news20100424reut1

[Top News] from [REUTERS]

[Environment News]
[Green Business | Japan]
LA PAZ
Fri Apr 23, 2010 10:22am EDT
Bolivian protesters suspend Sumitomo mine blockade
ボリビアの抗議団体、住友系鉱山の封鎖を一時中断する。｝

(Reuters) - Bolivian peasant farmers called off a 10-day protest against the San Cristobal mine owned by Japan's Sumitomo Corp late on Thursday, a local government official said.

Hundreds of local residents, who are demanding compensation from the company for the use of water supplies, overturned containers full of mineral ore and destroyed a small office at the remote site in the Potosi region.

"After yesterday's meeting between the residents and the governor, we've got a temporary solution. The blockade's been lifted," an official from Potosi's provincial government told Reuters.

"The protesters have set May 8 as the deadline for their demands to be resolved," the official added.

The demonstrators are also calling for the installation of services, including electricity, running water and mobile phone coverage.

No one at the mine could be reached to comment.

The company said on Tuesday it would progressively reduce operations due to the blockade, which cut off the main rail access of the silver-lead-zinc mine, which ships ore via ports in neighboring Chile.

Protests by Indian groups against mining companies are fairly common in impoverished Bolivia and in neighboring Peru, a leading producer of silver, zinc and copper.

Throughout the Andean region indigenous groups are demanding greater control over natural resources and a bigger share of their countries' mining and energy revenues.

San Cristobal is one of the largest mines in landlocked Bolivia, producing some 1,300 tons of zinc-silver ore, and 300 tons of lead-silver ore per day.

According to Sumitomo's website, the mine is the world's sixth-largest producer of zinc and the third-largest producer of silver.

(Reporting by Diego Ore; Writing by Helen Popper; Editing by Walter Bagley)


[Environment News]
[Barack Obama | Green Business | Mexico]
WASHINGTON
Fri Apr 23, 2010 12:45pm EDT
Obama unchanged on offshore drilling despite spill
｛オバマ政権、流出事故にもかかわらず沖合での掘削を変更せず。｝

(Reuters) - President Barack Obama has no plans to reconsider his proposal for new offshore oil drilling in the aftermath of an oil spill in the Gulf of Mexico, the White House said on Friday.

White House spokesman Robert Gibbs said the administration had taken swift action to ensure the safety of workers and the environment after the spill, which on Thursday measured one mile by five miles.

Asked whether Obama had second thoughts on offshore drilling, Gibbs said, "No."

Obama still believes that "we have to have a comprehensive solution to our energy problems," and the spill did not open up new questions about his drilling plan, he said.

"We've taken swift action to ensure the safety of those that are there and to ensure the safety to the environment by capping the exploratory well," Gibbs said.

"We need the increased production. The president still continues to believe the great majority of that can be done safely, securely and without any harm to the environment," he said.

Oil appears not to be flowing from the sunken drilling rig and damaged well in the Gulf of Mexico, but hope was dimming as search continued for 11 workers missing in the disaster, the U.S. Coast Guard said on Friday.

The Transocean Ltd Deepwater Horizon sank Thursday after burning since Tuesday following an explosion while trying to temporarily cap a new well drilled for BP Plc 42 miles southeast of Venice, Louisiana.

(Reporting by Matt Spetalnick; Editing by Will Dunham)


[Environment News]
[U.S. | Green Business | Mexico]
HOUSTON
Fri Apr 23, 2010 12:54pm EDT
Oil spill contained, search for 11 continues
｛オイルの流出は阻止、11名の行方不明者の捜索続く。｝

(Reuters) - Oil appears not to be flowing from a sunken drilling rig and damaged well in the Gulf of Mexico, but hope was dimming as search continued for 11 workers missing in the disaster, the U.S. Coast Guard said Friday.

"As of right now, the spill is not growing," a U.S. Coast Guard spokeswoman said.

A remotely operated unmanned submarine sent down Thursday to inspect the scene found no oil leaking from the sunken Transocean Deepwater Horizon drilling rig and no oil flowing from the well, reducing the risk a major spill, a spokeswoman said.

On Thursday, officials said there was a slick 1 mile by 5 miles, a mix of crude oil and fuel.

But 11 workers remained missing despite an intensive search and it was feared they were unable to escape the blast.

The Transocean Ltd Deepwater Horizon sank Thursday after burning since Tuesday following an explosion while trying to temporarily cap a new well drilled for BP Plc 42 miles southeast of Venice, Louisiana.

The blast occurred about 10 p.m. CDT Tuesday (0300 GMT Wednesday) as the rig was capping a discovery well pending production, company officials said. Some 115 of the 126 workers on board at the time of the explosion were rescued.

Shares of Transocean traded on the New York Stock Exchange fell 1.5 percent to $88.94, while shares of BP on the NYSE were off 37 cents $59.18.

(Reporting by Bruce Nichols; Editing by Lisa Shumaker)


[Environment News]
[Green Business]
Jeffrey Jones
CALGARY, Alberta
Fri Apr 23, 2010 1:51pm EDT
Syncrude faces multimillion-dollar tailings costs
｛シンクルード社、尾鉱処理費に数百万ドルが必要。｝

(Reuters) - Syncrude Canada Ltd, the country's largest oil sands producer, will spend hundreds of millions of dollars building two plants to reduce toxic waste under recently tightened regulations, it said on Friday.

The plants, which will employ new technology to process tailings from oil sands production, are conditions of approvals by the Alberta Energy Resources Conservation Board, the first under a directive issued in February 2009.

Syncrude and the ERCB said the new rules are tough, but at least one environmental group said the approvals impose weaker targets than what were spelled out in the directive.

The board approved tailings ponds -- expansive man-made lakes that hold water, leftover bitumen, clay and heavy metals from the oil sands production process -- for both Syncrude and the yet-to-be-built Fort Hills project. The nods came with several conditions.

"This is the first time we've laid down specific criteria that the companies had to meet with respect to managing their tailings ponds," ERCB Chairman Dan McFadyen said in an interview.

"They were performance criteria. It didn't say how to do it. It said here's what you have to do to meet the management of tailings ponds to get them toward what we call a trafficable surface so they can then be reclaimed."

Under the new rules, operators must report on the ponds annually, cut the accumulation of fluid tailings and specify dates for construction, use and closure.

The ponds came to symbolize the battle between environmental groups and the oil sands industry in 2008, when 1,600 ducks were killed when they landed on a tailings pond at Syncrude's operation in northern Alberta. Syncrude has pleaded not guilty to federal and provincial charges over the incident and the case is now being tried.

For its ERCB approvals, it will build one commercial scale tailings plant by August 2012 at its Mildred Lake site, and another at its Aurora North mine, the board said.

Syncrude must also meet annual targets for capturing tiny particles, called fines, in the tailings.

The cost of the compliance, including building the plants, is in the hundreds of millions of dollars, said Syncrude spokeswoman Cheryl Robb.

"They're holding us to the plan that we submitted, which we considered an aggressive plan," Robb said.

Simon Dyer, oil sands director for the Pembina Institute, an environmental think tank, said the approval conditions do not go far enough.

"Despite the tough talk about tailings, Alberta has accepted a plan from Syncrude that doesn't comply with its own rules to clean up tailings waste," Dyer said.

He said the targets for capturing fines, 9.3 percent next year, climbing to 34.6 percent by 2014, are lower than what the directive requires.

ERCB executive manager Terry Abel said the board insisted on tougher measures than what Syncrude initially proposed.

For its approval, Fort Hills, a consortium that includes Suncor Energy Inc, Teck Resources and UTS Energy, must apply to use new technologies six months before testing them and have no fluid-like deposits of tailings left when it closes the mine.

Last week, environmental groups launched a complaint against Canada under the North American Free Trade Agreement, saying the country has failed to enforce rules governing tailings ponds and their safety.

Critics charge that the ponds are being allowed to leak and contaminate ground water, damaging the environment and endangering the health of local residents.

Even the province's government has said it wants to see the ponds eliminated altogether.

The board said it is reviewing applications Albian Sands Energy Inc, Canadian Natural Resources Ltd, Imperial Oil Ltd, Royal Dutch Shell and Suncor.

($1=$1 Canadian)

(Reporting by Jeffrey Jones; editing by Rob Wilson)

news20100424reut2

[Top News] from [REUTERS]

[Environment News]
[Barack Obama | Green Business | COP15]
Richard Cowan
WASHINGTON
Fri Apr 23, 2010 3:25pm EDT
Scenarios: Outlook for climate bill in Congress
｛状況分析： 議会での気候変動法案の見通し。｝

(Reuters) - When a compromise climate change bill is unveiled in the U.S. Senate -- possibly as early as Monday -- it will kick off a new drive to pass the controversial environmental legislation this year.

Here are possible outcomes for the legislation that aims to reduce U.S. emissions of greenhouse gases, such as carbon dioxide, that many scientists blame for global warming.

IT GOES ALL THE WAY

There's widespread agreement that enactment of a bill this year is very difficult. But things could line up to make it happen. Here's how:

* Senators John Kerry, Lindsey Graham and Joseph Lieberman unveil a bill that wins some strong business and industry support and merely tepid opposition from those who otherwise might savage it.

* The Senate doesn't get too hung up on financial regulatory reform, immigration reform, a Supreme Court nomination or anything that would take away time from debating the climate change bill in June or July (a Washington heat wave during those months might not hurt either).

* The U.S. economy shows further signs of improving, thus making it somewhat less politically risky to vote for a bill that would raise domestic energy prices. And, supporters make a convincing case that the climate bill creates jobs.

* President Barack Obama becomes heavily engaged in pushing for passage.

* If the Senate passes a bill, the House of Representatives is willing to compromise on its already-passed measure, which doesn't have strong incentives to expand nuclear power and offshore oil drilling.

Approval of a compromise bill by a House-Senate negotiating panel clears the way for each chamber to vote on final passage and send a bill to Obama for signing into law, in September or October.

SOME OF IT GOES ALL THE WAY

Instead of passing comprehensive climate change legislation with firm targets for reducing carbon dioxide emissions, only a smaller step is politically feasible.

This likely would be in the form of the alternative energy measure approved by the Senate Energy and Natural Resources Committee last year that would place new requirements on electric power utilities to use wind, solar and other clean energy sources.

There also could be opportunities for passing new tax incentives to help develop green energy.

DEADLOCK

The Senate cannot manage to get the 60 votes necessary to overcome procedural hurdles against either comprehensive climate change legislation or more narrow energy-environment bills.

In that case, supporters will argue that great progress has been made with the 2009 House passage of a bill, approval of a Senate Environment and Public Works Committee measure and significant work on a compromise that at least brought some Republicans, moderate Democrats and many industry groups into the conversation.

The next Congress, in 2011, would try again, but it could be an even tougher battle as Democrats' strength likely will be diluted by the November elections.

(Reporting by Richard Cowan, editing by Anthony Boadle)


[Environment News]
[Barack Obama | Green Business | COP15]
Fri Apr 23, 2010 6:45pm EDT
Factbox: Details of draft climate bill in Senate
｛ファクトボックス： 上院での気候変動法案の詳細。｝

(Reuters) - A compromise U.S. climate change bill is being drafted by Democratic Senator John Kerry, Independent Senator Joseph Lieberman and Republican Senator Lindsey Graham.

The bill is expected to be formally unveiled on Monday. But Reuters has obtained many of the details likely to be included.

Here is what's known so far, according to sources, although details could change before Monday:

-- A 17 percent reduction in overall greenhouse gas emissions by 2020, from 2005 levels, would be the goal. Many scientists think that is insufficient to keep global temperatures from rising a dangerous 2 degrees Celsius (3.5 degrees Fahrenheit) above pre-industrial times. The bill hopes to achieve around 80 percent reductions by 2050.

-- The Environmental Protection Agency would be prohibited from regulating carbon dioxide emissions. State and regional "cap and trade" programs to reduce carbon pollution would be terminated. States could still impose energy-efficiency standards and renewable energy standards.

-- Electric power utilities would be put under a cap and trade program, starting in 2013, to force them to reduce carbon emissions. Cap and trade forces a reduction in carbon pollution over the years and required pollution permits could be traded on a regulated market.

Still unclear is how the pollution permits would be allocated to utilities and whether all of them would initially be given away for free or whether some would be sold.

The legislation is expected to avoid the term "cap and trade," in favor of something more descriptive, possibly "pollution reduction targets."

-- Manufacturers would be incorporated into the same program starting in 2016.

-- New incentives would be included for heavy trucks to switch from diesel fuel to cleaner-burning natural gas.

-- Domestic and international "offsets" would be allowed to help companies achieve pollution-reduction goals. Instead of reducing some of their smokestack emissions, they could invest in projects that aim to cut emissions, such as saving forests. More details on the number and type of offsets were unknown.

-- Additional government loan guarantees and other incentives expected to help spur construction of 12 new nuclear plants.

-- Oil refiners may be required to obtain pollution permits based on the amount of carbon in their motor fuels, but full details of the transportation portion of the bill were not yet available.

-- More government funds to help the coal industry develop clean technology, such as "carbon capture and sequestration." Last month, $10 billion was included in one draft, but changes were more recently made and details were not available.

-- An expansion of offshore oil and gas drilling in parts of Alaska and the East, excluding the Northeast. There's been a fight over whether states would share some of the federal revenues generated from the new drilling, with some senators vehemently opposed, either because they are against expanded drilling or they come from non-coastal states.

-- A price collar to prevent large market fluctuations in the price of carbon pollution permits. The collar would aim to keep prices initially in the range of $10-$25 per ton.

-- Consumer rebates to help cover the costs of higher energy prices.

-- Border protections for energy-intensive industries, such as steel, paper, glass and chemical manufacturers. The goal is to have a weapon in hand that would be deployed by the United States if foreign countries with weaker climate controls tried to flood the United States with their cheaper products.

-- Senators also were fighting over an oil industry proposal to allow states, instead of Washington, to regulate the production of natural gas from shale.

-- Pollution-reduction would be aimed at larger companies, such as those with emissions above 25,000 tons a year.

(Reporting by Richard Cowan, Timothy Gardner, and Ayesha Rascoe; Editing by Eric Beech)

news20100424reut3

[Top News] from [REUTERS]

[Environment News]
[Barack Obama | Green Business | COP15]
Timothy Gardner
WASHINGTON
Fri Apr 23, 2010 6:47pm EDT
Climate bill gives polluter and nuclear breaks
｛気候変動法案、公害企業、原子力企業に好意的配慮を付与。｝

(Reuters) - The U.S. climate change bill expected to be unveiled on Monday contains incentives to spur development of a dozen nuclear power plants, but delays emissions caps on plants that emit large amounts of greenhouse gases, industry sources said on Friday.

The draft bill, led by Democratic Senator John Kerry, has loan guarantees, protection against regulatory delays and other incentives to help companies finance nuclear plants, which can cost $5 billion to $10 billion to build, the sources said.

"I think it's a start that combined with a price on carbon" should help the power companies build new nuclear capacity, said one source briefed on a call held by Kerry on Thursday night with industry representatives.

Nuclear power plants emit almost no carbon dioxide, the main greenhouse gas blamed for global warming. But no new plants have won government approval in three decades, due partly to high costs and concerns about nuclear waste.

The compromise bill, also being written by Senators Lindsey Graham, a Republican, and Joseph Lieberman, an independent, is easier on big emitters than previous legislation, a move an environmentalist said could help win its passage.

The senators face a narrowing window of opportunity to win the necessary 60 votes to avoid procedural hurdles before congressional elections in November.

Signing a new energy and climate law is a priority for President Barack Obama, who would like the United States to be a leader in moving to a low-carbon economy. The Copenhagen Accord he helped devise in the Danish capital last year seeks to limit a rise in temperatures to below 2 degrees C (3.6 F) over pre-industrial levels.

The bill contains a cap on greenhouse gas emissions from power plants that would begin in 2013, a year later than outlined in previous legislation, the source said.

The draft also takes a sector-by-sector approach rather than creating an economy-wide market for emissions, an approach favored in the climate bill that cleared the House of Representatives in June.

It would create a regulated market in which polluters and speculators would be allowed to buy and sell emissions permits. Polluters who cut emissions would earn permits they could sell.

Initially the price of permits in that market would be limited to a maximum of $25 per ton, to help reduce costs for polluters. Previously, the senators had been aiming for a price ceiling of $30 a ton.

REALITY CHECK

Even with the breaks, the bill seeks to reduce U.S. emissions 17 percent by 2020 from 2005 levels, the same level talked about for months. It is also about the level of cuts that Obama favors.

Eileen Claussen, president of the Pew Center on Global Climate Change, said the bill would likely contain items considered necessary to get votes.

Asked if the bill might be weakened too much from an environmental standpoint in order to lure Republican support, Claussen said: "No. People whose major concern is climate change have to temper their ambitions."

"The reality is you have to get 60 votes for anything to happen," Claussen said.

Claussen also said Monday's draft bill would include legislation already passed by the Senate Energy Committee that calls for incentives for offshore oil drilling, a better transmission grid and minimum levels of power from clean sources like solar and wind power.

Shares in a number of power and nuclear utilities closed higher on the day as the Dow Jones Utility Average index, rose 0.95 percent to 388.52, slightly higher than gains in the broader market.

The bill will be supported by the Edison Electric Institute, a leading power industry group, and three oil companies, sources said. BP, Shell and ConocoPhillips. They did not immediately return calls.

The American Petroleum Institute will not say whether it supports the bill until the bill is unveiled.

The API's Lou Hayden said his group would continue to support Energy Citizens, a coalition of industry and local advocacy groups that generated grass-roots opposition to the climate bill passed by the House, known as Waxman-Markey.

Matt Dempsey, a spokesman for Republicans on the Senate Environment and Public Works Committee, said members of his party would focus largely on the impact the bill would have on consumer gasoline prices.

"Republicans will make sure the public understands the price of gas at the pump is going to go up if Kerry-Graham-Lieberman passes," Dempsey said.

While full details of the transportation part of the bill were not yet available, it might contain a provision requiring oil refiners to obtain pollution permits based on the amount of carbon in their motor fuels.

Such a provision could cause prices to rise, which likely would be passed on to consumers. There also could be protections to help consumers with higher energy prices.

(Additional reporting by Richard Cowan and Ayesha Rascoe; graphics by Jasmin Melvin; Editing by Peter Cooney)


[Environment News]
[Green Business]
Tom Brown
MIAMI
Fri Apr 23, 2010 6:56pm EDT
Florida citrus growers reject EPA water rules
｛フロリダのかんきつ類の栽培者、ＥＰＡの水資源の規制に拒否する。｝

(Reuters) - Plans by the U.S. Environmental Protection Agency to clean up Florida's waterways set unattainable goals and would saddle the state's farm industry with billions of dollars of costs it cannot afford, Florida citrus growers said on Friday.

"There is no way Florida agriculture, including the $9 billion citrus industry, can survive if the EPA actually follows through with their proposal," said Michael Sparks, head of Florida Citrus Mutual, the state's main citrus growers association.

"Of course we all want clean water, it is essential to our livelihood in agriculture, but we need to set reasonable goals," Sparks said in a statement.

New restrictions on the release of phosphorous and nitrogen, also known as "nutrient" pollutants, into Florida's lakes and waterways could cost between $855 million and $3 billion to implement, the statement said.

It cited a report issued on Thursday by the Florida Department of Agriculture and Consumer Services (FDACS) that said recurring costs from the EPA restrictions would total between $902 million and $1.6 billion per year, with additional indirect economic impacts to the state of $1.15 billion annually.

The EPA's proposals, which are open to public comment until the end of this month, are in line with the agency's January 2009 determination that numeric nutrient standards were needed in Florida to meet requirements of the Clean Water Act.

The state, with an economy heavily dependent on tourism and recreational use of its waterways, suffers from substantial water quality degradation due to nutrient over-enrichment.

The EPA has said the problem is expected to worsen due to population growth and land-use changes.

The FDACS report said the EPA had estimated the annual cost of compliance with the restrictions on nutrient pollutants at about $35 million. But it said that estimate was incomplete, both in terms of the estimated number of agricultural acres affected and the methods used to determine the economic impact.

The EPA did not respond specifically to the question raised by the FDACS about its cost estimates.

But in a statement provided to Reuters, the agency said "clean and safe waters are central to Florida's prosperity" as well as to people's health.

"We do not have to make a false choice between our health and the economy. EPA is proposing a cost-effective rule to curb the impacts of nutrient pollution that decimates property values and can cause costly illnesses," the EPA said.

"We are working closely with Floridians to make sure that these waters are drinkable, fishable and swimmable, which then ensures a future for those industries that want to prosper in Florida."

(Editing by Pascal Fletcher and Marguerita Choy)

news20100424reut4

[Top News] from [REUTERS]


[Green Business]
WASHINGTON
Fri Apr 23, 2010 6:39pm EDT
Top ETFs reject proposed U.S. energy position limit

(Reuters) - Two leading energy exchange-traded funds (ETFs) on Friday lashed out at efforts to apply position limits to U.S. oil and gas markets on Friday, seeking to forestall action they say would drive up costs and reduce liquidity.

Employing familiar arguments against the rationale of using position limits as a means to prevent price spikes or reduce volatility, the funds urged the Commodity Futures Trading Commission not to move forward with its proposal.

Letters from the U.S. Commodity Funds and ETF PowerShares owner Deutsche Bank -- both of which were in the spotlight over the past two years after their funds amassed vast long positions in oil and gas futures -- were among the hundreds of last-minute comments sent to the CFTC during a 90-day public comment period, which ends on Monday.

"The unintended consequences of the proposed rule may lead to even less transparency and more risk for investors in the financial energy markets," Nicholas Gerber, chief executive of the U.S. Commodity Funds LLC, wrote in the letter.

Gerber said that an estimated 3 million to 4 million individual investors held investments in commodity ETFs in 2009, and that regulators should base any limits on those underlying holders rather than the ETF provider itself.

"If the Commission does choose to move forward with the proposed rule, we strongly urge the Commission to add in provisions that would exempt passive, unleveraged investors such as the funds from any position limits that are adopted, and instead take a "look-through" approach in order to regulate the positions of individual investors in the funds," he wrote.

Regulators have sought to shift the focus of efforts to set a hard cap on the size of position that a single trader is able to hold in the futures market toward the desire to limit undue influence over prices, but the original impetus stemmed from fears that financial investment artificially inflated prices.

Although a number of studies have called that theory into question, the political will to curb financial investment into commodity markets remains strong, aided recently by signs of greater support for tough financial reform regulation.

Hans Ephraimson, CEO of DB Commodity Services LLC, listed a series of "critical problems" with the proposal: "It finds no support in empirical evidence or regulatory precedent, it's unduly onerous, will significantly limit the usefulness of the U.S. future markets to international traders, and is premature in light of pending congressional legislation."

He said passive long-only index funds should be exempted from the limits.

Last September both USCF and PowerShares restructured funds in order to avoid running afoul of position limits. At the time, the U.S. Natural Gas Fund, reduced its buying of natural gas futures and replaced up to 25 percent of its futures holdings with swaps instead.

(Reporting by Ayesha Rascoe and Roberta Rampton; additional reporting by Josh Schneyer; Writing by Jonathan Leff; Editing by David Gregorio)


[Green Businesss]
Christiaan Hetzner
FRANKFURT
Fri Apr 23, 2010 1:06pm EDT
China plays pivotal role in Volkswagen's e-car plan

(Reuters) - Chinese consumer reaction to electric cars made by Volkswagen AG will determine the fate of the German group's plans to lead the industry in battery-powered vehicles, the group's CEO said on Friday.

VW has set a 2018 goal of being the leading provider of electric vehicles (EVs) in the industry and has forecast 3 percent of its overall sales would stem from cars equipped with this form of propulsion.

"China is the most important market worldwide for the Volkswagen group, and the success of e-mobility in China is decisive for the global execution of the e-mobility strategy," Chief Executive Martin Winterkorn said in a statement on Friday.

The VW manager's comments are perhaps the clearest indication to date that China car buyers may determine who will emerge the winner in the race for viable and affordable zero-emissions technology.

Eclipsing the United States as the world's largest car market last year, China was only a decade ago a destination for western manufactures to sell obsolete models.

Now carmakers are rushing to offer Chinese buyers the latest technology it has to offer, such as EVs.

Porsche launched the world premiere of its Panamera grand tourer in Shanghai last year, only the fourth model line in its range.

At the Beijing auto show this week, Volkswagen will unveil an electric version of its Lavida sedan, the group's first ever e-car completely designed and produced in China.

Sales of the Lavida equipped with a conventional engine are expected to amount to more than 200,000 vehicles, according to the German carmaker.

Production at both of its local joint ventures, Shanghai-Volkswagen and FAW-Volkswagen, should begin around 2013 or 2014, it said in a statement.

Audi and Skoda also plan to offer EVs.

(Editing by David Holmes)


[Green Business]
Gerard Wynn
LONDON
Fri Apr 23, 2010 10:13am EDT
Green project finance cost to stay high: banker

(Reuters) - The high cost of financing renewable energy projects, a key drag on growth, will stay at present levels this year, a senior executive at Netherlands-based Rabobank told Reuters.

Project finance costs are significantly above 2007 levels, after a financial crisis wrecked banks' balance sheets, drying up credit and stoking the cost of borrowing.

"We see a little increase in the number of banks that are getting back in business (but) we don't see too much pressure on that (cost) margin," said Rabobank's head of renewable energy and infrastructure finance, Marcel Gerritsen.

Some countries less hit by the financial crisis were seeing more active banks. "I think there may be some margin pressure in those countries but that's a minority," he said, citing France. In most countries, project finance costs would remain at present levels through 2010.

However the volume of renewable energy project finance was expected to rise slightly this year.

"There are some big offshore (wind) projects coming to market this year and given their size they require significant amounts of debt."

Global investment in clean energy fell 6.5 percent last year, the first such drop in at least six years, largely as a result of frozen credit markets.

Offshore wind borrowing costs are even higher than many other renewable energy projects, because of concerns about bottlenecks and technical challenges in an emerging sector which several countries are depending on to meet European targets.

Gerritsen said he had some doubts about whether banks could supply sufficient debt to meet that ambition.

"Our view is that there are gaps between demand and supply," he said. "That may hinder the growth trajectory that governments in particular are expecting or planning for."

Britain aims to install 32 gigawatts (GW) of offshore wind by 2020 compared with about 1 GW installed now.

It was "difficult to assess" whether that was achievable, said Gerritsen, depending on whether new banks stepped up, utilities financed some projects using their balance sheet, and equity investors were happy with 10-15 percent returns seen now.

The cost of renewable energy project finance debt in Europe was in general 250 to 325 basis points above the cost of lending, compared with 100-125 basis points in 2007, said Gerritsen. The United States was seeing similar levels.

"We started a team in North America mid last year, pricing there is still very much above 300 basis points and we don't see (downward) pressure there."

The costs of offshore wind are higher still, at 300-350 basis points in the case of one European project which Rabobank financed mid last year. "Offshore is a little bit new in the market so spreads are a bit wider there."

news20100424reut5

[Top News] from [REUTERS]

[Green Business]
Ernest Scheyder
NEW YORK
Fri Apr 23, 2010 9:22am EDT
High hopes for chemical industry earnings

(Reuters) - U.S. chemical makers are poised to report their fourth consecutive quarter of improved earnings, a sign that the broader economy continues to right itself after the recession.

Most analysts expect the industry's powerhouses to report improved margins, higher pricing and an uptick in consumer demand for the January-to-March period.

"It's going to be a very good quarter as far as earnings go," Alembic Global Advisor analyst Hassan Ahmed said.

However, fluctuating raw material costs have been a concern. The cost of crude oil rose 5.2 percent during the quarter, while natural gas costs fell 32.2 percent.

Those fuels are important base materials that the industry uses to make ethylene, propylene, ammonia and other products. Those in turn are used to make thousands of everyday items, including carpets, paint, shoes and rain coats.

But unlike energy price run-ups in 2008, chemical makers appear ready for increases this summer.

"The chemical companies have gotten much better at announcing and passing through selling price increases to customers," Deutsche Bank analyst David Begleiter said.

In perhaps a positive sign for the U.S. chemical industry, Saudi Basic Industries Corp, the world's largest petrochemical producer, posted a first-quarter profit of about $1.45 billion, up from a year-earlier loss, as volumes, customer prices and sales all increased.

BUY OR SELL?

The question now facing investors is whether now is the time to buy or sell chemical stocks.

The S&P Chemicals Index rose 1.5 percent during the first quarter, and the Dow Jones U.S. Chemicals Index gained 7.3 percent.

For investors worried about high-valuation chemical stocks, Deutsche Bank's Begleiter has advice: "Be selective. Focus on the highest-quality names that are out there."

Begleiter recommends DuPont, Celanese and Lubrizol.

In quarters when chemical companies don't change their earnings outlooks frequently, their stocks tend to outperform, Alembic Global Advisor's Ahmed said.

"We may have already passed a trough in earnings revisions and, in turn, may see positive chemical sector stock price performance over the next few months," he said.

Ahmed recommends Praxair Inc, Dow Chemical and Braskem SA.

COMPANY SPECIFICS

Analysts on average expect Dow Chemical, the U.S. industry leader, to report earnings of 30 cents per share on Wednesday, according to Thomson Reuters I/B/E/S.

StarMine Smart Estimates, which puts more weight on recent forecasts by top-rated analysts, expects profit of 31 cents per share, an upside surprise of 4.3 percent.

For DuPont, the average Wall Street estimate is $1.06 per share, according to Thomson Reuters I/B/E/S.

StarMine expects DuPont, which is reporting earnings on Tuesday, to earn $1.05 per share, a downside surprise of 1 percent.

Elsewhere in the sector, Ashland is expected to earn 88 cents per share. Wall Street will look for an update in Tuesday's earnings statement about the company's plans for its profitable Valvoline oil-change business.

Lubrizol, which makes lubricants, is forecast to earn $1.93 per share. The company, which is rumored to be bidding for European rival Cognis, posts results on Thursday.

Analysts expect Celanese, a large producer of acetyl chemicals used to make thousands of everyday products, to report profit of 59 cents per share on Tuesday.

GAS DRAMA

Companies that produce and distribute oxygen and other gases used in sectors like construction, technology and medicine, may bring drama to the earnings season due to a buyout battle between two large players.

Air Products and Chemicals Inc has gone hostile in its bid for rival Airgas Inc. On Thursday Air Products said its quarterly profit rose 33 percent.

Airgas, which is announcing its earnings on May 6, is expected to earn 67 cents per share.

Analysts expect industry peer Praxair to report profit of $1.09 per share on Wednesday.

(Reporting by Ernest Scheyder; Editing by Lisa Von Ahn)


[Green Business]
[Deals]
SAN FRANCISCO
Sat Apr 24, 2010 1:44pm EDT
Better Place to work with Chery on electric cars

(Reuters) - Electric vehicle infrastructure firm Better Place said on Saturday it has reached a deal to work with China's Chery Automobile on new technology for the Chinese auto market.

California-based Better Place said it signed a memorandum of understanding with Chery, China's largest independent car maker and exporter, to collaborate on electric vehicle technology.

Under the agreement, the two companies will jointly develop switchable-battery electric vehicle prototypes in the hopes of securing regional Chinese government pilot projects, Better Place said.

Better Place is aiming to build a network of charging stations for electric cars, leasing batteries to customers for use in their vehicles. Better Place is already building networks in Israel, Denmark and Australia.

The well-funded start-up raised $350 million in January from a consortium led by HSBC and Morgan Stanley Investment Management. The funding valued the company at $1.25 billion.

China overtook the United States as the world's biggest auto market last year. Chery sold around 500,000 vehicles in 2009.

(Reporting by Gabriel Madway; Editing by Will Dunham)