Here's a note from a reader yesterday. It reminded us of an opportunity in offshore real estate. But first the note:
“Hi guys,
“Enjoy your work, keep it up. Be as verbose as you like.
In today's London missive, Bill Bonner says "Why rising temperatures are a threat to this old ball has never been fully clarified." Well, I'm sorry Dan missed the film about oil in Melbourne, but you can hire "An Inconvenient Truth" at any DVD place.
“Can I suggest you do so, invest the couple of hours to watch it, take it with a least a small dose of salt, like you should any opinion, but think about the issues raised. Not being American, I found the cartoonish simplicity of some of Al's presentation a bit hard to swallow (surely the average American has an attention span slightly longer, and an intellect slightly higher than, a goldfish?), but the consequences of global warming at even the lower end of projections are pretty catastrophic. Less penguins will be the least of the problems - how about several hundred million refugees having to vacate coastal areas? And I'm not just talking Bangladesh; try Manhattan and half of Florida under water. These are not "The Day After Tomorrow" sci-fi scenarios; they are the consequences agreed likely by thousands of the world's best-informed researchers and scientists.
“Come on, guys - you seem pretty well informed about lots of things. This is a life-and-death challenge facing the entire world. I will be pushing up daisies long before the worst hits, and probably you, too. But I have kids and, so far, one grandchild. I don't want them living in a runaway greenhouse effect, cursing this generation for not acting while we had the chance.”
Al Gore is an insufferable, sanctimonious bore, as are all politicians. As for global warming, that ground's been covered here before. We'll just reiterate that there's a lot we don't know, and that whenever so many people insist on something being true, we are skeptical. Skepticism is a useful instinct in a world where mass-media shapes opinions and fuels hysteria.
But as our beat is money, let's consider the issue for a moment. Who's to say that rising sea levels are a bad thing? The coast line isn't really gone. It just moves further inland, raising somebody else's property values.
And think of all the new offshore real estate that will be created. We are referring, of course, the small but growing business of "floatels." On our recent trip to Singapore we read how the offshore and marine unit of Keppel Corporation aims to capture the worldwide market for floating hotels, which it reckons is around US$3 billion and growing. If global warming kicks in, this market should expand...as rapidly as ocean levels rise.
Right now, the floatels are designed to accommodate workers at offshore oil and gas facilities. Considering the declining production at the world's biggest oil fields (Burgan in Kuwait, Cantarell in Mexico, and Ghawar in Saudi Arabia), you can expect a lot more deep-water drilling in remote locations where crews will have to reside year round. That's big business for floatels.
Who's to say, however, that, floatels are only for the oil and gas business? New tourist projects in Abu Dhabi and Egypt involve floating restaurants and hotels. Why not whole new cities offshore? The whole problem with real estate is that it's so land locked. Why not open it up and allow for even larger population concentrations by building offshore? Who knows what the world will look like in 50 years?
Dan Denning
The Daily Reckoning Australia
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About the Author
Dan Denning is the author of 2005's best-selling The Bull Hunter (John Wiley & Sons). He began his financial publishing career in 1997 and has covered financial markets form Baltimore, Paris, London and, beginning in 2005 Melbourne. He’s the editor of The Daily Reckoning Australia and the Publisher of Port Phillip Publishing.
