STT's forest valuation charade

 

Publicly owned commercial native forests as operated by Sustainable Timber Tasmania P/L (STT) are perpetual assets managed for the benefit of future generations.

Yet when STT values its forests every year it values the estate as a single rotation crop. Which is a patently absurd assumption for a perpetual asset where replanting is mandatory.

This is the loophole that allows STT to pretend to be sustainable. Replanting costs are excluded when determining the expected net proceeds which forms the basis for a forest’s value.

Hydro & Aurora Energy: Onerous contracts

 

Power Purchase Agreements have been used to assist developers of renewable energy projects. These notes explain how Hydro Tasmania and Aurora Energy account for these agreements and how accounting standards allow much of the relevant detail to escape the reporting net.

Included also is a closer look at how Hydro’s sale of a majority share in its windfarms was only possible due to a generous Power Purchase Agreement by Hydro effectively guaranteeing to pay the purchaser’s debt over the term of the agreement.

Finally there’s a note outlining how the assumption of sunk costs are used by renewable energy promoters to give a rosy view of individual projects. For instance, a windfarm developer needn’t consider the costs of Marinus because it’s a sunk cost however large.  A recent article is cited describing how sunk cost trickery understates the costs of renewable energy projects.

STT revisited

 Most people hoped we’d heard and seen the last of them.

But then a bell rang, and out they came, like the travelling troupers from Harry Paulsen’s Touring Stadium.

The forest fighters were back, determined as always to ignore recent events if it didn’t suit their narrative.

The spark that re- ignited the fire was the decision of the Victorian government to halt native forest logging. It was described as a Dan Andrews stuff up, as the actions of an anti-forestry government, but that shows a wilful ignorance of the financial unsustainability of native forest harvesting in general and VicForests in particular, where the final nail in its coffin were the massive 2020 bushfires.