The New Carbon Cycle

New CDM Methodology Approved for Landfill Gas

LONDON, UK – 27 June 2007 – CantorCO2e Limited announced today the approval of a new and unique Clean Development Mechanism (CDM) methodology involving the use of biogas sourced from Methane Capture Projects in Chile. Having just been approved by the CDM Executive Board, the new methodology, known as ‘CDM methodology AM0053’, is the “injection of biogenic methane into a natural gas distribution grid.”

Specifically this involves the use of captured biogas, perhaps methane from existing landfill sites or coal mines, and injecting that biogas into existing natural gas distribution grids whilst at the same time displacing more harmful fossil fuels that would normally be used within these grids. This new methodology was developed by CantorCO2e, which researched, advised upon and established the methodology for and on behalf of Metrogas S.A., the largest natural gas distributor in Chile.

The biogas used in the implementation of this methodology may be sourced from registered or non-registered methane capture CDM projects and so also enhances the scope of other CDM methodologies already in use. The methodology could help reduce the current natural gas crisis that Chile faces. Currently Chile produces very little of the natural gas that it currently consumes with all imports coming from Argentina. However, availability of imported natural gas from Argentina is limited.

According to the Chilean Natural Gas Association, the country has faced several shutdowns due to interruptions in the supply of natural gas from Argentina which impacts heavily on the Chilean people. Now that the methodology has been approved, it is expected that most landfill sites in the Metropolitan Region of Santiago, the capital of Chile, will supply its biogas to the natural gas distribution grid as an alternative to current electricity generation methods.

In addition to the reduction of greenhouse gas emissions, the implementation of this methodology in developing economies is of great sustainable benefit since it will result in a reduction in the dependence of other countries on the importation of fossil fuels and will instead enable them to become more self sufficient.

Thompson & Knight's Climate Change and Renewable Energy Practice Group Discussed in Dallas Morning News Article and Wall Street Journal

Thompson & Knight LLP's Climate Change and Renewable Energy Practice Group was discussed in a front page article in the Dallas Morning News and in the Wall Street Journal's Law Blog.   The article and blog discuss the development of climate change practice groups in law firms and how expected climate change regulation will effect the companies that will be regulated and how the legislation will establish markets for carbon credits that will serve as a part of a cap-and-trade system.  Such legislation would be designed to limit the emission of carbon dioxide and other greenhouse gases to attempt to reduce global warming.  Several bills have been filed in both the House and Senate.  Several western and northeastern states have already established frameworks for regulating greenhouse gases even if the federal government does not act. 

The other issue the article and blog discuss is the potential for litigation to be filed by plaintiff's attorneys seeking to recover damages allegedly resulting from climate change, whether storm-related or related to rising sea levels.  Some of these plaintiff's  attorneys believe climate change litigation has the potential to be bigger than tobacco litigation.

Canadian Premiers and New England Governors Met and Discussed Forming a Regional Carbon Cap-and-Trade System

According to an article in the Globe and Mail, the Eastern Canadian premiers and the New England governors have met and agreed to consider developing a regional cap-and-trade system to control the emission of greenhouse gases.  The premiers and governors said that they are moving toward a common market in energy and will have to find ways to share emission targets as well as power and transmission costs.

New Brunswick Premier Shawn Graham says he will host a workshop on the potential for developing a regional cap-and-trade program.  It is something of an about-face for the New Brunswick premier who indicated earlier he wasn't interested in such an approach.  Quebec Premier Jean Charest says a cap-and-trade program is inevitable, so the premiers and governors should take the lead on developing a system.

Several northeastern states are already well along in developing a regional carbon cap-and-trade system.  In time, the national governments will likely enact climate change regulation.  Until then, the provinces and states will be working on developing a cap-and-trade system for North America.

Credit Suisse Invests in Eco-Securities and Demonstrates the Emergence of the New Carbon Cycle

Investment in carbon trading companies by banks and investment banks demonstrate how our economics can be forged into a New Carbon Cycle of carbon reduction projects offsetting the carbon dioxide emitted from burning of fossil fuels.

This New Carbon Cycle reflects that human evolution has shifted from physical adaptation to adaptation of our technology and our social and economic systems.  As a result, as climate change threatens our environment and the lives and livelihoods of many people around the globe, it is our nature to attempt to adapt our technologies and social and economic systems to reduce the threat and impact of emission of carbon dioxide and other greenhouse gases. 

The natural carbon cycle functions through the recycling of carbon through the atmosphere and incorporation in to plant matter which dies or is consumed by animals and eventually is released again into the atmosphere. This system created the pre-industrial age balance of carbon dioxide and climate. 

The New Carbon Cycle will emerge not through natural forces as the human emission of greenhouse gases is overwhelming the natural carbon system, but through adaptation of human technology and economic systems.  The source of this adaptation is the cap-and-trade system for greenhouse gas emissions under the Kyoto Protocol.  This system provides the mechanism for the economic driver to create and distribute through the global economy technology to reduce greenhouse gas emissions.

The power of this adaptation is reflected in the $30 billion invested in the European Union Emissions Trading System last year. As a result of the emergence of this carbon economy, banks and investment banks are directing  billions in capital to carbon reduction projects. Further evidence of this evolving financial market in anticipation of ever growing carbon credit trading, Credit Suisse has invested $58.9 million to buy a 9 percent stake in carbon emissions credit developer Ecosecurities Group PLC. Under their agreement, the two companies plan to raise $133.9 million for greenhouse gas emission reduction projects driven by global concerns to fight climate change. 

According to an Associated Press story reported on the Forbes website:

"Banking and the investment banking sector see the carbon market as a big growth opportunity, it relates to so many thing in their portfolio like the utilities and renewables businesses," Ecosecurities Chief Financial Officer Jack Macdonald said, adding that the company was in talks with several other partners over the sale of a stake before deciding to opt for Credit Suisse.

Carbon markets and particularly those relating to investments in the developing world are seen as potentially very lucrative.

CDM projects were designed as part of the Kyoto process to encourage green investments in the developing world. With CDMs for every metric ton of greenhouse gas emissions the project avoids emitting, the project owners are given one tradable CDM credit, worth the equivalent of one ton of carbon dioxide emissions.

This story demonstrates the powerful evolutionary process that has been created through the Kyoto Protocol and the EU Emissions Trading System and that is growing dramatically every year.  If the United States enters the global cap-and-trade system the capital that will enter the market will undoubtedly exceed $100 billion.  This system will grow and survive on its own with no central planning or direct guidance by governmental regulation, but by the emergence of numerous individuals and business entities assigning capital on a global basis to renewable energy projects such as wind energy, energy efficiency, and reforestation, and preservation of forests, among many other actions and projects.

This self organizing process reflects the innate human ability to adapt and evolve through intellect to create new systems and processes to address human needs or concerns.  Obviously this ability to adapt and innovate is not perfect or capable of accomplishing every feat or solving every problem.  However, human evolution is the best hope for sustainable energy generation and a solution to global warming. 

Brazil and World Bank Working on Generation of Carbon Credits through Forest Protection

From Carbon-360 blog:

As reported by the ISN, International Regulations and Security Network, early on since the introduction of the Kyoto Protocol, the Rio de Janeiro Stock exchange has been open for carbon credit trade, incentivating projects in Clean Development Mechanisms (CDMs) that allow Brazilian and South American companies to sell carbon credits to developed countries.

In Manaus - the Amazon state, the carbon credit market is now open for communities that limit deforrestation and environmental degradation, according to the Vancouver Sun. Deforrestation worldwide is said to contribute to 20% of total carbon emissions.

With this in mind, the World Bank is funding US$250 million to reward developing countries which have high deforrestation rates such as Brazil, India and Indonesia for limiting and showing proof of a reduction in deforrestation.

US Utility AEP Announces Plan to Purchase 4.6 Million Carbon Credits from US Livestock Farms

COLUMBUS, Ohio,– American Electric Power (NYSE: AEP) today announced an agreement with an affiliate of Environmental Credit Corp. (ECC) to purchase approximately 4.6 million carbon credits between 2010 and 2017 generated from capturing methane on livestock farms. (One carbon credit is equal to one ton of carbon dioxide reduction.) The agreement is part of the first large-scale livestock methane offset program established in the United States that will capture and destroy methane from approximately 400,000 head of livestock on as many as 200 U.S. farms. Cost of the credits is not being disclosed due to confidentiality agreements.

“The methane offset program is one piece of a comprehensive strategy to address our greenhouse gas emissions,” said Michael G. Morris, AEP chairman, president and chief executive officer. “While we remain fully committed to making on-system reductions in emissions from our fleet -- including building the next generation of clean, coal-gasification plants, validating technology to capture and store carbon from existing coal plants, and investing in new renewable generation -- offset programs are an important part of a complete carbon strategy.

“Methane capture programs from livestock farms offer significant benefits. Not only do they reduce the impact of a highly potent greenhouse gas, but they also reduce odor and pest issues and provide a new source of income for farmers who often struggle with razor-thin margins. A farm with 2,000 head of livestock could receive $105,000 or more during the 10-year agreement. Because we see the issues that farmers face in our 11-state service area, we’ve also required that more than half of the credits that we purchase through this agreement come from projects on farms located within those 11 states.”

"By sponsoring the reduction of emissions on farms throughout the country, AEP can make a significant, measurable difference in overall greenhouse gas emissions quickly and efficiently, while continuing its work on internal reduction projects," said Ed Heslop, chief executive officer of ECC. "This approach has implications that reach far beyond the 11 states served by AEP. This partnership between ECC and AEP reflects ECC´s ongoing pledge to foster projects that mitigate greenhouse gases, and because of AEP´s commitment to this project, ECC is investing more than $25 million in services and materials to bring the 200 farms online with emission reduction. This has the added benefit of bringing revenue to the farms very early in the project."

Methane from livestock manure accounts for 6.6 percent of total greenhouse gas emissions in the United States. Methane is 21 times more potent than carbon dioxide (CO2) in trapping heat in the atmosphere and is released into the air through common manure-handling practices. Through the methane-capture program, ECC will install covers on manure storage lagoons to capture and flare (burn off) methane, converting it to CO2, a much less-potent greenhouse gas. Capturing and flaring the methane from manure lagoons significantly reduces the greenhouse gases, as well as odors, emitted from livestock farms. It also helps prevent issues with pests, rainfall and dust.

According to the terms of the agreement, AEP will purchase up to 600,000 carbon credits per year between 2010 and 2017 at a fixed price from ECC. ECC will work with farmers to design and provide lagoon cover systems, including gas meters and flares, at no cost to participating farmers. ECC also will provide data monitoring, reporting, independent verification, certification and registration of the carbon credits with the Chicago Climate Exchange (CCX), the world’s first and North America’s only voluntary, legally binding greenhouse gas emissions reduction and trading program. AEP is a founding member of CCX.

AEP has led the U.S. electric utility industry in taking action to reduce its greenhouse gas emissions. AEP was the first and largest U.S. utility to join CCX and, as a member, committed to gradually reduce, avoid or offset its greenhouse gas emissions to 6 percent below the average of its 1998 to 2001 emission levels by 2010. Through this commitment, AEP will reduce or offset approximately 46 million metric tons of greenhouse gas emissions by the end of the decade.

AEP is achieving its CCX commitment through a broad portfolio of actions, including power plant efficiency improvements, renewable generation such as wind and biomass co-firing, off-system greenhouse gas reduction projects, reforestation projects and the potential purchase of emission credits through CCX.

Earlier this year, AEP announced an expanded strategy to capture, reduce, avoid or offset 5 million tons of greenhouse gas emissions per year post 2010, including plans to add 1,000 megawatts of nameplate-rated wind capacity and to install carbon capture on two existing coal-fired power plants, the first commercial use of technologies to significantly reduce CO2 emissions from existing plants. Technologies being advanced by AEP’s plan include both post-combustion and pre-combustion solutions to carbon dioxide emissions from coal-fired generation. The company also is continuing existing – and exploring new – initiatives for both demand-side and supply-side efficiency.

Department of Agriculture and Department of Energy Announce R&D Funding for Biomass and BioFuels

Yesterday, the U.S. Department of Agriculture (USDA) and the U.S. Department of Energy (DOE) announced a combined total of up to $18 million will be available for research and development (R&D) of biomass-based products, biofuels, bioenergy and related processes.

The $18 million solicitation will fund projects in the development of technologies to convert cellulosic biomass into intermediaries for bio-based fuels (45 percent); product diversification (30 percent); feedstock production (20 percent); and analysis for strategic guidance (5 percent).

USDA and DOE are issuing these grant solicitations for several types of projects aimed at increasing the availability of alternative and renewable fuels, which will help further President Bush's energy initiatives, including Twenty in Ten. The Twenty in Ten Initiative promotes greater energy security through increased efficiency and diversification of energy sources. USDA will provide up to $14 million and DOE will provide up to $4 million (FY'07).

Finavera Renewables CEO Offers Ocean Energy Solutions before U.S. Senate Committee

Washington, United States, June 7th 2007 – Finavera Renewables Inc. ('Finavera Renewables') (TSX-V: FVR) CEO Jason Bak outlined potential solutions to regulatory issues facing the U.S. ocean energy industry today before the U.S. Senate Energy and Natural Resources Committee. The committee was examining jurisdictional concerns in the permitting process for ocean energy projects. In his testimony, Mr. Bak asked for simplified and rationalized permitting regulations to allow more rapid development of the industry, which has the potential to generate one-tenth of the world's electricity.

Bak said, "The opportunity to speak to the Senate Energy and Natural Resources Committee reinforces the leadership role Finavera Renewables has taken in the ocean energy industry. The potential for the development of the ocean energy industry is amazing, and Finavera Renewables is committed to capitalizing on that potential. By taking a leadership role, we hope to initiate positive changes that will result in the rapid growth of ocean energy. There is strong momentum within industry and among the stakeholder groups to bring this new energy resource online."

In late April, Finavera also testified before the House Committee on Natural Resources alongside environmental groups, scientists, coastal state leaders, and commercial fishermen to urge Congress to help promote ocean renewable energy, while assuring protection for environmental and other stakeholder interests. Finavera Renewables has been leading the effort to provide regulatory certainty for the ocean energy industry, and was the only wave energy company to be invited to participate in both of the hearings. Today’s testimony follows up with key recommendations for resolving jurisdictional issues for ocean energy.

Bak stressed the importance of streamlined regulations in today’s testimony, "These are real projects. U.S. steelworkers are at work today constructing our second generation wave energy buoy, which we plan to install off the coast of Newport, Oregon this summer. Our Makah Bay project (in Washington State) is the first, and so far only, wave energy project to apply for a federal operating license. We are leaders in an industry that is already creating jobs and is poised to bring clean electricity, desalination, and, in time, hydrogen fuel to the American economy."

G8 Clarification or Confusion?

After the negotiated announcement by the G8 leaders, much of the debate in the press and with environmental organizations was weather progress of any sort had been made.  German Chancellor Merkel had pressed the United States to agree to a fifty percent cut in greenhouse gas emissions by 2050.  Japan's leader and the conservative leader of Canada had agreed to such a goal.  President Bush in the G8 document agreed to language that the G8 countries would "seriously consider" a fifty percent cut by 2050.  A goal to be set for more than forty years from now is in some ways symbolic, which would not appear to be a great concession.  The G8 announcement also discussed technological innovation as the solution to climate change.  This statements appear to be wording negotiated by the Administration and suggest a continuing political aversion to limits on emissions of greenhouse gases.  What is more important is the apparent commitment of President Bush to at least enter into negotiations over a post-Kyoto agreement on climate change under the auspices of the United Nations.  However, the language advocated by the Administration speaks of "goals" with each country deciding how they will reach those goals would suggest the Administration would not favor a Kyoto-style approach in the next UN agreement.  The issue is will that UN-based agreement involve a cap-and-trade system.  Although the Administration has endorsed existing SO2 and other cap and trade systems in the United States and proposed a similar program for mercury emissions, carbon trading has been criticized by the Administration in the past.  No announcement by the Administration at this point suggests a change of position.   Until some announcement on cap and trade as a potential solution is announced by the President Bush, it would appear this issue has not been conceded.

Thompson & Knight Ranks Among Top Law Firms

DALLAS --- In a new study, the international law firm of Thompson & Knight LLP is named as one of the top 40 firms in the U.S. based on growth in three key financial performance measures.

Applying similar principles to those used to evaluate the performance of public corporations, The American Lawyer’s editorial staff tracked law firms’ growth in financial returns and earnings during the past four years based on three categories: revenue per lawyer; profits per partner, and compensation for all partners. The study computed the average growth in each category for the time period of 2002-2006 for each of the nation’s largest 200 firms and arrived at a comprehensive numerical score, which was then ranked on the "Growth Index" chart published in the June issue.

"We’re pleased to be recognized for our consistent performance in recent years based on this type of objective criteria," said Pete Riley, managing partner of the Firm. "Continued growth is important in attracting and retaining the very best attorneys, and as a result providing high-quality and value-oriented service to our clients."