TPT January 2013

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Global Marketplace
January 2013 71
› In California, voters handily approved Proposition 39,
which will change the way corporations are taxed, raising
an estimated $1bn annually. For the first five years, Mr Krauss
reported, “More than half of the new revenue will be allocated
to a fund aimed at promoting jobs by retrofitting schools and
government buildings to increase energy efficiency and the
use of renewable power sources.”
Oil and gas
› Pennsylvania has an estimated 200,000 abandoned
oil and gas wells, but knows the location of only 8,257
of them. This illustrates a potential problem for drillers
active in the Marcellus Shale that underlies 600 miles of the
Appalachian Basin of eastern North America. As noted in the
Ventura County Star (12 October), abandoned wells can in
rare instances serve as conduits for natural gas displaced
by new drilling. A subsidiary of Shell Oil Co was drilling in
Pennsylvania last summer when a 30-foot geyser of methane
gas and water erupted, requiring the evacuation of several
homes.
With attention directed to those abandoned wells posing the
greatest threat, a division of the Department of Environmental
Protection in the state has found and plugged 2,871 of them
since the 1980s, but a lack of funding has slowed its pace.
According to the division’s director, many other US states with
large numbers of abandoned wells also spend little money on
the effort.
As reported by the Harrisburg, Pennsylvania, newspaper,
drillers have an incentive to identify and plug abandoned
wells because by law they are financially responsible for any
damage that results when their drilling sites intersect with old
wells.
› Standard & Poor’s Ratings Services has said that foreign
investors, notably Asian government-owned national
oil companies (NOCs), are showing increasing interest in
a number of North America’s oil and gas resources. Before
2008, investment in Canadian and US oil and gas companies
by Asian government-owned NOCs was negligible.
Since then, according to the S&P report released 19 October,
concerns about the access and adequacy of energy supplies
have been the primary motivation behind the Asian nations’
international investments. With a focus on securing access
to long-term resource supplies, their NOCs have accelerated
the pace of acquisitions and joint-venture activity in North
America.
Automotive
Seeking to reduce its dependence
on Europe, Peugeot tailors a no-
frills sedan for emerging markets
A stripped-down sedan from PSA Peugeot Citroën went on
sale on 1 November in Turkey and was to be rolled out in
Eastern Europe, Africa, and South America within months.
Aimed at middle-class buyers in emerging economies, the
Peugeot 301 is meant to gain a foothold for the French auto
maker in places with more growth potential than saturated
Western Europe.
“We have a vehicle of conquest, and have great faith and
hope,” David Rio, director of the Peugeot brand’s international
operations, said in a 8 November interview in Paris.
Mr Rio told Mathieu Rosemain of Bloomberg News that
the primary competition for the 301 is not considered to be
the no-frills models from Renault’s Dacia nameplate. The
Peugeot car is intended, instead, to go up against the Renault
Symbol (or Thalia, in some markets), Hyundai’s Accent Era,
and the Chevrolet Aveo.
“The 301 is a stretched version of Peugeot’s 208 hatchback,
which designers say will appeal to consumers in emerging
markets,” wrote Mr Rosemain. The Paris-based manufacturer
is aiming for sales of 150,000 of the units annually by 2014,
equivalent to about 4 per cent of its deliveries in 2011.
But Carol Thomas, an analyst with LMC Automotive in Oxford,
England, told Bloomberg that in her view Peugeot’s volume
targets were “quite optimistic.” Ms Thomas said that a car for
emerging markets must be affordable, and Peugeot is pricing
the 301 well above some others on its level. In Turkey it starts
at $16,700: approximately $1,400 higher than the Renault
Symbol and $4,830 above the Dacia Logan from Renault.
Other automotive news . . .
› The finance chief for BMW, Friedrich Eichiner, said on
19 October that the German auto maker will submit an
investment plan to the government of Brazil for a new assembly
plant in that country. Sources with knowledge of the project
advised Reuters that the company contemplates a $395mn
facility to build five models, including the Mini.
As reported from São Paulo by Alonso Soto, BMW decided to
go ahead with the project despite a tax hike on imported cars
as well as uncertainty over new rules requiring car makers to
use more local content. A fresh Brazilian investment would
suggest that BMW is intent on reaping the benefits of the
growing market for luxury cars in Latin America’s biggest
economy.
Steel
Largest scrap dealer in China
expects stepped-up use of the
product, reducing Chinese steel
makers’ demand for iron ore
According to the chairman of China Metal Recycling Holdings
Ltd, the nation will increase scrap use in steel production over
the next three years. Reporting from Hong Kong in Bloomberg