With the Democratic National Convention in full swing, expect much attention focused on alternative energy, Cleantech and environmental issues. After all, House Speaker Pelosi has mentioned that her goal is to save the planet and Al Gore will show up and do his usual speech on how global warming will destroy the planet if we don’t do anything ASAP. I don’t want my cynicism to show through but have the DNC and Obama’s organizers taken any measures to ensure that this convention is environmentally friendly? How much energy is being used to run the event? Just asking.

Anyway, a great article out in the Jpost today about how Israel is on the way to being a world leader in Cleantech. While Shai Agassi’s electric car initiative has gained many headlines around the world, Israel is also very quietly making strong inroads, in solar and water technologies. The article focuses on how Israel is developing the technology for the purpose of letting larger nations do the implementation. Much like the current technological revolution, Israel has been behind many of the advances that have powered us forward. The view is that Cleantech will be Israel’s next boom industry as technologies will be developed that power a move away from crude oil towards alternative energy sources.

The article quotes Isaac Berzin, an expert in using algae to curb greenhouse gases: “Israel should be a world leader - creating the solutions the world is looking for. Investments are coming to Israel [as a result] and lots of jobs are created. Let’s say you develop a major solar technology, which is cost effective etc. What’s the demand for electricity in Israel? A small fraction of world demand. If your only output is Israel then you are in trouble. Hi-tech was great for Israel. Where were the markets? Out there, which is absolutely fine.”

It’s interesting that the one thing Israel lacks is natural resources. The one thing Israel has loads of is brainpower, ingenuity and entrepreneurship. Isn’t it ironic that Israel is using its’ main resource to try and level the economic playing field by developing technology that will greatly lessen the need for natural resources.

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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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The Israeli company Energtek (EGTK.ob) has developed a new alternative technology allowing motorcycles to be powered with natural gas.

According to a report in the Jpost: “Energtek has developed a system to power two- and three- wheeled vehicles with natural gas. The motorcycles and scooters use gas canisters that can be replaced in less than a minute, without the need for special refueling stations, CEO Lev Zaidenberg said. The technology also makes it more cost efficient to tap so-called stranded gas in reservoirs that aren’t large enough to justify building a pipeline.”

The company plans to target Asia, where there are more than 250 million two- and three-wheeled vehicles. The company plans on doing a private placement shortly in order to fund the initiative, and they claim that they will be profitable in 2010.

It’s funny because Israel never had an auto or transportation industry, but because of the country’s global technological edge in alternative energies, an alternative transportation industry is starting to pop up. From natural gas powered motorcycles to electric cars, as in Project Better Place,  to GreenRoad Technologies, - Zack” Cleantech” Miller’s favorite-who employ a in-vehicle device that improves driver safety and betters fuel consumption for car fleets, maybe just maybe Israel will be the Detroit of the 21st century.

Disclosure: Author’s fund has no position in any stock mentioned as of 7/30/08.

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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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