Merrill Lynch & Co., the Wall Street firm targeted by environmental activists for financing coal-fired power plants, said it invested $35 million in a company that uses steam from underground reservoirs to generate electricity.
Closely held Vulcan Power Co., based in Bend, Oregon, is raising $150 million to develop geothermal plants that may produce enough ``green power'' to satisfy the needs of 2 million people, New York-based Merrill said in a statement today. Merrill's is the first investment.
Merrill Chief Executive Officer Stanley O'Neal is putting more of the firm's capital into private companies, seeking to replicate the returns of larger rival Goldman Sachs Group Inc. Last year, Goldman recorded a $700 million gain on the sale of a single power plant in New Jersey.
``They were behind the ball relative to their larger peers,'' said Erin Archer, an analyst with the mutual-fund arm of Thrivent Financial for Lutherans in Minneapolis, which owns about 500,000 Merrill shares. ``Maybe more bets on alternative energy like this one will be a back-door path for them.''
Merrill, the world's third-largest securities firm by market value, acquired the Vulcan stake through Merrill Lynch Commodity Partners, formed this year to make principal investments in the energy industry. The unit, headed by David Owens and Rob Jones in Houston, is a part of Merrill's commodities business.
Vulcan was founded in 1991 by Chairman and CEO Steve Munson. The company owns leases and applications on 136,000 acres of steam-producing properties with the potential to generate as much as 2,000 megawatts of electricity, according to Merrill's statement.
Underground Reservoirs
Such plants, called geothermal because they use steam drawn from hot underground reservoirs to drive generators, currently supply about 2,800 megawatts in the U.S., according to Vulcan's Web site. Advocates say it damages the environment less than gas, oil, coal, hydroelectric or wind-driven power plants.
In January, global-warming activists staged a protest outside Merrill's headquarters over a plan to help TXU Corp. finance $10 billion of coal-fueled power plants in Texas. The activists, organized by the Rainforest Action Network, toted signs accusing the firm of ``banking on climate destruction.''
Vulcan's properties are in California, Nevada, Oregon, Arizona and Washington, according to the Web site. Prior leaseholders invested $50 million on geological studies, drilling and other development work, and Vulcan has spent an additional $20 million.
Merrill's investment will be used for ``next-stage steam exploration drilling on advanced-stage properties,'' Vulcan said on the Web site. The company plans to start up plants in Nevada and Oregon within three years of meeting its $150 million fundraising target.
Closely held Vulcan Power Co., based in Bend, Oregon, is raising $150 million to develop geothermal plants that may produce enough ``green power'' to satisfy the needs of 2 million people, New York-based Merrill said in a statement today. Merrill's is the first investment.
Merrill Chief Executive Officer Stanley O'Neal is putting more of the firm's capital into private companies, seeking to replicate the returns of larger rival Goldman Sachs Group Inc. Last year, Goldman recorded a $700 million gain on the sale of a single power plant in New Jersey.``They were behind the ball relative to their larger peers,'' said Erin Archer, an analyst with the mutual-fund arm of Thrivent Financial for Lutherans in Minneapolis, which owns about 500,000 Merrill shares. ``Maybe more bets on alternative energy like this one will be a back-door path for them.''
Merrill, the world's third-largest securities firm by market value, acquired the Vulcan stake through Merrill Lynch Commodity Partners, formed this year to make principal investments in the energy industry. The unit, headed by David Owens and Rob Jones in Houston, is a part of Merrill's commodities business.
Vulcan was founded in 1991 by Chairman and CEO Steve Munson. The company owns leases and applications on 136,000 acres of steam-producing properties with the potential to generate as much as 2,000 megawatts of electricity, according to Merrill's statement.
Underground Reservoirs
Such plants, called geothermal because they use steam drawn from hot underground reservoirs to drive generators, currently supply about 2,800 megawatts in the U.S., according to Vulcan's Web site. Advocates say it damages the environment less than gas, oil, coal, hydroelectric or wind-driven power plants.
In January, global-warming activists staged a protest outside Merrill's headquarters over a plan to help TXU Corp. finance $10 billion of coal-fueled power plants in Texas. The activists, organized by the Rainforest Action Network, toted signs accusing the firm of ``banking on climate destruction.''
Vulcan's properties are in California, Nevada, Oregon, Arizona and Washington, according to the Web site. Prior leaseholders invested $50 million on geological studies, drilling and other development work, and Vulcan has spent an additional $20 million.
Merrill's investment will be used for ``next-stage steam exploration drilling on advanced-stage properties,'' Vulcan said on the Web site. The company plans to start up plants in Nevada and Oregon within three years of meeting its $150 million fundraising target.
BajaeNergyBLOG
OiL,Baja
eNergy
BLOG
