A Few Questions on Stranded Assets

Now for a post that’s a bit different from the usual rants about food or art:

‘Stranded Assets’ are a somewhat emotive topic that have moved from the relative backwater of Guardian-readership into mainstream investing thought.  The issue has been simmering away since about 2011, entwined with various fossil-fuel divestment campaigns, and headline-grabbing art performances.  Meanwhile, relatively quietly and in the more prosaic world of investment management, coalitions of investors, purely out of gimlet-eyed self-interest, have been pressuring the corporate world to take the threat of climate change more seriously.  With the 2015 COP21 climate-change conference in Paris, and Mark Carney’s widely-publicised intervention, the issue moved onto the front-pages.  We wanted to ask a few questions to assess how this issue might evolve, and how much, if any, is already priced into oil & gas stocks.

Is this a fringe issue or a real risk to investors?

Some investors, oil companies, and media have tried to paint the issue as something dreamt up by coddled, rich-world tree-huggers that has no relevance to actual portfolio allocation decisions.  While at one point this might have been true, it is no longer a gap-year fringe issue.  Look at BOE Governor Carney’s letter to insurers delivered at Lloyd’s in September 2015,  an HSBC research report from April 2015 on stranded assets, or Michael Bloomberg’s chairmanship of the Financial Stability Board (FSB) disclosure panel on climate-related financial risks.

What exactly is the financial risk?

There are at least 3 components to the financial risk to an investment portfolio.  Firstly, to the extent climate change causes substantial, secular changes to the global economy, most obviously a higher frequency of natural disasters (hurricanes, flooding, etc.), this could have implications for insurers’ liabilities as well as for broader portfolios with significant EM concentrations.  Much of these risks are concentrated in the significant equity/debt markets of Latin America and South/Southeast Asia.  So we are talking increasingly-frequent and large natural-disaster-related losses distributed across broad-market portfolios.

Secondly, if one believes that the 2° C global-warming target is something that, from a regulatory perspective, is likely to be enforced – meaning that most global regulators are likely to comply with their COP21 commitments to bring down emissions to a level consistent with this target – then it would appear that much of the world’s coal, oil, and gas reserves would be un-burnable.  Therefore, the reasoning goes, because the traded energy groups are partially valued using their hydrocarbon reserves, this would have significant negative implications for their market valuations.  In theory, if this regulatory response happened overnight, there would be a massive drop in energy group stocks, associated drops in utility shares, as well as companies that support the energy complex (pipes, pumps, etc.).  Given these sectors’ contribution (Vanguard’s all-world VT ETF is 13.7% invested in energy, basic materials, and utilities), there would be implications for broad indices, and therefore pensions, endowments.  Insurance companies, already exposed above on their liability side, may also run risks on assets.

Obviously this isn’t going to happen overnight. There are other caveats: technology to lower carbon emissions might improve – though, carbon capture & storage (‘CCS’) doesn’t appear to be going anywhere fast.  Also, much of the world’s oil & gas is owned by national oil companies (‘NOCs’) who aren’t investible anyway and operate in countries, such as Iran, Iraq and Saudi Arabia, where the regulatory response to COP21 may be quite different from that in the US/EU.

Lastly, carbon risk is tied up with oil-price risk.  At current prices, much of the reserves of certain oil & gas companies is uneconomical to exploit – Russian Arctic oil, Canadian tar sands, shale all need prices between $80-120 range to be profitable.  These assets can be said to be, to a greater or lesser extent, economically stranded due to low oil prices.

How might this play out?

From a pragmatic perspective, the risk to portfolios lies over a 1-3 year horizon, as the regulatory response evolves.  The risk also lies in large institutional investors themselves placing pressure on companies, or indeed divesting, from fossil-fuel groups.  To the extent that investor coalitions, such as the IIGCC, which represents €13TN of assets, can gradually push energy companies to publish sensitivity analyses, at least the scale of the problem at an individual company level would become clearer.

At present, companies and equity analysts are able to assess the impact of prices on reserve valuation.  But it is much harder to disentangle the parallel effects of oil prices and climate-change regulation on the value of reserves.  Absent any other information, the base-case assumption might be that companies under pressure on carbon-emission regulation, would exploit their lowest-cost reserves first and mothball high-breakeven reserves.

In 2015/2016 there have been a number of high-profile divestments, particularly from coal groups, for instance by the Danish fund AP2, the Rockefeller Family Office, and the Norwegian Government Pension Fund.  There will undoubtedly be more – though it’s not clear that divestments, at least at the current rate, pose a significant portfolio threat to investors, since someone else buys those shares at the market price.

A game-changer could be if more SWFs joined Norway in either divesting or aggressively pushing for changes in company policies, not least because they are amongst the largest investors, with the most patient capital, and with potential access to infrastructure projects and assets that are not publicly traded.  Moreover, the biggest SWFs often belong to hydrocarbon exporters, who, one might imagine, would like to diversify their exposure away from energy.

China is another force to watch – in the 13th 5-year Plan, to be announced in March 2016 – there are expectations of significant initiatives to reduce carbon emissions and promote green technology.  The date often mentioned is 2030, when China’s carbon emissions are expected to peak, but until the Plan is actually announced it’s not clear what, if any, immediate steps are expected.

On the other hand, a more granular picture on regulatory response scenarios is provided in a paper from the Grantham Research Institute.  The interesting bit of it is as suspected – in what sense is it fair to ask EM countries, significantly poorer per-capita than the DMs, to bear the inevitable costs, howsoever pro-rated, of transitioning to a low-carbon environment?  Moreover, how reasonable is it to expect that countries who have short or non-existent histories of civil society/institutions, a record of policy reversals, endemic corruption, and weak states, will embark on, and deliver on, COP21 commitments that are intensely challenging, from institutional, legal, political, financial, and technological perspectives.  The report, euphemistically, highlights Argentina, China, India, Indonesia, Saudi Arabia as having ‘potential for increasing support [for implementing COP21 commitments]’.  Lest our SUV-driving North American friends pat themselves on the back, neither the U.S. nor Canada do much better in the report.  So it’s quite possible that, from a regulatory perspective, very little happens in the next few years; though that would seem to imply that the necessary adjustment to policies, and therefore investment portfolios, when it inevitably comes, will be that much more severe.

How have the oil & gas companies responded?

As stated above, the quality of disclosure and sensitivity analyses is presently most inadequate.  Even so, European majors score better – for instance, Shell, Total, Repsol, GALP all score highly on the Carbon Disclosure Project’s rankings. Chevron and Exxon Mobil are on record as being resistant to shareholder resolutions proposed in 2015.  However, Exxon Mobil did produce a climate-change disclosure report in 2014, albeit without any meaningful sensitivity analysis.  More specific information on company responses, including mining groups, can be found at the Association of Chartered Certified Accountants.

Exxon Mobil’s 2016 energy outlook, which covers the period out to 2040, provided their take on how carbon reduction commitments might be met for the system as a whole, namely through dramatic reductions in carbon-dioxide and energy intensities (50% and 40% respectively).  According to the FT, this stretches credibility given apparent lack of political will, certainly in the US and even in the EU, as well as an inadequately high carbon price.  Looking at the price of American gasoline and the alacrity with which people drive in most of the U.S., outside Manhattan anyway, I can see the pink paper’s point.

Lastly, some companies, such as Total SA have invested in renewable energy as a hedge, howsoever small, to their extractive activities.

Is the risk already priced in?

At current oil prices (Brent future for December 2018 delivery is $46), the market recognises that certain high-breakeven reserves, such as in the Arctic or in Canadian tar sands, are unlikely to be monetisable.  Thus, economic stranding is reflected in share prices of groups and funds that are highly exposed to these reservoirs.  It is much less likely that the risk is priced in for the integrated majors, given their diverse properties and mid- and down-stream operations.  It is even less likely to be priced in for utilities and infrastructure companies.  Again, there doesn’t seem to be much analysis or disclosure around the (presumably) differing sensitivities to economic and carbon-related stranding, in part because the regulatory regime that would drive this is yet to be announced.

How to play this?

At the moment, this is basically a structural risk that’s relatively hard to avoid – since in theory everyone from energy companies to utilities to car-makers are somewhat exposed.  Moreover, energy groups are steady dividend payers, for now anyway, so dropping them has a significant financial cost.  Thirdly, coal is mined by integrated miners who also pull other stuff out of the ground, so divesting coal might mean losing much of the metals & minerals complex.

The simplest approach, for a small or passive investor if not the system as a whole, is to remain invested in a broad index, and hope for the best.  There are two reasons for this: one is that, depending on how the situation plays out, portfolio impacts could vary tremendously.  Mercer Consulting highlight drastically different return and composition-of-return scenarios depending on whether regulatory and investor actions prompt rapid, proactive and coordinated, as opposed to, delayed and fragmented, responses.  Thus, this risk could be viewed as an exogenous factor, a bit like catastrophe, war, or un-planned death, that cannot be diversified away simply or costlessly.

The ‘dumb’ strategy above can be improved by removing coal, which no one has anything good to say about (not even Goldman Sachs), and (possibly) by removing high-breakeven companies, such as those involved in Canadian sands or US shale.  Whether one then tilts the portfolio from oil to the relatively cleaner gas becomes a judgement call.  Further tilts are possible away from E&P towards pipelines, infrastructure, refining, or distribution, again probably with diminishing returns (in terms of yield/concentration trade-off).

Vanguard VT (all-world ETF) against two ‘low-carbon’ ETFs Source: E*Trade

Some new ETFs, including CRBN from iShares and LOWC from State Street/SPDR follow indices with lower carbon footprints, such as the MSCI ACWI Low Carbon Target Index, jiggling other index constituents to achieve similar dividend yields and correlation with the much broader all-world MSCI ACWI Index.  This chart above shows performance relative to Vanguard’s all-world ETF VT, albeit over the slightly meaningless timeframe of a year.  These ETFs use company disclosures on emissions to re-weight their allocations, but it’s not entirely transparent how meaningfully exposure to carbon regulation has actually been reduced: for instance, Exxon Mobil and Chevron are still in the portfolios, albeit at tiny allocations, while Enbridge Inc, a gas-pipeline operator and Ultrapar, a Brazilian conglomerate with downstream operations represent meaningful holdings in LOWC, while not showing up at all in VT.

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Clean energy ETFs compared to VT (Vanguard all-world) and VDE (Vanguard energy) ETFs on 5-yr horizon

A complement to the approaches above could be investing in clean, renewable, alternative energy and related companies.  There are a number of ETFs in the space (ICLN, PZD, QCLN, FAN, NLR, KWT, YLCO, GEX).  Most of them look like dogs: over 5 years they’ve substantially under-performed the broad market (VT) as well as energy (say VDE) ETFs.  Fukushima Dai-ichi wiped out the uranium ETF.  Over 3 years the others seem to have gone through a bubble as oil prices went up, making their relatively-expensive technologies look viable.  Then, in the last year as oil prices have crashed, substitution effect has made green technologies again look uneconomic.  So unless one believes substantial subsidies for green tech are forthcoming, that oil prices will shoot back up, or that regulatory and public attitudes towards nuclear will change, these feel a lot like a levered play on oil prices, where investment timing becomes critical.  However, within this universe, specific plays might be interesting (such as measurement companies or water-treatment companies), due to the diversity of their businesses and/or relative independence from subsidies and oil prices.

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The clean-energy bubble (2013-2016)
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Clean energy follows oil down in 2015-2016

Catania: Central Fish Market

Catania’s main fish market, the largest in Sicily & probably Italy. Tuna arrive unfrozen from the Trapani & Marsala fishing grounds off the western coast of sicily, some with hooks still in their mouths. The tuna hunt is one of the great dramas, blood-tinged and a bit sad, as much else in sicily. The great fish are herded by the fleet into large nets, each opening into a slightly smaller net, until the last: the ‘house of death’. Here they are, to the rhythm of antique songs of Arab origin, and upon the instructions of the rais, a word of Arab origin meaning ‘leader’, speared and slaughtered, with care taken to avoid damage to the precious stomach and midsection. The wine-dark sea turns a foamy red.

6am,just landed tuna are relieved of their heads, guts, roes to be preserved as bottarga. The fish are left mostly whole beyond the midsection, as some customers buy the ‘loin’ intact while others want steaks. The complex stomach area, with its delicious fatty bits, and more difficult sinews near the pectoral and dorsal fins, are carefully sectioned. Thin slices are cut for raw dishes like battuto, and possibly sashimi at Catania’s top restaurants.

Men walking about in wellies, no pools of blood and water yet. That’s to come.

The market is mostly open-air, amidst the arches of a railway line. Fish come in by small lorries, and ice in the ubiquitous Ape 50. Fish are carted around on great hand-trucks. The dealers in large fish, with the biggest stalls (slabs of marble or high-density plastic chopping boards) in the main piazza next to Piazza Duomo. There is a raised area where old men stand, some shouting orders for fish, others joking with the fishermen. The smaller stands, retail as they carry a much broader range of fish, are under the arches. Three coffee stands supply the market, and one has a delivery service. After the tuna and swordfish are decapitated and gutted, the first espresso (that we saw) arrived in little plastic cups.


Unlike Tsukiji there isn’t a defined primary or whole-fish section of the market. But the gent with white hair seemed like a sort of primary dealer, with the biggest, most valuable fish in the market – expertly butchering it into large blocks that get sold over the course of the day. It’s all about theatre as he arranges the swordfish blade and tuna heads in just the right way.






On a different morning, this stall landed a large tuna, which they worked through. One man stuck his hands inside the fish to tear out the gills and innards, draining deep red veinous blood onto the cobbles.


Our catch: 1 kg from just behind the stomach, away from the main fin, so a mix of filet & fatty chu-toro. For €10 about 30% London prices. They also threw in bones & shavings. This tuna was about 8 hours between killing and eating, so probably fresher than at Tsukiji.

Simply cooked in the padella, with a tomato salad, and zucchini.

Response to ‘The Ethical Cost of High-Price Art’

Reading Professor Singer’s thoughtful post on Project Syndicate at 5am GMT, I felt compelled to address some of his points, and request clarification on others.  To declare my bias upfront, while I am not schooled in ethics or philosophy, I am a practicing artist, having previously spent twenty years as an emerging-markets derivatives trader, and am of Indian extraction, so feel somewhat qualified to comment.

To start with, Prof. Singer’s points on inequality, outrageous prices for art, and conspicuous consumption are excellent and timely.  It is undeniable that capitalism’s inherent tensions, and the failure of political elites to renew their legitimacy with electorates by effectively regulating the corporate (including financial) sector, threatens the post-war social democratic consensus (politically centrist, globalised, and market-orientated) that has prevented WWIII and lifted millions of people in the third-world out of poverty.  It is also the case that a significant portion of Modernist and Contemporary Art has taken as its subject matter the commenting upon, with a view presumably to correcting, various perceived social ills.  Lastly, there is also a considerable literature, including Kant, Benjamin, and Adorno, on aesthetics, the ‘special status’ of art, and the perils of commodifying aesthetic categories as if they were sacks of potatoes to be bought and sold.

My difficulty with the article, aside from the slightly moralistic tone as to what rich people should or shouldn’t do with their money, was threefold.  Firstly, I didn’t understand the bit about ‘they are not beautiful, nor do they display great artistic skill’.  This was a rather throwaway evaluation, without any persuasive backup, either on Prof. Singer’s subjective aesthetic judgement, or via reference to the copious existing literature on Barnett Newman.  Further, and strangely for an econo-geopolitical blog, was that Prof. Singer seemed to (largely) ignore the fact that art, whatever its special status or aesthetic merits, is also an asset, as pretty much everything in the world is.  That it can be bought and sold follows from it being an asset, as does the possibility that booms and busts may occur in any market for assets.  Thus, if we accept that Barnett Newman’s ‘most important’ works, say Onement I (1948), thought to be his breakthrough piece in the ‘zip’ series, have a certain market price, howsoever inflated, then a (very loosely-applied) version of arbitrage pricing should imply a price for his other works, on a relative value basis, even if they are not (apparently) as innovative.  Secondly, while uniqueness has value, other factors, such as provenance and decorative appeal, also impact valuation.  Bottom line, artworks are assets in a capitalist system, whether we like it or not, and their prices are sometimes hard to explain.

As an aside, I would also point out that Newman’s practice of doing a series of zip paintings is absolutely central to art-making, and some artists, such On Kawara, make their entire career of it – it’s not a simple failure of invention to make serial or sequential work.

A second point regards ‘the art market’s greatest strength is its ability to co-opt any radical demands that a work of art makes, and turn it into another consumer good for the super-rich’.  This, and similar comments I hear within the community of artists (the website Hyperallergic is a good reference), presupposes a monolithic, insatiable entity we call the market, which has malevolent intention.  Clearly there is no such thing, any more than there are such Cookie Monsters in the housing-market, the market for technology stocks, etc.  There are buyers, sellers, regulators, consumers, commentators, and a host of other people, including dodgy bankers and gallerists, who act within a system, and that system, in many of the cases above, is, perhaps, broadly incentivised to see prices rise.  The government, which, rightly so, taxes most transactions, is similarly incentivised.  So, if there is hypocrisy here, as Prof. Singer seems to suggest, it only has a little to do with artists, buyers, or sellers of art; rather the blame is diffusely spread indeed, and includes the critics, politicians, government exchequers, the media, a novelty-crazed public, and possibly might even implicate an art-education system that churns out ever-increasing numbers of artists, curators, and graphic designers every year.

Thirdly, the point about ‘spending time…with indigenous artists’ is vague in that it’s not obvious how buying one or a few artists’ work in, say Africa, would do anything other than give those few artists a little, or a lot of, money.  It could also, perhaps, be seen as a little patronising – many ‘developing countries’ have produced artefacts that are at least the aesthetic equals, and have often influenced more recent art (Cubism and African masks, for instance).

Fourthly, there is a sense in the Prof. Singer’s post, and in similar discourse, that the money that is spent on art, and perhaps consumption products generally, somehow is ‘wasted’, by which I understand, it ‘disappears’ and becomes unavailable for other, presumably better, uses.  Again, common sense tells us the money doesn’t disappear, it goes from buyer to seller, leaving aside any transaction taxes the government might take, which of course, become available for government sector spending in the national accounts.  So if the money doesn’t disappear, is there any a priori reason to assume that the new owner(s) of the money (the seller or sellers) is any more or less likely to spend it on worthy causes than the old owners of the money (the buyer or buyers)? I shouldn’t think so.

But my main concern is the view that artists and art collectors, or more broadly Arthur Danto’s ‘art-world’, has some obligation to correct the world’s ills.  As I’ve noted above, this is commonplace within (parts of) said art-world, but it’s not self-evident to me that social concern need be art’s only, or even main, concern.  People make, view and buy art for all kinds of reasons, and have done so since the Renaissance (or earlier); critics, gallerists, curators, and academics are also involved in art for all kinds of reasons, not least, to make a living.  Correcting social evils, such as lack of water or measles, is a laudable goal; it is something the wealthy can and do try to correct through charitable work and taxes; it is also something that can lend gravitas, relevance and urgency to artwork that would otherwise exist purely as a formal and material phenomenon.

But it does not follow that art buyers who spend their money on art are any more unethical than those who buy cars, houses, watches, and so forth, though of course the numbers, visual impact and media attention may be greater.  Art, if it’s anything at all so reducible, is a mirror of its society, and perhaps what is being registered in Prof. Singer’s post is a discomfort with contemporary consumer society and its excesses.  I’m not sure what an actionable proposal would be – roll back capitalism and globalisation, eliminate most consumer goods, get rid of the housing market, shut down most of the media, dramatically increase taxes on the wealthy, perhaps stopping just short of tarring and feathering the ‘rich bastards’ !  Most of which have less to do with art than a wholesale re-engineering of society.  May it be more successful in this century than in the last.

Highlights of RAW Natural Wine Fair 2014

RAW Wine Fair: the end of the affair...
RAW Wine Fair: the end of the affair…

RAW 2014 was, as in 2013, at once fantastic and frustrating: some phenomenal wines and winemakers, but relatively few are actually sold in the UK. On the other hand, if you take the view that wine is best tasted in situ, then it’s all the more reason to get down to Solicchiata, Asti, Udine, or Tokyo !

Of the 151 wine stands, in the interests of focus, I mainly stuck with Italy (Friuli, Sicily, Campania, Lazio, and Piedmont), Georgia, and the Japanese sake stand.

2013 review here, with an introduction to natural wine, importers, etc. https://eatthehipster.wordpress.com/2013/05/21/raw-natural-wine-fair-london/

The highlight was the sake stand, manned by the awesome duo of Masaru Terada (of Teradahonke organic sake brewery based in Chiba Prefecture near Tokyo) and Dick Stegewerns of Yoigokochi sake importers (Leiden, Holland). They had about 25 organic sakes, defined as junmaishu (“100% pure rice wine” without alchohol, sugars, additives), some of which were unpasteurised and unfiltered. Many of them were relatively “unpolished”: polishing rice removes the bran on the surface to expose the starch, and most “standard” sake is 30% polished, for what’s thought to be a cleaner flavour, perhaps at the expense of character.

Masaru Terada and friend..
Masaru Terada and friends…
Teradahonda's offering
Teradahonda’s offering

A favourite was Ine Mankai (from Mukai Shuzo brewery in Kyoto Prefecture), a rose sake made from 30%-polished red rice, sweet and acidic. Another was the Yuzu (from Heiwa Shuzo in the southern prefecture of Wakayama), flavoured with yuzu lime. Teradahonke had a number of cloudy sakes described as “pre-modern”, made with minimal polishing, while Senkin Tsurukame 19 (Senkin brewery) was 81% polished ! Bottom line, the sake stand was an eye-opener on the range and variety of sake production in Japan, which doesn’t really make its way to most Japanese restaurants in London, at least at an affordable price by the glass.

On to Friuli-Venezia-Giulia – once again Stan Radikon’s wines impressed with their colour, aroma, tautness: favourites were Oslavje 2007 (Chardonnay, Sauvignon Blanc, and Pinot Grigio), the utterly austere Ribolla 2007 (Ribolla Gialla), and the more forgiving Jakot 2007 (Tokaj). Still in FVG, Franco Terpin’s Ribolla Gialla 2007 from the Collio hills was notable, as were Marco Sara’s peppery Schioppettino 2012 (Schioppettino grapes native to FVG) and the Frank 2012 (Cabernet Franc). I also greatly enjoyed Denis Montanar’s slightly sweet Rose Di Refosco Dal Peduncolo Rosso 2010 (RDP grapes), and more tannic Verduzzo Friulano 2006 (VF grapes).

Radikon from FVG
Radikon from FVG
Denis Montanar
Denis Montanar from FVG
Denis Montanar from FVG
Denis Montanar from FVG

Just next door, in Veneto, Costadila from Valdobbiadene offered a great prosecco, 450 Slm 2012, with no added sugar and slightly cloudy, as well the slightly-orange, owing to 20 days of skin contact, 280 Slm 2012 . I think the odd names might refer to elevations.

Costadila from Valdobbiadene, Veneto
Costadila from Valdobbiadene, Veneto

In Piedmont, the standouts were Luca Roagna’s Barbaresco Paje 2008 (Nebbiolo), made in the traditional style (botti grandi instead of barriques , autochthonous yeasts, and a submerged cap of crushed skins atop the fermenting wine), producing a pale and pleasantly tannic wine, 6 years after bottling. Cascina Roera’s wines from Monferrato near Asti, particularly the Monferrato Rosso of 2008 (Nebbiolo) was excellent but probably could use a few more years of ageing (Roera is also a traditional vintner). Lastly, I liked Valfaccenda’s Roero Arneis 2013 (Arneis grapes), for its hint of perfume and sweetness.

IMG_5661 IMG_5662

Some very fine wine was at Cancelliere from Campania in the Montemarano zone, made from Aglianico grapes, said to be southern Italy’s answer to Nebbiolo, its high tannins and acids making it suitable for long ageing, indeed requiring ageing before its drinkable. Unlike Nebbiolo it gives a deep garnet colour and more chocolate/plum aromas rather than the pale colour and rose/tar combination of Nebbiolo. It’s prominently made at Monte Vulture in Basilicata (though there were no Basilicatan producers at the fair), but also in Campania. The Gioviano 2008 Irpinia Aglianico DOC, and particularly, the Nero Ne 2008 Taurasi DOCG, both had wonderful colour and mouthfeel, and super-sweet winemakers (this really is a general comment about most of the makers I met). Fabulous stuff. Still in Campania, Don Chisciotte 2011 from Pierluigi Zampaglione, made with Fiano grapes, was delicious.

Lamoresca from Sicily
Lamoresca from Sicily

South to Sicily: Frank Conelissen has been written about here and elsewhere, and had his very fine, if slightly crazy, wines ran dry quickly! Lamoresca, from near Ragusa in SE Sicily, had some likeable wines, from the autochthonous Nero d’Avola, Frappato, and Nerello Mascalese grapes (see Eric Asimov in the NY Times). I also thought the wines of Porta del Vento, from near Palermo, made from Perricone and Catrarratto grapes were worth buying.

Lastly, the non-Italian standout was Esencia Rural’s wines from La Mancha in Spain: the unfiltered Pampaneo 2013 (Tempranillo) with its hint of cumin, and the De Sol A Sol 2010 (Tempranillo), were both remarkable. The former is available in the UK (many of the above are not). The estate also produces a mad black garlic, apparently ultra-hip in NYC restaurants – basically it’s garlic that’s been slow roasted that roasted at low-temperature for up to a month, until they turn black, ultra-caramelised, and umami-rich.

Esencia Rural's Pampaneo from La Mancha
Esencia Rural’s Pampaneo from La Mancha
And their de Sol a Sol, note the great label: the hands of the winemakers parents, if I recall
And their de Sol a Sol, note the great label: the hands of the winemakers parents, if I recall