Tag Archives: Investments

Natural Resource Chart of the Week

The Global Resource world is changing dramatically with the entry of new players in the markets and significantly changing weather patters. In just six months we  have seen the worst drought in over half a century that devastated the crop in the US corn producing farm belt sending ripples through agricultural markets. This was promptly followed by ‘Superstorm’ Sandy – the worst hurricane on record. Also, unusually intense typhoons in China (three consecutive in the span of one week) damaged approximately 3.5 million hectares of farmland in major corn, rice and wheat producing areas while floods created worries about lower grains supply from Australia and Argentina.


Australia is currently experiencing its highest temperatures since record keeping began and the country is being devastated by epic fires destroying homes, farms and infrastructure at an unparalleled rate.

Read our most recent piece by Anric Blatt on the most compelling investment ideas for 2013 and beyond by clicking here.

by Anric


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U.S. receives international support for renewable energy

With the December 31 deadline for the extension of the wind power production tax credit looming, the future of American green energy hands in limbo. The US might to look to other countries that are dedicated to the development of the renewable energy sector.

China is in its 12th five year plan and places strong emphasis on boosting economic growth through development of seven emerging industries: new energy, energy conservation and environmental protection, biotechnology, new materials, new IT, high-end equipment manufacturing and clean energy vehicles. China is understandably more aggressive in its investments in a low-carbon economy. The country aims to reduce greenhouse gas emissions by 40 to 45 percent per unit of gross domestic product (GDP) by 2020, compared with 2005 emission levels. China seeks to increase the use of non-fossil fuels as a percentage of total energy use to 11.4 percent by 2015 and 15 percent by 2020.

Japan recently approved incentives for renewable energy, which will help the country decrease its dependence on nuclear power and increase clean energy programs, such as offshore wind farms. These incentives could result in billions of dollars in clean energy investment, expanding revenue from renewable generation and equipment, including wind turbine components such as ultracapacitors, to more than $30 billion by 2016.  Just 1 percent of Japan’s power supply comes from renewable energy sources, apart from hydro-electric dams which account for most of the rest of the electric power. Despite the low starting point, Japan has the potential to generate cleaner and safer energy from renewable sources such as the sun, wind and geothermal. Over the past decade, Japan’s wind power capacity has multiplied to 2.5 million kilowatts, and the Japan Wind Power Association estimates the country can generate 740 million kilowatts of wind power on a commercial basis on land and offshore.

Germany also announced a shift away from nuclear power last year with an ambitious plan to shut down all of its 17 nuclear reactors within a decade and replace the 30 percent of the energy currently generated by nuclear reactors with renewable power. The country pledged to obtain 80 percent of its power from renewable sources by 2050. Currently, Germany gets 17 percent of its electric power from clean energy sources, about half-way to its target of 35 percent by 2030. The aggressive energy policies have also stimulated the job market in the country with 382,000 new clean energy technology jobs, and this number expected to reach 600,000 by 2020.


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First U.S. Tidal power project launches in Maine

The ocean is a tremendous bank of energy. Covering more than two-thirds of our planet, the amount of energy embodied in the ocean’s tides, currents, and waves, could power the world – if we were able to commercialize the technology to harness its renewable power.

While technologies harnessing energy from tides and currents have been domestically discussed for decades, no project has ever reached commercial development and been connected to the grid in the United States. In Eastport, Maine, however, that changed today with the launch of the Ocean renewable Power Company (ORPC) tidal energy project. As clean energy advocates, we are excited to highlight new, innovative projects that inject clean power and jobs into communities, deploy American ingenuity and know-how and utilize smart clean energy policies. The DOE invested $10 million in the project as part of its larger water power program that aims to better understand the environmental impacts that come with harnessing ocean energy.


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Data Suggests Global Economy “More Vulnerable than Ever” to Price of Oil

Rising oil prices have had significant negative impact on the global economy, according to new economic research.  As oil prices approach historical highs, the global economy may suffer from another “price shock,” warns Dr. Minqi Li, associate professor of economics at the University of Utah.

Dr. Li’s regression analyses of world economic growth rate versus change in world oil consumption suggest that the global economy has not, in fact, become less dependent on oil in recent years, contrary to much previous research.

Furthermore, Dr. Li’s models show that world oil supply has become much less responsive to oil price increases.  As seen in the graph above, from January 1994 to May 2004, an oil price increase of $0.97 on average brought about an additional influx of one million barrels of oil to the world’s daily supply.  From June 2004 to November 2011, however, it took an increase of $11.80 dollars to bring about the same increase in daily oil supply.  The observed “world oil supply curve” has dramatically steepened by nearly 12 times.  This may have serious ramifications for future global economic growth.

“If world oil production does peak and start to decline in the near future, it may impose a serious and possibly an insurmountable speed limit on the pace of global economic expansion,” says Dr. Li.

To ensure sustained global economic progress despite the challenges of rising oil prices, we must seek out opportunities in the “Bridge Period” as emerging energy technologies become more cost effective, and traditional energy production becomes cleaner and more energy efficient.

Learn more about Investing in the “Bridge Period” by clicking here

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Posted by on March 27, 2012 in Commodities, Oil


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"Moving from Green vs. Gold to Green EQUALS Gold"

Thomas Friedman’s latest column in the New York Times reaffirms our conviction that energy, climate and resource concerns are of primary importance around the world.

Those who are late to the recognize these challenges will be in for a rude awakening…

“The planet is getting flatter and more crowded.  There will be two billion more people here by 2050, and they will all want to live and drive just like us. And when they do, there is going to be one monster traffic jam and pollution cloud, unless we learn how to get more mobility, lighting, heating and cooling from less energy and with less waste – with so many more people.”

When you have a global market, with a burgeoning population, that faces rising scarcity of resources and still so much waste in how we make and consume things, there is a great market opportunity for innovation.  Energy and resource efficiency, Friedman says, will be “the next great global industry.”

The world is “going from green vs. gold to green equals gold.”

Read Friedman’s complete column here

Read our recent Q&A on investment opportunities in Natural Mega Themes


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Chinese Water, Agriculture at Risk from Climate Change

The Chinese government’s “Second National Assessment Report on Climate Change” warns of significant risks to agriculture and water resources as a result of a changing climate.

Global warming may reduce crop yields, shrink rivers and increase the frequency of damaging droughts and floods, says the 700+ page report, recently released to the public.  Chinese prosperity and economic growth may be hindered as a result.

If global warming trends continue unmitigated, Chinese grain output could fall between 5% and 20% by 2050.  China is already the world’s largest consumer of grains and relies heavily on imports of key commodities.  Any decrease in domestic production would be deeply felt.

Lin Erda, one of the chief authors of the report, remarked:

“Generally, the observed impacts of climate change on agriculture have been both positive and negative, but mainly negative.  But steadily, as the temperatures continue to rise, the negative consequences will be increasingly serious.  For a certain length of time, people will be able to adapt, but costs of adaptation will rise, including for agriculture.”

However, Lin points out that improved crop choice and more efficient use of irrigation and fertilizer could help the situation, suggesting that agri-science and new technologies will be crucial for China going forward.

The impact of climate change on China’s water resources may be sizable.  Experts fear “severe imbalances in China’s water resources,” concentrated precipitation in the summer and autumn rainy seasons, and “increasingly frequent” floods and droughts.

“Without effective measures in response, by the latter part of the 21st century, climate change could still constitute a threat to our country’s food security.”

The report warns that 8 of mainland China’s provinces could face severe water shortages by 2050 (less than 500 cubic meters per resident), and 10 others could face lesser shortages.  The continual retreat of glaciers in Tibet which feed many important rivers is also cause for concern, as is rising sea levels that could impact coastal cities like Shanghai.

Through it all, Chinese carbon emissions continue to rise.  Rising by a predicted 10.4% a year, China’s emissions could grow to 9 or 9.5 billion tons by 2020.  Achieving the Chinese government’s stated goal of a 40-45% reduction in economic carbon intensity by 2020 (the level of carbon pollution for each unit of growth) will be an expensive endeavor. China’s efforts to reduce carbon emissions will likely require 10 trillion yuan (USD $1.6 trillion) of investment, with half designated for energy-saving technology and clean energy.

The report emphasizes the importance of prompt action, noting that “many cost-effective and mature technologies for energy saving and new and renewable energy have already been widely applied.  In the future, controlling greenhouse gas emissions will require more costly and less mature technologies.”

Read the full article here


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Norway Commits $300 million/year to Support Carbon Markets & Energy Efficiency

The oil-rich nation of Norway has announced significant financial commitments to support broader global access to energy and the development of a new carbon marketplace.

As part of its “Energy+ Partnership” with the UK, France, Denmark, Switzerland, the Netherlands and South Korea, Norway will invest $300 million a year to further these goals.  Poor, developing nations including Bhutan, Ethiopia, Kenya, Liberia, Maldives, Morocco, Nepal, Senegal and Tanzania will receive aid to build new, efficient power plants and increase public access to energy.

The Energy+ Partnership initiative will be launched this June at the Rio+20 summit.  The top priority of the conference will be broadening global access to energy.  The International Energy Agency (IEA) warns this undertaking may cost $48 billion a year – at a minimum.

Included in the Energy+ agenda are measures to reduce greenhouse gas emissions in developing nations and develop practical ways to establish new carbon markets.  Instead of the project-by-project approach established by the U.N.’s Clean Development Mechanism system, many governments are now advocating for the creation of carbon markets across entire sectors.  Norway’s investments will go towards furthering these markets in energy.

Read the full article here


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