Friday, March 30, 2007

Peak Mazola?

The WSJ EnergyRoundup has some interesting thoughts and lots of links on today's corn report.
Limit down. Equities yawn? Something to think about over the weekend.

End of oil heralds climate pain

From the Beeb:

"Many people think that running out of oil, or "peak oil", would be good for the climate. In his new book The Last Oil Shock, David Strahan begs to differ; he suggests it may bring catastrophe. "

HT: Junkscience

Fair weather brings strong profit for Lloyds of London

From the International Herald Tribune:

HT: Junkscience

Thursday, March 29, 2007

Mitsubishi Heavy To Borrow Money Using CO2 Credits

This seems like an important milestone toward treating emission credits as bankable property rights. Two questions, why didn't this deal get more play in the press and why is Mitsubishi borrowing money? (Because they can. I know, old joke. Seriously, what is the effective cost of capital here?).

From EnergyDaily:

Pickens Tells CNBC: Fundamentals Pushing Up Oil, Not Politics

The video is here.


In answer to an email "why would ADM benefit from subsidies for cellulosic ethanol?"

"Where there are subsidies, there I will be" or something to that effect.

NYTimes Leonhardt on climate change policy

This by way of Environmental Economics again, from yesterday.
Scroll down to the comments for some simple (and not so simple) exposition.

Pig poop: subsidies vs taxes

Environmental Economics has a post touching on the taxes vs. cap'n trade vs. subsidies subject of the last few posts.

It's been pointed out to me that ADM's stock seems to be waking up. Watch for a retracement of yesterdays gap open and it may be setting up one of Mr. O'Neills saucer & handle formations.

Which may portend passage of the $6 Bil. in subsidies for cellulosic ethanol currently being proposed. Stocks are smarter than commentators.

Wednesday, March 28, 2007

Carbon sequestration: "This is an interesting untested technology"

Michael Dorsey is assistant professor at the Dartmouth College in the Environmental Studies program.

Scitizen has been running some interviews comparing cap and trade vs. taxation vs. subsidies for new technology.

From last December

What (do you think) is Humanity's Greatest Challenge?

Determine what the next X-prize will be offered for:

From: Commercial Space Watch

Summary of Testimony of Jeffrey R. Holzschuh

Vice-Chairman, Institutional Securities Morgan Stanley.

Some insight on China. Six page PDF

From yesterday's testimony: "China's emissions cap-trading efforts would be made more effective if America creates its own carbon cap-trading system to foster U.S. carbon emissions reductions."

These guys are major players in cap and trade. When I get around to publishing the Rent-Seekers stock index they and GS (maybe LEH too) will be the core of the Financials component.

Other witnesses at Climateer Economics

Tuesday, March 27, 2007

USDA Funds Available!

Inviting Applications for Renewable Energy Systems and Energy EfficiencyImprovements Grants and GuaranteedLoans

HT: Renewable Energy Access

Ethanol, Rent-seeking,ADM and God

In 1995 The Cato Institute put their imprimatur on a paper that said each dollar of Archer Daniels Midland's ethanol profit cost the American taxpayer $30. This wasn't quite fair, as it ascribed all government subsidy costs to ADM's lobbying efforts.

Dwayne Andreas was a prodigious lobbyist. This from SourceWatch: "A Watergate-era investigation led to criminal charges that he had illegally contributed $100,000 to Humphrey's 1968 campaign for President, but Andreas was acquitted. And his $25,000 cash donation to President Richard M. Nixon's re-election bid in 1972 became a focus of Watergate inquiry into abuses surrounding unreported campaign money. According to an investigative memo uncovered in 1992 that quotes President Nixon's personal secretary Rosemary Woods, Andreas delivered $100,000 in $100 bills to the White House shortly before the 1972 election."
I've looked at love from both sides now.

Mr. Andreas' motivation was higher than just rent-seeking for ADM, The Washington Post noted in 1985 that "Andreas said he was raised in a religious tradition that called for 'tithing' 10 percent of personal income to the church. And, he adds, 'I consider politics to be just like the church.'"

A back-of-the-envelope calculation shows that the cost to the taxpayer for each dollar of ADM's ethanol profit is down to $2.85. The current round of subsidies are set to expire in 2010.

Ethanol may be blessing or curse for farmers

There has been some insightful commentary and forthright research coming out of ethanol country. This article from the Minneapolis StarTribune contains a quote from the Minnesota Commissioner of Agriculture: "If I were to give a personal prediction for the next year or two, I would suggest that the economic opportunity for an ethanol producer doesn't look that great," referring to new facilities, not those already bought and paid for.
Investors may want to take note.

Monday, March 26, 2007

Corn Can't Solve Our Problem

Two self-referential (some would say self-reverential) points from last Friday's post on biofuels.

We have a meme! The above title is the headline for this WaPo story from Sunday's early edition.

Secondly, Sen. Cameron's definition of an honest politician seems relevant to this classic bit of rent-seeking between ADM and the Canadian government.

The money quote, "Our concern is when you start making comments about clawing back and putting rate caps of returns on industries that it may retard or may even discourage the kind of vibrant industry that we all seek," completely spins the fact that the proposal is to clawback Canadian government largess from ethanol producers achieving a level of profitability, not what the maximum RoR will be.

Usually, if a John threatens a whore for reneging on an agreed upon service it's chargeable, here it's corporate communications.

Friday, March 23, 2007

Brush anode and tubular cathode scale up microbial fuel cells

How's this for cool?

The Ethanol Backlash

From the Wall Street Journal:
HT: WSJ Energy Roundup

I think we've got us a meme here.
For your weekend reading pleasure I had decided last night to offer a 103 page PDF from the Global Subsidies Initiative of the International Institute for Sustainable Development entitled Biofuels-At What Cost.

Dated October 2006, this is a real eye-opener. First, the interplay of mandates, tariffs, direct subsidies and cost shifting make for a very opaque market, which is how many of the players prefer it.

Second, even by oil industry standards where energy is measured in Quads and revenues in B's and T's the numbers are large. $5.5 to $7.3B in 2006 ($1.o5-$1.38/gallon) and rising. Throw in another $10B for increased food and feed costs and we're talking real money.

Finally for investors in rent-seeking organizations there is the real risk that the politicians will change the rules. Heed the words of Sen. Simon Cameron (R&D!-Pa.): "The honest politician is one who when he is bought, will stay bought."

Seriously, at a minimum, Ch. 5 is worth a look.

HT: Econbrowser

Thursday, March 22, 2007

Sustainable Fuel for the Transportation Sector

There is a paper in the March 20 Proceedings of the National Academy of Sciences with the above title. In it the authors present a new method (patent pending) of producing fuel for vehicles. In addition to discussion of their system they give a quick overview of just how challenging it is going to be to make any meaningful reductions in oil consumption by using corn as the feedstock for ethanol or soybeans for biodiesel.

Some factoids: Diverting the entire U.S. corn crop to ethanol production replaces 12% of current gasoline consumption. What's that got to do with the price of tortillas in Mexico?
Just under 20% of the entire U.S. landmass is under cultivation. To run our planes, trains and automobiles (and trucks) using biomass would require harvesting an area equal to 58% of the whole country at current rates of production, which can't happen because the most productive land is already being farmed, so figure 75-80% of the whole country being farmed just to supply our energy needs. With no land devoted to food crops the obesity epidemic takes care of itself.

Thursday, March 15, 2007

As the World Warms

From The Atlantic:

HT: Infectious Greed

Lunar platinum and alcohol fuel cells

From The Space Review:

HT VentureBeat

CO2e and Cantor Environmental Brokerage Join Forces as CantorCO2e

From CNW Telbec:

InterContinental Exchange Makes Offer to Purchase CBOT Holdings

From Bloomberg:

Applied Materials Commits to Leading U.S. Solar Power Generation Capability

From Semiconductor International:

HT: VentureBeat

Big-Name U.S. Investors Back Brazilian Ethanol Start-Up

In today's Wall Street Journal:

HT: WSJ Energy Roundup

The Forex guy down the hall stole your Journal? Here's some backround from Cattle Network:

Carbon traders dip toe in post-2012 market

From Reuters:

See below. This is one inefficient market.

Traders left guessing at future carbon prices

From Reuters:

MIT provides blueprint for future use of coal

From PhysOrg:

Climate Change to Cost Germany €800 Billion

From Der Spiegel:,1518,471762,00.html

HT: Junkscience

Wednesday, March 14, 2007

Nypa for ethanol production: N’Delta in the limelight

From the Tide (Nigeria):

What Every Tech Pro Should Know About 'Green Computing'

From InformationWeek:

Off- Topic: Universal statistical properties of poker tournaments

From the ArXiv:

We present a simple model of Texas hold'em poker tournaments which contains the two main aspects of the game: i. the minimal bet is the blind, which grows exponentially with time; ii. players have a finite probability to go ``all-in'', hence betting all their chips. The distribution of the number of chips of players not yet eliminated (measured in units of its average) is found to be independent of time during most of the tournament, and reproduces accurately Internet poker tournaments data. This model makes the connection between poker tournaments and the persistence problem widely studied in physics, as well as some recent physical models of biological evolution or competing agents, and extreme value statistics which arises in many physical contexts

Four page PDF

Start-Up Fervor Shifts to Energy in Silicon Valley

From the New York Times:

Israeli firm turns seaweed into green fuel by new technology

From The Hindu:

Biodiesel firm seeks more cash from bankers

From The Guardian:,,2033127,00.html

HT: WSJ Energy Roundup

Ethanol Liberation Movement

From the Wall Street Journal:

M'bishi Heavy Gets $4-5 Bln TXU Reactor Deal-Source

From Reuters:

HT: Junkscience

Canada emissions trade seen worth C$12 bln: CIBC

From Reuters (Can.):

Carbon Disclosure Project

Canada 2006:

70 paqge PDF:

Tuesday, March 13, 2007

New Approach Needed to Pump Up Carbon Offset Sales, Says Study

From PR Newswire:

China to build airports...

China reportedly plans to invest 52 billion yuan (6.7 billion dollars) in building 37 new airports...
From Agence France Presse:

The Business of Climate Change

From Lehman Brothers:

145 page PDF

It's Not Easy Going Green...

From Knowledge@Wharton:

Wal-Mart Announces Goal to Sell Sustainable Electronics; Retailer to Score Electronics Suppliers on the Sustainability of Their Products

From PRN-First Call:

HT: Treehugger

Corrected-Coke concerned about corn syrup prices

From Reuters:

Is Global Warming a Hot New Litigation Frontier?

From the New Jersey Law Journal:

HT: Junkscience

Cross-posted at Climateer Economics

Monday, March 12, 2007

When Corporate Interests Conflict on Global Warming

From The Big Picture:

Then & Now: Physical Effects of One Year of Day Trading

From uglychart:

Climatic Consequences

Investment Implications of a Changing Climate

From Citigroup:

120 page PDF

The World Welcomes CTC!

From the Carbon Tax Center:

CTC Home:

Only a carbon tax can stop global warming

From the Salt Lake Tribune:

Collezione shuts down facilities due to global warming

“Due to the global warming the knitwear does not sell as much,”

From the Turkish Daily News:

Al Gore's Carbon Solution Won't Stop Climate Change

From AlterNet:

Pigovian Taxes:

Cross-posted at: Climateer Economics

Friday, March 9, 2007

Kerry Announces Hearing on Proposed $32 Billion TXU-KKR Deal

From John Kerry's website:

John Kerry on Coal:

and outlawing proposed coal-fired power plants:

Kerry to Propose Bill to Halt Texas Coal Power Plant Construction

John Doerr's Tears

From Wired News:

HT: Infectious Greed

LS9 and Gevo latest biofuel companies, backed by Khosla Ventures

From VentureBeat:

...Study by Swiss Re: below-average catastrophe losses in 2006

From Swiss Re:

Four page PDF$FILE/NewsRelease%2008_March_07.pdf

'Inconvenient Truth' coming to a Gammage near you

Gore will be paid $100,000 plus expenses for the event
From the ASU Web Devil:

HT: Junkscience

Thursday, March 8, 2007

Dingell/Boucher Solicit Recommendations On Climate Change in Preparation of Upcoming Legislation

Letter to energy industry groups
From the House Committee on Energy and Commerce:

New Weapon Against Warming: "Flatulence Cards" Offset Dog, Human Emissions

For 35 Australian dollars (about 27 U.S. dollars), customers of Sydney-based Easy Being Green can offset a year's worth of carbon emissions linked to their dogs.

From National Geographic:

Throwing Dollars at the Sun

From the WSJ Energy Roundup:

Biofuels: An advisable strategy?

From the Universitat Autonoma de Barcelona:

HT: Junkscience

Green energy deals 'mislead customers'

From The Independent:

HT: Junkscience

Professor Martin L. Weitzman on the Stern Review of the Economics of Climate Change

Warning: This one is for the pro's.

If you understand "It may well turn out that the option value of waiting for better information about catastrophic tail events is negligible because early detection is impossible..." this is a valuable paper. If not, a better use of time may be to release a small amount of sequestered CO2 and create a biochemical-electrical field i.e. crack a beer and think about other things.

By Professor Weitzman:

Dr. Weitzman's C.V.

Cross-posted at Climateer Economics

Monday, March 5, 2007


Theodore Roosevelt IV Appointed Chairman of Initiative

From Lehman Brothers:

JPMorgan Environmental Index - Carbon Beta

From J.P. Morgan:

Business puts new energy into energy policy

From American Public Media:

and from the Wall Street Journal:

Obama, Biden Sponsor Bill With Tax Breaks for Auto Fuel Gains

From Bloomberg:

Will green tech become the valley's new bubble?

From the San Jose Mercury News:

US Coal-Fired Power Plant Plans up in Smoke?

From PlanetArk:

HT: Junkscience

Bio-fuel Investments


Brazil-US: Biofuels to Top Lula/Bush Summit Agenda

From Brazzil Magazine: