Arroyo’s Gasmar investment offers a glimpse into the future of energy By leungchopan Arroyo Investors last week disclosed an investment in Gasmar S.A., a terminal and storage facility for liquefied petroleum gas (propane) in northern Chile. The case for that investment is cemented in a particular view of the industrialized world’s energy future. Houston-based Arroyo Investors, an independent investment manager that focuses on power and energy infrastructure investments in North and South America, has more than $2.5 billion in assets under management. Rudolf Araneda, partner in Arroyo’s office in Santiago, Chile, said in a statement: “As Chile continues its push to lower the carbon intensity of its energy consumption. LPG is a critical energy source to displace higher carbon intensity fuels such as diesel and biomass. Gasmar’s receiving and storage assets are critical to advancing the growing need for LPG services in Chile.” The supply of propane Gasmar has a facility...
Posts
Wave energy converters are in principle no more exotic than windmills or hydroelectric plants. Each of these three systems exists to turn kinetic energy, the motion of sea water, air, or river water respectively, into electricity. Contemporary exploitation of this idea as it applies to waves may be dated to the invention of the Salter duck wave energy device in 1974. That was of course inspired by the oil crisis of its day. In October 1973, the Arab members of OPEC declared an embargo on the sale of oil to the countries they saw as assisting Israel. In the final week of February 1974, according to AAA numbers, 20% of US gasoline stations had no fuel. By the end of the embargo the following March the global price of crude oil had risen from $3 to $12 a barrel. It was a fruitful moment for energy-related innovations. There have been many innovations and elaborations of the idea of wave energy since the days of the Salter duck. Also, efforts to make this a significan...
I've recently encountered a working paper on the subject of "oil price shocks" prepared by economists affiliated with China's Shanghai Tech University. There is something in it that surprised me a bit. Specifically: the authors do not believe that a sudden increase in the mean price of petroleum (that is, averaging across different local markets within a nation etc.) hampers economic growth. Nor do they believe that a sudden decrease in the mean assists growth. They claim to have solid empirical evidence for this negative conclusion, though their data is confusing to me and I offer no assessment here. But if it is valid, the conclusion means that "oil price shocks" as generally understood do not exist. That strikes me as very odd. It would seem intuitively plausible that a sudden increase in the value of any commodity integral to the system of production would ... well ... hamper production. More expensive input, less total output. Why is that i...
The headline of this post is the title of a new book by David Buchan and Malcolm Keay. The subtitle is "Toward an Energy Union?". The general theme of the book is that the EU's reforms on energy related issues have so far been inadequate. They have been too optimistic about the consequences of market liberalization and have underestimated the costs that would be associated with cuts in emissions. The authors spend a fair amount of time on the issue of feed-in tariffs (FIT). These are the deals that member states are willing to offer alternative electricity generators, including for example homeowners who might simply have solar panels on their roof. The payments are determined by technology, and in essence by politics, so kilowatts are not treated as fungible. Though of course once it gets into the grid, a kilowatt is a kilowatt and is indifferent to where it came from. Feed-in tariffs have proven very popular. Every nation state that creates them finds that it ha...
Reuters recently ran a story that begins this way: "Riverstone Holdings LLC, a private equity firm that focuses on energy and power sectors, said it would sell U.S.-based oil and gas explorer Rock Oil Holdings LLC to SM Energy Co ( SM.N ) for $980 million in cash." Surely that sounds boring to most of you, dear readers. One point that may make the lede interesting, for observers of the news media, is the choice whereby the story was made to be about Riverstone Holdings, the PE firm. The other two firms are direct and indirect object, "to sell" is the predicate. Riverstone is the subject. [By the way, "lede" is standard journo jargon for "lead paragraph," as distinct from "lead story" for which the standard spelling is retained.] Was there an alternative? Of course there was! More than one, surely, but the one that comes immediately to my mind would read, "SM Energy Co is purchasing Rock Oil Holdings LLC from ...."...