US picks up pace of drilling permit approvals
President Joe Biden's administration has started approving hundreds of requests to drill on federal land, after a first month where the pace of federal permitting plunged 98pc from the same period last year.
The US Interior Department's Bureau of Land Management (BLM) has approved 200 drilling permits over the past two weeks, compared to the just 16 drilling permits approved during the first full month of the new administration. The surge in activity brings the number of approved drilling permits to 229 since Biden took office, of which more than 70pc went to operators in Wyoming and 24pc went to operators in North Dakota.
The quickened pace of drilling permitting comes as the US Senate prepares to vote early next week on whether to confirm US representative Deb Haaland (D-New Mexico) as the next US interior secretary. The Interior Department, when asked for comment, said it has continued to process permits to drill on federal land in a timely manner.
"The review process for an application for a permit to drill is comprehensive to ensure oil and gas development will be done in an environmentally sound and responsible manner," the agency said.
The approval of oil and gas permits slowed to a trickle after Biden took office on 20 January, when the acting US interior secretary imposed a high-level review of permits for at least 60 days. But the number of permit approvals has picked up as the administration today reaches its 50th full day in office.
Oil and gas industry officials say the pace of permitting is still well below what is typical. BLM over the same 50-day stretch in 2020 issued more than 1,200 drilling permits, although at that time there was more drilling activity because Covid-19 restrictions were not widely in place and crude prices did not begin their steep dive due to Opec+ production disputes until late February.
"It is encouraging that the Interior Department has started to approve permits, but it is still way below demand and normal levels," Western Energy Alliance president Kathleen Sgamma said.
Sgamma said she would be "surprised" if the Interior Department extends the high-level oil and gas permitting review past its scheduled expiration on 21 March, given what she says is a lack of legal authority for restricting permitting.
Oil and gas producers have protested the slowdown in drilling permits under Biden, along with uneven treatment of minor "sundries" permits, in the weeks after Biden took office. The industry says limiting permitting could lead producers to shift investments to private lands or overseas, depriving states of royalties and making the US more reliant on imports.
Lawsuit over delays withdrawn
US independent Continental Resources last month filed a lawsuit that accused the Biden administration of unlawfully delaying 50 drilling permits in North Dakota, which the company said could jeopardize its ability to build well pads before a 10 June deadline needed to avoid disturbing endangered species. But the company voluntarily withdrew the lawsuit this week after the permits were approved from 25 February and 9 March.
The more rigorous review of drilling permits is distinct from a "pause" that Biden imposed on new federal oil and gas leasing that remains in effect. That pause is unlikely to have any effect on US oil and gas production until 2022 because of the "minimum eight-to-ten month delay" from leasing to production for onshore areas, the US Energy Information Administration said this week. The agency expects the pause will reduce crude production by less than 100,000 b/d next year.
The Interior Department this week said it would release an interim report outlining its "next steps" on oil and gas development by early summer. The administration has said it will pause leasing until it finishes a comprehensive review of the entire oil and gas permitting program, which might include changes to royalty and permitting policies.
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APA defers FID for Australian gas pipeline's stage 3
APA defers FID for Australian gas pipeline's stage 3
Sydney, 13 May (Argus) — Australian pipeline operator APA has deferred a final investment decision (FID) for stage 3 of its planned east coast grid expansion, given potential rule changes for the South West Queensland pipeline (SWQP). APA is pushing back the FID by about 6-12 months to the first-half of 2025, and was likely initially planning to make the FID this year. The operator postponed the FID because of recent action by the Australian Energy Regulator (AER), which said it might recommend rule changes for the SWQP. A review was announced in February and is not expected to be completed until November at the earliest, APA said. The firm opposes any further regulation of the SWQP , maintaining that it does not return excessive profits. APA said the lack of a single arbitration case involving the facility since such a regime was instituted in 2017 is evidence that its customers accept present arrangements. "We've probably got around six to 12 months at the very most for us to work through and hopefully there's no change to regulation, but basically the time frame is we need to get started pretty much early next year on building stage 3," APA's chief executive Adam Watson said on 9 May. If the AER decides to make the lightly regulated SWQP subject to reference price regulation, an access arrangement would need to be determined which will take 2-3 years to complete, APA said. This means any changes would be instituted in the fiscal year to 30 June 2028. The SWQP can carry 440 TJ/d (11.75mn m³/d) in a westerly direction from Wallumbilla to the Moomba hub, from where gas can enter the APA-operated Moomba-Sydney and Epic Energy-owned Moomba-Adelaide pipelines for transport to southeastern facilities. Expanding the capacity of pipelines allowing the north-south transit of gas is considered critical to avoiding shortfalls owing to the depletion of Gippsland basin fields this decade. Stage 1 of APA's east coast grid expansion was completed in 2023, with stage 2 also now operational in line with guidance. These two stages increased capacity by 25pc, allowing about 50 TJ/d more gas to flow on the SWQP to southern markets, with similar increased volumes expected from stages 3 and 4. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
China, US pledge joint methane action at climate talks
China, US pledge joint methane action at climate talks
San Francisco, 13 May (Argus) — The US and China have pledged to further co-operate on methane reduction, among other topics, following a first meeting between the countries' new climate envoys in Washington during 8-9 May. The meeting follows video conferencing between the two sides in January under their "working group on enhancing climate action in the 2020s" initiative. China and the US reaffirmed their 2021 agreement to co-operate on reducing carbon emissions in the power generation sector, cutting methane emissions and boosting renewable energy in the " Sunnylands Statement on Enhancing Cooperation to Address the Climate Crisis " last November in San Francisco. China confirmed the appointment of Liu Zhenmin to replace Xie Zhenhua as the country's climate advsior in January. Liu's US counterpart John Podesta replaced John Kerry in January. Liu and Podesta discussed co-operation "on multilateral issues related to promoting a successful COP 29 in Baku, Azerbaijan" at the latest talks, the US state department said on 10 May. They also discussed issues identified in the Sunnylands statement, including energy transition, methane and other non-CO2 greenhouse gases, the circular economy and resource efficiency, deforestation,as well as low-carbon and sustainable provinces, states and cities. They plan to co-host a second event on reducing methane and other non-CO2 greenhouse gases in Baku and "conduct capacity building on deploying abatement technologies". It remains to be seen how the two new climate advisors will bring the two countries closer in climate negotiations. The Sunnylands statement and the close relationship of their predecessors were instrumental in bringing consensus at last year's Cop 28 UN climate summit in Dubai. China released a much anticipated methane plan last November, although Xie has flagged challenges with data monitoring in the sector. But China and the US have agreed to develop and improve monitoring to "achieve significant methane emissions control and reductions in the 2020s". China has also not signed on to the Global Methane Pledge to cut methane emissions by 30pc by 2030, from 2020 levels. The country's emissions may also rise more than expected after it redefined its meaning of energy intensity, according to the Helsinki-based Centre for Research on Energy and Clean Air. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
California refineries required to report turnarounds
California refineries required to report turnarounds
Houston, 10 May (Argus) — Refiners in California starting in June must file maintenance schedules with the state's energy commission at least 120 days in advance of planned work, and diagnostic reports within two days of unplanned shutdowns. The new reporting requirements, part of the SB X1-2 bill passed in March 2023, take effect following an 8 May meeting of the California Energy Commission (CEC) where the measures were finalized. The CEC will now be able to gather a broad range of data from refiners and set a maximum gross gasoline refining margin in an effort to avoid price spikes at the pump. If companies identify a need for maintenance less than 120 days before the planned work, a report to the CEC is required within two business days of the discovery, according to the reporting form posted in the SB X1-2 docket. The reporting form includes space for a description of the work, unit level details and information on the expected effect of a turnaround on transportation fuel inventories at the refinery. The same information will be required for unplanned maintenance, with a report to be sent to the CEC within two business days of the initial outage or lowered rates, and within two business days of the completion of work or return to normal throughputs. The additional information will aide the CEC in analyzing refiner margins and determine whether a margin cap and subsequent penalties are warranted, according to the commission. Industry groups think many of the reporting requirements are burdensome and politically motivated , often requesting information unnecessary to determine margins. Marine import reporting on horizon At the same 8 May business meeting, the CEC moved closer to finalizing a requirement for importers of foreign and domestic refined products and renewable fuels to report shipments at least four days before delivery. The reporting form includes information on vessel routes, costs and products shipped. The CEC approved for the marine reporting requirements to be submitted to the state's Office of Administrative Law for a 10-day review before a targeted 20 May start date. By tracking import data, the CEC aims to build a more accurate picture of what drives retail fuel prices and refiner margins in the state. "In many cases these forms request information that has questionable or no relevance at all to the CEC's efforts to minimize or prevent price spikes," said Sophie Ellinghouse, general counsel for trade group the Western States Petroleum Association, during public comments on the marine reporting requirements at the 8 May meeting. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Mexican power outages enter fourth day
Mexican power outages enter fourth day
Mexico City, 10 May (Argus) — Mexican power grid operator Cenace issued its fourth consecutive day of operating alerts amid the heatwave gripping the country. Net electricity demand reached 47,321MW early today, with deployed electricity capacity slightly below at 47,233 MW, according to Cenace. Since 7 May, Cenace has declared emergency operating alerts as demand exceeded generation capacity during peak evening hours, prompting the grid operator to preemptively cut electricity supply across different states to maintain grid integrity. Power outages have lasted up to several hours in Mexico City and in major industrial states as power demand has outstripped supply by up to 1,000MW. Peak demand this week hit 49,000MW, just below last year's historic peak of 53,000MW during atypical temperatures in June. "We are very concerned about the unprecedented outages detected across 21 states, a situation that affects the normal functioning of Mexican companies," national business chamber Coparmex said. Peak electricity demand typically rises in June-July but temperatures this week have risen as high as 48°C (118° F) across some states. Mexico City reported a record high of 34.3°C on 9 May and high temperatures are forecast to continue into next week, Mexico's national weather service said. The inability of Mexico's grid to respond to increased demand is because of insufficient power generation capacity, non-profit think-tank the Mexican institute for competitiveness (Imco) said this week. "Despite the energy ministry's forecast that 22,000MW of new power capacity would enter service by 2026, only 1,483MW had entered service as of 2022" since late 2018, Imco said. President Andres Manuel Lopez Obrador's administration pledged to build new generation capacity, including five gas-fired, combined-cycle plants, but recognized this week that delays had contributed to the power outages. "We have an electricity generation deficit because some of the combined-cycle plants were delayed, but we are working on it and it will soon be resolved," Lopez Obrador said on 9 May. Lopez Obrador's government has also curtailed private sector power development during his administration. Mexico needs to upgrade and expand its transmission network, industry associations say. "In order to resolve this problem, we believe that a reopening of the electricity market to the private sector is imperative," Mexico's wind energy association, Amdee, said. Mexico has 87,130MW of installed capacity, with 39.5pc from combined-cycle gas-fired power plants and 31pc in renewable power, including wind, solar, hydroelectric, geothermal and biomass, according to the latest statistics from the energy ministry. By Rebecca Conan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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