INTERVIEW - Railroads, Oilfields Offer US Carbon Reductions
Date: 01-Dec-06
Country: USA
Author: Timothy Gardner
The long distances that goods travel from ports in California to the U.S Midwest and East Coast offer opportunities to make shipping more efficient, reducing emissions scientists have linked to global warming, said Bill Townsend, CEO and founder of Salt Lake City-based Blue Source LLC, in an interview.
That may not make sense in smaller countries such as those in Western Europe. "Driving across some (European) countries is like driving across Iowa, it's a totally different scale," he said.
Companies that reduce heavy-emissions trucking and maximize lower-emissions rail shipping, a practice known as intermodal transport, could earn scores of credits in any future US emissions trading plan, he said.
In addition, scores of old oilfields in Texas, California and other states offer space to pump carbon dioxide below ground after capturing emissions at coal and natural gas power plants.
The European Union, to meet its limits under the Kyoto Protocol, placed greenhouse emissions limits on industrial plants and is attempting to expand that to transportation sources. It also created an EU trading system where plants that exceed their emissions limits can buy credits from companies that come in below their limits.
The United States is the world's largest polluter, but does not regulate greenhouse gas emissions. President George W. Bush pulled the United States out of the Kyoto pact in his first term. Nevertheless, some US companies have begun to develop and trade greenhouse emissions in hopes of getting credit for taking early action.
Blue Source, which describes itself as the No. 1 US developer of carbon credits, generates about 25 million tonnes of credits a year. It has sold about 15 million to 18 million tonnes and the rest are listed on three registries in hopes that they will have value if the country eventually regulates emissions, said Townsend.
Currently, the credits sell from $1.50 to $8.50 a tonne, with higher-end sales taking place in states such as California and seven Northeastern states seeking to bypass the Bush administration and create their own carbon trading platforms, he said.
Townsend said companies such as trucker J.B. Hunt Transport Services Inc., which have taken steps to make transportation more efficient, could do well in a future emissions trading system. "The more progressive transportation companies are building relationships with rail now in ways they never did before," he said.
CARBON CAPTURE
For decades, oil companies have been injecting carbon dioxide from naturally occurring sources into aging oilfields
to boost output. Expanding that practice to encompass emissions from man-made sources like coal-burning power plants, could be the next step.
"That puts us at the intersection of climate change and domestic energy, which is a place we really like to be," said Townsend. Companies are planning to build more than 100 coal plants in the United States, some of which could capture carbon.
Blue Source and US private equity firm First Reserve Corp. said this fall they will target greenhouse gas investment opportunities of up to $500 million.
Townsend's company has already built, owned and designed four of the five US pipelines that transport carbon dioxide captured from energy sources to old oilfields. He said the commitment with First Reserve could increase investment in carbon pipeline infrastructure.