January 7, 2011
Inside Energy Extra
The Obama administration proposed Monday to replace
the decades-old fuel-efficiency labeling system for new cars and
trucks with one of two new approaches that would also rank
vehicles according to their greenhouse-gas emissions.
One option under the initiative, which his being spearheaded
by the Environmental Protection Agency and the Transportation
Department, would assign vehicles letter grades ranging from
A+ to D. The grades would be based on vehicles’ fuel efficiency
- either in terms of miles per gallon or miles per charge, in the
case of electric vehicles - as well as tailpipe carbon-dioxide emis-
sions that are blamed for global climate change.
A second proposed option would omit the letter grades and
simply rank vehicles on sliding scales for fuel efficiency, CO2
emissions and other air pollutants. Both options would phase
out the conventional miles-per-gallon window stickers that
automakers have put in the windows of new cars and trucks for
decades.
“The old, petroleum-centric labels, simply aren’t good
enough anymore,” David Strickland, the administrator of DOT’s
National Highway and Traffic Safety Administration, told
reporters on a conference call. DOT and EPA will take public
comments on the two proposed labeling options for 60 days
before deciding what do, Strickland said. The new system would
take effect in 2012, he added.
Under the letter-grade option, electric vehicles would receive
an “A+,” and high-performance cars that use a lot of gasoline
would receive a “D,” officials said. That approach would also
lump cars and trucks into a metric that balances CO2 emissions
with gas mileage and average annual fuel costs. Electric cars and
plug-in hybrids would be graded on a ratio that assumes 33.7
kilowatt hours of electricity used for every one gallon of gaso-
line.
Notably, neither labeling option would account for the GHG
emissions that coal-fired and other power plants generate in pro-
ducing the electricity that consumers use to charge their electric
vehicles.
More information on the initiative is available at www.epa.
gov/fueleconomy.
—Test_userqa1059
The McGraw-Hill Companies
Shares of metallurgical coal producers moved sharply higher
on the open of trade Tuesday, supported by expectations that
international benchmark prices for fourth quarter 2010 top-qual-
ity low-vol metallurgical coal settled at $209/metric ton FOB.
Checking for Alternative Headline
BLM struggles to track lease protests
Faulty computer software and inconsistent policies are hurt-
ing the Interior Department’s efforts to gauge how protests filed
by environmental groups and other advocacy organizations
are impacting oil and natural gas lease sales on public lands,
according to a report released Monday by the Government
Accountability Office.
GAO, the investigative arm of Congress, concluded that
efforts made by Interior’s Bureau of Land Management to track
protests from green groups, state and local governments and
other parties have largely failed. When lease parcels have been
withdrawn from sales, incomplete information makes it nearly
impossible to tell what role protests played in the decision, GAO
found.
“Although BLM has taken steps to collect agency-wide pro-
test data, when we tried to evaluate the effects of protests, we
were hindered by the incompleteness, inconsistency and ambi-
guity of these data,” the report said. “Without more robust pro-
test information, BLM, Congress and the public lack a full pic-
ture of protest activity and how protests affect leasing decisions.”
The GAO report was a follow-up to a similar 2004 study that
found that data-gathering on protests was hampered because
state offices were using different, incompatible systems to gather
and track protests.
In response, BLM added a software module to its lease record-
keeping system that was supposed to better capture information
relating to protests.
But in examining data collected in Colorado, New Mexico,
Wyoming and Utah from 2007-2010, GAO found that staff were
not always entering the required information, were not updating
the status of protests, or were generalizing reasons for protests to
the point that the information was useless.
Wilma Lewis, Interior’s assistant secretary for lands and min-
erals management, said BLM will determine by the end of 2011
if the faulty software can be fixed, modified or replaced.
—Test_userqa1059
 Inside Energy Extra

Feeder Crudes: Jul 16-22, 2010 Met coal exposed equities surged on the open of trade in
Summer Cracking Coking Crack- New York. At the close of trading, Walter Energy was trading
ing Coking higher by 5.15% to $72.03/share, Peabody Energy by 2.08% to
Yield Yield Freight Netback Netback $42.78/share, Alpha Natural Resources by 5.78% to $37.14/share
and Patriot Coal by 2.29% to $10.28/share.
Spot
The met coal pricing follows earlier speculation that Q4
US Gulf 2010 low-vol PCI coal was priced out of Queensland, Australia
Arab Berri 82.03 81.23 1.88 80.15 79.35 at $147/mt FOB.
76.11 Reports of settlement prices for top-quality high-vol met
Arab Heavy 77.92 77.09 2.01 75.91 75.08 coal came in at $190/mt FOB port.
Analysts at Brean Murray, Carret & Co. led by Jeremy
71.41
Sussman said Tuesday that “while this [low-vol price] is...a slight
Arab Light 79.89 79.02 1.92 77.97 77.10 decrease from our expectations of $220/mt, it was nonetheless a
74.41 bit better than buy-side sentiment.”
Arab Medium 78.52 78.27 1.96 76.56 76.32 Brean Murray reminded investors that BHP Billion settled
72.71 with Japanese steel makers in Q3 2010 a met coal pricing agree-
ment at $225/mt.
BCF 17 74.77 75.12 1.21 73.56 73.92
Analysts at Brean Murray “remain bullish on Walter and
69.64 Peabody at current levels,” with Walter having significant
BCF 22 77.44 78.00 1.16 76.28 76.85 US based low-vol operations and Peabody having significant
N.A. Australian based exposure.
BCF 24 78.62 78.70 1.14 77.48 77.56 Analysts at Standard & Poor’s Equity Research selected
Peabody Energy as focus stock of the week on Tuesday. S&P cur-
N.A.
rently has a strong buy rating on Peabody with a price target of
Basrah Light 79.78 79.27 1.64 78.14 77.63 $43/share.
74.88 Positive catalysts for Peabody include “the significant reduc-
Bonny Light 85.25 N.A. 1.43 83.82 N.A. tion in thermal coal inventory levels at utilities” in addition to
77.29 rising demand for metallurgical coal products from steel produc-
ers from lows seen in late 2009.
Brass River 82.50 N.A. 1.29 81.21 N.A.
S&P’s Financial Services, LLC, like Platts is owned by The
76.86 McGraw-Hill Companies, Inc.
Brent 82.46 82.01 1.23 81.23 80.77 76.42 Patriot Coal and Alpha Natural Resources were selected as
Cabinda 81.70 82.24 2.23 79.47 80.02 top picks to play the low-vol met coal pricing market, with
75.59 Brean Murray saying we “would be buyers today on the back of
this news.”
Cano Limon 82.14 82.40 1.03 81.11 81.38
Regarding low-vol PCI pricing, analysts at RBC Capital
76.86 Markets viewed the reported benchmark settlements as “neutral
Escalante 77.89 80.28 3.42 74.47 76.86 to slightly positive.” RBC said in an investor release “although
73.12 the suggested price is down 18.3% from Q3 2010, the settle-
Forcados 85.02 N.A. 1.38 83.64 N.A. ment does remove uncertainty, the number is in line with our
expectations.”
77.28
Analysts at Brean Murray, Carret & Co. led by Jeremy
Isthmus 81.30 80.52 0.63 80.67 79.89 Sussman said Tuesday that “while this [low-vol price] is...a slight
75.06 decrease from our expectations of $220/mt, it was nonetheless a
Kuwait 78.74 78.53 1.94 76.80 76.59 71.03 bit better than buy-side sentiment.”
LLS 84.40 83.84 0.65 83.75 83.19 79.69
Analysts at RBC commented that an 18.3% decline to $147/
Marlim 77.43 79.31 N.A. 76.25 78.13
mt “is better than the sequential decline reported the other
68.94 week for Russian PCI material
Mars 78.88 79.08 0.63 78.25 78.45 74.81 —Staff
Maya 74.64 74.17 0.62 74.02 73.55 67.46
Mesa 81.24 80.35 1.10 80.14 79.25 76.11
Merey 74.86 75.65 1.20 73.66 74.44 N.A.

2 Copyright © 2010 The McGraw-Hill Companies

 Inside Energy Extra

Feeder Crudes: Jul 16-22, 2010

Loan aid critical to nuclear: S&P

Olmeca 82.12 81.20 0.59 81.53 80.61

New US nuclear development depends on federal support
76.90 such as loan guarantees, especially as Natural Gas prices remain
Rabi 84.51 84.82 1.45 83.06 83.37 76.84 depressed, Standard & Poor’s said in a report Monday.
Soyo/Palanca 84.01 83.20 1.62 82.39 81.58 Federal loan guarantees, in which the government backs
76.69 financing for most of a new nuclear project, “significantly”
improve the economics of reactor construction, S&P analysts
Statfjord 83.03 82.39 1.24 81.79 81.15
Swami Venkataraman and Aneesh Prabhu wrote.
77.79 A merchant nuclear plant costing $6,500/kW to build is
Troll 85.27 85.02 1.33 83.94 83.69 78.92 likely uncompetitive without a federal loan guarantee at prevail-
Ural 80.49 80.61 1.38 79.11 79.23 74.03 ing forward gas prices, S&P said.
WTI 82.44 81.70 0.94 81.50 80.76 77.01 “Low Natural Gas prices pose a conundrum for merchant
nuclear developers,” the S&P analysts wrote. The long-term
US Atlantic Coast
power purchase agreements merchant nuclear operators need
may be difficult to obtain with Natural Gas prices in the $5/
Arab Heavy 76.36 77.83 1.86 74.50 75.97 MMBtu range, the report said.
71.41 For regulated utilities, reactor construction may be easier,
Arab Light 79.06 79.73 1.78 77.28 77.95 because they can make the case to regulators that nuclear costs
are more stable than gas-fired units and argue that emissions
74.41
regulations that would favor nuclear energy may be forthcom-
Arab Medium 77.24 78.55 1.82 75.42 76.73 ing, S&P said.
72.71 Under a “best” case, which includes government subsidies
BCF 22 77.36 77.38 1.10 76.26 77.38 and Carbon costs of $20/ton, reactors can be competitive with
N.A. Natural Gas at prices as low as $3.90/MMBtu, the report said.
S&P, like Platts, is part of The McGraw-Hill Companies.
Bonny Light 84.50 N.A. 1.86 82.64 N.A.
77.29 Energy Secretary Steven Chu on Monday helped dedicate
Brass River 83.15 N.A. 1.66 81.49 N.A. the most power X-ray laser in the world, a device that will be
76.86 able to look at individual atoms and produce movies of atomic
Brent 81.59 82.69 0.91 80.68 81.78 76.42 interactions.
US Department Of Energy’s SLAC National Accelerator
Cabinda 81.72 83.07 1.92 79.80 81.15
Laboratory in Menlo Park, California, began doing preliminary
75.59 experiments with the Linac Coherent Light Source last year, but
Ekofisk 82.11 83.00 0.96 81.15 82.04 Monday marked the formal dedication of the $420-million facil-
77.73 ity.
Foinhaven 83.42 85.43 0.99 82.43 84.45 Chu took the opportunity to tout the facility’s contribution
to US competitiveness, a subject he often returns to in order to
N.A.
justify expanded research and development budgets.
Forcados 84.05 N.A. 1.78 82.27 N.A. “The LCLS shows what the scientific workforce of our
77.28 nation, in cooperation with our international partners, is capa-
Gullfaks 83.43 84.64 0.95 82.48 83.69 ble of achieving,” Chu said. “Pioneering research will remain
79.72 critical if the US is to stay a global leader when it comes to
innovation and competitiveness.”
Hibernia 81.36 82.74 0.86 80.50 81.88
The laser also received $53.6 million under the 2009
76.52 American Recovery and Reinvestment Act. Construction started
Mesa 80.05 81.14 1.06 78.99 80.09 76.11 in 2006, and was completed last year.
Oriente 77.72 78.38 2.16 75.56 76.23 In experiments done since the laser began operating, scien-
69.42 tists have used LCLS to create images of bacteria, as well as some
of the molecular machinery associated with photosynthesis in
Rabi 84.29 85.70 1.88 82.41 83.81 76.84
plants. The laser works by bombarding samples with ultrafast
Soyo/Palanca 83.63 84.32 2.14 81.49 82.18 pulses of high-power X-rays, which are converted into a series
76.69 of images that can be put together to create a movie.

3 Copyright © 2010 The McGraw-Hill Companies

 Inside Energy Extra

Feeder Crudes: Jul 16-22, 2010 SLAC Director Persis Drell, during the dedication ceremony
at the lab, thanked US Department Of Energy’s Office of Science
for funding the project.
Statfjord 82.49 83.34 1.24 81.25 82.10
“Now we have a facility that is annihilating expectations.
77.79 The early experiments are swimming with data and are already
Troll 83.49 86.08 0.98 82.51 85.10 78.92 exploring new frontiers - the science is starting to flow,”
US West Coast Drell told an audience that included California Democratic
Representatives Zoe Lofgren and Mike Honda.
The research has a wide spectrum of potential energy uses,
ANS 88.04 90.90 N.A. 88.04 90.90 77.83
including helping to lay the foundation for more efficient
Basrah Light 87.36 89.88 2.50 84.86 87.39 Biofuels and Solar Energy, and better understanding energy
74.88 materials, officials said.
Escalante 84.41 89.49 2.39 82.02 87.10 —TEST USERQA1059
73.12 Inside Energy Extra
Kern River 86.71 91.94 1.65 85.06 90.29
Most powerful X-ray laser dedicated
70.09
Line 63 87.78 92.81 0.11 87.67 92.70 Energy Secretary Steven Chu on Monday helped dedicate
78.19 the most power X-ray laser in the world, a device that will be
Minas 90.37 94.10 N.A. 88.08 91.81 75.42 able to look at individual atoms and produce movies of atomic
interactions.
Oriente 88.69 90.84 3.87 84.82 86.97
US Department Of Energy’s SLAC National Accelerator
69.42 Laboratory in Menlo Park, California, began doing preliminary
Mixed Lt Swt 94.07 94.89 1.89 92.18 93.00 experiments with the Linac Coherent Light Source last year, but
70.09 Monday marked the formal dedication of the $420-million facil-
THUMS 86.66 89.99 N.A. 86.66 89.99 ity.
Chu took the opportunity to tout the facility’s contribution
71.89
to US competitiveness, a subject he often returns to in order to
US Midcontinent justify expanded research and development budgets.
“The LCLS shows what the scientific workforce of our
BCF 24 N.A. 84.14 2.11 N.A 82.03 nation, in cooperation with our international partners, is capa-
N.A. ble of achieving,” Chu said. “Pioneering research will remain
critical if the US is to stay a global leader when it comes to
Basrah Light 81.54 84.13 2.74 78.80 81.39
innovation and competitiveness.”
74.88 The laser also received $53.6 million under the 2009
Bonny Light 87.52 N.A. 3.37 84.15 N.A. American Recovery and Reinvestment Act. Construction started
77.29 in 2006, and was completed last year.
Bow River N.A. 85.62 1.84 N.A. 83.78 In experiments done since the laser began operating, scien-
tists have used LCLS to create images of bacteria, as well as some
64.92
of the molecular machinery associated with photosynthesis in
Cabinda 82.14 86.94 3.28 78.86 83.66 plants. The laser works by bombarding samples with ultrafast
75.59 pulses of high-power X-rays, which are converted into a series
Cano Limon 83.48 87.10 2.06 81.42 85.04 of images that can be put together to create a movie.
76.86 SLAC Director Persis Drell, during the dedication ceremony
at the lab, thanked US Department Of Energy’s Office of Science
Forcados 87.57 N.A. 3.15 84.42 N.A.
for funding the project.
77.28 “Now we have a facility that is annihilating expectations.
LLS 86.68 88.14 0.78 85.90 87.36 79.69 The early experiments are swimming with data and are already
Mesa 82.06 85.54 2.09 79.97 83.46 76.11 exploring new frontiers - the science is starting to flow,”
Mixed Lt Sr 82.29 84.03 1.84 80.45 82.19 Drell told an audience that included California Democratic
Representatives Zoe Lofgren and Mike Honda.
63.23
The research has a wide spectrum of potential energy uses,
Olmeca 85.02 86.13 1.71 83.31 84.42 including helping to lay the foundation for more efficient
76.90

4 Copyright © 2010 The McGraw-Hill Companies

 Inside Energy Extra

Feeder Crudes: Jul 16-22, 2010 Biofuels and Solar Energy, and better understanding energy
materials, officials said.
Energy Secretary Steven Chu this week picked up a new
Mixed Lt Swt 85.94 87.28 1.66 84.28 85.62
special assistant, Ali Zaidi, who formerly worked at the Office of
70.09 Management and Budget.
Syncrude 87.28 N.A. 1.53 85.75 N.A. Chu took the opportunity to tout the facility’s contribution
77.55 to US competitiveness, a subject he often returns to in order to
WTI 84.51 86.30 0.43 84.08 85.87 77.01 justify expanded research and development budgets.
“The LCLS shows what the scientific workforce of our
WTS 83.84 85.91 0.65 83.19 85.26 74.51
nation, in cooperation with our international partners, is capa-
Caribbean ble of achieving,” Chu said. “Pioneering research will remain
BCF 17 74.06 71.66 0.35 73.71 71.32 critical if the US is to stay a global leader when it comes to
69.64 innovation and competitiveness.”
BCF 22 75.83 74.45 0.33 75.50 74.12 The laser also received $53.6 million under the 2009
American Recovery and Reinvestment Act. Construction started
N.A.
in 2006, and was completed last year. Energy Secretary Steven
BCF 24 75.23 75.62 0.32 74.91 75.30 Chu this week picked up a new special assistant, Ali Zaidi, who
N.A. formerly worked at the Office of Management and Budget.
Basrah Light 76.63 75.22 1.11 75.52 74.11
74.88 “Ali Zaidi is one of our special assistants who will help
implement the secretary’s agenda to build a clean-energy econo-
Bonny Light 81.09 N.A. 1.50 79.59 N.A.
my, ensure America’s leadership on science and technology, and
77.29 enhance our nuclear security,” US Department Of Energy Press
Brass River 78.70 N.A. 1.66 77.04 N.A. Secretary Stephanie Mueller said.
76.86
Brent 78.60 78.48 0.86 77.74 77.62 76.42 Zaidi, a Harvard graduate, worked on the Obama presi-
dential campaign prior to joining Office of Management and
Cabinda 78.79 78.62 1.55 77.24 77.07
Budget.
75.59 —Staff
Cano Limon 78.88 79.12 0.48 78.40 78.64
76.86
Escalante 75.72 77.18 2.85 72.87 74.33
73.12
Forcados 86.71 N.A. 1.65 85.06 N.A.
77.28
Isthmus 77.96 76.37 0.73 77.23 75.64
75.06
Kuwait 75.91 74.54 1.63 74.28 72.91 71.03
Maya 73.00 70.04 0.76 72.24 69.28 67.46
Merey 74.26 70.76 0.35 73.91 70.41 N.A.
Mesa 78.03 75.55 0.31 77.72 75.24 76.11
Olmeca 77.58 76.58 0.71 76.87 75.88
76.90
Rabi 80.65 81.93 1.53 79.12 80.41 76.84
Soyo/Palanca 79.65 79.88 1.28 78.37 78.60
76.69
Statfjord 78.95 78.37 0.86 78.09 77.51
77.79
Troll 80.28 80.75 0.94 79.34 79.82 78.92
Cracking Visbrk Cracking

5 Copyright © 2010 The McGraw-Hill Companies

 Inside Energy Extra

Feeder Crudes: Jul 16-22, 2010

Shunda’s mines have an overall existing annual production

Visbrk
of 750,000 mt.
Yield Yield Freight Netback Netback In a statement, L&L Energy, headquartered in Seattle,
Spot Washington, said that under the terms of a memorandum of
Singapore understanding it had signed with Shunda, it intends to take a
Arab Heavy 72.86 71.00 0.87 71.99 70.12 minimum 51% stake in the miner. L&L is currently performing
due diligence regarding the purchase.
70.08
L&L said it also plans to invest an undisclosed amount prin-
Arab Light 74.33 71.94 0.83 73.50 71.11 cipally in the construction of a 1 million mt capacity coking
72.83 facility scheduled to be operational in 16 months and for which
Arab Medium 73.15 70.91 0.85 72.30 70.06 it has recently received licensing approval from the Chinese
71.28 government.
Shunda also plans to utilize joint venture funding from L&L
Attaka 75.96 75.68 2.03 73.93 73.66 77.16
to expand the annual production capacity at its coal washing
Dubai 75.33 72.09 0.78 74.55 71.30 72.94 facility from 900,000 mt to 1.2 million mt.
Duri 76.66 74.85 1.07 75.59 73.77 73.28 “We believe with the Shunda’s existing mining, coal wash-
Kuwait 73.42 70.92 0.89 72.53 70.04 71.03 ing operations, and the anticipated new coking faculties, it
Minas 76.88 75.55 0.99 75.89 74.57 75.42 will have a dramatic effect on our net income and earnings per
share,” L&L president and CEO, Dickson Lee, said in a state-
Murban 75.60 73.15 0.79 74.81 72.36
ment.
74.91 L&L currently operates three coal mines, two coal washing
Oman 74.97 72.38 0.73 74.24 71.65 73.11 facilities, a coking coal facility, and a coal consolidation and
Qatar Dukhan 75.18 72.93 0.85 74.33 72.08 wholesale business in Yunnan and Guizhou Provinces.
74.48 L&L Energy became a publicly traded company in the US in
August 2008 and trades under the symbol “LLEN”.
Qatar Marine 75.63 73.11 0.85 74.78 72.26
Lisa Hough, BP America’s Rockies team leader, said Thursday
73.07 that the company would resume drilling in the county, which
Tapis 77.22 76.20 0.78 76.44 75.42 77.99 lies in the northern part of the prolific gas-producing San Juan
Umm Shaif 74.49 71.60 0.79 73.70 70.81 Basin, in the third quarter. The company said in January it
74.39 would cease drilling for at least six months in the county, where
BP has long been the number one gas producer.
Zakum (Lower) 74.70 72.64 0.79 73.91
At the time, BP said it planned to lay down the single rig it
71.85 74.69 then had operating in the basin and concentrate on spending
Italy its capital in producing regions where drilling was more eco-
Arab Light 75.79 74.26 1.79 74.00 72.48 nomical, such as Texas.
73.83 “We’re planning to bring back the one rig this fall and
resuming drilling as we talked about last January,” Hough said.
Arab Heavy 73.97 72.04 1.87 72.10 70.18
She added that BP would “go back on track” with its $2.4
71.13 billion long-term plan, which calls for drilling an additional
Azeri Light 79.37 77.33 1.19 78.18 76.13 1,000 gas wells in the region over the next 13 years.
78.01 Hough said the company’s decision to resume onshore drill-
Es Sider 78.02 76.36 0.76 77.26 75.60 ing operations in southern Colorado was unrelated to its prob-
lems in the offshore Gulf of Mexico, where a well blowout at
75.55
BP’s Macondo project continues to pour oil into the Gulf.
Iran Heavy 75.48 73.79 0.90 74.58 72.90 Hough said the company’s decision in January to release the
73.12 drilling rig it had operating in the county was based on a com-
Iran Light 76.85 74.88 0.88 75.97 74.00 bination of factors. She cited the cumulative impact of federal,
74.37 state, county and Ute Indian tribe drilling rules on the com-
pany’s drilling economics. BP decided “to take a pause to work
Kirkuk 75.11 74.29 1.10 74.01 73.19 74.55
with the agencies to meet their requirements,” she said.
Saharan Blend 75.80 74.94 0.81 74.99 74.13 In addition, “because of the economic downturn, Rockies
76.61 natural gas was at a disadvantage,” to the price of gas from

6 Copyright © 2010 The McGraw-Hill Companies

 Inside Energy Extra

Feeder Crudes: Jul 16-22, 2010 other producing basins.

Hough also noted that at the time it stopped drilling that
one well BP had drilled but not completed about 55 wells in
Suez Blend 75.33 73.15 0.81 74.52 72.34
the county and “we wanted to focus on bringing those wells on
71.64 line.” Now, “the economics have improved and we’re complet-
Urals 76.62 74.30 1.36 75.26 72.94 74.03 ing those wells,” she added.
Zuetina 77.96 76.68 0.87 77.09 75.82 “We’re invested in Colorado for the long term,” Hough said.
76.37 She added that the company recently announced an investment
in a wind farm in the state and that Colorado “is one of our
Amsterdam-Rotterdam-Antwerp
top-tier states for solar.”
According to the La Plata County Energy Council, BP pro-
Arab Heavy 74.18 72.44 1.86 72.32 70.58 duced 212.4 Bcf from La Plata County wells in 2009, far outpac-
71.13 ing the second-place producer, Samson Resources, which pro-
Arab Light 76.59 75.02 1.77 74.82 73.25 duced 52.6 Bcf in the county in the same period.
According to Colorado Oil and Gas Conversation
73.83
Commission data, in 2009 the county accounted for 6% of
Arab Medium 74.82 73.39 1.81 73.01 71.59 drilling permits in the state, with 298 permits. As of June 7, the
72.08 number of drilling permits had dropped to 117, accounting for
Azeri Light 80.48 78.48 1.83 78.65 76.65 4% of all permits in the state, the COGCC data show.
78.01 La Plata County has some of the strictest land use policies
for oil and gas operators of any county in the state. In 1992, the
Basrah Light 76.53 74.64 1.67 74.86 72.97
state Supreme Court upheld the county’s right to impose restric-
74.88 tions on drillers beyond those imposed by the COGCC.
Brass River 79.78 N.A. 1.56 78.22 N.A. Josh Joswick, gas issues organizer for the San Juan Citizens
76.86 Alliance, said that BP’s return to the county was “not unex-
Brent 78.98 77.10 0.81 78.17 76.28 76.42 pected.” Joswick, who served three terms as a Democratic
county commissioner in La Plata County, also discounted BP’s
Ekofisk 78.97 76.86 0.65 78.32 76.21
contention that the county’s land use regulations were partially
77.73 responsible for BP declaring a temporary drilling halt. He said
Flotta 77.19 75.06 0.73 76.46 74.33 74.73 the company’s decisions were based solely on the economics of
Forties 77.49 74.98 0.83 76.66 74.15 76.42 drilling in the county.
Gullfaks 80.36 78.20 0.79 79.57 77.41 Pointing to a region-wide decline in gas drilling in the past
year, Joswick identified low gas prices as the prime culprit.
79.72
“Nobody’s drilling,” he said. “There’s no reason to produce gas
Iran Heavy 76.22 74.40 1.53 74.69 72.87 when it’s that cheap. The regulations reason is just a red her-
73.12 ring.”
Iran Light 77.66 75.45 1.51 76.15 73.94 He added that more than 3,000 oil and gas wells have been
74.37 drilled under the county’s land-use regulations. — Jim Magill

Kirkuk 76.57 N.A. 1.01 75.56 N.A. 74.55

—TEST USERQA1059
Kuwait 75.25 73.31 1.83 73.42 71.49 71.03
Murban 78.23 N.A. 1.70 76.53 N.A.
74.91 Czech consumers switch power suppliers
Saharan Blend 77.77 N.A. 0.42 77.35 N.A.
A total of 105,812 Czech customers switched Electricity sup-
76.61
plier in the first half of 2010, more than twice the amount for
Statfjord 79.31 77.39 0.53 78.78 76.86 the same period in 2009, data from Czech Electricity market
77.79 operator OTE showed Monday.
Urals 77.14 75.11 0.91 76.23 74.20 74.03 In the first six months of 2009, 47,512 customers changed
Zuetina 79.71 N.A. 0.42 79.09 N.A. Electricity supplier, according to OTE data.
The increase in switching is in part due to growing compe-
76.37
tition in the Electricity supply market with the market domi-
@_OPR_FEED_ROW:Effective January 4, 2009 nance of major players being increasingly threatened by new
Platts changed the basis used to calculate weekly and

7 Copyright © 2010 The McGraw-Hill Companies

 Inside Energy Extra
Feeder Crudes: Jul 16-22, 2010
monthly spot prices for Saudi Arabian crudes sold
into the US from WTI to Mars. an oil spill could be slipping from Senate’s legislative schedule, ana-
entrants since the liberalization of the Czech market in 2006.
A large proportion of switches took place in January, as they
have done every year, due to contractual agreements.
However, a spokesman from OTE told Platts that this began
to change in 2009, with supplier changes becoming more even-
ly distributed throughout the year than before.
The European Commission has no concerns that Energy
Commissioner Gunther Oettinger has outside interests and sec-
ondary sources of income that could conflict with his EC role,
a spokesman for EC Budget Commissioner Janusz Lewandowski
said at the EC’s daily press briefing in Brussels Tuesday.
Lewandowski’s spokesman, Patrizio Fiorilli, was comment-
ing on reports in German news magazine Stern that Oettinger,
who was head of the regional government in the German state
of Baden-Wuerttemberg before joining the EC, had made omis-
sions in his declarations of interests and had subsequently had
to revise his list of outside interests twice.
A German businessman and management consultant,
Andreas Frank, has lodged a case with the public prosecutor in
Stuttgart over Oettinger’s interests.
“The declaration of interests of Commissioner Oettinger has
been supplemented by additions that actually go beyond the
requirements of the code of conduct and, as far as the situa-
tion is [now], Oettinger is free from any suspicion of conflict of
interest. And I can add that in his declaration of interest he has
documented that no conflict of interest for his current office
arises from his previous voluntary activities,” Fiorilli said.
All EU commissioners have to list any positions or outside
interests they hold before taking office. In a revised declara-
tion of interests, which Oettinger signed on July 10, he lists
additional roles including in the Stuttgart regional forum, from
which had planned to stand down from before taking office,
and roles on regional cultural and sporting bodies not men-
tioned in earlier declarations.
Stefan Biehl, a spokesman for the Stuttgart public prosecu-
tion service, Staatsanwaltschaft Stuttgart, confirmed to Platts
that Frank had reported Oettinger to the prosecutor and was
pressing charges. Biehl said the Staatsanwaltschaft was currently
looking into the matter and whether there were grounds for
charges.
But EC spokesman Fiorilli said it was not unusual for politi-
cal figures to have such interests. “I would like to add that,
especially in federal countries where regions have a heavy role
to play, it is absolutely normal for political leaders to actually
be involved in sporting or cultural activities,” the EC budget
spokesman said.
—Staff
Inside Energy Extra (30-Aug-10) Inside Energy Extra
8 Copyright © 2010 The McGraw-Hill Companies
Oil spill bill losing momentum: Analysts
Legislation to eliminate a federal cap on a company’s liability for
lysts with FBR Capital Markets said Tuesday.
With the BP spill contained and no longer dominating media
reports, FBR said a spill-response package was “losing momentum”
as a prospect for legislative action this fall and perhaps for longer.
“Our contacts in Washington increasingly suggest that Congress
is unlikely to send a compromise oil spill bill to the president before
the November elections, and our sense is increasing that the Senate
may not even be able to pass its version of the bill before Congress
adjourns,” Arlington, Virginia-based FBR said.
The House has already passed a bill to eliminate a $75-million
cap on company obligations for economic and natural-resources
damages resulting from an oil spill, but the Senate must follow suit
before a final bill can be sent to President Barack Obama for his
signature. Obama is expected to sign such legislation if it is passed
by Congress.
Senate Democratic leaders attempted to move an oil-spill bill
over Republican opposition before leaving Washington for an August
recess, but could not muster the 60 votes needed for passage.
Senate Majority Leader Harry Reid and others had hoped to pass
such a measure this year, even if deadlock in the Senate made a
more comprehensive energy bill impossible.
“We continue to believe that the longer the debate drags on, the
more the most serious risk to independent producers dissipates,”
FBR said. “In our view, the capping of the well, and the likely even-
tual ‘kill’ will help alleviate pressure to act precipitously and give the
industry the time to marshal evidence and resources against prohibi-
tively restrictive legislation.”
New US nuclear development depends on federal support
such as loan guarantees, especially as natural gas prices remain
depressed, Standard & Poor’s said in a report Monday.
Federal loan guarantees, in which the government backs financ-
ing for most of a new nuclear project, “significantly” improve the eco-
nomics of reactor construction, S&P analysts Swami Venkataraman
and Aneesh Prabhu wrote.
A merchant nuclear plant costing $6,500/kW to build is likely
uncompetitive without a federal loan guarantee at prevailing forward
gas prices, S&P said.
New US nuclear development depends on federal support
such as loan guarantees, especially as natural gas prices remain
depressed, Standard & Poor’s said in a report Monday.
Federal loan guarantees, in which the government backs financ-
ing for most of a new nuclear project, “significantly” improve the eco-
nomics of reactor construction, S&P analysts Swami Venkataraman
and Aneesh Prabhu wrote.
“Low natural gas prices pose a conundrum for merchant nuclear
developers,” the S&P analysts wrote. The long-term power purchase
agreements merchant nuclear operators need may be difficult to
obtain with natural gas prices in the $5/MMBtu range, the report
said.
For regulated utilities, reactor construction may be easier,
because they can make the case to regulators that nuclear costs are
more stable than gas-fired units and argue that emissions regula-
tions that would favor nuclear energy may be forthcoming, S&P said.
Under a “best” case, which includes government subsidies and
carbon costs of $20/ton, reactors can be competitive with natural
gas at prices as low as $3.90/MMBtu, the report said.
S&P, like Platts, is part of The McGraw-Hill Companies.
—IEE
 Inside Energy Extra
BLM struggles to track lease protests
Shares of metallurgical coal producers moved sharply higher
Hol Not for IEE
In a letter released last week, Chairman Jon
Wellinghoff defended his decision to order field hear-
ings
for a liquefied natural gas terminal and pipeline
proposal in Northwest Oregon and chided the com-
pany
for raising objections to the unusual procedure.
”I believe that on a one-time basis this was a
useful exercise,” Wellinghoff wrote Senator Ron
Wyden, Democrat-Oregon. “Not only do we have a
better appreciation of the frustrations and concerns
which people have about projects of this kind, but we
are taking affirmative steps to make the whole proce-
dure
more interested-party friendly.”
In April, an administrative law judge spent three
days in the Portland area taking testimony from resi-
dents
who accused Oregon LNG of misleading them,
trespassing on their property and bringing armed
guards to community meetings. ALJ Bobbie McCa-
rtney
concluded the probe in June by issuing an 80-page
report that cleared the company of all misconduct
claims (GD 6/8).
Lawyers for Oregon LNG called the meetings
unprecedented and said FERC didn’t have authority
to create the process. The company has applied to
build a 1.5 Bcf/d terminal on the Columbia River and
a 121-mile pipeline to Molalla.
“I should tell you that the informal fact-finding
process which I requested generated some negative
reaction,” Wellinghoff wrote Wyden. The company
9 Copyright © 2010 The McGraw-Hill Companies
on the open of trade Tuesday, supported by expectations that
international benchmark prices for fourth quarter 2010 top-
quality low-vol metallurgical coal settled at $209/metric ton
FOB port.
Met coal exposed equities surged on the open of trade in
New York. At the close of trading, Walter Energy was trading
higher by 5.15% to $72.03/share, Peabody Energy by 2.08% to
$42.78/share, Alpha Natural Resources by 5.78% to $37.14/share
and Patriot Coal by 2.29% to $10.28/share.
The met coal pricing follows earlier speculation that Q4
2010 low-vol PCI coal was priced out of Queensland, Australia
at $147/mt FOB.
Reports of settlement prices for top-quality high-vol met
coal came in at $190/mt FOB port.
Analysts at Brean Murray, Carret & Co. led by Jeremy
Sussman said Tuesday that “while this [low-vol price] is...a slight
decrease from our expectations of $220/mt, it was nonetheless a
bit better than buy-side sentiment.”
Brean Murray reminded investors that BHP Billion settled
with Japanese steel makers in Q3 2010 a met coal pricing agree-
ment at $225/mt.
Analysts at Brean Murray “remain bullish on Walter and
Peabody at current levels,” with Walter having significant
US based low-vol operations and Peabody having significant
Australian based exposure.
Analysts at Standard & Poor’s Equity Research selected
Peabody Energy as focus stock of the week on Tuesday. S&P cur-
rently has a strong buy rating on Peabody with a price target of
$43/share.
Positive catalysts for Peabody include “the significant reduc-
tion in thermal coal inventory levels at utilities” in addition to
rising demand for metallurgical coal products from steel produc-
ers from lows seen in late 2009.
S&P’s Financial Services, LLC, like Platts is owned by The
McGraw-Hill Companies, Inc.
Patriot Coal and Alpha Natural Resources were selected as
top picks to play the low-vol met coal pricing market, with
Brean Murray saying we “would be buyers today on the back of
this news.”
Regarding low-vol PCI pricing, analysts at RBC Capital
Markets viewed the reported benchmark settlements as “neutral
to slightly positive.” RBC said in an investor release “although
the suggested price is down 18.3% from Q3 2010, the settle-
ment does remove uncertainty, the number is in line with our
expectations.”
Analysts at RBC commented that an 18.3% decline to $147/
mt “is better than the sequential decline reported the other
week for Russian PCI material
Faulty computer software and inconsistent policies are hurt-
ing the Interior Department’s efforts to gauge how protests filed
 Inside Energy Extra

“vigorously objected, claiming among other things by environmental groups and other advocacy organizations
that no authority existed to conduct the proposed are impacting oil and natural gas lease sales on public lands,
process, according to a report released Monday by the Government
that its conduct would violate the commission’s Accountability Office.
GAO, the investigative arm of Congress, concluded that
ex-parte rule and claiming the company likely would
efforts made by Interior’s Bureau of Land Management to track
have no opportunity to review the report.” protests from green groups, state and local governments and
Wellinghoff said the company had access to the other parties have largely failed. When lease parcels have been
“town hall meetings” and the process as a whole. withdrawn from sales, incomplete information makes it nearly
“On the other [Oregon LNG] objections, the com- impossible to tell what role protests played in the decision, GAO
found.
mission’s
“Although BLM has taken steps to collect agency-wide
lawyers concluded they were more sound protest data, when we tried to evaluate the effects of protests,
and fury than substance,” he said. “Nonetheless, a we were hindered by the incompleteness, inconsistency and
more cooperative approach by [Oregon LNG] would ambiguity of these data,” the report said. “Without more robust
have been helpful.” protest information, BLM, Congress and the public lack a full
picture of protest activity and how protests affect leasing deci-
Wellinghoff also passed along to Wyden that
sions.”
“some of your constituents were not completely The GAO report was a follow-up to a similar 2004 study that
enamored of the process.” — Meghan Gordon found that data-gathering on protests was hampered because
state offices were using different, incompatible systems to gather
and track protests.
In response, BLM added a software module to its lease
record-keeping system that was supposed to better capture infor-
Caribbean Product Postings (cts/Gal) mation relating to protests.
But in examining data collected in Colorado, New Mexico,
Exxon Shell
Wyoming and Utah from 2007-2010, GAO found that staff were
Curacao West Petrotrin not always entering the required information, were not updat-
Chevron ing the status of protests, or were generalizing reasons for pro-
Effective Date 07/23 07/16 07/23 tests to the point that the information was useless.
Avgas 100/130 325.00 322.00 Wilma Lewis, Interior’s assistant secretary for lands and min-
erals management, said BLM will determine by the end of 2011
375.00 W
if the faulty software can be fixed, modified or replaced.
98 Oct. Unl 219.00 222.00 Shunda’s mines have an overall existing annual production
of 750,000 mt.
95 Oct. Unl 216.50 217.00 224.00 In a statement, L&L Energy, headquartered in Seattle,
W Washington, said that under the terms of a memorandum of
understanding it had signed with Shunda, it intends to take a
92 Oct Unl 222.50
minimum 51% stake in the miner. L&L is currently performing
87 Oct. Unl 210.00 210.00 due diligence regarding the purchase.
W L&L said it also plans to invest an undisclosed amount prin-
83 Oct Unl 218.50 cipally in the construction of a 1 million mt capacity coking
Dpk/Jet 216.50 214.00 216.00 facility scheduled to be operational in 16 months and for which
it has recently received licensing approval from the Chinese
W
government.
45 Cet 0.5%S Gasoil 209.00 210.00 Shunda also plans to utilize joint venture funding from L&L
210.00 W to expand the annual production capacity at its coal washing
LS Gasoil 218.00 facility from 900,000 mt to 1.2 million mt.
ULS Gasoil 221.00 “We believe with the Shunda’s existing mining, coal wash-
ing operations, and the anticipated new coking faculties, it
Heavy Fuel Oil ($/BBL) 73.00 76.00 75.00
will have a dramatic effect on our net income and earnings per
W share,” L&L president and CEO, Dickson Lee, said in a state-
W=withdrawn effective July 1, 2010 ment.
L&L currently operates three coal mines, two coal washing

10 Copyright © 2010 The McGraw-Hill Companies

 Inside Energy Extra
Chan Meth for IEE
Iroquois Gas Transmission System began a binding
open season Monday for its Wright Transfer
Compressor project that would add up to 15,400 HP
of transfer compression at its interconnection with
Tennessee Gas Pipeline’s 200 Line in Wright, New
York.
As supplies on Tennessee have increased from
Marcellus Shale and the Atlantic LNG terminal,
Iroquois said it has received significant interest
from shippers in making its Wright interconnect
bidirectional.
Scott Rupff, Iroquois’s vice president of
marketing, development and commercial operations,
said the WTC project “would enable us to physically
receive gas from Tennessee, further diversifying sup-
ply
options for our customers, enhancing system reliabil-
ity
and reducing supply cost.”
The project would compress up to 375 MDt/d
from Tennessee into Iroquois at Iroquois’ rate zone
boundary, enabling WTC shippers to supply both
Zone
1 and Zone 2 markets on Iroquois, the pipeline said.
Iroquois plans to begin service in the summer of
2012.
Parties interested in firm transportation capacity
on the WTC project can find information on the open
season at www.iroquois.com. Iroqouis will accept
bids
through October 15. — Jeff Barber
11
facilities, a coking coal facility, and a coal consolidation and
wholesale business in Yunnan and Guizhou Provinces.
L&L Energy became a publicly traded company in the US in
August 2008 and trades under the symbol “LLEN”.
Lisa Hough, BP America’s Rockies team leader, said Thursday
that the company would resume drilling in the county, which
lies in the northern part of the prolific gas-producing San Juan
Basin, in the third quarter. The company said in January it
would cease drilling for at least six months in the county, where
BP has long been the number one gas producer.
At the time, BP said it planned to lay down the single rig it
then had operating in the basin and concentrate on spending
its capital in producing regions where drilling was more eco-
nomical, such as Texas.
“We’re planning to bring back the one rig this fall and
resuming drilling as we talked about last January,” Hough said.
She added that BP would “go back on track” with its $2.4
billion long-term plan, which calls for drilling an additional
1,000 gas wells in the region over the next 13 years.
Hough said the company’s decision to resume onshore drill-
ing operations in southern Colorado was unrelated to its prob-
lems in the offshore Gulf of Mexico, where a well blowout at
BP’s Macondo project continues to pour oil into the Gulf.
Hough said the company’s decision in January to release the
drilling rig it had operating in the county was based on a com-
bination of factors. She cited the cumulative impact of federal,
state, county and Ute Indian tribe drilling rules on the com-
pany’s drilling economics. BP decided “to take a pause to work
with the agencies to meet their requirements,” she said.
In addition, “because of the economic downturn, Rockies
natural gas was at a disadvantage,” to the price of gas from
other producing basins.
Hough also noted that at the time it stopped drilling that
one well BP had drilled but not completed about 55 wells in
the county and “we wanted to focus on bringing those wells on
line.” Now, “the economics have improved and we’re complet-
ing those wells,” she added.
“We’re invested in Colorado for the long term,” Hough said.
She added that the company recently announced an investment
in a wind farm in the state and that Colorado “is one of our
top-tier states for solar.”
According to the La Plata County Energy Council, BP pro-
duced 212.4 Bcf from La Plata County wells in 2009, far outpac-
ing the second-place producer, Samson Resources, which pro-
duced 52.6 Bcf in the county in the same period.
According to Colorado Oil and Gas Conversation
Commission data, in 2009 the county accounted for 6% of
drilling permits in the state, with 298 permits. As of June 7, the
number of drilling permits had dropped to 117, accounting for
4% of all permits in the state, the COGCC data show.
La Plata County has some of the strictest land use policies
for oil and gas operators of any county in the state. In 1992, the
state Supreme Court upheld the county’s right to impose restric-
tions on drillers beyond those imposed by the COGCC.
Copyright © 2010 The McGraw-Hill Companies
 Inside Energy Extra
German antitrust office gets transparency unit
Germany’s Federal Cartel Office, the Bundeskartellamt, has wel-
comed government plans to create a market transparency unit that
oversees the wholesale market for power and Natural Gas, a spokes-
woman for the antitrust office said Tuesday in an interview confirming
a report in the German news magazine Der Spiegel.
“The plans by the federal government to establish a market
transparency unit within the antitrust office (Bundeskartellamt) are at
an early stage,” Bundeskartellamt said in a statement.
The spokeswoman said the government is currently working out
the brief and scope of such a unit, which was already mentioned in
the coalition treaty following the federal election last September.
“Our task is to protect competitive markets from restrictions, the
Federal Cartel Office is therefore the proper authority for the planned
new oversight of competitive markets,” Bundeskartellamt Vice
President Peter Klocker said in the statement.
The market transparency unit’s main task would be to investigate
violations and infringements against competition and financial market
laws.
“Such a unit would significantly enhance our existing instruments
in the fight against abuse of market dominance,” the statement said.
“It would also contribute in advance to the deterrence of market
abuse,” it added.
Big utilities have been accused in the past to abuse their mar-
ket dominance by adjusting prices in the wholesale market, mainly
through the energy exchanges, the Der Spiegel article said.
Germany’s chancellor Angela Merkel on Thursday will visit the
trading floor Leipzig-based European Energy Exchange-Germany’s
leading energy exchange-as part of an “energy journey” to inform her-
self about Germany’s power market ahead of the planned new energy
strategy the government will present in September.
The average purchase price of energy on the Italian power
Exchange (IPEX) in the week to Sunday fell Eur8.16/MWh or 11.3%
from the previous week, reaching Eur63.83/MWh ($82.35/MWh)
IPEX figures also showed there was a drop of 14.3% in the
Electricity volumes traded on the IPEX, which amounted to 2.9 million
MWh.
Exchange-based trading dropped 3 percentage points to 58%.
Over-the-counter trading accounted for the remaining 42%.
The average selling price ranged from Eur56.91/MWh in the
North and Central North Italy to Eur90.99/MWh in Sicily.
—Staff
Central day-ahead markets
($/MWh)
60.0
Midwest North Central
South Central Texas
52.5
45.0
37.5
30.0
May-19 May-24 May-27 Jun-01 Jun-04 Jun-9
Note: Based on averages from each region
Price Notice1 for IEE
In the Appalachian market, Dominion Transmission
tacked on
12
Josh Joswick, gas issues organizer for the San Juan Citizens
Alliance, said that BP’s return to the county was “not unex-
pected.” Joswick, who served three terms as a Democratic
county commissioner in La Plata County, also discounted BP’s
contention that the county’s land use regulations were partially
responsible for BP declaring a temporary drilling halt. He said
the company’s decisions were based solely on the economics of
drilling in the county.
Pointing to a region-wide decline in gas drilling in the past
year, Joswick identified low gas prices as the prime culprit.
“Nobody’s drilling,” he said. “There’s no reason to produce gas
when it’s that cheap. The regulations reason is just a red her-
ring.”
He added that more than 3,000 oil and gas wells have been
drilled under the county’s land-use regulations. — Jim Magill
The Obama administration proposed Monday to replace
the decades-old fuel-efficiency labeling system for new cars and
trucks with one of two new approaches that would also rank
vehicles according to their greenhouse-gas emissions.
One option under the initiative, which his being spear-
headed by the Environmental Protection Agency and the
Transportation Department, would assign vehicles letter grades
ranging from A+ to D. The grades would be based on vehicles’
fuel efficiency - either in terms of miles per gallon or miles
per charge, in the case of electric vehicles - as well as tailpipe
carbon-dioxide emissions that are blamed for global climate
change.
A second proposed option would omit the letter grades and
simply rank vehicles on sliding scales for fuel efficiency, CO2
emissions and other air pollutants. Both options would phase
out the conventional miles-per-gallon window stickers that
automakers have put in the windows of new cars and trucks for
decades.
“The old, petroleum-centric labels, simply aren’t good
enough anymore,” David Strickland, the administrator of DOT’s
National Highway and Traffic Safety Administration, told
reporters on a conference call. DOT and EPA will take public
comments on the two proposed labeling options for 60 days
before deciding what do, Strickland said. The new system would
take effect in 2012, he added.
Under the letter-grade option, electric vehicles would receive
an “A+,” and high-performance cars that use a lot of gasoline
would receive a “D,” officials said. That approach would also
lump cars and trucks into a metric that balances CO2 emissions
with gas mileage and average annual fuel costs. Electric cars and
plug-in hybrids would be graded on a ratio that assumes 33.7
Copyright © 2010 The McGraw-Hill Companies
 Inside Energy Extra

more than 10 cents as volumes neared 500,000 Mcf,

up nearly 100,000 Inside Energy Extra (30-Aug-10) Inside Energy Extra
Mcf from Friday. Liquidity was up at every point in BLM struggles to track lease protests
the region, with Shares of metallurgical coal producers moved sharply higher
Columbia Gas Transmission-Appalachia seeing the on the open of trade Tuesday, supported by expectations that
international benchmark prices for fourth quarter 2010 top-
largest boost, as volumes
quality low-vol metallurgical coal settled at $209/metric ton
shot up 150,000 from Friday to more than 900,000 FOB port.
Mcf on ICE. Met coal exposed equities surged on the open of trade in
Along the Gulf Coast, Henry Hub ticked up just a New York. At the close of trading, Walter Energy was trading
few pennies, weakening higher by 5.15% to $72.03/share, Peabody Energy by 2.08% to
$42.78/share, Alpha Natural Resources by 5.78% to $37.14/share
relative to the rest of the region as points eastward
and Patriot Coal by 2.29% to $10.28/share.
made larger The met coal pricing follows earlier speculation that Q4
gains with in response to the Northeast heat wave. 2010 low-vol PCI coal was priced out of Queensland, Australia
Transco zone 4 tacked on about a nickel as nearly at $147/mt FOB.
425,000 Mcf Reports of settlement prices for top-quality high-vol met
coal came in at $190/mt FOB port.
changed hands on ICE, up about 150,000 Mcf from
Analysts at Brean Murray, Carret & Co. led by Jeremy
Friday. The gain Sussman said Tuesday that “while this [low-vol price] is...a slight
pushed Transco 4 back to a more typical 3-cent pre- decrease from our expectations of $220/mt, it was nonetheless a
mium to Henry Hub bit better than buy-side sentiment.”
after holding at an uncharacteristic discount to the Brean Murray reminded investors that BHP Billion settled
with Japanese steel makers in Q3 2010 a met coal pricing agree-
Louisiana point
ment at $225/mt.
throughout last week. Southern Natural Gas of Loui- Analysts at Brean Murray “remain bullish on Walter and
siana and Florida Gas Peabody at current levels,” with Walter having significant
Transmission zone 3 also flipped to a premium after US based low-vol operations and Peabody having significant
trading at a discount Australian based exposure.
to Henry Hub last week.
That widespread shift in regional spreads paired with
cooler weather
in Texas undercut Houston Ship Channel and the
Katy Hub as both shed
a penny. Houston Ship Channel saw volumes drop by
nearly half to less
than 300,000 Mcf on ICE.
In the Southwest, prices were headed in the other
direction on

Volume / Issue / January 7, 2011

Officers of the Corporation: Harold McGraw III, Chairman, President and Chief Executive Officer;
Kenneth Vittor, Executive Vice President and General Counsel; Robert J. Bahash, Executive
Vice President and Chief Financial Officer; John Weisenseel, Senior Vice President, Treasury
Jean Chemnick, Derek Sands, Operations.
Editorial director, US energy policy Herman Wang, Tom LoBianco
Platts makes no warranties, express or implied, as to the accuracy, adequacy or completeness
Bill Loveless Address news tips to Bill_loveless@platts. of the data and other information set forth
Managing editor Vice President, Editorial To reach Platts
Brian Hansen Dan Tanz E-mail:support@platts.com
Platts President North America
Associate editors Larry Neal Tel:800-PLATTS-8 (toll-free)+1-212-904-3070 (direct)

13 Copyright © 2010 The McGraw-Hill Companies