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Mar 19, 2012
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Declining U.S. coal still has bright spots

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By Christopher Swann

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

U.S. coal has crossed an ominous milestone, with its share of power generation falling below 40 percent for the first time since 1978, the Energy Information Administration reported last week. Cheap gas and tougher pollution rules should extend the trend. But investors can still make winning bets if they plan for the industry’s decline.

Mar 12, 2012
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Icahn targets given red alert by Dynegy debacle

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

Carl Icahn’s reputation already precedes him when he turns up to agitate. Now a court-appointed official has shredded a retooling at Dynegy, where the uppity investor meddled and installed directors. Companies on the receiving end of his tactics, like CVR Energy, have all the more reason to spurn Icahn.

Once a $13 billion powerhouse, Dynegy’s equity is now worth a mere $70 million. The 76-year-old raider-cum-activist has played a significant role in the latest step of the downfall, ever since he helped block a $600 million leveraged buyout by Blackstone at the end of 2010. With a stake of nearly 15 percent, he is the largest shareholder – and responsible for two of Dynegy’s six directors.

Mar 5, 2012
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U.S. natural gas looks irresistibly cheap vs oil

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

America’s natural gas is looking irresistibly cheap. With crude prices rising and gas sliding further, oil is now about eight times dearer than gas based on energy content, according to consultancy Navigant – the biggest gap since Harry Truman was in the White House in the 1950s. Global shifts dictate the price of the black stuff, but local market forces should work on U.S. gas.

In fact they already are, even in gasoline-loyal Detroit. General Motors, for instance, said on Monday that it will start selling dual gasoline and compressed natural gas-powered pickup trucks later this year. In power generation, too, gas has been making most rival fuels – including nuclear, renewables and even coal – look pricey. A glut following several years of aggressive shale drilling has pushed the U.S. gas price down by 37 percent over the past year to its lowest level in decades.

Feb 28, 2012
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Globalization stops short at the corporate suite

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

The global war for talent is a popular justification for exorbitant chief executive pay. But with few exceptions, expatriate chiefs are a tiny minority at most major publicly traded corporations. It’s bad news for shareholders, especially in high-pay hubs, who could find better-value stewards overseas.

Multinationals are constantly in search of cheaper workers. The one exception appears to be the most expensive staff of all, in the boardroom. Particularly in the United States and Britain, boards have shown little desire to get the maximum bang for their buck by insisting companies cast wider recruitment nets. Anglo-American companies continue to tolerate steep rises in pay at the top that far exceed returns.

Feb 28, 2012
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Investors ill-served by crude accounting standards

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By Christopher Swann and Kevin Allison

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Investors are poorly served by crude accounting standards – crude oil, that is. Divining the energy resources that explorers uncover matters to shareholders. Yet they must choose between two equally unreliable figures. Estimates based on Securities and Exchange Commission rules gyrate wildly with energy prices, while company data are too opaque. Exxon Mobil, for example, claims to have discovered more oil than it has pumped for each of the past 18 years – a rosier picture than shown by the official figures. Oil punters deserve better.

Feb 22, 2012
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UPS could be bidding against itself for TNT

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By Christopher Swann and Quentin Webb
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

TNT shareholders are waiting for a much bigger buyout package. There’s good reason for the Dutch parcel service to expect UPS, its American suitor, to sweeten its bid of 4.9 billion euros, or $6.3 billion, given the huge synergies that would probably result from the union. But with rivals FedEx and DHL inhibited in varying ways, TNT investors may not get the bidding war they’d like.

UPS hasn’t unwrapped the expected cost savings from acquiring TNT. Stripping out expenses would be relatively easy, though, given UPS’ formidable presence in Europe. And the opening offer suggests it would retain a large slug of these benefits for itself.

Feb 22, 2012
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IMF strategically withdraws from Greek campaign

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By Christopher Swann and Neil Unmack

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The International Monetary Fund played a big part in the first bailout of Athens but will have just a minor role in the second. The fund is providing only 13 billion euros more, barely enough to service existing loans. With the EU taking greater responsibility for the Greek mess, the IMF may find it easier to build a broader euro-zone firewall.

Feb 9, 2012
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Pennsylvania sells out cheaply in fracking fight

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By Christopher Swann

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

Pennsylvania is selling out cheaply in the fight against fracking. The Keystone State, the nucleus of national opposition to the deep-drilling technique, is poised to levy a gas tax, ostensibly to cover drilling damages. The charge may soften the hostility. But the levy is less than half that of other states, suggesting the industry still has the upper hand.

Jan 10, 2012
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Euro crisis could make IMF bigger and softer

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

Europe’s travails are an opportunity for the International Monetary Fund. With a kitty approaching $1 trillion, the fund will need to get even heftier in 2012 if the euro zone crisis takes a turn for the worse. And the long-inflexible “conditionality” attached to its loans may have to soften if big countries like Italy or Spain are forced to borrow. Some U.S. republican senators are balking at this bigger, easier IMF. But it looks preferable to the recent trend that saw nations build up their currency reserves.

Jan 3, 2012
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U.S. shale exuberance may need to be tempered

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

France’s Total and China’s Sinopec kicked off 2012 with $4.5 billion of deals with Chesapeake Energy and Devon Energy, respectively, to drill for U.S. shale oil and gas. Vast resources and technology in America should keep attracting foreign buyers. But the reaction by Ohio officials after several earthquakes suggests political risks will intensify.

    • About Christopher

      "I am a columnist at Thomson Reuters focusing on the energy industry and hedge funds. Prior to this I worked at Bloomberg and the Financial Times."
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