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TXCO Chart - Nice Consolidation!
http://stockcharts.com/charts/gallery.html?TXCO
NEW TXCO IR Presentation!
This company is drilling, drilling, drilling. Oil, Gas, Tar Sands, high growth and huge cap ex.
http://www.txco.com/presentation.html
The long term bias to energy prices is to the upside. Major fields are in decline and Wall Street is in denial. T. Boone Pickens will be on CNBC tomorrow and it will be interesting to see what he has to say.
OIL.TO, POE.V, PMG.TO, have all rebounded 30-90% off lows of a couple weeks ago. CXPO.OB is screaming buy after nearly 50% retrace.
Good Luck!
Kipp
NEW TXCO IR Presentation!
This company is drilling, drilling, drilling. Oil, Gas, Tar Sands, high growth and huge cap ex.
http://www.txco.com/presentation.html
The long term bias to energy prices is to the upside. Major fields are in decline and Wall Street is in denial. T. Boone Pickens will be on CNBC tomorrow and it will be interesting to see what he has to say.
OIL.TO, POE.V, PMG.TO, have all rebounded 30-90% off lows of a couple weeks ago. CXPO.OB is screaming buy after nearly 50% retrace.
Good Luck!
Kipp
The World Hates My Jr. Canadian Listed Gold and Silver Favorites!
Aaaahhhhrrgggggg!
I am feeling love in the mid to small oil drillers so not a total downer. Fertilizer remains white hot too.
If I could just get a little love for my little Jr's!!!!
Molding away.
Kipp
Inflation vs. Deflation
A while ago we were debating a slowdown in the U.S. and if that would cause inflation or deflation. It looks to me like we have our answer. Iron ore prices were locked in +70% year over year. Oil, Copper, Grain, Gold/Silver, Platinum, all pushing record high proices. The USD tumbles again this morning. Inflation is raging in China and they will export higher prices to the world.
OPEC is behind Canada, Mexico, and South America, as far as supplying oil to the US. The truth of the matter is that oil production is not keeping up with demand. The monster oil fields are in decline and can't be replaced. Cheap oil is gone and it isn't coming back. To say OPEC has everything to do with oil prices is simply false.
Oil, Gold/Silver, Fertilizer remain the places to be.
Invest in the "stuff" the world needs.
Kipp
Oil Trades Near $96 After Rising on OPEC Outlook, Refinery Fire
By Christian Schmollinger and Nesa Subrahmaniyan
Feb. 19 (Bloomberg) -- Crude oil traded near $96 a barrel in New York after rising yesterday on speculation OPEC will curb production and refinery disruptions will limit fuel supplies.
The Organization of Petroleum Exporting Countries, due to meet March 5, may cut production as winter heating demand wanes, oil ministers from Algeria and Iran said the past week. Gasoline jumped as much as 1.3 percent yesterday after an explosion shut Alon USA Energy Inc.'s Big Spring refinery in Texas.
``OPEC wants to hold the price at a high level,'' said Tetsu Emori, a fund manager at Astmax Ltd. in Tokyo. ``They keep saying that the demand in the second quarter will fall further so they need to make a production cut. They don't care about the supply and demand balance.''
Crude oil for March delivery was at $96.34 a barrel, up 84 cents from the Feb. 15 close, in after-hours electronic trading on the New York Mercantile Exchange at 1:03 p.m. in Singapore. Floor trading on the exchange was closed yesterday for the Presidents' Day holiday.
Oil gained as much as 1 percent to $96.45 yesterday before closing at $95.89. Those trades will be booked today for settlement purposes because of the U.S. holiday.
OPEC pumps about 40 percent of the world's oil. The group lowered its 2008 oil demand growth forecast to 1.4 percent last week, citing the risk of recession in the U.S. It is also projecting a 1.6 million-barrel reduction in daily demand in the second quarter as heating demand wanes.
Lower Consumption
``OPEC is certainly not going to let any supply surplus develop,'' said David Moore, the commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. ``The oil market, particularly on the refinery side, has just been beset by problems.''
OPEC won't increase production as demand may drop by 1.8 million barrels a day in the second quarter, because of the U.S. economic slowdown, refinery shutdowns for maintenance and lower fuel consumption as winter comes to an end, Chakib Khelil, the group's president said on Feb. 13.
``Oil markets are really more concerned about growth in China and India as well as the prospect for further supply cuts, rather than concerns about the U.S. economy,'' said Gerard Burg, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. ``Growth in demand has really been driven by Asia.''
Brent crude for April settlement was at $95.05 a barrel, up 14 cents, on London's ICE Futures Europe exchange at 12:55 p.m. Singapore time. The contract rose 28 cents, or 0.3 percent, to $94.91 a barrel yesterday.
The North Sea Sullom Voe terminal in Scotland's Shetland Islands resumed normal operations yesterday after berthing was halted for a day because of high winds. Berthing has stopped at least 12 times this year because of high seas.
Blast Boosts Gasoline
Gasoline for March delivery was at $2.53 a gallon in New York, up 1 percent from last week's close. The contract gained after the blast at the Alon plant yesterday.
The fire in part of the 70,000 barrel-a-day refinery has been contained and the company doesn't yet know the cause of the blast, Alon Spokesman Blake Lewis said in a telephone interview.
``Refineries are either in maintenance or starting to ramp up gasoline production,'' National Australia's Burg said. ``Any outage at this time is going to influence gas markets.''
Gasoline demand in the U.S., the world's largest oil consumer, usually peaks June through August as summer vacation travel puts more cars on the nation's roads. U.S. stockpiles have risen for 14 weeks and held 229.2 million barrels on Feb. 8, a nine-year high.
Prices Rebound
Oil prices jumped 4.1 percent last week after economic reports out of China and Japan suggested Asian demand for commodities may remain strong.
New York oil futures reached a record $100.09 a barrel on Jan. 3. Prices dropped as low as $86.24 this month as U.S. oil and gasoline stockpiles rose amid concern that a recession in the world's largest energy consumer will hurt demand.
Rising stockpiles and declining heating demand should allow oil prices to ease to an average $83 a barrel in the second quarter from $91.66 in the first, National Australia forecasts.
``But that said, if we see a cut in OPEC supply, or if we see a situation where there is a major disruption to supply elsewhere, that would obviously lead to prices being driven higher again,'' Burg said.
China's inflation highest in 11 years
Story Highlights
China's inflation accelerated in January to 7.1 percent -- its highest rate in 11 years
Snowstorms worsened food shortages, setting back efforts to cool rising prices
Economists are warning that inflation could rise further in coming months
HONG KONG (CNN) -- China's consumer prices hit another 11-year high in January, stoking fears the country could start exporting inflation and signaling an end to the days of ultra-cheap Chinese goods.
"We are taking for granted that China will provide cheap products forever. But I think we are probably about to see the end of an era," said Dong Tao, an economist with Credit Suisse in Hong Kong.
"China is exporting inflation in a big way. The rest of the world will feel that."
China has been exporting the opposite -- deflation -- for more than a decade. The country is a manufacturing machine, with Chinese factories churning out everything from T-shirts to television sets for ultra-cheap prices, helping to keep consumer prices down worldwide.
Soaring costs of fuel, food, and raw materials, however, are now forcing some Chinese manufacturers to raise prices for their goods.
PAQ Manufacturing, a Hong Kong firm that makes luggage for brands such as Samsonite at its Chinese factory, expects to increase prices "by around 10 percent at least," said company representative Calvina Chan.
"The materials, the prices are increasing," she said. "Also, the currency keeps on rising."
The Chinese currency appreciated by 7 percent last year and rose a further 1.9 percent in 2008 to 7.1623 yuan per dollar, according to Bloomberg. Morgan Stanley expects the yuan to increase by as much as 10 percent this year.
Another major cost is workers' wages.
Tao at Credit Suisse estimates Chinese wage rates for migrant workers, many of whom are employed at factories in the Pearl River Delta, have been growing by up to 30 percent every year for the past four years.
With so many factories opening in the booming manufacturing area, companies have had to compete for workers by offering higher pay.
Food prices have also pushed up wages.
Surging prices of food staples such as pork have propelled annual Chinese consumer inflation from 6.5 percent in December to 7.1 percent in January, according to China's National Bureau of Statistics. That is the highest level in more than 11 years.
Snowstorms last month -- China's worst in half a century -- disrupted transport and power and destroyed crops, exacerbating shortages of food and fuel and forcing millions of workers to go home late for the country's biggest holiday at Lunar New Year.
Paul Yeung of Hong Kong toy maker GoldLok Toys says he worries some of his workers won't return to his firm's Chinese factory until mid-March.
"We usually expect the workers to come back the end of February, but this time I'm not sure they can come back on time," Yeung said. "It may cause us to delay all the shipments for March."
Other manufacturers are more concerned about the longer-term trend of rising costs.
"There are about 70,000 factories in the Pearl River Delta today. Many of them are talking about reducing their workforce or even shutting down," said Stanley Lau, deputy chairman of the Federation of Hong Kong Industries. "We expect more than 10 percent of these factories will be closed in a year or two."
Some companies say they are exploring plans to move their factories inland to Hunan province or to other countries such as Vietnam.
Lau also calls China's new labor laws, which went into effect Jan. 1, "a nightmare." The rules, he complained, make it difficult to hire and fire workers.
Lau is advising members to upgrade their production by buying new equipment and technology instead of relying heavily on labor.
Central authorities have been raising interest rates, tightening credit, and using price controls to rein in inflation.
Hong Liang, an economist at Goldman Sachs, wrote in a research report that the inflation impact from the snowstorm may not have been fully reflected yet in the January inflation data.
Liang said she expects the February consumer price index, which is scheduled to be released March 11, to be much higher than 7 percent and possibly close to double-digit levels.
Liang said it is still too early to expect any policy loosening in China
STP.V and AOS.V Oil Sands?
I own quite a bit of AOS and no STP at the moment. The valuation of the oil sand reserves of both companies is currently a few pennies per barrel. Can anyone help me rationalize these low valuations? With oil near $100 it seems like the Don Coxe "reserves in the ground, in safe parts of the world" theory would attract more interest here.
My gut says these 2 stocks are going to run hard very soon.
Kipp
AOS.V - $.04 Per Barrel Oil!!!!
Take a few minutes to scroll this presentation and see why AOS is worth holding. I hold a lot of slightly underwater shares.
http://www.aboilsands.ca/documents/Presentations/AOS_London_Presentation.pdf
Holding for longer term 10 bagger.
Kipp
CF Industries Best-Ever Net Income of $135.4 Million, or $2.38 per Diluted Common Share, for Fourth Quarter 2007
(No other sector has better growth and visibility going into 2008, FERTILIZER ROCKS! Kipp)
Thursday February 7, 4:40 pm ET
Strong Operating Performance Capitalized on Robust Demand and Delivered Substantial Increases in Volumes, Sales, and Earnings
Company Announces Increase in Regular Quarterly Dividend to $0.10
DEERFIELD, Ill.--(BUSINESS WIRE)--CF Industries Holdings, Inc. (NYSE: CF - News):
Fourth Quarter Highlights:
Sales and net income highest for any quarter since company’s August 2005 IPO
Net sales rose to $852.5 million, up 62 percent from fourth quarter 2006, driven by substantially higher prices and increased nitrogen volumes
Operating earnings totaled $214.2 million, compared to $10.9 million in fourth quarter 2006
Net income totaled $135.4 million, or $2.38 per diluted share, compared to $8.0 million, or $0.14 per share, in fourth quarter 2006
Fourth quarter results included $12.9 million in non-cash, pre-tax unrealized gains, or $0.15 per diluted share on an after-tax basis, from mark-to-market adjustments on natural gas derivatives. The gains compare to $9.4 million in non-cash, pre-tax unrealized losses, or $0.10 per diluted share on an after-tax basis, for mark-to-market adjustments included in fourth quarter 2006 results
Full-Year Highlights:
Improved pricing and volumes pushed net sales to nearly $2.76 billion, up 36 percent from $2.03 billion in 2006
Net earnings totaled $372.7 million, or $6.57 per diluted share, up substantially from $33.3 million, or $0.60 per diluted share, in 2006
Full-year results included $17.0 million in non-cash, pre-tax unrealized gains, or $0.19 per diluted share on an after-tax basis, from mark-to-market adjustments on natural gas derivatives. The gains compare to $30.7 million in non-cash, pre-tax unrealized losses, or $0.34 per diluted share on an after-tax basis, for mark-to-market adjustments included in 2006 results
Dividend Increase
Board approves increase in regular quarterly dividend to $0.10, up from $0.02 per share
Outlook:
Record grain prices and robust worldwide demand for fertilizer point to strong spring season
Company’s forward bookings substantially higher than levels a year ago
CF Industries Holdings, Inc. (NYSE: CF - News) today reported net earnings of $135.4 million, or $2.38 per diluted share, for the fourth quarter of 2007. The earnings, highest for any quarter since the company’s August 2005 Initial Public Offering (IPO), compare to net earnings of $8.0 million, or $0.14 per diluted share, in 2006’s fourth quarter.
Net sales totaled nearly $852.5 million for the quarter, a 62 percent increase compared to the year-earlier quarter and also the highest ever for any quarter since the IPO. Gross margin increased more than five-fold from the fourth quarter 2006 level to $236.0 million.
“I’m extremely pleased by the results we delivered for both the fourth quarter and the year. Strong domestic and international grain markets have produced exceptionally high global demand for fertilizer. Tightness in this demand-driven market pushed fertilizer prices sharply higher for all of our products. In this environment, effective execution of our operating and sales plans delivered our best-ever public company sales and earnings performance,” commented Stephen R. Wilson, chairman and chief executive officer, CF Industries Holdings, Inc.
“The weather cooperated perfectly during the fall season, and the combination of good levels of fall fertilizer application and normal customer inventory stocking for the spring season helped us ship nearly 2.5 million tons of nitrogen and phosphate fertilizer during the fourth quarter, almost 170,000 tons more than in the year-earlier quarter,” Wilson added.
Pricing for nitrogen and phosphate products reflected these favorable market conditions, as average selling prices improved substantially both from year-earlier levels and from those in 2007’s excellent third quarter.
Nitrogen Fertilizer Business
Fourth quarter 2007 saw strong volumes and sales for all of the company’s nitrogen products, as a combination of a robust fall ammonia application season and customer inventory building for expected spring planting pushed demand and pricing to high levels.
Net sales for nitrogen totaled $630.7 million, up 58 percent from $399.3 million in fourth quarter 2006. During the quarter, the company sold nearly 1.93 million tons of nitrogen fertilizer, up 10 percent from the nearly 1.75 million tons in 2006’s fourth quarter.
Gross margin on nitrogen sales was $153.1 million for the quarter, up significantly from the $31.8 million in the year-earlier period and $80.2 million in third quarter 2007. In 2007, fourth quarter nitrogen gross margin represented 24.3 percent of sales, up from both the 8.0 percent reported in the year-earlier period and 20.6 percent in 2007’s third quarter.
Product prices increased substantially for all of the company’s nitrogen products compared to both the fourth quarter of 2006 and the third quarter of 2007. The average selling price for ammonia was $410 per ton in the fourth quarter, up from $314 in the year-earlier period and $370 in 2007’s third quarter. For urea, the average selling price was $357 per ton, up from $239 in 2006’s fourth quarter and $334 in 2007’s third quarter. For urea ammonium nitrate solution (UAN), the average selling price was $239 per ton, up from $162 in the year-earlier period and $230 in 2007’s third quarter.
The impact of stronger nitrogen selling prices was partially offset by higher purchased product and realized natural gas costs. Purchased product costs were driven by an increased level of sales volume supported by purchases as well as by higher nitrogen fertilizer prices.
During the fourth quarter, CF Industries completed a turnaround on an ammonia plant at its Donaldsonville nitrogen complex, which included installation of a distributed control system and improvements to reduce natural gas consumption. The company’s two nitrogen complexes operated at 96 percent of capacity during the quarter.
“Maintaining high operating rates, coupled with the ability of our extensive distribution system to move high volumes of fertilizer quickly and efficiently, were important factors in delivering the nitrogen segment’s excellent fourth quarter performance,” CF Industries’ Wilson explained.
“The very strong fall ammonia season was largely concentrated in the month of November, and our ammonia logistics and distribution system met the challenge, effectively meeting customer needs in a compressed season,” he added.
Nitrogen sales under CF Industries’ Forward Pricing Program (FPP) totaled 1.53 million tons during the fourth quarter and accounted for 80 percent of segment sales. These totals were up substantially from 770,000 tons and 44 percent sold under the FPP during the 2006 fourth quarter.
For calendar year 2007, total nitrogen sales were $2.04 billion, up substantially from $1.52 billion in 2006. Volume totaled 6.94 million tons, up 10 percent from 6.31 million in 2006. Gross margin was $446.8 million, up substantially from $98.5 million in 2006. Additional full-year statistics are found on the attached Nitrogen Fertilizer Business segment data table.
Phosphate Fertilizer Business
In the fourth quarter, the company’s phosphate fertilizer business recorded substantial increases in average selling prices, sales, and gross margin compared to the year-earlier period, reflecting the tight worldwide supply/demand balance for phosphate.
Net sales totaled $221.8 million, up 75 percent from $127.1 million in the year-earlier quarter. Sales volume of 526,000 tons was comparable to the 537,000 tons sold in the 2006 fourth quarter.
Gross margin on phosphate sales was $82.9 million, up substantially from $11.1 million in fourth quarter 2006 and from third quarter 2007, when gross margin was $71.1 million. Gross margin represented 37.4 percent of sales, improved from 8.7 percent in the year-earlier quarter and 36.6 percent in this year’s third quarter.
Prices for phosphate products increased substantially, with diammonium phosphate (DAP) at $420 per ton, compared to $235 in the fourth quarter of 2006 and $388 in 2007’s third quarter, and monoammonium phosphate (MAP) at $431 per ton, compared to $243 in the year-earlier quarter and $403 in 2007’s third quarter. The impact of higher phosphate fertilizer prices was somewhat offset by increased sulfur and phosphate rock costs.
The company’s Plant City Phosphate Complex operated at 102 percent of rated capacity during the fourth quarter. “As in nitrogen, our excellent operating performance took good advantage of the strongest global demand for phosphate in recent memory,” Wilson noted.
Phosphate fertilizer sales under the company’s FPP totaled 206,000 tons, representing 39 percent of total phosphate volume. In 2006’s fourth quarter, FPP sales were 64,000 tons, or 12 percent of the quarter’s total segment sales.
For calendar year 2007, total phosphate sales were $714.8 million, up substantially from $511.0 million in 2006. Volume totaled 2.0 million tons, down modestly from 2.1 million tons in 2006. Gross margin was $223.2 million, also up substantially from $48.7 million in 2006. Additional full-year statistics are found on the attached Phosphate Fertilizer Business segment data table.
Liquidity and Financial Position
At December 31, 2007, the company’s cash, cash equivalents, and short-term investments totaled $861.0 million, and its negative net debt (i.e., net cash) defined as total debt minus cash, cash equivalents and short-term investments, plus customer advances totaled $550.3 million. At December 31, 2006, the company reported cash, cash equivalents, and short-term investments of $325.6 million and negative net debt (net cash) of $218.7 million.
Dividend Increase
Earlier this week the company’s Board of Directors approved an increase in the regular quarterly dividend from $0.02 to $0.10 per common share. The dividend will be paid on February 29, 2008 to stockholders of record on February 22, 2008.
Mark-to-Market and ARO Impacts
The company’s reported results for the fourth quarters of 2007 and 2006 and for both full years include certain items that affected comparability.
Fourth quarter 2007 results included $12.9 million in non-cash, pre-tax unrealized gains, or $0.15 per diluted share on an after-tax basis, from mark-to-market adjustments. This compares to $9.4 million in non-cash, pre-tax unrealized losses, representing $0.10 per diluted share on an after-tax basis, in 2006’s fourth quarter. Mark-to-market adjustments on natural gas derivatives are included in the company’s nitrogen segment gross margin.
The company conducts periodic reviews of its asset retirement obligations (AROs) to ascertain whether changes have occurred in cost estimates that impact the magnitude of the liability. Operating earnings in the fourth quarter of 2007 included a non-cash charge of $0.7 million for adjustments to AROs equivalent to $0.01 per diluted share on an after-tax basis. This compares to a $20.3 million non-cash charge in the fourth quarter of 2006 for adjustments to AROs. The $20.3 million charge in 2006, equivalent to $0.22 per diluted share on an after-tax basis, was primarily related to revised cost estimates for water treatment, storm water management, phosphogypsum stack closure costs, and demolition costs at the company’s closed Bartow, Florida phosphate complex.
For full year 2007, results include $17.0 million in non-cash, pre-tax unrealized gains, or $0.19 per diluted share on an after-tax basis, from mark-to-market adjustments on natural gas derivatives. This compares to $30.7 million in non-cash, pre-tax unrealized losses on natural gas derivatives, representing $0.34 per diluted share on an after-tax basis, in 2006.
Other Fourth Quarter Developments
As previously announced, in October of 2007 CF Industries completed its acquisition of a 50 percent interest in KEYTRADE AG, a global fertilizer trading company headquartered near Zurich, Switzerland for $25.9 million. The company also acquired certain non-voting preferred shares of KEYTRADE for $0.9 million and contributed an additional $12.8 million in subordinated financing. In December, KEYTRADE became the exclusive marketer of CF Industries’ phosphate fertilizer exports. Results for KEYTRADE are included in “Equity in earnings of unconsolidated affiliates-net of taxes.”
In November, the company announced that it had received notification that its bid for a natural gas supply from Perú’s Camisea gas fields had been accepted.
Safety Performance
CF Industries completed the fourth quarter without a lost-time accident (LTA) at any of its facilities.
“This achievement, during a quarter when our facilities were operating at high levels to meet customer demand, reflects our commitment to the safety and well-being of our employees,” Wilson commented, noting that the no-LTA streak has continued into the first quarter of 2008.
Strategic Update
The company also provided updates on a number of strategic initiatives.
Uranium Enrichment: NUKEM, Inc., the company’s marketing partner in a proposed venture to supply uranium oxide (U3O8) to electrical utilities, has made progress in identifying supply contracts with utilities at prices that should support project economics. CF Industries and NUKEM are currently negotiating a partnership agreement to construct an extraction facility at the company’s Plant City Phosphate Complex in Florida to produce approximately 900,000 pounds of U3O8 annually from the complex’s phosphoric acid stream. Permitting and construction of the facility, which would use proven technology, could require several years.
Perú Nitrogen Complex: CF Industries is moving ahead on a number of fronts on its proposed venture to build a world-scale ammonia and urea complex in Perú to serve markets in that nation and in Central and South American countries. The company currently is negotiating a gas contract term sheet, evaluating potential sites, and analyzing technology options, as well as working with the Peruvian government on a variety of project development matters.
Gasification: The company has completed the pre-FEED (Front End Engineering and Development) study on a proposed gasification project at its Donaldsonville, Louisiana nitrogen complex. The preliminary cost of the design upon which the pre-FEED study was done was substantially higher than expected. Consequently, the company is currently investigating alternative design configurations and technologies to improve the economics of the project.
Trinidad Joint Venture: The term sheet for the natural gas contract to support a proposed joint venture nitrogen complex in Trinidad expired on December 31, 2007. CF Industries and its partners in the project have previously reported that the inability to obtain a suitable site in Trinidad made proceeding on the project unlikely. The partners have requested that the government of the Republic of Trinidad and Tobago extend the term sheet but, to date, the government has not agreed to an extension.
Outlook
“Looking to the spring planting season, the fundamentals that drove our strong 2007 performance look even better for the farm economy and the company in 2008,” CF Industries’ Wilson noted.
“Prices for most major crops remain at record or near-record levels, providing an incentive for farmers to maximize planted acreage and to optimize fertilizer application this spring. And despite today’s high fertilizer prices, these crop prices clearly should support excellent farm economics in 2008, coming on the heels of 2007’s record farm income,” he commented.
Predictions from some agricultural economists point toward lower corn acreage in 2008, with expectations generally for 88 million to 89 million acres, down from the near-record 93.6 million acres planted in 2007. Putting that into perspective, the planned acreage would still be well above the 79.1 million acre average planted during the 1997-2006 period.
Wilson also noted that the United States Department of Agriculture is predicting increased acreage for other nitrogen-consuming crops such as wheat and sorghum in 2008. Both crops are enjoying strong prices, and increased acreage for them could reduce any negative effect on nitrogen demand caused by the expected reduction in corn acreage. Strong crop prices are also expected to push up nitrogen application rates for corn and other crops as farmers attempt to maximize yields.
Wilson added that corn demand for ethanol production is expected to increase by 30 percent from 2007 levels this year, with much of the increase required to meet federal mandates under the Renewable Fuels Standard. Margins on ethanol production are currently below the record levels achieved last year, but they remain positive.
In phosphate, the worldwide supply/demand balance is expected to remain extremely tight over the next several years, suggesting strong demand and pricing for phosphate fertilizers.
CF Industries, along with other phosphate producers, is facing significantly increased input costs, especially for sulfur. Increased sulfur demand from the phosphate and metals industries, coupled with outages at several major Gulf Coast refineries that produce sulfur, have tightened the market. The company believes the supply/demand balance for sulfur could become more favorable to users later in 2008 when refineries are expected to be producing sulfur at higher rates.
“Looking ahead to the first half of 2008, questions remain regarding corn acreage, sulfur cost, and the strength of the general economy. However, taken against the backdrop of low grain stocks worldwide, high grain prices, record farm economics, and robust global markets for nitrogen and phosphate fertilizers, we’re looking at the first half of 2008 with excitement and optimism. We’re well positioned to serve our customers in this strong agricultural market,” Wilson added.
As in any year, weather, natural gas costs, and other factors could affect the company’s performance.
FPP Update
As of February 5, 2008, FPP bookings for the remainder of 2008 stood at 2.6 million tons, compared to 1.9 million tons at the comparable point last year.
Conference Call
CF Industries will hold a conference call to discuss fourth quarter and 2007 results at 10:00 a.m. EST on Friday, February 8, 2008. Investors can access the call through the Investor Relations section of the company’s Web site (www.cfindustries.com), as well as find call-in information there.
Company Information
CF Industries Holdings, Inc., headquartered in Deerfield, Illinois, is the holding company for the operations of CF Industries, Inc. CF Industries, Inc. is a major producer and distributor of nitrogen and phosphate fertilizer products. CF Industries operates world-scale nitrogen fertilizer plants in Donaldsonville, Louisiana and Medicine Hat, Alberta, Canada; conducts phosphate mining and manufacturing operations in Central Florida; and distributes fertilizer products through a system of terminals, warehouses, and associated transportation equipment located primarily in the midwestern United States. The company also owns a 50 percent interest in KEYTRADE AG, a global fertilizer trading organization headquartered near Zurich, Switzerland.
CF Industries OUTLOOK
“Looking to the spring planting season, the fundamentals that drove our strong 2007 performance look even better for the farm economy and the company in 2008,” CF Industries’ Wilson noted.
“Prices for most major crops remain at record or near-record levels, providing an incentive for farmers to maximize planted acreage and to optimize fertilizer application this spring. And despite today’s high fertilizer prices, these crop prices clearly should support excellent farm economics in 2008, coming on the heels of 2007’s record farm income,” he commented.
Predictions from some agricultural economists point toward lower corn acreage in 2008, with expectations generally for 88 million to 89 million acres, down from the near-record 93.6 million acres planted in 2007. Putting that into perspective, the planned acreage would still be well above the 79.1 million acre average planted during the 1997-2006 period.
Wilson also noted that the United States Department of Agriculture is predicting increased acreage for other nitrogen-consuming crops such as wheat and sorghum in 2008. Both crops are enjoying strong prices, and increased acreage for them could reduce any negative effect on nitrogen demand caused by the expected reduction in corn acreage. Strong crop prices are also expected to push up nitrogen application rates for corn and other crops as farmers attempt to maximize yields.
Wilson added that corn demand for ethanol production is expected to increase by 30 percent from 2007 levels this year, with much of the increase required to meet federal mandates under the Renewable Fuels Standard. Margins on ethanol production are currently below the record levels achieved last year, but they remain positive.
In phosphate, the worldwide supply/demand balance is expected to remain extremely tight over the next several years, suggesting strong demand and pricing for phosphate fertilizers.
CF Industries, along with other phosphate producers, is facing significantly increased input costs, especially for sulfur. Increased sulfur demand from the phosphate and metals industries, coupled with outages at several major Gulf Coast refineries that produce sulfur, have tightened the market. The company believes the supply/demand balance for sulfur could become more favorable to users later in 2008 when refineries are expected to be producing sulfur at higher rates.
“Looking ahead to the first half of 2008, questions remain regarding corn acreage, sulfur cost, and the strength of the general economy. However, taken against the backdrop of low grain stocks worldwide, high grain prices, record farm economics, and robust global markets for nitrogen and phosphate fertilizers, we’re looking at the first half of 2008 with excitement and optimism. We’re well positioned to serve our customers in this strong agricultural market,” Wilson added.
Guy - NGG.V ZMR
Thanks so much. I think I will help some of those sellers convert some of those shares a couple days before the expiration! What a deal!
Kipp
NGG.V - Warrents - HELP ME FELLOW VMC'ers!!!
I am too dang busy at work/traveling/chasing my kids around to sit down and try to figure out what is going on with the $.30 warrents that expire 2-18.
Can someone give me a warrents refresher/specifics and tell me how this will impact the share price of NGG.V.
I know I made a lot of money on EZM when they had a big overhang at $1.20, once the stock was absorbed it took off.
Feeling way way behind these days.......thanks in advance for any help.
Kipp
cl001 - What other sector of the economy can say things like this:
Mack said continued high demand for agricultural commodities would enable Syngenta "to target double digit growth in earnings per share through 2010."
and
"The nitrogen market environment remained very positive in the fourth quarter,” said Terra President and CEO Michael Bennett. “Nitrogen products selling prices remained strong as high commodity grain prices continued to support very healthy nitrogen demand.
“Our plants operated well, with high on-stream factors and efficient utilization during the fourth quarter.
“As we look to the first half of 2008, we anticipate continued strong demand for our products as supported by the record level of customer prepayments we have accepted for delivery. Grain prices continue to be robust, providing ample incentive for growers to optimize yields.”
Bennett continued, “In response to increasing demand and improved margin realization for upgraded nitrogen products, we are evaluating projects to increase upgrading capacity at several of our facilities. We believe additional investment in our upgrading capacity will enhance the strong market position of our operations and improve Terra’s long-term earnings capability.”
I LIKE AG!
researcher- fertilizer
I think there is still upside in the fertilizer stocks if you take the longer view. The multiple to earnings on a forward basis are still low considering earnings growth, product price appreciation, limited supply, and the health and strength of grain markets and prices. The agricultural story has years and years to play out. Don't forget the week dollar.
Good Luck!
Kipp
FERTILIZER EARNINGS
Mind Blowing Numbers! CF Industries reports after the bell.
Terra Industries Inc. Reports Fourth Quarter and Full-Year Results
Thursday February 7, 7:30 am ET
http://biz.yahoo.com/bw/080207/20080207005401.html?.v=1&printer=1
SIOUX CITY, Iowa--(BUSINESS WIRE)--Terra Industries Inc. (NYSE:TRA - News):
S U M M A R Y
Q4/07 vs. Q4/06:
Operating income up $93 million.
Revenues up $121 million, or 27%.
Ammonia, UAN and AN selling prices up 16%, 69% and 20%.
FY07 vs. FY06:
Operating income up $354 million.
Revenues up $523 million, or 28%.
Ammonia, UAN and AN selling prices up 6%, 41% and 10%.
Outlook:
Projected grain inventories should encourage another year of strong planted acres of corn and wheat, which should lead to continued good nitrogen demand.
Nitrogen prices should remain strong through the 2008 planting season.
Natural gas prices will significantly affect Terra’s product costs.
Terra Industries Inc. (NYSE:TRA - News) announced today net income for the 2007 fourth quarter of $69.7 million ($.66 per share), up from net income of $11.6 million ($.11 per share) for the same period in 2006.
Terra reported 2007 fourth quarter operating income of $131.4 million, compared to operating income of $38.8 million for the 2006 fourth quarter. The 2007 earnings improvement was mostly due to higher selling prices.
For 2007, Terra posted net income available to common shareholders of $196.8 million ($1.90 per share) on revenues of $2.4 billion. For 2006, Terra recorded a net loss to common shareholders of $.9 million ($.01 per share) on revenues of $1.8 billion. The 2007 net income was reduced by $77.8 million ($49.8 million, net of tax), or $.47 per share, for debt retirement and asset impairment charges.
Analysis of fourth quarter results
Revenues for the 2007 fourth quarter totaled $570 million compared to $450 million for the 2006 fourth quarter. The $121 million revenue increase from the prior year was due primarily to higher nitrogen selling prices. Ammonia, nitrogen solutions (UAN) and ammonium nitrate (AN) selling prices improved 16, 69 and 20 percent, respectively, over those of the same period last year. Sales volumes of ammonia and UAN also increased by 9 and 5 percent, respectively, while AN sales volumes decreased by 22 percent, compared to last year. The improved selling prices and sales volumes reflect strong demand resulting from improved commodity grain prices and Terra customers’ efforts to secure supplies for the 2008 spring planting season. The 2006 fourth quarter revenues included Terra’s UK operation, which in September 2007 was contributed for a 50% interest in a joint venture that is reported as non-operating equity earnings.
Fourth quarter equity earnings were $5 million higher than last year due to improved operating rates at the Point Lisas Trinidad nitrogen facility.
Selling, general and administrative expense for the 2007 fourth quarter increased by $7.9 million over the 2006 fourth quarter. This is composed of an increase of $11.4 million in incentive and share-based compensation, partially offset by $3.1 million of reduced legal fees incurred in 2006 in association with planning of the UK joint venture. There was no incentive compensation earned during 2006. Share-based compensation, which vests over three years, included effects of 2007 fourth quarter increases to the price of Terra’s common shares.
Analysis of full-year results
The $523 million revenue improvement from 2006 to 2007 was mainly due to higher sales volumes and selling prices, driven by strong nitrogen products demand. UAN and AN sales volumes increased by 19 and 21 percent, respectively, over those of 2006. UAN and AN selling prices increased by 41 and 10 percent, respectively, in 2007 over 2006.
The $354 million operating income improvement from 2006 to 2007 was due to higher sales volumes and selling prices, and lower natural gas costs, partly offset by an impairment loss on Terra’s Beaumont facility and increased expenses for incentive and share-based compensation.
Terra refinanced its long-term debt in February 2007 and recorded a $39 million charge associated with the refinancing. The new debt agreement has a due date in 2017 and a fixed interest rate of 7.0%.
Forward natural gas position
Terra’s forward purchase contracts at Dec. 31, 2007, fixed prices for about 28 percent of its next 12 months’ natural gas needs at about $9.9 million above the published forward market prices at that date. These forward positions hedge production costs associated with sales commitments that Terra plans to ship in the first and second quarters of 2008.
Cash balances, customer prepayments and share buybacks
Cash balances, including almost $300 million in customer prepayments, totaled $698 million at Dec. 31, 2007. Terra expects to ship products under the prepay agreements during the 2008 first half.
During the 2007 fourth quarter, Terra did not repurchase any of its common shares under its share repurchase program. Since announcing its authorization to repurchase up to 9.5 million of its outstanding common shares by June 30, 2008, Terra has repurchased 6.7 million shares.
Donaldsonville ammonia plant restart
Terra plans to restart its Donaldsonville, Louisiana ammonia plant during the third quarter of 2008. The output of this facility will replace 400,000 tons per year of purchased imported ammonia at more favorable gross margins. The facility will undergo turnaround and startup activities during the first half of 2008. The facility ceased production in December 2004; however, Terra has maintained the facility for a potential restart and retained the skilled workforce needed to operate it.
CEO’s remarks
“The nitrogen market environment remained very positive in the fourth quarter,” said Terra President and CEO Michael Bennett. “Nitrogen products selling prices remained strong as high commodity grain prices continued to support very healthy nitrogen demand.
“Our plants operated well, with high on-stream factors and efficient utilization during the fourth quarter.
“As we look to the first half of 2008, we anticipate continued strong demand for our products as supported by the record level of customer prepayments we have accepted for delivery. Grain prices continue to be robust, providing ample incentive for growers to optimize yields.”
Bennett continued, “In response to increasing demand and improved margin realization for upgraded nitrogen products, we are evaluating projects to increase upgrading capacity at several of our facilities. We believe additional investment in our upgrading capacity will enhance the strong market position of our operations and improve Terra’s long-term earnings capability.”
Conference call details
Terra management will conduct a conference call to discuss these fourth quarter results this afternoon at 3:00 ET. A live webcast of the conference call will be available from Terra’s website at www.terraindustries.com, and will be archived for playback for three months.
About Terra
Terra Industries Inc., with 2007 revenues of $2.4 billion, is a leading international producer of nitrogen products.
Forward-looking statements
This news release may contain forward-looking statements, which involve inherent risks and uncertainties. Statements that are not historical facts, including statements about Terra Industries Inc.’s beliefs, plans or expectations, are forward-looking statements. These statements are based on current plans, estimates and expectations. Actual results may differ materially from those projected in such forward-looking statements and therefore you should not place undue reliance on them. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements is set forth in Terra Industries Inc.’s most recent report on Form 10-K and Terra Industries Inc.’s other documents on file with the Securities and Exchange Commission. Terra Industries Inc. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
Terra Industries Inc. Reports Fourth Quarter and Full-Year Results
Thursday February 7, 7:30 am ET
http://biz.yahoo.com/bw/080207/20080207005401.html?.v=1&printer=1
SIOUX CITY, Iowa--(BUSINESS WIRE)--Terra Industries Inc. (NYSE:TRA - News):
S U M M A R Y
Q4/07 vs. Q4/06:
Operating income up $93 million.
Revenues up $121 million, or 27%.
Ammonia, UAN and AN selling prices up 16%, 69% and 20%.
FY07 vs. FY06:
Operating income up $354 million.
Revenues up $523 million, or 28%.
Ammonia, UAN and AN selling prices up 6%, 41% and 10%.
Outlook:
Projected grain inventories should encourage another year of strong planted acres of corn and wheat, which should lead to continued good nitrogen demand.
Nitrogen prices should remain strong through the 2008 planting season.
Natural gas prices will significantly affect Terra’s product costs.
Terra Industries Inc. (NYSE:TRA - News) announced today net income for the 2007 fourth quarter of $69.7 million ($.66 per share), up from net income of $11.6 million ($.11 per share) for the same period in 2006.
Terra reported 2007 fourth quarter operating income of $131.4 million, compared to operating income of $38.8 million for the 2006 fourth quarter. The 2007 earnings improvement was mostly due to higher selling prices.
For 2007, Terra posted net income available to common shareholders of $196.8 million ($1.90 per share) on revenues of $2.4 billion. For 2006, Terra recorded a net loss to common shareholders of $.9 million ($.01 per share) on revenues of $1.8 billion. The 2007 net income was reduced by $77.8 million ($49.8 million, net of tax), or $.47 per share, for debt retirement and asset impairment charges.
Analysis of fourth quarter results
Revenues for the 2007 fourth quarter totaled $570 million compared to $450 million for the 2006 fourth quarter. The $121 million revenue increase from the prior year was due primarily to higher nitrogen selling prices. Ammonia, nitrogen solutions (UAN) and ammonium nitrate (AN) selling prices improved 16, 69 and 20 percent, respectively, over those of the same period last year. Sales volumes of ammonia and UAN also increased by 9 and 5 percent, respectively, while AN sales volumes decreased by 22 percent, compared to last year. The improved selling prices and sales volumes reflect strong demand resulting from improved commodity grain prices and Terra customers’ efforts to secure supplies for the 2008 spring planting season. The 2006 fourth quarter revenues included Terra’s UK operation, which in September 2007 was contributed for a 50% interest in a joint venture that is reported as non-operating equity earnings.
Fourth quarter equity earnings were $5 million higher than last year due to improved operating rates at the Point Lisas Trinidad nitrogen facility.
Selling, general and administrative expense for the 2007 fourth quarter increased by $7.9 million over the 2006 fourth quarter. This is composed of an increase of $11.4 million in incentive and share-based compensation, partially offset by $3.1 million of reduced legal fees incurred in 2006 in association with planning of the UK joint venture. There was no incentive compensation earned during 2006. Share-based compensation, which vests over three years, included effects of 2007 fourth quarter increases to the price of Terra’s common shares.
Analysis of full-year results
The $523 million revenue improvement from 2006 to 2007 was mainly due to higher sales volumes and selling prices, driven by strong nitrogen products demand. UAN and AN sales volumes increased by 19 and 21 percent, respectively, over those of 2006. UAN and AN selling prices increased by 41 and 10 percent, respectively, in 2007 over 2006.
The $354 million operating income improvement from 2006 to 2007 was due to higher sales volumes and selling prices, and lower natural gas costs, partly offset by an impairment loss on Terra’s Beaumont facility and increased expenses for incentive and share-based compensation.
Terra refinanced its long-term debt in February 2007 and recorded a $39 million charge associated with the refinancing. The new debt agreement has a due date in 2017 and a fixed interest rate of 7.0%.
Forward natural gas position
Terra’s forward purchase contracts at Dec. 31, 2007, fixed prices for about 28 percent of its next 12 months’ natural gas needs at about $9.9 million above the published forward market prices at that date. These forward positions hedge production costs associated with sales commitments that Terra plans to ship in the first and second quarters of 2008.
Cash balances, customer prepayments and share buybacks
Cash balances, including almost $300 million in customer prepayments, totaled $698 million at Dec. 31, 2007. Terra expects to ship products under the prepay agreements during the 2008 first half.
During the 2007 fourth quarter, Terra did not repurchase any of its common shares under its share repurchase program. Since announcing its authorization to repurchase up to 9.5 million of its outstanding common shares by June 30, 2008, Terra has repurchased 6.7 million shares.
Donaldsonville ammonia plant restart
Terra plans to restart its Donaldsonville, Louisiana ammonia plant during the third quarter of 2008. The output of this facility will replace 400,000 tons per year of purchased imported ammonia at more favorable gross margins. The facility will undergo turnaround and startup activities during the first half of 2008. The facility ceased production in December 2004; however, Terra has maintained the facility for a potential restart and retained the skilled workforce needed to operate it.
CEO’s remarks
“The nitrogen market environment remained very positive in the fourth quarter,” said Terra President and CEO Michael Bennett. “Nitrogen products selling prices remained strong as high commodity grain prices continued to support very healthy nitrogen demand.
“Our plants operated well, with high on-stream factors and efficient utilization during the fourth quarter.
“As we look to the first half of 2008, we anticipate continued strong demand for our products as supported by the record level of customer prepayments we have accepted for delivery. Grain prices continue to be robust, providing ample incentive for growers to optimize yields.”
Bennett continued, “In response to increasing demand and improved margin realization for upgraded nitrogen products, we are evaluating projects to increase upgrading capacity at several of our facilities. We believe additional investment in our upgrading capacity will enhance the strong market position of our operations and improve Terra’s long-term earnings capability.”
Conference call details
Terra management will conduct a conference call to discuss these fourth quarter results this afternoon at 3:00 ET. A live webcast of the conference call will be available from Terra’s website at www.terraindustries.com, and will be archived for playback for three months.
About Terra
Terra Industries Inc., with 2007 revenues of $2.4 billion, is a leading international producer of nitrogen products.
Forward-looking statements
This news release may contain forward-looking statements, which involve inherent risks and uncertainties. Statements that are not historical facts, including statements about Terra Industries Inc.’s beliefs, plans or expectations, are forward-looking statements. These statements are based on current plans, estimates and expectations. Actual results may differ materially from those projected in such forward-looking statements and therefore you should not place undue reliance on them. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements is set forth in Terra Industries Inc.’s most recent report on Form 10-K and Terra Industries Inc.’s other documents on file with the Securities and Exchange Commission. Terra Industries Inc. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
Eastern Platinum (ELR.TO, ELRFF)
(I got this from a newsletter. Has anyone done any DD? I am at work and need to look at it overnight. Kipp)
Eastern Platinum based upon its
industry’s valuation metrics is severely undervalued with a market cap of under
$20 per PGM ounce in the ground resource. All other platinum producers are
valued in excess of $60 per PGM ounce in the ground. New producer stocks
generally take time to reach peer level valuations. This is likely due to the
transition from hype to showing you can achieve solid operating numbers.
Eastern Plats is set to rapidly increasing production and expects to be producing
at a rate of 185,000 oz/year of platinum at the end of 2008 followed by 320,000
oz annual rate of production in late 2009. Soaring platinum prices will increase
interest by US investors for which Eastern Platinum should benefit greatly.
Eastern Plats being a small producer in South Africa should not be affected by
the power crisis as the authorities have only required large, deep underground
mining operations to cease production. Company Website: www.eastplats.com
Housing Meltdown - Business Week
I found the full story at Business Week - Here is the link:
http://www.businessweek.com/magazine/content/08_06/b4070040767516_page_2.htm
LOOK AT THE "SLIDE SHOW" links on the right side!
I agree 100% with the author and anyone speculating on this being the bottom of housing could be in the "house of pain"!
Kipp
Real Estate, Banks, Stocks, U$D, Commodities
I see a lot of speculation on where we are and where we are headed. My 2 cents:
The real estate market bubble is not anywhere near done, and even when it does bottom, it will be like busts of past bubbles and take years and years to get back to appreciation, inflation will help on paper but not in "real" terms. MAny of these companies will be bankrupt and de-listed. People that got burned by the tech/stock market bubble went into real estate, believing house prices would never go down because "housing prices have never gone down since record keeping started, decades ago, so it will never go down in the future. They're not making anymore land you know".....so the realtors and lenders were telling them. Now the speculation in real estate is over and prices are headed back down to the level that wage earners can qualify for traditional loans. HOME PRICES WILL GO DOWN UNTIL THE AVERAGE WORKER CAN QUALIFY FOR A LOAN BASED ON REAL INCOME FROM THEIR PAY CHECKS! Prices are headed back to what they were in the mid to late 1990's.
Investing in the mortgage companies, home builders, and banks is way too risky.....think falling knife. I don't see the risk reward of trying to call a bottom????
The next kick in the rear is going to be further decline in the dollar. The dollar is going to be the next "carry trade" currency of choice. We are going to lower interest rates to + or - 2.0% and cover the world in a blizzard of US dollars. Borrowing USDs and investing in commodities is going to be the new hedge fund game. The market is starting to realize that the only real store of value is in the "real" things the world needs. The natural resource assets held by companies, in safe parts of the world cannot be reproduced, they are worth a fortune.
Gold can be argued as an investment because it has no use. Like it or not, it is seen as a store of value and it is going up.
I see tough sledding ahead, wild volatility, crisis after crisis developing. My strategy is to stay invested in commodities, including energy, grain, fertilizer, metals, and some gold, and investing in the companies that help produce them. Most of my stocks are Canadian listed with some Norwegian listed stocks. The dollar is going to be a hot potato and sitting on the sidelines in USDs will further decrease future buying power. Food, fuel, healthcare, education, and basic materials prices are going up, up, up and declining dollars simply won't go as far in a hyper inflationary situation.
The VMC Jr's Energy, Metals, and Agriculture Boards are a great place to get ideas for investing. Thanks to all that bring their stocks to our attention and share ideas and opinions.
I have been a VMC'er since day 1 on Raging Bull. I have been a little stressed by some of the bickering on the board of late. None of us are right 100% of the time. We have proven that collectively, we can beat the market averages. I try to post off topic or personal opinions on weekends and/or before/after market hours. I try to post the stock ticker symbol first during market hours or when talking about a stock. I also try to respect other peoples ideas and opinions and not personally attack anyone. My participation in the VMC network has changed my financial situation in ways that are hard for me to comprehend......let's keep these boards going and help each other make money in these challenging times!
Thanks to all of you that contribute to our efforts!
Kipp
Bobwins - Groppe on oil.
Thanks for finding this video. $80ish/bbl oil is fine with me. Our smaller drillers can make a ton of cash at these prices. I think the majors are going to have a hard time growing production, none of them can double, tripple production, like TXCO, CXPO.OB, POE.V, PMG.TO, etc. Groppe looking out 7 years seems like forever.....I just wonder what inflation and $USD will do to his forecast. I have also been sitting on AOS.V, all of those barrels must be worth something some day.
Another point that Groppe makes is that high prices will cause people to change behavior. I agree with that, I have changed my behavior this past 2 years by parking my big Dodge P/U(12mpg) and buying a diesel Jeep Liberty(26mpg). I also installed a pellet/corn stove in the basement, reduced my natural gas use in half!
Just sitting and molding with my drillers.
Kipp
ADY - American Dairy - Bobwins milk play in China. Look at this chart $26 down to $6 and change now rocketing off the bottom.
Chart: http://stockcharts.com/charts/gallery.html?ADY
I need to do some reading but something's up here.
Kipp
bunky - VT.TO
I don't follow them closely. If they handle grain they won't do as well as they would if they were a fertilizer manufacturer. They get paid $X/bushel to handle and store grain. A fertilizer manufacturer that makes 5 million tons of product, raises the price $100/ton and makes a huge profit.
I will look into them more and see if I am missing something.
Regards,
Kipp
littlefish, you may be a little pre-mature in not having patients.
Jesse Livermore said:
"It was never my thinking that made big money for me. It was my sitting...Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after this that a stock operator can make big money. it is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of ignorance."
It will be breathtaking when the precious metal jr's take off, when....I have no idea exactly, but they will.
I can say the same for the mid and jr. oil drillers, it will be breathtaking.
Good Luck!
Kipp
Global Food Shortage
(Re-post from this weekend, look at these numbers)
I want to bring the developing global grain shortage to my fellow VMC'ers attention. There will be more and more press on this developing crisis as the year unfolds.
Here are the numbers:
Global Farmland Under Cultivation (millions of hectares):
........................1998 -1999 -2000 -2001 -2002 -2003 2004 -2005 -2006 2007
Area (hectares) 686.3 670.4 666.0 666.8 653.8 664.2 667.9 671.8 668.4 684.7
As you can see from the numbers, despite the growth in crop prices, the same amount of land that was under cultivation 10 years ago is being farmed today.
Total Global Grain Stats for the past 10 years(millions of tonnes):
Production (metric tons) 1,875 -1,872 -1,842 -1,874 -1,821 -1,861 -2,043 -2,016 -1,991 -2,077
Consumption (metric tons) 1,836 -1,867 -1,863 -1,905 -1,914 -1,947 -1,994 -2,031 -2,045 -2,096
Ending stocks (metric tons) 579 -584 -563 -532 -440 -355 -403 -388 -335 -315
As you can see from the numbers consumption has risen above production and inventories are nearly HALF of what they were 10 years ago.
Enter the Bio-Fuels initiative/mandates and what they will consume and you can only come to one conclusion......Global Grain Shortage!
It should also be noted that North America has not had a dramatic weather event for 16 years running. Any major drouth will have a devastating impact.
After Hours Comments: THE BULL IS ALIVE!
I feel we are about to see the markets go into rally mode on the back of the next FED rate cut and blizzard of cash from uncle Ben and crew. This is a financial/real estate crisis, not an inventory build/unemployment crisis. Commodities are the place to be, protection from weak dollar, B.R.I.C are still on fire for natural resources, global inventories of everything are critically low.
Grains were up and are pressing all time highs: http://www.cbot.com/cbot/pub/page/0,3181,949,00.html
Metals were up at record levels:
http://www.kitco.com/market/
The dollar was down $.41 to $75.70
Fertilizers are at record high prices and record low supply.
Base metal inventories are low.
Oil is up over $91/bl and not signaling a major recession.
Interest rates are low, low, low!
Everyone is big time bearish, lots of shorts will be forced to cover.
Buying Energy, AG/Fertilizer, Gold/Silver.
My 2 cents after hours.
Good Luck!
Kipp
Shell Oil/Peak Oil...Easy Oil Gone 2015
From: Jeroen van der Veer, Chief Executive
To: All Shell employees
Date: 22 January 2008
Subject: Shell Energy Scenarios
Dear Colleagues
In this letter, I'd like to share reflections about how we see the energy future, and our preferred route to meeting the world's energy needs. Industry, governments and energy users - that is, all of us - will face the twin challenge of more energy and less CO2.
This letter is based on a text I've written for publication in several newspapers in the coming weeks. You can use it in your communications externally. There will be more information about energy scenarios in the months ahead.
By the year 2100, the world's energy system will be radically different from today's. Renewable energy like solar, wind, hydroelectricity and biofuels will make up a large share of the energy mix, and nuclear energy too will have a place.
Mankind will have found ways of dealing with air pollution and greenhouse gas emissions. New technologies will have reduced the amount of energy needed to power buildings and vehicles.
Indeed, the distant future looks bright, but getting there will be an adventure. At Shell, we think the world will take one of two possible routes. The first, a scenario we call Scramble, resembles a race through a mountainous desert. Like an off-road rally, it promises excitement and fierce competition. However, the unintended consequence of "more haste" will often be "less speed" and many will crash along the way.
The alternative scenario, called Blueprints, has some false starts and develops like a cautious ride on a road that is still under construction. Whether we arrive safely at our destination depends on the discipline of the drivers and the ingenuity of all those involved in the construction effort. Technical innovation provides for excitement.
Regardless of which route we choose, the world's current predicament limits our maneuvering room. We are experiencing a step-change in the growth rate of energy demand due to population growth and economic development, and Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand.
As a result, society has no choice but to add other sources of energy - renewables , yes, but also more nuclear power and unconventional fossil fuels such as oil sands. Using more energy inevitably means emitting more CO2 at a time when climate change has become a critical global issue.
In the Scramble scenario, nations rush to secure energy resources for themselves, fearing that energy security is a zero-sum game, with clear winners and losers. The use of local coal and homegrown biofuels increases fast.
Taking the path of least resistance, policymakers pay little attention to curbing energy consumption - until supplies run short. Likewise, despite much rhetoric, greenhouse gas emissions are not seriously addressed until major shocks trigger political reactions. Since these responses are overdue, they are severe and lead to energy price spikes and volatility.
The other route to the future is less painful, even if the start is more disorderly. This Blueprints scenario sees numerous coalitions emerging to take on the challenges of economic development, energy security and environmental pollution through cross-border cooperation.
Much innovation occurs at the local level, as major cities develop links with industry to reduce local emissions. National governments introduce efficiency standards, taxes and other policy instruments to improve the environmental performance of buildings, vehicles and transport fuels.
As calls for harmonization increase, policies converge across the globe. Cap-and-trade mechanisms that put a cost on industrial CO 2 emissions gain international acceptance. Rising CO2 prices accelerate innovation, spawning breakthroughs. A growing number of cars are powered by electricity and hydrogen, while industrial facilities are fitted with technology to capture CO 2 and store it underground.
Against the backdrop of these two equally plausible scenarios, we will only know in a few years whether December's Bali declaration on climate change was just rhetoric or the beginning of a global effort to counter it. Much will depend on how attitudes evolve in Beijing, Brussels, New Delhi and Washington.
Shell traditionally uses its scenarios to prepare for the future without expressing a preference for one over another. But, faced with the need to manage climate risk for our investors and our grandchildren, we believe the Blueprints outcomes provide the best balance between economy, energy and environment.
For a second opinion, we appealed to climate change calculations made at the Massachusetts Institute of Technology. These calculations indicate that a Blueprints world with CO2 capture and storage results in the least amount of climate change, provided emissions of other major manmade greenhouse gases are similarly reduced.
The sobering reality is that the Blueprints scenario will only come to pass if policymakers agree a global approach to emissions trading and actively promote energy efficiency and new technology in four sectors: heat and power generation, industry, mobility and buildings. It will be hard work and there is little time.
For instance, Blueprints assumes CO2 is captured at 90% of all coal- and gas-fired power plants in developed countries in 2050, plus at least 50% of those in non-OECD countries. Today, there are none. Since CO2 capture and storage adds cost and brings no revenues , government support is needed to make it happen quickly on a scale large enough to affect global emissions. At the very least, companies should earn carbon credits for the CO2 they capture and store.
Blueprints will not be easy. But it offers the world the best chance of reaching a sustainable energy future unscathed, so we should explore this route with the same ingenuity and persistence that put humans on the moon and created the digital age.
The world faces a long voyage before it reaches a low-carbon energy system. Companies can suggest possible routes to get there, but governments are in the driving seat. And governments will determine whether we should prepare for a bitter competition or a true team effort.
That is the article, and how I see our challenges and opportunities. I look forward to hearing how you see the situation (please be concise).
Regards
Jeroen van der Veer, Chief Executive
Shell Oil/Peak Oil...Easy Oil Gone 2015
From: Jeroen van der Veer, Chief Executive
To: All Shell employees
Date: 22 January 2008
Subject: Shell Energy Scenarios
Dear Colleagues
In this letter, I'd like to share reflections about how we see the energy future, and our preferred route to meeting the world's energy needs. Industry, governments and energy users - that is, all of us - will face the twin challenge of more energy and less CO2.
This letter is based on a text I've written for publication in several newspapers in the coming weeks. You can use it in your communications externally. There will be more information about energy scenarios in the months ahead.
By the year 2100, the world's energy system will be radically different from today's. Renewable energy like solar, wind, hydroelectricity and biofuels will make up a large share of the energy mix, and nuclear energy too will have a place.
Mankind will have found ways of dealing with air pollution and greenhouse gas emissions. New technologies will have reduced the amount of energy needed to power buildings and vehicles.
Indeed, the distant future looks bright, but getting there will be an adventure. At Shell, we think the world will take one of two possible routes. The first, a scenario we call Scramble, resembles a race through a mountainous desert. Like an off-road rally, it promises excitement and fierce competition. However, the unintended consequence of "more haste" will often be "less speed" and many will crash along the way.
The alternative scenario, called Blueprints, has some false starts and develops like a cautious ride on a road that is still under construction. Whether we arrive safely at our destination depends on the discipline of the drivers and the ingenuity of all those involved in the construction effort. Technical innovation provides for excitement.
Regardless of which route we choose, the world's current predicament limits our maneuvering room. We are experiencing a step-change in the growth rate of energy demand due to population growth and economic development, and Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand.
As a result, society has no choice but to add other sources of energy - renewables , yes, but also more nuclear power and unconventional fossil fuels such as oil sands. Using more energy inevitably means emitting more CO2 at a time when climate change has become a critical global issue.
In the Scramble scenario, nations rush to secure energy resources for themselves, fearing that energy security is a zero-sum game, with clear winners and losers. The use of local coal and homegrown biofuels increases fast.
Taking the path of least resistance, policymakers pay little attention to curbing energy consumption - until supplies run short. Likewise, despite much rhetoric, greenhouse gas emissions are not seriously addressed until major shocks trigger political reactions. Since these responses are overdue, they are severe and lead to energy price spikes and volatility.
The other route to the future is less painful, even if the start is more disorderly. This Blueprints scenario sees numerous coalitions emerging to take on the challenges of economic development, energy security and environmental pollution through cross-border cooperation.
Much innovation occurs at the local level, as major cities develop links with industry to reduce local emissions. National governments introduce efficiency standards, taxes and other policy instruments to improve the environmental performance of buildings, vehicles and transport fuels.
As calls for harmonization increase, policies converge across the globe. Cap-and-trade mechanisms that put a cost on industrial CO 2 emissions gain international acceptance. Rising CO2 prices accelerate innovation, spawning breakthroughs. A growing number of cars are powered by electricity and hydrogen, while industrial facilities are fitted with technology to capture CO 2 and store it underground.
Against the backdrop of these two equally plausible scenarios, we will only know in a few years whether December's Bali declaration on climate change was just rhetoric or the beginning of a global effort to counter it. Much will depend on how attitudes evolve in Beijing, Brussels, New Delhi and Washington.
Shell traditionally uses its scenarios to prepare for the future without expressing a preference for one over another. But, faced with the need to manage climate risk for our investors and our grandchildren, we believe the Blueprints outcomes provide the best balance between economy, energy and environment.
For a second opinion, we appealed to climate change calculations made at the Massachusetts Institute of Technology. These calculations indicate that a Blueprints world with CO2 capture and storage results in the least amount of climate change, provided emissions of other major manmade greenhouse gases are similarly reduced.
The sobering reality is that the Blueprints scenario will only come to pass if policymakers agree a global approach to emissions trading and actively promote energy efficiency and new technology in four sectors: heat and power generation, industry, mobility and buildings. It will be hard work and there is little time.
For instance, Blueprints assumes CO2 is captured at 90% of all coal- and gas-fired power plants in developed countries in 2050, plus at least 50% of those in non-OECD countries. Today, there are none. Since CO2 capture and storage adds cost and brings no revenues , government support is needed to make it happen quickly on a scale large enough to affect global emissions. At the very least, companies should earn carbon credits for the CO2 they capture and store.
Blueprints will not be easy. But it offers the world the best chance of reaching a sustainable energy future unscathed, so we should explore this route with the same ingenuity and persistence that put humans on the moon and created the digital age.
The world faces a long voyage before it reaches a low-carbon energy system. Companies can suggest possible routes to get there, but governments are in the driving seat. And governments will determine whether we should prepare for a bitter competition or a true team effort.
That is the article, and how I see our challenges and opportunities. I look forward to hearing how you see the situation (please be concise).
Regards
Jeroen van der Veer, Chief Executive
PZG Charts - Bouncing HARD off the bottom with high volume.
http://stockcharts.com/charts/gallery.html?PZG
I think Bobwins, and tarafan own this stock. Does anyone else own this, comments?
Kipp
Paramount (PZG) Announces High Grade Gold and Silver Results from the First Holes in its San Miguel Vein in Mexico
http://biz.yahoo.com/iw/080128/0353402.html
Paramount Gold and Silver Corp. Announces High Grade Gold and Silver Results from the First Holes in its San Miguel Vein in Mexico
Monday January 28, 3:30 am ET
CHIHUAHUA, MEXICO--(MARKET WIRE)--Jan 28, 2008 -- Paramount Gold and Silver Corp. (Toronto:PZG.TO - News) (AMEX:PZG - News) (Frankfurt:P6G.F - News) (WKN: A0HGKQ) is pleased to announce assay results from its first four drill holes in the San Miguel vein of its San Miguel project, in the Guazapares Mining District, Mexico. Drill holes SM-01 TO SM-04 were drilled 40-50 meters apart and were designed to intercept the previously un-drilled San Miguel structure approximately 70 meters below the surface (see map). The San Miguel structure is exposed for at least 1 kilometer and appears to be open along strike to the northwest.
The area in which these four holes were drilled (see map) was selected because of very good grades in 12 surface channel samples across the vein, which averaged 9 meters at 4.22 g/t Au Eq. This area also has several shallow old mine workings, which had high precious metal grades according to local miners. In addition, geologists quite familiar with the nearby Palmarejo deposit have said that the veins here have an appearance virtually identical to those at Palmarejo. The assay results tabulated below support that suggestion. These results are particularly exciting because the ratio of gold to silver is significantly higher than at other portions of the property.
Highlights of these assay results are (see table at http://www.paramountgold.com
for further details and maps):
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True Gold
Hole From To Interval Width Gold Silver Equiv.
Number meters meters Meters Meters Grams/ton grams/ton grams/ton
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SM-01 42.00 72.00 30.00 19.29 0.32 113.00 2.20
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Including: 4.82 0.51 296.00 5.45
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72.00 86.00 14.00 9.00 2.99 149.00 5.48
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Including: 2.57 7.08 373.00 13.30
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SM-02 50.45 65.00 14.55 11.15 0.47 220.00 4.13
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Including: 0.31 2.93 3160.00 55.60
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SM-03 34.50 48.10 13.60 10.42 0.48 410.00 7.33
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Including: 0.77 1.86 2610.00 45.36
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48.10 48.55 0.45 0.34 Cavity
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48.55 60.50 11.95 9.15 0.37 105.00 2.12
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Including: 0.77 1.26 384.00 7.66
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SM-04 30.20 36.00 5.80 4.44 0.13 595.00 10.05
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52.70 56.80 4.10 3.14 0.96 545.00 10.03
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Including: 0.61 1.93 1445.00 26.01
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95.30 100.00 4.70 3.60 13.93 115.00 15.85
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including: 0.69 47.90 138.00 50.20
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ADVERTISEMENT
Larry Segerstrom, COO of Paramount Gold and Silver Corp., commented, "These results from the first four drill holes in the San Miguel Vein confirm the continuity of the gold and silver mineralization from the surface down to at least 70 meters of depth. These precious metals grades and thicknesses are consistent with and may represent the discovery of a high-grade ore shoot similar to those at nearby Palmarejo. The geological characteristics of the structure strongly suggest that these first four holes are in the upper levels of the vein system and that similar mineralization may persist to a depth of 200 meters or more."
Quality Control
Paramount takes detailed digital photos of the entire core before it is cut by saw to half core which is assayed at ALS Chemex's Vancouver laboratory. As part of quality assurance, quality control (QA/QC), Paramount has put into place a detailed program of periodically introducing certified standards, blanks and duplicates into the sample stream. Half-core samples are being retained on site for verification and reference purposes.
The qualified person who has reviewed this news release is Dana C. Durgin, M. Sc. Economic Geology. He is a Certified Professional Geologist (CPG #10364) with the American Institute of Professional Geologists, and a Registered Professional Geologist in Wyoming (PG-2886).
About Paramount
Paramount Gold is listed on the AMEX and TSX under the symbol PZG and trades on the Frankfurt Stock Exchange under the symbol P6G (WKN: A0HGKQ). Paramount Gold is a precious metals mining exploration company presently in the early stages of an extensive exploration program at their San Miguel project in the Guazapares Mining District, part of the Sierra Madre Occidental gold-silver belt of Mexico. Paramount has completed over 27,000 meters of core drilling, totaling 157 drill holes on the project, with results pending on 43 of these holes. In April 2007, Paramount began a 50,000 meter drill program, of which 20,000 meters have been completed to date. In 2007, Paramount completed $25 million in financing which is being utilized to develop their San Miguel and Andrea projects and other opportunities.
"Safe-Harbor" Statement: This press release contains forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements that are not statements of historical fact regarding the intent, belief or current expectations of the Company may not be realized. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company's ability to control, and that actual results may differ materially
bbotcs, I agree that things are going to be way different in the future. I will argue that change will only come with 200, 500, 1000% increases in the cost of energy. Conservation is still rarely talked about. There is no "magic bullet" and it's going to take a monumental effort to change the global energy equation. We are in for some tough times!
Kipp
I do not believe in conspiracy theories, period. I get tired of the posts about them. Utter B.S.
GM/Coskata All you want to know is here.
http://www.autobloggreen.com/2008/01/13/gm-and-coskata-announce-worldwide-cellulosic-ethanol-partnership/
General Motors vehicles and biomass materials are two things that you can find pretty much anywhere on the planet. GM and Coskata Energy announced a partnership today at the Detroit Auto Show that certainly hints at a future where you we will find biomass materials fueling GM vehicles in a lot of places, maybe pretty much anywhere.
If you've heard the Coskata name before, it's likely from the name of the Coskata-Coatue Wildlife Refuge. The Coskata energy company, no relation, was started in July of 2006 with funding by ethanol-magnate Vinod Khosla's Khosla Ventures as well as Advanced Technology Ventures and Great Point Ventures. Why was all this big money interested in Coskata? Because Coskata claims they will soon reach one of the holy grails of the new energy movement: cheap cellulosic ethanol that can be created, well, pretty much anywhere in the world. The short version of this story: Coskata Ethanol can make ethanol from biomass, municipal solid waste and any other carbon-containing material and GM, which has taken an equity stake in Coskata, wants to promote the heck out of this ability.
More details than you can possibly devour in one sitting after the jump.
Gallery: Coskata promo photos
Aside from the variety of feedtsocks, Coskata is particularly proud that its ethanol production process uses less than a gallon of water to make a gallon of ethanol and returns 7.7 times the energy it takes to make the biofuel (this was verified by Argonne National Labs but note that all of this energy is not contained in the ethanol; some of it is in the electricity generated when parts of the biomass feedstock that don't become ethanol are burned). So, to make 100 gallons of ethanol, Coskata needs a ton of dry material and less than 100 gallons of water. Also, Coskata President and CEO Bill Roe said that will cost less than a dollar to produce a gallon of ethanol "almost anywhere in the world" using his company's process (yes, that's the production cost, and does not take government production credits into account).
Coskata uses "proprietary microorganisms" and patented bioreactor to produce ethanol. The microorganisms are fed a syngas and then they process the gas into ethanol. Coskata currently has five strains of these microorganisms (all from Oklahoma State University and Oklahoma University) that can make ethanol, butanol and other liquids. Coskata representatives told AutoblogGreen that they expect to increase the number of strains in the future, and will possibly be able to make other fuels from them. Roe also said that other automakers approached his company but that GM had the most long-term, most well-developed plan.
AutoblogGreen spoke with the Coskata (and GM) representatives on a cold morning in early January in Chicago at the Coskata headquarters. The day featured presentations from five individuals, beginning with Roe. The others were (in order) Mary Beth Stanek, director of GM's environment & energy policy and commercialization, Coleman Jones, GM's biofuel implementation manager, Candace Wheeler, GM technical fellow in GM research & development and planning and Richard Tobey, VP of engineering and R&D at Coskata. You can listen to recordings of all of these presentations. I'll note the highlights here.
Stanek said that GM wants to get non-food sources of ethanol into commercialization as soon as possible and that GM has come up with a practical estimate of U.S. ethanol for light-duty fuels in 2010 (which is so not far away), and decided that 61 percent will still be gasoline, four percent will be grain ethanol and 35 percent (!!) could be cellulosic ethanol. Even though GM is bringing out a lot of non-biofuel-specific technologies on eco-cars (hybrids, electric drive, lightweight materials, etc.), Stanek said biofuels remain a focus for the company.
Jones described how the Coskata process takes a biomaterial and first converts it into syngas before feeding it to the microorganisms. Considering that the recently-passed energy bill requires 36 billion gallons of ethanol by 2025, which is well over 20 percent of the U.S. fuel supply, having a non-corn-based way to produce that ethanol is important. He expects there to be 18 million flex-fuel vehicles in the U.S. in five years. Jones also made the point that you get more miles per BTU using ethanol (but fewer miles per gallon, because there are fewer BTUs in a gallon of ethanol than in a gallon of gasoline).
Wheeler said that there were about seven billion gallons of ethanol produced in the U.S. in 2007, most of them from corn. GM began talks with Coskata in the spring of 2007 and the automaker likes the variety of inputs that the Coskata process can use. I mean, considering Coskata can make ethanol from some of the residual materials in vehicle recycling (plastics, rubber), partnering up is sensible. Wheeler said that GM will help promote Coskata ethanol and get it into the marketplace. The DOE gave out $385m worth of biorefinery projects grants in February 2007 and GM is helping Coskata apply for some of the $200m that will be given out in the next round, coming in February 2008.
Finally, Tobey said that the microorganisms in the bioreactor effectively ingest the syngas and extrude ethanol. Water used in the process (necessary because the microorganisms are are anaerobic and quickly die in the presence of oxygen) is recycled for a while but, because all living organisms create waste products, the water cannot be reused indefinitely and so is recycled on a continuous basis. As stated, the end result is an overall water use of less than one gallon of water per gallon of ethanol produced. The microorganisms are not genetically modified (although future strains might be), but have been adapted to be more tolerant to harmful chemicals. They little critters are also not harmful to people or animals.
So far, Coskata's operations are small, but expansion is coming soon. The company will have a small pilot scale plant running in Warrenville, IL by the end of January 2008 and a 40,000 commercial demonstration plant in operation by the end of 2008 (details on this plant were not given out, but Tobey said announcements will follow in the coming months). The first Coskata 100-million-gallon-per-year plant should be operational by late 2010-early 2011. A number of firms are bidding on that, but no details were given out.
In the short Q&A that followed the presentations, Stanek said that GM is taking an equity stake in Coskata, but how much is not public information. GM will take the ethanol from the demonstration plant and use it at GM's Milford Proving Ground. Most importantly, GM will be attempting to take this technology around the world. The main goal for both the firms is to quickly commercialize this process.
Not enough detail for ya? Well, stay tuned for the next AutoblogGreen podcast, which features an interview with Roe where he admits that using the Coskata process to turn coal into ethanol is a very likely possibility down the road (but probably not in America). Also, here are the recordings of the full presentations from GM and Coskata representatives.
Coskata CEO Bill Roe (20 min, 13MB),
GM's Mary Beth Stanek (15 min, 10MB)
Coleman Jones (12:30 min, 8.6MB)
Candace Wheeler (20 min, 13MB)
Coskata's Richard Tobey (21 min, 14MB)
Brief Q & A following the presentations (2 min, 1.5MB)
Alternately, you can listen to all the presentations in this one 90 minute file (61MB). If you don't have 90 minutes to listen to all the presentations, here's a 90 second clip from Coleman Jones on what you need to do to a car to make it E85 capable. One annoying thing about the Minidisc recorder that I use is that it somehow manages to pick up cell phone signals as little beeps. In a room full of journalists and executives, you can guess that there are a lot of these floating in the air, and so these recordings contains some annoying beeps. You can still understand what's being said, but I thought it was fair to warn you. As you're listening to the audio clips, you can follow along with the slide presentations in the gallery below.
Gallery: Coskata and GM presentation slides
Lastly, we have gathered the press releases marking the announcement below. I told you it was more than you can handle in one go.
GM, Coskata Partner in Breakthrough Ethanol Technology
Process Makes Ethanol from Renewables Including Trash and Old Tires
DETROIT, Jan. 13 – General Motors announced a partnership Sunday with Coskata Inc. to use the company's breakthrough technology that affordably and efficiently makes ethanol from practically any renewable source, including garbage, old tires and plant waste.
Coskata, which was formally introduced as part of GM's opening press conference at the North American International Auto Show, uses a proprietary process that leverages patented microorganisms and bioreactor designs to produce ethanol for less than $1 a gallon, about half of today's cost of producing gasoline.
"We are very excited about what this breakthrough will mean to the viability of biofuels and, more importantly, to our ability to reduce dependence on petroleum," GM Chairman and CEO Rick Wagoner said.
Coskata's process addresses the issues most often raised about grain-based ethanol production.
According to Argonne National Laboratory, which analyzed Coskata's process, for every unit of energy used, it generates up to 7.7 times that amount of energy, and it reduces CO2 emissions by up to 84 percent compared with a well-to-wheel analysis of gasoline.
Coskata's process uses less than a gallon of water to make a gallon of ethanol compared with three gallons or more for other processes.
Coskata, based in Warrenville, Ill., can use its technology practically anywhere in the world that a carbon-based feedstock is available.
For GM, this could lead to joint efforts in markets such as China, where growing energy demand and a new energy research center could jumpstart a significant effort into ethanol made from biomass, Wagoner said.
More immediately, GM will receive the first ethanol from Coskata's pilot plant in the fourth quarter of 2008. The fuel will be used in testing vehicles at GM's Milford Proving Grounds.
GM is the auto industry leader in offering consumers a choice of flex-fuel cars and trucks that run on either ordinary gasoline or E85 – a blend of 85 percent ethanol and 15 percent, or any combination of the two. GM produces more than 1 million is flex-fuel vehicles a year and has 3.5 million on the road globally.
In the U.S., GM has more than 2.5 million FlexFuel models on the road and is committed to making half its production flex-fuel capable by 2012. GM sells 11 E85-capable models this year and will increase that to more than 15 models for the 2009 model year.
GM has worked in partnerships with businesses, university and non-governmental organizations over the last two years to grow the U.S. infrastructure for E85, helping to open 300 fueling stations in 15 states. Helping make the fuel more readily available was the next logical step.
The timing of the GM-Coskata partnership coincides with President Bush's signing last month of the Energy Independence and Security Act, which calls for a dramatic increase in biofuels – from 7.5 billion gallons in 2012 to 36 billion gallons in 2022. Corn- and other grain-based ethanol are expected to account for up to 15 billion gallons of that new standard with 21 billion gallons coming from cellulosic and biomass sources.
One of the criticisms of cellulosic ethanol is that its development is several years away. Coskata CEO and President Bill Roe says the next generation ethanol is here today.
"We will have our first commercial-scale plant making 50 to 100 million gallons of ethanol running in 2011, and that includes the two years it will take to build the plant," Roe said. "Success in delivering on our business plan means that we could account for a significant portion of the biomass ethanol mandated in the new Renewable Fuels Standard within 10 years."
The partnership includes an undisclosed equity stake for GM, joint research and development into emissions technology and investigation into making ethanol from GM facilities' waste and non-recyclable vehicle parts.
The Coskata partnership builds on a quarter century of GM research into biofuels and is part of GM's five-fold approach to providing energy alternatives for automobiles. These include continued efforts in making fuel-efficient engines; E85 ethanol; hybrids; electrically driven vehicles and hydrogen fuel cells.
"There is no question in my mind that making ethanol more widely available is absolutely the most effective and environmentally sound solution," Wagoner said. "And it's one that can be acted on immediately."
About GM
General Motors Corp. (NYSE: GM), the world's largest automaker, has been the annual global industry sales leader for 76 years. Founded in 1908, GM today employs about 280,000 people around the world. With global headquarters in Detroit, GM manufactures its cars and trucks in 33 countries. In 2006, nearly 9.1 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. More information on GM can be found at www.gm.com.
About Coskata
Coskata is a biology-based renewable energy company for economies dependent on foreign sources of oil. Using proprietary microorganisms and transformative bioreactor designs, the company will produce ethanol for under US $1.00 per gallon almost anywhere in the world, from a wide variety of feedstocks. Founded in 2006 by leading renewable energy investors and entrepreneurs, including Khosla Ventures, GreatPoint Ventures and Advanced Technology Ventures, Coskata has compiled a strong IP portfolio of patents, trade secrets and know-how and assembled a first-class team for the development and commercialization of its compelling syngas-to-ethanol process technology. For more information, please visit www.coskata.com.
Company Background
Chronology of Coskata
June 2006: Dr. Rathin Datta and Todd Kimmel work to obtain exclusive rights to the organisms at Oklahoma State University and Oklahoma University with Dr. Ralph Tanner, Dr. Randy Lewis, and Dr. Ray Huhnke
July 2006: Coskata, Inc. founded with Series A funding from Khosla Ventures, Advanced Technology Ventures, Great Point Ventures
February 2007: Executive team expanded to include Wes Bolsen and Richard Tobey. The technical and business teams are built out
May 2007: New global headquarters in Warrenville, IL acquired to establish premiere anaerobic microbiology R&D center and small scale pilot operation
August 2007: Rights to 16+ patents on the Coskata process either issued or under consideration
September 2007: President and CEO, Bill Roe, brought in
December 2007: Coskata sees 50x improvement in the performance of the core ethanol producing micro-organisms from their date of acquisition. Allows commercial scale next generation ethanol to be made economically viable
January 2008: General Motors unveils Coskata and a strategic partnership at the 2008 International Auto Show, taking ownership stake in Coskata, Inc.
Coskata was founded in 2006 by Todd Kimmel and Rathin Datta, with support from GreatPoint Ventures, Khosla Ventures and Advanced Technology Ventures (ATV). Kimmel was an Entrepreneur-in-Residence at ATV where he was actively looking for new commercialization opportunities in the cleantech and renewable energy sectors.
In researching opportunities, the team learned of work taking place at the University of Oklahoma under Dr. Ralph Tanner and entered into an exclusive agreement to license microorganisms that could be used to create ethanol through a biofermentation process. The concept of synthesis gas passing over a catalyst bed to create natural gas was the starting point for the broader concept of turning synthesis gas into valuable products like liquid fuels, which would become the foundation of Coskata.
Key Advantages of Coskata's Next Generation Ethanol:
Efficient: Together, Coskata's proprietary microorganisms and bioreactor designs lead to the highest conversion rates of feedstock to ethanol in the industry – over 100 gallons per dry ton while utilizing less than one gallon of fresh water per gallon of ethanol.
Affordable: Using Coskata's process, ethanol can be manufactured at a variable cost of under US $1.00 per gallon - the lowest cost of manufacture in the industry.
Flexible: Coskata's unique three-step production process makes use of the industry's widest variety of available feedstock – biomass, municipal and agricultural wastes, forest residuals, bagasse, and other carbonaceous sources – enabling local production of next-generation ethanol.
Building Coskata
Kimmel and his team saw the potential for paradigm shifting technology in the production of ethanol. In July of 2006, after detailed discussions with Samir Kaul and Vinod Khosla of Khosla Ventures and Bill Wiberg of ATV, Coskata was born. Over the course of the following twelve months, the management team worked together to build a top-tier biofermentation technology team, establish the technology vision for the overall Coskata process technology, begin important experimentation work and research, and establish critical relationships that would serve Coskata over that period of time and in the future.
Coskata has established a new 25,000 sq. ft. research and development facility located in Warrenville, Ill and continues to add key hires to its executive ranks. The company has established a roster of impressive leaders as key partners, including General Motors, Brigham Young University, Oklahoma State University, the University of Oklahoma and Argonne National Laboratory.
GENERAL MOTORS: GLOBAL LEADER IN BIOFUEL-CAPABLE VEHICLES
DETROIT – General Motors' commitment to reinvent the automobile includes a range of clean transportation technologies that respect the environment. Biofuels, including ethanol, are a key way to reduce petroleum use and greenhouse gas (CO2) emissions, and GM is the global industry leader in producing vehicles that operate on ethanol fuel blends.
GM's partnership with Coskata to commercialize its unique process for turning biomass into ethanol is just the most recent evidence of GM's commitment to make ethanol more available by promoting ethanol production technology and infrastructure. GM intends to announce several more strategic biomass arrangements in the coming months, and is watching technology developments in grain-based biofuels.
The Coskata partnership also builds on GM's longstanding leadership in automotive fuels development and testing that includes research and development of unleaded fuels in conjunction with the development of the catalytic converter and early formulations of ethanol.
"For 30 years, GM has been at the forefront of developing and promoting ethanol and ethanol-capable vehicles to reduce petroleum consumption and emissions," said Beth Lowery, GM vice president, Environment, Energy and Safety Policy. "We believe ethanol used as a fuel, not just as a gasoline additive, is the best near-term alternative to the surging global demand for oil because ethanol is renewable and it significantly reduces CO2 emissions compared to gasoline. Best of all, it is available today."
After working alongside ethanol producers to develop fuel formulations to provide optimum performance in vehicle engines, GM began promoting ethanol more than two decades ago and was the first manufacturer to enable its entire U.S. fleet to operate on E10, a blend of 90 percent gasoline and 10 percent ethanol.
Globally, GM has about 3.5 million flex-fuel vehicles on the road in the U.S., Canada, Europe and Brazil. About 2.5 million are capable of operating on any percentage of gasoline and ethanol, up to 85 percent ethanol (E85). Another 1 million are in Brazil, where more than 90 percent of vehicles GM sells run on 100-percent ethanol, known as E100. GM produces more than 1 million flex-fuel vehicles a year globally.
GM has committed to doubling North American flex-fuel vehicle production from 400,000 to 800,000 by 2010 and to make half of its vehicles flex-fuel-capable by 2012. In the 2007 model year, GM produced 14 FlexFuel models totaling 760,000 vehicles.
In addition to the Coskata partnership, GM is working with universities, businesses and non-governmental organizations to promote the benefits of E85 at a grassroots level. GM has played a significant role in raising E85 awareness in 15 states and has helped open 300 E85 refueling stations in the last two years.
The U.S. is the largest market using fuels blended with ethanol; however, its use as a fuel source is gaining global popularity as a more environmentally responsible option to petroleum-based fuels. GM has developed market-specific engines and vehicles that allow consumers to benefit from the use of earth-friendly ethanol fuels produced and available in their country.
Brazil is the best example of the market potential for alternative fuels. Since 1975, Brazil has been using ethanol made from sugar cane to create self sufficiency in motor vehicle fuels. GM has been a leader in flexible-fuel powertrains in the Brazilian market. These are vehicles capable of operating on any blend of gasoline and ethanol, up to 100 percent ethanol.
The Saab 9-5 BioPower is another example of GM applying its ethanol learnings globally.
During the development of BioPower, Swedish engineers teamed with their GM colleagues in Brazil to transfer knowledge of flex fuels. As a result, Saab leads the European premium car segment in offering the 9-5 BioPower model, which accounts for 70 percent of all 9-5 sales.
The GM/Coskata partnership – What will they accomplish together?
The GM/Coskata partnership brings together the world's top automaker and a leader in producing vehicles capable of running on biofuels - with innovators in the biofuels industry.
GM has over 25 years of experience designing and producing bio-fuel capable vehicles.
The Coskata team consists of 35 experts in the field of biofuels with 27 PhDs and 16 patents in process.
Some of the best microbiologists are employed by Coskata.
Shared Science
Through their partnership, GM and Coskata will share the science and work to accelerate biomass ethanol commercialization.
GM and Coskata will work together in several areas such as waste and emissions management, global applications and fuel testing.
Bill Roe, President and CEO, Coskata: "GM is enabling Coskata to produce the next generation of biofuels - without using a food source - making it economically viable and commercially available."
Rapid Commercialization & Retail Development
The partnership will help rapidly commercialize the Coskata process and lead to infrastructure growth for E85 flex-fuel vehicles.
Over the last 18 months, GM has led the effort to grow E85 stations around the county. The effort has led to more than 300 ethanol pumps in 15 states.
Greater availability of biofuels will help encourage more stations to sell E85 and make this alternative fuel a viable choice for the drivers of more than 2.5 million GM FlexFuel vehicles and the more than 6 million total FFVs on the road today.
Coskata is one of several companies that will change the ethanol industry by building plants of its own and licensing its technology to other companies. Coskata expects to produce 50-100 million gallons of ethanol in its first plant by 2011.
Government Grants
A major catalyst in improving the growth of infrastructure is continued government assistance for retail station conversion and funding into biomass technologies.
The new Energy and Security Act mandating the production and use of 36 billion gallons of ethanol fuel annually by 2022 is complemented by partnerships like GM and Coskata that match an established industry leader with an emerging company that has a breakthrough technology.
Other Benefits
Using Coskata's process, GM can provide non-recyclable plant waste as a feedstock for ethanol, further reducing landfill use and contributing to GM's effort to increase the number of its global production facilities that send zero waste to landfills.
Even non-recyclable parts of vehicles that have run their lifespan can serve as a feedstock using the Coskata process.
Mary Beth Stanek, GM director of Environment and Energy Policy and Commercialization: "GM's investment in Coskata's process of developing biofuels is an important step towards enhancing U.S. energy security, while at the same time, tackling some of our most important environmental challenges in a meaningful way."
Coskata Energy Web Site
http://www.coskataenergy.com/
$1.00/gallon Ethanol...Interesting
http://www.usatoday.com/money/industries/energy/environment/2008-01-13-gm-ethanol-coskata_N.htm
General Motors finances ethanol maker Coskata
By James R. Healey, USA TODAY
DETROIT — General Motors (GM) says it is investing in a fledgling company that claims its secret process could be able to make ethanol from waste in large quantity as soon as 2010 for $1 a gallon or less, half the cost of making gasoline.
Bill Roe, CEO of 18-month-old ethanol maker Coskata, says the company's process uses bacteria developed at the University of Oklahoma and existing gasification technology to generate 99.7% pure ethanol, plus water. He says the method should leapfrog cellulosic production, which has been seen as the next step from today's ethanol production using corn.
GM won't disclose its investment, but Roe says it's enough to make Coskata "a speed-to-market play. I don't think most people saw this coming," he says. "Most talk about cellulosic ethanol is futuristic."
Coskata's process can use garbage, old tires and other waste, but Roe says wood waste probably will be used at first because it's available, cheap and easy to handle.
Coskata was founded July 2006 with backing from Khosla Ventures, Advanced Technology Ventures and Great Point Ventures. It is based in Warrenton, Ill.
Ethanol is being blended with gasoline to cut oil use. Much fuel sold in the USA now is 10% ethanol, which modern cars burn without problems. An 85% ethanol blend, or E85, is seen as a way to drastically cut oil use, but it requires slightly modified "flex-fuel" vehicles.
GM has promised to make 50% of its vehicles E85-capable by 2012 if there is a sufficient ethanol distribution and says it is trying to make sure enough E85 is available. Of the 170,000 U.S. gas stations, E85 now is sold at about 1,000, mainly in the Midwest.
Roe pledges to be operating a 40,000-gallon-per-year pilot plant this year and to line up partnerships with other companies to build $400 million facilities that each could produce 100 million gallons a year as soon as late 2010. The USA uses 140 billion gallons of gasoline a year.
While E85 could cut oil use, questions have been raised about health and financial drawbacks.
A study from Stanford University's civil and environmental engineering department, updated last year, says E85-fueled vehicles increase ozone levels, and a shift to 100% E85 fuel could boost U.S. respiratory deaths by about 185 per year. The author, professor Mark Jacobson, says "E85 may be a greater overall public health risk than gasoline."
GM spokesman Alan Adler says the automaker believes the report is wrong and says it has joined some environmental, pro-ethanol and health groups to call for a working group to seek consensus on ethanol health effects.
"There is no question in my mind that making ethanol more widely available is absolutely the most effective and environmentally sound solution," Chairman and CEO Rick Wagoner said said Sunday, announcing the tie-up between GM and Coskata at media preview days ahead of the North American International Auto Show here. "And it's one that can be acted on immediately."
GM says it also has asked Jacobson to revise the work. Jacobson says he's never had such a request: "What they're saying is absolutely false." He says his conclusions, partly based on data from GM and other automakers, are conservative.
E85 contains less energy per gallon than gasoline, so it takes more to go the same distance. Adjusting for that difference, E85's cost is between midgrade and premium gasoline, says travel group AAA. The U.S. average price for gasoline was $3.095 per gallon, AAA reported Friday, while E85's energy-adjusted price was $3.325.
Even giving monetary value to cutting oil use, E85 is a bad bargain at today's prices, says John Graham, dean of the Pardee Rand Graduate School and founder of the Harvard Center for Risk Analysis. His study of alternatives to gasoline published last year found that burning E85 could cost as much as $1,600 more over a vehicle's life, while diesel fuel could save up to $2,300.
Ethanol blended with gasoline also has a federal subsidy of 51 cents per gallon. Roe says Coskata's process could erase the cost disadvantage, even without the subsidy.
Excellent TeckCominco IR Presentation on Zinc, Lead, Copper & Moly!
Click:
Mining Research Analysts Group
December 14, 2007
Presentation by Andy Roebuck, Manager, Market Research and Michael Schwartz, Market Research Analyst
download/view presentation slides (2MB PDF)
At this link:
http://www.teckcominco.com/Generic.aspx?PAGE=Investors+Pages%2fInvestor+Relations+Presentations&portalName=tc
Kipp
Sulfuric acid plant to interrupt operation
Saturday, January 26, 2008
By BRAD CROCKER
PASCAGOULA -- One of the two 1,500 ton-per-day sulfuric acid plants at Mississippi Phosphate Corp.'s fertilizer facility in Pascagoula will be out of production for about 30 days to replace boiler components, the company announced Friday.
The boiler's internal tubes and tube sheets experienced a major failure in July 2007, the company said in a news release. Production resumed in late August but was interrupted again in early September until it was back on line until this week.
"The contractor retained by the company to assemble and install the replacement internal components of the boiler has failed to deliver an operationally reliable boiler," the company said. "The latest failure of the boiler has led the company to conclude that further efforts by the contractor to correct its prior defective work are unlikely to be successful."
In October, the company sued the unidentified contractor, seeking damages related to the alleged previous failures. The case is still pending.
As the sulfuric acid plant remains idle, production of diammonium phosphate will reduce to about 900 tons per day, but company spokeswoman Melinda Hood said customer service will not be interrupted and none of the facility's 225 employees will lose work.
There were no environmental or safety issues connected with the shutdown, Hood added.
"This was a planned takedown, a controlled takedown," she said.
Another contractor has been hired to assemble and install new internal components in the boiler. Hood said replacement parts are already on-site and the company's maintenance crews are also available to "double-check everything."
According to the company Web site, Mississippi Phosphates can produce about 750,000 tons of diammonium phosphate each year based on sulfuric acid produced at the Pascagoula site and 870,000 tons annually if supplemental sulfuric acid is available for purchase.
Hood said it was "very unlikely" that the company would be required to purchase any additional sulfuric acid to meet production demands.
A majority of the DAP is sold domestically and distributed through rail, truck and barge.
Reporter Brad Crocker can be reached at bcrocker@
The end of cheap oil: Are you ready?
This is a must read summarization of the current oil situation!
http://www.dcvelocity.com/print/?article_id=1698
Kipp
The end of cheap oil: Are you ready?
This is a must read summarization of the current oil situation!
http://www.dcvelocity.com/print/?article_id=1698
Kipp
Donald Coxe View from "Basic Points" Jan. 2008:
The fast-growing Asian middle class who have given the world $95 oil, $3.00
copper and $12 nickel is about to give the world a full-blown food crisis.
Here’s why:
1. The supply of arable land under cultivation has not increased during this
decade, primarily because of industrialization, desertifi cation and urban
sprawl across much of the Third World, particularly China and India.
2. When people by the hundreds of millions switch from a diet of rice
and bread to three square meals a day, their protein consumption rises
rapidly. That protein can come from dairy products and/or meat. Their
physiognomies actually change—they’re no longer skinny, and their
children no longer stay small. Their caloric intake is transformed—along
with their forms. (Form follows bodily functions.)
3. In all past periods of soaring food prices, major crop failures or wars were
the sole cause. Once the droughts or fl oods, plagues of locusts, or wars
ended, surpluses were again the norm, and food prices collapsed, forcing
governments into further subsidies. Example: more than 40% of the EU
budget goes into farmers’ pockets, because raw food prices have so rarely
been far above production costs.
4. Wheat prices doubled last year, and, as we are told (in such media as can
fi nd space to write about grains), that surge came because of crop failures in
Australia and Eastern Europe. Nobody noticed it when the USDA reported
that world wheat production was up 1% last year.
Can we trust the USDA? Its data come from a huge worldwide satellite
system that monitors production everywhere. That system was first
launched by President Ford, and his successor took money from the
Defense Budget to beef up (no pun intended) the satellite surveillance.
Why? To prevent a repetition of “The Great Grain Robbery,” when Nixon
sold the USSR virtually the entire US wheat crop in 1972 at $1.65 a bushel,
sending wheat up to $5 a bushel, and triggering global food infl ation.
That was economically greater aid to the Soviets than Stalin got in any
year under Lend-Lease.
5. The US Midwest, which prides itself on being “The Saudi Arabia of
Corn,” has had 17 straight years without a signifi cant crop failure—the
longest winning streak on record. Although global warming could have
contributed to that remarkable record (by lengthening growing seasons
in the key northern states—Minnesota, Iowa, Illinois, and Ohio), history
tells us that the good years for growing ears of corn don’t last forever. We
in the Midwest have more than doubled the Joseph quota for great growing
conditions, and are due for a reversion to the mean. When that happens,
the world will almost surely face its greatest-ever food crisis.
6. “Greatest-ever food crisis?” Isn’t that hyperbolic? Famine has been one of
the Four Horsemen forever. What’s different this time? Answer: In the past,
supply pressures came from crop failures or war, and so were local. This
time, the pressure comes from demand, which is global. (To give the reader
some idea of the scale of the increase in demand as people get richer, the
FAO reports that from 1981 to 2001, per-capita daily protein consumption
in the US rose from 99 grams to 114, while in China it increased from
54 to 82. In light of the increase in Chinese incomes since then, that gap
will, presumably, have narrowed further.)
7. The ethanol-biodiesel booms are driven by powerful political coalitions
that include campaigners for “energy independence.” Brazil, with its vast
production of sugar and soybeans, has managed to switch more than
70% of its motor vehicles to alternative fuels. The fact that corn ethanol
has become a new example of government farm folly with $5.00 corn
doesn’t mean biofuels aren’t worth pursuing. The world’s shortage of
oil is a fact—although one wouldn’t know it from listening to electionyear
demagogy. Biofuels from other sources—including animal fats and
cellulosic materials—will become increasingly economic. But there is so
little well-watered land—and so much demand.
8. To date, the prices of food growing on stalks have soared like tech stocks
during the era of another kind of moonshine-driven markets. Although
food prices have climbed in many Third World countries—notably China—
there has not been full cost pass-through to consumers in North America.
Prices for eggs and dairy products are up in North America, but not as much
as feed prices. Meat is still priced as if little of signifi cance had occurred.
US Grocers and food manufacturers are still eating higher raw food prices,
in large part because Wal-Mart—with a 40% market share—continues to
subsidize general merchandise sales with cheap food. Either Wal-Mart is
about to reconstitute itself as a tax-exempt charity devoted to feeding the
poor and the lower middle class, or food prices will climb. Sharply.
9. We are frequently asked whether it is reasonable to include India in this
analysis of soaring Third World protein consumption. Aren’t most of
those teeming millions vegetarians? From our visit there, we learned that
vegetarianism is indeed widespread, but many vegetarians consume eggs,
fi sh, and dairy products. Taboos dictate which meats they eat: Muslims
won’t eat pork, but will eat beef, whereas non-vegan Hindus reject veal
or beef, but will eat lamb, pork, or goat.