They say that virtue is its own reward, and Wolin-Levin president Robert B. Levin (shown here receiving a plaque from C2 Intl. president Hans Herrmann…Mr. Levin is on the right) agrees. By acting on his commitment to be environmentally responsible, he has been rewarded with substantial savings on his electric bill.
If this goes against conventional thinking about the economics of “going green,” then Cost Containment Intl. and Community Green Energy (CGE) think that it’s time for the conventional thinking to change.
Wolin-Levin has agreed to “green up” its electricity by purchasing Renewable Energy Certificates (RECs) from Community Green Energy equal to 100% of its annual use. Wolin-Levin will also purchase its electricity through a contract negotiated by Cost Containment, Intl.. This new contract will knock a substantial percentage off of Wolin-Levin’s energy bill.
Both the REC purchase and the new energy contract will help support CGE’s Chicagoland Green Energy Initiative, which has a goal to fund 1,000 new renewable green energy installations in the Chicagoland area. Initiative members fund the Initiative through their everyday business activities. C2 is a charter member of the Initiative, and with this new contract, Wolin-Levin joins them as a CGE supporter.
The REC purchase means that Wolin-Levin can claim their electric use is completely green, which gives them a substantial marketing advantage in the competitive luxury condo market. Their support of the Chicagoland Green Energy Initiative means they will also be helping to bring renewable green energy to their community. And the reduced energy bill shows that what’s good for the environment is good for business, as well.
“We all want to do the right thing when it comes to the environment,” says Levin. “Joining the Initiative and working with Cost Containment made it not just the right choice, but the obvious choice. We’re making Chicagoland a healthier place, and we’re saving money in the process. What’s not to like?”
This is the the kind of talk that Fritz Kreiss, the founder of Community Green Energy, like to hear. “We created CGE because we think green energy isn’t just good energy, it’s good business,” says Kreiss. “For too long, green energy has been pigeonholed as a moral issue. It’s not. America needs it, and America needs to be a leader in it.” CGE has created an economic model that uses traditional business incentives to spur investment in green energy. “Even in these tough times, the American economy is still the most powerful economic engine in history. There is plenty of money to invest in green. We just created a new way to aim enough of it in the right direction.”
That’s an approach that fits well with the Cost Containment Intl. approach. Our focus has always been on aiming your money in the right direction: back in your pocket. Community Green Energy offers an approach that turns a green commitment into a solid business advantage: a new twist on the classic win-win approach.
“Make no mistake: we have a profound belief in green energy,” says Kreiss. “But CGE wants to open the door to everybody. If you join your local Initiative because you have a personal commitment to green energy, that’s great. If you join your local Initiative because it helps you build your business, that’s also great. Just join.”
“Right now, a responsible manager has to make the bottom line their top priority” says Levin. “The traditional equation says green energy is a luxury you can’t afford. CGE and Cost Containment changed the equation. As an individual who has a commitment to a better environment, I’m really pleased. As a good manager, I’ve done my job. When someone offers you a plan like that, you take it.”
You can learn more about CGE at their web site…click here to go there, and you can learn more about RECs by clicking this link.
Sometimes, a little dose of reality can spoil everybody’s fun.
Some parts of the country actually experienced summer weather that felt like summer this week, especially in the southern states, and the extra demand resulted in a tepid, sub-expectation injection this week. In fact, the working gas in storage actually LOST ground to both last year’s figures and the five-year average, something that hasn’t happened in quite a while.
So the ground was set for another burst of irrational exuberance on NYMEX. Then the government went and spoiled everything.
They released job figures for June.
It’s clear that the mood in the country is shifting from outright pessimism to a fragile, impatient optimism, so figures showing that unemployment is still increasing…albeit at a slower rate than before…put a major damper on everything, including NYMEX natural gas. A short end-of-month rise has been gradually losing steam heading into the long weekend ahead.
What’s less clear…and of particular interest to us here at Cost Containment Intl….is whether we have finally hit the long-anticipated support to NYMEX natural gas prices. Despite (or perhaps because of) all the different factors in play, and a fair amount of weekly bouncing, the overall price curve since April is flat. Predictions of sub-$3.00 prices have not happened, and every uptick and decline has proved to be temporary. It’s a bit on the bumpy side, but it’s starting to feel like level ground.
Of course, we haven’t yet seen a week where all the forces line up together and push in the same direction, or a market reaction to such a clear signal. With reality, as with the current NYMEX, even the level path has its ups and downs.
If you are simply interested in checking the NYMEX price, this has been a pretty uneventful week. But if you’re interested in the story behind the price, there have been some interesting developments this week…with a touch of conspiracy theory mixed in for good measure.
On the face of it, this week saw the latest uptick in NYMEX prices gradually fade in the face of market fundamentals which offered absolutely no support.Huge supply. Little demand. Sluggish economy sending mixed signals. Nothing drastic on the weather front. Today’s storage report came in marginally under estimates…the overall storage numbers continue to pad their record-setting pace…and the NYMEX only blinked. The past week has been an easy, gentle slope downward. Situation normal.
Behind the scenes, however, we have been tracking some interesting stories centering around the United States Natural Gas ETF. Unless you have a taste for the esoteric financial instruments that got us into our current economic mess, you’ve probably never heard of them. ETF in this case stands fro exchange-traded fund. These funds are ways for people to play around with commodities (in this case, natural gas) in much the same way that people used to play around with American mortgages. We mentioned them peripherally in a previous post about the NYMEX price jumps we have seen at the end of recent months.
The reasons that UNG is getting so much attention are twofold. First, a lot of big money investors are directing a lot of their big money into UNG. Second, there are indications that UNG is currently responsible for up to one-third of all open NYMEX contracts. That’s right: one third of NYMEX contracts potentially being controlled by one entity with very specific interests that have nothing to do with heating or cooling your building.
Still just a few stories. We’ll see if more follow.
Next week moves us from June to July: let’s see whether or not NYMEX and the fundamentals mesh as a new front month comes up. At Cost Containment, we keep tabs on everything that affects your energy future, so you can bet that we’ll be watching with keen eyes.
Another week, another rally based on…nothing much.
Later today, the Potential Gas Committee will release a report affirming that yes, the United States has almost a century’s worth of proven, recoverable reserves. Speculation has already begun as to what this means for international reserves, since the drilling techniques that have lead to this substantial increase (depending on which figures you use, America’s reserves are 33% to 48% higher than they were at the last report four years ago) are only beginning to be implemented around the world.
Nonetheless, NYMEX picked this week to hold a sustained rally above $4.00, rising as high as $4.33, for no discernible reason whatsoever. There was considerable speculation….in other words, speculation about speculation…but no solid reasoning. New confidence in the economy? Perhaps. Assumptions that natural gas will eventually follow oil pricing, as it has in the past? Perhaps. Market tricks aimed at short-term recoups? Perhaps.
As of this writing, the rally is wilting a bit in the face of the hefty injection from today’s storage report, but is resisting the precipitous drop we have seen, and enjoyed watching, on past Thursdays. Just like NYMEX to spoil our fun. Did they read last week’s newsletter and become self conscious about these storage report reactions? Perhaps.
We’ve said this before: in today’s NYMEX, fundamentals aren’t enough.Indeed, investors appear to be doing their best to ignore the fundamentals while they chase that elusive Sign That The Economy Is Better. Every week, some believe they have found it. And every week, it seems, this belief is becoming a bit more resilient to the facts that contradict it.
And it plays up once again that anyone trying to time the bottom for natural gas prices is playing a risky game. All of the indicators point towards a continued downward trend before a rebound in 2010. We’re just not sure the market is paying attention to the indicators anymore.
These are some choppy seas. Cost Containment is the best way to smooth your ride.
There’s really no other way to say this: nothing much happened this week.
Prices bounced around within a fairly narrow range all week. Today’s weekly storage report came in a few Bcf under expectation, and the price is currently up to around $4.00, but this reaction can be considered knee-jerk at this point. By the beginning of next week, it will drift down, after which it will most likely spend a few days…bouncing around within a fairly narrow range.
All indications continue to point to a gradual downward trend as we head into summer, although the direst precitions have not yet actually materialized. There will, no doubt, continue to be short-term overraction to anything resembling good news (Raymond James stating on Tuesday that the 2009 natural gas market was “hosed” does not fall into this category), but for the moment, discussing the NYMEX natural gas price has taken on all the drama of the San Diego weather report. Today was in the mid-60s and partly cloudy. The rest of the week? Mid-60s and partly cloudy.
It’s likely that investors have turned their attention to where the action is: oil. The oil markets have rebounded nicely (if you happen to be an investor or a producer…less so if you drive a car) in the last few weeks. Anyone who doubts the decoupling of the energy markets should check out the divergence in the past month. Two very different stories.
We are even seeing indications that the reliable link between natural gas and electric rates may be doing a bit of decoupling as well. We have seen some local ratcheting up of electric rates, despite the even path of natural gas. It’s too early to tell if this is a trend or not, but it bears watching. The eventual effect on eletric rates of the proposed Cap and Trade legislation, which is currently mired in congress, will add a new level of complexity to what was once a very predictable relationship.
So there is still plenty to keep the energy markets interesting. We’re keeping our eyes open.