Friday, February 08, 2008

The Modern Business Environment

Biofuels are not Our friend, so says a new group of Scientists. Farmers love the $5/bushel Corn, but shortages of animal Feed is raising Food prices, and destruction of native habitat will release far more Greenhouse Gas than will be saved by use of biofuels; the article cites 93 times, but which is a highly suspect number, Crops normally absorbing about half the CO2 of simple pastureland, which sucks up about 25% of the CO2 of forest. This is not to say that agricultural farming of Energy will pay in the Greenhouse reduction program, but extreme numbers do not help in the argument. I still think the development of a liquid Plastic explosive, which will explode only with the introduction of a electrical charge is the best Bet; the added milling Costs recouped by greater combustion of the fuel, and that the proposed liquid could serve as its own lubricant.

Gazprom again has to apply pressure on the Ukraine by threats to cut Natural Gas shipments, in order to receive $1.5 billion in unpaid Supply to the country. The Ukraine is the transit pipeline for Gazprom supply to western European customers, and the nation will siphon off any Natural Gas necessary for domestic use; an unamusing form of Price Controls which neither the Company or its Western customers appreciate. We may be seeing the prelude to the first of the Gas Wars.

Exxon Mobil has been moving through the Courts to stop Venezuela from selling some $12 billion worth of Venezuelan Oil assets on the World Market. Hugo Chavez is running out of Cash, and he wants to spend it now. One wonders if he would actually get full value from such Sales, given his advocacy of nationalization of industries. His policy seems to be Nationalize, regain the assets, then resale; after a polite interval, again Nationalize and resale. This policy incites some hesitation among the World Business leadership, especially as Chavez shows no indication of paying Government Expenditures by any real form of Taxation. Doesn’t this sound like the subprime Mortgage crisis somehow–writing Mortgages, selling bundled Mortgages, declaring Mortgages are worthless, writing more Mortgages, again bundling Mortgages? lgl

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