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Posts Tagged ‘nuclear energy

*Ring* *Ring*

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It’s 1978 calling, telling us nuclear power plants are safer to live near than those of the coal-fired variety.

This, per a Gristmill article:

Former ORNL researchers J. P. McBride, R. E. Moore, J. P. Witherspoon, and R. E. Blanco made this point in their article “Radiological Impact of Airborne Effluents of Coal and Nuclear Plants” [PDF] in the December 8, 1978, issue of Science magazine. They concluded that Americans living near coal-fired power plants are exposed to higher radiation doses than those living near nuclear power plants that meet government regulations.

[…]

The fact that coal-fired power plants throughout the world are the major sources of radioactive materials released to the environment has several implications. It suggests that coal combustion is more hazardous to health than nuclear power and that it adds to the background radiation burden even more than does nuclear power. It also suggests that if radiation emissions from coal plants were regulated, their capital and operating costs would increase, making coal-fired power less economically competitive.

Hmmmm. Don’t we look silly for wasting our time on coal? Sure, we’ve got a ton of it, but we can surely find some other use for that black stuff (hard, not liquid variety) than our open-pit strip mining.

Used under a Creative Commons License. "Coal mine Lake" by Nitin Kirloskar (via Flickr).

Used under a Creative Commons License. "Coal mine Lake" by Nitin Kirloskar (via Flickr).


Sure makes for cool pictures, though.

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Written by walonline

August 6, 2008 at 10:44 pm

Venture Capital Floods to Alternative Energy; ETFs Sprout

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Two interesting things from an article at ETFguide.com–venture capital is flooding to alternative energy to the tune of $571 million in Q1 ’08, and following this trend, for more casual investors, ETFs have popped up from various fund families. First, here’s the key bit on the venture capital:

According to a recent Ernst & Young report using data from Dow Jones VentureOne, $571.6 million of venture capital was invested in 34 clean technology companies during the first quarter of 2008. A significant portion of investment was focused on alternative fuels ($178 million), energy/electricity generation ($148.3 million), and energy efficiency ($116.4 million).

A number like $571 million is not really even the start of this stuff. Let’s compare it to one of the largest companies in the world, a member of “big oil” (hiss hiss). Exxon Mobil (XOM) has $470 billion in market capitalization. That doesn’t even count any leverage/liabilities from lenders. Chevron, BP, and Shell all have more than $200 billion. They also have billions of dollars in working capital.

My point here being that alternative energy, combined with the entire green movement, should continue to expand. In addition, the high prices of oil and electricity should help them upward. This sector has had issues recently because energy prices weren’t high enough to have people consider alternatives (good feelings from helping mother earth don’t apply for the entire market).

There have been many talks of bubbles at this point, but there aren’t enough good public companies to push this. There has to be value initially for a bubble (although not much), and it doesn’t seem to be there, yet. Growth along these lines, because of the nature of energy, and its infrastructure-heavy requirements, should give us a period of broad steady growth after an initial capital intensive startup.

In the volatile market, one thing is for certain–political movements the world over for environmental-based taxes and programs will effectively increase demand for these “green” services. CNBC reported in April that the average for clean energy stocks was off. I’m willing to write off that as mostly market volatility and a downward trend market-wide. Even as far back as November, MSN Money was talking about a green bubble. Again, I would reiterate: its just getting started. Energy costs have to rise to a point that it becomes valuable for people to look at alternatives.

Back to the article–most of us don’t have access to start-ups or enough money to qualify us to receive venture capital offerings. The availability of new ETFs lets the common person invest in companies that have made public offerings, so they’ve been around a little longer than the “start-up”. Also, it allows an expert (who you pay through gains in capital) to choose them for you. Whatever your strategy, there are many different types available, as ETF Guide documents (links in the block are from the original website):

The range of investment strategies are a broader industry sector approach, with ETFs like PowerShares WilderHill Clean Energy Portfolio Fund (Ticker: PBW) or PowerShares WilderHill Progressive Energy Portfolio Fund (Ticker: PUW). Each of these funds cover a range of emerging technologies like biofuels, wind power, hydroelectricity, geothermal power and solar energy.

The other strategy, which is more aggressive, is to make sub-sector bets that focus exclusively on a specific niche of alternative energy, like Solar (Ticker: TAN) or Nuclear Power (Ticker: NLR).

Top performing areas so far this year include the PowerShares Global Nuclear Energy (Ticker: PKN) ahead by 10.5 percent, the Claymore MAC/Global Solar Energy (Ticker: TAN) up 9.3 percent, and the PowerShares Progressive Energy (Ticker: PUW) advancing 2.1 percent.

Alternative energy ETFs generally charge annual expenses between 0.60 to 0.75 percent.

Make sure the expense ratios work with each fund’s probable growth, to ensure you’re not burning away any profits. Also, as with any investment, understand what its components are (know the stocks an ETF holds significant portions of, or mutual fund for that matter).

These might be a nice option for those that want a riskier investment in their portfolio, but would choose a simple stock. Instead, this allows you to diversify within a specific area (as laid forth in the fund’s prospectus) for relatively low cost. Again, this simply adds to the options set forth in previous posts of mine, and elsewhere.

Disclosure: I do not own any security listed in the post.

Written by walonline

June 10, 2008 at 8:30 am

Stupid Energy Policies: Ethanol and Politics

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Even before commodities were on a steep rise, the agricultural lobbyists have pushed for new ways to sell grain. In many Midwestern states, corn-based ethanol was added to gasoline as a way to sell the ethanol that was produced to helped maintain the values of corn. All of this was (and still is–to the tune of $5.5 billion per year) subsidized. Now, with the increasing political push and popularity of buzz words such as energy independence, global warming/climate change, and green, this has turned into an energy policy.

This year, Congress passed legislation to increase the US biofuel output by nearly five times, the UK just enacted a policy requiring the use of biofuels, and the EU is working on meeting a 10% of transport fuel requirement by 2020. Quite obviously, this will vastly increase the amount of needed biofuels, but is this the right direction for energy policy in the United States and Europe? There are a number of problems with biofuels–especially, the corn-based ethanol. Briefly, we will look at some of the issues: the debate on commodity inflation, academic research completed recently on biofuels, and other issues.

Many articles have claimed that biofuels are driving the inflation in commodity and food prices (see Ronald Bailey at Reason and Simon Jenkins at the Guardian). A report from Texas A & M’s Agricultural Policy and Research Center sees it as the increase in petroleum costs. There is also a lot of talk on Wall Street about the overall upward push commodities (see Seeking Alpha, for example). This overall inflation, not just one or a group of commodities, might be to blame, but there are still plenty of empirically proven problems with biofuels and the policies dreamt up by governments and lobbyists (or are those one in the same?)

For example, Chinese academics Zhang and Yuan have found that corn-based ethanol does not reduce carbon emissions compared to gasoline over its lifecycle. They suggest that a reduction in fertilizer usage and electricity used during irrigation would help this.

Second, Searchinger, et al, have found that using crop lands for biofuels increase greenhouse gases via changes in land use. Corn-based ethanol, thought to save emissions (compared to gasoline) by 20%, actually doubles emissions. Switch-grass increases emissions by 50%. The study also, “raises concerns about large biofuel mandates and highlights the value of using waste products.”

Third, Groom, Gary, and Townsend believe that bio-diversity is at risk and that there are many fuels that have very poor carbon footprints. Carbon output should be less over the entire production process of the raw material, fuel synthesis and transport to market. They write that, “Corn-based ethanol is the worst among the alternatives that are available at present. […] We urge aggressive pursuit of alternatives to corn as a biofuel feedstock.”

Ronald Bailey (linked above), writing in Reason believes food prices will be driven up by sheer population demand and a broadening worldwide middle class, both requiring much more food. Also, he uses a favorite of free-market economists–that governments need to quit supporting these industries with subsidies and handouts. If they are economically viable, and there really is a market for biofuels, they will expand and be efficient without burdening the taxpayer.

As for the up comming election, economist Paul Krugman believes none of the candidates have good policies. A blog, JustOneMinute, looks more deeply into the issue and separates himself with a sort of lesser-evils analysis, saying:

Let’s say that McCain may have flipped (probably without much conviction or knowledge) on the science by declaring that ethanol “is part of the solution to this climate greenhouse gas emissions problem” but he has been consistently opposed to subsidies, which means that in terms of policy he is miles ahead of Obama.

He also places Hillary in the middle of the two party nomination front runners.

It is pretty easy to see that we have made some bad decisions on biofuels and developing industries before we know whether they truly are better. Simon Jenkins (linked above), is with me, believing we could do better in reducing our carbon footprint as nations if we simply told the anti-nuclear lobby to “shove it” and got comfortable with the fact that nuclear power is clean and efficient, if managed correctly–but that’s an entirely different screed.

The answer is plain–an energy policy that doesn’t use a flawed economic policy (the subsidies of ethanol) and allows for investment in many new energy technologies, will be most effective at reducing pollution and dealing with the popular political buzz words of the day.

UPDATE (4/18 @ 1PM): CNBC just reported that the Bush Administration has taken a stance on moving away from corn-based ethanol to other options. I’ll get an article link up when I find one. Also, Gordon Brown sent letters to G8 leaders requesting further inquiry into the use of biofuels. This news is one of the things weighing down corn futures today.

Works Cited:

Zhang and Yuan. “[Carbon balance analysis of corn fuel ethanol life cycle].” Translated from chinese. Abstract found here.

Searchinger, et al. “Use of U.S. croplands for biofuels increases greenhouse gases through emissions from land-use change.” Science 319(2008): 1238-40.

Groom, Gary, and Townsend. “Biofuels and Biodiversity: Principles for Creating Better Policies for Biofuel Production.” Conservation Biology (2008).