POINT OF ROCKS, Wyoming—On a mid-June afternoon in the dusty plains of southwest Wyoming a team of oil drillers got the final thumbs-up to begin boring deep into the earth. As of yesterday they were more than 90 percent of the way to reaching their goal of drilling a test well 2.5 miles below the surface.

But this is not any old well.

The crew from Baker Hughes, the Houston, Texas-based oil services company, is not even searching for oil but something far more elusive: a leak-proof place to permanently store carbon dioxide emissions from coal-burning power plants to curtail global warming pollution.

The effort is part of the Wyoming Carbon Underground Storage Project, or WY-CUSP. Fourteen years in the making, the project is being closely watched to see if it can overcome the financial and technical challenges that have plagued other carbon capture and and sequestration (CCS) plans in the United States.

Up until last month, American Electric Power's Mountaineer CCS plant in New Haven, W.Va. had grabbed the lion's share of industry attention. It was the nation's most advanced attempt at capturing CO2 from the 31-year-old coal plant's exhaust gases and burying it in the deep-rock sandstone there. But on July 13, citing an uncertain U.S. climate policy and the continued economic downturn, AEP shelved the project.

Ron Surdam, director of the University of Wyoming's Carbon Management Institute (CMI), which manages WY-CUSP, believes his team's project is worthy of a different fate than AEP's pilot. "We think we've got a world class place to store CO2," he told SolveClimate News.

But while the focus of attention may be shifting to WY-CUSP, it, too, faces enormous hurdles, and commercialization of CCS — touted by many as a critical national energy policy — remains a distant and uncertain prospect. Even if WY-CUSP succeeds in identifying a massive underground storage location for CO2, that is only half the battle — and perhaps the easier one to win for this technology.

Markets in water rights are likely to evolve as a rising population leads to shortages and climate change causes drought and famine.

 But they will be based on regional and ethical trading practices and will differ from the bulk of commodity trade.

 Detractors argue that trading water is unethical or even a breach of human rights, but already water rights are bought and sold in arid areas of the globe from Oman to Australia.

 "We at Blackhawk strongly believe that water is in fact turning into the new gold for this decade and beyond," said Ziad Abdelnour, president and chief executive of U.S.-based private equity firm Blackhawk Partners.

 "No wonder smart money is aggressively moving in this direction."

 For now, however, he cited buying shares in water treatment companies or utilities, rather than water trade per se.

 Some of the big investment banks dominant in commodities are among those who have voiced skepticism water could ever attract direct trade.

A U.N. report has criticized Shell and the Nigerian government for contributing to 50 years of pollution in a region of the Niger Delta which it says needs the world's largest ever oil cleanup, costing an initial $1 billion and taking up to 30 years.

The United Nations Environment Program (UNEP) analyzed the damage oil pollution has done in Ogoniland, a region in the oil-rich labyrinthine creeks, swamps and waterways of the Niger Delta, the heartland of Africa's largest oil and gas industry.

Royal Dutch Shell and the Nigerian state-oil firm own most of the oil infrastructure in Ogoniland, although the Anglo-Dutch giant was forced out of operating in the region by communities in 1993 who said it caused pollution that destroyed their fishing environment.

Shell stopped pumping oil from Ogoniland after a campaign, led by writer and activist Ken Saro-Wiwa, who was later hanged by the Nigerian military government, provoking international outrage.

"The environmental restoration of Ogoniland could prove to be the world's most wide-ranging and long term oil cleanup exercise ever undertaken," a United Nations Environment Program (UNEP) report released on Thursday said.

"Control and maintenance of oilfield infrastructure in Ogoniland has been and remains inadequate: the Shell Petroleum Development Company (SPDC) own procedures have not been applied, creating public health and safety issues."

The UNEP report said 10 out of the 15 investigated sites which SPDC said they had completely remediated still had pollution exceeding the SPDC and government remediation values.

Several major automakers on Friday embraced the Obama administration's proposal to push the industry further away from once-dominant gas guzzlers to more lean and efficient vehicles.

The proposal, which is the result of months of negotiations between the Obama administration and auto makers, would require the companies to reach an average fuel efficiency across their U.S. fleets of 54.5 miles per gallon by 2025.

"This agreement on fuel standards represents the single most important step we've ever taken as a nation to reduce our dependence on foreign oil," Obama said at an event announcing the new standards.

Flanked by top auto maker executives, Obama said the new rules would lower the country's oil use by 2.2 million barrels a day over the next 15 years.

The rules will cut more than 6 billion tons of carbon emissions for the duration of the program.

"Can we do it? Well, we put a man on the moon; of course we can do this," said Fadel Gheit, senior analyst covering the oil and gas sector at Oppenheimer. "If the will is there, we will be successful and this is the best way to achieve this by pushing and cajoling."

Flaring of natural gas from wells is on the upswing in Texas and North Dakota as oil and gas producers rush to develop new shale plays, and critics are not happy about it.

Flaring, once a common practice, involves burning off natural gas that cannot be captured and sold in order to produce more valuable oil. It is frowned upon because it causes air pollution, boosts global warming and wastes natural resources.

Because the market currently prices oil much higher than natural gas, companies including Chesapeake Energy and EOG Resources have sped up the search for crude in basins like the Eagle Ford in Texas and the Bakken in North Dakota.

Gas comes up with the oil, and although pipeline companies are rushing to build the capacity needed to transport the gas to market, their efforts have not caught up with the spike in wells drilled. Unlike gas, oil can be trucked or railed to market.

"The gas is worth very little in comparison to oil," said Bruce Hicks, assistant director of North Dakota's state's oil and gas division. "This is an oil-driven play."

It's an unlikely dream for Japan's beleaguered government but one that the worst nuclear accident in 25 years has made more alluring: an urban landscape topped with gleaming solar panels powering a nuclear-free economy.

Solar is one of the power sources the government of the world's third-largest economy is focusing on after the March earthquake and tsunami shattered Tokyo's nuclear-dependent energy policy.

Energy captured directly from the sun costs more than from imported fossil fuels, and would add to the already daunting reconstruction bill the country faces.

To unleash a potential hundreds of billions of dollars of private investment in solar Japan needs a coherent national energy policy to include a generous feed-in tariff — a subsidy paid by end-users.

"Energy has become the biggest theme after the earthquake; the most important investment opportunity created after the crisis," said Sparx Group Co. president and chief executive Shuhei Abe at the Reuters Rebuilding Japan Summit.

"But the government must take action. It must quickly implement a feed-in tariff," said Abe, who manages $300 million worth of assets in the cleantech sector.

Prime Minister Naoto Kan, facing criticism over his handling of the crisis and struggling for his political survival, in May announced a plan that would put solar panels on some 10 million roofs by 2030. The announcement cheered investors, but the government has so far failed to follow through.

(Reuters) - A halving of a global nuclear power expansion after Japan's Fukushima disaster would increase global growth in carbon dioxide emissions by 30 percent through 2035, the IEA said on Wednesday.

The International Energy Agency warned last month that a political goal to limit climate change to safer levels was barely achievable after global emissions rose by near 6 percent in 2010.

Governments agreed last year to limit warming to less than 2 degrees above pre-industrial levels, but the world was poised to surpass that level of carbon emissions, said the energy adviser to 28 industrialized economies.

A halving of nuclear power growth would make the task even more difficult, said IEA chief economist Fatih Birol.

"We believe this huge emissions increase plus the rather bleaker perspective for nuclear power put together make the 2 degrees target very, very difficult to achieve."

The world will again fall short of a full climate deal this year, after two past attempts, say developed countries which want a narrower focus on forests and funds at resumed U.N. talks next week.

A fresh postponement will all but end hopes of a binding U.N. deal to succeed the Kyoto Protocol before its present round expires at the end of 2012, leaving a legal gap and possible makeshift arrangements for years.

A summit in Copenhagen two years ago was blown off course by world recession and political wrangling and hopes are now dimmed for a conference in Durban, South Africa later this year.

Developing countries want to extend Kyoto, which binds only rich countries to cut greenhouse gas emissions until 2012. But Japan, Russia and Canada reject that, preferring a new, wider deal in a rich-poor deadlock which echoes world trade talks.

"In Durban it's almost impossible to see a legally binding agreement, if we take into consideration the positions of many countries including the United States and China," said Akira Yamada, who will head Japan's delegation at the next round of talks at a two-week meeting in Bonn, Germany, from June 6-17.

The United States could vault back into the top rank of coal exporters for good this year thanks to Asia's fuel demand — just as surging gas output and tougher environmental laws threaten mainstay domestic sales.  

Leading U.S. producers, with wallets bulging from high world prices, are jostling to boost their Asian presence. 

 Their only problem is squeezing enough coal through over-stretched ports and railroads, but efforts are underway to open new outlets thanks to surging confidence in the sector.

"We see it as a structural change," said Deck Slone, chief spokesman for Arch Coal Inc, the second largest U.S. producer after Peabody Energy Corp.

Arch has agreed to buy International Coal Co and has opened a Singapore-based subsidiary to boost its export presence.

Analysts say total U.S. coal exports could amount to around 100 million tons (91 million tons) this year, leaving only Australia and Indonesia above it in the world export rankings, and putting it above Russia, Colombia and South Africa.

One of the reactors at Japan's crippled Fukushima nuclear power plant has a hole in its main vessel following a meltdown of fuel rods, leading to a leakage of radioactive water, its operator said on Thursday.

The disclosure by Tokyo Electric Power Co (TEPCO) is the latest indication that the disaster was worse than previously disclosed, making it more difficult to stabilize the plant.