TransAlta Says Nation Should Join in Carbon Trading

CALGARY - - Canada's biggest carbon-dioxide emitter, said the country should join international emissions-trading programs to reduce the costs of cutting pollutants blamed for global warming.

``The broader the geography of any carbon-trading program, the better it would be for the industry to give it more optionality,'' Chief Executive Officer Steve Snyder said today in an interview in Calgary. ``TransAlta would like to see, if there is a trading system, to make it as broad-based internationally as we could.''

TransAlta, the largest publicly traded power producer in Canada, derives about 62 percent of its net generation capacity from coal-fueled plants, according to the company's annual report. Canada last year mandated a 20 percent reduction in emissions by 2020 and this year said it wants a market set up to trade carbon credits to help companies meet that goal.

``We are not resisting trying to find a way to reduce and hopefully eliminate all types of emissions,'' said Snyder, 58. ``We are looking for some recognition of the enormity that it imposes and the costs, and some way to do that such that we don't impose a big burden quickly on either consumers or shareholders.''

Alberta, Canada's leading carbon-emitting province partly because of rising production from its oil-sands region, isn't in favor of national or regional carbon-trading programs, Premier Ed Stelmach has said. The province last year passed a law requiring companies to pay C$15 ($14.75) per metric ton of carbon if they can't meet targets to reduce emissions.

Alberta's Stand ``We're not a province that's going to be either buying credits from someplace else or looking at any inter-regional transfer of wealth,'' Stelmach said after a March 10 speech in Edmonton.

New rules from Alberta and Canada's federal government that focus on reducing the intensity of carbon produced on a per-unit basis make sense until technology, including carbon capture and storage, is commercially proven in the next 10 to 15 years, Snyder said.

Tighter or uncertain environmental standards may drive up power costs as electricity producers shy away from building conventional, coal-fueled plants that could be made too expensive to run under new rules, Snyder said. Electricity prices in Canada may rise to C$100 per megawatt hour in the next 15 years from about C$50 to C$70 currently, he said.

Acquisition Prospects The collapse of the U.S. subprime mortgage market in the past year tightened credit markets and pared prices for power assets, Snyder said. TransAlta continues to evaluate investment opportunities in western Canada and the U.S.

``A year ago, if you were trying to sell an asset, the only thing that counted was how much could you get for it,'' he said. ``Today, the question is whether you can close the deal and, by the way, is it good value or not? It's a big shift.''

The company said on Feb. 20 it agreed to sell two Mexican power plants to InterGen Global Ventures BV for $303.5 million. The transaction, subject to regulatory approval, is scheduled to close later this year.


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