By Paul Eccleston
Last Updated: 6:01pm BST 08/07/2008
The cost of flights throughout Europe are to rise after MEPS voted to impose pollution limits on the airline industry.
For the first time it will bring airlines within Europe’s CO2 Emissions Trading Scheme (ETS) aimed at cutting greenhouse gases.
Carbon trading could add to the cost of holiday flights
The European Commission said the decision was a big step in helping meet the EU’s legal obligation under the Kyoto Climate Agreement to cut its CO2 emissions by 8% from 1990 levels by 2012. But it acknowledged this would mean a rise in fares.
"Fully passing on costs to customers would mean that by 2020 airline tickets for an average return journey could increase by 4.60 euros (£3.65) to 39.6 euros (£31.4) depending on the journey length," said the Commission’s impact assessment report on the plan.
But Michael O’Leary boss of Europe’s biggest budget airline Ryanair said it would add up to £39 to the cost of an airline ticket without providing any environmental benefits.
The move also infuriated US officials and US-based airlines who said the EU had no right to force airlines using its airspace to abide by the ETS rules. From January 1 2012 all airlines flying in and out of European Union countries or flying within the EU, will be subject to CO2 limits.
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The biggest industrial polluters, mainly the big power companies, are already part of the ETS under which they are allocated emissions limits set for their sector. If they exceed their CO2 limit they have to buy extra permits to compensate for the pollution they cause. If they keep below their limit they are allowed to sell on their unused allowance. But until now aviation has been kept out of the scheme.
The industry accounts for only an estimated three per cent of total emissions they have grown by almost 90 per cent since 1990 and environmental groups have been pressing for them to be included. Aircraft emissions will be capped at 97% of their average 2004-2006 level, decreasing to 95% from 2013, subject to review.
Airlines will receive 85% of their emission allowances for free in 2012, but the percentage could be reduced from 2013, again, subject to review closer to the time.
The remaining 15% of allowances will be auctioned. Some flights will be exempt from pollution limits - light aircraft (take-off weight under 5.7 tonnes); emergency service, Customs and military flights; UN-mandated humanitarian flights; research flights; and all flights run by small airline companies producing "low" emissions (less than 10,000 tonnes of CO2 a year).
But official royal and Government flights will be part of the scheme: the agreement makes clear that pollution limits will apply equally to air travel "performed exclusively for the transport, on official mission, of a reigning monarch and immediate family, heads of state, heads of government and government ministers, of an EU member state." Small jets favoured by businessmen and rocks stars are alos included.
MEPs voted 640 to 30 for the scheme, which also includes none-EU airlines but it will have to be ratified by the 27 EU member states.
The European Regions Airline Association (ERA) said the cost of emissions trading for European airlines would be £5.6B in the first two years of the scheme and £72B over the 10 years to 2022.
"This legislation will impose massive additional costs on a transport industry that already has to bear unprecedented fuel costs." said ERA director general Mike Ambrose.
Ryanair boss Michael O’Leary, a bitter critic of environmental policies affecting the airline industry, said: "It is extraordinary that a bunch of MEPs who swan around between Strasbourg and Brussels, enjoy huge expenses and flight benefits, would vote to increase taxation on Europe’s consumers in a measure which won’t have any effect at all on the environment, but will further damage European airlines at a time when oil is already 140 dollars a barrel.
"These clowns in the European Parliament seem determined to destroy the European airline industry with these discriminatory taxation penalties. When aviation accounts for less than 2% of Europe’s Co2 emissions, and when airlines like Ryanair have invested heavily in new aircraft to reduce our emissions per passenger by 50%, there is no justification for this tax theft by the European Union."
The move was welcomed by the environment lobby but Friends of the Earth said emissions at 97% of 2004-2006 levels in 2012 would still leave CO2 output from aircraft 90% higher than 1990 levels while EU climate change commitments required an actual cut of 8% on 1990 levels. And giving away 85% of the emissions trading “permits” for free would mean unjustified windfall profits for the airlines.
Liberal Democrat MEP and environment spokesman Chris Davies said MEPs had responded to the "spectacular" pace of air traffic growth, adding: "Air travel across Europe has never been so cheap as it is now, but the real price will be paid by future generations if we don’t apply pressure to curb the rise in carbon emissions."
Wednesday, 9 July 2008
Gordon Brown: Motorists should switch to electric cars and learn 'eco-driving'
Last Updated: 12:01am BST 08/07/2008
British motorists should exchange their petrol-driven cars for electric or hybrid vehicles and learn "eco-driving" techniques to cut CO2 emissions dramatically, according to Gordon Brown.
By 2020, the Prime Minister wants all new cars sold in Britain to be electric or hybrid vehicles producing less than 100 grams of carbon dioxide per kilometre. At the moment, the worst gas-guzzlers produce up to 500 grams per kilometre.
From September, all new drivers will have to pass practical "green" driving tests as part of a Government push to improve fuel efficiency for cars by 60 per cent over the next decade.
By advising motorists on their choice of car and driving style, Mr Brown left himself open to accusations of interfering in yet another area of people's lives just days after his controversial comments urging Britons not to waste food.
He also risked the wrath of beleaguered drivers by suggesting that higher fuel and car tax prices may actually benefit motorists.
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Motoring organisations hit back by accusing Mr Brown of being narrow-minded in suggesting everyone should drive electric or hybrid cars, as many new diesel cars are actually more fuel-efficient than hybrids when driven on longer journeys.
Mr Brown, speaking at the G8 summit in Hokkaido, Japan, made it clear that he believes the shift to electric vehicles is essential in tackling climate change, and he is prepared to impose yet more tax on petrol cars to persuade people to give them up.
Nine of the best green cars
He said: "The issue is can we move quickly towards the adoption of these new technologies? The general view is that we can move quickly. This is not the odd vehicle that would be a hybrid but vehicles that are family cars.
"The popularisation of this new technology in the same way as we moved from old diesel to low-sulphur diesel. These things are happening quickly and we want to incentivise them happening in Britain.
"I genuinely think that this new technology – hybrids and so on – [can be] adopted widely to the benefit of the ordinary family, to change the family car and make it far more energy efficient. And over time to make it cheaper to use energy.
"I think a combination of car licence [road tax] and petrol costs could – if we could develop the new technology – be to the benefit of car drivers. I see there being incentives to people to adopt hybrid cars. Cars that the ordinary family…can think of buying."
The Government is planning to increase road tax significantly for many popular family saloons from next year and the Prime Minister said he favoured taxing drivers of petrol cars at a higher level than their electric replacements. Sarah Brown, the Prime Minister's wife, was driven in a green car to promote the campaign to encourage their widespread use.
Mr Brown and other world leaders meeting at the G8 summit signed a new pledge to cut carbon dioxide emissions in half by 2050. To meet this target, the world leaders unveiled 25 recommendations to boost energy efficiency.
A spokesman for the AA said that Mr Brown's aim to have all new cars producing less than 100g/km of CO2 by 2020 was a "noble ambition" but was unrealistic, and pointed out that many manufacturers were achieving lower CO2 emissions with ultra-efficient diesel cars than with hybrid technology.
The Society of Motor Manufacturers and Traders pointed out that while electric and hybrid cars are suitable for short journeys in cities, their fuel consumption rockets on longer journeys, where diesel and petrol cars produce less pollution. "We would caution against specifying one particular technology as a way of reducing carbon," said a spokesman.
"Even the government's own report – the King review of low-carbon cars – states that 'different fuels suit different uses'."
And Nigel Humphries, of the Association of British Drivers, said Mr Brown was "talking nonsense" as electric and hybrid cars "are only any use in cities, where the government doesn't want us to use cars anyway".
The Government also announced that it would soon begin educating motorists on "eco-driving techniques", saving fuel by driving more smoothly rather than accelerating quickly and braking sharply. From September, new motorists will be tested on whether they can drive in an environmentally-friendly way.
Ministers have also pledged to implement a "fuel-efficiency tyre programme". According to a Government briefing note this will involve new "resistance standards" for tyres and "on-board tyre pressure monitors" in a further attempt to improve fuel efficiency. Under-inflated tyres can increase fuel consumption of cars by up to three per cent.
Other measures for cutting emissions will include new standards for electrical items to reduce energy use when they are on "standby" and attempts to increase home insulation.
The G8 leaders believe that global energy use could be cut by twenty per cent if the energy efficiency recommendations are introduced.
Mr Brown said: "If successfully implemented they would reduce emissions by an amount equivalent to the emissions that come from the US at the moment."
It emerged yesterday that Mr Brown is facing a potential Labour revolt over his climate change policy.
More than 80 MPs are said to be backing an amendment to the Government’s Climate Change Bill to make it more radical.
The Bill calls for a legally-enforceable 60 per cent cut in UK carbon dioxide emissions by 2050. The MPs say that should be raised to 80 percent.
The amendment Bill is not likely to be debated until after the summer recess, and the Tories may abstain, sparing Mr Brown a defeat.
British motorists should exchange their petrol-driven cars for electric or hybrid vehicles and learn "eco-driving" techniques to cut CO2 emissions dramatically, according to Gordon Brown.
By 2020, the Prime Minister wants all new cars sold in Britain to be electric or hybrid vehicles producing less than 100 grams of carbon dioxide per kilometre. At the moment, the worst gas-guzzlers produce up to 500 grams per kilometre.
From September, all new drivers will have to pass practical "green" driving tests as part of a Government push to improve fuel efficiency for cars by 60 per cent over the next decade.
By advising motorists on their choice of car and driving style, Mr Brown left himself open to accusations of interfering in yet another area of people's lives just days after his controversial comments urging Britons not to waste food.
He also risked the wrath of beleaguered drivers by suggesting that higher fuel and car tax prices may actually benefit motorists.
advertisement
Motoring organisations hit back by accusing Mr Brown of being narrow-minded in suggesting everyone should drive electric or hybrid cars, as many new diesel cars are actually more fuel-efficient than hybrids when driven on longer journeys.
Mr Brown, speaking at the G8 summit in Hokkaido, Japan, made it clear that he believes the shift to electric vehicles is essential in tackling climate change, and he is prepared to impose yet more tax on petrol cars to persuade people to give them up.
Nine of the best green cars
He said: "The issue is can we move quickly towards the adoption of these new technologies? The general view is that we can move quickly. This is not the odd vehicle that would be a hybrid but vehicles that are family cars.
"The popularisation of this new technology in the same way as we moved from old diesel to low-sulphur diesel. These things are happening quickly and we want to incentivise them happening in Britain.
"I genuinely think that this new technology – hybrids and so on – [can be] adopted widely to the benefit of the ordinary family, to change the family car and make it far more energy efficient. And over time to make it cheaper to use energy.
"I think a combination of car licence [road tax] and petrol costs could – if we could develop the new technology – be to the benefit of car drivers. I see there being incentives to people to adopt hybrid cars. Cars that the ordinary family…can think of buying."
The Government is planning to increase road tax significantly for many popular family saloons from next year and the Prime Minister said he favoured taxing drivers of petrol cars at a higher level than their electric replacements. Sarah Brown, the Prime Minister's wife, was driven in a green car to promote the campaign to encourage their widespread use.
Mr Brown and other world leaders meeting at the G8 summit signed a new pledge to cut carbon dioxide emissions in half by 2050. To meet this target, the world leaders unveiled 25 recommendations to boost energy efficiency.
A spokesman for the AA said that Mr Brown's aim to have all new cars producing less than 100g/km of CO2 by 2020 was a "noble ambition" but was unrealistic, and pointed out that many manufacturers were achieving lower CO2 emissions with ultra-efficient diesel cars than with hybrid technology.
The Society of Motor Manufacturers and Traders pointed out that while electric and hybrid cars are suitable for short journeys in cities, their fuel consumption rockets on longer journeys, where diesel and petrol cars produce less pollution. "We would caution against specifying one particular technology as a way of reducing carbon," said a spokesman.
"Even the government's own report – the King review of low-carbon cars – states that 'different fuels suit different uses'."
And Nigel Humphries, of the Association of British Drivers, said Mr Brown was "talking nonsense" as electric and hybrid cars "are only any use in cities, where the government doesn't want us to use cars anyway".
The Government also announced that it would soon begin educating motorists on "eco-driving techniques", saving fuel by driving more smoothly rather than accelerating quickly and braking sharply. From September, new motorists will be tested on whether they can drive in an environmentally-friendly way.
Ministers have also pledged to implement a "fuel-efficiency tyre programme". According to a Government briefing note this will involve new "resistance standards" for tyres and "on-board tyre pressure monitors" in a further attempt to improve fuel efficiency. Under-inflated tyres can increase fuel consumption of cars by up to three per cent.
Other measures for cutting emissions will include new standards for electrical items to reduce energy use when they are on "standby" and attempts to increase home insulation.
The G8 leaders believe that global energy use could be cut by twenty per cent if the energy efficiency recommendations are introduced.
Mr Brown said: "If successfully implemented they would reduce emissions by an amount equivalent to the emissions that come from the US at the moment."
It emerged yesterday that Mr Brown is facing a potential Labour revolt over his climate change policy.
More than 80 MPs are said to be backing an amendment to the Government’s Climate Change Bill to make it more radical.
The Bill calls for a legally-enforceable 60 per cent cut in UK carbon dioxide emissions by 2050. The MPs say that should be raised to 80 percent.
The amendment Bill is not likely to be debated until after the summer recess, and the Tories may abstain, sparing Mr Brown a defeat.
Tuesday, 8 July 2008
Hokkaido Hot Air
FROM TODAY'S WALL STREET JOURNAL ASIA July 8, 2008
Japanese Prime Minister Yasuo Fukuda tried to set the stage for this week's Group of Eight summit in January by claiming, "Global environmental issues have now gone beyond the discussion stage to become real problems with significant effects on our day-to-day lives and economic activities." Well, it turns out $145 oil is a bigger problem.
The inflationary pain in the major economies is now clear. U.S. consumer price inflation in May stood at 4.2% year-on-year. The Eurozone has seen 4% inflation in the first six months of this year. The OECD reports that average year-on-year inflation among its members in April reached a seven-year high of 3.9%. This, a credit crunch and a slackening global economy are now topping the G-8 agenda.
Most of this tumult comes courtesy of the Federal Reserve's easy money policies, which are flowing through the rest of the dollar bloc nations, especially in Asia. The G-8 can't do much about this directly, though it could help with a clear statement that the leaders are concerned about inflation and want a stronger U.S. dollar. This would require U.S. leadership, however, and the Bush Treasury has too often seemed to favor a weak dollar in the name of pushing exports. One result has been the commodity price explosion that has accompanied the dollar's decline.
The G-8 can also help by breaking down trade barriers and allowing all this extra capital to flow to more productive uses. And maybe, just maybe, the leaders of the rich economies will resist calls to raise global prices even further in the name of averting climate change.
President Bush reiterated his commitment to the Doha Round of global trade negotiations before leaving Washington, promising to "work to tear down barriers to trade and investment around the world." His problem in Hokkaido will be the unwillingness of some of his G-8 peers, and others, to do the heavy lifting required to turn talk into action. Brazil and India are reluctant to come to the table in global trade talks until the European Union and the U.S. cut their agricultural subsidies and improve market access. G-8 host Japan is one of the worst offenders.
Instead, this week's summit is likely to fall back on grandiose rhetoric and handouts. The 2005 huddle in Gleneagles delivered a pledge to double development aid by 2010, to $50 billion. Most of that aid has yet to be delivered. Before today's meeting, the U.S. committed almost $1 billion for "global food security." The Asian Development Bank has promised some $500 million for food aid for poor countries. If history is any guide, most of that money won't be well spent.
As for climate change, Mr. Bush insists that any plan for tackling carbon emissions must include the developing world's big emitters, China and India. Given their longstanding and understandable unwillingness to subject themselves to costly, economy-crippling carbon constraints, we can only hope Mr. Bush's statement amounts to scuppering any major new emissions initiatives this week. In a world preoccupied with inflation, Mr. Fukuda's plan to halve global carbon emissions by 2050 -- dubbed "Cool Earth 50" -- makes little sense.
Already "environmentalism" is contributing to higher food prices. The quest for a more atmosphere-friendly fuel has provided political cover for agricultural interests peddling ethanol as a solution. The result: diversion of agricultural land to corn at the expense of other crops, and diversion of corn to fuel at the expense of food. Corn futures have soared in the last year, closing at $7.70 a bushel in Chicago on Thursday compared with nearer to $4 less than a year ago.
Still, the G-8 summit offers some pluses. A rhetorical bow to the importance of free trade is welcome in a world where politicians like America's Barack Obama are increasingly willing to ignore the evidence of trade's economic benefits. And Hokkaido is a convenient forum for discussions on pressing non-economic issues, especially nuclear proliferation. Mr. Bush met Monday with Dmitry Medvedev, their first meeting since the new Russian President took office. He will interact this week with Mr. Fukuda, South Korean President Lee Myung-bak, and Chinese President Hu Jintao. Such face-to-face diplomacy has its uses.
But given the serious economic problems facing the world, it's hard not to think this conclave could do more than it probably will. Only a year ago, the G-8 released a statement calling the global economy "in good condition." We'll take the helpful bits of rhetoric for now, but true action on issues like trade may have to wait until the global economic outlook takes a turn for the worse.
Japanese Prime Minister Yasuo Fukuda tried to set the stage for this week's Group of Eight summit in January by claiming, "Global environmental issues have now gone beyond the discussion stage to become real problems with significant effects on our day-to-day lives and economic activities." Well, it turns out $145 oil is a bigger problem.
The inflationary pain in the major economies is now clear. U.S. consumer price inflation in May stood at 4.2% year-on-year. The Eurozone has seen 4% inflation in the first six months of this year. The OECD reports that average year-on-year inflation among its members in April reached a seven-year high of 3.9%. This, a credit crunch and a slackening global economy are now topping the G-8 agenda.
Most of this tumult comes courtesy of the Federal Reserve's easy money policies, which are flowing through the rest of the dollar bloc nations, especially in Asia. The G-8 can't do much about this directly, though it could help with a clear statement that the leaders are concerned about inflation and want a stronger U.S. dollar. This would require U.S. leadership, however, and the Bush Treasury has too often seemed to favor a weak dollar in the name of pushing exports. One result has been the commodity price explosion that has accompanied the dollar's decline.
The G-8 can also help by breaking down trade barriers and allowing all this extra capital to flow to more productive uses. And maybe, just maybe, the leaders of the rich economies will resist calls to raise global prices even further in the name of averting climate change.
President Bush reiterated his commitment to the Doha Round of global trade negotiations before leaving Washington, promising to "work to tear down barriers to trade and investment around the world." His problem in Hokkaido will be the unwillingness of some of his G-8 peers, and others, to do the heavy lifting required to turn talk into action. Brazil and India are reluctant to come to the table in global trade talks until the European Union and the U.S. cut their agricultural subsidies and improve market access. G-8 host Japan is one of the worst offenders.
Instead, this week's summit is likely to fall back on grandiose rhetoric and handouts. The 2005 huddle in Gleneagles delivered a pledge to double development aid by 2010, to $50 billion. Most of that aid has yet to be delivered. Before today's meeting, the U.S. committed almost $1 billion for "global food security." The Asian Development Bank has promised some $500 million for food aid for poor countries. If history is any guide, most of that money won't be well spent.
As for climate change, Mr. Bush insists that any plan for tackling carbon emissions must include the developing world's big emitters, China and India. Given their longstanding and understandable unwillingness to subject themselves to costly, economy-crippling carbon constraints, we can only hope Mr. Bush's statement amounts to scuppering any major new emissions initiatives this week. In a world preoccupied with inflation, Mr. Fukuda's plan to halve global carbon emissions by 2050 -- dubbed "Cool Earth 50" -- makes little sense.
Already "environmentalism" is contributing to higher food prices. The quest for a more atmosphere-friendly fuel has provided political cover for agricultural interests peddling ethanol as a solution. The result: diversion of agricultural land to corn at the expense of other crops, and diversion of corn to fuel at the expense of food. Corn futures have soared in the last year, closing at $7.70 a bushel in Chicago on Thursday compared with nearer to $4 less than a year ago.
Still, the G-8 summit offers some pluses. A rhetorical bow to the importance of free trade is welcome in a world where politicians like America's Barack Obama are increasingly willing to ignore the evidence of trade's economic benefits. And Hokkaido is a convenient forum for discussions on pressing non-economic issues, especially nuclear proliferation. Mr. Bush met Monday with Dmitry Medvedev, their first meeting since the new Russian President took office. He will interact this week with Mr. Fukuda, South Korean President Lee Myung-bak, and Chinese President Hu Jintao. Such face-to-face diplomacy has its uses.
But given the serious economic problems facing the world, it's hard not to think this conclave could do more than it probably will. Only a year ago, the G-8 released a statement calling the global economy "in good condition." We'll take the helpful bits of rhetoric for now, but true action on issues like trade may have to wait until the global economic outlook takes a turn for the worse.
Your Carbon Ration Card
July 7, 2008
While American politicians mull a carbon cap-and-trade system for industry, our British cousins are already contemplating the next step: personal CO2 rations.
A Parliamentary committee in May proposed giving all British adults "carbon allowances" that they would be required to spend – along with, you know, real money – when buying gasoline, airline tickets, electricity or natural gas. Britons who wanted more credits than they were issued could try to buy them – again, with real money – from those who hadn't spent their allotment. All of this is supposed to give people a financial incentive to reduce energy consumption and thus their carbon "footprint."
The Labour government, already in a precarious political state, isn't dumb enough to support the rationing plan, which Environment Minister Hilary Benn calls "ahead of its time." Instead, it favors a climate-change bill that Parliament is on the verge of passing that would lay much of the necessary groundwork. But eco-eager Britons don't have to wait for Westminster. A private test program for personal cap-and-trade began recently with 1,000 volunteers keeping tabs of their gasoline use.
It would cost a country like Britain billions of dollars a year to run a personal cap-and-trade system nationwide, but set that aside. War-time-like energy rations are a clear illustration of the extent to which environmentalists hope to control every aspect of modern life. Do you really want to blow much of your annual "ration" on that long carbon-spewing jet flight to Florida, or should you swap that summer AC for weekend drives in the country?
The global warmists want you to sacrifice for their cause. And the duration of their war on carbon will make the decade-and-a-half of British rationing during and after World War II seem like a fleeting moment. The pending climate-change bill calls for a 60% cut in carbon emissions from their 1990 levels by 2050. Once 2050 rolls around, who exactly will declare the end of hostilities?
The prospect of personal CO2 rations should debunk the idea that the cost of curbing carbon emissions would fall on the owners of dirty old factories. That notion was always a green herring: Like corporate taxes, the business costs of carbon reduction will be passed on to consumers. In that sense, we should be grateful to the Brits for showing us where this anticarbon crusade really ends up.
While American politicians mull a carbon cap-and-trade system for industry, our British cousins are already contemplating the next step: personal CO2 rations.
A Parliamentary committee in May proposed giving all British adults "carbon allowances" that they would be required to spend – along with, you know, real money – when buying gasoline, airline tickets, electricity or natural gas. Britons who wanted more credits than they were issued could try to buy them – again, with real money – from those who hadn't spent their allotment. All of this is supposed to give people a financial incentive to reduce energy consumption and thus their carbon "footprint."
The Labour government, already in a precarious political state, isn't dumb enough to support the rationing plan, which Environment Minister Hilary Benn calls "ahead of its time." Instead, it favors a climate-change bill that Parliament is on the verge of passing that would lay much of the necessary groundwork. But eco-eager Britons don't have to wait for Westminster. A private test program for personal cap-and-trade began recently with 1,000 volunteers keeping tabs of their gasoline use.
It would cost a country like Britain billions of dollars a year to run a personal cap-and-trade system nationwide, but set that aside. War-time-like energy rations are a clear illustration of the extent to which environmentalists hope to control every aspect of modern life. Do you really want to blow much of your annual "ration" on that long carbon-spewing jet flight to Florida, or should you swap that summer AC for weekend drives in the country?
The global warmists want you to sacrifice for their cause. And the duration of their war on carbon will make the decade-and-a-half of British rationing during and after World War II seem like a fleeting moment. The pending climate-change bill calls for a 60% cut in carbon emissions from their 1990 levels by 2050. Once 2050 rolls around, who exactly will declare the end of hostilities?
The prospect of personal CO2 rations should debunk the idea that the cost of curbing carbon emissions would fall on the owners of dirty old factories. That notion was always a green herring: Like corporate taxes, the business costs of carbon reduction will be passed on to consumers. In that sense, we should be grateful to the Brits for showing us where this anticarbon crusade really ends up.
Ray of Sunshine Emerges In Sagging IPO Market
Alternative Energy Bolsters Hopes For New Offerings
By LYNN COWANJuly 7, 2008;
Even though this summer is expected to be a slow season for new stock offerings, market watchers are already daydreaming about the kinds of deals they would like to see in the wake of Energy Recovery Inc.'s successful debut last week.
The 16% pop by the initial public offering of Energy Recovery, which makes energy-saving devices for water-desalination plants, ended a two-month streak of eight IPOs that didn't gain on their first days of trading.
Noble Environmental Power
An IPO to watch? Wind-farm firm Noble Environmental Power.
While one strong IPO doesn't a trend make, it does have analysts considering which stocks could weather uncertain market conditions like Energy Recovery did -- it rose on the same day the Dow Jones Industrial Average hit bear-market territory.
"Alternative energy plays will continue to attract the attention of investors," says Ben Holmes, publisher of research site Morningnotes.com. "Energy Recovery could be the torchrunner for this industry."
There are just a few alternative-energy IPOs in the U.S. pipeline, according to data from Dealogic, but Mr. Holmes and others said that Energy Recovery could spur more "green" companies to go public.
Linda Killian, portfolio manager of Renaissance Capital LLC's IPO Plus Aftermarket Fund, said deals to watch include wind-farm company Noble Environmental Power Inc.; GT Solar International Inc., which makes equipment to produce the raw materials for solar cells; and Global Energy Inc., which is developing synthetic-gas facilities. However, she warns that investors shouldn't be expecting the kind of buzz that surrounded the largest IPO this year -- Visa Inc.
"In terms of an all-weather deal that would also be well known to people, there's nothing on the calendar like another Visa," says Ms. Killian.
Outside the alternative-energy market, satellite-imagery company DigitalGlobe Inc., website-hosting firm Rackspace Inc. and online college Grand Canyon Education Inc. look promising, says Scott Sweet, managing director of research firm IPOBoutique.com. But that batch will require a better stock market to debut, he says.
"Once the market stabilizes and we don't have these wild gyrations on a daily basis, there's a strong pipeline that could open up in the mid-third to fourth quarter of this year," says Mr. Sweet.
Investment bankers expect the IPO market to be slow at least through Labor Day, but think offerings that share some of the same traits as Energy Recovery will work.
"We need to focus on the basics of what IPOs are about, which is real growth with a strong competitive advantage, as well as good management teams," says John Chirico, co-head of capital-markets origination for the Americas at Citigroup Inc., a lead manager on Energy Recovery's offering.
One offering that hasn't even filed a prospectus is creating some early interest: Russian Internet search engine Yandex, which is rumored to be considering a fall debut in the U.S.
"People are calling me about it already," says Sal Morreale, who tracks IPOs for Cantor Fitzgerald LP. "There hasn't been much to hang your hat on in this market, so this is one to watch."
There also haven't been many tech stocks from Russia, and Yandex is a market leader there, says Tom Blackwell, who heads the Moscow office of PBN Co., an emerging-markets consultant.
"With Google at the back of people's minds, and looking at potential growth in Russia in coming years -- that will be enough to push people toward it," says Mr. Blackwell.
Write to Lynn Cowan at lynn.cowan@dowjones.com
By LYNN COWANJuly 7, 2008;
Even though this summer is expected to be a slow season for new stock offerings, market watchers are already daydreaming about the kinds of deals they would like to see in the wake of Energy Recovery Inc.'s successful debut last week.
The 16% pop by the initial public offering of Energy Recovery, which makes energy-saving devices for water-desalination plants, ended a two-month streak of eight IPOs that didn't gain on their first days of trading.
Noble Environmental Power
An IPO to watch? Wind-farm firm Noble Environmental Power.
While one strong IPO doesn't a trend make, it does have analysts considering which stocks could weather uncertain market conditions like Energy Recovery did -- it rose on the same day the Dow Jones Industrial Average hit bear-market territory.
"Alternative energy plays will continue to attract the attention of investors," says Ben Holmes, publisher of research site Morningnotes.com. "Energy Recovery could be the torchrunner for this industry."
There are just a few alternative-energy IPOs in the U.S. pipeline, according to data from Dealogic, but Mr. Holmes and others said that Energy Recovery could spur more "green" companies to go public.
Linda Killian, portfolio manager of Renaissance Capital LLC's IPO Plus Aftermarket Fund, said deals to watch include wind-farm company Noble Environmental Power Inc.; GT Solar International Inc., which makes equipment to produce the raw materials for solar cells; and Global Energy Inc., which is developing synthetic-gas facilities. However, she warns that investors shouldn't be expecting the kind of buzz that surrounded the largest IPO this year -- Visa Inc.
"In terms of an all-weather deal that would also be well known to people, there's nothing on the calendar like another Visa," says Ms. Killian.
Outside the alternative-energy market, satellite-imagery company DigitalGlobe Inc., website-hosting firm Rackspace Inc. and online college Grand Canyon Education Inc. look promising, says Scott Sweet, managing director of research firm IPOBoutique.com. But that batch will require a better stock market to debut, he says.
"Once the market stabilizes and we don't have these wild gyrations on a daily basis, there's a strong pipeline that could open up in the mid-third to fourth quarter of this year," says Mr. Sweet.
Investment bankers expect the IPO market to be slow at least through Labor Day, but think offerings that share some of the same traits as Energy Recovery will work.
"We need to focus on the basics of what IPOs are about, which is real growth with a strong competitive advantage, as well as good management teams," says John Chirico, co-head of capital-markets origination for the Americas at Citigroup Inc., a lead manager on Energy Recovery's offering.
One offering that hasn't even filed a prospectus is creating some early interest: Russian Internet search engine Yandex, which is rumored to be considering a fall debut in the U.S.
"People are calling me about it already," says Sal Morreale, who tracks IPOs for Cantor Fitzgerald LP. "There hasn't been much to hang your hat on in this market, so this is one to watch."
There also haven't been many tech stocks from Russia, and Yandex is a market leader there, says Tom Blackwell, who heads the Moscow office of PBN Co., an emerging-markets consultant.
"With Google at the back of people's minds, and looking at potential growth in Russia in coming years -- that will be enough to push people toward it," says Mr. Blackwell.
Write to Lynn Cowan at lynn.cowan@dowjones.com
High Energy Prices Drive Innovation
By ROD HUNTER FROM TODAY'S WALL STREET JOURNAL ASIA July 8, 2008
The leaders of the G-8 and of major developing countries will discuss how to respond to the twin challenges of energy security and climate change tomorrow. The first instinct of most leaders will likely be to propose new regulations. Yet market forces may already be solving these problems, as high oil prices drive a shift away from the polluting, petroleum-fueled internal combustion engine to cleaner forms of transportation.
That's a change worth cheering, even if oil prices are painful in the meantime. Oil, a resource that Venezuelan OPEC founder Juan Pablo Perez Alfonzo dubbed the "devil's excrement," figures at the center of the world's most nettlesome economic, environmental and foreign policy conundrums. Oil is the United States' principal transportation fuel, and the source of a third of the country's greenhouse gas emissions. Other major countries are similarly dependent on oil for transportation. As prices have risen, worries about energy security and long-term climate effects have reached a fever pitch.
Toyota
The 2008 Toyota Prius
History teaches that innovation directed by markets can solve problems such as these. In New York at the end of the 19th century, horses were the main form of transport -- and a major source of pollution. As many as many as 200,000 horses each produced 15 to 35 pounds of manure per day. Manure piles along the roads and in stables produced vast numbers of flies, an important vector for infectious diseases such as typhoid fever. Horses became increasingly expensive, thanks to rising prices for hay, oats and the urban land required for stables.
Initially the automobile, whether powered by gasoline, steam or electricity, wasn't much competition for the horse, except as a plaything of the rich. Then, around the turn of the century, a series of innovations involving the internal combustion engine and manufacturing (mass production, assembly lines and interchangeable parts) improved performance, reliability and costs. As car prices fell, the horse, the manure and the "typhus fly" were done for.
The same thing may be happening today. This March, for instance, American entrepreneur Elon Musk started production of his electric sports car, the Tesla. This car isn't just a fancy golf cart -- it accelerates from 0 to 60 miles per hour in four seconds, tops out at 125 mph, and has a range of 220 miles. The $110,000 price tag limits the Tesla to the wealthy, but mass production models are in the works. General Motors has committed itself to rolling out its electronic vehicle, the Volt, by 2010. Toyota plans a successor to its popular Prius hybrid.
Recent cost comparisons by Deutsche Bank's auto analysts suggest electric cars will be cheaper to operate than conventional vehicles. Fuel costs per mile for gasoline-fueled cars are $0.27 in Germany, $0.24 in Britain, $0.17 in Brazil and $0.11 in the U.S., with differences driven by local fuel taxes. For electric vehicles, the cost per mile is a mere $0.02. If one adds in the cost of a battery amortized over the life of the car, the cost is still only $0.10. Batteries will be expensive, at least in early years, but electric cars won't need costly engines or complex transmissions like today's autos. With few moving parts, reliability will increase.
Cost differentials like those could drive a quick transition to energy-efficient forms of transportation. There would surely be failures along the way -- even Henry Ford had a couple of flops and an encounter with bankruptcy before making it big with his "car for the great multitude" -- the Model T. And it would take a while to replace the existing transportation fleet made up of cars that last 15 years.
Nonetheless, incremental effects on oil demand could be powerful. Developed countries would grow less dependent on oil producers, and transportation-related greenhouse gas emissions could ease (even coal-fired power plants are better than millions of gasoline-powered autos). As costs fall, electric vehicles could be adopted in developing countries, amplifying energy security and climate benefits.
Such a transition would reduce the world's dependence on regimes run by thugs and theocrats. More than 80% of proven reserves are controlled by national oil companies and Russian firms, which don't operate like normal profit-maximizing businesses. (Witness Russian threats to turn off gas supplies to Ukraine and Eastern Europe.) High oil prices have corrupted countries with weak institutions and reinforced misbehavior of international miscreants such as Iran and Venezuela.
Regulation and taxes can of course shape market incentives. But regulation comes with unintended consequences -- the more complex the regulation (think cap-and-trade), the more scope for undesired consequences. High oil prices, as unpleasant as they are, are making a lot of alternative energy and transportation technologies look attractive. The petroleum-powered auto has provided affordable independence to millions for a century, but has brought its own problems. Innovation and markets could well send the internal combustion engine and its oil-related worries the way of the horse and buggy.
Mr. Hunter, a senior fellow at the Hudson Institute, served as a senior director at the National Security Council under President George W. Bush, where he was responsible for international economics.
See all of today's editorials and op-eds, plus video commentary, on Opinion Journal.
The leaders of the G-8 and of major developing countries will discuss how to respond to the twin challenges of energy security and climate change tomorrow. The first instinct of most leaders will likely be to propose new regulations. Yet market forces may already be solving these problems, as high oil prices drive a shift away from the polluting, petroleum-fueled internal combustion engine to cleaner forms of transportation.
That's a change worth cheering, even if oil prices are painful in the meantime. Oil, a resource that Venezuelan OPEC founder Juan Pablo Perez Alfonzo dubbed the "devil's excrement," figures at the center of the world's most nettlesome economic, environmental and foreign policy conundrums. Oil is the United States' principal transportation fuel, and the source of a third of the country's greenhouse gas emissions. Other major countries are similarly dependent on oil for transportation. As prices have risen, worries about energy security and long-term climate effects have reached a fever pitch.
Toyota
The 2008 Toyota Prius
History teaches that innovation directed by markets can solve problems such as these. In New York at the end of the 19th century, horses were the main form of transport -- and a major source of pollution. As many as many as 200,000 horses each produced 15 to 35 pounds of manure per day. Manure piles along the roads and in stables produced vast numbers of flies, an important vector for infectious diseases such as typhoid fever. Horses became increasingly expensive, thanks to rising prices for hay, oats and the urban land required for stables.
Initially the automobile, whether powered by gasoline, steam or electricity, wasn't much competition for the horse, except as a plaything of the rich. Then, around the turn of the century, a series of innovations involving the internal combustion engine and manufacturing (mass production, assembly lines and interchangeable parts) improved performance, reliability and costs. As car prices fell, the horse, the manure and the "typhus fly" were done for.
The same thing may be happening today. This March, for instance, American entrepreneur Elon Musk started production of his electric sports car, the Tesla. This car isn't just a fancy golf cart -- it accelerates from 0 to 60 miles per hour in four seconds, tops out at 125 mph, and has a range of 220 miles. The $110,000 price tag limits the Tesla to the wealthy, but mass production models are in the works. General Motors has committed itself to rolling out its electronic vehicle, the Volt, by 2010. Toyota plans a successor to its popular Prius hybrid.
Recent cost comparisons by Deutsche Bank's auto analysts suggest electric cars will be cheaper to operate than conventional vehicles. Fuel costs per mile for gasoline-fueled cars are $0.27 in Germany, $0.24 in Britain, $0.17 in Brazil and $0.11 in the U.S., with differences driven by local fuel taxes. For electric vehicles, the cost per mile is a mere $0.02. If one adds in the cost of a battery amortized over the life of the car, the cost is still only $0.10. Batteries will be expensive, at least in early years, but electric cars won't need costly engines or complex transmissions like today's autos. With few moving parts, reliability will increase.
Cost differentials like those could drive a quick transition to energy-efficient forms of transportation. There would surely be failures along the way -- even Henry Ford had a couple of flops and an encounter with bankruptcy before making it big with his "car for the great multitude" -- the Model T. And it would take a while to replace the existing transportation fleet made up of cars that last 15 years.
Nonetheless, incremental effects on oil demand could be powerful. Developed countries would grow less dependent on oil producers, and transportation-related greenhouse gas emissions could ease (even coal-fired power plants are better than millions of gasoline-powered autos). As costs fall, electric vehicles could be adopted in developing countries, amplifying energy security and climate benefits.
Such a transition would reduce the world's dependence on regimes run by thugs and theocrats. More than 80% of proven reserves are controlled by national oil companies and Russian firms, which don't operate like normal profit-maximizing businesses. (Witness Russian threats to turn off gas supplies to Ukraine and Eastern Europe.) High oil prices have corrupted countries with weak institutions and reinforced misbehavior of international miscreants such as Iran and Venezuela.
Regulation and taxes can of course shape market incentives. But regulation comes with unintended consequences -- the more complex the regulation (think cap-and-trade), the more scope for undesired consequences. High oil prices, as unpleasant as they are, are making a lot of alternative energy and transportation technologies look attractive. The petroleum-powered auto has provided affordable independence to millions for a century, but has brought its own problems. Innovation and markets could well send the internal combustion engine and its oil-related worries the way of the horse and buggy.
Mr. Hunter, a senior fellow at the Hudson Institute, served as a senior director at the National Security Council under President George W. Bush, where he was responsible for international economics.
See all of today's editorials and op-eds, plus video commentary, on Opinion Journal.
Leave Your Carbon Footprint at the Door
Japanese Model Home Touts Eco-Gadgets for G-8 Summit; Air-Washing the Laundry
By LISA THOMASJuly 8, 2008;
As leaders of the world's most powerful nations discuss climate change at the Group of Eight summit in northern Japan, Japan's big tech companies are displaying some of their most cutting-edge solutions in a nearby "zero emissions house."
The single-story, 2,152-square-foot house generates all the energy required for a family of four, therefore eliminating carbon-dioxide emissions, according to the Japanese government. Products inside, many already on sale in Japan, include a washer that requires no water and an air conditioner that senses where people are in a room and automatically sends cool air in their direction rather than cooling empty space. Yet the eco-friendly products also carry a steeper price tag than traditional appliances.
The house uses a wind-turbine generator and a photovoltaic generation system, which directly converts light into electricity, to produce about 15 kilowatts of energy a day, nearly five times the amount used by a regular household. The government has presented the house as one of its contributions toward helping the world cut greenhouse emissions in half by 2050.
The zero-emissions house is an attempt by Japan's big tech companies to showcase their recent and growing focus on environmental technologies as a future area of growth.
Sanyo Electric
This washing machine made by Sanyo Electric Co. uses air to clean clothes instead of water.
The waterless washer is Sanyo Electric Co.'s latest Aqua washer/dryer, a three-in-one machine that uses high-powered air, or ozone, to wash clothes without a single drop of water. The process of "ozonation" -- which disinfects bacteria on contact -- can air-wash clothes, removing about 80% of biodegradable stains without using any water at all, says Ryo Hagiwara, Sanyo's spokesman.
The company says a full-cycle of air-wash uses about twice as much electricity as a regular wash, but only one-fifth the total energy of a comparable full wash and dry -- in part because the air wash doesn't need a drying system.
The Aqua washer also has a regular wash setting that can purify and recycle water that had been used for a bath, thus reducing the amount of fresh water required by the machine to a mere half-bucket.
The machine is available only in Japan and Taiwan, but the company says it hopes to make inroads eventually in the U.S. and Europe. Sanyo's Aqua washer costs 228,000 yen ($2,135) or about 80% more than an equivalent washer/dryer on the Japanese market.
Human-Sensing AC
The air conditioner is the new, human-sensing air-conditioner by Mitsubishi Electric Corp., which detects a person's motion and location using heat sensors. The machine, which is available only in Japan, then emits air waves specifically targeting the people. That can save up to 50% in energy use, the company says. Still, the air conditioner, which is built into a wall, costs a lofty 200,000 yen ($1,873), or about a third more than conventional air conditioners.
Sharp Corp.
A solar-powered TV made by Sharp Corp. is both thin and efficient, consuming half the energy of current models.
There's also a low-energy television set. Sharp Corp., a leading solar-panel producer, is showing one of the world's thinnest liquid-crystal-display TVs, with a thickness of about three-fourths of an inch. The set, not yet on sale, consumes only half the energy of existing models, the company says.
Sharp is also showing a solar-energy array whose solar cells can be made semitransparent, so they can be put into a window.
Some ideas are simple. Sekisui House Ltd. is displaying a roof-top vegetation system that uses a thin film of moss grown on tile plates attached to the roof of the house.
The housing company says the moss, which can be fitted alongside solar panels on the rooftop, can lower the temperature inside the house by one degree Celsius, helping reduce air-conditioning use. The company plans to start sales in Japan soon.
Seeking Dominance
Squeezed both by low-cost competitors from China and Taiwan and innovative companies like Apple Inc., the Japanese companies that dominated the global electronics industry for decades have been seeking ways to play up their technological manufacturing strengths and know-how to stay ahead.
What's more, competition is fierce as rivals jump onto the environment-friendly technology bandwagon. Just last year, Sharp lost its No. 1 position to Germany's Q-Cell AG in global market share of solar panels.
Japan's model home goes one step beyond previous zero-emissions homes by providing a fully furnished home using cutting-edge household appliances.
Last year, the British government presented a carbon-free home that beefed up heat insulation by using triple-glazed windows, solar panels and low-energy lighting, among other things.
Write to Lisa Thomas at lisa.thomas@wsj.com
By LISA THOMASJuly 8, 2008;
As leaders of the world's most powerful nations discuss climate change at the Group of Eight summit in northern Japan, Japan's big tech companies are displaying some of their most cutting-edge solutions in a nearby "zero emissions house."
The single-story, 2,152-square-foot house generates all the energy required for a family of four, therefore eliminating carbon-dioxide emissions, according to the Japanese government. Products inside, many already on sale in Japan, include a washer that requires no water and an air conditioner that senses where people are in a room and automatically sends cool air in their direction rather than cooling empty space. Yet the eco-friendly products also carry a steeper price tag than traditional appliances.
The house uses a wind-turbine generator and a photovoltaic generation system, which directly converts light into electricity, to produce about 15 kilowatts of energy a day, nearly five times the amount used by a regular household. The government has presented the house as one of its contributions toward helping the world cut greenhouse emissions in half by 2050.
The zero-emissions house is an attempt by Japan's big tech companies to showcase their recent and growing focus on environmental technologies as a future area of growth.
Sanyo Electric
This washing machine made by Sanyo Electric Co. uses air to clean clothes instead of water.
The waterless washer is Sanyo Electric Co.'s latest Aqua washer/dryer, a three-in-one machine that uses high-powered air, or ozone, to wash clothes without a single drop of water. The process of "ozonation" -- which disinfects bacteria on contact -- can air-wash clothes, removing about 80% of biodegradable stains without using any water at all, says Ryo Hagiwara, Sanyo's spokesman.
The company says a full-cycle of air-wash uses about twice as much electricity as a regular wash, but only one-fifth the total energy of a comparable full wash and dry -- in part because the air wash doesn't need a drying system.
The Aqua washer also has a regular wash setting that can purify and recycle water that had been used for a bath, thus reducing the amount of fresh water required by the machine to a mere half-bucket.
The machine is available only in Japan and Taiwan, but the company says it hopes to make inroads eventually in the U.S. and Europe. Sanyo's Aqua washer costs 228,000 yen ($2,135) or about 80% more than an equivalent washer/dryer on the Japanese market.
Human-Sensing AC
The air conditioner is the new, human-sensing air-conditioner by Mitsubishi Electric Corp., which detects a person's motion and location using heat sensors. The machine, which is available only in Japan, then emits air waves specifically targeting the people. That can save up to 50% in energy use, the company says. Still, the air conditioner, which is built into a wall, costs a lofty 200,000 yen ($1,873), or about a third more than conventional air conditioners.
Sharp Corp.
A solar-powered TV made by Sharp Corp. is both thin and efficient, consuming half the energy of current models.
There's also a low-energy television set. Sharp Corp., a leading solar-panel producer, is showing one of the world's thinnest liquid-crystal-display TVs, with a thickness of about three-fourths of an inch. The set, not yet on sale, consumes only half the energy of existing models, the company says.
Sharp is also showing a solar-energy array whose solar cells can be made semitransparent, so they can be put into a window.
Some ideas are simple. Sekisui House Ltd. is displaying a roof-top vegetation system that uses a thin film of moss grown on tile plates attached to the roof of the house.
The housing company says the moss, which can be fitted alongside solar panels on the rooftop, can lower the temperature inside the house by one degree Celsius, helping reduce air-conditioning use. The company plans to start sales in Japan soon.
Seeking Dominance
Squeezed both by low-cost competitors from China and Taiwan and innovative companies like Apple Inc., the Japanese companies that dominated the global electronics industry for decades have been seeking ways to play up their technological manufacturing strengths and know-how to stay ahead.
What's more, competition is fierce as rivals jump onto the environment-friendly technology bandwagon. Just last year, Sharp lost its No. 1 position to Germany's Q-Cell AG in global market share of solar panels.
Japan's model home goes one step beyond previous zero-emissions homes by providing a fully furnished home using cutting-edge household appliances.
Last year, the British government presented a carbon-free home that beefed up heat insulation by using triple-glazed windows, solar panels and low-energy lighting, among other things.
Write to Lisa Thomas at lisa.thomas@wsj.com
Tanti Group unit forms venture to invest in Chinese wind farms
By P.R. VENKATTHE WALL STREET JOURNAL EUROPEJuly 8, 2008
SINGAPORE -- Bahrain-based investment bank Arcapita Bank BSC formed a joint venture with Singapore-based Colossus Holdings, a unit of India's Tanti Group, to invest $2 billion to develop wind farms in China.
The partners signed a definitive purchase agreement to acquire Honiton Energy Holdings PLC, a Chinese wind-energy generation company, with an eye toward developing a 1,650-megawatt portfolio of wind farms in the Inner Mongolia region of China, Arcapita said.
Tanti Group owns Suzlon Energy Ltd., the world's fifth-largest wind-turbine manufacturer by sales. Suzlon, which has expanded rapidly since its launch in 1995, has been moving to improve its technology through the purchase of REpower Systems AG, one of Germany's largest wind-turbine manufacturers. REpower's technology could boost Suzlon's product line and give it access to larger offshore wind technology. The US$1.8 billion deal has been in the works since last year.
Write to P.R. Venkat at venkat.pr@dowjones.com
SINGAPORE -- Bahrain-based investment bank Arcapita Bank BSC formed a joint venture with Singapore-based Colossus Holdings, a unit of India's Tanti Group, to invest $2 billion to develop wind farms in China.
The partners signed a definitive purchase agreement to acquire Honiton Energy Holdings PLC, a Chinese wind-energy generation company, with an eye toward developing a 1,650-megawatt portfolio of wind farms in the Inner Mongolia region of China, Arcapita said.
Tanti Group owns Suzlon Energy Ltd., the world's fifth-largest wind-turbine manufacturer by sales. Suzlon, which has expanded rapidly since its launch in 1995, has been moving to improve its technology through the purchase of REpower Systems AG, one of Germany's largest wind-turbine manufacturers. REpower's technology could boost Suzlon's product line and give it access to larger offshore wind technology. The US$1.8 billion deal has been in the works since last year.
Write to P.R. Venkat at venkat.pr@dowjones.com
The $100 tank becomes a reality for U.S. motorists
By Christopher Maag
Published: July 7, 2008
With prices high and rising, a new financial milestone has arrived in the United States: the $100 tank of gasoline.
Bryan Carisone, a heating and air-conditioning contractor in Raritan, New Jersey, "absolutely loves" his new GMC Denali XL, an extra-large sport utility vehicle with televisions built into the leather seats. But in June, one week after he bought it, he pulled into a station on a near-empty tank and watched the total climb higher and higher - to $109.
"It just about killed me," Carisone said.
For decades, the $100 barrel stood as a hypothetical outlier in doom-and-gloom conversations about future oil prices. And nobody could even imagine a U.S. family paying $100 to fill the tank.
But the future is here. Oil passed $100 a barrel in January and hit $145 a barrel last week before retreating. Gasoline prices in the United States surpassed $4 a gallon, or $1.06 a liter, on June 8, stalled for a while, and have been rising again in recent days, setting a record Saturday.
By late spring, owners of pickup trucks and sport utility vehicles with 30-gallon tanks, like the Cadillac Escalade ESV and Chevrolet Suburban, started paying $100 or more to fill a near-empty tank. As gasoline prices continue to rise - the U.S. average stood at about $4.10 a gallon Saturday - membership in the triple-digit club is growing. Now, even not-so-gargantuan Toyota Land Cruisers and GMC Yukons can cost $100 to fill up in the United States.
Data on exactly how often people in the United States pay $100 for a tank of gasoline are scarce, given price variations from market to market and day to day.
But during the first five months of 2008, about 11 percent of U.S. drivers said they bought 24 gallons or more at their last fill up, according to a survey of 81,000 drivers by the NPD Group, a market research firm - which at today's prices would place many of them at or around $100.
For people who love their big vehicles, the pain is acute.
Members of the Chevy Avalanche Fan Club of North America prize the Avalanche, a large sport utility vehicle, for its versatility, including a rear cab wall that slides forward for a larger pickup bed or backward for more passenger room.
But the Avalanche also has a 31-gallon tank, which would cost $127 to fill at Saturday's U.S. average price. Even the truck's most dedicated fans find that a tough bill to swallow. David Obelcz, who founded the club in 2002 and is still a member of the board, sold his Avalanche because he could not afford gasoline for it.
Thirty members of the fan club's Arizona chapter used to attend off-roading and other events three times a month. But now that Avalanche owners pay more than $100 a tank, the club is lucky to attract 10 members once every two months, said Eric Tolliver, a leader of the chapter.
"Everybody's trying to save money on gas, so now we mostly chat online instead of driving," Tolliver said.
Eric Laugen, a firefighter in Seattle, is administrator of the Chevy Avalanche Fan Club of North America. For a trip to Prudhoe Bay in Alaska, he wanted to drive his truck because it has enough room for his fishing and camera gear, as well as space in the back to sleep.
He rode his motorcycle instead. That meant pitching a tent every night, and no fishing.
"Motorcycle touring is a pain," said Laugen, talking on his cellphone from a park in Alaska. "But then I looked at how much gas would cost in the Avalanche. It just doesn't make sense anymore."
Hummer clubs are suffering, too. In Nebraska, Ric Hines of the Omaha Hummer Owner Group - known as Omahog - stopped doing off-road trips this summer and started riding his recumbent bicycle instead.
"I get to camp either way, and biking pushes me to save a few hundred dollars on gas," Hines said.
Mark Price, founder of the Illiana Hummer Club in the Chicago area, owns three Hummer H1s, which get about 8 miles a gallon, or 29 liters per 100 kilometers. "A lot of our members won't travel 70 miles just to support a parade anymore," Price said. "People wait for something a little closer."
Larger families that were accustomed to the convenience of sport utility vehicles are having to cut back as well. Colleen Hammond of Chagrin Falls, Ohio, loves packing her three kids and all their soccer gear into her 2000 GMC Yukon XL.
But she hates paying $160 to fill the 38.5-gallon tank. Last month, she parked the Yukon in her driveway and borrowed her friend's Toyota Land Cruiser.
"I don't know if it gets better gas mileage, but I like her car because it costs $100 to fill it," said Hammond, 40. "I think $100 for a tank of gas is cheap now."
Steve Burtch bought a Dodge Ram last year, when gasoline cost $3.75 a gallon, because he thought gasoline prices had peaked and would start coming down. Instead, he pumped his first $100 tank in June. "I don't know how much longer I'm going to be able to keep this up," said Burtch, 43, who lives in Marion, Ohio.
It seems that plenty of other drivers in the United States are sharing his dismay. An automotive information Web site and market research firm, Edmunds.com, compiled sales data showing that in the past seven model years, Americans bought 25.4 million vehicles with tanks 24 gallons or larger - the point at which three figures for gasoline is a real possibility today. A few big trucks and sport utility vehicles have tanks exceeding 30 gallons.
But people who try to pump $100 worth of gasoline often find that they cannot, since most pumps in the United States that take credit cards shut off at $75 to prevent someone with insufficient funds or a stolen credit card from running off with gasoline. In addition, some older pumps still are not capable of registering triple-digit bills.
Many consumers whose tanks would easily swallow $100 worth of gasoline refuse to pump that much at once, just to avoid the trauma.
"Usually I don't let it get real empty so that I don't have to see that $100 on the pump," said Bob Hammond of Chesterland, Ohio, who drives an Avalanche.
Gary Chamberlain always pays cash for gasoline, so the pump kept right on spinning two weeks ago when he made his first triple-digit fill-up of his Ford conversion van.
"The bill was $104.98, which was a real shock," said Chamberlain of Marion, Ohio. "I never thought I'd see the day."
Published: July 7, 2008
With prices high and rising, a new financial milestone has arrived in the United States: the $100 tank of gasoline.
Bryan Carisone, a heating and air-conditioning contractor in Raritan, New Jersey, "absolutely loves" his new GMC Denali XL, an extra-large sport utility vehicle with televisions built into the leather seats. But in June, one week after he bought it, he pulled into a station on a near-empty tank and watched the total climb higher and higher - to $109.
"It just about killed me," Carisone said.
For decades, the $100 barrel stood as a hypothetical outlier in doom-and-gloom conversations about future oil prices. And nobody could even imagine a U.S. family paying $100 to fill the tank.
But the future is here. Oil passed $100 a barrel in January and hit $145 a barrel last week before retreating. Gasoline prices in the United States surpassed $4 a gallon, or $1.06 a liter, on June 8, stalled for a while, and have been rising again in recent days, setting a record Saturday.
By late spring, owners of pickup trucks and sport utility vehicles with 30-gallon tanks, like the Cadillac Escalade ESV and Chevrolet Suburban, started paying $100 or more to fill a near-empty tank. As gasoline prices continue to rise - the U.S. average stood at about $4.10 a gallon Saturday - membership in the triple-digit club is growing. Now, even not-so-gargantuan Toyota Land Cruisers and GMC Yukons can cost $100 to fill up in the United States.
Data on exactly how often people in the United States pay $100 for a tank of gasoline are scarce, given price variations from market to market and day to day.
But during the first five months of 2008, about 11 percent of U.S. drivers said they bought 24 gallons or more at their last fill up, according to a survey of 81,000 drivers by the NPD Group, a market research firm - which at today's prices would place many of them at or around $100.
For people who love their big vehicles, the pain is acute.
Members of the Chevy Avalanche Fan Club of North America prize the Avalanche, a large sport utility vehicle, for its versatility, including a rear cab wall that slides forward for a larger pickup bed or backward for more passenger room.
But the Avalanche also has a 31-gallon tank, which would cost $127 to fill at Saturday's U.S. average price. Even the truck's most dedicated fans find that a tough bill to swallow. David Obelcz, who founded the club in 2002 and is still a member of the board, sold his Avalanche because he could not afford gasoline for it.
Thirty members of the fan club's Arizona chapter used to attend off-roading and other events three times a month. But now that Avalanche owners pay more than $100 a tank, the club is lucky to attract 10 members once every two months, said Eric Tolliver, a leader of the chapter.
"Everybody's trying to save money on gas, so now we mostly chat online instead of driving," Tolliver said.
Eric Laugen, a firefighter in Seattle, is administrator of the Chevy Avalanche Fan Club of North America. For a trip to Prudhoe Bay in Alaska, he wanted to drive his truck because it has enough room for his fishing and camera gear, as well as space in the back to sleep.
He rode his motorcycle instead. That meant pitching a tent every night, and no fishing.
"Motorcycle touring is a pain," said Laugen, talking on his cellphone from a park in Alaska. "But then I looked at how much gas would cost in the Avalanche. It just doesn't make sense anymore."
Hummer clubs are suffering, too. In Nebraska, Ric Hines of the Omaha Hummer Owner Group - known as Omahog - stopped doing off-road trips this summer and started riding his recumbent bicycle instead.
"I get to camp either way, and biking pushes me to save a few hundred dollars on gas," Hines said.
Mark Price, founder of the Illiana Hummer Club in the Chicago area, owns three Hummer H1s, which get about 8 miles a gallon, or 29 liters per 100 kilometers. "A lot of our members won't travel 70 miles just to support a parade anymore," Price said. "People wait for something a little closer."
Larger families that were accustomed to the convenience of sport utility vehicles are having to cut back as well. Colleen Hammond of Chagrin Falls, Ohio, loves packing her three kids and all their soccer gear into her 2000 GMC Yukon XL.
But she hates paying $160 to fill the 38.5-gallon tank. Last month, she parked the Yukon in her driveway and borrowed her friend's Toyota Land Cruiser.
"I don't know if it gets better gas mileage, but I like her car because it costs $100 to fill it," said Hammond, 40. "I think $100 for a tank of gas is cheap now."
Steve Burtch bought a Dodge Ram last year, when gasoline cost $3.75 a gallon, because he thought gasoline prices had peaked and would start coming down. Instead, he pumped his first $100 tank in June. "I don't know how much longer I'm going to be able to keep this up," said Burtch, 43, who lives in Marion, Ohio.
It seems that plenty of other drivers in the United States are sharing his dismay. An automotive information Web site and market research firm, Edmunds.com, compiled sales data showing that in the past seven model years, Americans bought 25.4 million vehicles with tanks 24 gallons or larger - the point at which three figures for gasoline is a real possibility today. A few big trucks and sport utility vehicles have tanks exceeding 30 gallons.
But people who try to pump $100 worth of gasoline often find that they cannot, since most pumps in the United States that take credit cards shut off at $75 to prevent someone with insufficient funds or a stolen credit card from running off with gasoline. In addition, some older pumps still are not capable of registering triple-digit bills.
Many consumers whose tanks would easily swallow $100 worth of gasoline refuse to pump that much at once, just to avoid the trauma.
"Usually I don't let it get real empty so that I don't have to see that $100 on the pump," said Bob Hammond of Chesterland, Ohio, who drives an Avalanche.
Gary Chamberlain always pays cash for gasoline, so the pump kept right on spinning two weeks ago when he made his first triple-digit fill-up of his Ford conversion van.
"The bill was $104.98, which was a real shock," said Chamberlain of Marion, Ohio. "I never thought I'd see the day."
Johnson drops pollution battle against Porsche
Matthew Taylor
The Guardian,
Tuesday July 8, 2008
London mayor Boris Johnson is to pay about £400,000 to Porsche after agreeing to scrap a plan to levy a £25 charge on the most polluting vehicles in the capital, it emerged last night.
The luxury sports car specialist had begun a legal challenge to the proposal, put forward by the former mayor, Ken Livingstone, earlier this year.
Yesterday Johnson withdrew the proposal, and a court ruled that the Greater London Authority should pay Porsche's legal costs. The company says that it will give the money to Skidz - a charity which offers youngsters training in mechanical skills and maintenance.
Last night Jenny Jones, Green party assembly member, said she was appalled by the decision. "This is a mayor who is telling us he wants to see value for money, and to account for every penny, and here he is paying one of the richest car companies in the world hundreds of thousands of pounds of taxpayers' money."
A spokesman for Johnson said the mayor was required to cover Porsche's legal fees after agreeing not to contest its original challenge, adding it was the "most cost effective way" to end the scheme.
Johnson said he was pleased Porsche had decided to give the money to charity. "[This] is a generous decision and I am delighted that Skidz will use the money to offer training for young people in the capital," he said. However, Jones said this was unacceptable: "People may, quite understandably, want to see their money spent on things that they voted for."
In February Porsche announced it would take Livingstone to court over charging drivers of the most polluting types of vehicles £25 each time they entered central London. The German firm argued that the rise, due to come into force in October, was "unfair and disproportionate". Throughout his mayoral campaign Johnson said he would scrap the CO2 charge, which he said would hit families and small businesses.
The Guardian,
Tuesday July 8, 2008
London mayor Boris Johnson is to pay about £400,000 to Porsche after agreeing to scrap a plan to levy a £25 charge on the most polluting vehicles in the capital, it emerged last night.
The luxury sports car specialist had begun a legal challenge to the proposal, put forward by the former mayor, Ken Livingstone, earlier this year.
Yesterday Johnson withdrew the proposal, and a court ruled that the Greater London Authority should pay Porsche's legal costs. The company says that it will give the money to Skidz - a charity which offers youngsters training in mechanical skills and maintenance.
Last night Jenny Jones, Green party assembly member, said she was appalled by the decision. "This is a mayor who is telling us he wants to see value for money, and to account for every penny, and here he is paying one of the richest car companies in the world hundreds of thousands of pounds of taxpayers' money."
A spokesman for Johnson said the mayor was required to cover Porsche's legal fees after agreeing not to contest its original challenge, adding it was the "most cost effective way" to end the scheme.
Johnson said he was pleased Porsche had decided to give the money to charity. "[This] is a generous decision and I am delighted that Skidz will use the money to offer training for young people in the capital," he said. However, Jones said this was unacceptable: "People may, quite understandably, want to see their money spent on things that they voted for."
In February Porsche announced it would take Livingstone to court over charging drivers of the most polluting types of vehicles £25 each time they entered central London. The German firm argued that the rise, due to come into force in October, was "unfair and disproportionate". Throughout his mayoral campaign Johnson said he would scrap the CO2 charge, which he said would hit families and small businesses.
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