[Top News] from [REUTERS]
[Green Business]
Fri Jan 22, 2010 10:32am EST
Shale gas could help besieged U.S. coal miners
HOUSTON (Reuters) - U.S. coal miners, threatened by pressure to cut greenhouse gas emissions and end mountaintop mining, could improve their growth prospects by ramping up shale gas production.
Coal-mining companies face hurdles marshaling the finances and developing technical expertise to produce shale gas. But experts say the effort could be worth it, especially since gas burns cleaner than coal.
"With the advent of shale plays in gas, a lot of property these coal companies own could all of a sudden be potential sites for gas wells," said Matt Preston, coal analyst for Wood Mackenzie.
The hot new Marcellus shale play in West Virginia, Pennsylvania and New York spans the heart of historic coal country and is one target of coal company interest.
"We have had conversations with three significantly sized companies," said Bobby Tudor, CEO of energy investment bank Tudor, Pickering, Holt & Co., who broached the idea at a recent energy conference. He declined to say which companies he spoke with.
U.S. coal companies need to diversify after a boom in coal-fired power plant development early this decade fizzled amid growing concern about climate change, threatening demand for coal.
On the supply side, environmental advocates and the government are pushing to limit the practice of leveling mountains to recover thinning seams of coal in the U.S. coal heartland, Appalachia.
While a number of new coal plants are near completion, dozens of U.S. coal projects have been canceled. Some utilities are shutting older coal units and replacing them with plants fired by natural gas, which emits half as much greenhouse gas as coal when burned.
PRESSURE ON COAL INDUSTRY TO CLEAN UP GROWING
Replacement of coal plants with gas units should accelerate if the United States enacts carbon control legislation. Coal could regain market share if researchers can develop carbon capture and sequestration (CCS) technology to keep carbon emissions out of the atmosphere. But that could take years.
"We just don't know enough about how CCS scales up and how effective it will be," Preston said.
While coal companies await affordable carbon capture technology, they could supplement revenue by producing gas from coal properties, either shale gas or coal bed methane.
"I think there's an argument to be made for coal companies looking at natural gas as a way to broaden their risk profile," said Tom Hoffmann, retired spokesman for Consol Energy Inc, now an industry consultant.
The effort to develop natural gas will not be easy for coal companies. Most do not have the expertise to explore for, produce and sell gas.
"The skill set is very different," , said FBR Capital Markets analyst Dave Khani.
Most coal companies also need more financial heft to enter the capital-intensive gas business, and raising money could be difficult because Wall Street analysts see gas and coal as separate industries, Preston said.
"We'll see how power companies approach their fuel-buying in an age of carbon restrictions. I don't think we have a clear view of that yet," Hoffman said.
GAS HAS BEEN MORE PROBLEM THAN SOLUTION FOR COAL
Historically, miners have viewed natural gas oozing from coal seams as a problem. Coal companies ventilate it to the air or produce it from wells drilled into coal seams to cut the risk of in-mine explosions.
But unburned gas vented to the atmosphere is a greenhouse gas more potent than carbon dioxide, so the U.S. government encourages companies to drill and produce rather than vent it.
Walter Energy Inc joined the Chicago Climate Exchange to trade credits it gets for reducing its mines' methane emissions by producing and selling gas.
Consol Energy Inc has taken drilling for safety a step further, organizing a unit to find, produce and sell gas.
Consol unit CNX Gas Corp expected 2009 production to total 92 billion cubic feet. That is only a tenth of the biggest U.S. producers, but it's the second largest gas production in the Appalachian Mountain basin and growing, the company said.
Other coal companies view gas as a future asset, but not gas produced from wells. Peabody Energy, the biggest U.S. coal company, has invested in two high technology projects aimed at converting coal into gas.
"Coal to gas remains a long-term strategic focus," Peabody spokesman Vic Svec said.
Coal remains Peabody's main business. With new coal-fired power plants being built at a rapid pace outside the United States, coal will be important for years to come, he said.
Utility executives voiced skepticism about the long-term viability of gas as their main generator fuel. Aside from questioning the reliability of supply, they said ever-tighter environmental goals will require cleaning up gas, too.
"Gas is not the answer beyond 2030," said CEO Bill Johnson of Progress Energy, a big coal burner shutting old coal plants. "It won't get you to the goals we have for carbon."
(Additional reporting by Anna Driver; Editing by David Gregorio)
[Green Business]
SAN FRANCISCO
Thu Jan 21, 2010 6:57pm ES
California sets incentives for solar water heaters
SAN FRANCISCO (Reuters) - California is looking to boost the solar water heater market and make the heating systems -- which mostly run on natural gas or electricity -- green.
The California Public Utilities Commission said on Thursday it has established an incentive to promote the installation of solar water heating systems in new and existing homes and businesses.
The incentives range as high as $1,500, depending on the system, and the program is set up to run for 8 years or until the program funds are exhausted.
"The dispersion of solar heating systems can play an important role as we strive to achieve the goal of zero net energy in residential and commercial buildings by 2020 and 2030 respectively," CPUC Commissioner Dian Grueneich said in a statement.
The commission said 40 percent of the $350 million incentive budget is reserved for single-family residential systems, and 60 percent for commercial and multifamily systems.
The program will be available to those currently being served by PG&E Corp's Pacific Gas and Electric Co, Edison International's Southern California Edison, and Sempra Energy's San Diego Gas & Electric Co and Southern California Gas Co utilities.
(Reporting by Poornima Gupta; Editing by Phil Berlowitz)
[Green Business]
LONDON
Fri Jan 22, 2010 9:25am EST
EU carbon soften on weak energy, tumbling equities
LONDON (Reuters) - European carbon emissions futures declined on Friday, extending the previous session's losses, as weak energy prices and tumbling equities offered little support.
The benchmark contract for EU Allowances fell 10 cents or 0.75 percent to 13.15 euros ($18.68) a tonne at 0809 GMT, after declining to an intra-day low of 13.05 euros in the first hour of trade.
"Everything is weaker -- power, oil and equities. Following the Obama announcement, there is neither fundamental nor political support," an emissions trader said.
Proposals by U.S. President Barack Obama to impose new restrictions on banks sent Asian stock markets and commodities tumbling on Friday.
Weak German power and British natural gas prices have also dulled carbon permit demand for utilities.
"I cannot rule out that EUAs won't fall further today," the trader said.
U.S. oil fell on Friday to one-month lows below $76 a barrel, while German Calendar 2011 baseload power on the EEX fell 0.97 percent to 49.15 euros per megawatt hour.
British natural gas for February delivery was at 34.40 pence per therm.
Added to that this week, hopes for stronger world action in 2010 to curb climate change have dimmed after the U.S. Democrats lost a key Senate seat to a Republican opposed to capping emissions, experts said on Wednesday.
U.N. climate talks in Mexico in November will be undermined if the United States has not set caps on carbon emissions.
U.N.-backed certified emissions reductions were slow to trade.
[Green Business]
Fri Jan 22, 2010 10:32am EST
Shale gas could help besieged U.S. coal miners
HOUSTON (Reuters) - U.S. coal miners, threatened by pressure to cut greenhouse gas emissions and end mountaintop mining, could improve their growth prospects by ramping up shale gas production.
Coal-mining companies face hurdles marshaling the finances and developing technical expertise to produce shale gas. But experts say the effort could be worth it, especially since gas burns cleaner than coal.
"With the advent of shale plays in gas, a lot of property these coal companies own could all of a sudden be potential sites for gas wells," said Matt Preston, coal analyst for Wood Mackenzie.
The hot new Marcellus shale play in West Virginia, Pennsylvania and New York spans the heart of historic coal country and is one target of coal company interest.
"We have had conversations with three significantly sized companies," said Bobby Tudor, CEO of energy investment bank Tudor, Pickering, Holt & Co., who broached the idea at a recent energy conference. He declined to say which companies he spoke with.
U.S. coal companies need to diversify after a boom in coal-fired power plant development early this decade fizzled amid growing concern about climate change, threatening demand for coal.
On the supply side, environmental advocates and the government are pushing to limit the practice of leveling mountains to recover thinning seams of coal in the U.S. coal heartland, Appalachia.
While a number of new coal plants are near completion, dozens of U.S. coal projects have been canceled. Some utilities are shutting older coal units and replacing them with plants fired by natural gas, which emits half as much greenhouse gas as coal when burned.
PRESSURE ON COAL INDUSTRY TO CLEAN UP GROWING
Replacement of coal plants with gas units should accelerate if the United States enacts carbon control legislation. Coal could regain market share if researchers can develop carbon capture and sequestration (CCS) technology to keep carbon emissions out of the atmosphere. But that could take years.
"We just don't know enough about how CCS scales up and how effective it will be," Preston said.
While coal companies await affordable carbon capture technology, they could supplement revenue by producing gas from coal properties, either shale gas or coal bed methane.
"I think there's an argument to be made for coal companies looking at natural gas as a way to broaden their risk profile," said Tom Hoffmann, retired spokesman for Consol Energy Inc, now an industry consultant.
The effort to develop natural gas will not be easy for coal companies. Most do not have the expertise to explore for, produce and sell gas.
"The skill set is very different," , said FBR Capital Markets analyst Dave Khani.
Most coal companies also need more financial heft to enter the capital-intensive gas business, and raising money could be difficult because Wall Street analysts see gas and coal as separate industries, Preston said.
"We'll see how power companies approach their fuel-buying in an age of carbon restrictions. I don't think we have a clear view of that yet," Hoffman said.
GAS HAS BEEN MORE PROBLEM THAN SOLUTION FOR COAL
Historically, miners have viewed natural gas oozing from coal seams as a problem. Coal companies ventilate it to the air or produce it from wells drilled into coal seams to cut the risk of in-mine explosions.
But unburned gas vented to the atmosphere is a greenhouse gas more potent than carbon dioxide, so the U.S. government encourages companies to drill and produce rather than vent it.
Walter Energy Inc joined the Chicago Climate Exchange to trade credits it gets for reducing its mines' methane emissions by producing and selling gas.
Consol Energy Inc has taken drilling for safety a step further, organizing a unit to find, produce and sell gas.
Consol unit CNX Gas Corp expected 2009 production to total 92 billion cubic feet. That is only a tenth of the biggest U.S. producers, but it's the second largest gas production in the Appalachian Mountain basin and growing, the company said.
Other coal companies view gas as a future asset, but not gas produced from wells. Peabody Energy, the biggest U.S. coal company, has invested in two high technology projects aimed at converting coal into gas.
"Coal to gas remains a long-term strategic focus," Peabody spokesman Vic Svec said.
Coal remains Peabody's main business. With new coal-fired power plants being built at a rapid pace outside the United States, coal will be important for years to come, he said.
Utility executives voiced skepticism about the long-term viability of gas as their main generator fuel. Aside from questioning the reliability of supply, they said ever-tighter environmental goals will require cleaning up gas, too.
"Gas is not the answer beyond 2030," said CEO Bill Johnson of Progress Energy, a big coal burner shutting old coal plants. "It won't get you to the goals we have for carbon."
(Additional reporting by Anna Driver; Editing by David Gregorio)
[Green Business]
SAN FRANCISCO
Thu Jan 21, 2010 6:57pm ES
California sets incentives for solar water heaters
SAN FRANCISCO (Reuters) - California is looking to boost the solar water heater market and make the heating systems -- which mostly run on natural gas or electricity -- green.
The California Public Utilities Commission said on Thursday it has established an incentive to promote the installation of solar water heating systems in new and existing homes and businesses.
The incentives range as high as $1,500, depending on the system, and the program is set up to run for 8 years or until the program funds are exhausted.
"The dispersion of solar heating systems can play an important role as we strive to achieve the goal of zero net energy in residential and commercial buildings by 2020 and 2030 respectively," CPUC Commissioner Dian Grueneich said in a statement.
The commission said 40 percent of the $350 million incentive budget is reserved for single-family residential systems, and 60 percent for commercial and multifamily systems.
The program will be available to those currently being served by PG&E Corp's Pacific Gas and Electric Co, Edison International's Southern California Edison, and Sempra Energy's San Diego Gas & Electric Co and Southern California Gas Co utilities.
(Reporting by Poornima Gupta; Editing by Phil Berlowitz)
[Green Business]
LONDON
Fri Jan 22, 2010 9:25am EST
EU carbon soften on weak energy, tumbling equities
LONDON (Reuters) - European carbon emissions futures declined on Friday, extending the previous session's losses, as weak energy prices and tumbling equities offered little support.
The benchmark contract for EU Allowances fell 10 cents or 0.75 percent to 13.15 euros ($18.68) a tonne at 0809 GMT, after declining to an intra-day low of 13.05 euros in the first hour of trade.
"Everything is weaker -- power, oil and equities. Following the Obama announcement, there is neither fundamental nor political support," an emissions trader said.
Proposals by U.S. President Barack Obama to impose new restrictions on banks sent Asian stock markets and commodities tumbling on Friday.
Weak German power and British natural gas prices have also dulled carbon permit demand for utilities.
"I cannot rule out that EUAs won't fall further today," the trader said.
U.S. oil fell on Friday to one-month lows below $76 a barrel, while German Calendar 2011 baseload power on the EEX fell 0.97 percent to 49.15 euros per megawatt hour.
British natural gas for February delivery was at 34.40 pence per therm.
Added to that this week, hopes for stronger world action in 2010 to curb climate change have dimmed after the U.S. Democrats lost a key Senate seat to a Republican opposed to capping emissions, experts said on Wednesday.
U.N. climate talks in Mexico in November will be undermined if the United States has not set caps on carbon emissions.
U.N.-backed certified emissions reductions were slow to trade.
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