Key Clean Energy Vote Hours Away

The U.S. House of Representatives votes Friday to determine the fate of the American Clean Energy & Security Act - President Obama's climate change legislation.

Late yesterday, House Agriculture Committee Chairman Collin Peterson, D-MN, confirmed a compromise had been reached over difficult agriculture issues in the climate change bill. Peterson stated the votes to pass the bill when the full House meets Friday were in place - although the vote is expected to be close.

The most important plank in the bill - and the most contentious - is a 17 percent mandated reduction of greenhouse gases by 2020 -- mainly carbon dioxide from burning fossil fuels such as coal.

The 17 percent cap on greenhouse gases would have its greatest impact on utilities which today rely on coal to generate half the country's electric power. By placing a cost on pollution emitted into the atmosphere from the burning of coal, utilities will be mandated to either find ways to cut emissions or shift to clean energy.

The legislation holds the promise of a massive new boost to both the wind and nuclear power industries. Exelon (NYSE:EXC) , the nation's largest nuclear power company, recently exceeded Jefferies & Co's target price of $47, set just 2 months ago on April 15.

Also in April, Concentric Research put a $2.78 one year price target on wind power company NACEL Energy (OTC:NCEN) (BULLETIN BOARD: NCEN) , which has four wind farms underway in the Texas Panhandle - regarded as the nation's best region for wind turbines.

Entergy (NYSE:ETR) also has one of the largest nuclear power portfolio's in the country. Credit Suisse has an $89 target on the company - Entergy closed yesterday at $75.54.

Itron (NASDAQ:ITRI) , which makes sophisticated metering systems for all utilities, is another bet on the passage of the new climate bill. JP Morgan recently upgraded Itron from neutral to overweight.

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Dry autumns and winters may lead to fewer tornadoes in the spring, according to new analysis of long-term data

Global warming will likely mean more unpredictable weather, scientists say, and a new study by researchers at the University of Georgia pins down, possibly for the first time, how drought conditions in an area’s fall and winter may effect tornado activity the following spring.
The study, published today in the journal Environmental Research Letters, is specific to Georgia and the Southeast, but further study could reveal patterns that might make this more general—including the already tornado-prone Great Plains.

“Our results suggest that there is a statistically significant reduction in tornado activity during a tornado season following drought the preceding fall and winter,” said Marshall Shepherd, a meteorologist and lead author of the study. On the other hand, wet autumns and winters examined in the study had nearly twice as many spring tornado days as drought years did.

The research gives hope that one day meteorologists and climatologists may be able to predict the severity of a spring tornado season the way they now do for hurricanes. Other authors of the paper were Thomas Mote, also of the University of Georgia, and Dev Niyogi of Purdue University. Shepherd and Mote are in department of geography in the UGA Franklin College of Arts and Sciences.

The genesis for the research was the severe Atlanta tornado in March 2008, and Shepherd’s interest in how tornadoes form during severe drought years.

While such tools as Doppler radar have increased our ability to “see” tornadoes as they form, predicting a tornado season’s potential severity has remained elusive. The Intergovernmental Panel on Climate Change projected in 2007 that the frequency and severity of droughts may increase over time, but very little is known about drought conditions affect the frequency or intensity of severe weather hazards such as tornadoes.

To help understand how fall and winter weather might affect spring tornado seasons, the research team acquired the historical database of severe thunderstorms and tornado occurrences from 1951-2006 from the Storm Prediction Center of the National Oceanic and Atmospheric Administration. They also analyzed storm data reports from the National Climactic Data Center and meteorological drought conditions using historical rain gauge and Tropical Rainfall Measuring Mission (TRMM) satellite data from the National Aeronautics and Space Administration (NASA).

Using a number of tools of scientific analysis, the team primarily focused on tornado activity from March-June in Georgia and the Southeast. What they found was shocking, Shepherd said, yet plausible.

On average, wet autumns and winters presaged nearly twice as many spring tornado days in the study area as prior drought seasons. Springs following wet winters and falls were also five to six times more likely to have multiple tornado days than antecedent drought years.

“We do not suggest that soil moisture or precipitation the previous fall and winter exert a direct control on which individual storms will spawn tornadoes,” said Shepherd. “But these long-term seasonal relationships in the study area are striking.”

Correlating historical records and tornado activity has been difficult at best for scientists over the years. For one thing, the National Weather Service did not implement its watch and warning system until the mid-1950s, and only with advent of advanced radar techniques and ground examination of storm sites have researchers been able to say categorically that a certain storm even was a tornado. Also, studies linking tornadic activity with the El Niño cycle have been contradictory.

While it clearly seems that wet falls and winters lead to more severe spring tornado seasons, antecedent seasonal drought scenarios in north Georgia were almost never associated with above-normal tornadic activity the following spring over the 50-years period of the study.

The results for north Georgia were essentially replicated for the larger region encompassing Tennessee, Georgia, Alabama and Mississippi. For this entire region, a stunning 75 percent of years characterized by meteorological drought in falls and winters had below-normal tornado seasons in the spring.

While the new study, which was supported by grants from NASA, offers strong clues about how spring tornado seasons form, the authors urge caution in interpreting the findings until the analysis is repeated for other locations.

Just how the connection works between fall-winter rainfall and spring tornado seasons remains unclear. One possibility is that the atmosphere uses soil moisture “memory” from the fall and winter to modify conditions suitable for severe weather. A related hypothesis is related to “soil moisture” pockets and storm initiation.

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Arts Across Georgia

Online Guide For New Ship Speed Regulation Available

An online guide to a new ship speed limit designed to protect imperiled right whales will hopefully help speed up compliance while encouraging large ships to slow down.

The compliance guide for the right whale ship strike reduction rule made effective this week is available at:

·NOAA Fisheries’ Right Whale Ship Strike Reduction Web site: www.nmfs.noaa.gov/pr/shipstrike/

·NOAA Fisheries' Southeast Region's Right Whale Conservation site: http://sero.nmfs.noaa.gov/pr/mm/rightwhales/rwconservation.htm

·NOAA Fisheries Northeast Region's Ship Strike Reduction site: www.nero.noaa.gov/shipstrike/

The speed restriction established by the National Marine Fisheries Service of the National Oceanic and Atmospheric Administration (NOAA) requires vessels 65 feet or longer to slow to 10 knots or less while traveling in designated critical habitat areas along the U.S. Atlantic coast. The rule went into effect Tuesday, Dec. 9.

North Atlantic right whales are slow swimmers that frequently rest just below the surface and often do not respond to the sounds of approaching ships. Ship strikes are the leading cause of mortality for the species. Other threats to survival include entanglement in commercial fishing gear, collisions with smaller recreational boats and disease.

The regulation specifies November to March as the calving season. The warm coastal waters off the Georgia and northeastern Florida are the only known calving grounds for these rare aquatic giants. The whales are especially vulnerable during this time due to heavy traffic in Georgia’s shipping lanes, where the whales tend to be found. It has been estimated that the loss of one or two female right whales a year could lead to extinction of the species within a century.

Federally listed as endangered, there are only 350-400 north Atlantic right whales left in the world.

Georgians can help conserve right whales, as well as other animals not legally hunted, fished for or trapped and their habitats, through buying wildlife license plates featuring a bald eagle or a ruby-throated hummingbird. They can also donate to the Give Wildlife a Chance state income tax checkoff. Both programs are vital to the Nongame Conservation Section, which receives no state funds. Visit www.georgiawildlife.com for more information, or call Nongame Conservation offices in Social Circle (770-761-3035), Forsyth (478-994-1438) or Brunswick (912-264-7218).

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Survey Indicates U.S. Hotels Will Bottom Out in 2009

PRNewswire/ -- A new study released today by PKF Hospitality Research (PKF-HR) reveals that demand for U.S. hotel rooms will contract for the next two years. Compounding the negative impact of declining demand is a projected concurrent increase in supply. PKF-HR is forecasting a combined net increase in 2008 and 2009 of nearly 275,000 new hotel rooms compared to year-end 2007. This represents a 6.2 percent jump in accommodations over this two-year period.

With supply and demand levels moving in opposite directions, occupancy rates are projected to decline in both 2008 and 2009. Considering the 0.3 percent occupancy decline reported by Smith Travel Research in 2007, the result is three consecutive years of fewer accommodated roomnights for the average U.S. hotel.

These findings are based on the recently released third quarter 2008 edition of Hotel Horizons(SM), PKF-HR's quarterly forecast report for six U.S. chain-scales and 50 major markets. The forecast was released at The Lodging Conference 2008 in Phoenix this morning.

"Because of the extended slowdown of the U.S. economy, compounded by the negative consequences stemming from airline capacity cutbacks, we are now forecasting a 0.2 percent decline in lodging demand in 2008, followed by another loss of 1.1 percent in 2009," said Mark Woodworth, president of PKF Hospitality Research. "According to data from Smith Travel Research, this is the first time since 1988 that the U.S. lodging industry will experience two consecutive years of decline in lodging demand."

Slow ADR

Through the first half of 2008, the one saving measure for hotel owners and operators was the ability to maintain rate integrity. Despite a 2.5 percent decline in occupancy during the first six months of the year, managers were able to raise their average daily room rates (ADR) by 4.2 percent. Persistent yield management plus contractual rate agreements helped to buoy room rate levels.

"With supply and demand moving in opposite directions, the typical hotel manager will not be able to maintain their aggressive approach to raising room rates," Woodworth commented. "Accordingly, we are forecasting ADR growth for the entirety of 2008 to be 3.6 percent, followed by a minimal 1.3 percent gain in 2009." Looking forward, PKF-HR does not foresee ADR growth to exceed the pace of inflation until 2012, according to Woodworth.

Declining occupancy, plus slow ADR growth, combines for a dismal near-term outlook for revenue increases. PKF-HR projects RevPAR to increase a mere 0.8 percent in 2008, followed by a 3.2 percent decline in 2009. Given the strong contribution of rooms revenue, PKF-HR is forecasting total hotel revenues to remain virtually flat in 2008 (0.2 percent increase) and then decline in 2009 (negative 2.5 percent).

Expense Controls

"Historically, U.S. hotel managers have answered reductions in revenue with more vigilant cost containment. Fewer rooms occupied do lessen the need for staffing, plus inspire management to find expense reductions throughout the operation. Unfortunately, less controllable costs, such as utilities, property taxes and insurance, are on the rise," Woodworth noted.

PKF-HR believes that average operating expenditures will drop 1.0 percent in 2008, thus allowing unit-level net operating income (NOI) to increase 3.1 percent. However, the forecasted 2.5 percent decline in revenue for 2009 will be too much to overcome. Despite another 2.3 percent reduction in operating costs, the average U.S. hotel is projected to suffer a 3.0 percent decline in NOI during 2009. For the purposes of this analysis, NOI is defined as income before deductions for capital reserve, rent, interest, income taxes, depreciation and amortization.

"Fortunately, the U.S. lodging industry was in good financial shape entering the current trough in the business cycle. Unlike other forms of real estate, lodging was not experiencing any material amounts of foreclosures," Woodworth said. "A sample of 1,500 hotels that participated in our annual Trends in the Hotel Industry survey generated sufficient cash from their operations to cover their reported interest payment by a ratio of 1.86. This implies that most U.S. hotels can withstand a fairly substantial decline in NOI and still have the ability to meet their debt service obligations."

On The Horizon

"The current credit crisis may be unfairly punishing developers with sound market and financially justified projects. However, the lodging industry will eventually benefit from the near-term development difficulties," Woodworth noted. "PKF-HR believes the existing restrictive financing environment will linger into 2009, thus delaying or preventing the start of hotel projects currently in the pipeline. Given the 12 to 24 month time needed to construct most hotels, PKF-HR projects a window of one to two years when the amount of hotel openings will be very limited. The pace of new supply growth is forecast to drop to 1.4 and 1.8 percent, respectively, in 2010 and 2011.

"By 2010, we will start to see a reversal of current trends. While the pace of supply growth will be waning, we will start to see a return in the demand for lodging accommodations," Woodworth said. PKF-HR is forecasting a 2.2 percent increase in demand for 2010, followed by another 3.1 percent gain in 2011. With growth in demand exceeding supply, national occupancy levels will begin to rise again in 2010 and continue to increase through 2012.

Despite the forecast of growth in occupancy from 2010 through 2012, the outlook for increases in ADR is somewhat constrained. "As we have observed during the initial years of historical periods of recovery, occupancy gains precede ADR growth. Given the depth of the projected lodging industry slowdown in 2009, the newly built competitive properties added to most markets, and forecasts of below average CPI growth, we are forecasting average daily room rates to increase at a compound average annual rate of 2.7 percent, just equal to the long-term rate of growth for ADR," said Woodworth.

A Trough In 2009

"Seven years since the terrorist acts of 2001 -- the primary event that led to the last low point in the U.S. lodging performance -- a new, but familiar, set of circumstances is propelling the industry towards the next trough. Capital market turmoil is undermining asset values, a situation last seen in the late 1980's and early 1990's. The projected industry slowdown won't be as deep as the ones observed in 1981 or 1991, but it may take a little longer to fully recover," Woodworth concluded.

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