative fuels like biodiesel and ethanol, a much smaller percentage would only buy the stuff if it were cheaper than plain old petroleum.

Fortunately or unfortunately, we might be closer to that point then you think.

And my guess is that most of us wouldn’t want to go to the trouble of lugging around buckets of grease either. But what if gas was $5, $6, even $7 a gallon? Would we change our lifestyles?

“Our Addiction to Oil is a Matter of National Security”

So while a handful of people — maybe now it’s bigger than a handful — have been flocking to diesel to solve the country’s energy problems, it’s back to political moves in Washington to try and “solve” it.

The headlines are everywhere: The president wants to halt deposits to the U.S. Strategic Petroleum Reserve this summer to try and cut costs. Bush also has ordered a federal investigation into possible price gouging. And a group of senators Thursday proposed a $100 check be sent to every taxpayer to help soften the blow of higher gas prices.

Somehow, I don’t think a $100 check will really solve our dependence on foreign oil.

And the politicking continued on late into last week. President Bush traveled to Mississippi Friday to talk about how he wants to raise fuel efficiency standards on automobiles. The president and other political leaders are (and will continue) to try and win the public’s favor by introducing more and more ideas on how to combat higher gas prices.

From Friday’s Washington Post: “In Congress, anger over gasoline prices brought action in the Senate to a screeching halt yesterday, with Democrats interrupting debate over an emergency military spending bill to protest a key oil company subsidy. In a highly unusual move, Sen. Ron Wyden (D-Ore.) waged a solo filibuster on the Senate floor in an attempt to force a vote on a provision that would halt support for what Wyden said was about $35 billion for oil and gas companies.”

As I mentioned in a previous column (Check it out here: http://www.pennysleuth.com/issues/2006/04_24_06.html), a lot of small-cap alternative energy companies are seeing their stock prices soar now that this has become such a hot political issue.

The Alternative Energy Speculator

Many of these alternative energy outfits are very speculative plays.  Some of these outfits whose share prices have climbed more than 100% since the beginning of the year have no earnings and no operations. They are biodiesel companies that have not yet built biodiesel facilities, or energy companies that have mentioned an expansion into the ethanol business by 2010…

Just take a look at 02Diesel Corp. (OTD: AMEX), a Delaware-based alternative fuel additive company. This company’s share price waited patiently around $0.60 to $0.80 a share this year until about a month ago, when it shot to as high as $2.82. The stock now trades around $2.00.

While 02Diesel could eventually be profitable, it could be a long, uphill battle — mainly since the company will need to raise more than $10 million this year to continue with its business plans. And OTD keeps rolling with a loss of about 23 cents a share every year.

However, this is just a glance at the surface of this company. I think some due diligence is in order to get to the bottom of some of these alternative energy stocks. Therefore, I’m going to devote this week to researching one alternative energy stock I think you might find interesting. Look for more on this company and its coal-to-liquid technology next week.

Best,

Gunner
May 01, 2006

Veggie Cars and Energy Speculation was originally featured in the Penny Sleuth.