Energy Portfolios: Minor Corrections, Overall Results In Line with the Trend

PlPort_2013_11On Dec. 21, 2011, with $16 Imaginary Million, I created an investment simulation. I invested $1.0 Million in imaginary money in each of eight fossil fuel companies and eight sustainable energy companies. As of the close of trading 11 months later, Friday, Nov. 22, 2013, the trend, clearly evident after three months, in March of this year, continues.

  • The Dow Jones Industrial Average is up 22.72% from 12/21/12.
  • The S&P 500 is up 26.22%.
  • The Fossil Fuel Portfolio, dramatically underperforming the reference indices, is up 13.37% from Dec. 21, 2012.
  • The Sustainable Energy portfolio is up 145.37% from Dec. 21, 2012.
  • The Sustainable Energy Portfolio is also down 4.39% from October 18, 2013.

Note  that this represents a retreat of 4.39% from the high of 156.14%, in October, 2013.

As discussed in September and October, last month, in Septermber, 2013, in “Investing for the Future,” and October, in “Sustainable Investing: Green Energy, Green Economy,” the important question is:  Is this a trend or a bubble?  As I wrote, I think it’s a trend.

The 2,000 pound question, after Typhoon Haiyon, Hurricanes Sandy,  Irene and Katrina, after the fires of 2012 and 2013, the Missouri River Floods of 2011 – which knocked out the Fort Calhoun nuclear plant – the super-tornadoes of 2013 – one with a two mile wide contact point on land, which tore through Oklahoma (CNN / National Geographic / Zerohedge) is will we survive to make the transition to clean sustainable energy?

or rather:

  1. “How many of us survive to make this transition?”
  2. “What will be the carrying capacity of earth for humans?”

The data are summarized beginning in Table 1, below.

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Chris Christie, “Gov. Iwazaru” – The Monkey Who Cannot Speak

Hear No Evil, See No Evil, Speak No Evil

Three Monkeys

Chris Christie

Chris Christie

Chris Christie is like Iwazaru, the monkey who cannot speak.

As reported by Christopher Baxter, in the Star Ledger, in 2011, here,  while he vetoed a bill, S2996, that would have required New Jersey to work with other states to limit the greenhouse gases that scientists say are changing the climate, Gov. Christie said, “climate change is real.” He also said  “human activity plays a role in these changes” and that climate change is “impacting our state.”

In a rare moment of humility, he also said, “I can’t claim to fully understand all of this. Certainly not after just a few months of study. But when you have over 90 percent of the world’s scientists who have studied this stating that climate change is occurring and that humans play a contributing role it’s time to defer to the experts.”

He added that climate science is complex and “we know enough to know that we are at least part of the problem.” But that was in 2011. Before Hurricane Sandy.

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Oyster Creek & Nuclear Power After Fukushima

Oyster Creek Nuclear Generating Station

Oyster Creek Nuclear Power Plant, Courtesy Exelon

A public hearing will take place October 28, 2013, at the Clarion Hotel, 815 Route 37 West, Toms River, NJ. The subject of the hearing will be the National Academy of Sciences, NAS, study on nuclear power plants and cancer and “Lessons Learned from Fukushima.”

As I see it, the most important lessons from Fukushima are:

  1. Three of the Fukushima Dai’ichi nuclear reactors withstood the earthquake, the tsunami and the aftershocks. We can engineer systems that will withstand various scenarios, but this raises the cost such that nuclear cannot compete in a de-regulated energy market – see The Economist, here – and we cannot  engineer against all possible events.
  2. The radioactive plume reached across the Pacific to North America, just as the plume from Chernobyl reached across the Atlantic to North America. An accident anywhere, when it involves dispersion of toxic materials, is an accident everywhere,
  3. We have seen four (4) meltdowns in the 54 years between the passage of the Price Anderson Act and the disasters at Chernobyl and Fukushima. The risk of a catastrophic accident such as a melt-down may be low, but a catastrophic accident, is by definition, catastrophic.
  4. The losses from Fukushima are estimated in the Trillions of Dollars. The economic value of the electricity produced by the six nuclear reactors is probably less than $100 Billion. Generating electricity from nuclear power is like taking heroin for a headache: The cure is worse than the disease.

There is a fifth lesson to be learned; this from the NJ Clean Energy Program in New Jersey and Vestas, the wind company. As noted on the NJ Clean Energy Program – Project Activity Pages, we in New Jersey now have have 1,117.5 Megawatts (MW) of grid tied photovoltaic solar electric generating capacity, almost double the 636 MW of Oyster Creek. Vestas is offering 8 MW wind turbines.

WE HAVE WIND and SOLAR: WE DON’T NEED OYSTER CREEK OR OTHER NUCLEAR POWER PLANTS.

Offshore Wind Farm

Offshore Wind Farm

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Jenny McCarthy: “Playmate,” Co-Host on “The View,” & “Medical Expert”. Well, 2 Out of 3 Ain’t Bad.

Jenny McCarthy, Head and Shoulder

Jenny McCarthy, courtesy Playboy Enterprises

Jenny McCarthy, pictured above, is not a medical expert. After she became convinced that her son’s autism was triggered by vaccines, the actress, model, and “Playmate” associated herself with Generation Rescue, which promotes the unfounded anti-scientific belief that autism is caused by vaccines.  McCarthy has appeared on Larry King Live, in 2008, Youtube here, Oprah and currently co-hosts “The View,” a talk show on daytime television on the ABC network. ABC’s decision to hire her in this role was criticized in NJ.com, PLOS, the LA Times.

The problem is one needs nothing more than notoriety to become a pundit, and “pundits” who speak convincingly while they utter nonsense can cause real harm.

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In RE Carbon Dioxide – The EPA is Listening

Hurricane Sandy, NOAA handout satellite image taken on October 27, 2012.

Hurricane Sandy, via satellite, 10/27/12, NOAA

The people at the Environmental Protection Agency understand the issue of increasing atmospheric Carbon Dioxide above 350 PPM. And EPA is listening. EPA has held two public comment periods in New York City on 10/23/13 and will hold nine additional public comment hearings across the country to “solicit ideas and input from the public and stakeholders about the best Clean Air Act approaches to reducing carbon pollution from existing power plants.”

Boston, MA 11/04/13 Philadelphia, PA 11/08/13
Chicago, IL 11/08/13 San Francisco, CA 11/05/13
Dallas, TX 11/07/13 Seattle, WA 11/07/13
Denver, CO 10/30/13 Washington, DC 11/07/13
Lenexa, KS 11/04/13

 

Click HERE to register.

And as President Theodore Roosevelt said, “Speak softly …”

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Sustainable Investing: Green Energy, Green Economy

PLEP_13.10.18

On Dec. 21, 2012, with $16 Imaginary Million, I created an investment simulation. I invested $1.0 Million in imaginary money in each of eight fossil fuel companies and eight sustainable energy companies. As of the close of trading 10 months later, Friday, Oct. 18, 2013, the trend, clearly evident after three months, in March of this year, continues.

  • The Dow Jones Industrial Average is up 17.64% from 12/21/12.
  • The S&P 500 is up 22.03%.
  • The Fossil Fuel Portfolio, dramatically underperforming the reference indices, is up 7.47%.
  • The Popular Logistics Sustainable Energy portfolio is up 156.14%.

As discussed last month, in “Investing for the Future,” the important question is:  Is this a trend or a bubble?  As I wrote, I think it’s a trend.

Jeremy Grantham, the “G” in GMO, invests with the expectation that all things being equal, a company’s valuation tends toward their arithmetic mean values. (Note that Mr. Grantham has not been contacted for this study.) But note that disruptive technologies are, by definition, game changers. Disruptive tech alters the landscape. If you looked at the airline, automobile and railroad industries over the 20th Century, automobiles and airlines waxed while railroads waned.

The future may be similar for Fossil Fuels and Sustainable Energy. The Market Capitalization of the Fossil Fuel portfolio is $1.13 Trillion. The Market Capitalization of the Sustainable Energy Portfolio is $0.06 Trillion ($60 Billion).  The value of the companies of the Sustainable Energy portfolio is roughly 5.3% of the market capitalization of the companies of the Fossil Fuel portfolio. It can almost be described as a rounding error compared to the value of the Fossil Fuel portfolio. But if Mr. Grantham’s analysis is valid, and you aggregate the portfolios into one called “Energy” as opposed to a “Fossil Fuel” portfolio and a “Sustainable Energy” portfolio, then the shareholders of these various companies are in for an interesting few years.

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Real Shutdown Increases Real Unemployment by 800,000 Real Americans. Unofficially: Unemployment Rate Now 7.82%. Actually: 1.8 Million Unemployed by Shutdown; Rate of 8.48%

Pres. Obama & Speaker Boehner

Old Picture of President Obama & Speaker Boehner

The NY Times Editorial Board describes the shutdown, here, as “John Boehner’s Leadership Failure.” USA Today wrote, here,

“This shutdown, the first in 17 years, isn’t the result of two parties acting equally irresponsibly. It is the product of an increasingly radicalized Republican Party, controlled by a disaffected base that demands legislative hostage-taking in an effort to get what it has not been able to attain by the usual means: winning elections.”

On Saturday Night Live, Saturday, 10/5/13, Miley Cyrus and the cast mock-umented the GOP celebration over the shutdown with “We Can Stop (The Government).”

But Art and Politics aside, what are the effects of the Shutdown on the Economy?

The Government Shutdown increased Unemployment by 1.8 million, the Unemployment Rate increased 16.2%,  from 7.31% on August 31, 2013 to 8.48% on October 2, 2013.  At the same time, GDP growth dropped 20%, from 2.5% to 2.0%. 

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Government Shutdown – Partial – OK, But What’s Next? Default?

Paul Krugman, PhD

Paul Krugman, PhD, Nobel Laureate

The House Republicans, led (or maybe followed) by John Boehner, R, Ohio, are ready to shut down the government in order to force President Obama to delay implementation of various components of the Affordable Care Act, aka “Obamacare.”

They are not shutting down the entire government. The government will halt so-called “non-essential services.” The EPA, FDA, IRS help desk will be furloughed. This is precisely what Grover Norquist, Charles and David Koch and other big Republican donors want. It’s what they mean by “Starve the Beast.” Oddly enough the shutdown does not include Congress, which will remain in session, so our Representatives in the House and the Senate can continue to work, or at least draw paychecks. Continue reading →

Energy Portfolios – Investing for the Future

As of the close of trading Friday, Sept. 20, 2013, the trend, clearly evident by February 9, 2012 continues.

  • The Dow Jones Industrial Average is up 14.66% from 12/21/12.
  • The S&P 500 is up 16.36%.
  • The Fossil Fuel Portfolio, significantly underperforming the reference indices, is up 5.95%.
  • The Popular Logistics Sustainable Energy portfolio is up 110.10%.

PopLog.Port.13.09The important question is:  Is this a trend or a bubble?

I think it’s a trend. While I want to think it’s a trend, utility scale solar is at or below $4.00 per watt and getting cheaper.  Solar also scales from the 10 watts on a backpack to 10,000 watts or 10 KW on a rooftop to 500 million watts, 500 MW utilities are building. Wind is less expensive. Wind and solar are predictable. Continue reading →

Fracking Earthquakes … Fracking Causes Earthquakes

frackingmap

This map shows the intensity of shaking in the area of a magnitude-3.9 earthquake that struck near Youngstown, Ohio, on Dec. 31, 2011. Research has linked this earthquake to the underground injection of wastewater from fracking. Courtesy USGS

As reported on Live Science, here, and NBC News, here, disposal of wastewater from Hydraulic Fracturing, “Fracking,” has been linked to earthquakes in Ohio. As reported in Green, a the NY Times blog, here, fracking has also been linked to increased seismic activity in Oklahoma, altho scientists are uncertain whether the earthquakes are because of the injection of wastewater underground or the extraction of oil and methane via fracking.

This makes perfect sense. Fracking is, after all, injecting explosives under tremendous pressure into underground rock formations, then exploding the rock formations. To expect that not to have other effects – such as earthquakes – would be naive.

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Jersey Shore 350.org:Tues. 9/3/13, Stay Gold Cafe, Belmar, NJ, 6:00 PM

Jersey Shore Damage from Hurricane Sandy. U.S. Air Force photo by Master Sgt. Mark C. Olsen

Jersey Shore Damage from Hurricane Sandy. U.S. Air Force photo by Master Sgt. Mark C. Olsen

Approximately 97% of climate scientists agree that climate-warming trends over the past century are very likely due to human activities, which have increased atmospheric CO2 from roughly 265 parts per million, PPM, in 1800 to 400 PPM today. Many of these scientists and climate experts agree we must reduce the amount of CO2 in the atmosphere from current levels to below 350 PPM.

Along with climate-warming comes extreme weather, and events like Hurricane Irene, 2011, Hurricane Sandy, 2012. 350 Jersey Shore aims to inform New Jersey residents of our climate challenges, and provide solutions to help reduce carbon emissions locally and beyond.

Organized by Stephen Fowler of Echo Movement, 350 Jersey Shore, an arm of 350.0rg is meeting on Tuesday, Sept. 3, 2013 at 6:00 PM at the Stay Gold Cafe, Belmar, NJ. ( Event Link )

Popular Logistics Energy Portfolios – an Exercise in Climate Capitalism

Popular Logistics Energy Portfolios

In December, 2012 I created two portfolios, a “Sustainable Energy” portfolio comprised of Cree, First Solar, GT Advanced Technology, Lighting Sciences, Next Era Energy, Sunpower Solar, Solazyme and Vestas, 8 stocks in the solar, LED lighting, wind and biofuel sectors, and a “Fossil Fuel” portfolio, comprised of BP, Chevron Texaco, Conoco Philips, Exxon Mobil, RD Shell, Haliburton, Transocean, and Peabody Coal, 8 stocks in the coal, oil, and fracking sectors. The results, after eight months, as illustrated above:

The Sustainable Energy portfolio, is now up 96.55%
The Reference Fossil Fuel portfolio is up 3.78%
The Dow Jones Industrial Average is up 14.66%
The S&P 500 is up 16.36%.

In a trend clearly evident in February, the Sustainable Energy portfolio has significantly outperformed the Dow Jones Industrials and the S&P 500, and the Fossil Fuel portfolio, which has significantly underperformed the indices.

These data are summarized in table 1 and below.

Summary Data
Portfolio 12/21/12 08/21/13 Delta %
Sustainable Energy $8,000,000 $15,724,266 $7,724,266 96.55%
Fossil Fuel $8,000,000 $8,302,069 $302,069 3.78%
DJI 13,091 15,010 1,919 14.66%
S&P 500 1,430 1,664 234 16.36%
Table 1

The details are below the fold.

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Fukushima. Steam Rising from Sarcophagus

Fukushima Steam   
Rising from Sarcophagus
Rad-Waste flows to clouds

Rad-waste flows thru EAARTH
Carried on the  Jet Stream’s winds
any-every-where

NYTimes … ABC … BBC … Guardian, UK

With Nuclear power,
an accident anywhere is an accident everywhere.”

If the cheapest unit of energy is
the one that we don’t need, the “Nega-Watt,” then

the next cheapest is the one that
doesn’t need fuel and doesn’t create waste.
The “Nega-Fuel-Watt / Nega-Waste-Watt.”

Nuclear Power – State of the Art in 2013

The Fires of Fukushima

The Fires of Fukushima

Back in the 1960’s Nuclear Power was pitched as “Too Cheap to Meter.” Today  the state of the art can be summarized in 15 words:

Chernobyl, Fukushima, San Onofre, Fort Calhoun, Indian Point, Radioactive Waste, Evacuation Plans and Emergency Response. Continue reading →