Blythe Masters, the Queen Bee of carbon tax.
John's weekly update on graft, corruption and waste in the energy sector.
Carbon Markets In Death Spiral As Deutsche Bank Quits
Deutsche Bank is understood to have pulled the plug on its carbon trading desk, but will continue to operate in the European power and gas markets. The bank is believed to be in the process of winding down its emissions trading operations, the bulk of which operates in London.
Answering a question about the business at a press conference at the German bank’s results announcement, Stephan Leithner, board member for compliance, said: “We stopped emissions trading, and we have discontinued it.” Deutsche Bank’s press office refused to comment further on his statement, but it is understood that the desk in London is being wound down.
LONDON, Feb 6 (Reuters Point Carbon) – Investment banks Barclays and Deutsche Bank have parted ways with their leading carbon analysts, sources at both firms told Reuters Point Carbon on Wednesday, as banks continue to pare back activity in the battered emissions trading market.
Jürgen Fitschen, co-chief executive, and Stefan Krause, a director, are involved in the investigation that on Wednesday saw hundreds of police and tax officials raid the bank’s headquarters in Frankfurt, as well as private addresses in Berlin, Düsseldorf and Frankfurt.
The investigation is centred on 25 of the bank’s staff, according to German prosecutors, and involves allegations of tax evasion, money laundering and obstruction of justice linked to carbon trading certificates.
About 500 police and tax officials were involved in the raids and five staff members were arrested as part of the carbon trading investigation.
The World Bank aims to launch a new carbon fund this spring after it was delayed almost a year because falling carbon prices made it harder to raise cash, a senior official at the bank told Reuters Point Carbon.
Last week, MEP’s on the European parliament’s industry (ITRE) committee rejected a proposal to firm up carbon prices by withholding – or ‘backloading’ – 900 million EU allowances from the 2020 auctioning period. Analysts expect a narrow majority for action in key votes on the parliament’s environment committee on 19 February and, crucially, in a plenary later this Spring.
But Hans ten Berge, secretary-general of Eurelectric, warned that “if we choose the strategy of a lost decade then we are going for a collapse of the carbon market and it will be impossible to achieve the 2050 decarbonisation targets.”
Carbon prices, which are supposed to entice low-carbon investments, plunged to a record low of just €2.81 per tonne after the ITRE committee vote, down from a peak of €32 in April 2006. But ten Berge said that the price could yet fall further. “Just ask investors what the value is of a bond that you would not be able to cash before 2025,” he said. “I think that would be called a junk bond.”
Kerry, a longtime advocate of curbing greenhouse gas emissions, has vowed to make climate change and green energy a focus at Foggy Bottom, and the State Department’s work on the topics should give him plenty of chances.
Among Solar Stocks - Who Has The Liquidity To Last? (Good Charts)
With solar power component prices forecasted to decrease again this year due to continued overcapacity, investors need to assess which of the world’s largest photovoltaic (PV) suppliers have the liquidity to sustain additional revenue and earnings shortfalls. With the demand cycle unlikely to rebalance until 2015, even size won’t save some manufacturers from being forced out of the solar market.
Chu was also forced to walk back comments he made several years ago, when he noted that "we have to figure out a way to boost the price of gasoline to the levels in Europe." With the average price of gas doubling over Obama's first term, Chu's remarks were seized on by Republicans.
Obama has not yet named a successor for Chu. The confirmation process, however, should provide Senators with a vehicle to examine the Department's loan and grant programs for renewable energy. It is an opportunity to ensure that better safeguards are in place to protect taxpayer money.
House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) is bashing Energy Secretary Steven Chu’s record in the wake of Chu’s announcement Friday that he’s stepping down. Issa, who has probed the Energy Department green technology loan program that backed the ill-fated solar company Solyndra, cleared his throat with praise for Chu before attacking him in a Friday statement.
“While I wish Secretary Chu well in his future endeavors and respect his contributions to his country as a scientist, the direction the Department of Energy has taken under his leadership has been disconcerting,” Issa said.
“While many will remember Secretary Chu for his comments about the need to raise gas prices on American consumers and the high grades he publicly bestowed on himself, I found taxpayer losses on projects like Solyndra and the department’s deeply misguided effort to use taxpayer dollars as an investment bank for unproven technologies to be the most problematic aspects of his legacy,” he said.
Check out these clips of the fire at First Wind in Hawaii.
Firefighters responded to the blaze in 14 minutes, but were told by a representative of First Wind that based on two earlier fires, the flames were likely to die down on their own. Instead, the fire burned for more than seven hours and completely destroyed the warehouse, knocking the 30-megawatt wind farm offline.
Gotcher testified a surveillance camera videotaped the fire, and as a result, 30 possible causes had been narrowed to just two – a battery ground fault in the warehouse or some type of foreign object left in the aisle near the battery rack system. Of the 14 energy storage systems Xtreme Power has deployed nationwide, only the Kahuku wind farm has experienced problems with fire, in April and May of 2011, and the fire earlier this year.
Sens. David Vitter (R-La.) and Lamar Alexander (R-Tenn.) asked U.S. Attorney General Eric Holder why he is “targeting” oil and gas companies by prosecuting them for the unintentional death of birds. The senators said on the Senate floor Wednesday that they sent Holder a letter asking him why he is prosecuting oil and gas companies for violating the Migratory Bird Treaty Act (MBTA) by killing birds, yet he is not going after wind energy companies.
“This is not even handed enforcement of the law,” Vitter said. “What that is, is targeting one type of energy producer.”
First Wind officials said Tuesday that they have started work on a program to preserve the population of threatened or endangered Hawaiian seabirds in West Maui, several miles from the company’s Kaheawa Wind project. First WInd is constructing two fenced enclosures about 10 miles west of Wailuku to protect the Hawaiian petral, which is federally endangered, and the threatened Newell’s shearwater. The enclosures, which will encompass four to five acres, will have features to keep predators such as rats and mongoose out.
MY younger sister, Maureen, was born with cerebral palsy. That shaped my view of the world, as I saw the challenges that she and my parents had to deal with. My sister went to special schools for years. She graduated from college and is doing well, but it made me appreciate all she had to go through and all I had. I look at people with disabilities personally.
Video: First Wind CEO boasts about getting expedited stimulus money.
DENVER, January 7, 2013 – Bill Barrett Corporation (NYSE: BBG) announced today that its Board of Directors has appointed R. Scot Woodall, Chief Operating Officer, as interim Chief Executive Officer following Fred Barrett’s decision to step down as Chairman of the Board, Chief Executive Officer, President and a director of the Company, effective immediately. Jim W. Mogg, lead independent director, has been elected as non-executive Chairman of the Board, effectively immediately.
Aubrey McClendon’s agreement to resign effective April 1 culminated a shareholder revolt by Carl Icahn and Southeastern Asset Management Inc.’s O. Mason Hawkins that earlier had cost the CEO the chairmanship he’d held for more than two decades. McClendon also relinquished his annual bonus and saw executive perks curtailed amid federal investigations of a portfolio of personal loans that topped $840 million.
Clever traders at Enron and El Paso Energy created many financing tricks that in the years since have become part of the financing trade: derivatives, synthetic credit default swaps, deals financed with little or no equity. “Enron was the past master, but the game just resurfaced,” says Olson, referring to wild west deal making that inflated the housing bubble and led to the collapse of Lehman Bros. “They took it to a $3 trillion exposure.”
That makes him a little concerned about Chesapeake, which has long trumpeted its active trading and hedging strategies. “You don’t know what they have. I know that I don’t know.” “Chesapeake has valuable assets, but they have a financial dynamic that only works in the fourth dimension: they need $12 billion when their cash flow is just $2 billion.”
Chesapeake has outspent its cash flow every year for the past decade — forging ahead with acquisitions of land and drilling more wells than any operator — convinced that it will be able to find others to finance its growth. Over the years McClendon has convinced the likes of Total, Statoil, Cnooc, BHP Billiton Petroleum, BP, ExxonMobil and more to keep his ship afloat by buying Chesapeake assets. But today with natural gas prices so low, it has become a buyer’s market. And all the buyers know that with Chesapeake on the ropes they ought to be able to extract a good price.
Just two years ago, Chesapeake Energy helped write a state law mandating staggered terms for the board members of large publicly traded Oklahoma companies. This week, the Oklahoma City-based natural gas giant said it would seek “relief” from the very same law, which was designed to help prevent what’s essentially happening now at Chesapeake: a takeover of its corporate board.
The law requires companies incorporated in Oklahoma to have what’s known as a “classified” board structure. That means board members are divided into classes with staggered elections so that only one-third of the members face a vote of shareholders each year. Such classified structures make companies less vulnerable to board takeovers, a threat Chesapeake now faces.
After weeks of headlines questioning the company’s entangled financial relationship with its CEO Aubrey McClendon, Chesapeake this week bowed to the demands of its two largest shareholders, which now include billionaire corporate raider Carl Icahn. The activist investor and Southeastern Asset Management will name four new Chesapeake board members, the company said Monday.
By mortgaging properties that appear to be some of his company's least desirable assets, Mr. McClendon can raise money off holdings that might not otherwise be profitable. And should he default on the loans, he would lose a stake in property that wasn't his company's best bet anyway.
The arrangement protects Mr. McClendon from bigger personal losses while exposing the company's shareholders to the kind of risky financial deals that have drawn scrutiny and caused the stock price to plummet in recent weeks.
Meanwhile, the private equity firms lending the money for the mortgages haven't specified what research went into the properties, and shareholders have been told little about the specific pieces of farmland that are being used by Mr. McClendon to raise money on the promise of future drilling.
If you’ve been hearing a lot about Chesapeake Energy Corporation and its CEO Aubrey McClendon as of late, you might have some questions. What is this company? Who is McClendon and what’s the deal with his wine and antique map collection? To tackle some of those questions and more, StateImpact reporters in Oklahoma, Pennsylvania and Texas teamed up to create a reading guide to Chesapeake Energy’s recent financial woes.
While the urban media cover the staged protests and relay the protesters’ talking points, here’s a look behind the curtain. This link describes how the United Arab Emirates government provided funding so the movie Promised Land could be made.
Here’s one from Vivian Krause documenting Rockefeller Brothers Fund’s “partnership income” from competing pipeline ventures in the U.S., flowed through to efforts by West Coast Environmental Law and Pembina Foundation to oppose the Enbridge project.
And here’s one where the executive director of the Sierra Club admits to accepting $26 million from Chesapeake Energy, one of the U.S.’s largest gas companies, to run a campaign against coal. Michael Brune gamely argues that this was before Sierra discovered the evils of fracking, and tries to make it sound like they refused the dirty gas money, but you’ll notice they didn’t give any of it back.
The Centre for Industrial Progress plans to film impromptu interviews with Bill McKibben et al during The Blackout Rally on February 17, 2013 in Washington DC.
The Sierra Club, 350.org, and many other self-proclaimed environmentalist groups are planning the forward on climate rally.
To assess whether this is a good thing, you need know only two facts.
- In all of human history, there have been only three cheap, plentiful, reliable sources of energy: fossil fuel energy, nuclear energy, and hydroelectric energy. (Solar and wind have always been radically inferior as they have always been expensive and unreliable.)
- The leading “forward on climate” groups seek to destroy not only vital fossil fuel energy, but also nuclear and hydroelectric energy, which emit no CO2.
Conclusion: This rally has nothing to do with climate, though I know many of its participants believe it does. It is about opposing any form of practical energy for any reason. It is a Blackout Rally. And today’s so-called environmentalist movement is a Blackout Movement.
Kinder Morgan CEO Stepping Down
During Kinder Morgan Inc.'s fourth quarter earnings call on Wednesday afternoon, President C. Park Shaper told investors he would be stepping down at the end of March. Steve Kean, currently executive vice president and COO, will become president and COO of the company, effective March 31.
Shaper will continue to serve on the Kinder Morgan (NYSE: KMI) board of directors, but he is resigning from the boards of directors of Kinder Morgan Management LLC, Kinder Morgan Energy Partners LP and El Paso Pipeline Partners LP, all affiliated companies.
Oneok Partners LP agreed to buy an interstate pipeline system from Houston‐based Kinder Morgan
ONEOK and ONEOK Partners have generated solid earnings and announced growth projects in the past year, but have also found themselves snared in several thorny issues lately. The planned Bakken Crude Express Pipeline, ONEOK's supposed entry into oil transport from the Bakken Shale of North Dakota and Montana, was dropped last month due to a lack of producer commitments.
Trading firm Barcas LLC, meanwhile, sued ONEOK Partners in federal court, alleging fraud and breach of contract over efforts to secure commitments on the Bakken Crude Express. Houston-based Barcas accused the Tulsa leadership of trying to reap the benefits of the Bakken's financial windfall without compensating the trading firm for its efforts on ONEOK's behalf.
Norton was one of the executives singled out in the Barcas complaint. He was quoted as telling the Houston company it was excluded because one producer, Tulsa-based Samson Resource Co., would not work with Barcas leader Kevin Foxx. Foxx was a central figure in the financial collapse and bankruptcy of SemGroup LP four years ago.
Last year, the Norwegian government, which has the world's largest sovereign wealth fund, divested PotashCorp because of its purchase of Western Saharan phosphate. Several European banks have done the same. And the European Union last year ended a fishing agreement with Morocco, which included Western Sahara waters, because of concerns that it violated international law.
Other resources are still being exploited. Sand is exported to the nearby Canary Islands, owned by Spain, to bolster beaches there. Several international companies are exploring for oil in Western Sahara or off its shores. Activists say the Austin, Tex.-based company Crystal Mountain Sel Sahara is producing salt in Western Sahara. And several European companies as well as American company UPC Renewables are developing wind farms in Western Sahara, with plans to export the energy. Such investments go forward with little controversy, despite the legal gray area.
Photos by William Banzai7...