Land & Minerals

[Terrel L. Shields]

Seems that property with the mineral right intact is often priced at extremes. I recommend anyone marketing same, sever the two estates (mineral and land) if they have no idea what both are worth. I just told a bank I am not interested in their project. Clearly the house and acres are worth a somewhat limited amount. The balance then would have to come out of a mineral right I am confident isn't worth half that that amount is. I don't need that fight with seller, buyer, Realtor and bank...thank you

 

[Stephen J. Vertin MAI]

Seems that property with the mineral right intact is often priced at extremes. I recommend anyone marketing same, sever the two estates (mineral and land) if they have no idea what both are worth. I just told a bank I am not interested in their project. Clearly the house and acres are worth a somewhat limited amount. The balance then would have to come out of a mineral right I am confident isn't worth half that that amount is. I don't need that fight with seller, buyer, Realtor and bank...thank you

I have actually seen your book on the subject's unless there is another "Terrel Shields" out there (possibly son or father). Most people do not realizes this but Illinois holds some to the largest coal reserves in the US. In fact central Illinois is attributed to the first place large coal reserves were found in the US. The problem here is it cost more (not only in Illinois but other state's as well) to remove the coal than its current market value. I use to do a lot of mineral right appraisals in central and southern Illinois but now mostly for court cases. When Trump said he was bring back the coal industry anyone familiar with the industry knew he sounded crazy but knowing what I know now "who knows".

The system has to much big money calling shots. For example in Ohio the House passed HB 114 trying to neutralize renewable energy. The bill was supported by the fossil fuel and power companies (mind you this is not the first time they tried). Due to some not understanding how most utility companies work a very short summary is provided. They are basically promised a profit margin based on cost. If cost increase than profit margins grow. That is why most states have utility boards setting profit margins and watching for excessive costs. These renewable energy programs are bringing power to rural areas where utility companies use to claim were expensive to sustain. To relieve rural areas the burden of extremely high power bills the costs were spread to all power company customers. This is one of the reasons power companies want to end these renewable programs. They can no longer claim higher cost (thereby higher profits).

To Republican Governor Kasich's credit he assembled a task force. According to their findings, the cost of implementation (or supporting incentives) was well worth the billions it saved tax payers. It was cutting electrical cost and expanding the work force (last year the alternative energy work force exceeded people employed in fossil fuels) and in Ohio the alternative energy workforce grew 25 percent. Kasich vowed to veto any bill's reversing alternative energy programs. But it showed me two things. Smaller state representative are subject to political bribery and Kasich is a hell of a Governor for not bending to financial pressures.

With that said, mineral rights here (at least for the most part) have little to no value.

 

[Terrel L. Shields]

These renewable energy programs are bringing power to rural areas where utility companies use to claim were expensive to sustain. To relieve rural areas the burden of extremely high power bills the costs were spread to all power company customers.

The problem is that subsidies of solar and wind are basically shifted to non-subsidized folks. This is getting really bad in Canada and Australia. Rates have more than doubled. Coal was #1 producer of electricity. Now it is natural gas. But eventually nat gas prices increase asymmetrically. There are candidates running for the senate and governor who support banning fracking. Doing so bans natural gas production, which is exactly what Maryland and NY did. So. Where do they get their energy? Natural gas powers the majority of electrical energy in those states. My solution? Cut the natural gas lines to both states. After a winter and summer with black outs and brown outs, guess what? They will be happy to frack. CA thinks they will produce 100% of electricity by 2040. They won't. They will have capacity to do so, but the efficiency of wind and solar is between 15 - 25%. To complete the defalcation, they will cover Iowa and Kansas with windmills. That energy (often) is wasted yet is required by federal law to be paid for -subsidy and they will claim to "use" this electricity, but in fact, to try and transmit electricity from Iowa to California isn't possible. Electricity does not flow like pipelines. It simply energizes the grid or not...if not, then you brown out or black out. So California will be using fossil fuels from in state and out and claiming to trade that for those windmill generated Kw's. What a joke. Germany is producing most electricity from coal and their cost to users is more than double ours. Britain is using wood pellets imported from the SE US. The EU claimed it "carbon neutral" if you plant a tree in its place - the sort of sustainable harvest joke upon the world. Energy is just nuts.

If you drive electricity to the 50¢ level, guess what? People will be installing propane tanks or hooking to natural gas lines to run home generators 24/7. It will be cheaper. And in the process going "off the grid" will drive up the cost to the utility hence leading to even higher prices for those who remain on the grid. The grid is about to downsize...one way or the other and it isn't going to be pretty.

 

[Stephen J. Vertin MAI]

You are really hitting on one of my favorite subject' (this and building measurements). No doubt natural gas is King. Coal still comes in second (but it is falling every year). Crude oil third (which is surprising the Brits use wood pellets given the North Sea reserves) and renewable energies come in at a close fourth when including bio-fuels. Nuclear and hydro are running 5th and 6th respectively. Fourth place is actually amazing given in 2005 renewable sources were less than 1 percent. I am far from a tree hugger and have watched and read a number of articles on fracking and in my opinion damage reported by alarmist is substantially overblown. The US has one of the largest natural gas reserves in the world. You are right... let them see what life is like without electricity. Once their iPhone's can't be charged fracking will not look so bad.

"The problem is that subsidies of solar and wind are basically shifted to non-subsidized folks"

The non-subsidize folks are paying up the nose for distances from substations when power stations use fossil fuels now! There are a lot of lurkers out there who do not understand how the power grid works or what we are talking about. So I will give a brief overview. Thanks to Nikola Tesla we have AC power which travels further then DC (Thomas Edison's brain child) but as Terrel correctly pointed out it only travels so far (even with booster stations). So it is a relatively local affair (meaning power plant issues). Read Kasich's task force report (who is also far from a tree hugger). For every dollar invested in renewable energy there is nearly six dollars returned. I am not simply talking sun and wind (while technologies have come light years since 2006 it still has issues). I am also referring to bio-gas which literally takes cow, pig and any other bio-degradable crap and turns it into power via anaerobic digestion.

In 2008 there were about 175 anaerobic digester (ADs) systems in the US. Now there are nearly 3,000 (that is staggering growth especially given it happened during the Great Recession). Further it is not even close to ending. According to AgSTAR there are currently 11,000 anaerobic sites being eyed by US and foreign investors. Google built their first system in NC. I missed seeing the facility while looking at a proposed anaerobic digester being planned there (the investor group and set a tour the next day but I had to leave). I was fortunate enough to know a lot of folks who took the tour and gave their first hand accounts. North Carolina is generally not though of as a bastion of liberalism but are look at results in Ohio, Indiana and Wisconsin. Many of anaerobic digester systems are on farms. They are making systems producing 6,500 kWh or 6.5 MWh 24/7 365 days a year. That is real power so there is no justification for power companies to charge huge booster station fees any longer.

Further these ADs can be appraised similar to numerous symbiotic properties (c-store/gas-stations, hotels, landfills, nursing homes and so on). This year nearly 95 percent of our income has been coming from appraising ADs.

Interesting you brought up Canada. I have been thinking of attending a symposium coming at the end of this month concerning financing AD systems and the Canadian Government is one of the sponsors (among 30 US firms) they will be discussing RECs in Canada. My Grandmother (God bless her soul) was a Canadian citizen (and Ontario was like a second home when I was a kid). I was have been thinking of seeking AD appraisal business there. I know little or nothing what is going on there. The US has kept me extremely busy but I am very interested in the subject (sorry for any typos I wrote this fast since I have a bunch of other stuff I am doing).

 

[Stephen J. Vertin MAI]

One more thing (I told I love this subject) you are correct carbon credits as used in California and most of Europe are dumb. However, at least 20 percent of the US population is on the renewable energy credit (REC) system including Canada. It makes way more sense than carbon credits and you do not have to employ an army of statisticians and governmental verification staff. It is one MWh generated in renewable energy receives one REC (everything is verifiable from a desk top and payment records from power companies). None of this plant a tree crap. I add a few thousand dollars to fees if they use carbon credits (it is extremely complex).

 

[Tim The Enchanter]

From what I have read CA is already exporting excess electric power due to excess capacity.

Otoh, they called a "flex alert" the other day. Not many of those the last couple years though.
If it goes down for any length of time I will pull out Gennie.

867-5309

 

[Terrel L. Shields]

A is already exporting excess electric power due to excess capacity

True but that is because they cannot efficiently use the energy when they need it. High winds at night mean surplus electricity has to be used and mandated by the US to pay for the juice whether they use it or not. So they have to idle gas, coal, geothermal, etc. plants. Much of California's energy comes from the Columbia River valley. But again, they have to use (or waste) all the energy even when a huge wind event gens far too much electricity . Pay for it regardless whether you use it or not. BUT when it gets too far out of whack, all they can do is shut down and this is happening frequently in Australia.
This is what your electricity is (the "hydro" bill) $1,100 nearly (CA money)

 

[Randolph Kinney]

Pete: "A plan to fail is better than no plan at all." So when the woman complains about her "Hydro" bill, it is really the carbon tax levied to save the whole earth from global warming. We should all be very thankful that Canada has sacrificed its people to prevent Hurricanes Harvey and Irma. The plan to fail has succeeded.

 

[Tim The Enchanter]

Global warming, no solution.
Party like it's 1999, and no worries about what happens 90 or 100 years after your birth.
Maybe our Grandkids can figure it out. It's their problem after all.

 

[Meandering]

Global warming, no solution.
Party like it's 1999, and no worries about what happens 90 or 100 years after your birth.
Maybe our Grandkids can figure it out. It's their problem after all.

One good volcano f*rt and carbon taxes are obliterated, no matter how small your carbon footprint is. You can't throw money at the earth and make it stop what it's been doing for 10s of thousands of years.

We are in a solar minimum cycle. It's going to be colder. That's the way the world works. We're just along for the ride.

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