Tag Archives: alternative
Another Port and Pellet Pact
Some big news in the pellet industry this week was that Enova Energy group signed a Letter of Intent with the St. Joe Company in Florida to use the port and the AN Railway to ship wood pellets overseas, a minimum of 1 million metric tons. As pointed out in the announcement from Enova, the Port of Port St. Joe (yes, it is the Port of Port St. Joe) is well positioned for bulk cargo shipments, offering access to rail, the U.S. Gulf Intracoastal Waterway and state and U.S. highways. The Port also has a navigational channel that is federally authorized to a maximum of 37 feet, but dredging the Port’s shipping channel to the authorized depth is necessary prior to commencing shipping activities. And it sounds like it’s definitely going to happen. As a footnote, Enova has a biomass power plant in development in Painfield, Conn., that will begin operations during the last quarter of this year. – See more at: http://www.biomassma…h.e0UG9DRQ.dpuf Continue reading
US Property Prices Still Historically Low
Axis Property Investment, a firm located in the United Kingdom (U.K.), is telling clients that now is the time to invest in U.S. property provided the historically low interest rates and property bargains. The firm quotes rates as low as 3.6% for 30-year mortgages, which it says are even lower than what they were in the 1950s. Experts there warn, however, that buying property in the U.S. is different from buying in the U.K., particularly when it comes to pricing and the warranties that come with the home. Buyers are advised to do thorough research before jumping into any foreign market. For more on this continue reading the following article from Property Wire . A 30 year fixed mortgage currently costs as little as 3.6% in interest to service each year and this has made houses more affordable and driven a big rise both in mortgage applications and in refinancing to cheaper deals, experts claim. For those considering property investment in the US, the climate is favorable and hotting up. Low, but rising prices and increasing average rental rates make it possible to achieve much better yields than in the UK, says Axis Property Investment. It also points out that rental vacancies are now at their lowest levels in over a decade, while the homeowner vacancy rate is at its lowest point since March 2006. Selected regions in the US can easily give a rental yield of well above 5%. It points out that properties are often sold as seen and you can be taking on a property with associated problems either in terms of the fabric of the building or debts linked to the address which may be passed onto the new owner. It believes that more research needs to be done into prices before buying as property valuation in the US is different. Other issues worth checking if you are renting out the property is where there is a tenant before you buy. ‘A pre-tenanted property means there will be no initial void period and your income stream will start to flow into your account. Furthermore, there is also associated hassle and stress with an empty property such as the chance of vandalism, or the higher insurance premiums you may have to pay for an empty unit,’ the report says. The firm also recommends that overseas buyers commission an independent property inspection report and for investors to have a realistic exit strategy. ‘We are currently at the bottom of the US property cycle just at the point where prices are starting to rise. In order to derive the greatest overall returns, you should be looking to sell at the top of the cycle and this will take some time to arrive, maybe even a decade from now,’ it says. Continue reading
Carbon’s Unburnable Truth
21/03/13 The coal industry has made a feeble attempt to pop the concept of the carbon bubble and its investment consequences. The Australian Coal Association commissioned Alan Oxley to examine The Climate Institute and Carbon Tracker’s recent research into Australia’s Unburnable Carbon. Oxley attacked the carbon bubble concept in the AFR yesterday. If you accept the science of climate change, the carbon bubble concept is based on a simple unburnable truth. There is a limited budget for the heat trapping greenhouse gases we can put in the atmosphere to avoid global warming goals. Our research, and that of the International Energy Agency amongst others, examines the budget in terms of the goal that Australia, China and the US amongst over 190 other countries have agreed upon, of avoiding global warming of two degrees. This research is not the realm of radicals or “extremists” as the Minerals Council of Australia would have it. Two years ago the now CEO of Anglo American Mark Cutifani said “… the global carbon budget makes simple logical sense.” Investors like Warren Buffett and Jeremy Grantham have embraced the concept and begun applying it. Just last week investors representing $22.5 trillion held an historic summit in Hong Kong focused on their role in avoiding the economic costs of dangerous climate change and launched a new global low carbon investment register. Central to Oxley’s arguments is that national governments are unable or incapable of organising to avoid two degree warming and that investors should stick to their knitting and avoid public interest goals not supported by policy. In Oxley’s report he makes the old short-termist argument that the job of business is to maximise profits within current policy. This ignores the very real interest that investors such as superannuation and insurance funds should have, and are beginning to take, in the consequence of their investments. These funds are both legally obliged to manage funds for long term outcomes and invest in a range of asset classes that will take, and arguably are already taking, climate hits. They are awaking to the fact that their old ways of investing actually add to the risks they are now attempting to manage. Limiting average global warming to two degrees above pre-industrial levels is an extremely challenging task especially as there is already almost one degree warming with 1.4 degrees locked in by lag effects. There are however a number of social, political and technological scenarios where effective action to avoid two degrees warming will be taken. We don’t pretend to predict the exact course, but the International Monetary Fund and the World Bank – hardly a bunch of left-wing greenie extremists – are warning of the economic consequences if we don’t. Global leaders at the G8 concluded its meeting two days ago with a communique restating their commitment to this goal noting “climate change is one of the foremost challenges for our future economic growth and wellbeing.” The history of financial bubbles, such as the dot.com and sub-prime mortgage bubbles, is based on the assumption of never ending demand. History has shown those assumptions to be high risk indeed. All bubbles are theories until they crash. This bubble rests on very solid foundations of basic carbon physics and budgets. Contrary to Oxley’s claim yesterday, nowhere does the IEA say there is “little risk” of stranded assets for the coal industry. The IEA report does say that, for its two degree scenario, “more than two thirds of current proven fossil-fuel reserves are not commercialised unless carbon capture and storage is widely deployed.” The prospects of that are not good at the moment – the prospects of a bubble are therefore real, exposing as bizarre the report’s claims that a mining company’s reserves of fossil fuels are disconnected to its valuation by the market. It should be noted that The Climate Institute can hardly by labelled as ignoring the importance of carbon capture and storage. We have repeatedly called on industry and government to speed up the technology’s deployment, and have been public on why Australia and the world should pursue it. The ACA on the other hand appears in retreat, turning its billion dollar Coal21 fund, previously focused on low emissions technology into a vast slush fund now also able to “promote the use of coal.” Finally, our analysis challenges current valuation methods but does not, as Oxley’s report falsely asserts, call for full divestment. Our call is for far greater consideration and disclosure of carbon and climate risks from investors, as well as greater investment in low carbon solutions. In that we are joining and being joined by a swelling rank of NGOs investors and regulators. Denying the concept of the carbon budget is like denying climate science. That is carbon’s unburnable truth. This article was originally published in The Australian Financial Review (online). Republished with permission of the author. John Connor is CEO of The Climate Institute. Read more: http://www.businesss…h#ixzz2WrSQmCwt Continue reading
