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Showing posts with label energy. Show all posts
Showing posts with label energy. Show all posts
Tuesday, December 6, 2011
Saturday, December 3, 2011
Gas prices drive Geos from clunkers to chic
May 20, 2008|By Mallory Simon CNN
Brenton Netz has made a side business out of fixing up Geo Metros and selling them locally and on eBay.
It's a 12-year-old oft-mocked clunker of an automobile.
But Marci Solomon is hoping she'll be the one laughing -- all the way to the bank -- when her Geo Metro saves her from skyrocketing gas prices.
Solomon, like many others, was taking a huge hit when it came to gas prices. With her 100-mile commute to and from work each day, she saw no end in sight. Then she rediscovered the Geo Metro.
"I used to be a car snob, and I used to be too vain to drive anything that doesn't shine," said Solomon, an electrician. "But now it's about, do I want to eat, or do I want to make it to work? I want to do both."
The Metro has been making a huge comeback, especially on eBay, where Solomon bought the car, because of its extremely high gas mileage.
The 1996 Metro's average of 40 miles per gallon nears that of the hybrid 2008 Toyota Prius -- priced at $21,000 for the cheapest model -- and bests most current cars by a long shot, according to government ratings. Older models of the Geo Metro, specifically cars from 1991 and the XFi edition, have the same average as the hybrid.
Solomon toyed with the idea of purchasing a Prius but decided that for a price of $7,300, the Metro was the more economical option.
For the most part, Solomon plans on using the car for commuting from her home in Rochester, Washington, to her job. The vehicle she has now, a Honda Element, was getting 28 mpg, and she was filling up twice a week, costing her nearly $100. Stations were charging $3.97 a gallon in her area Tuesday, she said. iReport: Tell us how high gas prices are affecting you
The Metro is an investment in the future, Solomon said, even if she did pay more than five times the Blue Book value of the car.
"It was all about saving money," she said. "I don't think gas is ever going to go down, and these are going to be the types of solutions we have to turn to. I wanted to beat the rush."
The rush may have begun.
The 1996 2-door 3-cylinder Metro Solomon now owns opened on eBay May 7 with a bid of $200. A week later, Solomon won the car auction with a bid of $7,300. In 1995, a new Metro hatchback sold for about $9,000, according to Auto Mall USA.
In May alone, 43 Metros of various years and models were sold on eBay, ranging in price from $221.50 to Solomon's bid of $7,300. The cars have been hot items, drawing upwards of 49 bids on certain vehicles, with many of the auctions coming down to last-second bidding wars. On Tuesday morning, 34 Metros were still up for grabs.
Since her eBay purchase, Solomon has acquired another Metro, which she is considering flipping on eBay for profit. She has her eye on a third at a local car lot.
"To be honest, I'm thinking of scarfing up any Geo Metro I can find," she said.
Solomon isn't alone in trying to profit off of a gas-saving craze. Brenton Netz has been selling fixed-up Metros and Ford Festivas for two years now.
After buying a Metro on Craigslist in Montana and driving it back to his home in St. Cloud, Minnesota, Netz realized how rarely he was making trips to the pump.
"I thought the gas gauge was broken," Netz said. "I couldn't believe the gas mileage I was getting."
He realized that he had stumbled upon a possible side business and began buying one-way tickets to states in the West to purchase as many of the cars as he could. Netz said he has sold about a dozen cars and has eight more sitting in his backyard.
His cars go up for sale only one at a time because he knows that putting up a couple at a time would drive down the value and cut into his profit.
Netz says consumers don't seem to mind paying more than the retail value, and if they do, they generally stop feeling that way after they pick up the cars. He's gotten phone calls and e-mails from customers saying how thrilled they are with the mileage.
It seems, Netz said, people are beginning to realize that their car choices need to be focused more on practicality than status and appearance.
"Gas prices are definitely driving increased popularity in the Metro, which at times wasn't cool," he said. "Now the coolness factor is stemming from the fact that you're getting 50 miles per gallon and never having to fill up."
Friday, December 2, 2011
Learning Too Late of the Perils in Gas Well Leases
Learning Too Late of the Perils in Gas Well Leases
By IAN URBINA and JO CRAVEN McGINTY
Ruth Fremson/The New York Times
Jared Ely near gas wells leased on his family's land near Dimock, Pa. His father, Scott, says the leases should have been clearer.
After Scott Ely and his father talked with salesmen from an energy company about signing the lease allowing gas drilling on their land in northeastern Pennsylvania, he said he felt certain it required the company to leave the property as good as new.
So Mr. Ely said he was surprised several years later when the drilling company, Cabot Oil and Gas, informed them that rather than draining and hauling away the toxic drilling sludge stored in large waste ponds on the property, it would leave the waste, cover it with dirt and seed the area with grass. He knew that waste pond liners can leak, seeping contaminated waste.
“I guess our terms should have been clearer” about requiring the company to remove the waste pits after drilling, said Mr. Ely, of Dimock, Pa., who sued Cabot after his drinking water from a separate property was contaminated. “We learned that the hard way.”
Americans have signed millions of leases allowing companies to drill for oil and natural gas on their land in recent years. But some of these landowners — often in rural areas, and eager for quick payouts — are finding out too late what is, and what is not, in the fine print.
Energy company officials say that standard leases include language that protects landowners. But a review of more than 111,000 leases, addenda and related documents by The New York Times suggests otherwise:
¶ Fewer than half the leases require companies to compensate landowners for water contamination after drilling begins. And only about half the documents have language that lawyers suggest should be included torequire payment for damages to livestock or crops.
¶ Most leases grant gas companies broad rights to decide where they can cut down trees, store chemicals, build roads and drill. Companies are also permitted to operate generators and spotlights through the night near homes during drilling.
¶ In the leases, drilling companies rarely describe to landowners the potential environmental and other risks that federal laws require them to disclose in filings to investors.
¶ Most leases are for three or five years, but at least two-thirds of those reviewed by The Times allow extensions without additional approval from landowners. If landowners have second thoughts about drilling on their land or want to negotiate for more money, they may be out of luck.
The leases — obtained through open records requests — are mostly from gas-rich areas in Texas, but also in Maryland, New York, Ohio, Pennsylvania and West Virginia.
In Pennsylvania, Colorado and West Virginia, some landowners have had to spend hundreds of dollars a month to buy bottled water or maintain large tanks, known as water buffaloes, for drinking water in their front yards. They said they learned only after the fact that the leases did not require gas companies to pay for replacement drinking water if their wells were contaminated, and despite state regulations, not all costs were covered.
Thousands of landowners in Virginia, Pennsylvania and Texas have joined class action lawsuits claiming that they were paid less than they expected because gas companies deducted costs like hauling chemicals to the well site or transporting the gas to market.
Some industry officials say the criticism of their business practices is misguided. Asked about the waste pits on Mr. Ely’s land in Pennsylvania, for example, George Stark, a Cabot spokesman, said the company’s cleanup measures met or exceeded state requirements. And the door-to-door salesmen, commonly known as landmen, who pitch the leases on behalf of the drilling companies also dismiss similar complaints from landowners, and say they do not mislead anyone.
The Sales Pitch
“There are bad leases out there, and, as with any industry, there have also been some unscrupulous opportunists,” said Mike Knapp, president of Knapp Acquisitions and Production, a company in western Pennsylvania that brokers deals between landowners and drilling companies. “But everyone I know who does this work is on the up and up, and most of the bad actors that there may have been before are no longer in business.”
He said that his company’s leases ensure that landowners will get replacement water. The company also encourages landowners to visit an existing drilling site before signing a lease to get an idea of the potential noise and truck traffic. Some of the complaints about leases, he said, are just sour grapes from landowners who are envious about the amount of money they believe their neighbors are earning in bonuses and royalties.
To be sure, many landowners have earned small fortunes from drilling leases. Last year, natural gas companies paid more than $1.6 billion in lease and bonus payments to Pennsylvania landowners, according to a report commissioned by the Marcellus Shale Coalition, an industry trade group. Chesapeake Energy, one of the largest natural gas companies, has paid more than $183.8 million in royalties in Texas this year,according to its Web site.
Much of the money has gone to residents in rural areas where jobs are scarce and farmers and ranchers have struggled to stay afloat. Mr. Ely once worked for a company owned by Cabot on drilling sites in his area, until he was fired shortly after publicly complaining about Cabot’s drilling practices.
But many landowners and lawyers say that gas companies are intentionally vague in their contracts and use high-pressure sales tactics on landowners.
“If you’ve never seen a good lease, or any lease, how are you supposed to know what terms to try to get in yours?” said Ron Stamets, a drilling proponent and a Web site developer in Lakewood, Pa., who started a consumer protection Web site, PAGasLease.com, in 2008 so that he could swap advice with his neighbors as he prepared to sign a gas lease. Others have also taken steps to better inform landowners about the details in leases. In the past several years, the attorneys general in New York, Ohio and Pennsylvania have published advisories about the pitfalls of leasing land for drilling.
State regulations also provide protections to landowners above and beyond what is in their leases.
At least eight states specifically require companies to compensate landowners for damage to their properties or to negotiate with them about where wells will be drilled, even if the lease does not provide those protections.
Asked about the leases, officials from Exxon Mobil, the largest natural gas producer in the United States, declined to comment.
Protecting Landowners
Jim Gipson, a spokesman for Chesapeake Energy, said any claims of damage can be investigated by the state and federal authorities and, he added, noise or other disturbances that may come with drilling tend to be brief.
“The most frequently asked question we receive from our mineral owners is, ‘When are you going to drill my well?’ ” he said.
Mr. Gipson said that most leased properties do not end up having a well placed on them, so those leases do not need added protections. But some consumer advocates and lawyers say that protections are needed for all leased properties, even those without wells, because drilling may occur underneath them. These advocates also say that landowners’ eagerness to start earning royalties has made them vulnerable to deceptive tactics by landmen.
“We’re in town until tomorrow,” the landmen typically say, according to interviews with more than two dozen landowners in Ohio, Texas and Pennsylvania. “We have already signed up all your neighbors.”
The landmen then claim that if you do not sign right away you will miss out on easy income because other drillers will simply pull the gas from under your property using a well nearby.
Some landmen show up in poorer areas shortly before the holidays, offering cash on the spot for signing a lease. They might offer thousands of dollars per acre as a bonus to be paid shortly after the lease is signed. Royalties, which usually run between 12.5 percent and 20 percent of what the companies make for selling the gas, can mean tens of thousands of dollars per year for landowners.
Jack Richards, president of the American Association of Professional Landmen, said his members follow a strict code of ethics. His organization also encourages landowners to ask questions before they sign leases, he said.
“We promote open and honest communication between the landman and landowner before signing the lease,” he said, adding that the standard lease forms are written with some protections for landowners.
Some leases, however, also include language that comes back to haunt landowners.
“I thought I knew what the sentence meant,” said Dave Beinlich, describing a section that said that “preparation” to drill was enough to allow Chief Oil and Gas to extend the duration of his lease.
In 2005, Mr. Beinlich and his wife, Karen, signed a lease for $2 an acre per year for five years on 117 acres in Sullivan County in north-central Pennsylvania. They soon realized they had gotten far less money than their neighbors, so they planned on negotiating a new lease when theirs expired in 2010.
A day before their lease term ended, no well had been drilled on their land, but the gas company parked a bulldozer nearby and started to survey an access road. A company official informed them that by moving equipment to the site, Chief Oil and Gas was preparing to drill and was therefore allowed to extend the lease indefinitely.
The Beinlichs have sued. Kristi Gittins, a vice president at Chief Oil and Gas, says that the company does not comment on pending litigation, but that its goal is to produce gas and it makes an honest attempt to develop the land it leases.
“Lease contracts work both ways,” she added. “Chief honors the terms of its lease contracts, and we expect the landowners who have signed the lease contract to honor the terms of the contract as well.”
But lawyers say that drilling leases are not like other contracts.
“You’re not buying a refrigerator or signing a car note,” said David McMahon, a lease lawyer in Charleston, W.Va., and co-founder of the West Virginia Surface Owners’ Rights Organization, adding that once a well is drilled, it can produce gas for decades, locking landowners into the lease terms.
“With a gas lease, you’re permitting industrial activity in your backyard, and you’re starting a relationship that will affect the quality of living for you and your grandchildren for decades,” he said.
Mr. McMahon and other lease lawyers say that unlike many contracts, oil and gas leases are covered by few consumer protection laws, in part because drilling has been most common in states with less regulation.
 |  |
Ruth Fremson/The New York Times
Natural gas being burned off at wells near Dimock, Pa.
Natural gas being burned off at wells near Dimock, Pa.
Clauses With Consequences
“When it comes to negotiation skills and understanding of lease terms, there is a gaping inequality between the average landman and the average citizen sitting across the table,” said Chris Csikszentmihalyi, a researcher at the Massachusetts Institute of Technology who created a Web site last year called the Landman Report Card that allows landowners to review landmen’s professionalism and tactics.
Some lawyers also say that there are major differences between what drilling companies tell landowners and what they must disclose to investors.
Under federal law, oil and gas companies must offer investors and federal regulators detailed descriptions of the most serious environmental and other risks related to drilling. But leases typically lack any mention of such risks.
In New York, the duration of leases has been an especially contentious issue.
As leases near expiration, some gas companies try to extend them, often by invoking “force majeure,” a legal term referring to an unforeseen event that prevents the two sides from fulfilling an agreement.
In these instances, gas companies say the unforeseen event is the state’s repeated delays in releasing environmental regulations and issuing drilling permits.
Force majeure clauses appear in as many as half the roughly 3,200 New York leases reviewed by The Times.
Another important lease term is the Pugh Clause, said Lance Astrella, a lease lawyer in Denver. It is named after Lawrence Pugh, a Louisiana lawyer who started adding it to leases in 1947 to ensure that they would not be extended indefinitely without wells being drilled.
Fewer than 20 percent of the more than 100,000 Texas leasing documents reviewed by The Times include such a clause, and very few of the leases from Maryland, New York, Ohio, Pennsylvania and West Virginia include the language. While the leases collected by The Times represent a small fraction of the more than 8 million oil and gas leases in the United States, experts said they illustrated issues that landowners need to understand.
Mr. Astrella said that leases also typically lacked a clause requiring drillers to pay for a test of the property’s well water before drilling started, and landowners often do not think to do the tests themselves. If drilling leads to problems with drinking wells, landowners have few options if they want to prove that their water was fine before drilling started.
For some landowners, it can be a costly mistake.
“It’s been one expense after another since our water went bad, and the company only has to cover part of it,” said Ronald Carter, 72, of Montrose, Pa. Mr. Carter and his wife, Jean, said they signed a lease in 2006 for a one-time fee of $25 per acre on their 75 acres and annual royalty payments of 12.5 percent.
The Carters live on $3,500 a month, including the $1,500 per month they average in gas royalties. But they had to spend $7,000 to install a water purifier when their drinking supply became contaminated in 2009 after drilling near their property.
The Carters joined a lawsuit with about a dozen neighbors, including Mr. Ely, accusing Cabot Oil and Gas of contaminating their drinking water.
Mr. Stark, the Cabot spokesman, said that his company was not responsible for any water contamination in the area and that Cabot’s studies showed that the gas seepage into the drinking water was occurring naturally.
“All the testing we have been able to conduct show the water meets federal safe drinking water standards,” Mr. Stark said.
In 2009, Pennsylvania ordered Cabot to provide the affected residents with water. For the Carters, the company has paid for bottled water and for the installation of a water buffalo next to their trailer. Mr. Stark added that his company had offered to pay for treatment systems to remove gas if it leaked into their drinking water.
Mr. Carter said that even though Cabot had paid to provide him with bottled water and a water buffalo, he can barely afford his electricity bill, which doubled because he has to heat the water buffalo to make sure it does not freeze.
Those expenses may soon go up.
On Wednesday, Cabot stopped delivering water to the Carters, the Elys and others in Dimock after state regulators said the company had satisfied requirements of a settlement agreement with the state.
“It’s a little late now,” Mr. Carter said. “But there are a lot things I’d like to have done different with that lease.”
This article has been revised to reflect the following correction:
Correction: December 2, 2011
An earlier version of this article gave an incorrect url for Ron Stamets’ Web site. It is http://pagaslease.com.
A Layman’s Guide to Lease Terms
Lawyers and consumer advocates say that leases often contain or lack fine print that landowners should not overlook in signing leases. Here are some examples of key clauses that landowners have come to regret:
Key Clauses in Many Leases
FORCE MAJEURE Typically refers to natural disasters or other events that are beyond a company’s control and can delay drilling plans. In New York, gas companies have used it to argue that leases should be extended beyond their original terms because of the state’s moratorium on certain types of gas drilling.
ASSIGNMENT CLAUSE Allows a company to sell or transfer a lease to another company. Some landowners have complained that their leases have been sold to companies that are financially unstable or have poor environmental records.
ON-SITE STORAGE Some leases allow the energy company to use land for underground storage of gas or drilling waste, sometimes from another property.
PITS Many leases allow companies to place drilling waste into pits on the landowners’ property. Some lawyers say that leases should explicitly prohibit waste pits.
EXTENSION OF LEASE Leases are typically for three to five years, but they often include clauses that allow the drilling company to extend the leases even if landowners want to renegotiate or cancel them.
POST-PRODUCTION COSTS Some leases include language that allows the company to deduct certain costs of producing the gas before paying royalties.
Key Clauses Often Omitted
WATER TESTING CLAUSE Some lawyers say that landowners should add language requiring energy companies to pay for independent testing of the landowners’ drinking supply before they drill so that investigators can determine the origin of any contamination that might occur.
PUGH CLAUSE Protects landowners from gas companies indefinitely holding rights to an entire parcel, even if only a small part of it is being used for gas drilling.
INDEMNIFICATION CLAUSE Lawyers recommend that leases contain language exempting the landowner from all forms of liabilities stemming from the company’s activities.
FACILITIES CLAUSE Often establishes the “setbacks,” or the distances that are required between drilling activity and houses, roads, wells or other structures on the property. Without them, the lease may violate mortgage rules that dictate how certain properties can be used.
Thursday, May 22, 2008
The New Power Generation
The New Power Generation
ARTICLE DATE: 05.03.06
ARTICLE DATE: 05.03.06
Sure, shopping for electronics is no picnic. You drive to a store so large it's visible from space and wander the maze-like aisles until you find what you need. But at least there's a clerk or two there to help you—often poorly informed and commission-motivated, but it's help nonetheless.
Shop for batteries, though, and you're on your own. People usually buy batteries from grocery or drugstore racks. Asking a clerk which battery is best for your digital camera will probably earn you only a glazed look and a shrug.
This lack of information is really too bad, because given the way battery lines have been expanding in recent months consumers could use some direction. Suddenly, each of the big three battery makers—Duracell, Energizer, and Panasonic—is touting long-life batteries tailor-made for electronics.
Do they really perform better? Do they deliver enough extra juice to justify their higher price tags? And are they easy to find at the corner drugstore? With cash in hand, I set out to survey several local stores and scoop up their best batteries, then put them to the test during days of sightseeing and shooting on a conveniently timed trip to San Francisco. Once back home, I put them through further paces with an additional high-drain device (a battery-sucking portable television) and a low-drain test using a cheap flashlight.
Bucks for Batteries
First things first: If I was going to test the crème de la crème of long-life batteries, I needed to know what average batteries could do. I picked up some basic Duracell and Energizer alkalines, as well as RadioShack and IKEA store brands.
I bought four-packs of Duracell CopperTops and Energizer Maxes for $3.99 apiece, and I paid $8.99 for a 12-pack of RadioShack's Enercell store-brand double-As. The cheery yellow IKEA batteries seemed an even bigger bargain at $2.99 for a 10-pack (and I've seen them on sale for $2), but I suspected that they wouldn't stand a chance against the forefront of battery technology.
Today's phalanx of new batteries is actually a broad array of new and old tech. One of the three superbatteries I looked at, the Energizer e2 Lithium, has been around since the 1990s but found a real purpose only with today's digital devices. The Duracell PowerPix and Panasonic Oxyride are more recent releases designed to meet the needs of high-drain devices.
Buying the high-performance batteries proved more of a challenge than expected. The first drugstore I tried, a Walgreens, offered a large rack of mostly Duracells that included some of the company's Ultra line but none of its PowerPix batteries. There were no Energizer e2 Lithium or Panasonic Oxyride batteries to be found. Only as I was checking out did I notice the rack of high-performance batteries behind the counter.
That proved the rule in nearly every store. Common alkaline and store-brand batteries were easy to find, but the high-performance batteries were hidden away. In one Rite Aid, alkalines were located in a large, easy-to-spot aisle rack, photo batteries and a few long-life batteries sat on a countertop display, and the other long-life batteries were hanging on a wall behind the photo counter. That's the first place you'd look, right?
Theft deterrence is likely the reason for the separate racks. PowerPixes cost about $7, and e2 Lithiums are quite pricey—almost $10. Although theft is no doubt a problem, separate racks create another issue: Before deciding which batteries are best for their cameras and remote-control Lamborghinis, customers need to be able to find all the choices. I have a feeling many people buy lower-performing alkalines simply because they can grab them easily on their way to the checkout counter.
Shooting Spree
To put these batteries through their paces in some realistic conditions, I picked up a Kodak Easy-Share C360 and first tested the control batteries around New York City. Having strong batteries is important, I discovered, since they not only determine how many pictures you can take, but they also affect the camera's refresh rate. Nobody wants to lose out on a great shot because the digital camera is still processing the last image. I took most shots without a flash, and because I was shooting rapidly, my numbers are quite a bit higher than the battery companies' claims.
The IKEA batteries fared the worst, with only 209 shots; the Energizer Maxes got 309, Duracell CopperTops 327, and RadioShack Enercells a big 374. Taking that many photos on a pair of double-As might sound like a lot, but it's chump change compared with the powerhouses to come.
Next up were the long-life batteries, which I used while shooting like a crazed tourist on my trip to San Francisco.
First up was the Duracell Ultra, which is simply an alkaline battery created with an improved manufacturing process. Duracell also makes a line called PowerPix, which is recommended for heavy shooters, but I stuck with the Ultra line, which was easier to find, to see what a high-performance alkaline battery could do. The Ultras lasted for 522 pictures (about half a cent per shot), giving me more than enough power to shoot every monument, museum, and arresting view in the downtown area.
My next contestant was the Panasonic Oxyride. The Oxyride is similar to a standard alkaline, but it uses an oxy-nickel hydroxide chemical process to generate more power, and it's made with a vacuum process that also enables more power. It produces a 1.7-volt discharge, rather than the 1.5-volt discharge of typical double-As, and this yielded noticeably shorter camera refresh times. Oxyrides typically cost more than alkaline batteries, but they live up to Panasonic's performance claims. I squeezed 989 shots out of a pair of double-As (that's one-fourth of a cent per shot), which capably carried me through Chinatown and Fisherman's Wharf.
Last up was the heavy hitter, the Energizer e2 Lithium. The e2 is made differently from traditional batteries (see
I didn't have to wonder for long. The e2 simply didn't stop, taking me through the Haight-Ashbury and every inch of Golden Gate Park, and even into a local dive for a little Sonoma white at the end of the day. In the end, I took 2,676 shots using two e2 batteries (one-fifth of a cent per shot), which makes them the best choice both for skinflints and for people who don't want to change batteries often. But they aren't without flaws. The e2s deliver only 1.3 volts, which causes noticeably slower refresh times. That's a nuisance when you're trying to shoot quickly.
See the
TV, Timed
With better refresh rates and good value, the Panasonic Oxyride was my favorite for digital photography. I was surprised when it didn't do as well in a second test, powering the biggest battery vampire I could think of: an RCA portable television running off three double-A batteries. The IKEAs worked for 4 hours, the Duracell CopperTops for 4 hours 4 minutes, the Energizer Maxes for 4 hours 7 minutes, and the RadioShack Enercells for 4 hours 8 minutes. As for the high-performance batteries, the Duracell Ultras ran for 4 hours 45 minutes and the Energizer e2 batteries for 6 hours 15 minutes, but the Panasonic Oxyrides lasted only 3 hours 40 minutes. That's worse than any of the control batteries. What gives?
Then, just for kicks, I ran a battery test with a low-drain device, a flashlight, and the results were surprising. The low-end batteries all (except the slightly shorter-lasting IKEAs) powered the flashlight for more than 5 hours of constant use, while the high-performance batteries all burned out the flashlight's bulb long before they were drained. The Energizer e2s lasted an hour and a half, the Oxyrides 45 minutes, and the Duracell Ultras a scant 8 minutes. See the
The lesson is simple: Buy the right battery for the job. Long-life batteries deliver too much power for low-drain devices. Looks like there's some truth to the marketing hype after all.
Though the overall winner isn't clear-cut, it is clear that long-life batteries designed for digital gear offer good value and convenience—for digital cameras. They're more expensive, but they'll last forever—particularly the Energizer e2. Buying strictly based on cost? If you can find the IKEAs at $2 per 10-pack, don't hesitate to buy. When they're that inexpensive, the cost per shot matches that of the long-life Oxyride, and they outperformed everything else on our extreme TV run-down test, at just 19¢ for an hour of viewing. And one other thing I learned: If you're going to shoot thousands of photos while walking around all day, wear comfortable shoes.
Cost per hour
RCA Portable TV
Batteries needed: 3 AA
Cost - Battery - Life span (hr:mm)
$.60 Panasonic Oxyride 3:40
.19 IKEA 4:00
.74 Duracell CopperTop 4:04
.73 Energizer Max 4:07
.54 RadioShack Enercell 4:08
.94 Duracell Ultra 4:45
2.03 Energizer e2 Lithium 6:15
Ultra Hardware Heavy-Duty Flashlight
Batteries Needed: 2 AA
$18.75 Duracell Ultra 0:08 (Blown blubs throw off price)
3.33 Panasonic Oxyride 0:45 (Blown blubs throw off price)
3.23 Energizer e2 Lithium 1:33 (Blown blubs throw off price)
.15 IKEA 4:04
.36 Energizer Max 5:31
.27 RadioShack Enercell 5:37
.36 Duracell CopperTop 5:45
Digital Camera Tests
Name - Cost per 2 batteries - Number of Shots - Pictures per penny
Duracell CopperTop $2.00 327 1.6
Duracell Ultra $2.50 522 2.0
Energizer e2 Lithium $5.00 2,676 5.4
Energizer Max $2.00 309 1.5
IKEA $0.60 209 3.5
Panasonic Oxyride $2.50 989 4.0
RadioShack Enercell $1.50 374 2.5
Sunday, April 27, 2008
DRIP - Dividend reinvestment plans cut out the middlemen
PAUL B. FARRELL
Best-kept secret on Wall Street
Dividend reinvestment plans cut out the middlemen
By Paul B. Farrell, MarketWatch
Last update: 6:57 p.m. EDT April 10, 2005
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ARROYO GRANDE, Calif. (MarketWatch) -- Don't trust brokers? No confidence in fund managers? Cut out the middleman. Here's how: Buy stocks directly from a company. Become one of America's DRIP investors.
Never heard of them? I'm not surprised. Vita Nelson, editor of the Moneypaper newsletter, calls corporate dividend reinvestment programs, or DRIPs, the "best-kept secret on Wall Street."
Most people haven't heard about them for one simple reason -- companies can't advertise their DRIPs. Why? Because brokers and fund managers can't sock you with big fees and commissions if you buy stocks directly from a company. So they won't tell you the "best-kept secret" and they've made sure Congress and the SEC keep it a secret too.
But I can tell you. DRIPs are a great way to get on the dividend bandwagon. DRIPs are a simple way to invest dollars and reinvest dividends. DRIPs are a great long-term saving plan that can help you build a retirement portfolio of solid blue-chips.
And it's "so easy," says Charles Carlson, editor of the DRIP Investor newsletter and author of several books on investing, including "Buying Stocks Without a Broker" and "No-Load Stocks" (another buzzword for DRIPs), both great primers for the new DRIP investor.
More than 1,000 major companies offer DRIPs, including Coca-Cola (KO:
The Coca-Cola Company
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KO 59.33, -0.92, -1.5%) , Disney (DIS:
Walt Disney Company
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DIS 32.36, +0.42, +1.3%) , Exxon Mobil (XOM:
exxon mobil corp com
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XOM 92.46, -0.14, -0.1%) , Home Depot (HD:
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HD 29.78, +0.86, +3.0%) , Pfizer (PFE:
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WAG 35.49, -0.33, -0.9%) . Plus great foreign brands like AXA, BP, Barclays, GlaxoSmithKline and Toyota, all administered through ADRs by American banks, also offer DRIPs.
"In the Dow, Exxon has perhaps the most user-friendly DRIP," Carlson says. "You can make initial purchases directly. Minimum initial investment is $250. There is no enrollment fee and no purchase fees. The Exxon plan also has an IRA option, including a Roth IRA."
And you have to love Carlson's eight-stock "starter" DRIP portfolio. This winner had an 18.8% average annual return the past 10 years, handily beating the S&P 500's 10.3% percent average. Put another way, if you invested $1,000 in each of these stocks 10 years ago -- a total of just $8,000 -- your portfolio would have grown to a loveable $45,040 today.
The portfolio includes Medtronics (MDT:
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MDT 49.42, -0.04, -0.1%) , Popular (BPOP:
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BPOP 11.85, +0.06, +0.5%) , Walgreen, Pfizer, Dollar General (DG:
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DG, , ) , Exxon Mobil, Regions Financial (RF:
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RF 22.22, +0.36, +1.7%) and Disney. See accompanying chart.
And if you don't have $8,000 to start, Carlson suggests an even simpler four-stock portfolio with a super-low initial investment: Popular, Exxon Mobil, Cash America (CSH:
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CSH 48.21, +2.76, +6.1%) and Aqua America (WTR:
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WTR 18.04, +0.05, +0.3%) : "Buying into these four stocks costs you just $1,100 to start. And all of your money goes to work for you, no enrollment fees and no purchase fees."
Eight stocks may not be enough diversification for your needs. And you may still want some bond funds to build a balanced portfolio for your lifestyle. Carlson's books are filled details about asset allocations, company picks and alternative portfolios to fit all kinds of lifestyles, from young families to mature retirees.
Where to begin
How to get started? You need at least one share of stock to start (DRIP programs are only available to existing investors). There are three great organizations that will show you how to buy that first share or help you find one of the 300 companies that will let you get started buying that first share directly: DRIPinvestor.com, NetStockDirect.com and Moneypaper.com. Visit DRIPinvestor.com. See NetStockDirect.com. Check out Moneypaper.com.
According to these experts, building your stock portfolio using DRIPs is about as easy as opening any other account. Here are Carlson's eight steps for getting started in DRIPs:
Select the best companies
Research the plan's specifics before investing
Buy the first share of company stock
Wait for the stock certificate
Tell the company you want join their DRIP plan
Fill out and return their DRIP enrollment form
Know the rules about making cash payments
Keep good records
After you make your initial investment, you then add to it on a regular monthly basis. In fact, you can make it even easier by setting it up as an automatic deduction from your bank account. And today most transfer agents allow buying in DRIP plans via the Internet.
One drawback to some of the plans, says Carlson: "In recent years we see more companies with no-load stocks implementing fees in the plan. These fees are generally $5 to $18 for enrollment fees and purchase fees of $5 plus $0.10 per share."
Still, that's better buy than paying all the commissions, fees, trading costs and annual operating expenses the middlemen siphon off.
Big savings: no loads, no fund expenses
With DRIPs you can save upfront loads plus those endless annual management fees of 1.5% to 3% you have to pay your broker to buy the stocks and then hold onto them indefinitely.
Plus you'll save even more by buying stocks directly and not investing in a mutual fund. Remember, the fund simply turns around and invests your money in stocks and then charges an average 1.4% annual fee.
Think of it this way, you're creating your own private fund of DRIP stocks. You cut out all the broker's loads and you've eliminated the fund's operating expenses. And on top of that, you'll likely outperform Wall Street's hotshots and the vast majority fund managers.
Simple! But don't tell anyone. Remember, DRIPs are Wall Street's best-kept secret.
Company
10-year growth of $1,000 DRIP
Medtronics
$7,501
Popular
$10,435
Walgreen
$5,563
Pfizer
$4,806
Dollar General
$4,411
Exxon Mobil
$4,429
Regions Financial
$3,934
Walt Disney
$1,965
Total
$45,046
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