The biggest automakers posted mostly improving U.S. vehicle sales in June to cap the best first half in a decade and predicted an even better finish to the year.
Already accelerating auto sales will find a new gear in the year’s second half, according to several automakers. General Motors Co. has redesigned versions of the Malibu and Camaro coming. And Ford Motor Co. is finally reaching full production of its aluminum-bodied F-150 pickup and is promising a second-half sales surge of the top-selling vehicle line in America.
Prices and profits are also rising along with auto sales. Relatively low gasoline prices and interest rates continue to drive up sales of sport utility vehicles and pickups, which favor the Detroit Three automakers that specialize in those big rigs. The average vehicle sold for $33,340 last month, up 2.5 percent from a year ago, according to automotive researcher Kelley Blue Book.
“Auto sales continue to push higher and are slated to have one of the strongest years ever,” said Mark Williams, an analyst for Kelley Blue Book. “Demand for SUVs and trucks continues to drive the market, which resulted in several top automakers posting higher sales.”
Industrywide auto sales are on pace to have risen about 4 percent last month, Ford said. Analysts estimated that industry sales volume would be the best for June in nine years at 1.49 million. New products and growing consumer confidence will push the pace even higher the rest of the year.
“We just wrapped up the U.S. auto industry’s best six months in a decade,” said Kurt McNeil, GM’s U.S. vice president of sales operations. “People feel good about their jobs and the direction the economy as a whole is taking, so the second half of the year should be strong, too.”
And in Germany, General Motors launched a CarUnity app that lets owners of any brand rent their vehicles to Facebook friends or people in the app's network.
"This is a big bang moment for the auto industry," said Thilo Koslowski, vice president at research firm Gartner Inc., who estimates that by 2025, 20% of the vehicles in urban centers will be dedicated to shared use.
"Imagine all of a sudden 20% of your vehicles sales in the classic sense — to individuals who will be the only user of that car — go away," he said.
Each vehicle that goes into a full-time car-sharing service, such as short-time rental company Zipcar, supplants four to six new car sales and postpones the purchase of up to seven more, said Susan Shaheen, a transportation expert and professor of civil and environmental engineering at UC Berkeley.
As people share vehicles, cars become "less sexy and more just transportation tools," Koslowski said.
The ultimate effect on car sales is unclear. Population growth and a burgeoning middle class in developing countries are creating new customers at a steady clip. But sales could take a serious hit if people decide it's cheaper to forgo owning a car in favor of renting or ride-sharing for the occasional errand.
"This will force the auto industry to rethink how it markets its products," Koslowski said.
Up to 12,000 London cabbies caused gridlock in London when they refused to work in protest over Uber’s fare-by-distance calculations, which the Licensed Taxi Drivers Association argued works like a taxi meter and is therefore illegal for private cars to use.
The move backfired. While the black taxi drivers were “holding London to ransom” and “causing significant economic impact” to the city worth £125m, according to Uber, the cab-hailing app was granted a free ride to the front page and said that sign-ups soared by 850pc compared with the previous week.
“The results are clear: London wants Uber in a big way,” the company said at the time.
The uncertain geopolitical landscape of today’s natural gas markets has led increasingly to renegotiation of long-term gas supply contracts. Such contracts, which can be worth billions of dollars, often include price adjustment mechanisms which are intended to ensure that over the lifetime of the contract the contractual price can be adjusted to reflect changes in the market. Those mechanisms can provide for negotiations with a backstop of arbitration. While negotiations will be the preferred method to respond to minor changes in the market, when market fluctuations are volatile enough one (or both) parties may be incentivized to push instead for arbitration. This may be a significant roll of the dice, and some recent arbitral awards show that arbitral tribunals are not afraid of determining the appropriate price in accordance with the underlying contract and price review mechanism.
Any significant market shift will lead to buyers or sellers across the market seeking renegotiation of price under long-term contracts. For example, recent reductions to gas spot prices have led buyers to seek to trigger price review mechanisms under gas supply contracts. Suppliers have either agreed to the price review or taken the disputes to arbitration. Further complications arise when such gas supply agreements include a “take or pay” condition, where the buyer pays the supplier for specified quantities of gas irrespective of the buyer’s needs.
There can be ambiguity as to whether a price review mechanism is triggered. Often such mechanisms are drafted in general terms in order to provide flexibility between the parties. However, the language surrounding the triggering of such a clause—and the point at which any dispute should be elevated from negotiations to formal dispute process such as arbitration—should be carefully drafted if the parties wish to avoid a lengthy dispute processes as to whether the clause is even engaged (and only then as to what the price should be).
There are, or have been, a number of recent high-profile gas pricing disputes which demonstrate that commencement of arbitration can be one aspect of a negotiation process, or indeed can provide resolution of a valuable dispute by a neutral panel which allows the parties to carry on with performance of a long term contract.
For example, the Turkish pipeline operator BOTAS has been reported as having brought a claim against the National Iranian Gas Company in 2005 for alleged refusal to lower gas prices despite low production rates and poor quality product. That arbitral procedure took four years, at which point the arbitral tribunal issued an award in favour of BOTAS for US$760 million. From publicly available information, those companies continued their contractual relationship following that arbitral award, and more recently a second arbitration was commenced by BOTAS in January 2012 under the same underlying agreement. That second arbitration remains on-going.
This story is not unique to that case and as many buyers and suppliers under long-term gas supply contracts will know, arbitration can be a somewhat costly but otherwise helpful neutral process by which a dispute as to pricing can be resolved, otherwise allowing the parties to carry on with their contractual arrangements.
While arbitration can be a useful neutral mechanism, parties will be wary of arbitrators becoming overly assertive in applying a new or different formula which goes beyond what the parties originally negotiated or envisaged.
For example, the decisions in recent cases such as those in the cases of RWE v. Gazprom (2013) andRasgas v. Edison LNG (2012) indicate that tribunals are ready to depart from the wording of a gas supply contract, particularly where the contract price is linked to the price of oil. In the RWE award, the arbitral tribunal adjusted the contract price formula by linking it to gas spot prices instead of oil prices, as was agreed under the agreement. It is difficult to analyze these cases and draw conclusions as the awards and the respective contracts are confidential. However, at first glance, it appears that such decisions have caused justifiably concern for the parties, in particular suppliers.
Similarly, in Atlantic LNG Company of Trinidad and Tobago v. Gas Natural LNG SPA (2008), the arbitral tribunal came up with a two-part pricing scheme and imposed its own preferred pricing structure, which neither party requested or desired.
Recently, in partial award of BOTAS Petroleum Pipeline Corporation v. the National Iranian Gas Company (2014), the tribunal dismissed BOTAS’s claim that the NIGC failed to meet Turkish gas demands and thus sought both specific performance and a US$13 billion price cut on that basis. The second claim of US$25 million, for reduction in the price of gas on the basis of a price revision clause, is yet to be ruled upon by the tribunal.
Scotland announced plans to hold an emergency summit in early July to discuss a British decision to end government support for the onshore wind industry.
Scottish Energy Minister Fergus Ewing said British ministers need to "clarify the position regarding onshore wind projects already in the pipeline, and how many of them can expect to continue to receive investment during the grace period before funding is cut off."
London said $1.2 billion in government support last year helped onshore wind power generate 5 percent of total British electricity and bring the region closer to its climate change goals. With momentum building, the government announced plans to end public subsidies for new onshore wind farms starting in April 2016.
With 70 percent of the region's onshore wind situated in Scottish territory, Ewing said the government in Edinburgh "strongly disagrees" with the decision to end subsidies.
Myth #1: Organic Farms Don't Use Pesticides
When the Soil Association, a major organic accreditation body in the UK, asked consumers why they buy organic food, 95% of them said their top reason was to avoid pesticides. They, like many people, believe that organic farming involves little to no pesticide use. I hate to burst the bubble, but that's simply not true. Organic farming, just like other forms of agriculture, still uses pesticides and fungicides to prevent critters from destroying their crops. Confused?
So was I, when I first learned this from a guy I was dating. His family owns a farm in rural Ohio. He was grumbling about how everyone praised the local organic farms for being so environmentally-conscientious, even though they sprayed their crops with pesticides all the time while his family farm got no credit for being pesticide-free (they're not organic because they use a non-organic herbicide once a year). I didn't believe him at first, so I looked into it: turns out that there are over 20 chemicals commonly used in the growing and processing of organic crops that are approved by the US Organic Standards. And, shockingly, the actual volume usage of pesticides on organic farms is not recorded by the government. Why the government isn't keeping watch on organic pesticide and fungicide use is a damn good question, especially considering that many organic pesticides that are also used by conventional farmers are used more intensively than synthetic ones due to their lower levels of effectiveness. According to the National Center for Food and Agricultural Policy, the top two organic fungicides, copper and sulfur, were used at a rate of 4 and 34 pounds per acre in 19711. In contrast, the synthetic fungicides only required a rate of 1.6 lbs per acre, less than half the amount of the organic alternatives.
The sad truth is, factory farming is factory farming, whether its organic or conventional. Many large organic farms use pesticides liberally. They're organic by certification, but you'd never know it if you saw their farming practices.
Myth #2: Organic Foods are Healthier
Some people believe that by not using manufactured chemicals or genetically modified organisms, organic farming produces more nutritious food. However, science simply cannot find any evidence that organic foods are in any way healthier than non-organic ones - and scientists have been comparing the two for over 50 years.
Just recently, an independent research project in the UK systematically reviewed the 162 articles on organic versus non-organic crops published in peer-reviewed journals between 1958 and 2008 11. These contained a total of 3558 comparisons of content of nutrients and other substances in organically and conventionally produced foods. They found absolutely no evidence for any differences in content of over 15 different nutrients including vitamin C, ?-carotene, and calcium. There were some differences, though; conventional crops had higher nitrogen levels, while organic ones had higher phosphorus and acidity - none of which factor in much to nutritional quality. Further analysis of similar studies on livestock products like meat, dairy, and eggs also found few differences in nutritional content. Organic foods did, however, have higher levels of overall fats, particularly trans fats. So if anything, the organic livestock products were found to be worse for us (though, to be fair, barely).
Myth #3: Organic Farming Is Better For The Environment
As an ecologist by training, this myth bothers me the most of all three. People seem to believe they're doing the world a favor by eating organic. The simple fact is that they're not - at least the issue is not that cut and dry.
Yes, organic farming practices use less synthetic pesticides which have been found to be ecologically damaging. But factory organic farms use their own barrage of chemicals that are still ecologically damaging, and refuse to endorse technologies that might reduce or eliminate the use of these all together. Take, for example, organic farming's adamant stance against genetically modified organisms (GMOs).
GMOs have the potential to up crop yields, increase nutritious value, and generally improve farming practices while reducing synthetic chemical use - which is exactly what organic farming seeks to do. As we speak, there are sweet potatoes are being engineered to be resistant to a virus that currently decimates the African harvest every year, which could feed millions in some of the poorest nations in the world15. Scientists have created carrots high in calcium to fight osteoperosis, and tomatoes high in antioxidants. Almost as important as what we can put into a plant is what we can take out; potatoes are being modified so that they do not produce high concentrations of toxic glycoalkaloids, and nuts are being engineered to lack the proteins which cause allergic reactions in most people. Perhaps even more amazingly, bananas are being engineered to produce vaccines against hepatitis B, allowing vaccination to occur where its otherwise too expensive or difficult to be administered. The benefits these plants could provide to human beings all over the planet are astronomical.
Yet organic proponents refuse to even give GMOs a chance, even to the point of hypocrisy. For example, organic farmers apply Bacillus thuringiensis (Bt) toxin (a small insecticidal protein from soil bacteria) unabashedly across their crops every year, as they have for decades. It's one of the most widely used organic pesticides by organic farmers. Yet when genetic engineering is used to place the gene encoding the Bt toxin into a plant's genome, the resulting GM plants are vilified by the very people willing to liberally spray the exact same toxin that the gene encodes for over the exact same species of plant. Ecologically, the GMO is a far better solution, as it reduces the amount of toxin being used and thus leeching into the surrounding landscape and waterways. Other GMOs have similar goals, like making food plants flood-tolerant so occasional flooding can replace herbicide use as a means of killing weeds. If the goal is protect the environment, why not incorporate the newest technologies which help us do so?
Myth #4: It's all or none
The point of this piece isn't to vilify organic farming; it's merely to point out that it's not as black and white as it looks. Organic farming does have many potential upsides, and may indeed be the better way to go in the long run, but it really depends on technology and what we discover and learn in the future. Until organic farming can produce crops on par in terms of volume with conventional methods, it cannot be considered a viable option for the majority of the world. Nutritionally speaking, organic food is more like a brand name or luxury item. It's great if you can afford the higher price and want to have it, but it's not a panacea. You would improve your nutritional intake far more by eating a larger volume of fruits and vegetables than by eating organic ones instead of conventionally produced ones.
What bothers me most, however, is that both sides of the organic debate spend millions in press and advertising to attack each other instead of looking for a resolution. Organic supporters tend to vilify new technologies, while conventional supporters insist that chemicals and massive production monocultures are the only way to go. This simply strikes me as absurd. Synthetic doesn't necessarily mean bad for the environment. Just look at technological advances in creating biodegradable products; sometimes, we can use our knowledge and intelligence to create things that are both useful, cheap (enough) and ecologically responsible, as crazy as that idea may sound.