Tags: carbon | green | energy | California

California Carbon Allowances Sell Out at $11.50 During Auction

Thursday, 21 Aug 2014 03:49 PM

 

California, which releases more greenhouse-gas emissions than any other U.S. state except Texas, sold 22.5 million carbon allowances at auction for $11.50 each, just above analysts’ expectations.

Units of BP Plc, Chevron Corp., Edison International, PG&E Corp., Goldman Sachs Group Inc. and Morgan Stanley were among the companies that qualified to purchase the permits put up for sale Aug. 18, a report posted Thursday on the state Air Resources Board’s website shows. The agency doesn’t disclose the names of buyers. The state received 1.14 bids for every permit offered.

Futures contracts linked to the allowances have been trading below $12 a ton since April even as a record drought plagues California, shrinking hydropower resources and increasing demand for more emissions-intensive, natural gas-fired generation. A surplus of allowances will keep the state’s carbon market oversupplied through at least 2020, according Bloomberg forecasts.

“Trading has been really slow,” Emilie Mazzacurati, managing director of the carbon market consulting company Four Twenty Seven in Berkeley, California, said by e-mail. The auction was expected to be “undersubscribed and clear at the floor price” of $11.34 a ton, the state minimum, she said.

Colleen Regan, a Bloomberg New Energy Finance analyst in New York, said by e-mail yesterday that permits were expected to clear near the floor price as “demand won’t be overwhelming.”

Futures based on the permits, each allowing the release of a metric ton of carbon dioxide as early as this year, fell 3 cents yesterday to settled at $11.85 a ton, data compiled by CME Group Inc. show. The allowances, for delivery in December, have fallen 11 percent in the past year.

Advance Allowances

The 22.5 million permits put up for sale this week by California, which releases more emissions than any U.S. state except Texas, can be used as soon as this year. The state also offered 9.26 million that can be used in 2017, known as “advance” allowances. It sold 6.47 million of those for $11.34 each.

During the auctions, companies submit confidential bids for the number of allowances they want at a specific price. The highest bidder is awarded permits first, then the second- highest, and so on until the all of the permits for sale have been called for. Then all bidders pay the price of the lowest winning offer.

© Copyright 2015 Bloomberg News. All rights reserved.

Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Reuters Poll: Oil Price Will Average Less in 2015 Than During Financial Crisis

Friday, 30 Jan 2015 11:55 AM

Crude oil will likely continue falling before posting only a mild recovery in the second half of this year, a Reuters su . . .

Worker Pay in US Rose at a Slower Pace in Fourth Quarter

Friday, 30 Jan 2015 10:30 AM

Wages and salaries in the U.S. rose at a slower pace in the fourth quarter, indicating workers have limited success barg . . .

Consumers Sentiment Brightened in January to 11-Year High

Friday, 30 Jan 2015 10:19 AM

American consumer confidence reached an 11-year high in January as a strengthening labor market and plunging gas prices  . . .

Most Commented
Top Stories

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved