19
Andrew Paterson Principal, CMCP/ Verdigris Capital Washington, DC 619 / 807-3267 [email protected] 1 Financing Clean Energy Projects under the Reinvestment Act of 2009 OPENING -- GLOBAL PERSPECTIVES & DRIVERS

Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

  • Upload
    others

  • View
    15

  • Download
    0

Embed Size (px)

Citation preview

Page 1: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

Andre

w P

ate

rson

Princip

al,

CM

CP

/ V

erd

igri

s C

apita

l

Washin

gto

n,

DC

619 /

807-3

267

adpate

rson@

gm

ail.

com

1

Fin

an

cin

g C

lean

En

erg

y P

roje

cts

un

der

the R

ein

ve

stm

en

t A

ct

of

2009

OP

EN

ING

--

GL

OB

AL

PE

RS

PE

CT

IVE

S &

DR

IVE

RS

Page 2: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

NV

CA

/ D

elo

itte

20

09

Glo

ba

lV

C S

urv

ey

2

…fr

om

a c

om

pre

he

nsiv

e a

nnual surv

ey w

ith 7

25 r

esp

onses

Cle

an

Tech

Glo

bal

Driv

ers

Page 3: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

3

Glo

bal

Driv

ers

Page 4: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

4

Page 5: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

5

2008

Page 6: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

6

Page 7: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

7

Page 8: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

8

Page 9: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

9

en

erg

y

Page 10: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

10

En

erg

yGlo

bal

Driv

ers

Page 11: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

IEA

: “

Pri

ce

of

Ca

rbo

n E

mis

sio

ns

Mu

st

Ris

e”

--8 J

une 2

009 –

The p

rice o

f carb

on e

mis

sio

ns m

ust

ris

e to U

S$180 a

metr

ic ton b

y 2030 to m

eet gre

enhouse g

as

reduct

ion targ

ets

, th

e e

xecutive

directo

r of th

e Inte

rnational E

nerg

y A

gency

said

. "A

n e

nerg

y re

volu

tion is n

ecessary

," N

obuo T

anaka s

aid

at th

e A

sia

n O

il &

Gas

Confe

rence in K

uala

Lum

pur.

Euro

pean U

nio

n c

arb

on d

ioxid

e a

llow

ances for

Decem

ber

traded U

S$18.8

2 a

ton today

on the

Euro

pean C

limate

Exc

ha

ng

e in L

ondon.

United N

ations s

cie

ntist

s say

gre

enhouse-g

as

outp

ut should

peak b

y 2015 o

r te

mpera

ture

s m

ay

rise m

ore

than 2

deg

rees

Ce

lsiu

s

above

pre

-industr

ial le

vels

, addin

g to the r

isk o

f dro

ug

hts

and f

loodin

g fro

m c

limate

chang

e. W

orld e

nerg

y dem

and w

ill e

xpa

nd 4

5%

betw

een n

ow

and 2

030 a

t an a

vera

ge r

ate

of 1.6

% a

year,

with c

oal acc

ounting for

more

than a

third o

f th

e o

vera

ll in

cre

ase, T

anaka s

aid

to

day.

Deve

lop

ing

nations o

uts

ide the O

rganiz

ation for

Econom

ic C

oopera

tion a

nd D

eve

lopm

ent w

ill a

ccount fo

r 97%

of th

e in

cre

ase

in

carb

on e

mis

sio

ns b

y 2030, he s

aid

. G

overn

men

ts m

ust

make a

six

-fo

ld in

cre

ase in

sp

en

din

g o

n r

en

ew

ab

le v

en

ture

s r

ela

tive t

o

recen

t eco

no

mic

sti

mu

lus t

o m

eet

IEA

's450 p

art

s p

er

millio

n c

arb

on

scen

ari

o, T

an

aka s

aid

.

11

Glo

bal

Driv

ers

Page 12: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

CB

O:

Big

pri

ce

ta

g o

n e

mis

sio

ns

pla

n -

-$

84

6B

Tu

esd

ay,

Ju

ne 9

, 2

009

When

th

e H

ou

se E

ne

rgy

and

Co

mm

erc

e C

om

mitte

e a

pp

rove

d a

clim

ate

bill

last

mo

nth

to r

edu

ce g

ree

nho

use

-ga

s e

mis

sio

ns,

Re

pub

lica

ns -

an

d a

fe

w D

em

ocra

ts

-p

redic

ted

th

at it w

ou

ld im

po

se h

ug

e c

ost

s o

n th

e A

me

rica

n e

con

om

y. A

cco

rdin

g

to t

he

Co

ng

ress

ion

al B

udg

et O

ffic

e, th

ey

we

re r

igh

t. T

he

CB

O,

the

off

icia

l,

no

npa

rtis

an s

co

reke

ep

er

of

Co

ng

ress,

has d

ete

rmin

ed

in a

ne

w a

na

lysis

th

at

the

so

-ca

lled

"ca

p-a

nd

-tra

de

" sys

tem

in t

he

bill

wo

uld

co

st

Am

erica

n c

orp

ora

tions,

pu

blic

util

itie

s a

nd t

he o

il a

nd

ga

s in

dustr

y $

84

6 b

illio

n o

ver

10

ye

ars

. T

he

bill

is

the

ce

nte

rpie

ce o

f P

resi

den

t O

ba

ma

's e

ne

rgy

str

ate

gy.

Mo

st

of

tha

t m

one

y -

all

bu

t $

24

bill

ion

-w

ou

ld flo

w b

ack

ou

t fr

om

the

g

ove

rnm

en

t co

ffe

rs in

th

e fo

rm o

f re

ba

tes o

f va

riou

s k

ind

s to

aff

ecte

d ind

ust

ries,

loca

l po

we

r co

mp

anie

s a

nd

re

fine

rie

s, a

mo

ng o

the

rs.

Be

twee

n $

61

bill

ion a

nd

$

83

bill

ion

wo

uld

be

re

turn

ed

to

lo

we

r-in

co

me

fam

ilies in

pa

rtic

ula

r, a

cco

rdin

g to

th

e C

BO

and

the

co

ng

ress

iona

l Jo

int

Co

mm

itte

e o

n T

axa

tio

n,

tho

ugh

tha

t nu

mbe

r is

su

bje

ct t

o r

evi

sio

n w

he

n th

e H

ou

se W

ays

an

d M

ea

ns

Co

mm

itte

e g

ets

its

ch

an

ce t

o a

lte

r th

e m

ea

sure

's ta

x p

rovi

sio

ns t

his

sum

me

r.

12

Glo

bal

Driv

ers

Ma

y 26: G

lobal b

usin

ess le

aders

ass

em

ble

d in

Copenhagen a

t th

e a

t th

e

World B

usin

ess S

um

mit

on C

limate

Change M

ay

24-2

6 2

009, conclu

ded

their m

eetin

g c

alli

ng f

or

what th

ey

sa

y is

"am

biti

ous, glo

bal a

ctio

n o

n

clim

ate

change."

The b

usin

esses a

nnounced that a n

ew

glo

bal c

limate

tr

eaty

must set bold

targ

ets

for

em

issio

ns r

eductio

ns b

y 2020 a

nd 2

050,

limitin

g the g

lobal a

vera

ge r

ise in

tem

pera

ture

to a

maxim

um

of

2°C

com

pare

d to p

re-industr

ial l

eve

ls. T

he

y said

this

requir

es im

media

te a

nd

substa

ntia

l actio

n le

adin

g to

an a

bate

ment of

aro

und 1

7G

t ve

rsus

busin

ess-

as-u

sual b

y 2020 a

nd a

50%

reductio

n in

gre

enhouse

gases o

ver

1990

leve

ls b

y 2050. T

he b

usin

ess le

aders

indic

ate

d in

their r

ecom

mendatio

ns,

refe

rred to a

s "

The C

openhagen C

all,

" f

orm

s the b

asis

of a c

oncis

e

sta

tem

ent, w

hic

h s

ets

out th

e e

lem

ents

busin

ess b

elie

ves a

re r

equired f

or

an e

ffectiv

e n

ew

glo

ba

l clim

ate

tre

aty

to b

e f

org

ed.

Page 13: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

13

Dif

feri

ng

Ele

ctr

icit

y M

ix b

y R

eg

ion

(E

EI)

, 2

00

5

Nati

on

al

avera

ges

mask v

ery

sh

arp

reg

ion

al d

iffe

ren

ces

on

GH

Gs

an

d

ele

ctr

icit

y f

ue

l

so

urc

es.

Non

-Hyd

ro

Rene

wa

ble

sH

ydro

PA

C:

8%

44

%M

TN

: 2

%10

%W

SC

: 4

%1

%W

NC

: 3

%3

%E

SC

:2

%5

%E

NC

:2

%<

1%

SA

T:

3%

1%

MA

T:

2%

6%

NE

G:

7%

6%

http://w

ww

.ee

i.org

/

61

%

76

%70

% 55-6

5%

co

al

Reg

ional

Confli

cts

Page 14: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

An

aly

sis

of

Sen

ate

Vo

tes f

or

Clim

ate

bill -

2009

Ra

nk

ed

: le

ast

lik

ely

to

vo

te f

or

CO

2 C

ap

:

#S

tate

Sta

te P

res

Vo

te 2

00

8

Sta

te P

res

Vo

te 2

00

4

Vo

te o

n M

cL

bil

l (2

00

3)

SE

NA

TO

R (

All D

em

s)O

bse

rva

tio

n

Ne

xt

ele

ctio

n

1A

KR

R--

M.

Be

gic

hN

ew

ly e

lect

ed

fo

ssil

sta

te s

en

ato

r (o

ve

r S

teve

ns)

20

14

2A

RR

RN

OB

. Li

nco

lnC

oa

l u

se s

en

ato

r w

orr

ied

ab

ou

t co

sts,

20

10

2010

3A

RR

RN

OM

. P

ryo

rC

oa

l u

se s

en

ato

r w

orr

ied

ab

ou

t co

sts

20

14

4LA

RR

NO

M.

Lan

dre

au

Fo

ssil s

tate

se

na

tor

wo

rrie

d a

bo

ut

cost

s2

01

4

5M

OR

R--

C.

McC

ask

ill

Co

al u

se s

en

ato

r w

orr

ied

ab

ou

t co

sts

20

12

6M

TR

R--

J. T

est

er

Co

al so

urc

e s

en

ato

r w

orr

ied

ab

ou

t e

con

om

y2

01

2

7M

TR

RN

OM

. B

au

cus

Co

al so

urc

e s

en

ato

r w

orr

ied

ab

ou

t e

con

om

y2

01

4

8N

DR

RN

OK

. C

on

rad

Co

al u

se s

en

ato

r w

orr

ied

ab

ou

t e

con

om

y2

01

2

9N

DR

RN

OB

. D

org

an

Co

al u

se s

en

ato

r w

orr

ied

ab

ou

t e

con

om

y2010

10

NE

RR

no

t vo

tin

gB

. N

els

on

Fo

ssil u

se A

g s

en

ato

r w

orr

ied

ab

ou

t co

sts

20

12

11

WV

RR

NO

R.

Byrd

Co

al so

urc

e s

en

ato

r w

orr

ied

ab

ou

t e

con

om

y2

01

2

12

MI

DD

NO

C.

Levin

Ru

st b

elt

se

na

tor

wo

rrie

d a

bo

ut

eco

no

my

20

14

13

WV

RR

YE

SJ.

Ro

cke

fell

er

Co

al so

urc

e s

en

ato

r w

orr

ied

ab

ou

t e

con

om

y2

01

4

14

CO

DR

--M

. B

en

ne

tN

ew

co

al u

se s

en

ato

r w

orr

ied

ab

ou

t 2

01

02010

15

IND

RY

ES

E.

Ba

yh

Co

al so

urc

e s

en

ato

r w

orr

ied

ab

ou

t 2

01

02010

16

NC

DR

--K

. H

ag

en

Ne

w c

oa

l u

se s

en

ato

r w

orr

ied

ab

ou

t co

sts

20

14

17

NM

DR

YE

SJ.

Bin

ga

ma

nC

om

mit

tee

ch

air

pre

fers

Cli

ma

te b

ill

20

12

18

VA

DR

--J.

We

bb

Co

al so

urc

e s

en

ato

r w

orr

ied

ab

ou

t e

co

no

my

20

12

19

VA

DR

--M

. W

arn

er

Co

al so

urc

e s

en

ato

r w

orr

ied

ab

ou

t e

con

om

y2

01

4

20

MI

DD

--D

. S

tab

en

ow

Ru

st b

elt

se

na

tor

wo

rrie

d a

bo

ut

eco

no

my

20

12

21

MN

DD

--A

. K

lob

uch

ar

Co

al u

se s

en

ato

r w

orr

ied

ab

ou

t co

sts

20

12

22

PA

DD

--B

. C

ase

yC

oa

l so

urc

e s

en

ato

r w

orr

ied

ab

ou

t e

con

om

y2

01

2

23

WA

DD

YE

SM

. C

an

twe

llS

hip

pin

g t

rad

e s

en

ato

r w

orr

ied

ab

ou

t co

sts

20

12

24

WA

DD

YE

SP

. M

urr

ay

Sh

ipp

ing

tra

de

se

na

tor

wo

rrie

d a

bo

ut

20

10

2010

25

WI

DD

YE

SR

. F

ein

go

ldC

oa

l u

se s

en

ato

r w

orr

ied

ab

ou

t co

sts

2010

26

WI

DD

YE

SH

. K

oh

lC

oa

l u

se s

en

ato

r w

orr

ied

ab

ou

t e

con

om

y2

01

2

14

31 Y

es

vote

s fo

r usin

g R

econcili

ation t

o p

ass

a C

limate

bill

(com

pare

to those w

ho v

ote

d for

McC

ain

-Lie

berm

an in 2

003).

+26 If a

ll D

em

senato

rs s

witched: 5

7 v

ote

s; n

ot enoug

h for

60 n

eeded to in

voke c

lotu

re (

very

unlik

ely

all

26 w

ou

ld s

witch).

+ 2 If F

ranken a

nd K

ennedy

(or

repla

cem

ent)

vote

d Y

ES

: then

59 p

oss

ible

Dem

ocra

tic

vote

s are

ava

ilable

(w

ith 2

Indie

s)

+ 3? D

em

ocr

ats

mig

ht gain

3-4

senate

seats

in 2

010 (

FL, N

H, M

O, O

H, LA

?),

whic

h w

ou

ld p

ush them

ove

r 60 v

ote

s in

2011.

After

losses

in 2

006 a

nd 2

008, ju

st a

few

Republic

ans r

em

ain

to v

ote

for

Clim

ate

bill

: M

E (

2),

PA

, A

Z, IN

(?).

Auto

sta

te r

ust

belt

Dem

ocra

ts a

re a

lso a

toug

h “

YE

S”

vote

to g

et on a

Clim

ate

bill

if th

e e

conom

y continues to lang

uis

h.

Dem

ocra

ts v

oti

ng

Ap

ril 1 t

o p

roh

ibit

use o

f B

ud

get

Reco

ncilia

tio

n b

ill

as v

eh

icle

fo

r a

Clim

ate

bill.

(wo

uld

mo

ve v

ote

need

ed

fro

m 6

0 t

o

just

51)

Tough “

yes”

vote

s to g

et

Easie

r “y

es”

vote

s to g

et

An

aly

sis

by

An

dre

w P

ate

rso

n

Reg

ional

Confli

cts

“Inconven

ient

polit

ical r

ealit

ies…

Page 15: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

Iss

ue

s f

or

the

Da

y

�C

lea

n E

nerg

y P

roje

cts

are

in v

ogue…

with g

loba

l drivers

�W

hat

is g

ett

ing

done ?

an

d in N

ew

Eng

lan

d ?

�W

here

are

so

me o

f th

e b

est

em

erg

ing o

ppo

rtunitie

s ?

W

hic

h f

acto

rs?

�T

he R

ecovery

Act

put

ne

w f

inancin

g m

echa

nis

ms in p

lay,

so:

�H

ow

mig

ht

these t

ools

best

be p

ut

to u

se ?

R

estr

ictions ?

�Loan g

uara

nte

es, T

ax

cre

dits,

Sta

te p

rogra

ms

�H

ow

are

RG

GI

funds b

ein

g d

eplo

yed b

y sta

tes in N

ew

En

gla

nd ?

�E

BC

: H

ow

do e

nviro

nm

enta

l fa

cto

rs influence p

roje

ct

succe

ss ?

�Land u

se,

wate

r re

sourc

es,

air

pollu

tion s

avin

gs,

RG

GI, o

ffse

ts

�N

atu

ral re

sourc

e p

olic

ies:

ag

riculture

, tim

be

r, f

ossil

fuel ext

raction

�H

ow

are

lend

ers

and o

ther

investo

rs a

daptin

g t

o A

RR

A m

echanis

ms ?

�W

hat

is o

ur

curr

ent

read o

f th

e R

ecovery

…a

nd t

he e

ffects

of

AR

RA

?

15

Page 16: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

Ag

en

da

7:3

0 a

.m.

Regis

tratio

n a

nd N

etw

ork

ing / C

ontin

enta

l B

reakfa

st

8:0

0 a

.m.

Welc

om

e –

Danie

l K. M

oon

, P

resid

ent E

BC

Intr

od

ucti

on

-A

ndre

w P

ate

rson, S

enio

r A

dvi

sor

-C

MC

P/V

erd

igri

s C

apita

l

8:1

0 a

.m.

Th

e O

pp

ort

un

ity:

Up

date

on

Ren

ew

ab

le E

nerg

y M

ark

et

Tre

nd

s

•Jud

y C

hang, T

he B

rattle

Gro

up

8:4

0 a

.m.

Majo

r A

RR

A P

rovis

ion

s f

or

Pro

ject

Fin

an

cin

g

•F

inancin

g P

rovis

ions -

Will

iam

Hew

itt, P

art

ner

-P

ierc

e A

twood

•T

ax

Implic

atio

ns -

Forr

est M

ilder,

Sen

ior

Tax P

art

ner

-N

ixon P

eabod

y LLP

•S

tate

Pers

pectiv

e -

Viv

ek M

ohta

, P

h.D

. -

Directo

r, E

nerg

y M

ark

ets

, M

assach

usetts

Depart

ment of

Energ

y R

esourc

es

10:0

0C

OF

FE

E B

RE

AK

10:3

0 a

.m.

Th

e D

OE

Lo

an

Gu

ara

nte

e P

rog

ram

: A

Fra

mew

ork

fo

r S

uccess

•W

alte

r H

ow

es, V

erd

igri

s C

apita

l

11:0

0 a

.m.

Ro

un

dta

ble

Dis

cu

ssio

n -

Makin

g D

eals

Hap

pen

This

modera

ted r

oundta

ble

dis

cussio

n w

ill illu

str

ate

key

pro

visio

ns a

nd financin

g s

tructu

res a

nd d

iffere

ntia

te b

etw

een s

tate

and

federa

l agency

tools

for

energ

y pro

jects

. In

additi

on the p

art

icip

ants

will

off

er

pers

pectiv

es o

n r

isk s

haring.

Modera

tor:

John G

ulli

ver,

Pie

rce A

twood

Part

icip

ants

(pre

vio

us s

peakers

, plu

s):

•S

cott B

row

n, N

ew

Energ

y C

apita

lF

rank G

rave

s, T

he B

rattle

Gro

up

•R

ecep K

endircio

glu

, John H

ancock

Fin

ancia

l Serv

ices

Lid

dy

Kart

er,

Industr

ial S

ymbio

sis

Part

ners

, L.P

.

•John M

osk

al,

US

EP

A –

Re

gio

n 1

/ N

ew

Engla

nd

David

Sie

ver,

Capita

l Technolo

gy,

Inc.

•Joseph B

ato

r, E

aste

rn B

ank

12:0

0 p

.m.

Clo

sin

g / W

rap

-up

/ N

etw

ork

ing

12:3

0A

DJO

UR

N

16

Page 17: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

Intr

od

uc

e J

ud

y C

ha

ng

, B

ratt

le G

rou

p

17

Page 18: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

Wh

y F

ed

era

l In

cen

tives, W

hy N

ow

?

Cu

rre

nt

La

nd

sc

ap

e:

Ch

all

en

ge

s t

o F

ina

nc

ing

1.

The c

redit c

risis

deeply

dam

aged p

roje

ct

fin

ance (

no b

ala

nce s

heet)

, but

at

least

inte

rest

rate

s a

re lo

w…

for

no

w.

2.

Import

ed e

nerg

y ag

gra

vate

s t

he t

rade d

eficit a

nd d

olla

r curr

ency

insta

bili

ty.

3.

The f

ossil

price r

olle

r coaste

r in

2008 incre

ases r

evenu

e u

ncert

ain

ties,

and a

revers

al in

oil

and g

as investm

ent

could

trigger

more

vola

tilit

y.

4.

Vola

tile

reven

ues (

mark

et

prices)

make d

ebt

financin

g e

xtre

mely

difficult .

5.

Man

y altern

ative t

echnolo

gie

s h

ave n

ot

ach

ieved s

cale

yet.

6.

Inte

rmitte

nt

natu

re o

f som

e r

ene

wa

ble

energ

y options p

ose

s p

hys

ical lim

its

7.

Conve

ntion

al fo

ssil-

based s

ourc

es w

ield

a v

ast,

alread

y de

pre

cia

ted c

apital

investm

ent

advanta

ge –

but

face e

xpansio

n p

roble

ms.

8.

Regio

na

l diffe

rences o

n e

nerg

y are

severe

, fu

rther

fragm

enting m

ark

ets

9.

Sta

te b

udgets

are

in d

eficit a

nd w

ill n

ot

rebou

nd s

oon,

ham

pering o

ptions.

10.

The d

epth

of

the f

edera

l d

eficit d

em

ands t

hat

som

e s

ubsid

ies b

e r

epaid

.

�F

inancin

g d

om

estic-b

ase

d e

nerg

y r

esourc

es w

ith U

.S. (v

s. fo

reig

n)

debt

is

one o

f th

e b

est

hedges t

he c

ountr

y c

an m

ake.

18

Page 19: Andrew Paterson Principal, CMCP/ Verdigris Capital ...s3.amazonaws.com/ebcne-web-content/fileadmin/pres/Paterson.pdf · Andrew Paterson Principal, CMCP/ Verdigris Capital Washington,

Sc

en

ari

os

of

Re

co

ve

ry…

or

?

A.

Bott

om

ing n

ow

, jo

ble

ss t

o 1

0%

, w

eak r

ecovery

in 2

01

0 (

like 1

981-8

2)

B.

Pro

tracte

d r

ecessio

n into

201

1 w

ith n

ag

gin

g u

nem

plo

yme

nt

(EU

in 1

990s)

C.

Bankru

ptc

ies s

pre

ad,

deflatio

n f

orc

es r

estr

uctu

ring (

clo

ser

to 1

930s)

D.

Ext

ern

al shock a

nd c

urr

ency

devalu

atio

n (

like A

sia

in 1

998;

Mexi

co 1

99

5)

19