Archive for January, 2010

President Obama Urges Congress to Pass Energy and Climate Change Legislation that Places a Cost on Greenhouse Gas Emissions

Posted on January 28, 2010. Filed under: cap-and-trade | Tags: , , |

Carbon Traders and Clean-Tech Companies Heartened by State of the Union
By Joel Kirkland
The New York Times
January 28, 2010

It was music to the ears of carbon traders and clean-energy company executives to hear President Obama urge Congress to pass energy and climate change legislation that places a cost on greenhouse gas emissions.

“To create more of these clean-energy jobs, we need more production, more efficiency, more incentives,” Obama proclaimed in his first State of the Union address.

“And yes,” he said, “it means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America.”

Obama thanked the House for passing a bill in June, sponsored by Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.). At its core, that bill would create an economywide cap-and-trade program that ratchets down industrial carbon dioxide emissions over time by distributing a declining number of pollution permits to electric utilities and factories. Support in the Senate for cap and trade is much more tenuous, because of concern about the economic impact and the creation of an international commodity market for carbon allowances and offset contracts.

“This year, I am eager to help advance the bipartisan effort in the Senate,” Obama said.

Dirk Forrister, director of Natsource, a New York-based asset manager in carbon and renewable energy markets, said extending an olive branch to Republicans is critical to getting that bill passed out of the Senate, and Obama did just that.

‘A deal to be had on climate’
“He acknowledged the differences with the Republicans and said he’d work with them,” Forrister said after the speech. “So I took that as a real encouraging speech for climate and clean energy. There’s a deal to be had on climate if they can get past the partisanship.”

Forrister, former chairman of the White House Climate Change Task Force under President Clinton, and Henry Derwent, CEO of the Geneva-based International Emissions Trading Association (IETA), urged Obama to focus on passing a cap-and-trade scheme this year, rather than jettisoning the House approach for a less comprehensive energy bill. They called on Obama to “establish a clear timeline for passage of an economywide cap-and-trade bill.”

IETA represents some of the world’s largest investment banks and trading houses, most of which have carbon trading divisions poised to inject billions of dollars into a U.S. and European carbon emissions market.

The group asserts that a global financial trade in carbon credits, offset contracts and derivatives would fuel investment in clean-energy projects aimed at slashing global emissions. But it has long said it won’t happen unless Congress creates a U.S. market to buttress any global agreement on emissions reductions and financing programs for developing countries.

Obama placed energy and climate in the context of jobs, perhaps not suprisingly, given rising political pressure to turn his attention to bread-and-butter economic issues.

“I took it as a sign of real seriousness,” Forrister said.

Pitching a race to jobs and green technology
Obama emphasized an emerging race among the United States, China and Europe to capitalize on new clean-energy and battery technology to replace coal and oil, which dominate the world’s energy use.

“There is a race in the global theater,” Forrister said. “Folks in America don’t really like a defeatist attitude. They want a winning attitude.”

Ken Newcombe, CEO of C-Quest Capital, based in Washington, said the mere mention of “green jobs” should be a positive sign to the carbon trading and energy finance community.

“If he mentions green jobs, that’s talking big that he’ll continue on the climate security bill,” he said.

Before the speech, Newcombe warned that mentioning climate directly could complicate the political environment, but he said many investors are already convinced Obama is serious about the issue.

“The president turned up in Copenhagen and was singlehandedly responsible for getting accord out and breaking the deadlock,” he said. “That was a remarkable sign of his commitment.”

For his part, Obama also mentioned some items popular with the GOP: zero-emissions nuclear power plants, oil and gas drilling, biofuels and clean-coal technology.

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Motion in Senate Seeks to Stop EPA from Regulating GHG Emissions

Posted on January 21, 2010. Filed under: cap-and-trade | Tags: , , |

Three Senate Democrats Join Effort to Block EPA Carbon Rules
By Simon Lomax
January 21, 2010

Three Senate Democrats today joined a Republican effort to stop the Environmental Protection Agency from regulating greenhouse gases under existing law.

Democrats Blanche Lincoln of Arkansas, Mary Landrieu of Louisiana and Ben Nelson of Nebraska said they co-sponsored a motion that seeks to overturn the EPA’s finding that greenhouse gases are a threat to public health and should be regulated. The agency has proposed regulations for new cars, power plants, oil refineries and factories that could begin in March.

“This command-and-control approach is our worst option for reducing the emissions blamed for climate change,” said Senator Lisa Murkowski, an Alaska Republican, who wrote the measure. “Congress must be given time to develop an appropriate and more responsible solution.”

Murkowski decided today to seek a disapproval motion of the EPA’s Dec. 7 finding instead of trying to block the agency’s regulations by amending legislation now before the Senate. To pass the Senate, the disapproval motion would require 51 votes, fewer than the 60 required to amend legislation being debated this week to raise the U.S. government’s debt ceiling.

Lincoln said she will support Murkowski’s disapproval motion to block “heavy-handed EPA regulation.”

“I am very concerned about the burden that EPA regulation of carbon emissions could put on our economy,” Lincoln said in an e-mail.

Murkowski didn’t say how soon she would bring the motion to the Senate floor. Her decision will delay a vote on whether the EPA can regulate carbon dioxide from cars, power plants, oil refineries and factories “possibly until March,” Whitney Stanco, an analyst in Washington for Concept Capital, said in a report today.

Murkowski could ask for a vote on the disapproval resolution “at any time,” Robert Dillon, a spokesman for the Alaska Republican, said in a telephone interview.

The EPA’s authority stems from a 2007 Supreme Court ruling on the scope of the Clean Air Act. Legislation to limit that authority and set up a cap-and-trade market for carbon dioxide permits is stalled in the Senate.

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Brazil Temporarily Reduces Ethanol Content in Gasoline from 25% to 20%

Posted on January 14, 2010. Filed under: Advanced Biofuel, Hydrous Ethanol | Tags: , |

Brazil Temporarily Reduces Ethanol Content in Gasoline from 25% to 20%
Green Car Congress
January 13, 2010

The Brazilian government has rolled back the anhydrous ethanol blend level in gasoline from 25% to 20% for a period of 90 days, effective 1 February. The decision to roll back the blend level was announced following a meeting attended by executives from the Brazilian Sugarcane Industry Association (UNICA).

Blend reductions are not new in Brazil, UNICA said; the last reduction occurred in March of 2006, when the percentage fell from 25% to 20%. The blend level was raised to 23% in November of that year, and fully reinstated at 25% in July of 2007.

Under Brazilian federal law, the anhydrous ethanol content of all gasoline sold in the country must be between 20% and 25%. The blend range is set by an interagency board (Conselho Interministerial de Acucar e do Alcool, or CIMA). The 5% reduction in the blend is expected to result in an additional 100 million liters (26.4 million gallons) of hydrous ethanol available per month, or around 7% of the current monthly demand.

Hydrous ethanol is pure ethanol (E100) used in flex-fuel vehicles, which run on any mix of ethanol and gasoline. The blend reduction involves anhydrous ethanol, which is the type of ethanol that is mixed with gasoline. While hydrous ethanol contains about 5% water content, anhydrous ethanol is virtually water-free. Hydrous ethanol is the more popular fuel in Brazil.

“The government’s reasons for the temporary reduction are understandable, but the move must be limited to the 90-day period only. Because of high prices, consumers who own flex-fuel vehicles are already shifting from hydrous ethanol back to gasoline, so there is no risk of pumps going dry.

Dropping the blend requirement is unlikely to change the dynamics of the cane industry, which will continue to produce more ethanol and more sugar year after year. All that changed this year was the pace of that increase because of unseasonable rains that affected the harvest.”

—UNICA’s Technical Director, Antonio de Padua Rodrigues

Padua noted that the government should be praised for its open dialogue with the industry and for setting a timeframe for the measure, with reinstatement of the 25% blend happening as the sugarcane industry launches what will be the largest sugarcane harvest in Brazil’s history.

The Brazilian Sugarcane Industry Association (UNICA) represents the top producers of sugar and ethanol in the country’s South-Central region, especially the state of Sao Paulo, which accounts for about 50% of the country’s sugarcane harvest and 60% of total ethanol production. In 2008, Brazil produced an estimated 565 million metric tons of sugarcane, which yielded 31.3 million tons of sugar and 25.7 billion liters (6.8 billion gallons) of ethanol.

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