pieinthesky

Bowels of the Earth

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When Alice in Wonderland followed a white rabbit down a rabbit hole, she
ended up in an enchanted place where psychedelic happenings were rou-
tine. Today, I'm going to lead you down an even deeper hole following a
stream of waste water, hoping to find a lucky rabbit's foot of an investment.

"Crikey mate, it's mighty deep and hotter than an Australian ridgeback in a
wildfire, down here."

"Right you are, Oz. That's cause Mars, the god of fire has been down here
stoking the heat for a long time. We're at the bottom of a volcano, that has
been burning for millenia, for eons of time."

Our intrepid explorers/investors are not off in some exotic,deserted place,
but are less than 100 miles north of San Francisco, just east of the fabled
wine country of Napa/Sonoma. So, how did they get to the bottom of a
volcano? Like I said, by following a stream of waste water. This is water
that was flushed down toilets by people living just north of San Francisco,
yeah, the worst stuff imaginable, sent to a treatment plant where it got a
mild re-jiggering and, in the old days used to be dumped into the Russian
River, from where it flowed down into the Pacific Ocean. Ugh!

Before I go on with the story of where that water goes now, let me digress
to mention that Arnie, the governator of Calif., recently signed a bill which
demands that Calif produce 20% of its electricity from non-fossil fuel gen-
erators by the year ...here's where it gets like wonderland ...by the year
2010. That's about 2 years from now. Helloooo!! Alice, what are you do-
ing over there negotiating with a hot-head like Mars, the god of fire?

Another digression, with your permission. About 10 years ago, when util-
ities were de-regulated in Calif. there was a very agile power company
called Calpine which could see enormous possibilities created by the new
rules. The opportunity to overthrow, or at least push aside the entrenched
monopolies danced like sugarplums in their collective heads. They started buying and basically shopped 'til they dropped. Soon their cashflow could
not cover their loan payments and they ended up in Bankruptcy Court. Not
as bad as Enron, they didn't seem to break any laws, but their eyes got
bigger than their belly and they just couldn't chew what they had bit off.

That's the bad news, the bad rap on these guys. The good news is that
these geniuses (yep, the same guys I was just badmouthing one paragraph
ago) pulled off one of the greatest smooth-talking snow jobs since Calif. got
the Fed gov't to pay for the transcontinental railway. I happened to be living in the wine country at the time, and got to witness it in person. After
endless town meetings, city council presentations, antagonistic private land
holders' demonstrations, votes, and any other red tape that our democratic
process throws against someone who has game-changing idea... they made it happen. They got the right to, and actually built, in unbelievably
short order, a hundred or so miles of underground, deep underground,
culverts that transfer the wastewater from all the treatment plants in the area
up to a mountain geyser. This geyser had been converted into a power
plant about 30 years before, but had begun producing less and less power
as the the water table that supplied it was gradually eroded. They now have
unlmited, permanent source of fuel, non-fossil, to their plant. And, they don't have to pay for it, plus they generate good-will in the sense that this
water would otherwise foul an important river and the ocean. Genius.

Naturally, the company's stock got trashed. However, they just came out of
B-Court, have issued new stock, and it IPO'd a couple of weeks ago. Well,
I've given you both the good and the bad on this company. Me, I'm a buyer
because anyone that can re-engineer the society around them as handily
as they did, even as they marched ever closer to declaring bankruptcy,
deserves another shot. The stock is CPN, and trades around $17. They
have the greenest credentials in Calif power ...that's mars, the red planet
giving us the green light, once again. The cosmicmover.