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obal Fund Exchange is a global

set management business

hich invests across all areas of

e New Energy Revolution.

this issue:

World Energy Review 2011

Outlook on Solar & Wind

Oil Demand & Fuel Consumption

Water Stress in the Middle East

Chinas Resources Taxes

Rare Earth Element Demand

ur investment focus:

Clean Energy

Water

Agriculture

Traditional Energy

Natural Resources

Carbon & Emissions

Systematic Trading

Hedge Strategies

arn more:

Downloads Section

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Energy Newslette

SPOTLIGHT ON: WORLD ENERGY REVIEW 2011

The U.S. Energy Information Administration (EIA) recently published its annu

International Energy Outlook. We have included some pertinent excerpts fro

the 2011 publication to provide an overview on global energy themes and trend

Energy Demand A Historical Perspective

Looking back to the beginning of the 20th century, crude oil delivered only 4%

the worlds energy demand; yet only decades later it has become the mo

important energy source. Today oil supplies about 40% of the worlds energy b

96% of its transportation energy. Ever since the shift from coal to oil, the wor

has consumed over 875 billion barrels.

Energy Demand Looking to the Future

From now to 2020, world oil consumption is expected to rise by about 60%

Transportation will be the fastest growing oil-consuming sector. By 2025, th

number of cars will increase to well over 1.2 billion from approximately 70million today. Global consumption of gasoline is expected to double, according

the EIA.

The Rise of China & India

The two countries with the highest rate of growth in oil use are China and Indi

whose combined populations account for a third of humanity. In the next tw

decades, Chinas oil consumption is expected to grow at a rate of 7.5% per yea

and Indias 5.5% (compare to a 1% growth for the developing countries). It w

be strategically imperative for these countries to secure their access to oil in th

long term.

Oil Demand and the Economic Recovery

For the short term, the economic recovery is projected to continue at a slow

pace in 2011. World oil demand is set to grow by 1.0 million barrels per day

average around 86.6 million barrels. According to the EIA, the oil demand grow

is set to come from non-OECD countries, mainly China, India, Latin America an

Middle East. In the OECD countries, the oil demand is expected to be slight

higher than 2010, as those countries will still be struggling in recovery from th

financial crisis.

212 570 7970

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GLOBAL FUND EXCHANGE LTD

Investing in the Future of Ener

October2011

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New Japanese Turbine Design May

Reduce Cost of Wind Power

A technology breakthrough in wind turbine design was

recently announced by Japans Kyushu University.

Implementing this new design may result in steep cost

declines for wind power, potentially bringing prices below

that of nuclear energy.

The innovative new design, called the wind lens, could

result in triple the power output of a conventional wind

turbine. Falling component costs have already helped to

reduce the price per MW of wind power, but with this

new technology advance that trend could accelerate.

In some places in the United States, such as the TWE

Carbon Valley project in Wyoming, wind power is already

cheaper than coal $80 per MWh for wind vs. $90 per

MWh for coal. Whats more, government subsidies are

not necessary to achieve this cost differential. With

nearly 2.2 million square kilometers of high wind potentiallocations, the United States has been called the Saudi

Arabia of wind.

Chinas wind installation surge over the past few years has

propelled it ahead of the United States in total installed

capacity. According to the World Wind Energy Association

(WWEA) as of June 2011, China ranked first in the world

with approx. 52GW total capacity, followed by the United

States with 42GW, and Germany with nearly 28GW.

LEAN ENERGY NEWS

trong Outlook for Clean Energy in 2011

t the end of 2009, total global photovoltaic installations

urpassed 21,000 megawatts. According to the China

reentech Report 2009, jointly issued by the

ricewaterhouseCoopers and the American Chamber of

ommerce in Shanghai, the estimated size of Chinas green

chnology market could be between $500 billion and $1

illion annually, or as much as 15% of Chinas forecastedDP in 2013.

ver the past five years the average growth in new

stallations has been 27.6% each year. In the forecast

erformed by BMT Consulting agency, the expected average

nnual growth rate is 15.7%. More than 200 G.W. of new

ind power capacity could come on line before the year

013. Wind power market penetration is expected to reach

35%.

outh Koreas LG to Invest 8 Trillion Won in Green New Businessouth Korea-based LG, the second largest business conglomerate in the country, will invest 8 trillion won (US $6.8bn) into th

romising green new business sector. By 2015, LGs investments will aim to generate 10 trillion won in revenues and creat

0,000 new jobs.

ey focal points for LG include the electric vehicle battery sector (which will receive a 2 trillion won investment by 2013), the

hotovoltaic, LED and water treatment sectors (to receive 1 trillion won investment by 2014) and the polysilicon business (se

o receive 490 billion won in new investment by 2014.)

dditionally, 400 billion won by 2015 has been allocated toward the construction of new solar cell wafer manufacturin

cilities. South Korea has clearly identified the new energy mega trend as a major profit center for the future.

hrough a combination of substantial private sector investments and government stimulus programs, South Korea i

ositioning itself to benefit as the world transitions to a low-carbon energy economy. As the nations clean energy industr

xpands, we foresee significant investment opportunities in the region.

Solar: Worlds

Fastest Growing

Technology

Wind: Moving

Past Economic

Hurdles

Photovoltaic production

has been increasing by

20% each year since

2002, making it the

worlds fastest-growing

energy technology.

The wind power industry

was impacted by the

global financial crisis in

2009 and 2010, but

substantial growth is

predicted ahead to 2015.

New wind lens turbine design is a major advancement

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RADITIONAL ENERGY NEWS

you know that Chinas energy demand is set to grow so

matically over the next 25 years that its consumption is

pected to be 68% higher than that of the U.S.?

its International Energy Outlook 2011, the EIA reports

t throughout the world, energy consumption is expected

rise by 53% from 2008 through 2035, driven by robust

onomic growth and expanding populations in the

veloping countries.

obal Energy Consumption

owth in global energy consumption remains strong and is

pected to remain above average when taking into

nsideration the growth in alternative energy segments. In

current outlook provided by the EIA, the projected

wth in world real GDP (weighted by oil consumption) is

% in 2010.

ntinued upward revisions in this years world oil

nsumption have led to an expected world consumptionwth of 2.0 million bbl/d for 2010. EIA expects this

nsumption growth to be met in almost equal parts by a 1.0

ion bbl/d increase in production from OPEC and 1.0

lion bbl/d increase in non-OPEC supply. EIA believes that

projected gradual reduction in OECD oil inventories over

forecast period should lend support to firming oil prices.

e EIA estimates growth to be relatively flat for OECD

untries, which are generally the more advanced energy

nsumers. In contrast, non-OECDemerging countriesare

pected to expand by an average of 2.3% per year. Led by

na and India, non-OECD Asia is expected to grow thest, rising 117% from 2008 to 2035.

2035, China and India are expected to consume 31% of the

rldsenergy.

nsumption by Fuel

erms of fuel type, liquids remain the worldsmonster

GM to launch natural gas engine initiative

ergy drink through 2035. The category includes petroleum, natural gas liquids, ethanol, biodiesel, coal-to-liquids and gas-

uids. The gap is narrowing between liquids and coal (see above chart); with coal remaining the second largest energy source

wer the world. Although demand for liquids is set to remain high, supply may be harder to come by. Countries around t

rld, for example, are reporting numerous shortfalls in oil.

de Oil

e EIA has revised world oil consumption growth in 2010 upward in response to stronger-than-expected growth in European

mand during the second and third quarters of 2010, as well as continued strong growth in China. The non-OECD regio

ecially China, the Middle East, and Brazil, represent most of the expected growth in world oil consumption in 2011.

ong the OECD regions, EIA expects North America to show almost all the oil consumption growth in 2011, with a gain

arly 0.4 million bbl/d. In 2011, EIA expects global oil consumption growth of 1.4 million bbl/d.

eculation in the Markets

cording to OPECs outlook report, a lesson could be learned from the 2008 record price levels. The rise in crude prices was n

ely based on supply and demand fundamentals, but merely the factors of unregulated speculative investment. Throughoperiod of the high oil prices, the market was actually well supplied, therefore its important to recognize an unregulated

ures market as a possible threat against the disruption of the petroleum prices.

ternational Energy Outlook 2011 Suggests Oil Squeeze In Years to Come

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GRICULTURE NEWS

ater-stressed Jordan to Invest in Wheat

ltivation in Europe & Central Asia

Spiraling Commodity Prices in Qatar

The CPD is reportedly also considering introducing a price free

to block further hikes in already high prices. Following a rece

salary hike for Qatari government employees, the CPD has be

dealing with a public outcry from Qatari citizens worried abo

the rising costs of key food items.

To bring stability back to the market, a special committee hbeen set up by the Cabinet to monitor prices and ena

mechanisms to keep costs under control.

China to Impose Tax on Natural Resources a

OPEC Lowers Oil Demand Predictions

A forthcoming levy of resources taxes on crude oil, natu

natural gas, coking coal and rare earths may impact ener

markets in China. Beginning November 1st, China will impose

tax aiming to shift profits from companies to the government

poor, yet resource rich provinces, and provide incentives companies to fully utilize existing mines. This policy measu

may have an impact on Chinese demand and consumption

resources.

The Organization of Petroleum Exporting Countries (OPEC) a

expects to see a slowdown in Chinese oil demand. China play

a role in the downward oil demand prediction detailed

OPECs Oil Market Report. According to OPEC, there are thr

factors that could negatively impact Chinese oil dema

growth:

1) China has removed incentives that have pushed new cregistrations up for the past few years

2) Higher retail petroleum prices slightly suppressed

demand, mainly transport fuel, in the past three months

3) Mandatory blending of biofuels has reduced gasol

consumption slightly

OPEC, as well as the International Energy Agency (IEA) belie

Chinas oil demand should grow by 5% in 2012, or

0.5mmb/d, slightly below the historic trend. This projecti

would put 2012 demand growth closer to 0.6mmb/d- a figu

more in line with IEAs views from last month.

e pivotal intersection of rising food demand and dwindling

ter supplies is a key element of our investment strategy.

tinent news is monitored closely by our research team.

ther to our discussions of 21st Century Food Wars, we want

share recent news from Jordan as the nation grapples with

serious energy-water-food conundrum.

e Jordanian Ministry of Agriculture announced it has begun

gotiations with leaders in several European and Central

an nations all rich in water resources regarding future

estments in their local wheat cultivation efforts. The

nistry aims to acquire land parcels to be developed for

eat production through Jordanian investors.

s initiative comes as the Ministry recognizes the

sufficiency of local wheat production and the unsuitability

the Kingdoms environment for growing the stable crop.

Abdul Hadi Falahat, President of the Jordan Agriculture

gineers Association (JAEA) told The Jordan Times, The

ere lack of water resources and the shrinking of agricultural

ds due to the expansion of urbanization and infrastructure

velopment activities are the major reasons that make

dan unable to become self-sufficient in wheat production.

A is encouraging the government to take measures to

rease domestic production by encouraging wheat

tivation in the water-rich Jordan Valley and Disi region. By

ng so, Falahat believes Jordan can work towards increasing

stores of the food staple, although it is highly unlikelydan will ever achieve self-sufficiency.

e Department of Statistics (DoS) reports that only 5% of

dans wheat is produced domestically enough to meet

danian wheat demand for only 17 days out of the year

h the rest imported from other countries, primarily the

ted States. Jordan is also a major importer of American red

at, with domestic production falling from 35% in 2009 to

% in 2010. Jordans production of other key food items;

h as olives, olive oil, milk and eggs; has increased

nsiderably. Production levels of these dietary staples have

en over 100% in many instances.

country in the Middle East region, or the rest of the world

that matter, is immune to the problematic trend of

reasing food demand and decreasing water resources. As

regions population and industrial activity expands, hard

cisions will have to be made that will influence the

vernment policies and investment trends in the region.

are keeping close tabs on regional developments related

agriculture, food and water, and will continue to update our

estors, partners and friends on emerging news stories.

The 21st Century Food Wa

are real and being felt

over the world.

Spiraling commodity pric

in Qatar has prompted t

Consumer Protecti

Department (CPD) Minis

of Business and Trade to b

commodity traders fro

imposing any arbitra

price hikes, particularly

food commodities.

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CONTACT US

Corporate Head Office 20 Audrey Avenue

Tel: +1 212 570 7970 Oyster Bay, New York 11771

Toll Free: 1 866 608 5559 United States of America

Please visit our Future of Energy blog for more news updates.

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SOURCES

We regularly gather information from the following reputable sources, including but not limited to:

Bloomberg New Energy Finance RenewableEnergyWorld.com

Financial Times EnergyandCapital.com

Forbes.com: Energy News The Wall Street Journal

Green The New York Times Streetwise Reports: The Energy Report

New Energy World Network Thomson Reuters

Scientific American REChargeNews.com

SustainableBusiness.com Climate Change Business Journal

U.S. Energy Information Administration (EIA) Commodity Futures Trading Commission

GLOBAL FUND EXCHANGE LTD.

RARE EARTHS NEWS

Trends in Chinas Rare Earth Elements Industr

China is by far the worlds leader in reserves of rare ea

elements; crucial components of high tech and clean ener

technologies.

China possesses 57% of known rare earths and supplies 97% of t

worlds supply of these minerals, essentially giving China

monopoly over the industry. As a result, Chinese actions a

policies have dramatic ripple effects for the global cleantech a

high tech industries.

dy Hurst, analyst at the Institute for the Analysis of Global Security (IAGS) has written an extensive report on the Chinese ra

th element industry, along with impacts and potential lessons for the West. The report, which we encourage all to read

ilable on our website. Hurst says, With 1.3 billion people and the fastest growing economy in the world, China is faced w

challenging task of ensuring it has adequate natural resources to sustain economic growth, while also trying to appease t

ernational community, which has been protesting Chinas cuts in rare earth export quotas.

er the past few years, China has come under increasing scrutiny and criticism over its monopoly of the rare earth industry a

gradually reducing export quotas of these resources. Steaming ahead with clean energy development, China plac

mendous value on its rare earth reserves, and is increasingly worried about safeguarding its supplies for future use. Witho

per safeguards, China fears it will become a rare-earth poor country, or even a country without rare earth elements.

e Chinese middle class is on an upward trajectory, and it is flexing its purchasing power. Consumption is rising rapid

ticularly of high technology devices which require rare earths in construction. There is plenty of room to grow. As a result

kely that China will protect its rare earth reserves at any cost and will continue to call the shots in the global marketplace.

ina controls approx. 97% of the global rare earth market.

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