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from The Great Debate:

California v. Texas in fight for the future

It is not a national election year, but the “red state versus blue state” wars continue. Texas Governor Rick Perry's recent foray into California, to lure away businesses and jobs, signals more than a rivalry between these two mega-states. The Texas-California competition represents the political, economic and cultural differences driving American politics today – and for the foreseeable future.

Texas and California are robust political and economic competitors. We don’t know which will be the template for the future. As California emerges from its economic and fiscal doldrums and some of Texas' vulnerabilities become evident, it is now far from certain that Texas will emerge the victor.

California is a global hub for trade, tourism, culture and the manufacture of ideas and intellectual property. From high tech and biotech to entertainment, travel and logistics, the state’s brand transcends national boundaries. The Golden State tops the nation in agriculture. It also sets the pace on green energy development, which could lead to a dramatic increase in the state’s energy production.

The Texas economy has always been based on energy and agriculture. But the Lone Star State has been building a manufacturing and service base, attracting businesses with lower wage rates, weak unions, a friendly regulatory climate and large fiscal incentives. It remains to be seen whether it can maintain its economic momentum and overcome the inevitable obstacles to growth, such as a popping of the latest energy bubble.

from Breakingviews:

U.S. buyout barons have new tax-dodge rivals: MLPs

By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

U.S. buyout barons have new tax-dodge rivals: master limited partnerships. The low tax rates on private equity bosses’ so-called carried interests save them $1.3 billion a year, according to the U.S Treasury, an advantage critics want wiped out. But new data show investors in energy partnerships are now costing Uncle Sam a similar amount thanks to an outdated Internal Revenue Service perk from the 1980s. Both loopholes should be closed.

from Breakingviews:

Apple and Exxon may not be so different, after all

By Christopher Swann and Robert Cyran
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Apple and Exxon Mobil may not be so different, after all. The two seemingly disparate companies share more than nearly identical U.S. market-leading values of about $400 billion. Both are threatened by shrinking margins and the struggle to replace their precious wares. Exxon in various iterations has survived four times longer than Apple, but is just as vulnerable.

from Breakingviews:

2012 may be as good as it gets for Exxon

By Christopher Swann

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

2012 may be as good as it gets for Exxon Mobil. America’s largest oil company pumped out a near-record profit and its best earnings per share ever. But Exxon, like Chevron, is spending huge sums – almost $40 billion last year - to find and extract reserves. Holding output steady is tough enough. Unless oil prices jump, Exxon may have peaked.

from Breakingviews:

Shell shows the flip side of shale nirvana

By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Royal Dutch Shell’s latest results show there is a flip side to shale nirvana. The combination of vast new supplies and a continuing lack of export capacity have kept oil and gas prices down in North America. The cost advantage for the region’s manufacturers might excite the Davos set, but the much-hyped shale revolution also creates relative losers.

from Breakingviews:

Activist exposes Hess as latest governance villain

By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

An activist investor has exposed Hess as the latest governance villain in the energy patch. Hedge fund Elliott Associates reckons the U.S. oil company could be worth more than double its current $20 billion-plus value. But as at other energy groups, like Chesapeake Energy and SandRidge Energy, a too-cozy board has brought waste and strategic blunders.

from Breakingviews:

European carbon market doesn’t need a supply fix

By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Policymakers racing to prop up the European Union’s carbon market should focus on the long term instead. Proposals to boost record-low carbon prices show a confusion about what cap-and-trade systems such as the EU’s Emissions Trading Scheme can achieve. Even if the carbon price fell to zero, greenhouse gas emissions would stay within an agreed 2020 limit. To ensure the scheme’s future, authorities should focus on the cap, not juggle permit supplies.

from Breakingviews:

Oil barons and tech hipsters share a dark side

By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Oil barons and technology hipsters seem very different. But they share a dark side. The chief executive of U.S. explorer SandRidge Energy and some of his peers jet around at shareholders’ expense, while at Facebook and Google founder-bosses are insulated from owners by super-voting rights. Clubby boards also feature in both sectors.

from Breakingviews:

Coal’s ascendancy to leave ailing U.S. miners in pit

By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Coal’s ascendancy looks set to leave already ailing U.S. miners stuck in a pit. Within five years, the black rock is likely to replace oil as the world’s top energy source, according to the International Energy Agency. That should be good news for America’s miners, which are sitting on 28 percent of the planet’s coal. But they’re ill placed to do well from the boom.

from Breakingviews:

U.S. doesn’t need Washington for economic stimulus

By Agnes T. Crane and Christopher Swann
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

America doesn’t need Washington for an economic stimulus. President Barack Obama lobbied Congress for a $50 billion investment in infrastructure as part of the fiscal cliff battle, but it’s been stymied by gridlock. A contentious corner of the energy industry is having much more success, though. Shale gas and oil production pumped three times that amount into the economy in 2012, with more to come. It won’t cure America’s ills, but it should ease the pain.

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