Monday, May 31, 2010

The Costs of Offshore Drilling

The oil spill in the Gulf of Mexico is an environmental catastrophe that will have consequences that will span generations. The question we must now ask is do the costs of offshore oil outweigh the benefits.

For some, the lure of offshore oil is hard to resist. The International Petroleum Institute has estimated that deepwater oil fields contain as much as 300 billion barrels of recoverable oil, or more than Saudi Arabia's reserves.

It is widely known that the burning of oil is largely responsible for climate change. However, even without combustion, oil is a destructive source of complex hydrocarbons and heavy metals. Such materials will be absorbed and have an impact on the local marine life over time.

As primary consumers in the food chain, oysters, clams, and periwinkles will likely be among the first animals to accumulate hydrocarbons and heavy metals, which in turn will be passed on to the marine organisms that feed on these shellfish.

The Exxon Valdez oil spill showed that the Common loon, Cormorants, Harbor seal, Harlequin duck, and Pacific herring have not recovered while clams, killer whales, mussels and sea otters are still recovering more than 20 years later.

There are significant costs associated with the loss of livelihoods and incalculable short and long term costs associated with the destruction of marine habitats and wetlands. The oil pouring from the seabed into the Gulf will kill fish, mammals and birds, and turn giant swathes of ocean into dead zones.

Tighter regulations are inevitable but we need to see a wholesale shift away from offshore drilling for fossil fuels. Given the world's growing energy requirements, renewable sources of energy must play a larger role to meet that burgeoning demand.
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Next: BP's Corporate Irresponsibility / Responsibility for the Costs of the Gulf Oil Spill / Obama Presidency and the Gulf Oil Spill

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Sunday, May 30, 2010

Managing the Massive Gulf Oil Spill

Many are asking questions about what can be done to manage the ongoing oil spill in the Gulf of Mexico. The "top kill" approach has failed and the growing oil slick now covers thousands of square miles.

In the coming days a new capping method will try to contain the massive leak. BP has also started drilling a relief well, but that could take two or three months to complete.

Hundred of boats have been trying to deal with the slick by laying down miles of boom lines along Gulf shores.

Efforts underway to keep the oil off the beaches also include burning it on the surface of the sea and the Coast Guard and BP have been skimming oil from the Gulf. Skimming involves removing oil and other hydrocarbons from water. Skimming can be a cost-effective means of seperating oil and water.

Dispersants designed to clean up the spilled oil may actually make things worse. After the 1978 oil spill from the tanker Amoco Cadiz it was discovered that untreated areas recovered more quickly than areas treated with dispersants.

Berms may be the only means of keeping the oil from profoundly impacting coastal areas of the Gulf, although they also come with a cost to marine ecosystems.

Other more innovative solutions may be called for. For example, non-toxic bacteria can be mixed into the sand that will eat the oil and polymers can reportedly make the oil non-sticky making it easier to collect.

Despite miles of booms, scores of skimming ships and armies of beach washers, only 14 percent of the oil was ever cleaned up after the Exxon Valdez spill in Alaska.

With no solution in sight and one Exxon Valdez sized oil spill happening every ten days, this is destined to be America`s worst ever environmental disaster.
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Next: The Costs of Offshore Drilling / BP's Corporate Irresponsibility / Responsibility for the Costs of the Gulf Oil Spill / Obama Presidency and the Gulf Oil Spill

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Friday, May 28, 2010

Financial Regulation and Green Bubbles

Financial regulation can help us avert green bubbles. The green market is vulnerable to artificial inflation and the growth of green could be seriously undermined by a bursting bubble. Those who care about the environment have a vested interest in protecting the green market from bubbles.

The Securities and Exchange Commission's (SEC) civil lawsuit against Goldman-Sachs suggests they are serious about addressing securities fraud. These charges send a powerful message to those who manipulate markets.

Market manipulation describes a deliberate attempt to interfere with the free and fair operation of the market and create artificial, false or misleading appearances. Market manipulation is prohibited in the United States under Section 9. The Act defines market manipulation as transactions which create an artificial price or maintain an artificial price for a tradable security.

Although the SEC may not have the legal teeth to exact punishments through the courts, they have exacted their pound of flesh from Wall Street just by pressing charges against Goldman-Sachs. After the initial disclosure of the lawsuit, shares of Goldman Sachs plunged 13%, even though they reported earnings of $3.46 billion in the first quarter of 2010.

The repercussions of the SEC charges reverberated throughout the markets and the major indices tumbled. Broader stock indicators also took a hit, the Dow Jones Industrial shed hundreds of points, and on the NYSE, five stocks fell for every one that rose. Positive new consumer sentiment, better housing starts and strong quarterly results from companies such as Google, Bank of America, and General Electric could not keep the markets from going south.

Goldman Sachs was amongst those hardest hit by the SEC's charges, but many in the financial sector immediately began to bleed as the news about the criminal investigation broke.

While the general population vilifies derivative traders, they ignore the real culprits. Rather than focus on derivative trading, we need to erect safeguards against those who would artificially inflate (or pop) a bubble purely for speculative gain.

Although it may be popular to suggest that it is "morally reprehensible" for a firm like Goldman Sachs or Morgan Stanley to "bet on both sides," it is also an uninformed view. Derivatives may have been the focus of public ire, but they are a form of hedging that is sewn into the fabric of the financial system. Derivatives are actually an important means of mitigating against risk.

Although derivatives are not the evil financial instrument they are made out to be, as the recession of 2008 illustrates, overselling them can get us into serious trouble. Free markets may be a marvellous thing, but regulations are absolutely necessary to help us avert financial catastrophes. Although we clearly need greater regulation, most cannot understand the financial system well enough to know which regulatory approach works best.

With the aim of shedding light on financial regulation, well known investor George Soros offered his assessment of the recession of 2008. In an essay written on Oct. 25, 2009, Soros indicated that there is an urgent need for financial reform. In the essay, he explains:

"Instead of a tendency towards equilibrium, financial markets have a tendency to develop bubbles. Bubbles are not irrational: it pays to join the crowd, at least for a while. So regulators cannot count on the market to correct its excesses." This is why, according to Soros, "financial authorities must accept responsibility for preventing bubbles from growing too big."

While government stimulus staved off economic disaster, too much stimulus can inflate bubbles. With all of the government money being poured into the green market, we need to be vigilant. However, even more dangerous is the kind of regulation that is a drag on the economy and inhibits the growth of green without reducing the incidence of bubbles.

Transparency can go a long way, but if we are to achieve meaningful financial reforms that limit the cataclysmic effects of systemic shocks, we must work to prevent the wilful manipulation of the markets for financial gain.

Despite some last minute amendments, the Financial Regulation Bill was approved by the Senate. Even without this new legislation, we have already seen that government agencies are capable of delivering punishing blows. Wall Street should take heed, even if the SEC cannot win in a court of law, they can have a major impact on stock valuations.

While Goldman Sachs may not be found guilty, their reputational capital has been compromised and this is something that no investment bank can afford. The wider implications may encourage some would be market manipulators to reconsider. The SEC's charges and the Financial Regulation Bill may also encourage Wall Street to cooperate with efforts to make the entire system safer.

Economic growth is essential to the war against climate change. Without economic growth, there will be insufficient investment in new energy sources and sustainability efforts. As Paul Hawken said, "Business is the only mechanism on the planet today powerful enough to produce the changes necessary to reverse global environmental and social degradation." We urgently need to find the delicate balance between unfettered economic growth and appropriate regulation.
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Wednesday, May 26, 2010

Environmental Revolution: Leadership and Morale

The green market affords opportunities to lead industry with unique, environmentally friendly options for products and services. There is also considerable room for innovation that will drive the green economy forward.

Innovation is key to environmental solutions, but there cannot be innovation without inspired leadership. Considerable rewards await those companies that support such innovation. These rewards extend beyond high profile recognition and sales. Consumers develop deep connections with brands that are doing good for the planet.

Consumers are not the only ones who have discovered the importance of managing climate change, employees are also analyzing the environmental missions of the companies they work for. The US Green Building Council (USGBC) reports that employees tend to have more dedication when they know the company they work for is serious about addressing the problems that plague the environment.

Environmental leadership offers the opportunity to gain recognition and strengthen consumer loyalties, it also increases the morale of employees.
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Tuesday, May 25, 2010

Environmental Revolution: Honest Marketing

Green initiatives are often communicated in a company's marketing plans. These marketing efforts highlight a company's environmental features. Both the content and the format of a companies marketing efforts can play a vital role in enhancing the bottom line.

According to the American Marketing Association (AMA), green marketing is the marketing of products that are presumed to be environmentally safe. While the term came into prominence in the late 1980s and early 1990s, the AMA held the first workshop on "Ecological Marketing" in 1975.

Companies with integrity do not overstate green claims, they honestly communicate their efforts and seriously address all elements of the company's processes and supply chain.

Although some companies are guilty of greenwashing, making false claims can be very detrimental. Breaking a promise to consumers can be very destructive to a company's reputation, making false green claims can be even worse. Companies that misrepresent their green efforts undermine the entire spectrum of companies committed to greener practices.

Many people are increasingly well informed and in the digital age, access to information is often available through a quick search query. Companies that effectively and honestly communicate their green claims will be well positioned, those who misrepresent or provide only half the truth to try to generate buzz will suffer the consequences.

There are also legal implications of green marketing claims. Misleading or overstated claims can lead to regulatory or civil challenges. In the USA, the Federal Trade Commission provides some guidance on environmental marketing claims.

Marketing environmental integrity is a powerful message that resonates with a population increasingly interested in greener products and services.
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Next: Environmental Revolution: Leadership and Morale

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Saturday, May 22, 2010

Environmental Revolution: Technology Certification

To be a certified green, forward looking technology manufacturers are using safer materials to replace those that are toxic. Many of the materials traditionally associated with the manufacturing of technology are toxic. Standards are key to the widespread adoption of technology manufacturing that uses less toxic materials.

There are two widely recognized systems for technology certification, they are abreviated as RoHS and EPEAT. Both analyze the materials used in technologies to determine their environmental safety.

The Restriction of Hazardous Substances (RoHS) is one of the most stringent technology certifications, it establishes European standards.

The US technology certification system is known as the Electronic Products Environmental Assessment Tool (EPEAT). This tool is a bit more stringent than European standards. Although it complies with RoHS directives, it includes additional standards.

The EPEAT certification system aims to restrict mercury, lead, hexavalent chromium, cadmium, polybrominated (fire retardant) biphenyls and polybrominated diphenyl ethers.

Technology is a critical component of the green economy and certification systems are helping to standardize the criterion for green technologies.

© 2010, Richard Matthews. All rights reserved.
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Next: Environmental Revolution: Marketing, Environmental Revolution: Leadership and Morale

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Friday, May 21, 2010

Environmental Revolution: Building and Operations

A 21st century revolution is taking hold, like the industrial revolution that preceded it, the environmental revolution is advancing business interests, but with far less environmental impact. The term "Environmental Revolution" was first coined in a book called "Mid-Course Correction" by Ray Anderson.

Since the dawn of the industrial revolution mankind has honed mass production, replacing humans and horses with machines. But the industrial revolution has also had a catastrophic impact on the planet and its biodiversity.

The public awareness of the environment is encouraging businesses to find solutions that integrate renewable energy into their buildings and operations.

Businesses are increasingly building or renovating using green building methods and materials. Many of these businesses are also incorporating renewable energy, while decreasing material use and streamlining operations.

The costs associated with greener building and operations are recouped over time and these upfront costs help to position businesses to be compete in the new green economy.

These efforts also benefit employees. According to the United States Green Building Council (USGBC), green buildings actually improve worker productivity and minimize absenteeism.

This new revolution is driving down costs through energy efficiency and material conservation. Radical changes in building and operations are making it possible for businesses to help the planet and its inhabitants while bettering their bottom line.
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Next: Environmental Revolution: Technology Certification, Environmental Revolution: Marketing, Environmental Revolution: Leadership and Morale

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Wednesday, May 19, 2010

Sustainable Successes and Failures

When it comes to sustainability the right vision and effective execution can help companies compete and emerge as winners. Inadequate sustainability efforts can profoundly undermine a company’s ability to survive. Some once great companies have watched their iconic brands crumble due to their failure to proactively adapt to emerging megatrends. GM and Kodak are but two examples.

Many companies around the world now have a Chief Sustainability Officer (CSO) including AT&T (U.S.), SAP (Germany), and LoyaltyOne (Canada).

Forward looking companies are already benefiting from their sustainable positioning. By focusing on outperforming competitors on regulatory compliance 3M’s Pollution Prevention Pays reduced pollutants by more than 2.6 billion pounds and saved the company more than $1 billion.

DuPont understands that environmental risks outweigh potential earnings. That is why under a zero waste commitment, Dupont has opted to divest itself of its holdings that have big eco-footprints such as nylon and carpets.

Dow’s 2015 Sustainability Goals yielded new products in areas from solar roof shingles to hybrid batteries. Its core business, which had traditionally relied on commodity chemicals, has shifted toward advanced materials and high-tech energy opportunities.

IBM uses their environmental management system as the foundation for policy deployment, practice management, goal setting, decision making, and data capture.

Although some companies have made valiant efforts, this does not preclude room for improvement. Walmart has 38 sustainability goals and earlier this month they released their third sustainability report. Walmart's new climate goal is to reduce 20 million metric tons of carbon pollution from its products’ lifecycle and supply chain over the next five years. However, Walmart still needs to focus on avoiding waste and they need to define the way they measure progress on packaging.

Pioneering companies are already reaping the rewards of their sustainable efforts and a growing number of businesses are realizing that success in sustainable positioning comes from greater competitiveness and cost savings.
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Tuesday, May 18, 2010

Sustainable Business Methods, Strategy, Management and Reporting


There are at least four critical areas for businesses seeking to enhance their sustainability, including, methods, strategy, management, and reporting.

To address the specialized requirements of sustainability, companies are employing new business methods. Specifically, companies are using habitual practices and systematic processes to achieve accuracy and efficiency, often in an ordered sequence of fixed steps. Sustainable methods include business-case analysis, trend spotting, scenario planning and risk modeling.

Sustainable strategy involves planning to reduce a company's footprint. This implies using resources efficiently and effectively. By using analytical data, businesses can position themselves to develop distinctive sustainability strategies. Many aspects of strategy development will remain internal, but companies are increasingly adopting open-source approaches that rely on outside assistance.

Some sustainable companies are instructing their managers to incorporate sustainability objectives into compensation models, reviews, and other management processes.

Some firms have invested in technology to record and report environmental events such as spills and waste disposal. An environmental management system can be the foundation for policy deployment, practice management, goal setting, decision making, and data capture.

Sustainability concerns involve obvious issues like efficiency, carbon intensity and transparency, green IT, green power use, GHG reductions, toxic emissions, packaging, water intensity, paper use and recycling. Other less obvious issues include cleantech investments and patents, employee commuting, telecommuting, environmental financial impacts and toxics in manufacturing.

There are many things that businesses can do to be more sustainable, and many good reasons to do so.
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Monday, May 17, 2010

Sustainability is an Unstoppable Megatrend


Sustainability is not a passing fad or a marketing gimmick, it is a worldwide movement that is changing the way we do business. Sustainability entails continued development or growth, without significant deterioration of the environment and depletion of natural resources on which human well-being depends. This definition measures income as flow of goods and services that an economy can generate indefinitely without reducing its natural productive capacity.

Sustainability is more than a trend, a trend reflects a pattern of gradual change in a condition, output, or process, or an average or general tendency of a series of data points to move in a certain direction over time, represented by a line or curve on a graph. The term megatrend was popularized by John Naisbitt in his 1982 bestseller "Megatrends". Rather than being a function of a series of data points, the term megatrend reflects a general shift in thinking or approach affecting entire countries, industries, and organizations.

In the May 2010 issue of Harvard Business Review there is a feature article titled ‘The Sustainability Imperative’. The feature is written by David Lubin from the Sustainability Network and Daniel Esty from Yale University. Together they argue that sustainability is the next transformational business megatrend comparable to mass production, manufacturing quality movement, IT revolution, and globalization.

The authors suggest firms seeking to gain a competitive advantage must know what to do and how to do it. With many already onboard businesses must act now, as this unstoppable megatrend will make or break companies around the world.

Although we are still at a relatively early stage of the sustainability megatrend, it can be expected to continue to grow exponentially.
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Next: Sustainable Business Methods, Strategy, Management and Reporting / Sustainable Successes and Failures

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Sunday, May 16, 2010

Palin Renews Call for Offshore Oil Exploitation

It appears as though former Vice Presidential candidate Sarah Palin is oblivious to the millions of gallons of oil contaminating the Gulf of Mexico.

Sarah Palin is a leading contender for the Republican Presidential nomination. Palin is also the queen of the Tea Party movement, but she is no friend of green.

Palin has a deplorable environmental record. She is a longtime advocate of offshore drilling including drilling in the Arctic National Wildlife Refuge (ANWR). "We are ready for that gas to be tapped so we can fill a natural gas pipeline," Palin said during her state of the state address in January 2007. "I promise to vigorously defend Alaska's rights, as resource owners, to develop and receive appropriate value for our resources."

She has religiously advocated the unabashed exploitation of natural resources. "The amount of oil currently flowing through the Pipeline is less than half of what it was at its peak. We must look to responsible development throughout the state. . . . From further oil and gas development, to fishing, mining, timber, and tourism, these developments remain the core of our state," Palin added.

Palin's idea of "responsible development" involves "stability in regulations for our developers," which translates to an invitation to exploit resources with little environmental regulation.
Her former running mate John McCain seemed to cater to his base by emphasizing the intractability of his support for offshore drilling , “My position has not changed,’’ McCain told The New York Times. "

Rather than advocate for efficiency and renewable energy, Palin continues to insist that offshore drilling is somehow the environmentally responsible option. She recently reiterated her views on offshore oil with the statement, "We need to keep drilling because if we don't drill for a year, we're going to be more and more reliant on foreign countries that have even less stringent environmental standards," Palin told ABC News.

Palin ignores climate change, the same way she ignores the need for 21st century energy.

Palin not only advocates more offshore oil drilling, she also wants to see creationism taught in schools. While she is undeniably consistent, like all conservative thought, it is not entirely clear whether her positions are written in stone or simply date back to the stone age.
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Saturday, May 15, 2010

Two More Reasons to Move Beyond Fossil Fuels

As we reel under the weight of the oil spill in the Gulf of Mexico, we should not forget the coal mining disaster that proceeded it. The oil spill and the coal mining disaster coalesce to add to the chorus of powerful points about the demerits of fossil fuels. Over the past two weeks, we have all watched the BP oil disaster unfold, and before that we watched helplessly as rescue efforts tried in vain to get to miners trapped deep underground.

The April 5 explosion at Upper Big Branch in Montcoal, West Virginia killed 29 miners and Massey's drive to ramp up its underground production is currently under federal investigation. The explosion of the Deepwater Horizon 15 days later and its subsequent sinking on April 22, resulted in the loss of 11 lives and the ongoing destruction of thousands of square miles.

Upper Big Branch was cited 50 times in the month leading up to the accident, including for ventilation issues. President Obama called the mine's record "troubling," and said he was directing his administration to strengthen enforcement of mine safety laws. "Safety violators like Massey have still been able to find ways to put their bottom line before the safety of their workers," Obama said.

However, even under stringent safety regimes there are still unpredictable risks associated with coal mining and offshore oil. Even when we are able to extract fossil fuels successfully, their use is the single greatest contributor to environmental pollution and climate change.

The worst American coal industry disaster since 1970 and possibly the worst oil spill ever combine to highlight the ever increasing need to begin the long process of weaning ourselves off fossil fuels. These two tragic events underscore the need to break our addiction to dirty and dangerous fossil fuels.

This is a moment when we can encourage the US and its leaders understand the real need to get off dirty energy now. A petition organized by 350.org is asking President Obama to show leadership on clean energy and ban new offshore drilling.

The Sierra Club has organized a campaign which tells senators to stand up to pressure from the dirty energy lobby and end our reliance on oil and coal. The National Wildlife Federation (NWF) is asking citizens to tell senators to speak up for safer, cleaner energy choices.

The ever increasing importance of social media continues with 350.org's Facebook group against more offshore drilling. This is the largest social media hub against drilling.

Donate through 350.org directly to people impacted by the oil spill or join NWF's response efforts and volunteer to aid in clean-up efforts.

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Friday, May 14, 2010

Offshore Oil is an Avoidable Tragedy

The catastrophic explosion in the Gulf gives us reason to re-evaluate offshore oil’s place in a 21st century energy economy. The explosion killed eleven workers and caused a massive oil spill that has shut down one of the most fertile fishing grounds in the US. The oil spewing from the well is hitting coastlines and is a serious threat to wildlife, marine habitats, livelihoods and human health.

Official estimates from the federal government and BP, which owns the oil lease the Deepwater Horizon was working, place the leak rate at some 5,000 barrels (210,000 gallons). However other reports indicate that 70,000 barrels of oil a day may be gushing through the ruptured wellhead and it could take 90 days to stem the black tide. That translates to one Exxon Valdez spill every five days.

The leaking offshore oil well is located off Louisiana's coast, 5,000 feet under the ocean surface. The incident began when Swiss-based Transocean Ltd's Deepwater Horizon exploded and caught fire while finishing a well for BP. Ironically, Deepwater Horizon sank on Earth Day (April 22), two days after the initial explosion.

The underwater well continues to dump vast quantities of oil into the ocean and bad weather hampered early efforts to clean up the spill with controlled burning and dispersal agents. Oil now covers thousands of square miles in the Gulf of Mexico threatening fragile shorelines in Louisiana, Texas, Mississippi and Florida.

Deepwater oil rig spills are not without precedent, in 1979 through 1980, off the coast of Mexico, 140 million gallons of crude oil were spilled into the ocean. However, the amount of oil flowing from the recent explosion of the Deepwater Horizon puts it on track to become the worst oil spill in history, surpassing the damage done by the Exxon Valdez tanker that spilled 11 million gallons of oil into the ecologically sensitive Prince William Sound in 1989.

Louisiana Governor Bobby Jindal declared a state of emergency, President Obama said he will utilize every available resource at his disposal, and Homeland Security Secretary Janet Napolitano promised an all-out response.

Obama made clear his disapproval of the "cozy relationship" betweeen federal regulators and oil companies. The President also voiced his contempt for the lack of responsibilty shown by the central players in this matter. "I did not appreciate what I consider to be a ridiculous spectacle during congressional hearings into this matter," he said.

Even with all the resources being devoted to manage the spill, the damage cannot be contained. The White House science policy adviser, John Holdren, recently warned that the Gulf oil spill leak could worsen. Recent events are leading many to question President Obama’s plans for a limited expansion of US offshore oil and gas drilling.

BP made more than $6 billion in the first three months of this year. Coincidentally, around the time the Deepwater Horizon was burning, some of the major oil companies were also reporting substantial earnings. Exxon Mobil posted a 38% increase in profits, and Occidental Petroleum saw their profit nearly triple. The explosion in the Gulf of Mexico and big oil’s profits are fueling growing resistance to offshore oil exploitation.

While Big oil may be posting record profits, the disaster in the Gulf is costing billions not including the costs to irreplaceable marine environments and eco-systems. This massive black stain is polluting the Gulf's waters, beaches, and wetlands. Wildlife is at risk as are the people living in Gulf Coast communities. Each day more oil pours into coastal waters threatening over 400 species of fish, birds and wildlife.

So far all efforts to contain the spill have failed including an effort to contain the leak with a 98-ton concrete-and-metal box structure known as a cofferdam or 'Top Hat'.

This uncapped underwater gusher is damaging the economy as well as the environment. The oil spill has already drained billions from BP's stock market value and billions more are being spent in management efforts.

These events persuasively demonstrate how offshore oil imperils ecosystems, destroys livelihoods and undermines the economy. Offshore oil is inconsistent with a 21st century economy, particularly in light of the fact that clean energy can provide more jobs, less pollution, and real energy independence.
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BP's Corporate Irresponsibility
Responsibility for the Costs of the Gulf Oil Spill
Obama Presidency and the Gulf Oil Spill
Managing the Massive Gulf Oil Spill
The End of Oil and the Next Energy Economy
Peak Oil
The Economic Calamity of Peak Oil
Reigning in Irresponsible Oil Giants Chevron and Exxon Mobil
The Business of Climate Change Deception
Planning a Future Without Oil
Drill Baby Drill
Koch Industries' Environmental Crimes
Koch Industries Financing Climate Denial
Koch Industries Destroys the Environment & Funds Climate Denial
Protecting the Planet from Corporate Influence
How to get Through to Climate Change Deniers
America's New Fuel Efficiency Standards

Wednesday, May 12, 2010

Electric Vehicles Need New Business Models

Although interest in electric vehicles (EVs) is growing, the automotive industry needs to develop creative and unconventional business models to combat the higher costs of production. The evolution of electric vehicles is offering new opportunities and challenges for business development, partnerships and integration.

The growth of EVs will introduce new entrants, intermediaries and new means of creating value at different points in the vehicle value chain. To cultivate this rapidly growing industry, flexible partnerships must thrive between diverse and cross-functional industries such as telecommunications, energy providers, manufacturers, suppliers and retailers.

Although EVs have yet to benefit from economies of scale, Nissan has advanced an ambitious business model. The Nissan Leaf offers an affordable price point to support mass production. Tesla Motors' business model involves the straight forward commercial production of a federally-compliant highway-capable electric vehicle. Although they have relatively low-volume ambitions, Tesla's basic strategy is to design, manufacture and sell high-performance fully electric vehicles and advanced electric vehicle powertrain components.

According to “Winning on the E-mobility Playing Field” written by global management consultancy Arthur D. Little, original equipment manufacturers (OEMs), utilities, infrastructure, leasing companies and service providers will all be competing for consumers’ mobility budgets and must identify the right business model to fully capitalize on the green market. All players in the value chain must identify the most viable business models. Arthur D. Little believes four predominant business models will emerge:

1. The Mega-OEM: The few that achieve technology leadership will lead and their products will be used under different brands. This will push smaller OEMs out of the picture.

2. Modular Packaging: Some large suppliers will offer OEMs a complete modular package of EV technology – from battery and power electronics to complete vehicle architectures.

3. Local Urban Clean Transportation: With regulations likely to spread in big cities, local authorities will cooperate with automotive OEMs to develop ‘clean’ transport alternatives such as electro-mobility.

4. E-mobility Provider: Rail, aviation, car rental businesses and new entrant service providers will actively seek opportunities to increase their share of affluent travelers’ mobility budgets. Their presence in major travel hubs worldwide will enable them to implement an electric vehicle infrastructure capturing this lucrative customer market.

Stefan Lippautz, Director at Arthur D. Little believes that success in the upcoming electro-mobility market requires more than new technology development. “Competition in e-mobility exists on a wider playing field beyond the traditional automotive value chain. Focusing on selected customer groups will help achieve a unique selling proposition. Companies should tailor mobility products, focusing on viable business models for a small target group rather than targeting the entire market,” Lippautz said.

Although it is often said that a rising tide floats all boats, the growing interest in EVs is likely to float some boats more than others. There are many business cases of companies that failed in their efforts to bring successful technologies to market.

In the electric vehicle sector, the challenge involves more than just new technology. No matter how promising the technology, a good business model is crucial to success in this increasingly competitive marketplace.
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Tuesday, May 11, 2010

Lithium is the Right Stock at the Right Time for the Right Reasons

Lithium is a metal that is helping to power the new energy economy. A good lithium investment offers secure mines, a sound mining strategy and experienced management.

A great deal of lithium is found in politically unstable countries such as Bolivia and Chile. Bolivian President Evo Morales has nationalized Bolivia's oil and gas fields and this poses a serious risk for other highly profitable natural resources like lithium. Seek lithium investments with proven mining operations located in countries less vulnerable to political upheaval.

Avoid investments that are more marketing hype than sound fundamentals. Look for companies run by a proven management team that understands the industry.

Lithium is the key metal in an industry destined to soar. Expect big returns as it becomes increasingly clear that there will be massive demand.
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Monday, May 10, 2010

Mobile Electronics are Driving Demand for Lithium

The phenomenal growth of mobile electronics is fueling demand for lithium. Cell phones and laptop computers are some of the most sought after products in the world and they are both powered by lithium-ion batteries.

Lithium is powering the wireless world and wireless communications are driving the enormous demand for Lithium. Lithium is a crucial component of the $65.7 billion cell phone industry. Last year one billion cell phones were sold around the world each one powered by lithium.

Wireless communications include popular international mega-brands like iPhone, Android and BlackBerry. These are products with huge, ever-increasing demand, last year there were 50 million Blackberries sold and iPhone sales increased over 600 percent. Cell phone producers reliant on lithium include companies like Nokia, Motorola, SamSung, and Sony/Ericson.

There are a variety of other technologies that are powered by lithium batteries like MP3s and new mobile devices like Apple's iPad.

Laptop computers are another major source of lithium demand. The 177 million laptops sold last year eclipsed PC sales for the first time. The fact that laptops are outselling home PCs, reflects a general trend towards mobile sources of power and lithium is the key to mobile power.

Blue-chip companies are investing in lithium because they know that for the foreseeable future lithium batteries will provide the energy for all the most popular mobile electronics. This makes lithium one of the greatest wealth making opportunities of the century.
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Saturday, May 8, 2010

Electric Vehicles Will Drive Demand for Lithium

Lithium is a key ingredient in the power plants of electric vehicles, prompting Public Broadcasting (PBS) to say that, "Lithium is a metal which may soon make our old-fashioned, oil-dependent vehicle obsolete." Technology Review has said that,"Lithium batteries are driving a renaissance in electric vehicle development."

Lithium battery powered electric vehicles come in a range of sizes and configurations from tiny unicycles to large transport trucks. Toyota's Prius is a well known hybrid vehicle that has been a commerical success for years followed by Honda's Insight. Nissan recently inaugurated an affordable vehicle called the Leaf and most car makers have already released hybrids in a range of classes from subcompact to SUV.

After investing one billion dollars, General Motors is coming out with the highly anticipated electric car called the Volt. With the help of lithium batteries, GM estimates that the Volt can get 230 miles per gallon.

BusinessWeek magazine says, "Large and niche automotive makers are declaring the electric car the vehicle of the future..." The Financial Post reports, "people are realizing there are going to be an awful lot of lithium batteries used in electric vehicles."

The Wharton Business School raves about the electric car saying "the global impact would be enormous." As reported by the BBC, Mitsubishi expects that the demand for lithium will outstrip supply.

The coming explosion in electric vehicles makes lithium a sound investment.
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Friday, May 7, 2010

Lithium is the Next Big Investment Opportunity

Lithium battery technology is one of the innovations that are helping to change the way we use energy. There are fortunes that will be made as we transition from oil to more sustainable alternatives.

This transitional period is fundamentally changing the way we do business and these periods of change are extraordinary wealth making opportunities.

It is increasingly evident that we need to find alternatives to fossil fuels and lithium battery technologies offer the unique advantages of low weight and high efficiency.

The Daily Mail of London reports, lithium is, "a wonder metal that fires your phone, iPod and shiny new electric car, it is so clean, it may save the planet."

To meet the impending demand, private industry is receiving an influx of capital investment. International Battery, an Allentown manufacturer of large rechargeable lithium-ion batteries, recently reported that it received a $35 million investment to expand manufacturing.

Today, lithium is where oil was in the mid 1800s. Like oil, its starting off relatively small, and like oil, it will grow exponentially. The growth of lithium stocks will be similar to railroad stocks, airline stocks, and software stocks, all of which experienced meteoric increases as the technology was inculcated into the economy.

Lithium batteries are the best technology we have to respond to the needs of our times. That is why they are powering some of the most popular technologies including mobile devices and electric vehicles.

For the foreseeable future, lithium will be a major source of power for the new energy economy. Because the general public does not yet realize the importance of the metal, lithium is still a bargain, but this will change as investors begin to see the lofty heights to which it will ascend.

Due to the rapidly increasing industrial demand, the growth of lithium related stocks seems unstoppable. Despite the major gains we have seen in gold, silver and other metals, lithium can be expected to outperform them.

Although early investors in oil also made substantial earnings, what makes lithium exceptional is the fact that it provides power without the environmentally destructive consequences of fossil fuels.
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