2014 February 14

The Master Resource Report 2014-02-14

NYT: Is the Keystone Worth the Fight?

The New York Times held an interesting online debate between critics and supporters of the Keystone XL pipeline project. This is a hot item since the U.S. State Department released its report that found the pipeline would not make the carbon emissions worse. But like most emotionally charged debates both sides of the argument quickly can become bogged down in ideology rather than data. A modified version of one of my favorite quotes explains it best. “It’s difficult to get a man to understand something if his ideology depends on him not understanding it.”—Upton Sinclair

I would like to point out that my friend David Hughes was asked to be one of the debaters. Being a Canadian geoscientist he has more than passing knowledge.

So here is your challenge. Set your ideology and preconceived ideas aside and see if you can give both sides an honest chance at convincing you in the debate. It will be both hard and fun.

Global SUV Sales

The Wall Street Journal reported that Ford Motor has forecast that sport-utility vehicle sales outside the US will jump by 40% over the next four years far out distancing growth in other segments. “Globally, industry sales of SUVs grew 17% in 2013, while Ford’s own sales of such vehicles grew 37%…”

The article went on to report that the top models exported from the US were the Edge and Explorer models.

Ford reported that January sales in China jumped 53% year-over-year. Sales for the month totaled 94,466 which is an annualized rate of well over one million vehicles. For 2013 sales jumped 49% over 2012 bringing last year’s total to 935,813 vehicles for Ford and its joint venture partners in China.

When you hear about how the developing countries will move rapidly to higher mileage vehicles or skip the auto culture it might be worth some second thoughts. It doesn’t sound like a world with less oil demand is ahead based on this news.

Note: Currently clients and advisors at Ravenna Capital Management do not hold positions in Ford.