We knew this was coming. Carbon Financial Instruments are now trading for 10 cents per metric tonne on the Chicago Climate Exchange. I wonder if the investors are reacting to the Hockey Stick Implosion news? As reported on WUWT, less than one month ago it was 25 cents a tonne, and a year ago it was over 1 dollar. The all time high was May 2008 at over 7 dollars a tonne. Today: poof.
Looks like there was a big sell-off today. Carbon Investor confidence must be “unprecedented”.
The chart is only a sliver from rock bottom:
Anyone who was a founding member at 1 dollar has now lost 90% of their investment.
Tough noogies for them.
In other news, Zimbabwe dollars are still selling for higher value than CCX CFI’s on Ebay.
I wonder if this fellow might have to drop his price for the domain name? Maybe he’d take a barter deal for some CCX instruments?
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How much is CO2 worth on the open market?
A 100,000 BTU natural gas CO2 generator will cost you C$840. It will generate 73,000 cubic feet of CO2 at 1200 ppm [1], or 87.6 cubic feet of pure CO2 per hour at STP.
The price of natural gas is projected to be between C$3.5-C$4.0 per million BTU over this coming quarter. [2][3].
1 Cubic foot of CO2 weighs 0.1144 pounds [4], therefore in one hour this CO2 generator produces 10 lbs of CO2. This at a cost of C$0.35-C$0.40. The cost of CO2 is therefore C$77 per tonne.
Either I have made an error or $0.10 is too low. Of course, do these people actually have the goods to deliver?
Therein lies the lie. There is no product to purchase. The natural price for something that doesn’t exist is zero.
Actually, they want to take it away from you for 10c per tonne. I call that theft.
This is all done in fun. I would be interested in hearing from anyone on the economics of greenhouse horticulture.
1: http://www.vancouversun.com/business/asia-pacific/records+triple+digit+gain+central+bank+frets+about+rising+dollar/1997345/story.html
2: http://www.vancouversun.com/business/asia-pacific/records+triple+digit+gain+central+bank+frets+about+rising+dollar/1997345/story.html
3.http://www.canada.com/business/fp/Natural+prices+poised+plummet/2043909/story.html
4.http://wiki.answers.com/Q/How_much_does_one_cubic_foot_of_carbon_dioxide_weigh
Wow, 10 cents a share.
Hey buddy, can you spare a dime?
So, if the climate cools off and the carbon credit market crashes, can we call the credits “Frozen Assets”?
Actually, they want to take it away from you for 10c per tonne. I call that theft.
This example illustrates that the CO2 market is a phoney market. There is no commodity to trade. On any commodity market, even in the futures of that market, one is always purchasing a deliverable, which one might actually have to deliver at some point in the future. There is no deliverable in this phoney CO2 market; there are no CO2 tankers driving around delivering me the CO2 I want and need and paid for.
There is no tradable good here.
Personally, as a SCUBA diver, I am more interested in the price of Helium. Now, if someone has a solution to that issue…
Sorry, reference [1] got screwed up.
The Johnson generator appears to be more efficient:
http://www.johnsongas.com/industrial/CO2Gen.asp
Pounds CO2/hr.* 8.25
Burner Range BTU/hr.* 20,000-60.000
James Allison wins the thread on the first post!
Sorry, finally sorted out the link:
http://www.agroponic.com/
Even better is
http://www.blu-ox.com/faqs.html
It appears that “hydropnic”growers are very interested in these machines 🙂
Wonder what the value will be after the impending fiasco in Copenhagen ?
Maybe I’ll send Al Gore and David Suzuki an email letting them know that if thye pay me enough, I’ll take their credits off their hands.
Gonna need something to burn in the fireplace this winter. I’m expecting it to start early, be brutal and linger on into late Spring.
I’m thinking WV coal is in for a bit of trouble with Obama closing off the mountain top mining:
http://online.wsj.com/article/SB125433443346253225.html
That and the EPA ramping up things could make CO2 a better deal:
http://online.wsj.com/article/SB125435259851954193.html
Of course, humor is possible if they get sued and we find it’s illegal for the EPA to raise limits on pollutant releases.
My suggestion is to fire up the cards and letters, visiting if you happen to be in DC, or go to the local congresscritter offices. Take article or make references to some of the recent posts here. I’m pretty sure they’re not paying attention, but it’s basically all we’ve got.
Mike
Ralph, can you give us a URL for your article?
Cheers.
Reminds me of the Pet Rocks craze. An unbelievable number of people bought caged painted rocks till one day some Neanderthal in the group found out he could paint any old rock and call it his pet for free.
Do I smell a government bailout coming?
The logic of the guvmint would go like this:
The sagging market is ripe for a stimulus package. We need to be sending a LOT more CO2 into the air so that we can stimulate the companies that are geared to remove it! Yah. That’s it. That’s what we’re gonna do. Stimulate the production of CO2! Hell, it worked for cars din’t it?
Robert Wood, I suspect the device you are talking about is a so-called “inert gas generator.” The output is not just CO2, but mostly nitrogen from the combustion air. To get pure CO2 from the discharge stream, you have to have a process unit to remove the CO2 from the mixed gas at low temperature and under significant pressure, and then regenerate the process stream to get the pure CO2 out of the absorbent. An ethanolamine scrubber is one device commonly used for this purpose. The ethanolamine is then sent to a regenerator where it is heated to release the CO2. Thus, you can’t get the cost of the product CO2 just from the price of the natural gas burned. Plus, if you want to ship it somewhere, you have to add the cost of compression. That is why the cost of power from a coal-fired power plant wherein the CO2 is separated and buried in the ground somewhere will be a lot higher than from one wherein the CO2 just goes out the chimney.
Oh hell, there goes my retirement fund.
Ray (16:14:31) :
So, will the British-Columbia Liberal Government reduce the carbon tax? Or even better, abolish it?
As a fellow British Columbian, I can assure you that our goverment will not remove the tax, they will most likely increase it in the wake of this news.
Mark (15:30:18) :
My guess it that most of the fools who invested in such an instrument are die-hard ecofundamentalists.
If only that were true. My experience is that those people are the last ones to actually do such things. They demand that you do it, but they need all the cash they can get to attend world-wide rallies to protest our inaction.
Does the S.E.C. regulate this market? Does any government agency regulate it?
If not, maybe Zeke’s list of companies buying worthless CC’s should be considered for short sales.
Just invert the curve when you do the reconstruction and you’ll get a nice temperature proxy w/requisite hockey stick.
Yes, you can take a short position. However you won’t make any money because it can only go to 5 cents. (the minimum trade increment, and it can’t go to zero) You’ll make 5 cents, but you will pay 5 cents in trade fees, along with $250 to start up an account. So no matter what, you lose.
Ten cents is probably the rock bottom price. Only folks who actually have a contract will be selling. (no one will be taking a short position at ten) If you owned a contract you could sell it at ten, pay the five cent fee, and get a tiny amount of money back. If you had a contract, and it dropped to five, why would you sell it at 5 cents if the trading fee was five? You might as well hang onto it and pray.
You might have an “ask” at five, but there probably won’t be any sellers there so it should remain at ten. I’ve never seen a commodity at its lowest price. (this commodity can move only in 5 cent increments)
For comparison purposes, imagine if corn was selling at half a penny per bushel. This is 56 pounds of corn! (about 25 kg for our metric friends)
This price of ten cents is truly mind-boggling, and demonstrates that it is nothing but smoke and mirrors.
I think I will buy 1 carbon credit hold it to expiration and take delivery.
My soda went flat.
Ecotretas (14:40:43) : Can we short-sell them?
There would have been a nice profit from $7.00 to 10¢. Even 25¢ to 10¢ would have been good.
Jim Stegman (20:46:10) : $250 to start up an account
Why that much? There must be cheaper avenues.
If we could have known about this drop over the past month and shorted maybe 100,000 shares of CCX when it was at 25¢ ! …Enough of ‘what ifs’.
Smokey (20:17:43) : Does the S.E.C. regulate this market? Does any government agency regulate it?
Regulation?? I think the regulations at this time are whatever those bankers with that $750 billion say they are.
Al Gore is no doubt shortselling them, for the good of mankind
I recommend that people sell carbon dioxide and buy SO2. In a cyclical market like climate its best to get in first before all of the speculators in global cooling start piling in.
BTW I love your blog!