BLUE SOURCE: STOCKING UP ON CARBON CREDITS

Blue Source used to move CO2 gas but now it buys rights to neutralize CO2 gas that can be sold to companies who want to emit. Blue Source is betting the value of capturing and storing the CO2 will go up on the carbon trading market. A bigger company, First Reserve, bought Blue Source because they see the value of Blue Source going up. And with Senators Lieberman and Warner now serious about putting together a mandatory U.S. cap-and-trade system, it looks like First Reserve’s investment is going to pay off big time.

Blue Source moving into carbon trade standards
Steve Glesi, July 3, 2007 (Market Watch from Dow Jones)

WHO
Blue Source (Bill Townsend, co-founder), First Reserve Corp., Interface.


WHAT
First Reserve bought Blue Source because Blue Source is developing a “bank” of carbon credits which is expected to grow in value as more countries and trading groups make cap-and-trade mandatory.

WHEN
- First Reserve bought Blue Source last October.
- Blue Source began pumping “smokestack” CO2 into oil wells 12 years ago.
- Blue Source now owns contracts for credits through 2019.

WHERE
Blue Source began work in West Texas. It now sells carbon credits worldwide.

WHY
- The greenhouse gas (GHG) emissions prevented by Blue Source’s capture become marketable credits. They pay Blue Source for doing the emission prevention, balancing their own emissions.
- Blue Source now has 300 million tons of GHG credits running through 2019.
- Blue Source is now active in establishing standards for the voluntary carbon credit industry, in anticipation of the trade becoming mandatory. A recent sale to floormaker Interface was based on the Voluntary Carbon Standard under development by The Climate Group and The International Emissions Trading Association.
brave new world coming (click to enlarge)

QUOTES
- Townsend: "Carbon capturing, wind and other renewable energy -- there's not just one silver bullet…We have to do all of them."
- Blue Source and Interface joint statement: "The parties believe the voluntary carbon standard will significantly accelerate and strengthen the development of the voluntary carbon market, and that this transaction is the first offset sale based on the voluntary standard…”