The Great Debate UK
Tide turns against nuclear energy
By Kathleen Brooks. The opinions expressed are her own.
As the nuclear threat in Japan steps up a gear, global politicians have pre-empted a wave of anti-atomic feeling from their public and spoken out against nuclear reactors, which threatens its future as a viable alternative to oil.
As Japan has found out with devastating consequences when things go wrong with atomic energy the effect is both devastating and immediate. Unlike carbon fuels, which have a lagged detrimental effect on the atmosphere, a nuclear accident doesn’t get worse in increments – once radioactive material is released into the atmosphere the damage to the surrounding areas is done.
In contrast carbon-based fuels are more of an incipient threat. Increased rates of asthma, holes in the ozone layer and deterioration in air quality take many years take of oil-burning to come about, which makes it hard to pinpoint who the real culprit actually is. But if a radioactive cloud suddenly appears you know exactly where it has come from.
The outlook for nuclear energy is not good at this juncture. The relative infrequency with which nuclear disasters happen (there have only been three notable accidents in the past decade including the events in Northern Japan) seems to only increase their negative impact on public opinion. In contrast, individual oil companies can have multiple spillages over the same time frame and demand for crude will continue to rise.
from The Great Debate:
Buffett uses BNSF to bet on coal
(John Kemp is a Reuters columnist. The views expressed are his own)
Warren Buffett's acquisition of the remaining 77.4 percent of Burlington Northern Santa Fe (BNSF) railroad his Berkshire Hathaway does not already own looks like a strategic bet that America's future energy needs will be met, in large part, through a massive expansion in coal-fired power generation coupled with carbon capture and storage (CCS).
Coal is the most important item moved on BNSF's railroads. It accounted for almost half the tonnage moved by BNSF in the first nine months of the 2009 (214 billion revenue ton miles out of a total of 444 billion) and a quarter of the company's revenues ($2.7 billion out of a total of $10.4 billion).
from Commentaries:
Xstrata waiting plays into Anglo’s hands
Mick Davis is sticking to his guns over his proposal for a nil-premium merger between Xstrata and Anglo American. And well he might. The gap between the two mega-miners in terms of market capitalisation is tantalisingly close to zero.
But Davis should not think that this means a prolonged bear hug is going to persuade them to accept the miner's proposal.
Davis approached Anglo when the market caps of the two companies had almost converged, following a rise in Xstrata's share price and a fall in Anglo's. Following the offer, the gap widened in anticipation of a premium from Xstrata or a white knight bid from another mining group. So far neither has materialised and the gap has closed again.
Now Anglo and Xstrata have both reported first-half earnings, Anglo, valued at 25.6 billion pounds ($43.4 billion), is trading at a premium of roughly 5 percent to its antagonist.
Xstrata thinks its offer to split the $1 billion of merger savings it believes it can extract down the middle is fair because (whisper it softly) Anglo is poorly managed. Of course Davis can't say this openly because the deal is "friendly" but the focus on efficiencies and savings is designed to make the argument for him. Meanwhile, Anglo's riposte is to stress its own cost-cutting prowess.
It told investors that it expected to be ahead of schedule on its plan to extract $2 billion of stand-alone savings by 2011. Efficient, see?
Moreover, Anglo is arguing that Xstrata has timed its pounce at a moment when two important subsidiaries -- Anglo Platinum and De Beers -- are cyclically depressed. These two entities are collectively worth an estimated $15 billion, more than a quarter of Anglo's $58 billion enterprise value. Xstrata's focus on coal -- where sales have surged because of Chinese demand -- has conversely helped inflate its value.
Davis recognises the pivotal role that Anglo's newly-appointed chairman John Parker will have in deciding how this battle plays out, pointing out that Parker needs time to look at the business he is inheriting before making any move.
Anglo's shareholders may not be pushing Parker to invite Davis into immediate talks, but they will want to know how easy it will be to fix these assets, whether their value can be pushed up substantially, and whether the group has the management to deliver this.
If Parker can't come up with a convincing answer, that may again raise questions about Anglo's future as a standalone business. At that point, Davis may have another bite at the cherry.
It is significant that Parker hasn't forced Davis to "put up or shut up" in UK bid parlance and either make a bid or push off for six months. Perhaps he sees value in having Xstrata as an option to get Anglo's chief executive Cynthia Carroll working her socks off to turn Anglo round.
from The Great Debate:
Clean energy investment needs greener light
-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --
Investors in clean energy are like motorists stuck at broken traffic lights. The public policy light is green but the price and credit lights are deep red.
Investment in wind, wave and solar power should be booming after the European Union last year adopted an ambitious goal to draw 20 percent of its energy from renewable sources by 2020 to help fight global warming, and U.S. President Barack Obama made green power a central plank of his government's policy.
