Newsletter December 2010
Global Fund Exchange is
an asset management
business specializing in a
diversified global macro
approach to investing in
dynamic opportunities
across all sectors of the
New Energy Revolution.
Featured in this issue:
 Food Supply & Price
 G-20 Clean Power Potential
 Bullish Signals for Crude Oil
 Cancun Climate Talks
 Ban on U.S. Offshore Drilling
 Indian Nuclear Investments
+1 212 570 7970
globalfundexchange.com
SPOTLIGHT ON: FOOD SUPPLY & PRICE
World “Dangerously Close” to Food Crisis, Warns U.N.
Falling grain production around the world is putting us “dangerously close” to a
new food crisis, warned the United Nations Food and Agriculture Organization
(FAO) in a new report.
Weather catastrophes in Russia and Pakistan will contribute to a 63 million metric
ton decrease in global grain supply this year, representing a 2% reduction in total
global supply. Previously, the U.N. had expected total grain yields to rise by 1.2%.
The FAO anticipates a reduction of 7% in cereals, 35% in barley, and 10% in wheat.
Volatility in global food markets has raised prices for some essential commodities
to levels not seen since 2007 and 2008, when food shortages ignited riots in many
vulnerable regions of the world. “There is no crisis at this stage, but it could come
if we don’t act,” said Abdolreza Abbassian, an economist with the UN FAO. “The
numbers are getting dangerously close to what we saw in 2008.”
According to the report, total costs of food imports could rise over $1 trillion in
2010. This trend has prompted strong government reactions in many parts of the
world, notably China, which has responded by imposing strict price limits on food
and taking action against agricultural commodity market speculation.
The FAO says prices may increase further if world production does not increase
substantially, especially in wheat, maize and soybeans. “Just normal production
will not do anymore,” warned the report. “With the pressure on world prices of
most commodities not abating, the international community must remain vigilant
against future supply shocks in 2011 and be prepared.”
GLOBAL FUND EXCHANGE LTD.

RENEWABLE ENERGY NEWS
China Takes Top Spot on Renewable
Energy Country Attractiveness Report
Source: renewable-energy-news.info
“A new world order is apparent in the clean energy
sector,” says global consulting firm Ernst & Young, which
recently ranked China as the most attractive country in the
world for renewable energy investment in its latest Country
Attractiveness Indices. Since 2003, Ernst & Young has
analyzed and ranked global renewable energy markets on
the basis of investment strategy and resource availability in
each nation. Its latest report placed China at the top of the
list, citing its “record spending” on clean energy this
quarter, specifically in wind power.
China has invested nearly $10 billion out of total global
investment of $20.5 billion, meaning that just about one of
every two wind turbines produced are operating in China.
China’s incredible growth of wind power comes from
“carefully planned energy and industrial policy that elevates
cleantech to a national strategic level,” said Ben Warren, UK
Energy and Environmental Infrastructure Advisory Leader at
Ernst & Young. China’s solar market is on its way to “great
importance in the global market place,” he noted.
Although the U.S. was the global leader between November
2006 and May 2010, prolonged effects of the financial crisis
and record low gas prices resulted in a drop in rankings.
The U.S.’s renewable energy competitive ranking is now
five points below China’s.
South Korea, Romania, Egypt and Mexico all made the
attractiveness list for the first time, signaling new
opportunities for clean energy investments in those
countries. Japan also rose three points in the rankings,
thanks in part to the introduction of a Feed-in-Tariff (FIT)
which may propel significant expansion in the solar cell
market, potentially to $5.6 billion by 2020.
2
G-20 Clean Power Investment Potential to
Reach $2.3 Trillion by 2020: New Report
Clean power projects in G-20 nations could garner $2.3
trillion in private investments by 2020, according to a new
report by the Pew Charitable Trust.
Major energy demand combined with supportive federal
policies has made Asia – in particular China and India – a hot
spot for clean energy development. Similar growth potential
exists in other G-20 nations, which stand to receive an
additional $546 billion in investments over the next decade on
a “business as usual” basis. However, implementing more
industry-friendly government policies could boost that figure
significantly.
“The message of this report is clear: countries that want to
maximize private investments, spur job creation, invigorate
manufacturing and seize export opportunities should
strengthen their clean energy policies,” emphasized Phyllis
Cuttino, director of the Pew Climate and Energy program.
In Clean Energy Race, U.S. Faces “Sputnik
Moment” on Energy: Secretary Chu
To stay competitive in the global clean energy race,
Department of Energy Secretary Dr. Steven Chu says the
United States must significantly increase investments in
energy research and development. Other nations around the
world, especially China, are outpacing the United States both
in progressive federal energy policies and government
spending on research, leaving the United States facing a
“Sputnik moment” on energy, he said.
“America still has the opportunity to lead in a world that will
need a new industrial revolution to give us the energy we want
inexpensively but also carbon-free. It’s a way to secure our
future prosperity. But, I think time is running out.”
Secretary Chu’s remarks followed the release of a new report
from the President’s Council of Advisors on Science and
Technology on how best to “accelerate the pace” of
technology development in the U.S. The report’s primary
recommendations include major increases in energy research
and development spending and new demonstration projects.
Currently, the U.S. utilizes about 0.14% of the federal budget
for energy-related research. After adding in private sector
funding, total research spending in the U.S. is around 0.03% of
GDP. This amount is three times smaller than Japan’s, and far
behind that of many other nations.
Instead of the $5 billion a year we spend today, the Council
says annual energy research investments should grow to $16
billion. Without more federal support, the report warns, we
will not achieve “game changing” technology developments
needed to make clean energy cost effective and mainstream.
In his concluding remarks, Secretary Chu emphasized the
importance of sustained federal support. “Innovation is the

TRADITIONAL ENERGY NEWS
Weather, Supply Concerns & Stimulus Action
Push Crude Higher to Reverse 2 Yr. Contango
Source: PajamasMedia.com
Speculation of future stimulus moves by the Federal Reserve
plus a snap of cold weather in Europe and North America have
boosted crude oil prices to a 26 month high nearing $90 a barrel
–their longest advance in four weeks.
Oil producers and merchants have increased their net-short
positions in crude futures and options, reversing a two-year
contango. In its Commitments of Traders report, the
Commodity Futures Trading Commission (CFTC) showed that
hedge funds and large oil speculators have increased net-long
positions by 26%. This bullish positioning is indicative of a
wide-spread expectation of future crude oil price increases.
Analysts have begun to see a “backwardization” trend with
crude contracts beginning in September 2011, where prices for
future months are dropping lower than earlier months,
suggesting oil demand may begin to outpace supply in the
second half of next year. This theory is corroborated by recent
upwardly revised demand forecasts from OPEC and the
International Energy Agency (IEA). OPEC now predicts global
consumption will reach close to 87 million barrels per day next
year, and the IEA raised its 2011 global oil demand forecast to
88.5 million barrels per day (compared with the 87.3 million
barrels per day projected for 2010).
“Ninety dollars a barrel is now like a magnet that the bulls in
the market want to break through,” commented Victor Shum,
senior principal at Purvin & Gertz Inc. “These days, sentiment is
so bullish that any bad news on the economic front can’t hurt
the rally in oil.”
3
U.S. Policy Developments – Bans on
Offshore Drilling & Nat Gas “Fracking”
Two policy decisions in the United States will have important
implications for both oil and natural gas production in the
year ahead.
Firstly, President Obama has extended a moratorium put in
th
place after the April 20 BP oil rig explosion in the Gulf of
Mexico. This moratorium would prohibit deepwater drilling in
the Atlantic, Pacific and eastern parts of the Gulf of Mexico.
However, offshore drilling will be allowed to continue in
western sections of the Gulf of Mexico. In total, the
Deepwater Horizon rig spill poured 4.9 million barrels of crude
oil into the Gulf waters, devastating local tourism and fishing
industries and damaging coastline across many Gulf States, the
extent of which is still being determined by scientists in the
region.
Secondly, New York State has taken a step to restrict the highly
productive, yet controversial natural gas horizontal drilling
procedure known as hydraulic fracturing or “fracking.” New
drilling operations will not be permitted in the state until July
2011 to allow environmental regulators to conduct a review of
the process’ effect on drinking water supplies. The use of
fracking has contributed to a natural gas boom in the United
States. However, concerns over potential contamination in
watershed areas have turned the process into a hot political
topic. If other drilling states pass or consider legislation like
New York’s, the natural gas industry may face very serious
repercussions.
Chinese Coal Imports to Surpass Monthly
Record
Chinese coal imports are expected to reach an all-time high
this month as the nation’s appetite for energy continues to
increase. Chinese coal imports to total approximately 17.25
million this month, which leaps ahead of the previous import
record of 16.38 million tons set in December of 2009. The
majority of this imported coal will be used for heating and
electricity generation.
Although it consumes approximately 47% of all global coal, it is
estimated China only holds 14% of coal reserves. Over the
past decade, coal demand has risen about 10% a year, which
many experts are calling “unsustainable.”
China is expanding its domestic coal mining operations, but is
quickly finding it necessary to supplement these resources
with foreign imports from other resource-rich nations around
the world. However, it is not the only economy ramping up
coal demand. India and other developing Asian nations are
also seeking coal imports from abroad, which may translate
into price increases across the board.
 4
CLIMATE POLICY NEWS World Bank Lends Support to Carbon
Markets in Developing Nations
“A Step Forward” in Cancun Climate Talks
The United Nations climate talks in Cancun began without
much fanfare, at least compared with the much-hyped and
ultimately disappointing Copenhagen convention held last
year, but may in fact have been a more successful conference
than its more news-worthy predecessor.

Although no definitive deal was reached to reduce greenhouse

gases and set binding emissions regulation, many analysts and
observers are reporting at least moderate success from the
conference, which concluded this month.
Energy regulator says UK needs energy reform Source: Daily Mail

Most notably, delegates reported progress in bridging the

divide between rich and poor nations, which has long plagued
these negotiations. Christina Figueres, Executive Secretary of Source: youwall.com
the United Nations Framework Convention on Climate Change
(UNFCCC), praised both industrialized and developing nations
The World Bank announced a multi-million dollar new
for coming together to agree to commit to reducing emissions.
initiative to establish carbon trading systems in developing
nations which are particularly vulnerable to the effects of
The agreement reached at Cancun represented the first time climate change.
all major global economies agreed to reduce emissions,
however the text is not a binding document, nor did it go as far
The carbon trading systems have a twofold purpose – first, to
as stipulating an acceptable temperature rise of 2 degrees
put a “price tag” on carbon to spur clean energy projects
Celcius. Of the 193 nations gathered at the conference, only
within the participating nations, and second, to reduce
Bolivia rejected the agreement for not going far enough.
destruction of tropical forest land and slow deforestation.
Deforestation is one of the leading sources of greenhouse gas
“The agreement is not a legally binding treaty, but it allows the emissions in the world.
process to continue to seek stronger steps in the coming year,
and perhaps, a more robust accord at next year’s climate
“We know that the poorest countries will suffer the earliest
conference in Durban,” said Figueres. Negotiators also agreed
and the most from climate change,” said World Bank
to deploy funding and share technology in order to help
president Robert B. Zoellick in a statement at the U.N. climate
vulnerable developing nations mitigate and adapt to the
talks in Cancun this week, remarking that the perils of climate
effects of climate change. Countries also agreed to take
change were moving faster than global negotiations.
concrete steps to protect forestland in the developing world
and reduce emissions caused by deforestation.
“We also know that, while these countries would like to see a
comprehensive global accord on climate change, they are not
Expanding the scope of the Kyoto agreement and its binding
waiting for one. They are acting now and acting differently to
targets has been no easy task. Developing nations are
shift from being climate vulnerable to being climate smart.”
demanding aid from the industrialized world, which carries
most of the historical responsibility for carbon already in the
atmosphere. Countering that claim, many industrialized The World Bank is aiming to provide as much as $100 million
nations do not believe a viable agreement can exist without to help establish these new carbon exchanges in countries
imposing limits on the emissions of fast growing nations like such as China, Mexico, Indonesia and Chile. More countries
China, now the largest emitter of carbon dioxide in the world. may join the initiative as funding grows.

The results of Cancun appear to be a step in the right

direction, but much more work remains to be done. Nations
now have one more year in which to decide to extend the
existing Kyoto Protocol on emission reductions before it is set
to expire in 2012.
 5

NUCLEAR ENERGY NEWS

France Signs $20 Billion Nuclear Energy Deal with
India
President Nicolas Sarkozy of France and Prime Minister Manmohan
Singh of India signed a substantial civil nuclear energy deal during a
recent state visit to India by Mr. Sarkozy.

Under the terms of the agreement, India will build two French reactors,
each worth $10 billion, in Maharashtra, one of its most industrialized
states. India already has 22 reactors in use and has ambitious plans to
expand its nuclear energy sector. Over the next 15 years, the Indian
nuclear market is estimated to reach $150 billion.

After the United States, France is the world’s second largest producer of nuclear energy. It is competing with the United States and
Russia to become the premier provider of nuclear energy technology to developing markets in India and China.

As fossil fuel prices rise and supply constraint concerns grow, France is predicting a “resurgence” in the use of nuclear power for
energy production.

SOURCES
We regularly gather information from the following reputable news sources, including but not limited to:
RenewableEnergyWorld.com EnergyandCapital.com
Forbes.com: Energy News New Energy Finance
Green Inc. – The New York Times Streetwise Reports: The Energy Report
New Energy World Network Thomson Reuters
Scientific American: Energy REChargeNews.com
SustainableBusiness.com Climate Change Business Journal
GREENBUZZ WSJ.com: Environmental Capital
New Carbon Finance Carbon Credit Capital

WEB LINKS:

HOMEPAGE CORPORATE HEAD OFFICE 222 Townsend Square

LOG IN / REGISTER Tel: +1 212 570 7970 Oyster Bay, New York 11771

DOWNLOADS Toll Free: 1 866 608 5559 United States of America

CONTACT US Please visit our “Future of Energy” blog for more news updates.

GLOBAL FUND EXCHANGE LTD.