PANASONIC INVESTS $30 MILLION IN TESLA

Pansonic as we all know it is a company supplying consumer electronics for many countries all over the world. A few of us know that Pansaonic is the world’s leading battery cell manufacturer and one of the biggest automotive industry providers. Recently, Panasonic purchased 30 million dollars worth of stocks from Tesla Motors, a manufacturer of high performance electrical vehicles. The deal was sealed through the purchase of common stocks in a private placement. The deal was struck to expand and elevate the market of electrical vehicles.

Tesla In order to produce advanced battery packs for it’s products, saw this deal as fundamental and crucial to the company. Many people will wonder why I brought up this article in the energy industry blog. Well, the main reason is that Tesla cars are electrical rather than depending on gas. Panasonic aims to be one the leading Green companies in the electronics industry. This vision will propel the cultural corporate image and boost it’s public relations.

http://online.wsj.com/article/SB10001424052748704506404575593162128563810.html?mod=WSJ_Energy_leftHeadlines

Is Biofuel The Future of This Industry?

Bio MCN, one of the leading biofuel manufacturers in the world, has over produced to supply the entire Dutch biofuel gasoline quota for 2010 and more. Biofuel gasoline is produced by vegetables and animal fat and is considered as a renewable energy since it is made from certain types of residue. The positive aspect that biofuel has is that it reduces 78% of the carbon dioxide emissions. This company focuses to expand and influence others around the world to invest in biofuels as well. They strongly believe that this is a great alternative to natural gas and that it could possibly be the future.

Though I am impressed by Bio MCN’s aspirations and accomplishments in expanding and encouraging biofuel, I do not think that it is neither the answer nor the future. All that biofuel does is replace natural gas, and to produce this biofuel natural gas is used. So in the end we are still using harmful substances. This biofuel is great for if and when we run out of oil, but others are looking to alternative resources that use wind, water, and solar to create energy. Burning biofuel can still harm the ozone layer since it is burned substances. It is a great start in looking into other forms of energy, but if this company wants to expand I think they should also consider other options.

http://www.energy-business-review.com/suppliers/biomcn-bio-methanol-second-generation-biofuel

Top Ten Alternative Energy Companies

The author, Jeffery Martin, starts off by saying this is a “one-in-a-lifetime opportunity” to invest because our green economy is just starting. He compares our opportunity to those who had the chance to invest in AT&T in 1877. But, of course, he says that you must know which particular companies are safe to grow your portfolio.

Topping the list is Winslow Green Growth (WGG). Martin says that the safest investments are those that span the spectrum of risk. WGG is a fund that invests in socially responsible companies.

Number two on the list is WFI Industries. It helps to produce geothermal energy in new buildings. It does this by drilling long pipes more than five feet into the ground and then sending that air, which is basically constant throughout the year, into the building above. This air is warm enough for winter, yet cold enough for summer.

First Solar is ranked third for the sole reason that its solar panels are much cheaper than the rest. Their panels lack silicon.

Fourth on the list is Fuel Tech. He mentions how Fuel Tech has zero profitability but still an egregiously high stock price. He says that this is risky, but he points back to history to others like Google and Amazon that were once in the same position.

Bio-Solutions Corporation rounds out the top five. It offers organic solutions to organic problems. Not only has it developed a method to reduce mortality among industrially farmed poultry, it has discovered innovative ways to fight malaria. All of this is done with chemicals that are eco-friendly.

Sixth is Blue Earth Solutions, which has developed a way to breakdown styrofoam. The brokendown molecules can then be sold back to the Styrofoam producers.

Seventh is Zoltek. Zoltek produces carbon nanofibers. The nanofibers that it produces are extremely strong and equally lightweight. These are purchased by airplanes and car companies to reduce weight and therefore fuel consumption.

At eight is Composite Technologies, which produces some the world’s biggest wind turbines.

Number nine is Plug Power. It produces hydrogen fuel cells that might be the energy of the future. The writer notes that this company has the highest potential.

At bottom of the top is Ormat Industries. It provides alternative and renewable energy solutions. It also owns geothermal power plants.

So what do you guys think? Should we advise others to invest in these companies? Quite honestly, after reading the article, I’m tempted to invest in all of them. Obviously more research must be done. What other criteria do you think we should look for in companies that we plan on investing in? Do you think potential of the these green companies is worth risk? Should we go with the fail-proof option? Or, should we go with both and diversify?

http://www.helium.com/items/1537789-invest-in-green-companies

Federal Funding For Renewable Energies

In my previous post regarding the California solar energy plant, I discussed the federal program through which they are trying to receive a loan for the plant.  Now the government is discussing whether they should continue this loan program or cancel it.  Many of the president's aides are telling him to not discontinue it but there are some other concerns.  The main argument is over a wind farm in Oregon.  There are concerns that the corporate backers are only contributing about 10%, whereas the government would be providing over 65% and they don't feel this is a fair trade (WSJ).  The government claims that they have no plans to discontinue the program and that they just plan to streamline it. 

I felt this loan program, which pushed for advancement of of renewable energies, is a great program.  I appreciate when the government tries to move our country towards better forms of energy.  It saddens me to see that they are going to cut back with it, when oil projects aren't stopping. This will also have a wide effect on the industry as a whole, as it hurts the advancement towards renewable energies and possibly fosters positive energy for the oil and gas industry.

http://online.wsj.com/article/SB10001424052748703506904575592843603174132.html?mod=WSJ_Energy_leftHeadlines

Proposition 23 Rejected in California

A November 3^rd Wall Street Journal Article states that a ballot measure that would have delayed the implementation of a state cap on greenhouse gas emissions in California has failed (WSJ). The vote was not a close one, with 61% against the measure to postpone the bill and 39% for it. The bill was called Proposition 23 and it created a lot of controversy. There were oil companies and other businesses dependent on the fossil fuels industry who campaigned for the proposition and environmentalist groups and “alternative energy investors” who were against the proposition. In total, the campaigns both for and against Proposition 23 spent $40 million, a sum that mostly went to advertising (WSJ).

There are, of course, legitimate arguments coming from both sides of this debate. Again, according to the Wall Street Journal article, the National Petrochemical and Refiners Association said that because of the greenhouse gas cap, businesses and jobs will simply move from California to other states and countries because outside of California, they will not have to pay for their emissions (WSJ). On the other end of the spectrum, a group called the Union of Concerned Scientists claims California’s rejection of this proposition shows their belief that reducing carbon emission can help both the economy and the environment (WSJ).

This is an important issue for the energy industry. Because the proposition has now failed, I predict, like the National Petrochemical and Refiners Association, that traditional energy companies that rely on fossil fuels will simply abandon California because of the increased costs. Yes, rejecting this measure is an accomplishment for alternative energy investors because they will see less of an influence of oil and gas companies and an incentive to invest in clean energy. However, I am not entirely sure how intelligent it is to scare large companies that provide large amounts of tax revenue and jobs away from a state that is facing a $19 billion deficit and 12.4% unemployment, according to the Los Angeles Times and the U.S. Department of Labor Statistics. Perhaps this sort of bill will be wiser when the economy is more stable than it is now and when other states and countries adopt the same policy. For now, I think that Californians have made a mistake.

Ball, Jeffrey. "Californians Defend Carbon Caps." Wall Street Journal (2010): n. pag. Web. 3 Nov 2010. .

Shell's Profit, Smaller Companies' Demise

According to a Wall Street Journal article, Royal Dutch Shell PLC increased its profit strongly in the third quarter. However, the Obama administration’s drilling moratorium in the Gulf of Mexico, which ended this month, will have long lasting effects on production. Because of the ban, next year Shell expects to pump 40,000 barrels per day less than it had planned before the moratorium was enacted. This is 1.3% of its production (WSJ). Interestingly, Shell still reported an 88% rise in profit that beat expectations on Wall Street. This rise is likely because of increased natural gas and oil prices (WSJ). The company has also embarked on an “efficiency drive”, which also had an effect on profit. So far, Shell has lost $115 million because the moratorium forced some rigs to be unused (WSJ).

It is unlikely that production will return to forecasted levels very soon because of uncertainty about new regulations. Companies are trying to figure out how increased inspections, required spill cleanup plans, and more examination of testing will change business (WSJ). There are other companies, unlike Shell, that have taken unsustainable losses because of the ban. Some smaller companies, which represent 60% of production in the Gulf, will have to leave the Gulf of Mexico (WSJ). This could leave negative consequences for production of oil and gas in the U.S. While Shell increased profit, its development projects in Alaska and its projects in the Gulf have been slowed or stopped as well (WSJ).

All in all, this issue is not very complicated. Shell has increased profits, but it has still been hurt by the moratorium. The same cannot be said for smaller, independent companies. I hope that their production is not harmed to a large extent because as the article stated, that could have a large effect on U.S. production, which would likely push prices up. I suppose the only way to resolve this and move on is to figure out the new regulations in the Gulf so companies can get back to work and adjust their plans to reflect the new policies. Otherwise, the U.S. energy industry could be hurt by increased prices.

Chazan, Guy. "Shell: Drilling Ban Fallout Will Endure." Wall Street Journal (2010): Web. 28 Oct 2010.

It's About Location

This piece by Sam Hopkins shows that investing in green energies has just as much to do with the location as the company itself. He breaks down the pros and cons of each of the major area of oil producing and consuming.

North America
Pros- Political pressure is higher than ever to purse renewable energies.

Cons- Mexico’s biggest oil reserve, the Cantarell offshore field, has had 34% decline in production in the past year. Also, entrenched political groups, namely the corn industry, have dictated the US’s approach to clean energy.

Europe
Pros- The EU has many new members from the east, who have low-cost but high-tech industrial bases, that are former Soviet satellites. The EU also has a binding “20x20” target, which forces each of its 27 members to have 20% of all their energy to come from renewable energies by 2020. The Cleantech Competition across the EU will help them innovate and share to reach the 2020 target.

Cons- The recession has begun to slow down government spending on green energies.

Asia-Pacific:
Pros-As countries like China and India dance in their new money, they have spared plenty and are eager to invest and innovate to “leapfrog” fossil fuels.

Cons- Asia is way too reliant on coal.

Middle East
Pros- Superfluous money and an understanding that its oil reserves are running out have given reason to try greener energies. Masdar City in the UAE is fine example of the Middle East’s progress. Masdar City will be a walled city that is powered by solar panels and other green energies to achieve a zero-carbon output.

Cons-
Political questions and Iran’s increasing oil production are big obstacles to be overcome.

Africa
Pros-Africa has such a wide variety of climates and terrains. Every type of energy can be found there.

Cons- Rampant corruption and lack of unity are the biggest problems Africa’s green dream faces.

Latin America
Pros- Many countries are veterans to localized energy, like sugar ethanol, palm oil, and jatropha biodiesel. Solar energy is also abundant and cheap in Latin America.

Cons-
There are protective tariffs in a majority of the ethanol consuming countries. Also, Venezuela’s energy plan is oil-centric.

Sam Tompkins ends with to final points: politics is key and look out for a green Latin America.

When we plan our investing, I think all of his pointers will help. One of the things that I think could use some more research is the niche in Latin America. We need to find out more on why he points us so confidently in that direction.

http://www.greenchipstocks.com/articles/international-clean-energy/388