Blue Source and First Reserve Commit to Funding CO2 Emission-Reduction Infrastructure Projects, Leveraging Growth and Competencies from the Existing Blue Source GHG Offset Business - Industry Leader Russell Martin Joins Blue Source in Its Next Phase of Growth As Firm Builds Largest Carbon Offset Credit Portfolio
Salt Lake City, Utah; October 18, 2006 – Blue Source, the leading US aggregator of greenhouse gas (GHG) emission reduction offsets and First Reserve Corporation (“First Reserve”), the leading private equity investor in the energy industry, today confirmed their commitment to fund the development of infrastructure projects that help reduce ghg emissions in the US.
The commitment, backed by equity from First Reserve Fund X, LP, together with expected project debt, will target investment opportunities of up to $500m in value. This is the first investment commitment in the US that will focus on projects that develop emission reductions in the energy, transportation and manufacturing sectors.
Potential investments include projects that capture and sequester carbon dioxide emissions from the flue stack in power generation, advanced energy conservation, methane capture from coal mines and agriculture and the distribution of natural gas.
The commitment will be funded by First Reserve, a private-equity firm that specializes in the energy industry and that recently acquired a 50% interest in Blue Source.
Industry Leader Martin to Help Drive New Emissions Effort
To lead this infrastructure effort Blue Source today also announced that it has hired Russell Martin as Executive Vice President. Mr. Martin joins Blue Source from Kinder Morgan, where he was a vice president of business development of a similar CO2 infrastructure business unit. Before that, Mr. Martin worked at Shell Oil Company as a manager of the company’s CO2 marketing team and helped form Shell CO2, which produced, marketed and transported CO2 for enhanced oil recovery projects in the western US.
Blue Source will be actively seeking opportunities to invest in developments or acquisitions of infrastructure that physically reduce greenhouse gases and effectively transport the ghgs to a use other than venting into the atmosphere. As more companies recognize the economic advantages of reducing their carbon footprint there will be a symbiotic business relationship between the offsets Blue Source creates and the physical removal of CO2.
“Blue Source is committed to creating environmental benefits on a large scale,” said Bill Townsend, CEO and Co-Founder of Blue Source. “The launch of this investment commitment and the expertise of Russell Martin will help Blue Source achieve its next level of growth in identifying new distribution channels and carbon capture projects that create ghg offsets.”
“First Reserve has allocated this capital because of the sound underlying economics of the investment opportunities,” said Glenn Payne, Vice President of First Reserve Corp. “The expected need for additional infrastructure is in part driven by growth in the power sector where new coal plants will create carbon capture and sequestration investment opportunities uniquely suited for the experience of Blue Source and is consistent with First Reserve’s investment thesis.”
As an industry leader in identifying and aggregating ghg emission reductions, Blue Source’s offset portfolio allows counter-parties such as energy products companies, electric utilities, agriculture companies, cement manufacturers and others with significant carbon footprints to meet regulatory obligations and voluntary commitments to reduce CO2e emissions under the various protocols in place and under development within the US.
About Blue Source, LLC
Blue Source, LLC was founded in 2001 to identify, create, acquire, aggregate and market ghg emission reduction benefits created from various sources and types of suppliers, and then commingle such benefits in order to enhance value for their clients. Today Blue Source has aggregated and secured under long-term sourcing agreements approximately 300 million tonnes of ghg emission reduction offsets through the year 2019. After aggregation, Blue Source sells ghg offsets to retail and wholesale buyers and to financial markets leading in the development of new products that manage emissions risks and capture early mover advantages.
About First Reserve Corporation
First Reserve Corporation is the oldest and largest private equity firm specializing in the energy industry. Founded in 1983, First Reserve was the first private equity investment firm to actively pursue building a broadly diversified global investment portfolio of companies involved in the various sectors of the energy industry. Since 1992, First Reserve has raised over $12.7 billion for its buyout-focused funds. Throughout its 23-year history, the strong franchise that the firm has developed by investing exclusively in companies involved in the energy industry has served as a competitive advantage for First Reserve.
