Texas, industry groups challenge WOTUS changes
The state of Texas and industry groups are challenging the legality of recent changes the US Environmental Protection Agency (EPA) and the Army Corps of Engineers made in the definition of Waters of the US (WOTUS).
Texas attorney general Ken Paxton and a coalition of 17 industry groups led by the American Farm Bureau Federation filed separate lawsuits against EPA and the corps on 18 January in the US District Court for the Southern District of Texas asking the court to vacate the recently finalized WOTUS changes. Both lawsuits claim the changes expand the agencies' authority beyond what Congress intended.
The lawsuits are the latest action in prolonged deliberations over what bodies of water are subject to federal oversight. Attempts by the administrations of former presidents Barack Obama and Donald Trump ended up being challenged and blocked by the courts.
On 30 December 2022, EPA and the corps announced they had finalized a rule that establishes a "durable" definition of WOTUS, restoring water protections that were in place under the Clean Water Act prior to 2015. The rule was published in the Federal Register on 18 January, opening a 60-day period for opponents to file lawsuits, and is scheduled to be effective as of 20 March.
Among the points of contention for opponents to the rule changes is the new definition of interstate waters, which EPA and the corps have defined as "all rivers, lakes, and other waters that flow across, or form a part of, state boundaries," including wetlands.
The rule "allows for cascading expansion of federal authority from these non-navigable 'interstate waters' by lumping even a minor water feature (like a ditch, ephemeral stream, pond, or isolated wetland) that crosses state lines in with traditional waters," Texas said. That is a violation of the authority Congress gave the agencies in the Clean Water Act, which gives the federal government jurisdiction over "navigable waters," the lawsuit claims.
Texas also said the recent changes to WOTUS do not consider whether interstate water supports commerce and intrude on individual states' sovereignty.
The industry groups made similar claims in their lawsuit. And both Texas and the industry groups said EPA and the corps acted in an "arbitrary and capricious" manner that violates the Administrative Procedure Act.
The corps directed requests for comment to the EPA, which declined to comment on the lawsuits.
Paxton filed his lawsuit on behalf of the state as well as agencies including the Texas Commission on Environmental Quality, the Railroad Commission of Texas, the Texas Department of Agriculture. Other industry groups that filed with the American Farm Bureau Federation include the American Petroleum Institute and the National Mining Association.
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Canada rail strike to affect grains, industry says
Canada rail strike to affect grains, industry says
London, 3 May (Argus) — Strike action by workers at Canadian National Railway and Canadian Pacific Kansas City could have significant repercussions for the country's grains market, according to industry body the Grain Growers of Canada (GGC). Members of the Teamsters Canada Rail Conference authorised a strike on 1 May. Industrial action at the two major Canadian railroad companies could begin as early as 22 May. The parties have now entered a mandatory period of mediation. The GGC has called for a resolution to be reached in this period that safeguards Canada's grains supply chain. Canadian grain trade operations are particularly dependant on rail logistics, with the vast majority of grain from producing regions transported to ports by rail — 94pc of all Canadian grain is transported by rail, according to the GGC. Disrupted logistics could limit grain storage capacity, which could result in less stock available for export and curb selling by farmers. This could cause importers to seek alternative grains origins. Members are "worried about the impact a strike would have [...] on Canada's reputation as a reliable supplier", the GGC said. "Consecutive supply chain disruptions have already strained our relationships with international buyers. Another stoppage could drive them to seek other markets, affecting us in the long term," GGC's second vice chair Brendan Phillips said. In the high-protein wheat market — one of Canada's major agricultural exports — buyers may turn to US-origin Hard Red Spring wheat as an alternative, traders in both regions told Argus . This could have a significant effect on the market. "In June 2023, Canada exported over 2.6mn t of grain, highlighting the potential economic loss of over $35mn for each day in June that a strike persists," the GGC said. That said, wheat exports accounted for around 1.7mn t of this volume, Argus -aggregated data show. Canada's wheat exports have increased significantly ahead of the long-term average pace in 2024, surpassing 2023 levels by 710,000t in the week to 28 April. Remaining stocks of the 2023-24 wheat crop are low, according to market participants, and with the winter wheat harvest not scheduled to begin until July, low stocks could shelter Canada's wheat market to some extent. By Megan Evans Canadian wheat (excl. durum) exports mn t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Indonesia’s Tangguh LNG facility offers Jun-Jul cargoes
Indonesia’s Tangguh LNG facility offers Jun-Jul cargoes
Singapore, 3 May (Argus) — Indonesia's 7.6mn t/yr BP-operated Tangguh LNG facility is offering four LNG cargoes for June-July loading, through a tender that closes on 6 May. The Tangguh LNG project in Indonesia's west Papua province is offering four cargoes on a fob basis for loading on 17, 22, 27 June, and on 2 July, or two cargoes on a des basis. But the delivery windows are unclear. The firm was last in the market in March , when it offered four cargoes on a fob basis for loading during 28-29 April, 1-2 May, 3-4 May and 17-19 May, or three cargoes on a des basis for delivery over 6-8 May, 8-10 May and 12-14 May. But it is unclear if these cargoes were sold eventually. This offer adds to a growing pool of availability for June and July cargoes, as summer restocking demand among traditional major importing region northeast Asia is poised to be lower this year. This is mainly owing to higher inventories after the winter season and more than sufficient contracted term deliveries, buyers in the region said. This is despite Japan and South Korea forecasting higher summer temperatures this year as compared to the previous year, according to the Japan Meteorological Agency and Korea Meteorological Administration on 23 April. Spot prices have remained relatively rangebound at around high-$9s to low-$10s/mn Btu since the end of March despite weak demand. Spot prices have been tracking some strength in Dutch TTF contract prices, which has reduced importers' incentive to step up spot purchases since imported spot has no obvious price advantage. The front half-month of the ANEA — the Argus assessment for spot LNG deliveries to northeast Asia — was last assessed on 3 May at $9.955/mn Btu, lower by about 11¢/mn Btu from a week earlier, but about 71¢/mn Btu higher from a month earlier. Spot demand has been mostly confined to south and southeast Asian importers. Most of southeast Asia is currently experiencing a heatwave, which is likely to continue driving spot LNG demand from firms like Thailand's state-controlled PTT. The firm has issued another tender seeking three deliveries over 1-2, 7-8 and 10-11 July that closed on 3 May. It may have awarded the tender, but further details are unclear, traders said. By Rou Urn Lee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US regulator slams executive over Opec 'collusion'
US regulator slams executive over Opec 'collusion'
Washington, 2 May (Argus) — US antitrust regulators for the first time took action against a leading US oil executive over his alleged "collusion" with Opec, but the producers' alliance itself was not a target of investigation. The Federal Trade Commission (FTC) today issued a proposed consent order barring former Pioneer Natural Resources chief executive Scott Sheffield from joining the board of ExxonMobil following its $59.5bn takeover of Pioneer. FTC accused Sheffield of organizing "anti-competitive coordinated output reductions between and among US crude oil producers" and members of Opec and the broader Opec+ alliance. "Opec and Opec+ are cartels that exist to control global crude oil production and reserves," FTC said. The specific charges against Sheffield relate to the outspoken executive's frequent public appearances where he opined on US companies' desired production levels, his meetings and frequent communications with Opec officials since 2017 and his advocacy of drastic production cuts by US companies as global demand fell sharply at the beginning of the Covid-19 pandemic in 2020. Opec under then secretary general Mohammed Barkindo began active outreach to independent US producers, starting in March 2017 with private dinner discussions held on the sidelines of IHS CERAWeek conferences in Houston, Texas. Barkindo hosted similar discussions at CERAWeek in 2018 and 2019, in addition to hosting some of the US companies' chief executives at Opec seminars in Vienna. FTC references Sheffield's public comments following those meetings and alleges that Sheffield kept in frequent touch with Opec officials via messaging service WhatsApp and other means to discuss production levels and prices. Barkindo at the time said that production cuts and prices were never on the agenda of his meetings with the US shale producers and that his organization wanted to better understand the US companies' technological innovation and to compare market outlooks and forecast models. Barkindo in the same time frame held similar discussions with major US hedge funds and money managers. US oil executives polled by Argus in 2017-20 also said that their discussions with Barkindo and other Opec officials revolved around market fundamentals. The US oil industry broadly felt that it was benefiting from a policy of production cuts Opec was implementing as it supported prices at a time when the US domestic production and crude exports grew uninterrupted. Former president Donald Trump took credit for engineering a breakthrough agreement in April 2020 to remove more than 10mn b/d of global crude supply by brokering an agreement between Saudi Arabia, Russia and other Opec+ producers. Even without prodding from Trump, US producers cut back production cuts in 2020 as transportation fuel demand and prices fell sharply in the first months of the pandemic. FTC singled out Sheffield for allegedly coordinating his company's production levels with Opec. Sheffield "held repeated, private conversations with high-ranking Opec representatives assuring them that Pioneer and its Permian basin rivals were working hard to keep oil output artificially low," according to the FTC order. Sheffield, who helped found Pioneer and was its longtime chairman, served as chief executive from 1997 to 2016 and from 2019 through 2023. He remains on the company's board, serving as special adviser to the chief executive since 1 January. The son of an oil executive, Sheffield attended high school in Tehran, Iran. Pioneer shrugged off what it termed a "fundamental misunderstanding" of global oil markets and said that FTC misread "the nature and intent" of Sheffield's actions. Opec declined to comment on FTC's action against Sheffield. FTC is so far the only US regulator to set sights on Opec, even if indirectly. President Joe Biden in 2021 separately tasked FTC with leading an investigation into whether there is price manipulation in gasoline markets. Biden, like many of his predecessors at a time of high gasoline prices, in 2022 accused Opec of uncompetitive behavior in oil markets and expressed support for US legislation allowing antitrust action against the organization by the US Department of Justice. But that acrimony has largely dissipated after global oil and US gasoline prices fell in 2023 from unusually high levels in the previous year. US Congress has not taken significant steps to advance the anti-Opec legislation since 2022. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Canadian rail workers vote to launch strike: Correction
Canadian rail workers vote to launch strike: Correction
Corrects movement of grain loadings from a year earlier in final paragraph. Washington, 2 May (Argus) — Workers at the two major Canadian railroads could go on strike as soon as 22 May now that members of the Teamsters Canada Rail Conference (TCRC) have authorized a strike, potentially causing widespread disruption to shipments of commodities such as crude, coal and grain. A strike could disrupt rail traffic not only in Canada but also in the US and Mexico because trains would not be able to leave, nor could shipments enter into Canada. This labor action could be far more impactful than recent strikes because it would affect Canadian National (CN) and Canadian Pacific Kansas City (CPKC) at the same time. Union members at Canadian railroads have gone on strike individually in the past, which has left one of the two carriers to continue operating and handle some of their competitor's freight. But TCRC members completed a vote yesterday about whether to initiate a strike action at each carrier. The union represents about 9,300 workers employed at the two railroads. Roughly 98pc of union members that participated voted in favor of a strike beginning as early as 22 May, the union said. The union said talks are at an impasse. "After six months of negotiations with both companies, we are no closer to reaching a settlement than when we first began, TCRC president Paul Boucher said. Boucher warned that "a simultaneous work stoppage at both CN and CPKC would disrupt supply chains on a scale Canada has likely never experienced." He added that the union does not want to provoke a rail crisis and wants to avoid a work stoppage. The union has argued that the railroads' proposals would harm safety practices. It has also sought an improved work-life balance. But CN and CPKC said the union continues to reject their proposals. CPKC "is committed to negotiating in good faith and responding to our employees' desire for higher pay and improved work-life balance, while respecting the best interests of all our railroaders, their families, our customers, and the North American economy." CN said it wants a contract that addresses the work life balance and productivity, benefiting the company and employees. But even when CN "proposed a solution that would not touch duty-rest rules, the union has rejected it," the railroad said. Canadian commodity volume has fallen this year with only rail shipments of chemicals, petroleum and petroleum products, and non-metallic minerals rising, Association of American Railroads (AAR) data show. Volume data includes cars loaded in the US by Canadian carriers. Coal traffic dropped by 11pc during the 17 weeks ended on 27 April compared with a year earlier, AAR data show. Loadings of motor vehicles and parts have fallen by 5.2pc. CN and CPKC grain loadings fell by 4.3pc from a year earlier, while shipment of farm products and food fell by 9.3pc. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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