An interesting article in the FT today about potential upward pressure on the Oil price if it surpasses $80 as sellers of Calls need to cover their position with futures.
Options-driven rally likely if oil prices move above $80 | FT, 20 Oct
There’s a new group in town … ICER is a group of 12 regional energy regulatory associations that are trying to talk about regulation on a bigger stage. Looks pretty EU-centred on first blush but may represent a reasonable first step.
International Energy Regulator Launched | Energy Risk, 19 Oct 2009
I will say, however, that based on the “google scale of relevancy” – a term I just came up with –this organisation needs to work on getting more press (or at least hire some SEO folks to get their website higher in the search results).
There has been a trend recently that suggests Risk Management no longer does what it says on the tin; so much so that nowadays it appears risk management and optimisation drive business decisions even less than accounting, as identified in my earlier comment (http://energyandcommoditiesnews.blogspot.com/2009/09/without-risk-taking-there-is-no-banking.html).
Over the last year in particular, Risk Managers have become more like Risk Controllers (to bash the trader) and Risk Reporters (more for regulatory reasons rather than business reasons). The days that good risk management was a tool to help the business make positive contributions rather than just limit innovation may now be part of history. Good risk analysis, information and advice can improve performance, help traders use their risk capital more efficiently and highlight scenarios that their position is exposed to; it is also reasonable to expect that new profit opportunities will be identified as a consequence.
Risk Managers, whether they are the trader as the first line of risk management, an independent group or both, need to spend more time looking forward at how risk can impact and change performance rather than looking back.
The timeliness of this information is also important and more often than not it is almost a day behind, by the time it has been usefully interpreted! Providing the data for analysis and reporting the results of standard metrics can often be outsourced and provided in a timely manner for interpretation. This requires a different skill set to the real expertise of understanding what risk can do and how to utilise it in order to benefit the business.
Let’s look forward to the days when highly skilled and experienced Risk Managers start thinking about managing risk again, rather than spending their time preparing cushions of reports at ridiculous levels of confidence, precision and complexity.
Petrobas, the Brazilian energy giant, announced that they will use OpenLink’s Endur platform as well as the cMotion suite for their refined products business.
Reference:
Petrobras Selects OpenLink's Endur for its Crude Oil and Refined Products Business
| Bobsguide
Many of you have probably been reading about the benefits of a High-Temperature Superconductor (HTS) in the media recently. Apparently it was announced today by the American Superconductor Corporation (AMSC) that they have been chosen for the Tres Amigas Project which will connect all three major electricity grids in the US as well as provide pipe to bring in new non-dispatchable renewables onto the newly formed national grid.
Apparently scheduled for completion in 2014, it sounds like a pretty exciting prospect that should bring greater reliability and competition to the grid as well as provide a more effective environment for renewable sources to sell intermittent power into. Looking at AMSC’s chart, however, it appears this news was not a surprise as there was effectively no movement in the stock price today although maybe we’ll see a jump tomorrow as the announcement was late in the day.
References:
Superconductor Electricity Pipelines to be Adopted for America's First Renewable Energy Market Hub | Yahoo Finance
American Superconductor to Provide Hardware for Tres Amigas Project | Green Energy Reporter
The Tres Amigas Project: America's Renewable Energy Hub? | Fast Company
If you like to try your luck at the casinos in Vegas and also secretly hope to see a major green revolution take place in the near term you can take a position on both today. How? Buy ZENN stock (ZNNMF). ZENN, for those of you who don’t know, has been in the business of making zero-emissions vehicles but recently decided to change tact and now is focusing exclusively on an electric drive train that they plan on selling to Ford, Toyota and other major manufacturers. The ace up their sleeve? Their intimate relationship with EEStor a company that few know well but who is making some fairly audacious claims in the ultra-capacitor marketplace.
An “ultra-capacitor” is similar to battery technology in that it stores energy but rather than using a chemical process it stores electricity on it’s surface. A capacitor (even an ultra-capacitor) is typically characterised as possessing very high power-density (aka, power can be moved into and deployed out of very quickly) but very low energy-density (aka, stored energy on a per mass or per volume basis is very low). See the chart below to see this historic relationship with other technologies. It’s true that ultra capacitors are gaining greater energy density through nano-technologies but what EEStor is claiming would be a huge jump from anything else in the market. If believed, the EEStor technology would not only revolutionise motive transport but also the whole power industry (peak shaving, reduced spinning reserve, more economic and new power switching and quality devices, etc.)
EEStor’s ownership structure is not completely clear but it appears the two biggest holders are Kleiner Perkins (20%) and ZENN (12%). Even without the ownership stake it appears ZENN’s fate is highly correlated with EEStor’s. Admittedly I’d prefer to take the gamble directly with EEStor but as that option isn’t available to the public I think I’ll take a punt on ZENN. What do you think? Smart bet? Interesting gamble? Easy way to lose money?
Here’s a few links to help you decide:
[a few over-enthusiastic investors] [news on ZENN’s April run-up on prices]