Norway must prepare for end of oil, gas: Climate body
Norway's climate change committee said today the government should begin to prepare for "the final phase of Norwegian petroleum activities," recommending a number of far-reaching measures including an immediate halt to exploration and extraction permitting.
The committee, which is tasked by parliament to review choices to get the country to its target of reducing greenhouse gas (GHG) emissions by at least 50pc by 2030 compared with 1990 levels, said in a report that upstream policy "must be changed" and that Norway "must reduce the extent of petroleum extraction towards 2050 more than what is in current expectations."
It noted that the oil and gas industry accounts for 25pc of the country's total emissions, and said "the higher the level of activity in the oil and gas industry, the more the emissions in other sectors must be reduced" if Norway is to hit its 2050 goal.
Norway is Europe's biggest liquids producing country and a major gas supplier, with the hydrocarbons sector contributing around 20pc of gross domestic product (GDP) in the past five years. But the committee said today that "activity is no longer expected to be as large a growth engine towards and beyond 2030."
It recommended that no further permits for exploration, extraction, or construction and operation are granted until the government has a strategy in place for the "final phase," that there is a permanent halt in exploration without direct connection to existing infrastructure, and that "no decision is made to build new infrastructure that binds us to emissions towards and beyond 2050." It also said price drops or cost increases for the oil and gas industry "are handled without compensatory measures of a business policy or tax nature," as they were during the pandemic-induced price falls of 2020.
Those tax incentives resulted in a surge of plans for development and operations in the country's upstream. The committee said "an expectation of such political packages provides unfortunate incentives and makes the transition more difficult both for the petroleum industry and other industries." It recommended that all costs of climate measures in the sector are borne, "as far as possible" by companies that operate there, and said powering offshore infrastructure from land — a key part of some operators' plans to reduce emissions — should stop.
"It can be seen as a paradox if scarce renewable energy resources should be prioritised for businesses that extract fossil resources that contribute strongly to the climate challenge, and which are also expected to be phased out in a low-emissions world," the committee said.
In response, industry body Offshore Norway said while it agreed that emissions must be reduced "it would not make sense for Norway to stop looking for oil and gas."
The committee's report will feed into the government's required updated climate targets, but is not binding.
Related news posts
Alberta wildfire forces oil sands communities to flee
Alberta wildfire forces oil sands communities to flee
Calgary, 14 May (Argus) — A state of local emergency is unfolding near a major city in Alberta's oil sands region as an out-of-control wildfire grows in size, potentially putting various communities in its path. The wildfire to the southwest of Fort McMurray, Alberta, has grown to about 10,000 hectares (25,000 acres) after more than tripling in recent days, prompting officials to issue an evacuation order to residential communities on the southern part of the city on Tuesday. The Regional Municipality of Wood Buffalo has told residents in Beacon Hill, Abasand, Prairie Creek and Grayling Terrace to evacuate while the rest of Fort McMurray and neighbouring communities remain on an evacuation notice. "These neighbourhoods directly interface with where the fire could potentially spread. Regional Emergency Services will better be able to defend these neighbourhoods from wildfire if they are uninhabited and clear," said the municipality. Alberta's largest northeast city has a population of about 75,000 with many employed by oil sands operators in the region which pump out a combined 2mn b/d of crude. This comes in the form of both synthetic crude and diluted bitumen, representing roughly half of Alberta's output. No evacuation orders have been made for oil sands projects, so far, with most being about 40 kilometres (25 miles) or more north of Fort McMurray. Some oil sands projects have already been winding down for seasonal maintenance. There are about 50 active fires in the province. One other, near Grande Prairie in the northwest, is also out of control. About 400,000 b/d of oil equivalent (boe/d) were shut in a year ago in what was the worst wildfire season on record, according to the province. The blazes mostly affected operations in the liquids- rich northwest part of the province, but at least one oil sands project also had to temporarily evacuate. Wildfires also affected Alberta production in 2019, but the most devastating for the region was three years earlier, when fires forced mass evacuations and destroyed parts of Fort McMurray. Wildfires in the spring of 2016 knocked about 1mn b/d of crude output off line. "It's important to note that fire activity is very different than the 2016 Horse River wildfire and we are well positioned to respond to this situation," said regional fire chief Jody Butz on Tuesday. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
CVR expects normal Oklahoma refinery ops by end 2Q
CVR expects normal Oklahoma refinery ops by end 2Q
Houston, 14 May (Argus) — US independent refiner CVR has restarted several key units at its 75,000 b/d Wynnewood, Oklahoma, refinery and expects a return to normal operations by the end of the second quarter after a 28 April fire . The refiner has restarted a crude distillation unit (CDU), fluid catalytic cracking unit (FCC) and alkylation unit at the plant, while a reformer is restarting, CVR said in an operational update today. The April fire damaged pipe racks and pumps associated with the plant's naphtha processing units, the company said. CVR expects throughputs of 170,000-190,000 b/d in the second quarter, information it did not report during earnings released on 29 April as it assessed the impact of the fire. CVR reported throughputs of 201,000 b/d in the second quarter of 2023. The refiner expects its renewable diesel unit co-located at the Wynnewood plant to run throughputs of 1,800-2,600 b/d in the second quarter, down from 4,700 b/d in the prior year period. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US court upholds RFS blending targets for 2020-22
US court upholds RFS blending targets for 2020-22
Washington, 14 May (Argus) — A federal appeals court has affirmed biofuel blending requirements for 2020-22 under the Renewable Fuel Standard (RFS), rejecting lawsuits from refineries and renewable fuel producers challenging the standards. The US Environmental Protection Agency (EPA) acted within its authority in the rule when it revised the biofuel blending targets to account for small refinery exemptions it expected it would award in the future, the US Court of Appeals for the DC Circuit said today in a 2-1 ruling. The court rejected a complaint by refineries that argued EPA could only revise the annual biofuel blending targets based on exemptions it had already approved in the past. "The statute does not confine EPA to the Refiner Petitioners' preferred method of accounting for small refinery exemptions," DC Circuit judge Cornelia Pillard wrote on behalf of the majority. "EPA's choice to account for them both retrospectively and prospectively is not arbitrary or capricious." The ruling leaves intact a 2022 rule that required renewable fuel blending to increase to 20.63bn USG by 2022, up from 17.13bn USG in 2020. For the first time under the RFS, the rule used a new formula that tried to avoid a recurrent issue under which EPA failed to account for upcoming requests from small refineries for exemptions from the RFS. EPA has subsequently decided to start denying all small refinery exemptions, under a new argument that small refiners do not face a disproportionate hardship from complying with the RFS. But if the courts throw out that finding in a pending lawsuit , the formula at issue in today's court ruling could take on a greater relevance for how EPA accounts for small refinery exemptions when setting biofuel blending targets. The DC Circuit rejected a separate lawsuit by cellulosic ethanol producers that said EPA should have required increased blending of cellulosic ethanol, based in part on the availability of carryover compliance credits. The court found EPA had adequate authority to waive volumetric targets set by the US Congress in 2007 based on its finding there were inadequate domestic supplies of the fuel, which is produced from plant fibers. Judge Gregory Katsas, who dissented from the ruling, said he believed the biofuel blending requirements for 2022 were set "arbitrarily high." Katsas cited EPA's finding that those standards would impose an estimated $5.7bn in additional costs for fuel but only deliver $160mn in energy security benefits. Katsas also faulted EPA for increasing the biofuel blending targets by 250mn USG in 2022 to "cancel out a legal error" from biofuel blending targets in 2016. Katsas said there was no authority to transfer volume requirements from one year to another. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Rains hamper LPG distribution in south Brazil
Rains hamper LPG distribution in south Brazil
Sao Paulo, 14 May (Argus) — Torrential rain and flooding in southern Brazil's Rio Grande do Sul state reduced LPG distribution by 7-10pc in the affected area during the first two weeks of May, according to local market participants. LPG distributor Copa Energia's operations at its Canoas city unit — responsible for 30pc of the state's supply — were expected to resume by mid-May. The heavy rains since late April left 100 people dead, a further 128 missing and around 164,000 displaced from their homes, according to the state's civil defence. LPG companies have been working to ensure supplies are maintained in the region, with some advancing salary benefits to support workers during the crisis, local participants say. Distribution began to normalise by 6 May after "the chaos and lack of information" over the 4-5 May weekend passed, an industry executive says. State-controlled Petrobras' 201,000 b/d Refap refinery was also affected, cutting LPG output, but the volume was not disclosed. Many LPG retailers are now able to receive supplies, but it is unknown how many distribution routes have been compromised, according to local industry. LPG stocks have been able to meet demand, preventing shortages, they say. Oil regulator ANP's measures to cut red tape and foster collaboration during a crisis has kept the market supplied, according to LPG association Sindigas chief executive Sergio Bandeira de Mello. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more