FAIRFAX, VA, August 23, 2001 - ICF
Consulting's SO2 Emissions Market Outlook
2001 identifies substantial upside risk for SO2
allowance prices due to coal market dynamics and probable
cuts in the current emissions cap. ICF Consulting forecasts
these risks in its tenth annual comprehensive assessment
of the near- and long-term SO2 allowance market.
The study includes detailed sensitivity analysis and probability
distributions on future SO2 allowance prices.
The study's findings shed critical light on trends affecting
compliance planners, coal marketers, and SO2
market makers.
"All arrows point upward," says John Blaney, director of
ICF Consulting's energy
industry environmental practice. "This is a unique period
where most major uncertainties reinforce the existing upward
trend in SO2 allowance prices. The SO2
allowance bank is being rapidly drawn down, which will sting
the market in the next few years as coal generation continues
to increase and SO2 emissions rise. In addition,
the price differential between high and low sulfur coal
has risen dramatically in recent months, putting upward
pressure on near-term SO2 prices. However, the
biggest story is the effect of impending cuts in the SO2
allowance allocation resulting from upcoming multi-pollutant
regulations, which we predict will cause a dramatic increase
in SO2 prices. As a result, we believe that allowances
available at today's prices offer a buying opportunity as
we move into an uncertain regulatory future."
U.S. Environmental Protection Agency Administrator, Christine
Todd Whitman, stated in July that the Agency plans to propose
legislation in Fall 2001 outlining a multi-pollutant approach
to air regulation, covering emissions of SO2,
NOx, and mercury from power plants. The EPA's
position will increase the momentum that has been building
on Capitol Hill and in the industry for comprehensive multi-pollutant
air regulation. The policies proposed thus far require significant
reductions in the SO2 emissions ceiling.
"Further reductions in the SO2 emissions cap
will have broad impacts on electric and fuel markets, and
particularly on coal markets and coal-fired capacity," says
Blaney. "Companies with coal-fired generation capacity should
take advantage of current bargain SO2 allowance
prices to hedge the risk associated with uncertain future
air emissions regulations."
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ICF International (Nasdaq: ICFI) partners with government and commercial clients to deliver consulting services and technology solutions in the energy, environment, transportation, social programs, defense, and homeland security markets. The firm combines passion for its work with industry expertise and innovative analytics to produce compelling results throughout the entire program life cycle, from analysis and design through implementation and improvement. Since 1969, ICF has been serving government at all levels, major corporations, and multilateral institutions. More than 1,800 employees serve these clients worldwide. ICF’s Web site is http://www.icfi.com.
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For Immediate Release
Contact: Douglas Beck
1.703.934.3820
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