Publisher's Note: Today the price of oil hit $85 a barrel - a record price. Here at Energy & Capital, we've been telling you for years that we thought oil was headed over $80.
• "...heck you can kiss $45 a barrel goodbye... maybe even $50! In fact, we're probably facing a price spike between $80 to $100 a barrel within the next 24 months." -Brian Hicks, January 18, 2006
• "Our resident energy expert, Mike Schaefer, believes that oil prices will continue its rise... heading to at least $80 near term... then to $105 a barrel in the next 3 years." -February 7, 2006
• "...I think these estimates are a bit on the conservative side, and we should see $80 oil this year, no problem.- Chris Nelder, January 18, 2007
Today, we're calling for the price of oil to reach over $100 within the next 12 months.
Eventually though, we think the price of oil could reach $300 a barrel.
How and why?
Peak oil.
Even with oil at record levels, the majority of people still have no idea what peak oil is. That's why we created the Peak Oil Clock... to give people a visual of just how much oil the world is consuming every single day.
We're asking you to help us spread the word, because this crisis is too serious to take lightly. And we can't do it alone. Follow this link... it'll show how to add the Peak Oil Clock to your website or blog.
http://www.energyandcapital.net/peakoilclock/
It's time to get serious,
Coming Full Circle: Japan to Buy Carbon Credits
As the saying goes, all good things must come to an end. And although the first phase of the Kyoto Protocol doesn't end until 2012, there is already some speculation going on as to how it will turn out.
The treaty's host country has come under the most fire of late, with industry experts calling for them to miss their target by more than 2%.
You see, to meet their target, Japan has to reduce its emissions to 6% below 1990 levels by 2012. But, as it stands right now, emission levels in Japan are 7.8% above 1990 levels, meaning they have to accomplish a 13.8% reduction of current emission levels in the next four years.
If that's going to happen, a significant amount of carbon credits will need to be purchased, because Japan's emission levels are still rising.
Some of the increased emissions can be traced to the earthquake that struck Japan on July 16th of this year. That earthquake damaged a large nuclear power plant and caused a leak of radioactive material. The reactors automatically shut down and have not been restarted.
Closing that plant has forced Tokyo Electric Power and other utilities to revert to using dirty coal- and oil-fired plants, leading to a rise in emissions. So, in order to meet their target, those power companies are going to have to purchase increased amounts of carbon credits.
But it's not all bad news for Japan. Big industry--steel, cement, and auto--has actually reduced its emissions to 3% below 1990 levels. Emissions from the commercial and transportation sectors, however, are up 44% and 18%, respectively.
According to Tetsunari Lida, the Director of Japan's Institute for Sustainable Energy Policies, the country will need to spend $8 billion to offset their 8% cumulative rise in emissions for the eight years covered by Kyoto.
They'll do that through a Kyoto program called the Clean Development Mechanism (CDM), which allows companies from industrial countries to buy carbon credits through the United Nations from projects in developing nations.
Beyond the CDM, Japan is looking into a mandatory cap on industrial emissions, which are currently under a voluntary reduction scheme. Plans for such a system will be established by March 2008.
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From Hunter to Hunted, Carbon Credits in Africa
If Japan is on the hunt for carbon credits, Africa will soon be the ultimate prey.
Last week, in Johannesburg, South Africa, the Central Energy Fund (CEF), a private company focused on meeting the future energy needs of South Africa, announced the formation of an international carbon trading business called CEF Carbon. And even before it trades a single credit, billions in revenue are already being predicted as the world scampers to quell its rising emissions.
That's because, when it comes to the CDM, Africa is a relatively untapped resource. Sure, since its inception in 1997, the CDM has harvested about 80 million Certificates of Emission Reduction (CER), but less 900,000 of those have come from Africa, with more than 79 million coming from Asia and the Americas.
You see, when the CDM was established, companies and financiers flocked to Asia, which was rapidly developing and in need of new power sources. Thousands of new renewable and clean energy projects were set up that not only provided power, but CERs as well.
These ventures, now known as the low hanging fruit of the carbon world, provided massive returns for their investors. But now, with most of that fruit harvested, investors are looking at other areas of the world to initiate projects.
The Central Energy Fund in South Africa is a perfect example. So far, Africa has only registered 21 CDM projects, while Asia and the Americas have registered 477 and 286, respectively. Those low African numbers mean huge opportunity for growth in the carbon sector.
According to Mputumi Damane, one of the CEF's Directors, "CEF, through its existing project development capabilities, strong financial position and existing CDM project, is ideally placed to stimulate further growth in the CDM market on the continent."
And, of course, that growth will come in areas that Green Chip is quite familiar with. Of the 2,500 or so new CDM projects scheduled to come online, 18.6% will be biomass energy projects, 15.7% will be energy efficiency projects, 11.8% will be wind projects, and 6.9% will be landfill gas projects.
That's going to translate into huge profits for Green Chip investors, either through our traditional service or through Green Chip International, with picks from Sam Hopkins.
Many companies that Green Chip has been following will benefit from all these new carbon projects coming online, and our readers will be the first to hear which company to buy and when.
The global carbon market is truly coming full circle. It started with the signing of a treaty in 1997. From there, it spread like wildfire to London, which is now the world capital of emissions trading. And even to the U.S., where the Chicago Climate Exchange (CCX) has provided a voluntary trading scheme.
Now, with Kyoto's host country about to miss its target, and company shareholders around the world calling for full carbon disclosure, the carbon market is hotter than ever. Those who wait will only get to watch the growth of this market from the sidelines.
But those who act now will be making money hand over fist. For that to happen, you have to become a Green Chip member. You can do that by clicking here .
Until next time,
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