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No. of Recommendations: 2 the budget crunch the DOD is in now, it could come down to who can produce a better than current shipboard rotating machine, at a much reduced cost. In short, the Navy could always find itself in the position of being forced, budget wise, to buy the 2nd best technology - but at a much cheaper cost - even though HTS saves petroleum fuel consumption/resupply costs et al more in the long run.


As always, your analysis is excellent.

I see two major events impacting all military spending. The Democrats won the election and they will be looking for long-term cost reductions from the military. Lower fuel usage, in my opinion, will win out of lower initial cost. I also expect the Democrats to be more environmentally concerned and that will certainly impact any decision that deals with oil use.

The second event is related to the last. If the Supreme Court puts CO2 on the EPA's regulation list, expect the Democrats to be watchful of any military use of fuels that does not cut our country's output of CO2. I cannot remember how much oil the military uses -- it is a big percentage and 20% sticks in my mind. While I do not see Kyoto getting signed until after there is a new president, I do see politics favorable to energy solutions like those offered by AMSC. Of all the AE plays, I like AMSC best and it isn't creating new energy -- it is just helping us not waste what we already use.

There is lots of competition for government spending. AMSC is using this spending to get the research done it needs to get products to market. For now, I think the 55 Kelvin cooling target is far more important than anything else. As the temperature required to getting superconductivity rises, the cost of cooling (and the technology required to get it done) can become more conventional (and less costly). It is the temperature breakthrough that I think AMSC will be talking about five years from now that led to superconducting becoming a real-life reality.

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