Google wants to get into energy trading business. Is this a sign of coming deflation in that sector?


When you see automotive companies and consumer electronics companies getting into the business of Finance, you know that the boat is lurching to far to one side in will most surely topple over. So it happened in the US Financial Services industry that has expanded far beyond the original investment banks and brokerage houses.

Now we are witnessing a rush to go into energy trading in light of booming commodity prices. Google of all companies is now seeking to start trading energy. Yahoo has been thinking of that too. Of course, in addition, Google may be interested not so much in energy trading itself, as in the cap and trade scam that offers huge benefits to those who know how to game the system. But make no mistake, when dilettantes begin to break into a particular trade the trade is about to become too crowded and inevitably will lead to major distortions.

Of course, behind their “green” initiatives and concern for the environment hide true motives – if banks can do it, why can’t we. After all it does not matter how the owners of the internet giant make money. They are seeking to put their extra cash to work any way they can, sort of like ordinary Americans all got into real estate speculation and thought of themselves as “experts” and “successful” people. We all know how that turned out. If Google’s energy yearnings are a harbinger of energy price collapse so be it. The consumers will only benefit and the evil ones will lose money.

Reuters. January 09, 2010. Google applies to FERC for trading permit late December. * Aims to buy more renewable energy, become carbon neutral * Does not plan energy trading as a new line of business (Recasts with Google comment, background) By Tom Doggett WASHINGTON, Jan 8 (Reuters) – Google Inc (GOOG.O) has asked the main U.S. energy regulator for authority to trade electricity in the wholesale market, which will make it easier for the Internet search giant to obtain renewable energy to power its huge data centers as part of its green initiative. In its filing to the Federal Energy Regulatory Commission in late December, the company said its Google Energy LLC subsidiary wants the authority “to contain and manage the cost of energy for Google.” “We’re interested in procuring more renewable energy as part of our carbon neutrality commitment, so we applied for the ability to buy and sell energy on the wholesale market to give us more flexibility,” Google spokeswoman Niki Fenwick said on Friday. The company in December pledged on its blog “Going green at Google” to make its operations carbon neutral and reduce greenhouse gases blamed for global warming. Fenwick said Google does not have any plans to make the energy markets a new line of business, except that the company may sell any surplus renewable energy it does not use. Other companies that consume a lot of electricity have been given similar authority by FERC to help control their energy costs. “It’s routine,” an agency spokeswoman said of Google’s application. FERC lists on its website about 1,500 companies that have subsidiaries with the same market-based rate authority, including Alcoa (AA.N), the Safeway (SWY.N) grocery store chain and Walmart (WMT.N). Information technology and telecommunications facilities account for approximately 120 billion kilowatt hours of electricity annually — or 3 percent of all U.S. electricity use, according to the Energy Department. Rapid growth in the U.S. data center industry is projected to require two new large power plants per year just to keep pace with the expected demand growth, the department says. Google told FERC it does not own or control any facilities that generate electricity to sell in the wholesale markets and the extent of its electric generation ownership is to provide power solely to the company’s facilities and for emergency backup power. The company asked FERC to approve its request by Feb. 23. Google officials could not immediately be reached for comment. 

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2 Comments

  1. Posted January 10, 2010 at 12:32 pm | Permalink

    energy trading by google is interesting things

  2. Posted February 7, 2010 at 10:51 am | Permalink

    wetter gran canaria

    das wetter


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