Wednesday, February 20, 2013

US president Barack Obama’s sphinx-like energy policy, suits him just fine

US President Barack Obama's policy on energy and climate change remains inscrutable and full of strategic ambiguity, which probably suits him just fine.


The soaring rhetoric in his State of the Union address - "for the sake of children and our future we must do more to combat climate change" - masks a more complicated, some would say pragmatic, approach to the role of clean technology and fossil fuels in meeting future energy demands while curbing greenhouse gases.

The administration's commitment to tackling climate change by cutting emissions is not in any doubt. White House advisers are genuinely enthusiastic about the transformational potential of energy efficiency and zero-carbon technologies such as wind and solar to meet future demand while sparking a new investment boom to fire up economic growth.

By contrast, the administration remains hostile to coal, and unsympathetic about gas and oil, even though hydraulic fracturing promises to bring more jobs and growth if some manufacturing is brought back to the United States to benefit from cheap gas prices, and free the country from dependence on oil imports from outside North America.

Advisers from the White House Council on Environmental Quality and other bureaus within the Executive Office of the President have repeatedly briefed environmental activists to reassure them of the President's commitment to aggressive steps to promote clean technology and penalise polluting businesses.

The latest volley of green briefings came ahead of the State of the Union, where White House staff appeared to provide strong steering to environmental lobbying organisations about how to interpret the contents of the address, which gave it a stronger green gloss than the president's words alone might warrant.

In practice, the administration appears to be trying to find a middle way, one that keeps activists onside while not risking a complete breakdown in relations with the petroleum industry or being blamed for a new rise in energy prices.

Global pepper prices will remain firm during 2013 as production will be just sufficient to meet the increased demand given the limited carryover stock in the market.

The International Pepper Community (IPC), the inter-governmental organisation of major pepper-producing countries, says the global production shortage will be around 10,000 tonne to 15,000 tonne.

This, along with an inadequate carryover stock, will result in a firm price trend. According to IPC executive director S Kannan, world production in 2012 touched 3.47 lakh tonne, mainly due to a substantial increase in Indonesian output.

Global production in 2013 is predicted to drop by around 10% though Indian output is expected to show an almost 30% rise at 55,000 tonne. Vietnam, the largest producer, and Indonesia are expected to reap a lower harvest in 2013.

Last year, Vietnam with 1,16,550 tonne and Indonesia with 74,000 tonne were the two largest exporters. The latter showed over a 100% jump in shipments. India trailed them at 17,500 tonne, a decline of 26%.

The Indian market has seen only limited supplies although the season in full swing. "There is no carryover stock with growers. So they are holding on to the stock expecting a better price in the coming days," said C P Krishnan, whole-time director of GeojitBSE 0.66 % Comtrade, adding that climatic conditions and high labour cost have delayed the supplies. This has spiked the pepper spot price to Rs 412 per kg for the first time during a harvest.

Around 6,800 tonne pepper piled up in NCDEX warehouses due to complaints of mineral oil contamination has worsened the supply situation. Spices Board is testing the stock in the warehouses.

But given the limited resources available with the board for testing such a large quantity, it could take some time for completing the examination of the entire lot. According to Krishnan, the bullish trend may persist for some time in India.

The contract for March delivery on NCDEX shot up by 3.01% on Monday to Rs 380.10 per kg. April and May contracts too are showing a rising trend. With limited pepper available in India, buyers are moving to Vietnam, where a harvest will begin soon.

indiatimes.com

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