GE to Build Huge Solar Plant

In a surprising and exciting move, GE announced it will build the world's largest solar panel plant to become "a major player" in the industry. The plant is planning on employing "400 workers and create 600 related jobs." GE is already a huge player in the wind energy industry and with this new purchase, signs point to them becoming a big player in the solar energy business as well. This plan could really expand their company and really help solar energy grow.

As an alternative energy supporter, I am excited about this news. I believe solar energy is a great business and is one that should be invested in. It is one of the largest and fastest growing energy industries in the world. I think GE made a smart decision by giving this plant the go-ahead.  Not only will it create more clean energy, this plant will create a lot more jobs. Not to mention the fact that GE is a very well established company that knows how to make money and stay green. With a name like GE as a major player in the industry, solar energy could continue to rise at an astounding rate.

http://www.nytimes.com/2011/04/07/business/energy-environment/07electric.html?_r=1&ref=solarenergy

Securities Markets

The analysts say that available assets require large investments as industry’s costs are rising on labor and equipment, as well as increased taxes. Upstream growth options for International Oil Companies (IOCs) are becoming limited. Thus, analysts believe that there are major exporting nations who found they have more influence with consuming countries than they did previously, and therefore they are tightening their grip on upstream production.

“Energy security has emerged as a global foreign policy concern. Energy security is no longer just about the availability of supplies at affordable prices, but now includes other issues such as the disruption of supplies, security of demand, supply diversification, buffers against supply shocks, globalization of the entire energy chain, and increased interdependence in the world.” (NetAdvantage)

What is recommended? The IOCs need to adapt to this new competitive vibrant, as the limited resource environment will work against them, such as the drilling available for purchase today may be much harder to find in 20 years. One way to adapt to this new model is to exploit their core skills in size and technology.

If peak oil were a fixed point, analysts’ believe it’s more like a moving target. “As technology improves the pool of recoverable oil increases and therefore the reserve base is continually changing, driven by economics and technology.” (NetAdvantage)

BP Tries to Get Back to Drilling

Just recently the BP oil company has asked US regulators to have permission to start up oil drilling again in the Gulf of Mexico. BP had stopped the drilling of oil since one of their rigs blew up and spilled 4.9 million barrels of oil into the ocean (NY Times). BP is asking for 11 existing drill sites to be continued in July. The agreement is probably going to be reached in the next month. Although they will probably end up drilling in the near future, there will be much higher safety standards. These regulations will help prevent oil spills in the future.

Even though BP made a huge mistake and will probably never recover, I agree with this procedure. I believe it is the right move to let BP get back to what it should be doing. With higher safety regulations the 11 drill sites that are going to be continued will be much safer and will get BP back in business. While some might say it is too early or dangerous, I believe it will be good for the economy and hopefully start to build more trust in the company and the oil business.

http://www.nytimes.com/2011/04/04/business/energy-environment/04bp.html?_r=1&adxnnl=1&ref=earth&adxnnlx=1301897292-7/W2O7AH39fLMjrtJLYk1w

Recession on the Inudstry

The impact of the recession on the energy industry boils down to which part of the energy one is discussing. There are negatives and positives. The recession causes people to have less money in their wallets, thus, it's feasible to presume that people will cut back on traveling by car. The effect of this is less trips to the gas station in an attempt to minimize spending. The less people buying gas, the less money oil companies make. But, as this allows for different sectors of the energy industry to grow. With a growing political movement to end dependence on foreign oil comes a greater emphasis on how America can produce the energy with which it needs. This enables alternative forms of energy to be implemented. Therefore, companies which which desired to go into solar, wind, thermo, or nuclear energy have better chances of receiving funds from the government.

Energy Industry- Finance

In our Finance Lab assignment, we found out how many players, and the top 5 players in the Energy Industry. In the Energy Industry there are 2014 members, and the top 5 players are Exxon Mobil Corp., Petrochina Company Limited, Petroleo Brasileiro SA Petrobras, Royal Dutch Shell and Royal Dutch Shell (PLC). The total sales are approximately $ 53225040030, and the Oil and Gas Refining and marketing total sales is $ 204521750.

Therefore, in general the energy industry is growing, “A surge in oil and gas prices since 2003 enabled international oil companies (IOCs) to report record profits and build up considerable cash. Nevertheless, these are uncertain times for the IOCs. Oil and gas prices plunged in late 2008”. (Net Advantage) The energy sector has been cyclical in nature. However, its costs are rising due to labor and equipment, as well as increased tax and royalty rates. Generally the energy industry is growing due to alternative energy sources such as wind and solar powers. The competitive dynamics between the national oil companies (NOCs) and the IOCs has permanently changed, driven by high oil prices and limited access to upstream resources.

Advances in Solar Energy

Eli Yablonovitch was an employee of Exxon in the late 1970s. After the 1973 oil crisis, Yablonovitch began researching solar energy. His goal was to create more efficient and inexpensive tools for converting solar energy into power. Exxon supported his work until oil prices dropped and, once again, it became the most popular energy source.

Today, solar energy has become a major focus of the energy industry and people are realizing the importance of creating tools such as those Yablonovitch envisioned. Had his work been continuously supported, the U.S. would have made huge strides in alternative energy. However, China has now become the major contributor to the production of solar energy.

Yablonovitch's story demonstrates the importance of supporting alternative energy research. Had his work been supported in the 1970s, the U.S. and the world as a whole would be better equipped to produce and sustain alternative energy sources.

http://blogs.wsj.com/venturecapital/2011/03/14/sun-shines-on-yablonovitchs-research-but-it-took-years/?KEYWORDS=solar+energy

Oil Spill in South Atlantic

 A week ago there was an oil spill in the South Atlantic Ocean. The spill crashed into a very small island about 2800 km from the nearest large land mass, South Africa (NY Times). "The ship has broken in half and an additional 800 tons of fuel oil is believed to be leaking from the front section of the hull" (NY Times). The worst part of this story was that the island contains endangered penguins. This oil spill is threatening the life of the species.

While this oil spill is obviously nothing like the BP spill, it does raise more concerns about the safety of oil drilling and oil transportation. This oil spill will most likely exterminate the penguin species in the area. While this is not a huge issue, it is just another example of how dangerous and destructive these oil spills can be. This is why more money should spent on alternative energy. Alternative energy is much less dangerous and will not decimate species.

http://www.nytimes.com/2011/03/23/science/earth/23spill.html?_r=1&ref=earth

China Wins the Wind Energy Race

The Wall Street Journal reported in January 2011, that China had increased their capacity for wind energy, beating the United States and the rest of the world in the process. As countries compete to create a green future, China became victorious in the wind energy round because of their dedication to doing so. Experts claim that a major reason behind China's success is the consistent policy support efforts to create alternative energy receives. Conversely, the United States is said to have fallen behind in renewable energy progress because of the lack of congressional support the cause garners.

This article highlights the universality of the energy industry. All parts of the world are being affected by our lack of renewable and alternative energy resources. As such, many are searching for new ways to create and sustain power. The article also highlights how the energy industry relates to all sectors of the country's infrastructure. In this example, the importance of politics on the industry is demonstrated. Without the support of world leaders, environmental awareness cannot be engrained into our global culture. In my opinion, more emphasis should be placed on supporting a sustainable and safe industry because it will affect the world as a whole.

http://blogs.wsj.com/chinarealtime/2011/01/25/us-china-who-will-sail-ahead-in-wind-power-race/?KEYWORDS=Wind+energy

Nuclear Power Debate

As Japan continues to recover from the devastating earthquake, the issue of nuclear power and radiation is still a huge issue. There are now four nuclear power plants that may have leaked radioactive material into the air. Obviously the Japanese government is doing all it can to prevent more leakage and more radiation. While this leakage is being taking care of, the nuclear energy industry is taking a hit. Many people are questioning the industry and it's safety.

In a story on NPR a couple of days ago, several of experts on nuclear power discussed the issue in Japan. Several experts still support nuclear energy even after this disaster. While the issue in Japan is troubling, they believe nuclear power is still the future of alternative energy. Gwyneth Cravens, an expert on nuclear power, brought up an interesting point saying these plants are the oldest on the market today. Nuclear power is continuing to evolve and the safety features continue to expand. Ms. Cravens, and other experts on the show believe the newer, safer plants could have withstood the earthquake. While I believe the newer plants are safer, there are still old plants all over the world. In the show they mentioned one in California with little protection from the ocean, making it very susceptible to a tsunami. If nuclear power is going to be successful, there needs to be an upgrade to the protection of these plants.

http://www.npr.org/2011/03/15/134568574/assessing-the-future-of-nuclear-power-in-the-u-s

"On Our Radar: Wind and Solar Stocks Surge on Nuclear Fears"

This blog post discussed one company's surge in stock in response to the nuclear power plant dilemma in Japan. The German solar-panel manufacturer Solarworld has reported a 32% surge in stock. To immediate impacts which the author goes into detail about are, (1) nuclear lobbyist will have a more difficult time lobbying for the nuclear energy, (2)a South Texas power plant, which was supposed to undergo a $10 billion dollar expansion, will probably have its funds pulled.

While this is not a scholarly article, it does highlight a growing trend within the energy industry. It shows that solar and wind power investment is rising, and will only increase quicker due to the incident with Japan's nuclear power plant. This event exemplifies the stark contrasts between nuclear energy and solar/wind energy. One is significantly safer and cleaner, while the other can be disastrous.


http://green.blogs.nytimes.com/2011/03/15/on-our-radar-wind-and-solar-stocks-surge-on-nuclear-fears/?scp=5&sq=solar%20energy&st=cse

Differentiation

During the height of the recession, gasoline brands were hammered when it came to consumer perception scores. Shell's reasonable prices, travel-ready consumers, and the marketing of products and services have lifted most gasoline brands back on solid footing. "The "triple crown" winner is Shell Oil, with a quality score of 23.16, satisfaction score of 17.93 and recommend score of 16.29"

(http://www.brandweek.com/bw/content_display/news-and-features/direct/e3i5aa07fe16321f4391e5516f14c58cb5a )

I believe that marketing is a huge aspect of any company. What Shell did achieve was bridge the gap between buyers and the seller in their market. I believe that marketing is a huge aspect of any company. Shell defined the basic need of the consumer, (which was prices during the recession) and took it into consideration.

Japan Earthquake Shows Weaknesses of Nuclear Energy

The earthquake in Japan has been the main topic in the news the last couple of days. The destruction and devastation has been massive throughout the country. But the news continues to get worse. There are nuclear power plants in the Fukushima Daiichi Nuclear Power Station that are exploding and leaking radioactive material. The tsunami may have caused the failure of the cooling systems in the nuclear power plants. This failure then lead to the presumed leakage. Not only is this a pressing matter for thousands of Japanese who worry about their safety, this failure puts into question the stability of nuclear energy.

"Japan is one of the world’s top consumers of nuclear energy. The country’s 17 nuclear plants — boasting 55 reactors — have provided about 30 percent of its electricity needs." So this issue is going to create a lot of problems in the Japanese energy industry. While the Japanese depend on their nuclear energy, this natural disaster has showed that nuclear power is dangerous. Something needs to be done to make this energy safer. The leaking of radioactive material is a very serious issue. Something needs to be done, whether more safety precautions, or a slow shut down of nuclear energy all together.

http://www.nytimes.com/2011/03/13/world/asia/13nuclear-industry.html?_r=2&ref=global-home

Informational Interview- Shell

For my informational interview, I interviewed Mr. Youssef Abu- Youssef, a Treasury Supervisor at Shell. His main duties are managing group cash and cash forecasting. Abu- Youssef graduated from The Faculty of Commerce, in Cairo, with an undergraduate degree in commerce. Abu- Youssef stated that all kind of jobs are offered at Shell, including core jobs and supporting function jobs. However there are specific skills sets Shell looks for in potential candidates. These skills include analytical skills, good personal and communication skills and good performers across all educational levels. Abu-Youssef acknowledged that at Shell, the demand of all jobs is subject to market conditions. You can see more recruitment in some geographical areas where there is more expansion and therefore there is more need for physical and human capital. He said, “Last year, it has shown stable recruitment trend. However, with more recruitment in research and development function, the industry has more focus on meeting long-term growth plans and long-term future supply of current and new energy products.”

The employment trend Abu-Youssef perceives in the energy industry over the next few years is administrative support functions. He mentioned that administrative and support functions are being outsourced by most companies in order to be more cost efficient and gain competitive edge. Companies in the energy industry differentiate themselves by focusing on certain business lines in which they can compete, whether upstream (exploration) or downstream (lubes and fuel). “They are also focusing on research and development, hoping to find better energy solutions and holding new patents,” Abu- Youssef noted.

Informational Interview Description

I spoke with Matthew Johnson, a Policy Associate in the Energy and Climate Program at the Environmental and Energy Study Institute, based in Washington, D.C. The EESI is a non-profit organization dedicated to promoting policy solutions for a cleaner, more sustainable Earth.

Mr. Johnson spoke about the facets of the energy industry that he feels will receive the most attention throughout the next fiscal year. These areas are: the energy used within buildings and industries, vehicular energy, and solar energy. This is in large part do to Presidents Obama’s requested budget for the Department of Energy. Within the department, Obama has proposed an increase in funding for biomass, solar, geothermal, and wind energies. He has proposed a cut in water energy. The attention that will be paid solar energy is especially important because experts say solar energy prices can be drastically reduced. If the United States does not succeed in doing so first, another country will.

Vehicular energy is also very significant. The Department of Energy is dedicated to putting one million electric cars on the road by 2015. With this goal in motion, and President Obama’s budget allocations, the automotive industry will be a major focus of the energy industry in the coming years.

Mr. Johnson also explained how individual states are implementing non-profit programs created to save money by finding innovative ways to save energy. One such program is LoanSTAR in Texas. The efforts made by LoanSTAR and similar programs are helping to rebuild the national economy. They are also creating jobs for Americans by working with the American Recovery and Reinvestment Act.

Given Mr. Johnson's information, I think we should begin to focus more heavily on the automotive industry, as well as companies who work largely with biomass, solar, geothermal, and wind energies.

Solar Projects in California Dangerous?

In Southern California this past week there have been much opposition to plans for new solar plants to be constructed. As much as "five solar thermal projects" are facing opposition says the New York Times. While these projects would "power more than two million homes, create thousands of construction jobs and help the state meet aggressive renewable energy mandates," the opposition is worried about the wild life living in these areas. These solar panels would be built "in fragile landscapes and are home to desert tortoises, bighorn sheep and other protected flora and fauna." This construction would destroy their nature habitat, probably killing most.

While I am a big supporter of solar energy, this construction seems to be the wrong idea. We would be destroying a huge ecosystem in the protected landscape of Southern California. While it is always good to build new solar plants to generate homes and provide jobs, putting these five solar plants in would do more harm then good. I believe the regulators need to find a new place to put these plants so they do not ruin the animals habitat. Hopefully they can because these solar plants would be very beneficial to the state.

http://www.nytimes.com/2011/02/24/business/energy-environment/24solar.html?_r=1&ref=earth

Jack Welch- General Electric

“Jack Welch grew to fame in the business world through his management success and skills during his many years at General Electric. Welch turned the struggling slow moving giant of a company into a dynamic growth company revered by many. During his 20 years of leadership at General Electric (GE) Welch increased the value of the company from $13 billion to several hundred billion.” (http://www.woopidoo.com/biography/jack-welch.htm)

Jack Welch is known for his no nonsense leadership style. His leadership gave him a reputation of being hard, even ruthless, but also fair when making business decisions. In his management style he did not have time for bureaucracy or a system of government. If managers didn't change they were replaced with someone that could change. He used his code of ethics to run his business. Managers were given free period in office as long as they followed the GE (General Electric) ethic of constant change and were determined to do better. I believe that his style of management and his leadership made him strive and made his business grow rapidly. With the right management style, I believe that many managers and entrepreneurs can shine and excel.

“General Electric saw great growth and expansion under Jack Welch's leadership. Through streamlining operations, acquiring new businesses, and ensuring that each business under the GE umbrella was one of the best in its field the company was able expand dramatically from 1981 to 2001.” (http://www.woopidoo.com/biography/jack-welch.htm)

"Obama’s Shout-Out for Energy"

This article further proves to extent to which Pres. Obama and his staff (Dr. Chu) are attempting to distribute more money to the energy movement. In fact, the author states that Obama's new budget proposal has increased the spending for the Department of Energy by 3 billion dollars. The administration is focusing on wind, solar, geothermal, and biomass energy. Furthermore, the proposed budget asks for more funding of energy innovation hubs. According to Secretary Chu, these small labs are the equivalent to the Apollo Project. Dr. Chu believes that in these labs the leading innovations will take place for energy, his only concern is that in the last proposed budget he asked for 6 labs, but Congress only agreed to 3. Thus, he is attempting to increase the number of labs.

I am very proud to see that the administration is sticking to their word and really pushing for energy development. Interestingly enough, Yucca Mountain was not mentioned within the proposal. But what it did mention was a push to find new ways of disposing of waste - one such method was to decrease the half-life. A problem I see is that this is the type of news which doesn't get coverage. I doubt that a majority of Americans know to what extent Obama is pushing for energy development. So if Congress doesn't approve it then Americans are only going to see that "Obama failed because he did not do what he said he was going to do during the State of the Union Address about energy" when in fact, it is Congress who is hindering the President's actions.

http://green.blogs.nytimes.com/2011/02/14/obamas-shout-out-for-energy/?scp=10&sq=energy&st=cse

RecycleMania

American University has recently become involved in a competition called, "RecycleMania." It runs from February 6th to April 2nd and is meant to encourage a more green-friendly campus. I think the fact that tournaments such as these exist suggest a shift in the American mindset towards being ecologically friendly. This shift, in turn, represents a growing opportunity for the energy industry to promote green products and practices. Not only would doing so protect the environment, but it would also increase an organization's dedication to CSR, which would result in higher profits.

Resolutions to Oil Companies

A couple of days ago I read an article in the New York Times about how there are "at least 66 resolutions relating to climate and environmental issues aimed at more than 40 oil, coal and electric power companies, have been filed in the 2011 proxy season." These resolutions have most likely been brought up because of the BP oil spill. The spill has spurred many reforms in the oil business with many new reforms to safety regulations. These regulations are helping to make these companies safer so another BP spill does not happen.

These moves by the shareholders are very influential in how oil companies run their businesses. "The resolutions for 2011 are new highs for such resolutions aimed at the energy sector, and a 50 percent increase over the number filed last year." This rise is meteoric because of the BP oil spill and it may slow down production, but they are necessary. I think this is a good move by the shareholders because obviously there needs to be action when catastrophes like the BP oil spill happen. This step by the shareholders is an example of how ethics are related to business. BP oil made a mistake and the shareholders made the ethical decision and made oil companies change so they could be safer even if it means slowing down production.


http://www.nytimes.com/2011/02/19/business/energy-environment/19proxy.html?ref=earth

Exxon Mobil and XTO Energy Inc?

Oil and gas giant Exxon Mobil Corp. has completed the acquisition of XTO Energy Inc. and created a new organization to focus on the production of alternative natural gas and oil resources. The all-stock transaction, valued at $41 billion. In this acquisition, each common share of XTO had been converted into the right to receive 0.7098 shares of ExxonMobil common stock, with cash to be paid in instead of any fractional shares.

I believe this new organization will create opportunity for more jobs and investment in the production of “clean” natural gas both in the United States, and around the world.

Now Exxon is struggling to find more oil. “Exxon said in the report that it more than made up for the shortfall in oil by stocking up on natural gas, mostly through its acquisition of XTO Energy Inc. last year.” Exxon now has more natural gas in reserve for future production than oil.

Company spokesman Alan Jeffers says the company's "focus is on resources and projects that add shareholder value." That can be accomplished by finding oil, he says, but value can also be delivered through a corporate acquisition.

Exxon is the largest U.S. Company, and it has done so by market capitalization. But as we know, new technologies have helped vast resources of natural gas, however the growing demand from emerging economies raised oil prices up strongly.

If I were an investor, I would be wondering if Exxon bought XTO last year just to cover the level of their substitute problem.

http://online.wsj.com/article/SB10001424052748704409004576146362117313094.html?KEYWORDS=emerging+oil+companies

Big Oil Company in Gulf Being Sold

In a new development in the oil company world, Seahawk Drilling Inc, is being bought out by another large oil company called Hercules Offshore Inc. Seahawk Drilling, in order to avoid bankruptcy, sold its assets to it's competition Hercules Offshore Inc. The deal is worth approximately $100 million. Seahawk Drilling however did not go out without some words for President Obama. They were critical of Obama and blamed him for "a crippling regulatory environment in the aftermath of the BP PLC oil spill."

This article brings up the issue of the oil regulations after the BP spill. Most oil companies are losing revenue because the new regulations make the drilling process longer and more expensive. President Obama set up these regulations because of the catastrophic BP spill. While they are supposedly making the process safer, are they worth it? Seahawk Drilling argues its not worth it, but that might be the bankruptcy talking. Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, said "We know the pace is not as fast as some would like, and we regret the impact the permitting process has had on companies and individuals." This is a hot topic issue that we have to keep our eyes on in the future.


http://online.wsj.com/article/SB10001424052748704329104576138851833497500.html?mod=WSJ_Energy_leftHeadlines#printMode

Supply and Demand

The demand for clean energy has surged within the passing years. More and more countries are beginning to invest more of their GDP in transitioning to clean energy. But it seems as though the supply, or infrastructure, is not adequate enough to fulfill the demand. I say this based off of two things. President Obama very much emphasized his interest in clean energy during his speech at the State of the Union. Now he has promised new tax incentives, government investment, and revamped regulations for energy efficiency. I don't think President Obama would be so fired up about clean energy if the supply was meeting the demand. The President is urging Americans to invest in clean energy, thus there is demand for it from his perspective.

http://thecaucus.blogs.nytimes.com/2011/02/03/in-pa-obama-pushes-investment-in-clean-energy/?scp=3&sq=energy&st=cse

Energy Efficiency on College Campuses

More and more schools today are going green to do their part in helping to create a healthier planet. President Obama's speech at Penn State University last week followed up on this growing trend. His speech to Penn State students was mostly a follow up to his State of the Union Address the week before. The main focus of his speech was making more and more buildings greener and energy saving. Not only would this process of going green help the earth, but apparently it would help the economy. Obama states that these greener buildings would save "businesses up to $40 billion dollars a year in utility bills."

While I am not totally convinced that this plan will save company's $40 billion dollars. I do believe that greener buildings throughout the country, especially schools, will benefit the country over time. Greener buildings will help the environment and over time save businesses money. Sounds like a good investment to me.

Here is the article on his speech...

http://www.cnn.com/2011/POLITICS/02/03/obama.energy/index.html?iref=allsearch

Oil Prices Rising in Egypt

Gasoline prices are likely to crawl higher as anti-government protests continue in Egypt.

“The national average for a gallon of regular gasoline was $3.124 on Friday, according to AAA, Wright Express and the Oil Price Information Service. That's up 2.4 cents in the past week. Analysts expect prices to stay at $3 a gallon or higher — perhaps rising as much as 8 cents over the next two weeks — until the conflict in Egypt is resolved and tensions ease in neighboring countries.” (http://news.yahoo.com/s/ap/us_oil_prices)

Oil remains the biggest trade, and perhaps the biggest risk for traders, as unrest in Egypt persists. Countries, such ad the U.S and especially Europe as a whole are worried about the markets and any disruption to the Suez Canal or Suez-Mediterranean Pipeline; Egypt's key routes for oil transit from the Red Sea to the Mediterranean. A disruption in supply may be a major method for a big move in the price of oil.

So what will happen in the future? Speculations? Prediction markets? This is a speculative market designed so that prices can be interpreted as probabilities and used for prediction. Will the disruption in supply in Egypt, affect the prices of oil? Uncertainty about the spread of unrest could send oil prices significantly higher early this week.

(http://www.cbsnews.com/stories/2011/01/31/ap/business/main7302244.shtml)

Increased Demand, Decreased Supply in Energy Market

According to Ian Talley of the Wall Street Journal, the International Monetary Fund has said that international markets need to slow the growth of their economies to prevent inflations in both food and energy prices. If these inflations are not prevented, the overall repair of the global economy could be threatened. Countries such as China, India, and Brazil are becoming high in demand for both food and energy, but lack of supply in developed countries is resulting in economic troubles.

Many people blame these troubles on the U.S. Federal Reserve because of its recent policy to keep rates low so as to ultimately receive more money from "emerging markets" (Talley). This approach, known as quantitative easing, is one of the Fed's attempts to help repair the economy. The problem is that supply levels cannot keep up with demand, especially in the energy sector.

To combat this issue, the International Monetary Fund has teamed with the Group of 20 largest nations to suggest global guidelines for directing capital flow. With greater investments in the food and energy markets, the global economy's overall recovery should improve.

Source:

Talley, Ian. "IMF Warns on Inflation, Growth Risks." The Wall Street Journal 5 Feb. 2011. The Wall Street Journal Digital Network. Web. 6 Feb. 2011.

CSR: GE

Recently I read an article entitled as "CSR Doesn't Pay" written by David Vogel, a professor from University of California's Haas School of Business. In this article he wrote about CSR and how executive should behave because of it. That is to say, there are equal companies who are successful, and who are not successful, despite having slow/high CSR, so executives should strive to be more CSR but should not expect to become more successful than their competitors and should not expect there less responsible competitors to be punished. One reason which is attributed to this trend is simply the customers who care about CSR are greatly outweighed by the ones who don't.

I believe this is true. The way I see it, the biggest change will only occur when a significant portion of GE's customer push Congress for better CSR rewards and harsher punishments for companies which do not meet the minimum standard.

The reason I chose this article is because he gave a few examples of companies with high CSR and low. On such company was GE which is praised for having environmentally safe products and better energy efficient products as well.

http://www.forbes.com/2008/10/16/csr-doesnt-pay-lead-corprespons08-cx_dv_1016vogel.html

GE's values and actions are as follows:
Passionate
Curious
Resourceful
Accountable
Teamwork
Committed
Open
Energizing

Imagine

Build

Solve

Lead

I think who ever created these values and actions are intelligent. They chose commendable words that makes GE appear like an incredible company. I see the last four words as the most important because they seem to inspire the most innovation. Enstien once said that innovation and imagination is more important than knowledge. Thus I attribute these values to America since we are the leading innovators of the world. So more or less, when GE emphasizes on these values I feel a strong connection to the company, not only because the values and actions are very real, but because they also represent how I want America to be represented.

The EPA Finally Accepts Biomass!!

An editorial article caught my eye the other day in the Boston Globe. The article was about biomass and how the EPA (The Environmental Protection Agency) concluded that it was the best way to "curb Greenhouse gases." This is the first time that the EPA has regarded biomass as the leading source to deal with forest management without creating greenhouse gases. While this decision won't make a huge difference to the climate in the short term, over time this will benefit the earth. While some say biomass isn't the perfect alternative energy, with the EPA approving it, biomass has taken a step in the right direction.

Finally the EPA has let biomass become a larger contributor in the energy world. The EPA has realized that biomass can contribute to the reduction of greenhouse gases. I give the EPA praise because they made the right decision by approving the new biomass policy.


http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2011/01/26/a_win_for_environment_and_for_energy/

Obama's Goal for Clean Energy

In his State of the Union address, President Obama spoke of the importance of utilizing alternative clean energy sources. Reports Ryan Tracy of The Wall Street Journal, Obama has set the goal that by 2035, 80% of America's energy will be from clean sources. Part of the difficulty surrounding this goal is the extreme amount of funds needed to do energy research and make the shift from the country's current energy system to a new one. As such, Obama will have to appeal to members of Congress and impress upon them the significance of using clean energy. If he succeeds, a large portion of the federal government's budget will be dedicated to his goal.

Apart from helping the environment, one of the benefits of further developing America's use of clean energy is the subsequent strengthening of the energy market that will occur. By creating a competitive business market for energy, Obama believes America will "win the future by being the best place on Earth to do business." This statement demonstrates how vital business and the economy are to the wellbeing and power of the United States.

Source:

Tracy, Ryan. "Obama Renews Clean Energy Push." The Wall Street Journal 29 Jan. 2011. The Wall Street Journal Digital Network. Web. 30 Jan. 2011.

Exxon Mobil’s ethical statement:

Exxon Mobil’s, ethical statement:

“We believe that an unwavering commitment to high ethical standards and business integrity is critical to our competitive advantage and shareholder value. We expect our employees to integrate our commitment to ethical behavior into their activities and decision-making, including complying with all applicable laws and recording all transactions accurately in our books and records. Employees are required to annually confirm they have read the policies set forth in our Standards of Business Conduct. We provide detailed training on our ethics policy to all employees every four years. Regular training is provided on international trade laws applicable to our business, including the anti-trust and competition laws of the United States and other countries where we do business.” – (http://www.exxonmobil.com/Corporate/)

Reading their ethical statement, Exxon symbolizes commitment and high ethical standards towards both their activities and their decision-making. By imposing their employees to read the “Standards of Business Conduct”, it provides the sense that Exxon Mobil is very serious about their ethical behavior, and following the laws in all their transactions. Exxon Mobil also states that they are a company that is trying to find “better”, “safer” and “cleaner ways” for them to deliver the energy needed in the world. By using these words, Exxon Mobil is represented as an “environmentally friendly” company that is trying to find new habits and customs to offer energy.

Investment in Clean Energy Grew Substantially in 2010

According to Bloomberg New Energy Finance the world invested more than ever before in clean energy. From China to Germany to the United States of America; the world is ever increasing its effort to transition into clean energy. In 2009, the total investment in clean energy was 186.5 billion dollars. This figure (2009) is more than triple the amount of 2004 (51.7 billion). Well if you think that's impressive, in 2010, the world investment increased to $243 billion! Along with the article, the author provides his audience with an image which displays the 'VC-PE Clean Energy Investment by Sector for 2010.' The image exhibits that solar and wind power were the most heavily invested in.

I don't see how anyone could possibly fine anything wrong with this article or the results which Bloomberg New Energy Finance posted. I'm ecstatic that not only America is taking the transition into clean energy seriously. Many European countries and China are pushing for clean energy was well. What seems to be an incredibly well year for China only seems to get better because Bloomberg reports that China spent the most out of any other country on clean energy - roughly 51.1 billion dollars. Aside from a few corporations and programs losing funds, I find that 2010 was a good year for clean energy. I hope that we keep exponentially increasing the amount of money we spend on energy every year. In terms of ethics, I imagine some people see it as our moral responsibility to Earth to invest in clean energy. In a way, it's our way of returning an invaluable favor which Earth is doing for us. That is to say our existence is nearly impossible to be without Earth, thus it's our obligation to repay the favor, so to speak.

Thank you for reading and please leave a comment.

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Elvis Amaya

http://blogs.forbes.com/williampentland/2011/01/22/clean-energy-investment-reached-record-high-in-2010/

Why are we still investing in coal?

I was reading an article today in the New York Times about how the Midwest United States is still heavily investing in coal. Coal is a major energy source that contributes to major greenhouse gases and pollution. All over the coasts of America, coal production has diminished, yet in the Midwest, the coal industry is booming. According to the article St. Louis just purchased a $4 billion dollar coal plant. Why are we spending billions of dollars on an industry that is declining and hurts the environment? 

I believe these types of purchases are unnecessary. Although these huge plants create jobs and economic growth, solar plants and wind turbine plants also create jobs and spur economic growth over time. All the while these renewable energy sources do not harm the earth! And it's not like in the Midwest the sun doesn't shine and the wind doesn't blow. These coal companies and investors need to realize the ethical business choice is to leave coal behind. It hurts the environment! We need to move on from these pollutant energy sources.

If you are interested, here is the article I was referencing...

http://www.nytimes.com/2010/11/17/business/energy-environment/17COAL.html?ref=coal

Key ethical issues the energy industry faces

Key ethical issues the energy industry faces

What is ethics? Ethics is a set of moral principles especially ones relating to a specified group, field or form of conduct. When you apply ethics with the energy industry, things can get very messy. The oil industry is very complicated in general- there isn’t an “environmentally friendly oil company”. However that doesn’t mean that the oil companies can play around with ethics to maximize profits, there are sets of rules they need to follow.

Exxon Mobil is the biggest company in the world. “Being so huge, it has been estimated that Exxon-Mobil is responsible for 5% of world co2 emissions, and yet they are the only oil company that doesn’t recognize climate change.” (http://makewealthhistory.org/2008/03/10/which-is-the-most-ethical-oil-company/ ). The company is facing questions about its clearness on climate change issues coming from a new report that says the company is still funding “climate change denial” groups, a practice that was reported to have stopped.

Exxon Mobil benefits from economic conditions that hurt most American’s struggling to fill up their tanks. 15 environmental and consumer rights organizations are asking Exxon to provide more resources to renewable energy. Exxon responded that it reinvest profits into clean energy, and “reduce global greenhouse gas emissions”. However, Russ Roberts, Exxon spokesman said, “the company believes that pursuing wind and solar power production, as Expose Exxon has put forward, is "not economic to do." (http://www.ethicsworld.org/corporategovernance/corporatereputation.php)

The Expansion of Canadian Oil and the Ethics Behind it

Enbridge Inc. is Canada's major oil distributor and the largest single supplier of oil to the United States. It was recently released that Enbridge would begin supplying oil to China as well. The company's decision to do so creates competition among countries vying for Canadian oil. This competition should result in an increase in profits for Enbridge because the company will be able to name its own prices.

The concept of business ethics relates to this development because of the ways in which the crude oil will be transported to China. Using either the Northern Gateway pipeline or oil tankers presents a risk of spillage. The likelihood of such an event is higher because of the distance between Canada and China. As a result, environmental groups are opposed to the expansion of Enbridge Inc. The ethical question then becomes whether Enbridge should be more concerned about making money or protecting the environment.