Lessons from Frankenstorm E-Book

John Licata

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Wiley Finance RealTime
• Sprache: Englisch

Seitenzahl: 133

Veröffentlichungsjahr: 2013

Beschreibung

The world has been brought to its knees in recent years due to an increased amount of hurricanes, tsunamis and earthquakes which collectively have left tens of millions without power and derailed economic growth in the process. However, today weather is not the only threat to massive power loss. It's time to fight back before energy weaknesses and instabilities from disruptive weather patterns cause financial chaos around the world through cyberwarfare. In Lessons from Frankenstorm, you'll learn how to fight back. Overview: A look back at recent events (Fukushima, India blackout, Sandy here in the U.S., August 2003 blackout in Northeast U.S., etc.). Set up the case that something needs to be done, especially with warming temperatures (2012 was the hottest year on record). What are threats? Focus here is on weather (temperatures, rising tides, global warming, dwindling water supplies which impact certain energy sources (i.e. fracking, biofuels), terrorism (cyberterror which may create a whole new investing sector in the very near future). What can governments and utilities do? It could be good to focus on disaster recovery efforts, crisis management, legislation, planning and strategy AHEAD of next major storm or terrorist threats that could rattle global financial marketplaces. New legislation could lead to new asset allocation by investors, technology companies, utilities and private equity. Legislation (i.e. endorsing modern nuclear power, offshore wind, etc.) may also cause new alliances, joint ventures as a result. Could Frankenstorm be used a global blueprint for energy innovation? Here focus on efforts seen in New York and New Jersey emerging from the darkness and ruin left by Superstorm Sandy through the real next generation energy technologies and themes that investors may want to focus on for the next decade (i.e. thorium nuclear reactors which China just announced they are moving toward--should the U.S. follow?). Complacency is not the answer. Doing nothing and simply waiting for another major power outage that not only challenges our credibility as a superpower in a new world economy but could also cripple global market centers (maybe look at how slow Japan has reacted to Fukushima while Germany moved way too fast in my view to move away from nuclear power--something that has caused surging electricity prices).

Leseprobe

Contents

Cover

Series Info

Title Page

Copyright

About the Author

Acknowledgements

Introduction

Chapter 1: What in the World Is Happening?

Earthquakes

The Sky Is Falling

Chapter 2: Frankenstorm Threats Go Beyond Weather

Climate Change

Clean Water

Cyberterrorism

Too Much Dependence on Natural Gas

Complacency

Getting Too Caught Up in the Future

Chapter 3: Could Frankenstorm Be Used as a Global Blueprint for Energy Policy and Innovation?

What's Already Happening?

Solar Has a Brighter Future

Goodbye LIPA?

What Are We Doing on Cybersecurity?

Green Piggybanks: State/Regional SPR-Style Hubs for Gasoline and Water

Electric Vehicle Infrastructure

Building Infrastructure/Preparation Process

Clear the Path, Literally

Some Common Sense

Chapter 4: Will Fiscal Cliff and Post-Sandy Recovery Alter Energy Policy?

Our Energy Policy Needs GPS

Willingness to Further Explore Geothermal Power

Keystone XL Pipeline?

Energy Storage Is Key

Chapter 5: Investment Ideas

Areas Where We Can See the Biggest Alpha for the Next Decade

Chapter 6: The Calm before the Next Frankenstorm

Notes

Chapter 1: What in the World Is Happening?

Chapter 2: Frankenstorm Threats Go Beyond Weather

Chapter 3: Could Frankenstorm Be Used as a Global Blueprint for Energy Policy and Innovation?

Chapter 4: Will Fiscal Cliff and Post-Sandy Recovery Alter Energy Policy?

Chapter 5: Investment Ideas

The Wiley RealTime Finance series provides information, tools, and insights specifically for finance and investment professionals. Topics range from portfolio management to e-commerce, risk management, financial engineering, valuation and financial instrument analysis, and beyond.

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Copyright © 2013 by John J. Licata. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

ISBN 978-1-118-77417-5 (ePDF) ISBN 978-1-118-77440-3 (ePub)

About the Author

John is the founder and chief energy strategist of Blue Phoenix Inc. His ability to cross-pollinate idea generation and analysis of both traditional and unconventional global energy markets has been documented in the global media for north of a decade by the likes of Bloomberg, CNBC, Business News Network, Reuters, Fox Business Channel, and Yahoo! Finance.

He has over 15 years of energy and metals research/strategy experience, which has made him a highly sought out industry veteran for viewpoints related to advanced energy technologies and industries. John has held research, trading, and strategy positions at Dow Jones, Salomon Smith Barney, BrokerageAmerica, and on the trading floor of the New York Mercantile Exchange (NYMEX).

John is the primary editor and author of the Blue Phoenix Next Gen Energy blog. He has also contributed content to The Guardian, CNNMoney, CME Group, The Motley Fool, AOL Energy, and Technorati.

John graduated from Saint Peter's University with a BS in economics and he received his MBA from the Executive MBA Program at NYU's Leonard N. Stern School of Business.

He is a member of the board of directors for New York Energy Week and sits on the Regents Board for Saint Peter's University.

You can follow John on Twitter at https://twitter.com/bluephoenixinc and on Facebook at http://Facebook.com/BluePhoenixInc.

Acknowledgements

My heart continues to go out to the great number of people affected by Frankenstorm Sandy. I personally wish to thank those men and women in the Far Rockaways, Oceanside, New York, and the New Dorp area of Staten Island, New York, who shared their personal stories of survival with me. Words can't begin to tell you how much you've inspired me to try and make a difference in your recovery process by raising awareness of next-generation energy ideas and preventive measures I truly believe can help all of us during the next Frankenstorm, whenever it comes.

Thank you to my parents, sister, and in-laws for always believing in me and for reminding me that the best is yet to come.

A special thank you to Bill Falloon and Debra Englander of Wiley for their indispensable guidance and support of this e-book.

Finally, to my wife, Marissa, the muse of my life. Words can't express my gratitude for all of your patience and constant encouragement throughout the entire writing process of this e-book.

Introduction

The world has been brought to its knees in recent years due to an increased number of hurricanes, tsunamis, and earthquakes, which collectively have left tens of millions without power and derailed economic growth in the process. However, today, weather is not the only threat to massive power loss. It's time to fight back before terrorists exploit energy weaknesses and instabilities from disruptive weather patterns by causing financial chaos around the world through cyber warfare.

So where do I begin? Well, I was always raised to try and learn from past experiences, so that's a good start for me. I first took an interest in research nearly 14 years ago when my mother was diagnosed with breast cancer. I didn't set out to cure cancer, mind you, but I did want to learn how my mom could treat her illness and beat the dreaded disease. I have taken the same approach to research throughout my career focusing on how the United States could become more energy independent and self-sufficient. I mean who wants to pay for north of $4/gallon for gasoline, wait on gas lines or know that increased geopolitical tensions in another part of the world could cause skyrocketing energy prices here at home? So, in essence, for over a decade I've wanted to explore ways the United States could cure its energy disease.

As a survivor of 9/11, I saw firsthand life at its absolute worst, yet I also witnessed heroism and recovery at its best. Throughout the mental cataloging of images and sounds of the dark day and racking my brain over how/why such a terrible act had just happened, I tried to keep a stiff upper lip, carry on with my life, and vow to do what I could through my research to help discover or bring awareness to new, exciting, and innovative technologies the United States must advance in order to keep vital energy sources free from future threats. That's where the real alpha for investors will be for decades to come (safe, next-generation energy). However, as my own research as well as modern technology evolved, it became more and more apparent to me that the lack of direction for a national energy policy was impeding energy progress, even after massive storms like Hurricanes Katrina, Rita, Irene, and Superstorm Sandy—a “Frankenstorm”—invaded our shorelines.

So my research, which was focused predominantly on ways we could become more independent from oil, metamorphosed in recent years into ways we could not only produce cleaner energy but harness and store that power and also protect it from Mother Nature as well as terrorists. Seeing my hometown near New Dorp in Staten Island, New York, in utter destruction post Frankenstorm Sandy, I can say with confidence that my passion to cure our country of its energy disease and help other nations learn from the past has only been intensified. Preparation, innovation, and anticipation are themes I try and introduce throughout these pages. I also do my best to unearth and share new investing ideas within the energy space and make tough topics easier to comprehend for those who read this e-book.

I have appeared in the media (CNBC, Bloomberg, BNN, FOX Business, Reuters Insider, etc.) countless times over the past decade as a forward-thinking source. My research has been published by CNNMoney, AOL Energy, The Guardian, The Motley Fool, Technorati, and CME Group. I've established deep credibility for speaking about issues (e.g., fracking, cleanweb, advanced nuclear power, electric vehicles, biofuels) ahead of the trend. Today, I'm loudly beating the drum that energy storage in secure locations is vital for growth here at home as well as for financial centers around the world. That spells opportunity for investors.

In the past two years, Mother Nature has left tens of millions in the dark around the world (Japan, India, United States), and it's time we fight back and take advanced measures to keep the lights on before weather is not our only foe to fear.

In showbiz, “Lights, camera, action!” is a typical phrase uttered by a movie director shooting a new scene. Right now, the energy world is facing a critical time in history as global weather patterns and the threat of cyber terrorism both call for technological advancements so our lights stay on, even when the Hollywood or local news cameras stop rolling. Disruptive weather patterns have shown our increased vulnerabilities, yet action must be taken to secure our energy supplies because terrorists are lurking and we can't remain a superpower if our lights aren't on. The need for action when it comes to energy takes on a new meaning we must collectively push forth. It's time the world fought back.

1

What in the World Is Happening?

Headlines such as “Frankenstorm,” “Monster Storm,” and “The Perfect Storm” gripped global headlines as Superstorm Sandy, a weather pattern of epic proportion, battered the U.S. Northeast in October 2012 in a way not seen in over 100 years. Over 8 million people were left without power as a result. Living through the storm personally, I can say with confidence that the United States was not ready for Sandy, but we must be better prepared for the next Frankenstorm, a collision of storm fronts, which may or may not come from weather.

The need for 24/7 baseload power is only advancing, thanks to a growing population, an increased number of wireless product offerings, bigger TVs, and the need to charge hybrid and fully electric vehicles (EVs). In essence, Dandy Sandy should only validate the overwhelming need for advanced batteries, energy storage, and backup EV infrastructure on the East Coast, an area becoming much more prominent in the country for energy expansion, and today a possible example for the rest of the world post Sandy. So global investors should be watching very closely for investment clues from how New York, New Jersey, and even Connecticut rebuild post Sandy.

In 2011, just one storm season before the one that brought Frankenstorm Sandy, Hurricane Irene brought its own devastation to the East Coast and showed us the type of damage a modern monster storm can really bring. However, as we witnessed post Sandy or just months later from the paralyzing snowstorms in the Midwest or even the twin winter snow storm called “Nemo,” the United States is still largely unprepared to deal with mass power outages. Actually, so is the rest of the world.

In August 2012, I wrote an op-ed article for CNNMoney (“How the U.S. Can Avoid a Blackout Like India”), which basically challenged the notion that the United States is immune to the power failings seen this summer in India. I took a lot of flak for that article, yet the fact still remains (even post Sandy) that we can't afford to be complacent while weather patterns are clearly changing—and changing not in our favor, with rising tides, flooding, nor'easters, and dangerous wind currents that are all increasingly wreaking havoc on our power supply.

Hasn't anyone noticed the ease of disruptions to global power supplies in recent years? In 2003, Italy had a blackout that affected nearly 56 million. Germany had a power outage in 2006 that impacted roughly 10 million throughout Europe. China experienced power loss that shut the lights for over 30 million people in 2008. Tens of millions were sent into darkness in Brazil due to electrical outages in 2009. Many people (myself included) watched the 2011 Fukushima Daiichi nuclear disaster in awe from news programs broadcast around the world. Concerns over an earthquake and a tsunami were certainly put on a shelf (maybe too high a shelf, I believe) as most focused on what became the largest nuclear disaster since Chernobyl (1986). Now imagine if the lights went out in every city across the United States. That is what basically happened in India in the summer of 2012 as twin blackouts hit 370 million and an astonishing 670 million people in India in the same week (the entire U.S. population is 313.8 million).

Sure, India—the fastest growing population on the planet—does have frequent outages because of growing demand constraints on its power grid, and the country was plagued by the driest monsoon season in quite some time and arguably an example of climate change. However, these huge losses of power should raise some large red flags of concern that ultimately may result in firmer direction at the government level, new investment, increased innovation, and a consumer behavioral shift like never seen before. This has to happen here in the United States as well. Why? A convergence of sustainable supply and demand is really the heart of the global smart grid conversation. Therefore, as India recovers from its own power nightmare, it's time the United States puts its own politics aside and makes the smart grid a big priority before the lights go out at home again post Frankenstorm Sandy.

Remember the U.S. blackout of 2003? If you don't, that was a widespread power outage (again in the northeastern U.S.) that also impacted 10 million people in Ontario, Canada, thanks to a software issue at a FirstEnergy site in Ohio. Imagine, in this day and age, our power grid remains somewhat of a joke because we simply haven't learned lessons from the past. That has to change.

Earthquakes