Power Corp of Canada
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10 октября 2013, 03:22

Canadian Mogul Paul Desmarais Dead at 86

One of Canada's wealthiest and most powerful businessmen, Paul Desmarais built a corporate empire by engineering a reverse takeover of Power Corp. of Canada and refocusing the company on financial services.

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10 октября 2013, 00:06

Obituary: billionaire Paul Desmarais Sr

Former boss of Power Corp of Canada started building his money-management fortunes after inheriting a fleet of buses in a mining town

12 марта 2013, 19:34

Investors Are Happy With The Idea Of A BlackBerry Takeover

(Reuters) - BlackBerry shares rose 14 percent on Monday, fueled by takeover speculation and news that AT&T Inc will start selling the new BlackBerry Z10 touchscreen smartphone in the United States on March 22. The speculation was sparked by a comment from the head of China's Lenovo Group Ltd, who told a French newspaper on Monday that the personal computer maker might consider an acquisition of Canada's BlackBerry at some point in the future. "External growth remains a question of opportunities," said Yang Yuanqing, Lenovo's CEO, in an interview with Les Échos. "As for BlackBerry, the file could eventually make sense, but I must first analyze the market and understand the exact weight of this company," he said in response to a question about whether Lenovo would make a move on the smartphone maker. BlackBerry, a one-time smartphone pioneer, has bled market share to Apple Inc's iPhone, Samsung Electronics Co Ltd's Galaxy line and other devices powered by Google's market-leading Android operating system. In a make-or-break move to regain market share and return to profit, BlackBerry introduced the new smartphone to much fanfare in January, and said it was abandoning its old name, Research In Motion, and renaming itself BlackBerry. Analysts however poured cold water on the speculation that the Chinese technology giant would make a move on BlackBerry. "We believe a takeout of BlackBerry is unlikely, especially in the near term, nor is our investment thesis or 'outperform' rating predicated on such an event," said Wells Fargo analyst Maynard Um, in a note to clients. A spokesman for Lenovo in Canada also downplayed the CEO's comment, saying, "in no way was this an indication of activity or strategic direction." Another Lenovo executive had made a similar comment when asked about BlackBerry in January. That remark had also sparked a rally in BlackBerry shares, but Lenovo said at the time that the executive was only speaking broadly about M&A strategy. Analysts are also skeptical that the Canadian government, which in 2010 blocked mining giant BHP Billiton's $39 billion bid for Potash Corp, will easily approve a Chinese acquisition of BlackBerry. "An acquisition might be difficult," said Morningstar Inc analyst Brian Colello. "My understanding is that Canada treats the company and its patents as a bit of a crown jewel and would not rule lightly on a takeover." BlackBerry shares ended the day up 14.1 percent at $14.90 on the Nasdaq on Monday, while the Toronto-listed shares closed up 13.8 percent at C$15.29. AT&T LAUNCH BlackBerry is hoping the new devices, already on sale in Canada, Britain and more than 20 other countries, will help it win back market share in the United States, which was once a stronghold for the smartphone industry pioneer. The U.S. launch of the new devices has been delayed due to a longer carrier-testing phase in the country. AT&T said pre-sales of the devices will begin on Tuesday. BlackBerry says sales of its new smartphone have been outpacing its expectations so far, but investors are keen to see how it fares in the United States. As expected, AT&T said it would sell the devices for $199.99 with a two-year contract. T-Mobile USA said on Friday it planned to start selling the BlackBerry Z10 to its business customers in the United States on Monday. Verizon Inc, the biggest U.S. wireless carrier, has yet to say when it will start selling the Z10. The Z10 and the soon-to-be-launched Q10, which will come with BlackBerry's traditional physical keyboard, are powered by the new BlackBerry 10, or BB10 operating system. "We believe the Street is pricing in such a weak fiscal 2014 that BB10 does not need to be an outstanding success to surprise," Scotiabank analyst Gus Papageorgiou said in a note to clients on Monday. Papageorgiou, who has a "sector outperform" rating on the stock, said he expects the company sold about 1 million BlackBerry 10 devices in the quarter ended March 2. "Gross margins should begin to move higher as more Z10s enter the mix," he said. "Next quarter will be the true test as BB10 launches in the U.S." ($1 = 1.027 Canadian) (Editing by Lisa Von Ahn, Peter Galloway, Matthew Lewis and Ken Wills)

08 марта 2013, 23:46

Guest Post: LNG - The Holy Grail Of Gas Investments

Submitted by James Stafford of OilPrice.com, Liquefied natural gas (LNG) technology—from LNG seaborne tankers and LNG trains to floating LNG facilities have quickly gone from concept to commercialization, opening up new possibilities in new frontiers and rendering the remote—well, much less remote. Analysts say FLNG terminals will become a major growth market within the next couple of years, as they offer more flexibility than stationary terminals. Liquefaction of natural gas is the process of super-cooling natural gas to minus 260 degrees Fahrenheit (minus 162 degrees Celsius) at which point it becomes much safer and easier to transport. After its been shipped to its destination, regasification plants at importing or receiving terminals return the fuel to a gaseous state. A lot of money is being dumped into LNG technology right now. It’s a major bet on the LNG market, but here’s why it’s solid: •    LNG demand is set to double over the next decade to 408 million tons a year•    Major markets for LNG are opening up and some of them can’t be reached by overland pipelines•    The Asian market is particularly hot for LNG and they are paying top dollar•    Prices and rising global demand make it worth shipping LNG by seaborne tankers•    The US may become a major LNG exporter, and customers are already lining up•    Russia is now in the global LNG market and it’s determined to become a major player in this field•    Britain's natural gas imports from outside the North Sea will surpass domestic production by 2015 and add more than $11 billion to import costs as domestic supplies dwindle and Norway struggles to fill the gap (Qatar is only sending it leftovers right now—the bulk goes to higher paying Asian customers) As natural gas gains favor over oil and coal because it’s cheaper and cleaner, non-OECD countries are expected to account for 80% of natural gas demand growth by 2035. The largest share of global gas demand comes from the power sector. China is set to double its LNG imports to 25-30 MTPA by 2015 as Beijing views gas as the foundation of its energy future over the next decade. Australia and Qatar will be the biggest suppliers on the current scene. India is also set to double its regasification capacity by the end of 2015, as gas supplants liquid fuel demand. By 2015, LNG imports to India are expected to reach 17-20 MT (up from 9 MT in 2011). Global Liquefaction capacity is set to increase by 4.4% by 2015 and another 7.5% by 2020, when it is expected to reach 470 MTPA. Australia will be the biggest contributor to this number, adding 80 MTPA of LNG supply by 2020. The US could have the capacity to add 70 MTPA to supplies. The real game-changer will be if the US moves to export its LNG with its 70 MTPA capacity. In the meantime, companies in Canada are winning permits to export LNG. A Shell-led consortium in February became the latest permit holder for an LNG export facility in British Columbia. Shell joins the permit-holding ranks that already include Apache Corp., which has an interest in Kitimat along with Chevron, where the first LNG shipment is scheduled for 2015. The third license went to privately-owned BC LNG Export Cooperative. The Future is Floating Floating LNG production, storage and offloading concepts are revolutionary because they have the ability to station a vessel directly over distant fields, removing the need for offshore pipelines and adding the advantage of mobility—these floating facilities can be moved to a new location once existing fields are depleted.   Floating liquefaction technology can bring additional LNG supply by accessing stranded gas reserves that were previously thought to be too remote, small or otherwise challenging for conventional land-based LNG development. More specifically, the advantages include: •    fast-track regasification for new LNG importers•    lower upfront capital investment compared to onshore facilities•    rising expense of onshore projects improves the cost differential in favor of FLNG•    mobility/relocation to new fields•    overcoming restrictions due to limited land availability There are 10 existing Floating Storage and Regasification projects, and an additional 8 under construction, and at least 30 other potential projects on the drawing board. There are both small- and large-scale floating LNG projects. Small-scale floating LNG projects target 1-3 trillion cubic feet stranded gas reserves, while large-scale floating LNG projects are primarily focused on avoiding long distance submerged pipelines to shore and enhancing the prospects of fields for which traditional LNG development would be difficult. Shell, Mobil and Statoil are all developing large-scale FLNG projects in Australia, Nigeria and Namibia.Shell’s most prized LNG project is its Prelude Floating Liquefied Natural Gas (FLNG) Project in Australia, which is moored some 200 kilometers out to sea and will produce gas from offshore fields and liquefy it onboard. The LNG, LPG and condensate produced will be stored in tanks in the hull of the facility. LNG and LPG carriers will moor alongside to offload the products. This vessel will be six times bigger than the biggest aircraft carrier and will cost between $10.8 and $12.6 billion to build—but it also means that Shell won’t have to pay rising prices in Australia’s onshore LNG plants. The facility will produce about 3.6 million metric tons of LNG and 1.3 million tons of gas condensate a year. The Ichthy’s Floating Production Storage and Offloading Facility (FPSO) venture in Australia, led by Inpex Corp. (1605), will cost an estimated $34 billion and have a capacity of 8.4 million tons annually—of both liquefied petroleum gas and condensate. Petronas has its own plans to build its first FLNG project, which is set to start in 2015 in Malaysia. The facility will have a 1.2 million ton per annum capacity and will operate at the Kanowit gas field, 180 kilometers offshore Bintulu. ConocoPhillips (COP) also plans to build an FLNG facility off Australia, and smaller companies like GDF Suez (GSZ) and PTT Exploration & Production Pcl (PTTEP) also plan floating LNG projects. BHP and Exxon Mobil Corp. (XOM) are also considering FLNG for their offshore Western Australia Scarborough field because it would eliminate the costs of building pipelines and jetties. Russia’s Gazprom also plans to build an FLNG vessel to store and export LNG from Israel’s Tamar gas field, about 90 kilometers off the Israeli coast on the eastern Mediterranean. Tamar has estimated reserves of 9.7 trillion cubic feet of natural gas. According to a deal still being worked out with Israel, Gazprom would export roughly one-third of Tamar’s reserves over a 20-year period, starting in 2017. Onshore LNG Plants: Second Thoughts? While there is already some hesitancy about building new onshore LNG plants in Australia and some indications of second thoughts due to the advantages of floating facilities, Italy’s Eni and Anadarko (Texas) are planning an onshore LNG plant in Mozambique, in the Cabo Delgado province. The plant would have an eventual capacity of about 50 million tons a year. The plant would be the second largest in the world outside of Qatar. So far, though, Mozambique seems to have a limited capacity for the plant which is hindering plans for exports to begin in 2018. Increasingly, though floating LNG is being bandied about as a better answer to tapping into Mozambique’s massive offshore natural gas potential. In 2012, a total of 100 trillion cubic feet of natural gas was discovered in the country’s north. New LNG technology, like FLNG facilities, combined with Mozambique’s proximity to gas-hungry Asia, could propel the country into the major leagues. Indeed, there are rumors afoot that BP might be having second thoughts about building its own $40 billion Browse gas project onshore in Western Australia. The project is a joint venture with Woodside Petroleum as well as BHP Billiton Ltd, Shell, Mitsubishi and Mitsui. This summer should see a decision on this. LNG Transport: Seaborne Full Speed Ahead Demand for seaborne LNG is expected to increase this year by 5.6%, as some 15 million metric tons a year of liquefaction capacity is set to come on line by 2014—enough to fill 20 average vessels, or 80% of the vessels ordered for 2013. Demand growth for oil-product tankers will exceed fleet growth between 2013 and 2015 (expanding 4.8%), with supply growth expanding 1.8%. Then there’s this: the cost to book an LNG tanker more than doubled from 2010 to 2011.As of today, we count a total of 373 LNG vessels in operation, with orders for over 60 having been placed. Contracts are also being placed by new market entrants like Awilco, Dynagas, Thenamaris, Cardiff Marine and Alpha Tankers. Shell is the clear leader in the global LNG market because it has its own fleet of vessels so doesn’t incur the same processing and shipping costs, and when its FLNG project in Australia goes on line we expect much better things. Shell is also gearing up for LNG exports from its North American terminal in Kitimat (British Columbia). Shell is also toying with an LNG terminal in India (the country’s first ever), which would handle LNG imports coming from Australia. But here’s a smaller company that is looking strong: Golar LNG (GNLG). The company had a stellar year in 2011, up 188% year-on-year. The company is one of the largest independent owners and operators of LNG carriers and has 8 LNG-specific vessels. Its focus in 2011 on LNG instead of crude was a winning bet. Golar’s 4th quarter 2012 results were also impressive, with an increase in net income of $22.83 million compared to $17.18 million in 2011. Comprehensive net income was $32.89 million, up from $26.80 million in the previous year. Revenue for the quarter was $111.84 million--up from $80.62 million in 2011. Last year also saw Golar complete a third follow-on equity offering with a net proceed of $130 million. Also … Keep an Eye on LNG Technology Companies Floating LNG has required the development of some very specific technological components that are key to its performance. Specifically, more stringent environmental concerns require specific tandem offloading systems and dedicated LNG tankers. There are also ongoing technological developments that deal with onboard LNG storage to avoid sloshing.

06 марта 2013, 14:01

What The Oil Lobby Doesn’t Want You To Know About The Keystone Report

The U.S. State Department released its report into the Keystone XL pipeline on Friday, and its declaration that the project would have little impact on the environment and on oil sands development was met almost instantly with cheers from the oil industry and Alberta politicians, and jeers from the environmental activist community. The interpretation of the report by media and politicians was unequivocal: With the environment now a “non-issue” in the Keystone debate (a point that many people do not concede), the main roadblock to approving Keystone XL had been lifted. "Alberta applauds the U.S. Administration for the extensive, exacting and comprehensive review of potential environmental impacts from the project," Alberta Premier Alison Redford said in a statement. John Boehner, the Republican Speaker of the U.S. House of Representatives, was more blunt. The report “makes clear there is no reason for this critical pipeline to be blocked one more day,” Boehner said Friday. He added he wanted to see an end to “needless delays” on the project, and said it is time for President Barack Obama "to stand up for middle-class jobs and energy security and approve the Keystone pipeline." There are a few problems with Boehner’s statement. First, the report says there isn’t much in the way of “middle class jobs” coming from the project, nor are there any other jobs. It estimates that Keystone XL will require approximately 35 permanent and 15 temporary jobs after construction is completed. Second, the issue of “energy security” is becoming irrelevant to this discussion (more on that later). And third, Obama still has reason to reject the pipeline, and the State Department report can be the basis for that rejection as easily as it could be the basis for its approval. While the report does state that the environmental impact would be limited, it also states that the U.S. doesn’t actually need the Keystone XL and that maybe even the oil industry itself doesn’t need it. Story continues below slideshow The transportation segment of the oil industry “is showing it is capable of developing alternative capacity to move [Canadian and North Dakota] crudes to markets in the event the proposed Project is not built,” the report said. “Rail and supporting non-pipeline modes should be capable, as was projected in 2011, of providing the capacity needed to transport all incremental Western Canadian and Bakken crude oil production to markets if there were no additional pipeline projects approved.” That’s a far cry from all those news reports in the Canadian media, citing mainly industry insiders, saying that rejecting Keystone would be a disaster for Canada’s economy. John Bennett, the executive director of Sierra Club Canada, believes the industry’s push to build the Keystone XL is “an attempt to get into the market before demand dissipates.” And demand could certainly dissipate. The boom in U.S. oil and gas production has been so intense over the past few years that the International Energy Agency actually came out with a report last fall saying the U.S. will be a net exporter of natural gas by 2020 and almost entirely energy independent by 2035. “For reasons of national security, every decision on every fossil fuel project [in the U.S.] was approved, because they were attempting to maintain the supply of oil so they wouldn’t see the huge swings in prices we’ve seen over the decades,” Bennett told The Huffington Post. Bennett, who believes the State Department report makes it less likely that the Obama administration will approve the project, echoed the report when he noted that circumstances in North America’s energy industry have changed rapidly over the past few years, thanks to the shale oil boom. “The impact of fracking for oil and gas has changed the energy makeup of North America,” he said. “When I started doing this [job] 15 years ago, we were running out of oil in North America and the oil sands were the only areas likely to increase production, and a great deal of investment was put into the oil sands.” But the need for that oil sands investment is lessening with every barrel of light crude pumped out of North Dakota's Bakken oil field. And Bennett points out another dimension to the issue, one that will likely be at the heart of any Obama decision: politics. “Why would the President antagonize the millions of people who voted for him when it’s a pipeline he doesn’t need?” Bennett asked. Besides the environmentally conscious contingent of Obama’s base, which is pretty much unanimously opposed to the pipeline, there is the consumer angle. Canada’s oil business wants the Keystone because tight access to U.S. markets has caused the price of Canadian oil to drop relative to global rates. Canadian oil can reach only the U.S. Midwest, where an oversupply is keeping prices low. So it follows that building Keystone would expand the reach of Canadian oil past the low-price midwest market, allowing producers to get prices closer to the global market rate. The end result? Higher oil prices for everybody, as Keystone’s builder, TransCanada Corp., has pretty much acknowledged. And then there is the fact that some of Obama’s harshest political opponents stand to be among the biggest beneficiaries of Keystone XL’s construction – namely, the Republican-friendly oil industry. Chief among those beneficiaries would be the Koch brothers, the billionaire owners of Koch Industries, whose pressure group Americans For Prosperity has opposed just about every initiative the Obama administration has put forward. (The New Yorker described them as “waging a war on Obama.”) Though the Kochs have insisted that Keystone has "nothing to do with any of our businesses," Koch Industries’ Alberta-based subsidiary, Flint Hills, is responsible for about one-quarter of the oil sands crude shipped to the United States, and would therefore stand to benefit greatly from the higher bitumen prices Keystone XL would bring. That makes for a tough political calculus for Obama. If there is no longer a compelling national security reason for increasing reliance on Canadian oil, and if the U.S. is headed for energy independence, and if the entire environmentally conscious portion of Obama’s support base opposes it, why would the President approve a project that helps his political enemies? Maybe to appease Canada. Writing in The Globe and Mail last week, John Ibbitson predicted that, if Obama rejects the pipeline, “relations between Canada and the United States will enter a deep freeze the likes of which have never been seen.” Citing “highly placed government sources,” Ibbitson predicted that a rejection would mean “border co-operation initiatives could be put on hold. Canada could flatly reject American proposals to reduce agricultural and intellectual property protections at the Trans Pacific Partnership talks. Most important, the thousand different ways in which Canadian and American officials work closely and co-operatively together daily would be replaced by a Canadian cold shoulder.” Coming from a long-time political insider like Ibbitson, those words seem like thinly veiled threats from the highest echelons of Canada’s power structure. But they also stress how important the Keystone pipeline is perceived to be among Canadian politicians and pundits. (Of course, if the State Department report is right, it may not be that important after all.) But “upsetting Canada” is not very high on U.S. presidents’ lists of things to avoid, and if Obama decides to approve the pipeline, it may simply be the result of wanting to make a “business-friendly” decision. But the idea that the State Department report is a prelude to approval is simply faulty. Those taking orders for Keystone XL pipeline shipments may want to hold off for the moment, because which way Obama is headed on the pipeline remains a nail-biting mystery.

06 марта 2013, 14:01

What The Oil Lobby Doesn’t Want You To Know About The Keystone Report

The U.S. State Department released its report into the Keystone XL pipeline on Friday, and its declaration that the project would have little impact on the environment and on oil sands development was met almost instantly with cheers from the oil industry and Alberta politicians, and jeers from the environmental activist community. The interpretation of the report by media and politicians was unequivocal: With the environment now a “non-issue” in the Keystone debate (a point that many people do not concede), the main roadblock to approving Keystone XL had been lifted. "Alberta applauds the U.S. Administration for the extensive, exacting and comprehensive review of potential environmental impacts from the project," Alberta Premier Alison Redford said in a statement. John Boehner, the Republican Speaker of the U.S. House of Representatives, was more blunt. The report “makes clear there is no reason for this critical pipeline to be blocked one more day,” Boehner said Friday. He added he wanted to see an end to “needless delays” on the project, and said it is time for President Barack Obama "to stand up for middle-class jobs and energy security and approve the Keystone pipeline." There are a few problems with Boehner’s statement. First, the report says there isn’t much in the way of “middle class jobs” coming from the project, nor are there any other jobs. It estimates that Keystone XL will require approximately 35 permanent and 15 temporary jobs after construction is completed. Second, the issue of “energy security” is becoming irrelevant to this discussion (more on that later). And third, Obama still has reason to reject the pipeline, and the State Department report can be the basis for that rejection as easily as it could be the basis for its approval. While the report does state that the environmental impact would be limited, it also states that the U.S. doesn’t actually need the Keystone XL and that maybe even the oil industry itself doesn’t need it. Story continues below slideshow The transportation segment of the oil industry “is showing it is capable of developing alternative capacity to move [Canadian and North Dakota] crudes to markets in the event the proposed Project is not built,” the report said. “Rail and supporting non-pipeline modes should be capable, as was projected in 2011, of providing the capacity needed to transport all incremental Western Canadian and Bakken crude oil production to markets if there were no additional pipeline projects approved.” That’s a far cry from all those news reports in the Canadian media, citing mainly industry insiders, saying that rejecting Keystone would be a disaster for Canada’s economy. John Bennett, the executive director of Sierra Club Canada, believes the industry’s push to build the Keystone XL is “an attempt to get into the market before demand dissipates.” And demand could certainly dissipate. The boom in U.S. oil and gas production has been so intense over the past few years that the International Energy Agency actually came out with a report last fall saying the U.S. will be a net exporter of natural gas by 2020 and almost entirely energy independent by 2035. “For reasons of national security, every decision on every fossil fuel project [in the U.S.] was approved, because they were attempting to maintain the supply of oil so they wouldn’t see the huge swings in prices we’ve seen over the decades,” Bennett told The Huffington Post. Bennett, who believes the State Department report makes it less likely that the Obama administration will approve the project, echoed the report when he noted that circumstances in North America’s energy industry have changed rapidly over the past few years, thanks to the shale oil boom. “The impact of fracking for oil and gas has changed the energy makeup of North America,” he said. “When I started doing this [job] 15 years ago, we were running out of oil in North America and the oil sands were the only areas likely to increase production, and a great deal of investment was put into the oil sands.” But the need for that oil sands investment is lessening with every barrel of light crude pumped out of North Dakota's Bakken oil field. And Bennett points out another dimension to the issue, one that will likely be at the heart of any Obama decision: politics. “Why would the President antagonize the millions of people who voted for him when it’s a pipeline he doesn’t need?” Bennett asked. Besides the environmentally conscious contingent of Obama’s base, which is pretty much unanimously opposed to the pipeline, there is the consumer angle. Canada’s oil business wants the Keystone because tight access to U.S. markets has caused the price of Canadian oil to drop relative to global rates. Canadian oil can reach only the U.S. Midwest, where an oversupply is keeping prices low. So it follows that building Keystone would expand the reach of Canadian oil past the low-price midwest market, allowing producers to get prices closer to the global market rate. The end result? Higher oil prices for everybody, as Keystone’s builder, TransCanada Corp., has pretty much acknowledged. And then there is the fact that some of Obama’s harshest political opponents stand to be among the biggest beneficiaries of Keystone XL’s construction – namely, the Republican-friendly oil industry. Chief among those beneficiaries would be the Koch brothers, the billionaire owners of Koch Industries, whose pressure group Americans For Prosperity has opposed just about every initiative the Obama administration has put forward. (The New Yorker described them as “waging a war on Obama.”) Though the Kochs have insisted that Keystone has "nothing to do with any of our businesses," Koch Industries’ Alberta-based subsidiary, Flint Hills, is responsible for about one-quarter of the oil sands crude shipped to the United States, and would therefore stand to benefit greatly from the higher bitumen prices Keystone XL would bring. That makes for a tough political calculus for Obama. If there is no longer a compelling national security reason for increasing reliance on Canadian oil, and if the U.S. is headed for energy independence, and if the entire environmentally conscious portion of Obama’s support base opposes it, why would the President approve a project that helps his political enemies? Maybe to appease Canada. Writing in The Globe and Mail last week, John Ibbitson predicted that, if Obama rejects the pipeline, “relations between Canada and the United States will enter a deep freeze the likes of which have never been seen.” Citing “highly placed government sources,” Ibbitson predicted that a rejection would mean “border co-operation initiatives could be put on hold. Canada could flatly reject American proposals to reduce agricultural and intellectual property protections at the Trans Pacific Partnership talks. Most important, the thousand different ways in which Canadian and American officials work closely and co-operatively together daily would be replaced by a Canadian cold shoulder.” Coming from a long-time political insider like Ibbitson, those words seem like thinly veiled threats from the highest echelons of Canada’s power structure. But they also stress how important the Keystone pipeline is perceived to be among Canadian politicians and pundits. (Of course, if the State Department report is right, it may not be that important after all.) But “upsetting Canada” is not very high on U.S. presidents’ lists of things to avoid, and if Obama decides to approve the pipeline, it may simply be the result of wanting to make a “business-friendly” decision. But the idea that the State Department report is a prelude to approval is simply faulty. Those taking orders for Keystone XL pipeline shipments may want to hold off for the moment, because which way Obama is headed on the pipeline remains a nail-biting mystery.

21 февраля 2013, 20:42

Frances Beinecke: The Expansion of the Dirtiest Fuel on the Planet Hinges on the Keystone XL Pipeline

More than 35,000 people gathered in Washington, D.C. on Sunday to urge President Obama to confront climate change. Farmers, religious leaders, scientists, union workers, students, and more came together because we can't afford to wait any longer. Climate change is already threatening our communities with extreme weather and costly damages. The time to act is now. Fortunately President Obama has the power to stop a major source of global warming pollution from spreading: tar sands oil. The production of tar sands oil generates three times as many greenhouse gases as the production of conventional crude. And yet big oil corporations want to expand tar sands production and generate more pollution. The president can shield us from this pollution by rejecting the Keystone XL pipeline. Big oil companies would like us to believe tar sands expansion in a foregone conclusion, but economic and political realities reveal the future of the industry hinges on that pipeline. They need to haul their land-locked product through America's breadbasket to the Gulf of Mexico for export in order to compete with cheaper fuels. Climate march to the White House, February 17, 2013. Photo Credit: Melanie Blanding Numerous financial analysts and oil executives agree that the current opposition to Keystone XL is already slowing expansion. In a report released in January 2013, Standard & Poor's forecast that delays in approving new pipelines are putting future tar sands production growth at risk. TD Economics, part of a major Canadian bank, came to a similar conclusion about the tar sands industry, calling pipeline capacity constraints "a serious challenge to its long-term growth." "Unless we get increased [market] access, like with Keystone XL, we're going to be stuck," explained Ralph Glass, an economist and vice president at AJM Petroleum Consultants. "We're going to hit a wall at some point in time and our... production is going to be the one backed out of the system." Tar sands companies can't simply choose another route if Keystone XL gets blocked; no other viable alternatives exist right now. CIBC, a major Canadian financial services firm, recently concluded the pipelines proposals for hauling tar sands oil to Canada's West Coast have a less than 50 percent chance of being built. The Northern Gateway pipeline to the British Columbia Coast, for instance, is highly unpopular in that province, where 60 percent of residents oppose the project and aboriginal communities have refused to grant necessary easements. "I personally don't think Northern Gateway will go through anytime soon or if it ever will," said Roger McKnight, a senior petroleum adviser at En-Pro International Inc. "There's just too much politics in the soup and there are too many environmental concerns in the soup and there's aboriginal rights in the soup and that makes for a pretty unsavory soup." Meanwhile, efforts to ship tar sands to Eastern Canada or the Northeast United States are equally uncertain. Several layers of approvals stand in the way of access to coastal ports. In light of pipeline problems -- and the changing economics of the North American oil supply -- many oil companies are starting to shift investments out of tar sands. Suncor, the oldest operator in the region, has signaled three of its most important new projects are unlikely to proceed. Canadian Natural Resources Ltd cut capital spending by $680 million from its Horizon tar sands project last year. "There has been a loss of faith in the economics that are being presented by the producers here," Vice-President of Investor Relations at MEG Energy Corp John Rogers told the Globe and Mail. Keystone XL is the chokepoint for the tar sands industry, and it's time we closed it off for good. We don't need this dangerous pipeline and its dirty oil to power our economy; we have safer, cleaner solutions. President Obama raised fuel economy standards to 54.5 miles per gallon by 2025, for instance. These standards alone will save drivers more than $80 billion a year at the pump while cutting our oil use by one-third and carbon pollution from new cars in half. I applaud President Obama's commitment to fighting climate change. Approving Keystone XL would contradict that commitment. At the rally on Sunday, thousands of concerned citizens called on President Obama to lead our nation forward, not backward into darker, more polluted days. He can do that by promoting clean energy and reducing carbon pollution from power plants. But he must also reject the Keystone XL pipeline so that tar sands oil can be left where it belongs: in the ground.

19 февраля 2013, 20:03

Alternative Youth Groups Grow As Boy Scouts' Gay Turmoil Deepens

NEW YORK -- With the Boy Scouts of America entangled in a furor over its ban on gays, lesser-known youth organizations across the ideological spectrum see an opportunity. They wonder if the turmoil might prompt some families to give them a closer look as options for their boys. They range from Bible-based programs run by conservative religious organizations to coed, inclusive groups, including one founded on the basis of pagan beliefs. None of the groups has the size or iconic status of the BSA, though some have been around for many decades. Leaders of several of the groups, in public statements and interviews with The Associated Press, made clear they are following the Boy Scouts' predicament with interest and pondering possible ramifications for their own prospects – though not seeking to profit from "someone else's misfortune," as one leader said. The BSA, founded in 1910 and now serving about 2.66 million boys, is deliberating a possible shift in its long-standing policy of excluding gays as youth members or adult leaders. In May, the BSA's 1,400-member National Council is expected to consider a proposal to ease the ban by allowing sponsors of local Scout units to decide for themselves whether to admit gays. Gay-rights groups say the plan is inadequate, and that no units should be allowed to discriminate, while some conservative religious leaders and advocacy groups want the ban to stay in place nationwide. As a result, there has been consternation on both the left and right of the Scouting community, and warnings of possible defections depending on what decision is made in May. For families that do seek an alternative to the Boy Scouts, here are some of the options: FAITH-BASED PROGRAMS _The Southern Baptist Convention's Royal Ambassadors http://bit.ly/y1p6ck Founded in 1908, this is a program run by Southern Baptist churches for boys in first through sixth grade. The SBC's Women's Missionary Union, which oversees the program, estimates that it has about 6,300 adult leaders and 31,000 youth members. Its curriculum shares many features with the Boy Scouts – including camping trips and model race-car competitions – but it also stresses a goal of providing boys with "godly characteristics" and a "biblical worldview." Of the major religious denominations which sponsor large numbers of Boy Scout units, the Southern Baptists have been among the most outspoken in urging the BSA to keep the ban on gays. The SBC's official news agency, Baptist Press, recently reported that the Royal Ambassador program might spread to more Southern Baptist churches if the BSA's ban is lifted. The article quoted Don Hinkle, editor of the Missouri Baptist Convention's newspaper, as reminiscing fondly about his boyhood experience with the Royal Ambassadors. "Perhaps in these sad, self-destructing days for the Boy Scouts of America, God will use RAs in a new and powerful way to bring honor and glory to Him," Hinkle told Baptist Press. In addition to the Royal Ambassadors, the SBC also oversees the Challengers, a program for boys aged 12-17. ___ _The Assemblies of God's Royal Rangers http://royalrangers.com/ Founded in 1962 by one of the largest Pentecostal denominations, the Royal Rangers have about 81,000 youth members in about 4,000 units, according to church headquarters. "We provide Christ-like character formation and servant leadership development for boys and young men in a highly relational and fun environment," says the Rangers' mission statement. Every four years, the organization brings together several thousand boys and adult leaders for a "Camporama" at the Rangers' campground in Eagle Rock, Mo. Last summer's event featured a high-ropes course, two zip lines, a water slide, and a lumberjack show. Like the Southern Baptists, the Assemblies of God considers homosexuality immoral and has urged the Boy Scouts not to lift the ban on gays. A statement to that effect, from the denomination's leader, has been posted on the Rangers' website. "We are saddened and disappointed to hear that Boy Scouts of America, an organization long devoted to biblical values, is now considering loosening the principles in which it was founded," says the Rev. George O. Wood. "We pray the BSA will give careful consideration to this matter and hold firm to the beliefs that have made it a strong and influential organization for more than 100 years." ___ _The Seventh-day Adventist Church's Pathfinders http://bit.ly/ViNzhg Dating back more than 60 years, the coed Pathfinders program serves about 35,000 boys and girls ages 10-15 in the U.S. and Canada, according to James Black, the church's director of youth ministries for North America. Black said the program resembles the Boy Scouts in many respects, with an emphasis on camping, plus an array of honors and patches that the youth members can work for. Unlike the Scouts, however, the Pathfinders operate as a church-based ministry, with a priority placed on community service. However, Black said boys and girls are welcome to join even if not from Seventh-day Adventist families. Amid the Boy Scouts' turmoil, there's been an upsurge of inquiries from parents about possible participation in the Pathfinders, Black said. "We don't want to gain off of someone else's misfortune – but we want to be there as an available option for healthy, meaningful programs," he said. "We wish the best for the Boy Scouts. ...Our hearts and prayers go out to them." ___ _The Calvinist Cadet Corps http://www.calvinistcadets.org/ Founded in 1952, with a headquarters in Grand Rapids, Mich., this is a non-denominational but staunchly religious scouting-style program. Office manager Kathy Door, said the corps currently serves about 9,900 boys in 550 clubs in the U.S. and Canada, with strong bases of support in Michigan, Illinois, Iowa and the Pacific Coast. "When someone who hasn't heard of us asks questions, we tell them we're sort of along the lines of Scouting but we are much more conservative," Door said. "There are Bible lessons at every meeting." Most of the participants come from churches with Calvinist roots, such as the Reformed Church in America and the Christian Reformed Church. Door said the Cadet Corps was not trying to capitalize on the Boy Scouts' current predicament, but had received inquiries in recent days from leaders of several local Boy Scout units interested in learning more about the corps. ___ _The Knights of Columbus' Columbian Squires . http://www.kofc.org/un/en/squires/index.html This organization for Roman Catholic boys and young men ages 10-18 was founded in 1925 and claims a youth membership of more than 25,000, including some in units in Mexico and the Philippines. The Squires, says the program's Web site, "is an athletic team, a youth group, a social club, a cultural and civic improvement association, a management training course, a civil rights organization and a spiritual development program all rolled into one." SECULAR PROGRAMS _Camp Fire http://www.campfireusa.org/ Founded in 1910 as Camp Fire Girls of America, this organization changed its name and became coed in 1975. Boys now comprise almost half of its 300,000 youth participants, according to spokeswoman Catherine Lufkin. While the Boy Scouts have drawn some criticism for excluding gays and atheists, Camp Fire stresses its inclusiveness and says it welcomes youth and families regardless of race, creed, gender, social status, disability or sexual orientation. Lufkin said young people view Camp Fire's diversity as an asset and enjoy making friends who are different from themselves. Like the Boy Scouts, the Girl Scouts of the USA, and other major youth organizations, Camp Fire has seen its membership ranks decline in recent decades, though Lufkin said the numbers have stabilized in recent years. Nonetheless, Camp Fire adopted a new logo last year and has striven to develop "rebranding" strategies to attract new participants. "The hard truth is that the vast majority of parents and youth – from all walks of life – know nothing about us anymore," CEO Cathy Tisdale wrote in a newsletter last summer. ___ _Navigators USA http://navigatorsusa.org/ This alternative scouting organization has its roots in a Boy Scout troop based in New York City's East Harlem neighborhood and sponsored by the Unitarian Church of All Souls. The troop broke away from the BSA in 2003 out of disagreement with the exclusionary membership policies, and some of the volunteer leaders decided to continue independently as a coed, inclusive movement. The group's growth outside New York was slow at first, but founder and executive director Robin Bossert says the number of chapters has surged from 16 to 42 in the past year, with an average of about a dozen youths per unit. He attributes the growth in part to the controversies surrounding the Boy Scouts. Bossert said Navigators USA emphasizes outdoor activities – "to combat nature-deficit disorder" – as well as community service projects. ___ The Baden-Powell Service Association http://bpsa-us.org/ The BPSA was founded in 2008 by David Atchley of Washington, Mo., who as a leader of his son's Cub Scout pack had a rift with regional BSA leaders over his efforts to adopt a nondiscrimination code. Atchley, a software engineer, said the BPSA has grown steadily in the past two years, from just a handful of units to 19 now, ranging from Kingston, N.Y., and Exeter, N.H., to Albuquerque, N.M., and Sunnyvale, Calif. Like the Navigators, the group is coed, with an inclusive membership policy, and Atchley says the contrast with the Boy Scouts has been a factor in its growth. The organization takes its name from Robert Baden-Powell, whose initiatives in Britain in starting in 1907 launched the international Scouting movement. Atchley said the BPSA, inspired by its namesake, focuses on outdoor skills and community service. "It's back to basics, instead of broadening the program to appeal to everybody under the sun," he said, referring to the Boy Scouts' efforts to modernize and diversify their activities. ___ SpiralScouts International http://www.spiralscouts.org/ This coed organization originated in 2001 at the Aquarian Tabernacle Church in Index, Wash., which serves a Wiccan community Though developed on the basis of pagan beliefs and practices, it is open to youth and families of any faith – or no religious affiliation. Its units are known as circles; it also welcomes individual families who are designated as "hearths." Spokeswoman Rachel Scott said the U.S. component comprises about 150 adult volunteers and 350 youth scouts, ages 3-18, in 45 circles and hearths. The mix of genders is a key principle, according to the group's Web site. "Our program encourages girls and boys to learn, play, and work together under the direction of leaders of both genders as a way of showing by example that both men and women are capable and cooperative leaders," it says. SpiralScouts has gone public with its disapproval of the Boy Scouts' membership policies, offering to extend its highest rank to Eagle Scouts who have returned their badges to the BSA in protest over those policies. ___ Follow David Crary on Twitter at http://twitter.com/CraryAP

08 февраля 2013, 16:39

Frontrunning: February 8

Rate-Rig Spotlight Falls on 'Rain Man' (WSJ) Blizzard Cancels U.S. Flights, Threatens Snow in New York (BBG) Monti says he did not know of bank probes (FT) Japan's Aso: yen has weakened more than intended (Reuters) Japan Pledges Foreign-Policy Response to Territorial Incursions (BBG) Paratroops mutiny in Bamako in blow to Mali security efforts (Reuters) China, Japan engage in new invective over disputed isles (Reuters) Asteroid to Traverse Earth’s Satellite Zone, NASA Says (BBG) EU leaders haggle over budget tightening (FT) China Trade Tops Forecasts in Holiday-Distorted Month (Bloomberg) Buffett’s Son Says He’s Prepared Whole Life for Berkshire Role (BBG) Draghi’s Powerful Weapon Is Words as Euro Heeds His Voice (BBG) Dell to repatriate $7bn of overseas cash  (FT) Scant Pickup in Economic Growth Seen for 2013 (WSJ)   Overnight Media Digest WSJ * The Pentagon, Central Intelligence Agency and the U.S. State Department backed a plan to arm Syrian rebels, but the White House decided not to act, Panetta and Joint Chiefs Chairman Dempsey disclosed. * Hedge fund manager David Einhorn sued Apple Inc in a New York federal court in an effort to block an Apple shareholder proposal that he argues could limit how the company could return some of its $137 billion cash pile to investors. * Short-circuits inside a battery triggered a fire aboard a parked Boeing Co 787 Dreamliner last month, said U.S. investigators, who also found the safety approval process for the power devices was flawed and "must be reconsidered" before the jets return to passenger service. * New York's top prosecutor has launched a probe into the conduct of the three major credit-ratings firms, according to a person familiar with the matter, opening another legal front for an industry that remains in the cross hairs of state and federal investigators. * RadioShack Corp named Walgreen Co executive Joseph Magnacca to replace its acting chief, staking its future on a retail veteran who built his career in a merchandising role. * New Jersey regulators are set to reconsider a decision that had forced MGM Resorts International to put its stake in an Atlantic City casino up for sale, people familiar with the matter said   FT Hedge fund manager David Einhorn's Greenlight Capital sued Apple , saying the company should give stockholders a bigger piece of its $137.1 billion cash pile, in one of the strongest criticisms by an investor of the consumer device giant's cash allocation strategy. A top U.S. transport safety official has sharply criticised the process that approved the batteries on the Boeing Co 787, adding a new and potentially time-consuming wrinkle to the plane's grounding. Dell is seeking to raise $7.4 billion in cash by selling assets, many of them held outside the U.S., as part of its deal to go private. Struggling French carmaker PSA Peugeot Citroen wrote down the value of its automotive assets by 3.9 billion euros hurt by a weak European automotive market. The writedown will take the company's 2012 net loss to about 6 billion euros. Italy's Monte dei Paschi said there were no more derivatives losses beyond the 730 million euros ($988 million) it has disclosed, which have rattled financial markets and become a campaign issue ahead of parliamentary elections. European Central Bank president Mario Draghi's intervention to rein in a rising euro has the makings of a global currency war, some policy makers fear. The European Union's chief budget negotiator proposed further modest cuts to the bloc's long-term spending plan on Thursday to try to bridge deep divisions among member states on how nearly 1 trillion euros of funds should be spent. Stacey Cartwright, chief financial officer at British luxury clothing company Burberry Group, is to step down to pursue other interests. Cartwright, CFO since 2004, helped turn the company into a leading international brand.   NYT * Apple Inc said on Thursday it would continue to evaluate ways of returning some of its $137 billion cash pile to investors, after David Einhorn called on fellow stockholders to reject the company's plan to eliminate a kind of preferred stock. * Hewlett-Packard Co, one of the world's largest makers of computers and other electronics, is imposing new limits on the employment of students and temporary agency workers at factories across China. * The top transportation safety official in the United States said on Thursday that the Federal Aviation Administration accepted test results from Boeing Co in 2007 that failed to properly assess the risks of smoke or fire from the batteries on Boeing's new 787 jets. * The Irish government, trying to lighten the staggering debt burden of bailing out some of its biggest banks four years ago, reached a deal on Thursday with the European Central Bank to give the country more time to repay some of those loans. * In a speech on Thursday, Federal Reserve governor Jeremy Stein, who joined last year, focused on parts of the financial markets that show signs of overheating. Specifically, Stein raised a red flag about junk bonds and mortgage-backed securities, and how investors are financing their purchases of such assets. * Credit Suisse was among the first to adjust its debt-trading business to the harsher realities of new Basel III regulations, so it can probably weather the 28 percent quarter-on-quarter revenue drop it has just suffered in this segment. Other rivals may be less fortunate.   Canada THE GLOBE AND MAIL * Alberta Premier Alison Redford's government has frozen MLA pay, her second symbolic cost-cutting move amid warnings of slumping economic fortunes and bitter contract battles with doctors and teachers. * Ottawa's finances are taking a hit from discounted prices for Canadian oil, and Finance Minister Jim Flaherty says this will force him to hold a harder line on spending as he prepares the 2013 budget. Reports in the business section: * Air Canada's push for global growth is raising worries about its ability to match that expansion with customer service. Calin Rovinescu, the company's chief executive officer, said on Thursday that Air Canada continues to put pressure on its operations to compete as profitably as possible, largely by expanding internationally. * Former Quebec premier Lucien Bouchard is stepping down as head of the Quebec oil and gas association as uncertainty continues over the future of shale-gas development in the province. NATIONAL POST * The storm bearing down on Ontario may not be a genuine winter behemoth, but it is shaping up to be the most substantial snowfall most Ontarians have seen in more than four years, Environment Canada said Thursday. FINANCIAL POST * The inability to get oil sands crude to the right markets is costing the Canadian economy dearly, according to a new report paid for by the Saskatchewan government. Each stalled pipeline project means a loss to the Canadian economy of between C$30 million and C$70 million every day, said the report penned by the Canada West Foundation, a Calgary-based think-tank.   China CHINA SECURITIES JOURNAL -- Total profits of 19 Chinese brokerages jumped 75.5 percent to 2.70 billion yuan ($433.23 million) in January from the preceding month due to a rebound in China's A-share. -- China's money market condition could ease after the Spring Festival holiday, following an injection of a record 662 billion yuan into the market by the People's Bank of China on Thursday. SHANGHAI SECURITIES NEWS -- China may raise the retail price of gasoline and diesel after the Lunar New Year to track climbing crude prices, analysts said, marking the first fuel price hike this year that could help pare refining losses at oil firms. The price of gasoline may be increased by 0.18-0.22 yuan per litre, while diesel prices could be raised by 0.22-0.26 yuan a litre, the paper said, citing an analyst. CHINA DAILY (www.chinadaily.com.cn) -- A growing mountain of debt default cases being brought before courts in Wenzhou, Zhejiang province, is threatening to further derail ongoing financial reforms in the city. According to the latest figures, Wenzhou's intermediate and high court handled 19,511 cases related to private financing, involving some 22 billion yuan. -- Liquor companies' share prices and sales have slumped before the Lunar New Year, hit by a scandal about plasticizer contamination and a ban on government and military banquets that serve alcohol. SHANGHAI DAILY - The use of yuan worldwide surged to a record high in December partly due to increased yuan deposits in Hong Kong, a report showed on Thursday.   Fly on the Wall 7:00 AM Market Snapshot ANALYST RESEARCH Upgrades AECOM Technology (ACM) upgraded to Buy from Underperform at BofA/MerrillARM Holdings (ARMH) upgraded to Outperform from Neutral at Credit SuisseAvalonBay (AVB) upgraded to Buy from Neutral at UBSBRE Properties (BRE) upgraded to Buy from Neutral at UBSBarclays (BCS) upgraded to Neutral from Underperform at MacquarieBiogen (BIIB) upgraded to Buy from Neutral at CitigroupDiscover (DFS) upgraded to Outperform from Neutral at Credit SuisseEquity Residential (EQR) upgraded to Buy from Neutral at UBSLRR Energy (LRE) upgraded to Outperform from Neutral at RW BairdMetroPCS (PCS) upgraded to Neutral from Reduce at NomuraNetEase.com (NTES) upgraded to Buy from Hold at Deutsche BankRenasant (RNST) upgraded to Buy from Hold at WunderlichUDR, Inc. (UDR) upgraded to Buy from Neutral at UBSWestlake Chemical (WLK) upgraded to Neutral from Sell at UBS Downgrades Alpha Natural (ANR) downgraded to Fair Value from Buy at CRT CapitalCBL & Associates (CBL) downgraded to Market Perform from Outperform at Raymond JamesCameron (CAM) downgraded to Neutral from Overweight at HSBCLPL Investment (LPLA) downgraded to Negative from Neutral at SusquehannaRiverbed (RVBD) downgraded to Hold from Buy at CantorRiverbed (RVBD) downgraded to Market Perform from Outperform at FBR CapitalSkullcandy (SKUL) downgraded to Neutral from Buy at Roth CapitalTeva (TEVA) downgraded to Hold from Buy at CanaccordTrinity Industries (TRN) downgraded to Neutral from Buy at UBSWGL Holdings (WGL) downgraded to Hold from Buy at Brean Capital Initiations Affymax (AFFY) initiated with an Outperform at JMP SecuritiesAlnylam (ALNY) initiated with an Outperform at JMP SecuritiesCelgene (CELG) initiated with an Outperform at JMP SecuritiesDSW (DSW) initiated with a Buy at Sterne AgeeMcDermott (MDR) initiated with a Neutral at HSBCOnyx Pharmaceuticals (ONXX) initiated with an Outperform at JMP SecuritiesPharmacyclics (PCYC) initiated with an Outperform at JMP SecuritiesVerastem (VSTM) initiated with an Outperform at JMP SecuritiesVeriFone (PAY) initiated with a Hold at JefferiesZebra Technologies (ZBRA) initiated with a Market Perform at Wells Fargo HOT STOCKS Charter (CHTR) to acquire Optimum West from Cablevision (CVC) for $1.625BExpects acquisition to close in 3Q13FAA to allow Boeing (BA) to conduct 787 test flightsSoutheastern Asset Management told Dell (DELL) deal undervalues company, Reuters reportsBelieves Dell worth $20 per share. Dell-led consortium: no plans to raise $13.65 per share bidCorrections Corp. of America (CXW) authorized the company to elect to qualify as REITTo declare $650M-$700M special dividendGeokinetics (GOK) launched solicitation of votes for a plan of reorganization EARNINGS Companies that beat consensus earnings expectations last night and today include:LinkedIn (LNKD), SunPower (SPWR), Activision Blizzard (ATVI), Hasbro (HAS), Genpact (G), Coinstar (CSTR), athenahealth (ATHN), Regal Entertainment (RGC) Companies that missed consensus earnings expectations include:Corporate Office Properties (OFC), Carlisle (CSL), Republic Services (RSG), Aaron's (AAN) Companies that matched consensus earnings expectations include:Simpson Manufacturing (SSD), Intermolecular (IMI), Riverbed (RVBD) NEWSPAPERS/WEBSITES Fed Board Governor Stein pointed to signs of overheating in some corners of the credit markets. He said there isn't an imminent threat to the wider financial system, but highlighted several markets—including junk bonds, mortgage real-estate investment trusts and commercial banks' securities holdings—as areas where potentially troubling developments are emerging, possibly as a result of the Fed's easy-money policies, the Wall Street Journal reports For 20 years, Goldman Sachs (GS) has attracted clients to invest in its private-equity funds with the security blanket that the bank and its partners were in it too. But the looming "Volcker rule" is expected to sharply reduce the bank's investment in its own funds. That is forcing Goldman to make major changes in a $50B business. Goldman likely will have to shrink the size of its own investment in its funds to just 3% from as much as 37%, the Wall Street Journal reports France would consider taking a stake in PSA Peugeot Citroen (PEUGY), Budget Minister Jerome Cahuzac said, hours after the struggling car maker announced a $5.49B write down, Reuters reports Nissan Motor (NSANY) has bucked the optimistic trend among Japanese car makers reporting quarterly results, leaving its annual profit forecast unchanged as sluggish sales weighed on its bottom line while others got a boost from a weakening yen, Reuters reports. U.S. airlines (DAL, UAL, JBLU) cancelled about 2,000 flights and braced for additional cancellations from a winter storm that threatens to drop as much as two feet of snow across parts of New England, Bloomberg reports The Justice Department’s decision to sue Standard & Poor’s (MHP) has investors asking why Moody’s Investors Service (MCO) and Fitch Ratings weren’t targeted for awarding the same top grades to troubled mortgage bonds and other debt securities, Bloomberg reports SYNDICATE Health Insurance Innovations (HIIQ) 4.666M share IPO priced at $14.00New Source Energy (NSLP) 4M share IPO priced at $20.00ZAIS Financial (ZFC) 5.65M share IPO priced at $21.25

22 января 2013, 21:58

Obama Wins Praise Abroad For Climate Change Goals

* EU Commission, Australia PM among those praising Obama * Obama may have best chances if he side-steps Congress * New U.N. deal may take effect in 2020, too late for many By Environment Correspondent Alister Doyle OSLO, Jan 22 (Reuters) - U.S. President Barack Obama won praise abroad on Tuesday for his pledge to lead the fight against climate change, which has faltered as nations argue over who should foot the bill to lower carbon emissions. Two decades of summits and resolutions have not stopped mankind pumping growing quantities of greenhouse gases into the atmosphere, despite a wealth of evidence that it is causing more frequent and devastating droughts, storms and floods. Obama devoted a surprisingly long section of Monday's inauguration speech to climate change -- more than a minute out of about 20. He said failure to respond to the threat "would betray our children and future generations." "The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition; we must lead it," he said. "Great strong words on climate... The U.S. President could not commit stronger to delivering now," Connie Hedegaard, the European Union's climate commissioner, wrote on Twitter. "We have got work to do on climate change and President Obama was very forthright about the need to tackle climate change," Australian Prime Minister Julia Gillard told reporters. A succession of recent natural disasters has put a sharper focus on climate change. Superstorm Sandy struck the United States in October, a typhoon left more than 1,000 people dead or missing in the Philippines in December and this month a searing heatwave caused hundreds of wildfires in Australia. The United States has declared a natural disaster in its central and southern Wheat Belt because of a severe and persistent drought. The global economic slowdown has made the governments of richer nations more reluctant to invest in technology to mitigate climate change, led by a shift from fossil fuels towards clean energies such as wind or solar power. Developing countries whose carbon emissions are rising fastest say they cannot afford the entire cost of shifting to greener technology and that developed nations should help more. In the latest failure of environmental diplomacy, U.N. climate negotiations in Qatar in December ended without a single new pledge to cut pollution from a major emitter. Instead, governments agreed to try again for a binding United Nations pact to limit climate change that would enter into force from 2020, replacing the Kyoto protocol adopted in 1997 that the United States never ratified. Environmental campaigners were dismayed at the decision to wait years before taking concerted action. SIDE-STEP CONGRESS Obama's renewed promises could help. "It really changes the nature, style and substance of the U.S. engagement with the international climate negotiations," said Bill Hare, a scientist who heads Berlin-based Climate Analytics. He said that Washington, even in Obama's first term, had low ambitions for confronting climate change and that had dimmed efforts by other major emitters. China, the United States, India and Russia are the top greenhouse gas emitters. Unlike all of Washington's major allies in developed nations, the U.S. Congress has not legislated caps on domestic greenhouse gas emissions. But Obama can still take the lead with actions that side-step the divided Congress. The administration could impose tougher rules for coal-fired power plants or introduce measures to promote renewables. It also faces a decision on whether to approve TransCanada Corp's planned $5.3 billion Canada-to-Nebraska Keystone XL oil pipeline. "Words in an inauguration speech are one thing... Many are waiting to see what specific actions the president will take," said Samantha Smith, head of the WWF conservation group's climate and energy initiative. She still praised Obama for starting a new U.S. debate about climate change with the speech. She said one measure Obama could take included a phase-out of fossil fuel subsidies. When Obama first came to office he promised to act on climate change in a shift from ex-President George W. Bush who decided against trying to ratify the U.N.'s Kyoto Protocol for limiting emissions by industrialised nations. In 2009, Obama promised to cut U.S. greenhouse gas emissions by 17 percent below 2005 levels by 2020. But the U.S. Senate did not ratify the plan. Kyoto, originally backed by all other major developed nations, has been hit by defections by Russia, Canada and Japan from Jan. 1 this year, leaving only a core group led by the European Union and Canada targeting deeper cuts by 2020. Bush and the U.S. Senate reckoned that Kyoto unfairly omitted targets for emerging nations such as China and India and would mean U.S. jobs moved abroad. On the other hand, Washington risks losing a race to develop clean technologies. A study by the Pew Charitable Trusts last week indicated that worldwide revenue from installing clean energy facilities could total $1.9 trillion from 2012 to 2018. With the right policies, it said the United States could get 14.5 percent of the total. (Additional reporting by Nina Chestney in London; Editing by Tom Pfeiffer)

22 января 2013, 21:58

Obama Wins Praise Abroad For Climate Change Goals

* EU Commission, Australia PM among those praising Obama * Obama may have best chances if he side-steps Congress * New U.N. deal may take effect in 2020, too late for many By Environment Correspondent Alister Doyle OSLO, Jan 22 (Reuters) - U.S. President Barack Obama won praise abroad on Tuesday for his pledge to lead the fight against climate change, which has faltered as nations argue over who should foot the bill to lower carbon emissions. Two decades of summits and resolutions have not stopped mankind pumping growing quantities of greenhouse gases into the atmosphere, despite a wealth of evidence that it is causing more frequent and devastating droughts, storms and floods. Obama devoted a surprisingly long section of Monday's inauguration speech to climate change -- more than a minute out of about 20. He said failure to respond to the threat "would betray our children and future generations." "The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition; we must lead it," he said. "Great strong words on climate... The U.S. President could not commit stronger to delivering now," Connie Hedegaard, the European Union's climate commissioner, wrote on Twitter. "We have got work to do on climate change and President Obama was very forthright about the need to tackle climate change," Australian Prime Minister Julia Gillard told reporters. A succession of recent natural disasters has put a sharper focus on climate change. Superstorm Sandy struck the United States in October, a typhoon left more than 1,000 people dead or missing in the Philippines in December and this month a searing heatwave caused hundreds of wildfires in Australia. The United States has declared a natural disaster in its central and southern Wheat Belt because of a severe and persistent drought. The global economic slowdown has made the governments of richer nations more reluctant to invest in technology to mitigate climate change, led by a shift from fossil fuels towards clean energies such as wind or solar power. Developing countries whose carbon emissions are rising fastest say they cannot afford the entire cost of shifting to greener technology and that developed nations should help more. In the latest failure of environmental diplomacy, U.N. climate negotiations in Qatar in December ended without a single new pledge to cut pollution from a major emitter. Instead, governments agreed to try again for a binding United Nations pact to limit climate change that would enter into force from 2020, replacing the Kyoto protocol adopted in 1997 that the United States never ratified. Environmental campaigners were dismayed at the decision to wait years before taking concerted action. SIDE-STEP CONGRESS Obama's renewed promises could help. "It really changes the nature, style and substance of the U.S. engagement with the international climate negotiations," said Bill Hare, a scientist who heads Berlin-based Climate Analytics. He said that Washington, even in Obama's first term, had low ambitions for confronting climate change and that had dimmed efforts by other major emitters. China, the United States, India and Russia are the top greenhouse gas emitters. Unlike all of Washington's major allies in developed nations, the U.S. Congress has not legislated caps on domestic greenhouse gas emissions. But Obama can still take the lead with actions that side-step the divided Congress. The administration could impose tougher rules for coal-fired power plants or introduce measures to promote renewables. It also faces a decision on whether to approve TransCanada Corp's planned $5.3 billion Canada-to-Nebraska Keystone XL oil pipeline. "Words in an inauguration speech are one thing... Many are waiting to see what specific actions the president will take," said Samantha Smith, head of the WWF conservation group's climate and energy initiative. She still praised Obama for starting a new U.S. debate about climate change with the speech. She said one measure Obama could take included a phase-out of fossil fuel subsidies. When Obama first came to office he promised to act on climate change in a shift from ex-President George W. Bush who decided against trying to ratify the U.N.'s Kyoto Protocol for limiting emissions by industrialised nations. In 2009, Obama promised to cut U.S. greenhouse gas emissions by 17 percent below 2005 levels by 2020. But the U.S. Senate did not ratify the plan. Kyoto, originally backed by all other major developed nations, has been hit by defections by Russia, Canada and Japan from Jan. 1 this year, leaving only a core group led by the European Union and Canada targeting deeper cuts by 2020. Bush and the U.S. Senate reckoned that Kyoto unfairly omitted targets for emerging nations such as China and India and would mean U.S. jobs moved abroad. On the other hand, Washington risks losing a race to develop clean technologies. A study by the Pew Charitable Trusts last week indicated that worldwide revenue from installing clean energy facilities could total $1.9 trillion from 2012 to 2018. With the right policies, it said the United States could get 14.5 percent of the total. (Additional reporting by Nina Chestney in London; Editing by Tom Pfeiffer)

18 января 2013, 16:47

Frontrunning: January 18

Foreign Hostages Die in Algeria’s Battle With Terrorists (Bloomberg) The latest bank to soon join the currency wars: McCafferty Says BOE Must Keep Open Mind on New Policy Tools (Bloomberg) US debt talks complicated by timing (FT) BOJ eyes open-ended asset buying, agrees new inflation goal (Reuters) AmEx Says U.S. Card Income Fell 42% as Loss Provisions Increased (BBG) Call to raise age for US’s Medicare (FT) Obama Promise to Raise Middle Class Living Already Seen in Peril (BBG) China Exits Slowdown as Quarterly Growth Tops Forecasts (BBG) - actually, as new Politburo says to make it appear that way Britain to drift out of European Union without reforms (Reuters) Republicans weigh interim debt-limit hike (FT) Abe's aide says Japan shouldn't fret if yen falls to 100 vs dlr (Reuters) ... and it was 90 just a few days ago PBOC May Seek More Liquidity Operations (Dow Jones)   Overnight Media Digest WSJ * Former professional cyclist Lance Armstrong told the world Thursday evening that he used performance-enhancing drugs to win seven Tour de France titles. * Algeria's military launched a raid on Thursday to free about 40 foreigners held by militants at a remote natural-gas complex, leaving some hostages dead, surprising and angering several governments and putting leaders across the world at a loss to determine the fate of their citizens. * In his final days as U.S. Treasury secretary, Timothy Geithner reflected on the financial crisis and the response he helped craft, in an interview with The Wall Street Journal. Among other things, he said the government's rescue of the financial system was doomed to be unpopular. * In approving Boeing Co's 787 Deamliner to start carrying passengers in 2011, the Federal Aviation Administration relied extensively on data generated by Boeing that indicated the plane's advanced lithium-ion battery systems -- never used before on a big jetliner -- featured redundant safeguards that were essentially foolproof. * Rio Tinto Chief Executive Tom Albanese agreed to step down on Thursday, the latest in a string of leaders toppled by shifting fortunes at the world's biggest mining companies. * Quarterly earnings reports released on Thursday underscore the lingering illnesses afflicting some of the largest, best-known U.S. banks and the comparatively ruddy health of some smaller regional lenders. * Sony Corp has reached a deal to sell its U.S. headquarters at 550 Madison Avenue for $1.1 billion, the company said on Thursday, a strong price that shows how investors are bidding aggressively for top Manhattan properties. * Toyota Motor Corp has settled what was to be the first in a group of hundreds of pending wrongful death and injury lawsuits involving sudden, unintended acceleration by Toyota vehicles.   FT In a drive for transparency, authorities in the Cayman Islands are planning on creating a public database of funds domiciled in the British territory for the first time. Videogames seller Game Group is interested in acquiring stores from collapsed music retailer HMV, the CEO said. As their mega-merger continues to go through regulatory clearance, Glencore and Xstrata are set to extend the deadline for the deal for a third time. The British banking industry wants a deadline of May 2014 to be imposed for claims from customers who say they were mis-sold payment protection insurance, says one senior executive. Barclays is considering whether it should recoup some or all of the 290 million pounds it was fined for Libor-rate rigging from the bonuses it is due to pay investment bankers in 2012.   NYT * Hours after Algerian forces raided a gas facility, there was still no official word on the number of hostages freed, killed or still held by their Islamist kidnappers. * In a televised interview with Oprah Winfrey, Lance Armstrong admitted to using banned substances but did not say how he did it or who helped him. Thomas Weisel, who bankrolled Lance Armstrong through seven Tour de France wins, said in his first public comment on the matter that he never personally saw an instance of doping on the team. * Most banks have recovered from the recent financial collapse, but two companies, Bank of America and Citigroup have reported continuing effects on earnings. * AT&T warned that it would take a fourth-quarter charge of about $10 billion because of bigger-than-expected pension obligations. * The Chinese economy picked up steam during the last few months of 2012, closely watched data from Beijing on Friday confirmed. But at the same time the figures underlined the view that the pace of future growth is likely to remain well below that seen in recent years. * E*Trade Financial named Paul Idzik, a former executive at Barclays, as its new chief, ending a five-month search for a new leader. * Norwegian Cruise Line Holdings has sold shares in itself at $19 apiece, a person briefed on the matter said, reaping about $446.5 million in proceeds.   Canada CHINA SECURITIES JOURNAL --The State Electricity Regulatory Commission of China (SERC) said China's power consumption could reach above 9 percent in 2013 from 5.5 percent in 2012. CHINA DAILY (www.chinadaily.com.cn) --Fears over intellectual property lawsuits by foreign train technology companies will not derail exports of Chinese bullet trains, Vice Minister of Science and Technology Cao Jianlin said in an interview, dismissing copycat claims by Japan's Kawasaki as "nonsense." --A former Japanese leader visited a memorial site to victims of Japanese wartime aggression, but analysts were quick to reject ay suggestion that Tokyo will change its policies toward China. PEOPLE'S DAILY --China's Railway Ministry said investment in railway could hit 650 billion yuan and that it will set a National Railway Development Fund as soon as possible.   China THE GLOBE AND MAIL * Two class action lawsuits were filed against the federal government in Canada after the human resources and skills development department lost a portable hard drive containing personal information about more than half a million people who took out student loans. The department said last week the device contained data on 583,000 Canada Student Loans Program borrowers from 2000 to 2006. * The federal ethics commissioner wants to talk to Finance Minister Jim Flaherty about his letter to the Canadian Radio-television and Telecommunications Commission (CRTC) after it was revealed that he wrote to the arm's-length broadcast regulator in support of a constituent's bid for a radio licence. Reports in the business section: * More Canadians went online to do their Christmas shopping this year, according to a new report by MasterCard Advisors. Canadian consumers spent C$2.8 billion ($2.84 billion) shopping online in December, up 26 percent over the previous year and representing about 6.6 per cent of the month's total retail sales. NATIONAL POST * Three Quebec City teens have been arrested over charges of planning a shootout at their high school. The three teens, two boys aged 14 and 15 and a 16 year old girl, who have pleaded not guilty, face charges of conspiracy to commit murder and will remain detained until a bail hearing on Monday. FINANCIAL POST * The blowout in price between Alberta's heavy oil and the North American benchmark price is a "longer term issue" with no quick fix, Alberta Investment Management Corp (AIMCo) CEO Leo de Bever said.   Fly On The Wall 7:00 Market Snapshot ANALYST RESEARCH Upgrades Amazon.com (AMZN) upgraded to Outperform from Sector Perform at Pacific CrestCornerstone OnDemand (CSOD) upgraded to Buy from Neutral at GoldmanCredit Suisse (CS) upgraded to Overweight from Equal Weight at Morgan StanleyExpeditors (EXPD) upgraded to Outperform from Neutral at Credit SuisseFabrinet (FN) upgraded to Overweight from Neutral at JPMorganLas Vegas Sands (LVS) upgraded to Outperform from Market Perform at Wells FargoMovado (MOV) upgraded to Buy from Neutral at CitigroupNetflix (NFLX) upgraded to Buy from Neutral at Janney CapitalQlik Technologies (QLIK) upgraded to Buy from Neutral at GoldmanResearch in Motion (RIMM) upgraded to Buy from Hold at JefferiesTyson Foods (TSN) upgraded to Outperform from Market Perform at BMO CapitalWynn Resorts (WYNN) upgraded to Outperform from Market Perform at Wells Fargo Downgrades Alterra Capital (ALTE) downgraded to Neutral from Buy at Sterne AgeeBall Corp. (BLL) downgraded to Hold from Buy at JefferiesCSX (CSX) downgraded to Neutral from Outperform at Credit SuisseCapital One (COF) downgraded to Neutral from Buy at Janney CapitalCarrizo Oil & Gas (CRZO) downgraded to Underperform from Neutral at Credit SuisseClarcor (CLC) downgraded to Market Perform from Outperform at William BlairFinisar (FNSR) downgraded to Underperform from Hold at JefferiesMGM Resorts (MGM) downgraded to Market Perform from Outperform at Wells FargoNetSuite (N) downgraded to Neutral from Conviction Buy at GoldmanUltimate Software (ULTI) downgraded to Neutral from Buy at GoldmanVisa (V) downgraded to Neutral from Outperform at RW BairdWestamerica (WABC) downgraded to Underperform from Market Perform at BMO Capital Initiations Geron (GERN) initiated with an Overweight at Piper JaffrayHalcon Resources (HK) initiated with a Hold at Stifel NicolausHarry Winston (HWD) initiated with a Buy at NomuraInovio Pharma (INO) initiated with an Overweight at Piper JaffrayIntuitive Surgical (ISRG) initiated with a Buy at Janney CapitalMarathon Oil (MRO) initiated with a Buy at Stifel NicolausOncothyreon (ONTY) initiated with an Underweight at Piper JaffrayThreshold Pharmaceuticals (THLD) initiated with a Neutral at Piper JaffrayTronox (TROX) initiated with a Buy at B. Riley CarisZiopharm (ZIOP) initiated with a Neutral at Piper Jaffray HOT STOCKS GE (GE) on target to achieve dougle-digit earnings growth in 2013Said outlook for developed markets remain uncertain Sees growth in China, resource rich countries Weiss family raised American Greetings (AM) offer to $17.50 from $17.18 per shareMoody's changed Rite Aid (RAD) outlook to positive from stable Schlumberger (SLB) said global macroeconomic environment remains uncertainSees 2013 global oil demand similar to 2012 Liberty Media (LMCA) bought 50M shares of Sirius XM (SIRI), control above 50%Intel (INTC) ”excited about strong pipeline of products coming to market”Sees little growth in wireless in 2013 Capital One (COF) sees average quarterly revenue levels in 2013 like Q412Sees reduction in loan balances in 2013Sony Corporation of America (SNE) sold 550 Madison Avenue building for $1.1BAZZ Inc. (AZZ) sees FY14 margins remaining strongONEOK Partners (OKS) announced $465M-$500M project investments through 2015NuPathe's (PATH) Zecuity approved by FDA EARNINGS Companies that beat consensus earnings expectations last night and today include:General Electric (GE), Schlumberger (SLB), Xilinx (XLNX), Bank Mutual (BKMU), Intel (INTC), Wintrust Financial (WTFC) Companies that missed consensus earnings expectations include:Matthews (MATW), People's United (PBCT), Capital One (COF) Companies that matched consensus earnings expectations include:Wipro (WIT), Associated Banc-Corp (ASBC), American Express (AXP) NEWSPAPERS/WEBSITES GE (GE) is the world's top producer of aircraft engines and medical-imaging equipment, but as far as its profits are concerned, it’s very much a bank. GE Capital is expected to account for nearly half the company's 2012 profit, the Wall Street Journal reportsDell’s (DELL) potential $23B leveraged buyout could also be the deal that finally gets the leveraged-buyout machine going again, showering financiers in fees and potentially yielding big returns for investors, the Wall Street Journal reportsAmericans are more confident in the future and are increasingly striking out to set up their own homes, a move that is helping propel the housing recovery, Reuters reportsWhen U.S. natural gas producers release their 2012 annual reports, many companies may have to significantly reduce a key indicator of their financial health: reserves. The SECrequires companies to calculate and report year-end oil and gas reserves using 12-month average prices, Reuters reportsWith the worst flu outbreak since 2009 gripping the U.S., vaccine makers (GSK, AZN) are determined to do better next season. They’re developing powerful vaccines that hold the promise of cutting incidences of flu by the thousands, Bloomberg reportsFranklin Templeton Investments (BEN) reduced its holdings of Apple (AAPL) last year to 4.2% from 7% in 2011 on concern the maker of the iPhone lacks a strategy to sell cheaper smartphones in emerging markets such as China and India, Bloomberg reports SYNDICATE CyrusOne (CONE) 16.5M share IPO priced at $19.00Northern Tier (NTI) Energy 10.7M share Secondary priced at $24.46Norwegian Cruise Line (NCLH) 23.529M share IPO priced at $19.00SunCoke Energy (SXCP) 13.5M share IPO priced at $19.00Trius Therapeutics (TSRX) files to sell common stock

11 января 2013, 17:26

Shell May Have Moved Rig To Avoid Taxes

ANCHORAGE, Alaska/WASHINGTON (Reuters) - Shell may have moved an oil rig that ran aground off Alaska last week partly to avoid millions of dollars in taxes, U.S. Rep. Ed Markey said, raising even more questions about the oil company's decision on the timing of the move. The letter from the top Democrat on the House of Representatives Natural Resources Committee adds to the already-intense political scrutiny of Royal Dutch Shell's ambitious and troubled Arctic drilling foray last year. Shell's 30-year-old Kulluk drillship ran aground on New Year's Eve in what were described as "near hurricane" conditions while it was being towed south for the winter. In a letter to Shell's top U.S. executive, Marvin Odum, Markey said the decision to move the rig "may have been driven, in part, by a desire to avoid...tax liability on the rig." In late December, a Shell spokesman told a local newspaper, the Dutch Harbor Fisherman, that it was "fair to say the current tax structure related to vessels of this type influenced the timing of our departure." But Shell said in response to Markey on Thursday that its decision was guided by safety, not taxes. Markey, an outspoken critic of the oil and gas industry, said his office received information about Shell and taxes from Alaska's revenue department. Shell could have been exposed to a state tax if the rig had remained in the state until January 1, as Alaska law says an annual tax of 2 percent can be assessed on drilling equipment on that date, Markey said in the letter sent on Wednesday. The company spent $292 million on upgrades on the rig since purchasing it in 2005, so the liability could have been about $6 million, he wrote. In total, Shell has spent $4.5 billion since 2005 to develop the Arctic's vast oil reserves. Jim Greeley, Anchorage-based petroleum property assessor for the Alaska Department of Revenue, explained that the tax applies to property used for exploration, production or transportation of oil or natural gas. He could not say whether the Kulluk would have been taxed or whether Shell's actions avoided a tax. The issue was complicated by the fact that Shell's drilling was in federal waters. "There's no tax precedent for that," at least in recent times, Greeley said, adding that department officials were researching the tax practices from two decades ago when there was a flurry of drilling offshore Alaska. The decision would have to be made by the time the state publishes its tax rolls on March 1. CONOCO LOOKS ON Shell's Arctic work has been closely watched by many in the industry and especially by ConocoPhillips ahead of its planned Alaska offshore drilling program slated for 2014. According to the U.S. government, the Beaufort and Chukchi seas hold an estimated 23 billion barrels of recoverable oil - equivalent to a tenth of Saudi Arabia's reserves. A Shell spokeswoman said the plan for the Kulluk this winter was always to move it in December. "While we are aware of the tax environment wherever we operate, the driver for operational decisions is governed by safety." She said an approved tow plan for the rig included weather considerations. Winter transit in northern waters is not unusual for rigs. Just this month, a rig owned by contractor Seadrill was due to arrive in Norway to start work for Statoil, while another was headed to Canada for Exxon Mobil Corp. The Kulluk accident is only Shell's latest problem in Alaska. Its 2012 Arctic drilling season was plagued by delays due to lingering ice and problems getting a mandatory oil spill containment vessel certified by the Coast Guard. Also, the U.S. Environmental Protection Agency said late on Thursday it issued notices of violation for air pollution in 2012 for the Noble Corp-owned Discoverer, Shell's other Arctic rig, and for the Kulluk. The EPA also terminated a temporary, more lenient permit granted to Shell in September for the Discoverer and said Shell's application for a less strict air permit was still under review. The U.S. Department of the Interior said this week it would review Shell's Arctic oil drilling program to assess the challenges it faced and to guide future Arctic permitting. Markey's committee does not have the power to stop drilling. His investigation would focus on why the rig was being towed along the coast down to Washington state in such severe weather and on Shell's safety policies, an aide to Markey said. Any permitting changes or delays resulting from the Interior Department review could threaten Shell's 2013 drilling plans, as the company has a limited drilling window during the summer. The Kulluk, before heading south, had previously been at a private facility in Unalaska/Dutch Harbor operated by Kirkland, Washington-based Offshore Systems Inc, which serves fishing and other vessels in Alaska. Harbormaster Jim Days said it was there for at least a month after completing its Beaufort Sea drilling. The environmental impact of the Kulluk accident is so far limited. The incident response team has located all four survival ships and one rescue ship that were dislodged from the drillship when it ran aground. The survival ships all had 68-gallon-capacity fuel tanks and two had been breached. None of the 155,000 gallons of fuel and other oil products aboard the Kulluk itself had leaked. (Additional reporting by Andrew Callus in London and Braden Reddall in San Francisco; Editing by John Wallace, Jim Marshall, Tim Dobbyn, Dan Grebler, Phil Berlowitz and Matt Driskill)

11 января 2013, 17:26

Shell May Have Moved Rig To Avoid Taxes

ANCHORAGE, Alaska/WASHINGTON (Reuters) - Shell may have moved an oil rig that ran aground off Alaska last week partly to avoid millions of dollars in taxes, U.S. Rep. Ed Markey said, raising even more questions about the oil company's decision on the timing of the move. The letter from the top Democrat on the House of Representatives Natural Resources Committee adds to the already-intense political scrutiny of Royal Dutch Shell's ambitious and troubled Arctic drilling foray last year. Shell's 30-year-old Kulluk drillship ran aground on New Year's Eve in what were described as "near hurricane" conditions while it was being towed south for the winter. In a letter to Shell's top U.S. executive, Marvin Odum, Markey said the decision to move the rig "may have been driven, in part, by a desire to avoid...tax liability on the rig." In late December, a Shell spokesman told a local newspaper, the Dutch Harbor Fisherman, that it was "fair to say the current tax structure related to vessels of this type influenced the timing of our departure." But Shell said in response to Markey on Thursday that its decision was guided by safety, not taxes. Markey, an outspoken critic of the oil and gas industry, said his office received information about Shell and taxes from Alaska's revenue department. Shell could have been exposed to a state tax if the rig had remained in the state until January 1, as Alaska law says an annual tax of 2 percent can be assessed on drilling equipment on that date, Markey said in the letter sent on Wednesday. The company spent $292 million on upgrades on the rig since purchasing it in 2005, so the liability could have been about $6 million, he wrote. In total, Shell has spent $4.5 billion since 2005 to develop the Arctic's vast oil reserves. Jim Greeley, Anchorage-based petroleum property assessor for the Alaska Department of Revenue, explained that the tax applies to property used for exploration, production or transportation of oil or natural gas. He could not say whether the Kulluk would have been taxed or whether Shell's actions avoided a tax. The issue was complicated by the fact that Shell's drilling was in federal waters. "There's no tax precedent for that," at least in recent times, Greeley said, adding that department officials were researching the tax practices from two decades ago when there was a flurry of drilling offshore Alaska. The decision would have to be made by the time the state publishes its tax rolls on March 1. CONOCO LOOKS ON Shell's Arctic work has been closely watched by many in the industry and especially by ConocoPhillips ahead of its planned Alaska offshore drilling program slated for 2014. According to the U.S. government, the Beaufort and Chukchi seas hold an estimated 23 billion barrels of recoverable oil - equivalent to a tenth of Saudi Arabia's reserves. A Shell spokeswoman said the plan for the Kulluk this winter was always to move it in December. "While we are aware of the tax environment wherever we operate, the driver for operational decisions is governed by safety." She said an approved tow plan for the rig included weather considerations. Winter transit in northern waters is not unusual for rigs. Just this month, a rig owned by contractor Seadrill was due to arrive in Norway to start work for Statoil, while another was headed to Canada for Exxon Mobil Corp. The Kulluk accident is only Shell's latest problem in Alaska. Its 2012 Arctic drilling season was plagued by delays due to lingering ice and problems getting a mandatory oil spill containment vessel certified by the Coast Guard. Also, the U.S. Environmental Protection Agency said late on Thursday it issued notices of violation for air pollution in 2012 for the Noble Corp-owned Discoverer, Shell's other Arctic rig, and for the Kulluk. The EPA also terminated a temporary, more lenient permit granted to Shell in September for the Discoverer and said Shell's application for a less strict air permit was still under review. The U.S. Department of the Interior said this week it would review Shell's Arctic oil drilling program to assess the challenges it faced and to guide future Arctic permitting. Markey's committee does not have the power to stop drilling. His investigation would focus on why the rig was being towed along the coast down to Washington state in such severe weather and on Shell's safety policies, an aide to Markey said. Any permitting changes or delays resulting from the Interior Department review could threaten Shell's 2013 drilling plans, as the company has a limited drilling window during the summer. The Kulluk, before heading south, had previously been at a private facility in Unalaska/Dutch Harbor operated by Kirkland, Washington-based Offshore Systems Inc, which serves fishing and other vessels in Alaska. Harbormaster Jim Days said it was there for at least a month after completing its Beaufort Sea drilling. The environmental impact of the Kulluk accident is so far limited. The incident response team has located all four survival ships and one rescue ship that were dislodged from the drillship when it ran aground. The survival ships all had 68-gallon-capacity fuel tanks and two had been breached. None of the 155,000 gallons of fuel and other oil products aboard the Kulluk itself had leaked. (Additional reporting by Andrew Callus in London and Braden Reddall in San Francisco; Editing by John Wallace, Jim Marshall, Tim Dobbyn, Dan Grebler, Phil Berlowitz and Matt Driskill)

14 ноября 2012, 13:06

BLOOMBERG: Buffett Power Unit Targets Renewables for Acquisitions

Julie Johnsson and Noah Buhayar - Nov 14, 2012 7:42 AM GMT+1300 MidAmerican Energy Holdings Co., the power provider owned by Warren Buffett’s Berkshire Hathaway Inc., is targeting renewable energy deals amid high utility valuations, Chief Financial Officer Patrick Goodman said. “We believe renewables is the better investment right now” because utilities are too expensive, MidAmerican’s Goodman said in an interview today at an Edison Electric Institute conference in Phoenix. “As a cash buyer, we will be looking at utilities if pricing comes in a bit.” MidAmerican has sought opportunities to reinvest its cash and highlighted that it has more funds available to service debt and build its business because it doesn’t pay a dividend. The power provider also has access to capital from Omaha, Nebraska- based Berkshire, which holds a 90 percent stake and had $47.8 billion (BRK/A) in cash at the end of September. MidAmerican formed a new unit in January to support its investments in renewable energy, including the $2.4 billion 550- megawatt Topaz Solar Farm and 168-megawatt Alta Wind VII project in California. The proportion of energy MidAmerican generated from wind, hydroelectric, solar, nuclear and geothermal rose to 31 percent as of Sept. 30 from 19 percent at the end of 2006, according to a regulatory filing last week. Chief Executive Officer Greg Abel, 50, helped build MidAmerican through utility acquisitions, including the 2006 purchase of PacifiCorp. In 2008, MidAmerican agreed to terminate its purchase of Constellation Energy Group Inc. after Electricite de France SA bought half of the Baltimore-based company’s nuclear plants. Constellation was acquired by Exelon Corp. (EXC) this year. Price Ratio Average price-to-earnings ratio for the 59 companies in the Bloomberg Americas Electric Index is 14.93, up from 14.21 last year and 12.82 in 2010, according to data compiled by Bloomberg. Price to book value is 1.39, up from 0.75 in 2011. MidAmerican has acquired 1.6 gigawatts of wind and photovoltaic projects since December 2011, adding to an existing 3.3 gigawatts of wind and geothermal assets, according to London-based Bloomberg New Energy Finance. “Large utilities like MidAmerican are a natural source of equity for renewable projects,” said Stefan Linder, a New York- based analyst for Bloomberg New Energy Finance. “They have a low cost of capital and shareholders that seek long-term, steady returns.” Buffett also may be interested in tax credits from the projects, Linder said. Canada Deal Abel last month struck a deal with TransAlta Corp. (TA) to fund half the cost of natural-gas fueled power plants built or bought in Canada, where the companies said almost $200 billion in new investment is needed during the next 20 years. The energy company has also scouted natural gas investments in the U.S., Goodman said today. Buffett, the world’s fourth-richest person, has said that regulated businesses like the utilities have earnings power even under adverse economic conditions and can provide fair returns on capital as long as they invest in infrastructure. MidAmerican sells electricity to 6.3 million customers and operates in states including Iowa, Oregon and Utah. Owning utilities is “not a way to get rich,” Buffett, 82, said at a meeting of U.S. state regulators in 2006. “It’s a way to stay rich.” To contact the reporters on this story: Julie Johnsson in Chicago at [email protected]; Noah Buhayar in New York at [email protected]  Discuss this topic @ Share Investor Forum - Register freeRead the full transcript of the October 24 2012 Squawk Box Interview with Warren Buffett Download the 2010 Berkshire Hathaway Annual Report Download the 1977 - 2011 Warren Buffett Letter's to Berkshire Hathaway Shareholders Warren Buffett @ Amazon The Essays of Warren Buffett: Lessons for Corporate America, Second Edition by Warren E. Buffett Buy new: $24.32 / Used from: $17.64 Usually ships in 24 hours The Snowball: Warren Buffett and the Business of Life by Alice Schroeder Buy new: $13.60 / Used from: $4.50 Usually ships in 24 hours

18 октября 2012, 16:00

The Marketing of a President

After Tuesday night's bar fight of a presidential debate, I have a few questions for the major American political parties: How referable are your candidates for president? By which I mean, how likely are their followers to passionately advocate for them to their family, friends, neighbors, and peers? (And "advocate for" doesn't mean railing against the other guy.) How inspiring are their ideas? How much do they move their followers? Can their followers even really say what their core ideas are? While the punditocracy may give the candidates passing grades on pugilistic debating skills, the truth is that neither candidate really connected with voters or truly inspired them, and that's a problem for both parties. Let me put the issue in a different frame. The way in which we market presidents is broken, much like the way that we traditionally market businesses is broken. I say "market" presidents rather than "select" them because the way in which an organization commits to market its products and services can substantially determine the quality of the product it produces and sells. There is a better way. First, full disclosure, I'm a Republican and have worked in a presidential campaign as well as an Administration (for George H.W. Bush). In the spirit of nonpartisanship, I will offer suggestions (and critiques) only to my own party — but much of what follows could be applied equally to my Democratic Party friends, as well. Republicans are following the wrong business model The Republican model for selecting a president and other political leaders is now heavily weighted towards a relatively small number of huge donors — who don't come from the same world as ordinary voters and don't share their interests. These donors contribute (make that "invest") vast sums to fund campaigns run by professional managers, and they control the ideas the party generates. And what has this model delivered? After hundreds of millions of dollars spent, and interminable months campaigning against a clearly vulnerable incumbent president presiding over a persistently weak economy, the best we can say is that Mitt Romney and Barack Obama are in a dead heat. We can't say that Romney has cultivated a growing number of passionate and inspired citizen advocates for his candidacy and its ideas. And in the final three weeks, his success will depend on some dispiriting, high-risk combination of the final debate performance, the hopes of exploiting some possible "October surprise" (and avoiding one of his own), and most of all, negative ads. What a way to pick the nation's leader. There's a more effective way to market a president, and smart business executives (and we Republicans pride ourselves on our business skills) are finding it. They're increasingly abandoning the same, tired marketing model which relies on hired professionals — who don't come from their customers' world and don't share their interests — to market and sell to them. Instead, they're building organizations that depend on customer advocates for their growth and success. Republicans could stand to learn a thing or two from them. Create citizen advocates Progressive businesses like Salesforce.com and SAS Canada are moving toward a new marketing model in which customers sell, market and participate heavily in helping develop innovative solutions for them. Contrast that approach to the Republican Convention in Tampa. Where were the Republican citizen advocates who could appeal to the voters the party hope to attract? What we saw was a parade of entrepreneur after entrepreneur trying to inspire voters with their stories of how they took a risk, built their business and accepted responsibility. What the vast majority of voters — who have no desire to start a business — got was a lecture from people they don't relate to. Where was an average worker Republican who is thriving in the new job he got as a result of first-rate training from a community college, built with the help of Republican-led initiatives? Where was a Republican soccer mom whose kids are thriving after moving from a hopelessly broken, politically fractured school system to a vibrant charter school, made possible by Republican reforms? And in today's modern growth business, engaging your advocates in such ways is just a start. Forming them into communities takes growth to the next step — and to get there, you must inspire.Inspire: Hundreds of moon landings It's a sad day when the party of Reagan trots out a Power Point-toting Paul Ryan to inspire voters, with his message of small government and individual responsibility straight from the pages of Ayn Rand. How inspiring is that to, say, Jeremy, the college student at Tuesday night's debate? Not very, I suspect. To create passionate customer advocates, today's forward-thinking businesses understand the need to inspire them. Apple builds inspiring products. Salesforce.com donates one percent of all top line revenues to charity, and makes even its business software seem inspiring by showing how it can make its users more successful in their jobs and careers. However, in politics, pundits bemoan the cynicism and absence of inspiring goals from our politicians. Where will we find another Big Goal that a president can rally all Americans behind — such as John F. Kennedy's goal to land a man on the moon? There are hundreds of possible Big Goals we as a people, and as a Party, can pursue. Exciting new approaches are addressing major domestic and world problems today — from health care, education, protecting natural resources and the environment, poverty and hunger, and more. Micro lending, for example, is helping millions of poor people fund and start small businesses. Florida and other states successfully addressed a serious public health problem that experts thought had no solution: getting teenagers to quit (or not start) smoking.Tackle big goals: Yes we can The model that's emerging for these exciting initiatives is well suited to Republican principles: a combination of social entrepreneurism, business, NGOs and government facilitation (not control), along with heavy participation in creating the solution by the audience you're trying to serve. That's as opposed to the old paternalism of bringing in basketfuls of money and technology, along with outside "experts" to tell people how to take their medicines, dig their wells or grow their crops. Call today's social entrepreneurism the new Peace Corps on steroids. And we can adapt these approaches to address Big Goals here, such as helping American workers excel in a competitive world, preparing American children for the 21st century, restoring economic vibrancy, combating poverty and improving health care at home, and engaging the world in more mutually beneficial ways. Ayn Rand notwithstanding, government has an important role to play in such initiatives. (Like any other financial industry, for example, micro lending is subject to abuse and must be regulated.) And, much more exciting, government itself is innovating to support such Big Goal efforts. For example, Michael Porter describes new approaches to regulation that stipulate measurable social improvements from initiatives. The pieces of a great opportunity are all in place for the Republican party to stop playing small ball, presenting the government — and by implication, the presidency — as something to be gotten out of the way. Instead it can start to inspire voters with exciting solutions that achieve Big Goals, and that would pull excited voters back into the party and its campaigns.

06 августа 2012, 19:49

With More Spills, Pipeline Companies Face Greater Scrutiny

By Ayesha Rascoe WASHINGTON, Aug 6 (Reuters) - Enbridge Inc's ruptured pipeline, which leaked about 1,200 barrels of crude into a rural Wisconsin field 10 days ago, seemed like no big deal. The scene was contained within hours, the line repaired within days. The leak was miles from running water or endangered wildlife. The immediate impact was limited to the evacuation of two houses and "veterinary attention" for some horses and cows. And yet some experts and traders warn that Canada's Enbridge might not be able to restart its 318,000-barrel-per-day Line 14 for weeks - or even months - as a once-obscure U.S. regulatory agency gets more comfortable with flexing its recently enhanced muscles. The Pipeline and Hazardous Materials Safety Administration is in the spotlight after two big accidents in 2010 - BP Plc's Macondo disaster in the Gulf of Mexico and another Enbridge leak of 20,000 barrels into Michigan's Kalamazoo River in one of the biggest spills onshore. "Pipeline accidents have a high profile right now," said Andy Black, head of the Association of Oil Pipelines trade group. The U.S. Transportation Department, which oversees the PHMSA, began a new pipeline safety effort in 2011, urging operators to replace aging infrastructure and winning Congressional support for more resources and enforcement powers. Based on interviews with industry experts and a Reuters review of the agency's recent enforcement record, the change has been noticeable, and the message is clear: If pipelines are found wanting, do not count on a quick resumption in oil flows. That message may be doubly true for Enbridge, which has suffered a string of incidents -- one on the same pipeline years earlier. Last Tuesday, the agency issued Enbridge a corrective action order, a tough but not uncommon response to a spill. Since 2007, the PHMSA has issued 23 such orders. But the agency went a step further on Thursday. It demanded an exhaustive safety plan, which it and an independent auditor must review, for the entire 1,900-mile Lakehead pipeline system, not just Line 14. Those were among the toughest terms for any order since a pair of BP oil spills in Alaska in 2006. "This is PHMSA saying: 'We mean business,'" said industry consultant Don Deaver, a former Exxon pipeline engineer. It could take weeks to hire the independent inspector and begin a review of the system, he added. BLACK EYE The Wisconsin spill was the latest black eye for Enbridge's pipeline network, the main conduit for Canadian crude exports and one of the largest systems in the world. The company says it has had a 99.999 percent success rate in delivering 12 billion barrels over the past decade and is investing $800 million this year as it strives for a perfect record. But U.S. Transport Secretary Ray LaHood blasted Enbridge last week, demanding the company demonstrate why it should be able to keep operating the pipeline without a complete replacement or major overhaul. The rupture on Line 14 left a 4-foot by 6-inch gash, according to the initial report. The cause of the pipeline failure has not been determined. Enbridge said on Friday that it had submitted safety plans for both Line 14 and the Lakehead system and was waiting for news. Neither the company nor the PHMSA offered a timetable for when shipments might resume. The PHMSA will move forward when it is certain that the pipeline is not posing a risk to public safety, said spokeswoman Jeannie Layson. Looking at the incident on its own merits, some see little reason for holding up approval. "I'd be really surprised if this not up and running pretty darn quick, unless they find something structurally flawed," said Sarah Emerson, president of consulting firm Energy Security Analysis Inc in Boston. Oil traders are less certain. The disruption helped trigger a record surge in Chicago wholesale gasoline premiums as local refineries operated by BP and Exxon Mobil Corp face tighter supplies. It also threatens to depress crude prices in Canada as a lack of alternative pipelines leaves producers few avenues for export. "I am expecting an extended standoff - weeks not days," said one crude trader. CORRECTIVE ACTION At issue is the corrective action order, a list of demands the PHMSA can issue whenever it determines that a pipeline is "hazardous to life, property, or the environment." The agency determines how and when to apply an order, based on the age of the pipe, the commodities being transported, the operating pressure, the surrounding area and any other factors "deemed important" by the PHMSA associate administrator. According to a Reuters review of such orders over the past five years, most followed large pipeline leaks or spills in sensitive areas. The remedies tend to follow a fairly clear pattern. The orders typically require the PHMSA's permission for a company to resume operations on the pipeline in question. They usually set out a number of additional measures: running the pipeline at reduced pressure; conducting mechanical or metallurgical tests within a month, and additional tests within several months; and reporting more frequently to regulators. Richard Kuprewicz, head of pipeline consulting firm Accufacts Inc, said Enbridge's history was a major reason why a relatively small spill is getting such a close look. Besides the 2010 spill, Enbridge's Line 14 experienced a leak of 1,500 barrels in Wisconsin back in 2007 -- an incident that did not result in a corrective order. In November of that year, another Enbridge line caught fire in northern Minnesota, killing two workers. "There are other issues showing up that indicate the integrity management program is seriously incomplete," Kuprewicz said. HARD TO PLEASE It also seems to be getting more difficult for companies to satisfy the PHMSA, whose most powerful enforcement tool is blocking the operation of a line. The agency has rarely fined a company more than $1 million; the $3.7 million penalty it issued against Enbridge a month ago for the 2010 spill was the largest ever. Of five corrective orders issued to oil companies between 2007 and early 2010, none resulted in the closure of a pipeline for more than a week, according to the agency's own data. The longest outage - five days - occurred on Line 2 of Enbridge's Lakehead system, which spilled 2,237 barrels of crude in Neche, North Dakota, in January 2008, the data showed. But outages have tended to last far longer since the Michigan spill in mid-2010 heightened public anxiety over oil pipelines. Of 14 incidents that resulted in corrective action orders since that leak, at least eight have resulted in pipeline closures of 25 days or more. For example, Exxon Mobil's Silvertip line received a corrective order after a spill in Yellowstone County, Montana, last year and was shut for 85 days. Another Exxon pipeline in Louisiana is still shut after a leak on April 28; the company has requested a hearing to discuss aspects of the order. "The fines are still small - a drop in the bucket compared to the revenues that pipeline companies generate," said Deaver, the former Exxon engineer. But Deaver said Secretary LaHood's hard-hitting statement demanding Enbridge demonstrate why it should be allowed to continue operating its pipeline without major changes "indicates they are getting more serious." (Editing by Lisa Von Ahn)