The exchange-based trading of carbon allowances in the US is underway over four months ahead of the official start of the Regional Greenhouse Gas Initiative [RGGI], which covers 10 states in the Northeast and Mid-Atlantic that have pledged to reduce 2010 greenhouse gas emissions to 10% below their 1990 levels. The RGGI states have put in place a regional cap-and-trade system to regulate CO2 emissions from power plants and the program is slated to officially begin on January 1, 2009. The Chicago Climate Futures Exchange began trading RGGI futures contracts last Friday and the NYMEX is slated to begin trading on August 24. The last closing price for the December 2008 RGGI futures contract was $5.54 per ton of CO2, which is less than one-quarter of the prices for carbon credits (EUAs and CERs) in the EU since the emission caps in the US scheme do not represent aggressive reductions.
The latest version of my Global Carbon Trading Index contains 20 components, including a quartet of UK-based companies with five-day stock price surges of over 15% each: Climate Exchange +20.8% (London: CLE), EcoSecurities Group +20.1% (London: ECO), Trading Emissions +16.3% (London: TRE), and Camco +16.1% (London: CAO). A new company in the index is Clean Energy Fuels (CLNE) which acquired Dallas Clean Energy, LLC, from Camco earlier this week in a $19.1 million cash deal. A Seeking Alpha article by Tom Konrad identifies Clean Energy Fuels as an investment play on T. Boone Pickens energy plan (T. Boone also owns over one-third of the outstanding shares).
As part of the deal, Clean Energy Fuels has partnered to operate the project with Cambrian Energy, a leading landfill gas project development and management company. The McCommas Bluff landfill gas processing plant is the third largest landfill gas operation in the United States and is scheduled to close in 2042 with an estimated lifetime of 30 years for the production of pipeline quality methane gas production after the landfill closes. As part of the sale agreement, Camco and Clean Energy Fuels have agreed to enter into discussions for a deal in which Camco provides consulting services to determine the potential for the landfill gas operation to generate emission reduction credits.
$0.34 (08/21/08)
