Ports-to-Plains Investors










Ports-to-Plains Alliance


Grains Lock Limit Up

The Market Ticker

Look at the moves in corn, soy, oats and wheat. All jumped into market lock up today. What this means is if the price moves up to a certain point during the day, the market gets shut down so the price can't rise any more for the day. I don't trade commodities, however I have not heard of this happening recently. If anyone knows differently, please e-mail or post in the comments.




What does this mean? Look for food to get more expensive. What drove this today I'm not sure. The employment figures came in with net job loss, however I don't see how this would matter. I will dig around and see what I can find out. I will update with any new information later.


Food Crisis Warning


We have talked about commodity prices before but it is worth discussing again in light of recent price increases. Recently, I have been seeing several articles discussing the rapid rise of prices in commodities. This is an issue that should be a concern to all of us. Our food supply and access to affordable food is a national security issue in my opinion. Currently, we have more Americans on assistance or welfare that at any time in this countries history. The poor economy has left many people living paycheck to paycheck. It only takes one crisis event for a family living this way to become destitute. Why is this happening? There are several causes. Some are obvious and others are harder to pinpoint.

For one, most would agree that we are experiencing deflation. However, that is not the case for food and oil. The prices of these have been inflationary to say the least. With interest rates getting close to zero, cheap money is moving into commodoties and pushing prices higher. I find it interesting that when the CPI is released, they say that prices are holding steady. What they don't clearly tell you is that food and energy is not included in the formula.

Secondly, you have increased demand worldwide. This piece of the puzzle is only going to get worse. The estimates for population growth are staggering to me. Not to mention, several large agricultural producing nations such as Russia, Argentina, Australia etc... have all had bad weather or droughts that have decimated crops. You might have seen a few months ago where Russia stopped all grain exports due to the fires and droughts. Not a pleasant experience when you are a country in Asia or the Middle East who depends on Russian agriculture.

Lastly, you have pressures from bio-fuels. The recent debate here in the US about ethanol would be a great example. We are trying to reduce pollution by requiring more ethanol in gas. However, this just increases the price of corn for cattle and human consumption. Putting more pressure on those struggling to put food on the table. I would prefer the corn go to feed the people and animals and not the cars. We have plenty of oil if we would just drill it.

As I said, there are many reasons for prices rising and the examples above are just a few. However, we as a country are not keeping our representatives in congress accountable for our food security and I am afraid it will come back to haunt us. If incomes continue to plummet and food and gas prices continue to rise, we could be in for some rough times. The disruption of the social cohesion we have long enjoyed could be tested and it won't be pretty.


Smart Grid (How Smart Is It?)

A lot has been written and talked about in the past couple of years about Smart Grid.  What exactly is it and what should it be?  Today Smart Grid in most cases is just a more technological solution to Demand Side Management (DSM).  You all know DSM from free light bulbs to energy audits we must save electricity.  If you were Walmart why would they want you to buy less?  In essence that is what utility companies are asking you to believe that they want you to consume less of their product.  In truth the utilities are compensated for this lost consumption by you the rate payer at a higher cost then what that Kilowatt of electricity would have cost you in the first place.  In most areas demand grows at about a 2.9% on average growth rate per year over the last 25 years.  It has also become increasingly difficult to build new generation and the age of current assets on average are 27 years old.  By consumer reducing consumption the utility can forestall the unpopular activity of building new generation.  By delaying this for even 3 years would save the utility on average $80M per year.  On top of those savings the utility is also receiving money from the Public Utility Commission under the DSM program for each KwH saved.  Outside of the KwH which again is only the generation portion of your bill (that is about 30% of your entire bill) you will save on average $2 dollars per month, while the utility is making on average from each customer $6 per month.  So in essence you are paying more for them to save.  Will it always be like this?  The answer is no.  Here is what we as consumers must do to change the game.

First we must be willing to pay more for electricity nothing is free and the costs we pay per KwH in the US as some of the cheapest in the world.  Secondly the increase in cost and the consumption savings need to be reinvested in the utility infrastructure, new generation, consumer self generation programs, transmission and distribution upgrades.  This will provide us with the tools necessary to make use of Smart Grids.  In the coming weeks I will break down this discussion into separate areas such as generation, consumer self generation programs, T&D and IT.  The last is the most important without a strong well protected IT infrastructure none of this will reach its full potential which in my mind is making all of us well educated consumers.  We can really choose what's important and create a more market and consumer driven industry far from what it is today.  If you look at the telecommunications industry over the last 10 years that is where the utility industry has to go and it will not happen without us driving it.


Albertas Ethical Oil

National Post

Alberta has oil sands. Environmentalists do not like oil sands. What do you do? You re-brand and call it ethical oil. Some may look at this as a sales ploy or spin from government entities. In reality, I think you have a well thought out description of the oil itself and the region it comes from. Much of today's oil comes from the land of dictators and despots. Working conditions and wages are a joke. There are no safe guards or rights for workers in these countries. 

However, in Canada you do. As the article briefly points out, the wages earned and the regulations in place far exceed anything found in the third world oil patches. Not to mention a willingness to work with those who oppose the use of oil in the first place. Alberta has put up with a good deal of grief from the environmental movement. I wish the movement would see the positives in obtaining oil from Alberta and praise them for trying to be good stewards. The constant brow beating and hypocritical stance they take will eventually hurt the environmental movement and the seriousness with which they would like to be taken. I hope Alberta keeps on fighting because we need the resoucres they have.


Wind & Solar Lead Renewables

Renewable Energy World

Looks like wind and solar are leading the way for renewable energy. I think most people feel that they have the most potential in helping us cut our energy consumption from current sources. What is interesting is that the current economy has not had as big an impact as might be expected in the R&D and use of these new technologies. Europe is losing market share but proponents are looking to the US and China to pick up the slack. My feeling is that turning to these alternatives will help save money in the long run for the individual homeowners. It's already happening in Massachusetts and hopefully it will happen in other states. I'm all about the win-win scenario this represents.