February 15, 2006
Investors Are Tilting Toward Windmills
By CLAUDIA H. DEUTSCH
It's hard to be in a business where you literally — as well as figuratively — are tilting at windmills. But that business may have just gotten its biggest tail wind yet.
When President Bush called last month for more effort in alternative energies, a business that last year attracted only about $7 billion in investment nationwide, the 300 engineers and financiers at GE Energy Financial Services were already in the game. But that does not mean they were not happy that the White House acknowledged the sector.
"The president's speech changed zero for us; it was simply a recognition of what we already knew," said David L. Calhoun, vice chairman of GE Infrastructure, the group that includes both turbine manufacture and energy financing.
For now, wind energy is the only profit star in G.E.'s alternative energy galaxy, and both the finance and equipment sides of the company know they are gambling when it comes to solar and other fledgling technologies. Still, analysts applaud their decision to move on them.
"When you get the president talking about renewable energy, it has to be turning up the dial at G.E.," said Deane M. Dray, an analyst at Goldman Sachs who has an outperform rating on General Electric shares.
Certainly, it is getting attention from Energy Financial Services. The unit recently bought a wind farm in Germany and is installing new turbines there at a rapid pace. It has invested in solar energy farms in California and is in the end stage of negotiations for a large solar project in Europe. Indeed, renewable energy projects already account for $1 billion of the unit's $11 billion portfolio and are its fastest-growing niche. "The renewables space has really heated up, and I hope it will account for 20 or 30 percent of our investments in five years," J. Alex Urquhart, the unit's president, said.
Today, alternative energy financing is barely a footnote in G.E.'s revenue stream. But the G.E. machine is gearing up for change. On Jan. 30 — a day before the president bemoaned the nation's "addiction to oil" — Mr. Urquhart carved out a separate group to focus solely on renewable energy projects. Lorraine Bolsinger, who runs G.E.'s Ecomagination program, says she has begun to "run the financial projects through our scorecard process" to see which ones she should include in her group of G.E.'s "green" products.
The pace is quickening in G.E.'s industrial camp, too. Energy equipment and related services, which accounted for about $42 billion of G.E.'s $149.7 billion in revenue last year, is G.E.'s largest industrial business. Alternative energy products like wind generators accounted for less than $6.3 billion of last year's sales.
Four years ago, G.E. bought Enron's wind-turbine unit, and it is now a $2 billion business, heading rapidly toward $4 billion. In five years, G.E. expects that alternative energy products will account for more than a quarter of energy equipment revenue.
If that happens, it will probably be a boon for Energy Financial Services, too. Last year, energy financing got plucked out of G.E.'s financial stable and placed under Mr. Calhoun's umbrella, along with the equipment makers.
The financial team members say that working side by side with the technical equipment gurus is helping them pick and choose among potential investments. They get early alerts, they say, on which blade designs and composites make for the most efficient wind turbines, on whether solar energy is gaining momentum, or whether the technologies will have any resale or reuse value if a project does not work out or a borrower defaults.
"Only 60 percent of our projects involve G.E. technologies, but the global research center helps us decide which technologies to invest in," said Kevin Walsh, managing director of Energy Financial's new renewable energy group.
The potent mix of expertise is already paying off. Energy Financial, for instance, invested in a solar farm in California after G.E.'s industrial experts gave the project — which does not use G.E. equipment — a thumbs-up. The energy finance specialists are helping Mr. Calhoun evaluate the economic potential of a coal gasification project; if it proves viable, they will help promote and finance similar projects elsewhere.
G.E. is not alone in backing renewables, of course. In November, Goldman Sachs committed to investing $1 billion in renewable energy, and it is already "well on its way" to achieving that, according to Lucas van Praag, a Goldman spokesman.
J. P. Morgan Chase, too, has said it will invest more than $250 million in wind-energy projects. And venture capitalists have for some time been investing in smaller renewable energy projects and technologies.
Over all, says Michael T. Eckhart, president of the nonprofit American Council on Renewable Energy, the $7 billion invested in renewable energy projects last year should increase by 25 percent a year over the next few years.
He and many others say they believe that, if the president's imprimatur results in new regulations or tax incentives, even more Wall Street money will be attracted to such projects.
Wind power has been the leading alternative energy source in recent years. The costs of turbines have come down even as their reliability and efficiency have increased; G.E., Goldman, J. P. Morgan Chase and others are snapping up wind farms across the world.
By contrast, persistent shortages of silica, needed to make solar panels, have kept the solar energy sector from taking off on a similar trajectory.
And few Wall Street dollars are going to projects that involve wresting megawatts from agricultural waste, be it crops like corn or the switchgrass Mr. Bush mentioned. And there has been almost no interest, at least so far, in methane generated from manure.
Industry supporters see President Bush's speech as sending a new signal that might favor some of the more exotic energy sources, though. "Now that the president has put the power of the bully pulpit behind ethanol," Mr. Eckhart said, "a lot of conservative people who thought biofuels were silly will view them as a mainstream investment."
For now, investors say that the logistics of selecting sites for factories and transporting biofuels keep them from being economically competitive. "George Bush said interesting things about potential opportunities in biomass, but we need a better understanding of any legislative or regulatory changes his comments might spur," Mr. Van Praag of Goldman said.
GE Energy Financial Services has taken a few tentative steps toward biomass. It has a longtime, if small, investment in plants that burn woodchips for fuel. It is seeking advice about potential biofuel investments from colleagues at Jenbacher, an Austrian company G.E. bought in 2003 that makes generators that run on the gases emitted from landfills. And Mr. Urquhart said he is "going to keep calling our people in Washington, and see what kind of rule-making is evolving around the biofuel idea."
In the meantime, he is keeping his eye out for projects that might merit investment even without additional government incentives. Mr. Calhoun has his eyes on Mr. Urquhart's quest, in case it turns up something G.E. should buy or make.
"Alex helps us decide where to put our development dollars, and we help him evaluate where to invest," Mr. Calhoun said. "And if he finds a great biomass plant, we'd be delighted."
· Copyright 2006The New York Times Company
Day Two: February 28th
*History of Negev - past and present
1.Benny Morris
http://www.radioislam.org/historia/zionism/masalha_bedouin.html
Expulsion of Bedouins, 1949-55
By Nur Masalha, from his book Land Without a People, 1997 pp. 11-12 [..]
In November 1949, some 500 Arab Bedouin families (2,000 people) from the Beersheba area were forced across the border into the West Bank. Jordan complained about this expulsion [31]. A further expulsion of 700-1,000 persons of the Azazmeh or Jahalin tribes to Jordan took place in May 1950 [32]. On 2 September 1950 the Israeli army rounded up hundreds of Azazmeh tribesmen (a United nations Truce Supervision Organizatoin --UNTSO-- complaint spoke of 4,000)from the Negev "and drove ! them ? into Egyptian territory"[33]. A week later further expulsion of the Azazmeh tribesmen was carried out. UNTSO chief of staff Major-General William Riley put the total number of Bedouin at Qusaima in Sinai in mid-September 1950 at 6,200, the majority having been recently expelled by the Israeli army from the Negev. Riley also wrote that the Israeli army killed 13 Bedouin during these expulsion operations [34]. (The Israelis claimed that the Azazmeh tribesmen were crossing back and forth continually between the Negev and Sinai.) In September 1952 the Israeli army expelled some 850 members of the Al-Sani tribe from the northern Negev to the West Bank. "Subsequently," [Israeli historian Benny] Morris writes, "several thousand more Azazme [sic] and other Bedouin tribesmen were expelled to Sinai" [35].
Morris quotes and Israeli Foreign Ministry report as stating during 1949-53 "Israel expelled all told 'close' to 17,000 Negev Bedouin, not all of them alleged infiltrators"[36]! . The Arabs of the Negev had been reduced through expulsion and flight from 65,000-95,000, at the end of the British Mandate, to 13,000 by 1951 [37]. In fact the remaining Arabs of the Negev were not granted Israeli identity cards until 1952, a situation which made it easier for the Israeli army to push them out. A year later, in 1953, it was reported in the United Nations that 7,000 Arab Bedouin, approximately half of them from the Azazmeh trine, had been forcibly expelled from the Negev [38].
Two years later, in March 1955, members of the Azazmeh tribe, including women and children, suffered a massacre at the hands of the notorious 'Unit 101' of the Israeli army, which had been created by Chief of Staff Moshe Dayan in 1953 [39]. Commanded by Ariel Sharon and patronized in particular by Ben-Gurion, Unit 101 was considered the "bayonet" of the army and carried out numerous raids against Arab targets across the border. The tactics used by the unit were debated widely in Israe! l. Its expulsive action against Bedouin tribes of the Negev in the mid-1950s was described in the daily Haaretz in November 1959:
"The army's desert patrols would turn up in the midst of a Bedouin encampment day after day dispersing it with a sudden burst of machinegun fire until the sons of the desert were broken and, gathering what little was left of their belongings, led their camels in long silent strings into the heart of the Sinai desert." [40]
A shaykh of a Negev tribe, Tarabin al Sani', recalled in a conversation with a journalist in 1985:
"Those were the days of military government and do you know what that means? It meant they could kill people as if they were stray dogs out there in the desert with no witness to record their atrocities."
[?]
31. Morris, Israel's border wars, p.154
32. Ibid.
33. Ibid., p155
34. Ibid., pp.155-56
35. Ibid.,p.157
36. Ibid.
3! 7.Cited in Maddrell, The Bedouin of the Negev, p.6.
38. Cited in Christina Jones, The Untempered Wind: Forty Years in Palestine, (London; Longman, 1975), p.218.
39. On this little known massacre, see also Adnan Amad (ed.), Israeli League for Human and Civil Rights -- The Shahak Papers (Beirut: Near East Ecumenical Bureau for Information and Interpretation, n.d.), p.99, cited by Kurt Goering, "Israel and the Bedouin in the Negev", Journal of Palestine Studies 9, no. I (Autumn 1979), p.5.
40. Quoted in Jiryis, The Arabs in Israel, p.258, n.32.
41 Quoted in Maddrell, The Bedouin of the Negev, p.7
2. Report: The Situation of the Arab-Bedouin in the Negev/Naqab: (from Bustan site)
------
*Panel/debate: State perspective vs. “Bedouin Problem,” land and geo-politics
1. The 'Bedouin takeover' mythBy Clinton Bailey
In recent years, a myth has permeated official thinking and it is called "the Bedouin are taking over the Negev." The basis of this baseless legend is multifold - to justify withholding sufficient funds for developing the Bedouin community; to ! prevent the setting up of additional Bedouin settlements; to prepare public opinion for an perhaps violent offensive against Israel's Bedouin.
There is not little cynicism lurking in the vilification campaign that underpins the myth. After forcibly displacing the Bedouin from their traditional lands for the past fifty years, we are now accusing them of grabbing them back.
What some official bodies call a "takeover" - which usually means illegal squatting on government lands - is really a continuation of a long-standing Bedouin condition. Half of them have remained in the desert rather than move into the seven "planned settlements" of Rahat, Tel Sheva, Lakiya, Hura, Ksayfa, Arara, and Segev Shalom. The reason is mainly the state's reluctance to provide these towns, and others that were authorized but never built, with the funds needed to turn them into places in which anyone would want to live.
The "takeover" myth began in spring 1994, when a young man, Dakhalallah Abu Gardud, of the Azazma tribe, picked up one day and moved back to his ancestral lands near Kibbutz Revivim. The fact that the Abu Gardud clan, including Dakhalallah, counts 27 members serving in the regular army and in reserves units, had not saved them from being expelled fro! m their lands in 1985. The lands were declared a closed military zone.
Once the Bedouin left, the government established the civilian Moshav Ashalim there, renting the rest to companies for planting olive trees and raising fish in water tanks. One result of Dakhalallah's service in the army, including front-line stints in Lebanon, was his determination never again to let the authorities treat him like a second class citizen.
Within a few days of his return to his land, Abu Gardud was followed by some 500 families, all of whom were fed up with raising their children in the dangerous, chemical waste area of Ramat Hovav, to where they had been evicted over the years. This defiant action, untypical of Bedouin behavior in Israel, jarred the authorities.
The erstwhile minister of police, Avigdor Kahalani, immediately planned a major operation to expel them back to Ramat Hovav, but was stopped by Prime Minister Yitzhak Rabin, who would not countenance an attack on ar! med soldiers.
As a result, the Minister of Environment in the next government, Rafael "Raful" Eitan, proposed ousting all Bedouin soldiers from the army, but was overruled by then-minister of defense, Yitzhak Mordechai, owing to the indispensable role they play in Israel's defense.
Eitan was not deterred, however, and convinced then director general of the Prime Minister's Office, Avigdor Lieberman, that the Bedouin were "taking over the Negev." He then enlisted his help to thwart the establishment of the settlement, Be'er Kheil, which Ariel Sharon, as infrastructure minister, had promised to Abu Gardud, and for which he obtained government approval in 1998.
One of the main creators of the "Bedouin take-over" myth is Shmuel Rifman, head of the Ramat Hanegev Regional Council. By reiterating it in every forum, he aimed to bring the government to reverse its decision to establish Be'er Kheil. The Bedouin that were supposed to live there, as neighbors of his Kib! butz Revivim, he wanted forcibly settled in the town of Segev Shalom, where they have refused to live.
His success, so far, may be measured by the fact that no budget for constructing the settlement has yet been designated, even for 2003. The takeover myth also feeds off the prevailing official view that the Bedouin must be resettled on as little of the Negev's territory as possible - meaning in the seven, already existing, Bedouin towns.
Bedouin still in the desert, however, are understandably loathe to move into towns known to suffer from the greatest poverty and unemployment, as well as the worst education facilities in the country. On the other hand, they have agreed to move into tribally homogeneous towns with better facilities, should these be built for them.
Ariel Sharon, as minister of infrastructure, understood that, without expanding settlement possibilities for the Bedouin, the problem of their dispersion over the Negev could not be solved. He th! us decided to establish six new and suitable settlements, of which most of the unsettled Bedouin approved.
His vision, however, has been blocked for five years by ministers of the takeover persuasion such as Lieberman and Tsachi Hanegbi. Recently, Sharon tried to allocate one billion shekels for the construction of these six settlements, but the proponents of the takeover myth in his government managed to divert his plan for their own goals.
As a result, half the sum will be spent on "law enforcement" - against the Bedouin - like the Green Patrol. The rest will be almost exclusively used for bettering the existing settlements. This in itself may be fine, but it won't solve the problem of Bedouin dispersion in Ariel Sharon's time.
The writer, a research fellow at the Harry S. Truman Center of the Hebrew University, has studied Bedouin culture in the Negev for many years.
------
Day Three: March 7th