Atomic Anderson

When the chief executive of one of the United States’ biggest energy companies starts actively pushing for the introduction of a carbon tax to reduce greenhouse gases, you have to listen.
When that CEO is as successful as Paul Anderson, the man who led BHP’s turnaround and has now done the same thing at Duke Energy, you should listen very closely. There are well-thought-out implications for investment and energy markets.

Given Australia’s slavish following of American foreign and energy policy, it also could mean having a strategic jump on the next few years. Anderson believes that although the Bush Administration has effectively sidestepped doing anything to curb greenhouse emissions, climate change is certain to be a key issue in the next US presidential election.

The carbon tax Anderson is championing in the US will assist the development of non-fossil fuels. For Duke, that means nuclear because the other alternatives are not capable of sufficient scale to be efficient. That’s something to weigh when considering investment in the alternative fuels sector here. If Australia ever starts taking greenhouse seriously, wind farms won’t be the answer.

It’s part of the ground covered in the accompanying video I recorded with Paul Anderson in Canberra last week while he was here for the Qantas AGM - he’s a non-executive director of the airline. And this video is just part of a much longer interview that includes some intriguing observations on the differences between American and Australian corporate culture, differences that Telstra CEO Sol Trujillo might want to consider.

Anderson still has plenty of BHP shares, believing it remains an outstanding stock. Find out why in our Wednesday edition, in the second part of the video interview. The full transcript and audio later this week discloses, among other things, where Anderson believes the offshore platform will be built to take Australian liquefied natural gas into the Californian market. Duke is a very interested customer in taking that gas.

As for Duke Energy, Anderson has positioned it ready for major changes in the US energy industry. Duke shares have taken a battering in the US market correction as utilities have lost some of their favour, finishing on Friday just under $US26 for the first time since February, offering a yield of 4.77% with a price/earnings multiple of about 13.

By way of disclosure, there are some Duke shares tucked away in the Pascoe super fund because I regard Anderson as one of the best CEOs I’ve come across and worth following. There could be worse ways of obtaining a little diversification.