Blog | Commodities, Personal Finance

Investing in Green Energy: Here’s How to Profit

How to make millions by investing in green energy

Summary

• To encourage change, it must be profitable to change

• A wise investor can make millions by investing in alternative and clean energy sources

• Understanding Katusa’s investment strategies is the key to profit from green energy

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The world is an ever changing place. Some changes appear to be good for humanity and some do not. Right now we are in a place of transition in many different areas, like improvements to equality and human rights, health of the environment, security from terrorism, security from viruses, capitalism and socialism, and more. Changes are always happening.

Generally, most people who want change think it is coming too slow. But it doesn’t have to be. There is a way to make change happen faster: make it profitable.

This is, of course, counterintuitive for many people who want change. They think change can only come through elections and the government. That is why election season is always so heated; and why many people make demons out of those who hold different political positions than them.

But again, it doesn’t have to be that way. If more people understood how capitalism worked...and how it could work for the causes they believe in most, we’d have a lot less political division and a lot more people focused on making meaningful change by making it profitable to change. A quick look at history shows how this happens all the time.

​​When the government wanted more housing for the population what did they do? They didn’t regulate the housing industry and make it mandatory to build affordable housing. Instead, they made it profitable for investors by giving them tax breaks. The same is true when the government needed more energy, they gave oil drilling tax breaks.

It’s simple, money and the drive for profits makes change.

Green energy market value...a charged and unprofitable topic

Alternative energy sources are seemingly a huge market, valued at $928 billion. But the green energy market value alone doesn’t mean it’s a profitable market. There has not been a way to get investors involved in green energy on a grand scale. Solar power, wind power, hydro and geo-thermal energy are viewed as too expensive to profit from.

The government tried when it created huge investments into solar, unfortunately most of that money was funneled to “thank” the solar industry for backing specific candidates. Basically, it became corrupt. The answer is not in government-funded projects, but in investor-funded projects.

Until recently, investors avoided green energy as they have not seen a model that will generate profits. Marin Katusa, an extremely successful venture capitalist, fund manager, and friend to Robert Kiyosaki, is about to change that.

Sustainability economics and “Blue Sky Dreamers”

At Rich Dad, we identify the sustainability economy as a B.S. opportunity, that is a Blue Sky Dreamers opportunity. The Blue Sky Dreamers don't actually want to get their hands dirty. They don’t want to do the hard work of thinking. They want to do the easy work of judging. Henry Ford famously said, “Thinking is the hardest work there is, which is probably the reason why so few engage in it.”

But judging others… that is easy to do.

These Blue Sky Dreamers don’t understand the actual realities of what it takes to profit from alternative energy sources. They want a green world, which we all want. We all want a better future for our children and descendants than we have today. But they don’t understand that in order to have an electrical world, you have to have all sorts of rare minerals from the earth, like copper.

Companies like Apple or Tesla and other and other revolutionary technology companies rely on minerals mined from the earth. Here is the problem, 98% of the rare-earth minerals come from China. However, most would argue that China does not meet the environmental or ethical standards we’d like to see—not by a long shot. For example, cobalt is mined by children. Is that something we want to support? No.

Most people would rather not acknowledge this—or at least remain in ignorance of it. The world and its Blue Sky Dreamers don't like these harsh realities. They like the idea of a future of clean energy, green values, and butterflies and flowers. The problem is building these things is very difficult—and costly.

Marin Katusa recently explained that geothermal wells are a great supplier of profitable green energy, but they require extremely deep, ugly, mined holes. These are expensive too. Much more expensive, much larger, and much more ugly than an oil well. So to make this “green” energy, first you’ve got to infuriate all the environmentalists.

But here’s the real problem, these geothermal wells are not cheap. Neither is solar or hydro power. So while Blue Sky Dreamers want green energy, they don’t know how to pay for it. They don’t think about that, they simply judge everyone who is not producing it. They are, ultimately, by Henry Ford’s definition, lazy.

The Katusa investment strategy

Dr. R Buckminster Fuller talked about the world’s accounting system being off. He said we are using the old rules of energy in our accounting. We need to adopt the new rules.

This is where Marin Katusa made his breakthrough. Marin figured out how to make sustainability economics profitable. Marin created what one can call, “Cosmic Accounting.” Cosmic Accounting creates a way to accurately measure the energy output of “green” and alternative energies in comparison to energy created by oil.

Oil is measured by BOEs. BOE stands for Barrel of Oil Equivalent. 1 BOE = about 6,000 cubic feet of Natural Gas. But until Katusa’s breakthrough, green energy did not have anything like this to compare apples to apples. Katusa creates the GBOE, which is the GREEN ENERGY Barrel of Oil Equivalent. The GBOE is already changing the energy world.

Here’s the math. Don’t worry if you can’t follow it, many can’t.

How it works:

Our megawatt year of green power is now 8.76 million kilowatt hours (kWh). Now we convert kilowatt hours into megajoules using the defined ratio:

Now we can convert to green BOEs, using the definition of a BOE as 6.12 x103 MJ.

Crazy right? Here’s the short of it:

Using this conversion we now know that 1 megawatt of green power produced over one year is equivalent to 5,154 barrels of oil per year or 14 barrels of oil per day.

The purpose of Katusa’s formula is to figure out how much oil a well would have to gush initially in order to produce the same number of BOEs over its lifespan as a geothermal well (or any solar or wind farm) can produce over its much longer life span. These life spans vary, so we chose three representative values for each kind of well. For the oil field wells we looked at life spans of 10 years, 15 years, and 20 years. For the geothermal field wells we chose 20 years, 50 years, and 100 years.

Now we set our cumulative production equations equal to each other, insert decline rates (1.75% for the harmonic geothermal decline and 14% for the exponential oil decline), and run through our well life spans (T1 = 20, 50, and 100 and T2 = 10, 15, and 20).

Why sustainability is important

Bottom line is this… Green energy produces more energy at a lower lifetime cost. That is why it is important...to investors. This makes green energy a better investment as it is more profitable. In fact BP, one of the largest oil producers, held a 3 day conference announcing that the future will be GBOE. Until Katusa made his measurement, no one could measure how profitable sustainable energy would be. Now the world knows...and it’s racing to make its fortune. It’s good for business and good for the world.

The true GREEN revolution is starting. Katusa says:

All of the North American and European companies are going to accept that (GBOE). Now will Saudi Aramco do that? No. Will the Russian oil companies? No. So they're going to do what's best for them.

But the North American and European companies have to meet their criteria of not only making money, but also meeting the needs of the environmentalist, the politicians. And as stated earlier, the flow of money won't come in unless they accept the new world that we're in.

Here’s where it gets exciting for investors and people like you. Katusa continues:

This blog started by talking about profit and using that as a motivator to get good works done. Energy is the biggest industry in the world; the problem is that most of it is wasted. However, civilization runs on energy, and Marin has created a fund that profits from all this energy.

Now for the bad news…Katusa’s fund is sold out. Don’t feel bad, many have missed out on this.

The good news is Marin does have a great newsletter called Katusa's Resource Opportunities. Visit his site to get the full 411 and see what he's doing and what his subscribers are benefiting from.

FULL DISCLOSURE: Even Robert Kiyoaki wants in on Katusa’s brilliance and gift for making money, so he too is a subscriber.

The world is an ever changing place. Right now we are in a place of transition in energy and the environment. And while the change has been slow, it’s about to hit the accelerator… of an electrically powered race car. Profit is the ultimate power for change.