AIM listed Alkane Energy Plc, a commercial producer of coal mine methane which it generates from abandoned coal mines, has had a particularly meteoric rise these last few months. From 11p in mid-March to up to 58p a few weeks ago. Today it closed up 6% at 34p.

Even more unusual, is that the company claims not to know why. In a statement earlier this month, the company said;

“Alkane Energy notes the recent movement in the Company's share price. The Directors are not aware of any reason for the movement. The Company is trading in line with its recent trading statements”

Well, I've got a theory why Alkane is doing so well.

Europe has now had 7 months of carbon trading, a system designed to make it more expensive to burn coal - which is currently cheaper - than half as carbon-emitting natural gas. It has been calculated that should the price of carbon exceed EUR 28 a ton, then coal becomes less economic than gas. Two weeks ago, that price hit 29, although it was down again to 18 last week. It's back up again to 21-22 today. Many forecast it could reach 40 plus before the end of the year.

The point is this - if coal really does become forcibly uneconomic, then a substantial number of mines will become available for Alkane Energy to capture the methane from . . .