Praxair (PX): Clean coal play on cap-and-trade

"Chu said, 'These projects will train workers for a clean-energy economy and help position the United States as a leader in carbon capture and storage technologies for years to come.'

"This isn't a huge grant, but it does show that the United States government is continuing its support of this crucial technology.

"The so-called 'cap-and-trade' bill seeks to limit carbon-dioxide emissions. But carbon capture is designed to grab the CO2 before it hits the sky. It doesn't control emissions, it eliminates them.

"The most exciting application of this technology would come from the wide-scale adoption of a system that allows coal-fired electric utilities -- which produce half the power in the United States and even more than that in China -- to burn pure oxygen instead of air.

"This removes nitrogen from the smokestack and leaves nothing but water vapor and CO2, which are much easier to separate than a bunch of nitrogen byproducts.

"The captured carbon is then stored underground or used for other purposes. The point of the federally funded project is to share the leading technology with potential users of it.

"Praxair owns the lion's share of the patents behind this oxygen technology. Not only will the company profit from the use of its technology, it will also get a supply of CO2 gas, which it sells for industrial, medical and commercial purposes.

"The day will come when all of the world's coal-fired plants use this technology. It is the better mousetrap, and its eventual use is inevitable. For long-term investors, Praxair remains a compelling buy.

"I think the firm's 'oxy-fuel' technology alone is worth $76.62 a share. Investors who buy now get the world's leading industrial gas business for free."

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