ICE

According to the press release, “IntercontinentalExchange, Inc. (NYSE: ICE), a leading operator of regulated global exchanges, clearing houses and over-the-counter (OTC) markets, today reported consolidated revenues of $285 million in the fourth quarter of 2010, an increase of 11% from fourth quarter 2009 revenues of $257 million. Consolidated net income attributable to ICE for the fourth quarter grew 18% to $99 million from $84 million in the prior fourth quarter. Diluted earnings per share (EPS) in the fourth quarter were $1.34, up 19% from fourth quarter 2009 diluted EPS of $1.13.

For the fourth quarters ended December 31, 2010 and 2009, certain items were included in ICE’s operating results that management believes are not indicative of normal operating performance.  Excluding these items from fourth quarter results, fourth quarter 2010 net income attributable to ICE increased 19% to $100 million. Adjusted diluted EPS increased 21% to $1.35 in the fourth quarter of 2010.

For the year ended December 31, 2010, ICE reported consolidated revenues of $1.15 billion, the seventh consecutive year of record revenues and an increase of 16% from $995 million in 2009. Consolidated 2010 net income attributable to ICE grew 26% to a record $398 million, from $316 million in 2009, and diluted EPS increased 25% to $5.35 from $4.27. Consolidated cash flow from operations grew 10% from the prior year to a record $534 million in 2010.

“As part of our commitment to our customers and shareholders, ICE consistently leads in terms of execution on new opportunities and growth despite an uncertain economic and regulatory environment,” said ICE Chairman and CEO Jeffrey C. Sprecher. “We are serving the rising demands for risk management in global commodities and derivatives with our transparent markets and global clearing houses. With products that are globally relevant such as our flagship Brent crude and gasoil futures contracts, we are addressing risk management requirements and we will continue to bring innovation, growth and security to our customers and markets.”

Scott Hill, ICE SVP and CFO, said: “Once again in 2010, we delivered record revenues and earnings. The strength in our commodities business continues into 2011, and we continue to expand our trading, clearing and processing services for market participants world-wide. Our spending discipline, solid balance sheet and strong cash flow allow ICE to continue to invest in an expanded range of services for our customers, while delivering sector-leading growth and returns on capital.”"

Read more: ICE press release

This is not good news for cap and trade proponents as it will nearly end the trading of emissions credits in the United States. IntercontinentalExchange (ICE) bought CCE after spending around $600 million for it. European operations will continue however.

The Chicago Climate Exchange (CCX) operates what it calls a voluntary but legally binding greenhouse gas emissions trading scheme in which companies have to meet annual reduction targets, or a cap. Those below the targets can sell surplus allowances or bank them.

But Jeff Sprecher, chief executive of the InternationalExchange and CCX’s owner, told the Financial Times that participants in the CCX’s cap-and-trade scheme wanted to pull out.

“The bulk of the users have said to us that they really don’t want to continue to trade voluntarily in the absence of any credit for their work by the current administration,” the newspaper quoted him as saying.

The lower house of Congress last year passed a climate bill that set a national 2020 emissions reduction target on greenhouse gas emissions as well as outlined a national emissions trading scheme.

But Senate Democrats slimmed down the bill in July, abandoning a cap-and-trade scheme aimed at cutting emissions.

Republicans are also expected to make big gains against the Democrats in Tuesday’s mid-term elections, further diminishing the prospects of any climate legislation passing Congress in the near term.

Globally, the voluntary carbon market stalled in 2009 after six years of growth as the downturn in the global economy and uncertainty over future climate legislation curbed demand.

The market shrank 47 percent last year to $387 million and by 26 percent in volume to 93.7 million metric tons of emissions.”

Read more: Reuters

Carbonflow provides Software-as-a-Service (SaaS) applications for managing carbon reduction projects under the Kyoto Protocol’s Clean Development Mechanism and regional, state, and voluntary programs. These projects typically involve multiple decision makers and collaborators. A project may include local developers, government agencies, development banks, auditors, corporate buyers, and other constituents. These organizations may be on several continents with divergent communications and technical capabilities. Carbonflow’s SaaS approach increases the efficiency, transparency, security, and the timeliness of project management. Customers focus on collaboration not technology management.

Ken Marshall, Carbonflow CEO said “The global carbon reduction market is sophisticated and growing rapidly. McKinsey & Co., for example, forecasts the carbon emissions trading market to increase from $150 billion today, to $800 billion by 2020. Carbonflow is making the necessary investments to continue to lead in managing the projects that will expand the market.””

According to Reuters, “Developers behind the 19 Chinese wind and hydropower projects rejected by a U.N.-backed clean energy investment panel have accused the board in charge of making arbitrary and non-transparent rule changes.

Most said they had no choice but to reapply to try to earn internationally tradeable carbon offsets they said were needed to make their projects viable.

At its meeting in Bonn, Germany, at the end of July, the Executive Board running the U.N.’s Clean Development Mechanism (CDM) examined the documentation of 19 Chinese CDM applicants.

The panel said none of them managed to pass muster, even after revisions.

A manager at one of the rejected projects, the Mudanjiang Xiaoguokui wind power plant in northeast China’s Heilongjiang province, accused the executive board of moving the goalposts.

“The EB has changed the rules and we didn’t know about that when the projects were first proposed,” he said.

The CDM encourages investors from industrialized countries to fund clean-energy projects in the developing world by offering carbon credits known as certified emission reductions (CERs). The CERs can then be traded or used to comply with binding Kyoto Protocol emissions targets in rich nations.

China has generated more than half of the CERs so far in the scheme, but it has been widely criticized for exploiting the mechanism and flooding the market with cheap and dubious credits from projects that do little to reduce carbon dioxide emissions.

Chinese applicants have also been accused of deliberately under-reporting tariffs paid for renewable power in order to pass the CDM’s tough “additionality” test, designed to ensure that projects would only be viable if they receive CERs.”

Read more: Reuters

Steven Chu

According to the press release, “At the world’s first Clean Energy Ministerial, U.S. Energy Secretary Steven Chu today announced that the United States is helping launch more than 10 international clean energy initiatives.  These initiatives will cut energy waste; help deploy smart grid, electric vehicle, and carbon capture technologies; support renewable energy markets; expand access to clean energy resources and jobs; and support women pursuing careers in clean energy.  The new programs offer partners concrete, technical actions to promote economic growth while reducing greenhouse gas emissions and other pollutants.  The initiatives will eliminate the need to build more than 500 mid-sized power plants world-wide in the next 20 years.

“The Clean Energy Ministerial has brought together leaders from around the world to take unprecedented actions to deploy clean energy technologies – from energy efficiency to renewable energy to smart grids to carbon capture.  These steps will promote economic growth, create jobs and cut greenhouse gas emissions,” said Secretary Chu.  “What we’ve seen here is that working together, we can accomplish more, faster, than working alone.”

At this week’s Clean Energy Ministerial in Washington, D.C., countries are launching and joining innovative initiatives to accelerate the global transition to a clean energy and low-carbon future.  Ministers from 24 governments are participating in the two-day Ministerial.  These countries represent more than 80 percent of global energy consumption and a similar percentage of the global market for clean energy technologies.

The United States helped lead the development of several initiatives as part of a Global Energy Efficiency Challenge.  These projects will cut energy waste around the world by deploying super-efficient appliances, improving industrial and building efficiency for large-scale facilities, implementing smart grid technologies, and helping to put millions of electric vehicles on the roads.

Under the Super-efficient Equipment and Appliance Deployment (SEAD) Initiative, for instance, governments will work with the private sector to transform the global appliance market.  The program will address both ends of the efficiency spectrum – incentivizing the deployment of super-efficient appliances while implementing and enforcing stronger appliance standards that push the most inefficient appliances off the market.  The program will initially focus on televisions and lighting – two globally-traded products that together account for about 15 percent of household electricity use.  Leading experts estimate that international efforts to improve the efficiency of televisions alone could reduce energy use equal to about 80 power plants by 2030.

As part of the Global Energy Efficiency Challenge, governments also joined the U.S. to improve efficiency in the buildings, industrial and vehicles sectors.  The Global Superior Energy Performance (GSEP) Partnership will help large buildings and industrial facilities measure and manage their energy use, which will save money and reduce greenhouse gas emissions.  Under this public-private partnership, governments will establish internationally-recognized certification programs to recognize facilities that adopt approved energy management systems and achieve significant and independently validated efficiency improvements over time.  To start, eight companies representing over $600 billion in annual sales and the Massachusetts Institute of Technology will pilot the program.

In the transportation sector, the U.S. and other countries are participating in the Electric Vehicles Initiative (EVI) to enhance global cooperation on the development and deployment of electric vehicles.  Through sister-city partnerships, high-level discussions, and information-sharing on electric vehicle investments and best practices, EVI will help countries deliver on their respective deployment targets.  According to the International Energy Agency, this initiative will help put participating countries on the path to deploy at least 20 million electric vehicles by 2020 and reduce global oil consumption by approximately one billion barrels over the next decade.

To further accelerate the introduction of electric vehicles, improve the reliability of the electrical system, promote the growth of renewable energy, and help consumers and businesses better measure and lower their energy use, 15 governments also joined the International Smart Grid Action Network (ISGAN).  This partnership will accelerate the development and deployment of smart electricity grids around the world by facilitating cooperation in key areas, including smart grid policy, regulation and finance; standards policy; technology research, development and demonstration; workforce skills and expertise; and consumer engagement.

Governments also came together to participate in an additional seven initiatives that will support the growing global market for renewable energy and carbon capture technologies; bring solar LED lanterns to more than 10 million of the world’s poorest citizens by 2015; launch virtual Clean Energy Solutions Centers to help developing countries transition to low-carbon technologies; and encourage young women to pursue careers in clean energy.

At the conclusion of the meeting, the United Arab Emirates offered to host the second Clean Energy Ministerial in spring 2011.  The United Kingdom offered to host the third Ministerial at a date to be determined.”

Read more: DOE Press Release

Steven Chu

According to the press release, “U.S. Energy Secretary Steven Chu today announced that three projects have been selected to receive up to $612 million from the American Recovery and Reinvestment Act – matched by $368 million in private funding – to demonstrate large-scale carbon capture and storage from industrial sources.

The projects – located in Texas, Illinois, and Louisiana – were initially selected in October 2009 for phase one research and development grants.  Following successful completion of their Phase 1 activities, these three projects were identified as the most promising industrial CCS projects through a competitive process and will now enter into Phase 2 with additional funding to begin design, construction, and operation.

Today’s project selections are aimed at testing large-scale industrial carbon capture and storage, an important step in moving CCS technology toward eventual commercial deployment.  The Obama Administration has made a goal of developing cost-effective deployment of CCS within 10 years, with an objective of bringing 5 to 10 commercial demonstration projects online by 2016.

“Capturing carbon emissions and storing them underground is a crucial technology as we build a clean energy future and address the threat of climate change,” said Secretary Chu.  “These investments will create jobs and help ensure that America can lead the world in the clean energy economy.”

Projects announced today include large-scale industrial carbon capture and storage projects that capture carbon dioxide emissions from industrial sources – - and store the carbon dioxide in either a deep saline formation or via enhanced oil recovery. The selections announced today are expected to capture and store 6.5 million tons of CO2 per year- the equivalent of removing nearly one million cars off the road- and increase domestic production of oil by more than 10 million barrels per year by the end of the demonstration period in September 2015.

Phase 2 of these projects includes $612 million in Recovery Act funding and $368 million in private sector cost-sharing for a total investment of $980 million. The projects will be managed by the Department of Energy’s National Energy Technology Laboratory.

Potential additional applications for funding of large-scale industrial carbon capture and storage projects are pending further review.

Phase II Large-scale Industrial Carbon Capture and Storage Selections:

• Leucadia Energy, LLC (Lake Charles, LA)-Leucadia and Denbury Onshore LLC will capture and sequester 4.5 million tons of CO2 per year from a new methanol plant in Lake Charles, LA. The CO2 will be delivered via a 12-mile connector pipeline to an existing Denbury interstate CO2 pipeline and sequestered via use for enhanced oil recovery in the West Hastings oilfield, starting in April 2014. The project team includes Leucadia Energy, Denbury, General Electric, Haldor Topsoe, Black & Veatch, Turner Industries, and the University of Texas Bureau of Economic Geology.  (DOE share: $260 million)
• Air Products & Chemicals, Inc. (Port Arthur, TX)-Air Products will partner with Denbury Onshore LLC to capture and sequester one million tons of CO2 per year from existing steam-methane reformers in Port Arthur, Texas, starting in November 2012. The CO2 will be delivered via a 12-mile connector pipeline to an existing Denbury interstate CO2 pipeline and sequestered via use for enhanced oil recovery in the West Hastings oilfield. The project team includes Air Products & Chemicals, Denbury Onshore LLC, the University of Texas Bureau of Economic Geology, and Valero Energy Corporation.  (DOE share: $253 million)
• Archer Daniels Midland Corporation (Decatur, Ill.)-The project will capture and sequester one million tons of CO2 per year from an existing ethanol plant in Illinois, starting in August 2012. The CO2 will be sequestered in the Mt. Simon Sandstone, a well-characterized saline reservoir located about one mile from the plant. The project team includes Archer Daniels Midland, Schlumberger Carbon Services, and the Illinois State Geological Survey. (DOE share: $99 million)”

Source: DOE Press Release

This acquisition strengthens Thomson Reuters offerings to the energy sector through the combination of Point Carbon’s critical insight, market fundamentals and powerful analytics of key price drivers with Thomson Reuters leading news and pricing service.

Point Carbon provides banks, traders, portfolio managers, corporations and governments with critical insights based on deep industry knowledge and sophisticated modelling capabilities across the carbon, power, and gas markets. Point Carbon’s valuable demand, supply and price predictive models are based on proprietary data collection and are used by thousands of traders and analysts globally.

Technological advances are increasing the breadth, depth and frequency with which information is available on physical commodity flows and fundamentals, such as power production, consumption and weather, as well as events like political actions or operational outages. As global economic development continues to boost energy needs in a carbon constrained world, the combination of Thomson Reuters and Point Carbon will deliver the critical information and tools to allow market participants to optimize their business, investment and trading strategies in this evolving marketplace.”

Point Carbon Press Release

France’s finance ministry commissioned Michel Prada, former head of the country’s AMF stock market watchdog, to publish a report on the CO2 emissions market.

Prada’s report said there should be stricter fines against those who abuse the CO2 market or commit fraud in the sector. His report also advocated harmonizing laws across Europe for the carbon industry.

Last month, Hungary carried out the first sale of certified emissions reductions (CERs) which Hungarian companies had already used to offset against their emissions in the European Union’s emissions trading scheme.

Such used CERs are invalid as carbon offsets in Europe and the EU executive Commission consequently amended its trading rules to stop them from re-entering the EU carbon market.

The European Commission said that from August onwards, it would prevent the re-entry into its emissions trading scheme of carbon permits which companies had already used for compliance with their emissions caps.

Last year, European police agency Europol said fraudulent trading in European Union carbon emissions credits over the past 18 months has caused more than 5 billion euros ($6.99 billion) in tax revenue losses for several EU nations.”

Source: Reuters

According to Reuters, “Talks to define a mechanism for global forest protection should not be rushed if it is to work efficiently and fairly, a panel of experts said on Tuesday. Talks began in Paris last month to define an interim and global architecture for a financial incentive scheme to reduce emissions from deforestation and degradation called REDD-plus.

“We know any system which looks good on paper on day one is no good if it doesn’t stimulate long-term results,” said Lars Lovold, director of the Rainforest Foundation Norway.

U.N. climate talks in Copenhagen last December failed to deliver much guidance on the scheme and a meeting in Bonn on April 9-11 is not expected to make much progress on the issue.

Under REDD-plus, governments could receive payments for their emissions cutting efforts while ensuring the sustainable management, conservation and restoration of forests.

Norway, which will host the next round of the talks in May, would like to get plans defined for an interim mechanism, ideally defining governance and administrative bodies, the distribution of funds, application of standards and the monitoring and verifying of emissions.

The idea is to arrive at the U.N. climate talks in Cancun, Mexico, in December with a concrete plan aimed specifically at the issue of deforestation.

But balancing the interests of 64 nations, local governments, indigenous peoples, private investors and environmental organizations will be tough.

“We need to be realistic about what we can achieve and how quickly. With different countries involved there are different drivers and conflicts,” said Pat Hardcastle at consultancy LTS International.

The direct participation of all parties, especially including indigenous peoples in all parts of the process is crucial, the panel said.

“We need to revise the timeframe to allow for proper consultation. Putting a document on a website is not enough,” said Francesco Martone, policy adviser at the Forest Peoples Programme.

Defining financial rewards for governments that make progress in cutting emissions and sustaining forests was also key, said Dan Nepstad, senior scientist at the Woods Hole Research Center.

“It will be a rough road but if there are no rewards for good performance it will not work,” he said.”

Source: Reuters