<![CDATA[Grist - Comment Feed for The financial meltdown and other considerations for clean energy development]]> Grist Comment Feed en Comment #1 by Delay And Deny http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/ Wed, 17 Sep 2008 10:17:47 -0700 http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/1 Strangely, There Is A Parallel


I agree they have something in common.

Wall Street has acted in recent times more as a barrier to finance than as a conduit.  It extracted maximum payment for its services, and skimmed the cream with arcane instruments like derivatives.

Just as the ice is melting, providing new passageways between continents, Wall Street is melting, providing point to point access to capital.

The Internet and it's storehouse of information, may be a better arbiter of where capital should flow than one island in the Atlantic.    

Open the capital passageways...melt the middlemen.

]]> Strangely, There Is A Parallel


I agree they have something in common.

Wall Street has acted in recent times more as a barrier to finance than as a conduit.  It extracted maximum payment for its services, and skimmed the cream with arcane instruments like derivatives.

Just as the ice is melting, providing new passageways between continents, Wall Street is melting, providing point to point access to capital.

The Internet and it's storehouse of information, may be a better arbiter of where capital should flow than one island in the Atlantic.    

Open the capital passageways...melt the middlemen.

]]> Comment #2 by Sean Casten http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/ Wed, 17 Sep 2008 11:08:44 -0700 http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/2 My two cents

I think fossil fuel works against you because of one you left off: massive economic malaise.

Whoever wins the white house is going to face a massive economic slump, that's really hard to reconcile.  Thousands of business owners right now - not just in the clean energy space - can't get access to capital right now.  This means they can't expand their factories, get working capital loans, test out new business plans, etc.  Slow that engine down and you get immediate falloffs in economic activity.  In the short term, it's hard not to see this leading to political conversation based on JobsJobsJobs, at the expense of much else.  In the medium term (say, 2 years), it's hard not to see this leading to a slow down in economic growth, with a concomitant fall off in energy use, and thus energy prices.  

Recognizing the danger in making predictions about anything as complex as the economy, this alignment of stars seems to augur for lower, not higher fossil fuel prices.  

(On the other hand... since any economics conversation always has to end with that phrase... those sectors of the energy system that are currently capacity constrained, like power generation and petroleum refining will likely also face constraints on access to capital, causing supply tightening as well.)  

]]> My two cents

I think fossil fuel works against you because of one you left off: massive economic malaise.

Whoever wins the white house is going to face a massive economic slump, that's really hard to reconcile.  Thousands of business owners right now - not just in the clean energy space - can't get access to capital right now.  This means they can't expand their factories, get working capital loans, test out new business plans, etc.  Slow that engine down and you get immediate falloffs in economic activity.  In the short term, it's hard not to see this leading to political conversation based on JobsJobsJobs, at the expense of much else.  In the medium term (say, 2 years), it's hard not to see this leading to a slow down in economic growth, with a concomitant fall off in energy use, and thus energy prices.  

Recognizing the danger in making predictions about anything as complex as the economy, this alignment of stars seems to augur for lower, not higher fossil fuel prices.  

(On the other hand... since any economics conversation always has to end with that phrase... those sectors of the energy system that are currently capacity constrained, like power generation and petroleum refining will likely also face constraints on access to capital, causing supply tightening as well.)  

]]> Comment #3 by wreckenhavoc http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/ Wed, 17 Sep 2008 11:23:11 -0700 http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/3 Makes no sense

Why was Lehman tading carbon?  Can't you go to the tailings of the nearest coal mine and get a whole bucket for free?  Or is it maybe just a fancy way of saying they were trading diamonds?  If not, gosh, it's no wonder they went bankrupt!

]]> Makes no sense

Why was Lehman tading carbon?  Can't you go to the tailings of the nearest coal mine and get a whole bucket for free?  Or is it maybe just a fancy way of saying they were trading diamonds?  If not, gosh, it's no wonder they went bankrupt!

]]> Comment #4 by Sam Wells http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/ Wed, 17 Sep 2008 12:26:15 -0700 http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/4 Another problem ...

One of the issues with clean energy is how to send the juice down the power lines to the customers. We simply don't have a good electrical distribution system. So what happens is that if a wind turbine farm is cranking some wonderful KVA (kilo-volt-amps), it must pay EXTRA to load the wires with their juice. Heck of a way to run a railroad.

I mean an electrical infrastructure.

I wouldn't worry about the investor pool in clean energy, as many have bailed from financials and traditional oil and are seeking new opportunities. True, the "clean liquids" market for ethanol, bio-diesel, and synthetic distillate may take a bum rap. But thanks to Florida Light & Power, some major Australian and EU investors, and more interest in clean power sources, my thinking is they should do OK.

If they can sell electrical power over this WWII system of transmission wires we have today.
-sam

Onward through the fog


]]> Another problem ...

One of the issues with clean energy is how to send the juice down the power lines to the customers. We simply don't have a good electrical distribution system. So what happens is that if a wind turbine farm is cranking some wonderful KVA (kilo-volt-amps), it must pay EXTRA to load the wires with their juice. Heck of a way to run a railroad.

I mean an electrical infrastructure.

I wouldn't worry about the investor pool in clean energy, as many have bailed from financials and traditional oil and are seeking new opportunities. True, the "clean liquids" market for ethanol, bio-diesel, and synthetic distillate may take a bum rap. But thanks to Florida Light & Power, some major Australian and EU investors, and more interest in clean power sources, my thinking is they should do OK.

If they can sell electrical power over this WWII system of transmission wires we have today.
-sam

Onward through the fog


]]> Comment #5 by Pangolin http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/ Wed, 17 Sep 2008 17:24:12 -0700 http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/5 Bonus!!

Say you're Dr. Tummytuck and you've just taken a 20K hit on your portfolio and you've pulled another 150k out and it's now sitting around in untrustworthy banks earning 4%. What to do with the money? Just today your $2.5K heating oil bill hit your desk for the winter.

Converting a good chunk of that money to a geothermal heat pump for the mcmansion along with some solar panels is a quick way to get it earning gold-plated returns as wells as being tax free. The government can't tax you on money you don't spend but the effect on the bottom line is the same as earnings.

It's also a hedge against inflation since fuel and electricity prices tend to go up regardless of the state of the economy while the government is likely to increase the money supply to pay it's bills. Dr. Tummytuck even gets a tax credit if he lives in the right state. A solar panel, once installed, is fixed cost electricity for twenty years which PG&E isn't about to give you.

The next good storm when the power is out and your neighbors run out of gas for the generator Dr. Tummytuck gets to brag that the solar panels kept his house warm and beer cold while everybody else fed generators at $4/gallon. If they could get the gas. Independent power supply is starting to become a neccesity if you live out of town even a few miles.

Multiply this event by several hundred thousand in various combinations and you've got a new industry that will look for new customers further down the economic ladder. A little help from the government on building codes and financial vehicles that allow people to pay for new installations as part of their utility bills and we're talking real money.

Wall Street is a disaster. Real estate is a disaster. Commodities is just gambling. Where else are the petit-bourgeoisie going to hide their money?

Put the Carbon Back

]]> Bonus!!

Say you're Dr. Tummytuck and you've just taken a 20K hit on your portfolio and you've pulled another 150k out and it's now sitting around in untrustworthy banks earning 4%. What to do with the money? Just today your $2.5K heating oil bill hit your desk for the winter.

Converting a good chunk of that money to a geothermal heat pump for the mcmansion along with some solar panels is a quick way to get it earning gold-plated returns as wells as being tax free. The government can't tax you on money you don't spend but the effect on the bottom line is the same as earnings.

It's also a hedge against inflation since fuel and electricity prices tend to go up regardless of the state of the economy while the government is likely to increase the money supply to pay it's bills. Dr. Tummytuck even gets a tax credit if he lives in the right state. A solar panel, once installed, is fixed cost electricity for twenty years which PG&E isn't about to give you.

The next good storm when the power is out and your neighbors run out of gas for the generator Dr. Tummytuck gets to brag that the solar panels kept his house warm and beer cold while everybody else fed generators at $4/gallon. If they could get the gas. Independent power supply is starting to become a neccesity if you live out of town even a few miles.

Multiply this event by several hundred thousand in various combinations and you've got a new industry that will look for new customers further down the economic ladder. A little help from the government on building codes and financial vehicles that allow people to pay for new installations as part of their utility bills and we're talking real money.

Wall Street is a disaster. Real estate is a disaster. Commodities is just gambling. Where else are the petit-bourgeoisie going to hide their money?

Put the Carbon Back

]]> Comment #6 by Adam Stein http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/ Thu, 18 Sep 2008 02:44:29 -0700 http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/6 Sean

Maybe I'm not quite following, but you seem to be saying that high energy prices lead to low energy prices. (Fossil fuel prices go up -> economy suffers -> demand for fossil fuel goes down -> fossil fuel prices drop.) Is that right?

If so, I agree that there will be all sorts of unpredictable short-run effects, which is why I think there will be tons of volatility. Supply is tight, but there's lots of room for demand to swing around, which will lead to spikes and troughs in price.

But the underlying secular trend in demand and prices should be upward, no? China, etc.

www.terrapass.com/blog

]]> Sean

Maybe I'm not quite following, but you seem to be saying that high energy prices lead to low energy prices. (Fossil fuel prices go up -> economy suffers -> demand for fossil fuel goes down -> fossil fuel prices drop.) Is that right?

If so, I agree that there will be all sorts of unpredictable short-run effects, which is why I think there will be tons of volatility. Supply is tight, but there's lots of room for demand to swing around, which will lead to spikes and troughs in price.

But the underlying secular trend in demand and prices should be upward, no? China, etc.

www.terrapass.com/blog

]]> Comment #7 by Sean Casten http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/ Thu, 18 Sep 2008 03:01:22 -0700 http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/7 No

I'm saying that the collapse of the financial sector could slow economic growth, lowering fossil fuel demand and therefore price for same.

]]> No

I'm saying that the collapse of the financial sector could slow economic growth, lowering fossil fuel demand and therefore price for same.

]]> Comment #8 by Adam Stein http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/ Thu, 18 Sep 2008 04:38:58 -0700 http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/8 Ah, yes

That's certainly true. In fact, I've got another post on that coming up.

www.terrapass.com/blog

]]> Ah, yes

That's certainly true. In fact, I've got another post on that coming up.

www.terrapass.com/blog

]]> Comment #9 by Sean Casten http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/ Thu, 18 Sep 2008 07:01:35 -0700 http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/9 Interestingly enough

In the near term, there does appear to have been some fall out in CCX pricing.

See here for a discussion of why the CCX price has fallen so much in recent weeks, and in particular that:

Eckert confirmed that Lehman Brothers - the US investment bank that was put into administration on Monday - was registered as having a 3.4% stake in Climate Exchange and he suspected that there were other "forced sellers" among the firm's shareholders.

]]> Interestingly enough

In the near term, there does appear to have been some fall out in CCX pricing.

See here for a discussion of why the CCX price has fallen so much in recent weeks, and in particular that:

Eckert confirmed that Lehman Brothers - the US investment bank that was put into administration on Monday - was registered as having a 3.4% stake in Climate Exchange and he suspected that there were other "forced sellers" among the firm's shareholders.

]]> Comment #10 by Adam Stein http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/ Mon, 22 Sep 2008 10:08:00 -0700 http://www.grist.org/article/the-sea-ice-melt-is-to-the-arctic-as-the-wall-street-melt-is-to/10 CCX

That article is about the CCX stock price, which is a different sort of thing entirely than the carbon market. Carbon prices on CCX have been trending downward ever since Lieberman-Warner went bust.

www.terrapass.com/blog

]]> CCX

That article is about the CCX stock price, which is a different sort of thing entirely than the carbon market. Carbon prices on CCX have been trending downward ever since Lieberman-Warner went bust.

www.terrapass.com/blog

]]>