Daily Digest 12/19 - 82% Chance CA Pensions Going Under, Environmentalists Get Down To Earth, Strike 3 For Fracking?

• Report: 82% Chance California Pensions Are Going Under (and You’ll Be Next)
• Guest Post: Jon Corzine, MF Global, And Unaccountability
• Earthquakes, Water Pollution and Increased Greenhouse Gas Emissions? Fracking - Strike Number Three?
• Abundance of Shale Gas Could Drive the US Manufacturing Industry to New Heights
• India’s Coal Shortages to Worsen as Coal India Reduces Production Target
• Environmentalists Get Down to Earth
• Europe’s Energy Companies Call for Higher Carbon Prices

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Economy

Report: 82% Chance California Pensions Are Going Under (and You’ll Be Next) (June C.)

We’ve discussed the destruction of pension funds before, and soon it will become reality. It’s obvious that local, state and federal governments have no intention of cutting spending, regardless of whether that spending is for essential services or discretionary. This means that in order for California (as well as other pension funds nationwide) to keep their funds solvent they need to earn some serious return on their investments. In the case of California that’s 12.5% a year. You’d be hard pressed to find a mainstream financial adviser anywhere in the world that could deliver these kinds of gains (unless, of course, they’re advising you to buy collapse-proof assets like gold and silver).

Guest Post: Jon Corzine, MF Global, And Unaccountability (June C.)

Fast forward to the current MF Global flameout. Abelow shifted to Corzine’s Chief Operating Officer. And not only did Corzine ratchet up the ante on ways to really piss off farmers, but after several days of engaging in verbal dodge ball with Congress, this ‘thorough and exacting boss’ maintained his Forest Gump type cloak of secrecy regarding the stolen $1.2 billion of his customers’ segregated money.

Earthquakes, Water Pollution and Increased Greenhouse Gas Emissions? Fracking - Strike Number Three? (James S.)

The combination of horizontal drilling and hydraulic fracturing has already transformed North America's natural gas market in less than half a decade. In 2000 shale gas was 1 percent of America's gas supplies; today it is 25 percent. While U.S. energy companies began fracking for gas in the late 1990s, there was a dramatic increase in 2005 after the administration of President George W. Bush exempted fracking from regulations under the U.S. Clean Water Act. According to Washington’s energy Information Agency, shale gas production has grown 48 percent annually.

Abundance of Shale Gas Could Drive the US Manufacturing Industry to New Heights (James S.)

“An underappreciated part of the shale gas story is the substantial cost benefits that could become available to manufacturers based upon estimates of future natural gas prices as more shale gas is recovered,” said Bob McCutcheon, U.S. industrial products leader, PwC. He continued, “In fact, the number of U.S. chemicals, metals and industrial manufacturing companies that disclosed shale gas potential and its impact so far in 2011 easily surpassed that of the last three years combined, indicating this is of growing importance in the outlook of U.S. manufacturers. The significant uptick in shale gas commentary among the manufacturing community reflects the positive influence that shale gas is having from investment, operational and demand standpoints.”

India’s Coal Shortages to Worsen as Coal India Reduces Production Target (James S.)

CIL accounts for 81 percent of India’s domestic coal production and is the sole supplier of coal and other basic raw materials to state-owned power utilities across the country. It has already missed the target in 2010-11 with the production barely inching up 0.2 percent over a year before, touching 431 million metric tons. As a pre-emptive measure, CIL cut the current year’s target for the second time to 440 MT from 447 MT, itself lowered from 452 MT set in the beginning.

Environmentalists Get Down to Earth (jdargis)

If there was a tougher moment over the last 40 years to be a leader in the American environmental movement, it would be hard to put your finger on it. The earth is warming, perhaps catastrophically, yet legislative efforts to cap carbon emissions collapsed in 2010. Global carbon limits have been equally elusive, as a conference in Durban, South Africa, showed again last week.

Europe’s Energy Companies Call for Higher Carbon Prices (James S.)

Graeme Sweeney, executive vice-president of renewables, hydrogen and carbon dioxide (CO2) at oil major company Shell, said: “The CO2 price is currently too low to drive the essential energy efficiency measures and support the development of low-carbon technologies at the required speed and scale. To resolve this situation, we need an immediate and meaningful recalibration of the EU Emissions Trading System to drive up the price of CO2.”

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