US seeks to allow carbon storage on federal land
President Joe Biden's administration is advancing a proposal to allow carbon capture and storage (CCS) on millions of acres of federal land owned by the US Forest Service.
The proposed rule, published Friday, would open up the possibility of siting carbon storage projects on the 193mn acres of federal land in 44 states managed by the Forest Service. The regulation could support the Biden administration's push to expand the use of CCS, a technology that captures CO2 and then stores it deep underground in subsurface geological formations.
The proposal would remove an existing restriction from the Forest Service that blocks projects from having "exclusive and perpetual use" of federal land. Because CCS projects store CO2 for thousands of years, the agency said the restriction needs to be removed for projects to advance. Projects would still be subject to other permitting requirements and environmental reviews.
The US has seen a surge of interest in CCS as developers try to take advantage of $12bn in new funding from the 2021 infrastructure law and the expansion of the "45Q" tax credit that pays up to $85/metric tonne of CO2 that is stored in geologic formations. The Inflation Reduction Act also offers tax credits for clean hydrogen and low-carbon renewables fuels that are likely to rely partially on CCS.
But project developers have run into obstacles as they seek regulatory approvals for CO2 pipelines and Class VI injection wells needed for CCS. US Senate Energy and Natural Resources Committee chairman Joe Manchin (D-West Virginia) on Thursday criticized the US Environmental Protection Agency for not yet approving permits for a backlog of 169 carbon injection wells, while at the same time proposing to mandate CCS for fossil fuel power plants.
"Not a single Class VI well has been approved," Manchin said. "At the same time, the administration is more than happy to mandate widespread deployment of carbon capture on gas- and coal-fired power plants."
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Iraq’s Somo issues first gasoil export tender
Iraq’s Somo issues first gasoil export tender
Dubai, 21 May (Argus) — Iraq's state-owned Somo issued its first gasoil export tender, likely because additional volumes are coming from its new 140,000 b/d Karbala refinery. Somo is offering 82,000t (612,000 bl) of 500ppm sulphur gasoil over a three-month period from the date of signing the deal, with an option to extend the agreement upon Somo's approval. Somo indicates gasoil is to load from North Company refineries. The bids are to be submitted by 26 May. This is the very first gasoil export tender issued by Somo as historically Iraq has been heavily dependent on gasoil imports to satisfy its domestic demand. Market participants suggest Iraq can now afford to export gasoil because it has ramped up its new 140,000 b/d Karbala refinery south of Baghdad. Karbala refinery began commercial operations in April last year and primarily supplies oil products to domestic market, but in doing so it creates gasoil surplus in the northern part of the country. Iraq has also recently reopened its 150,000 b/d North refinery — part of Iraq's largest downstream facility the 290,000 b/d Baiji complex. The refinery was running at around 70,000 b/d in March, according to market sources. Additional production potentially caused Iraq to stop importing gasoil this year. Iraq's gasoil imports dropped to zero in February and March, show the latest data from Joint Organisations Data Initiative (Jodi). This is compared with around 24,500 b/d gasoil imports in 2023. By Ieva Paldaviciute Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia's Woodside plans CCS for Browse gas project
Australia's Woodside plans CCS for Browse gas project
Perth, 21 May (Argus) — Australian independent Woodside Energy is planning a carbon capture and storage (CCS) element for its Browse gas project offshore Western Australia (WA), but blamed stalled approval processes for the slow progress. The North West Shelf (NWS) life extension — which was first referred to regulators in 2018 — needed to be approved before Browse could progress further, chief executive Meg O'Neill said at the Australian Energy Producers conference held in WA's capital Perth this week. The life extension would allow the joint venture and third-party users to use the NWS project facilities until around 2070. WA's Environmental Protection Authority (EPA) recommended that the NWS life extension be approved in 2022, if it reduces its greenhouse gas (GHG) emissions to net zero by 2050. But the process remains incomplete, awaiting state and federal ministers' decisions and a final issuance of conditions for the project. WA's Office of the Appeals Convenor is still working through responses to the EPA's recommendation, which it must then report to the environment minister alongside its own recommendations, a process which was interrupted by the resignation of a senior bureaucrat last year. Woodside wanted to progress the CCS side of the Browse project before the end of 2024, O'Neill said, but the lack of certainty regarding approval timelines affected other elements of the project. "We've been working closely with the [federal government], state regulators and the Browse JV on the right approach to the environmental approvals, there are a couple of possible pathways that we are evaluating and we hope to be lodging the requests for approving that element of the project within this year," O'Neill said on 21 May. "But part of why we've been very disciplined in our work on Browse and not ramped up engineering work is because it is very difficult to get line of sight for when we'll get those approvals. With personnel changes at the appeals convenor we really don't have very good line of sight unfortunately." The 368bn m³ Browse development is considered critical to WA's future as a major LNG exporter and could provide long-term certainty for the 16.9mn t/yr NWS LNG, where partners have already signalled they will close a 2.5mn t/yr train later this year. Average gross GHG emissions from the three Browse fields are between 6.4mn-6.8mn t/yr with an additional 7.7mn t/yr once Browse gas is liquefied, resulting in total emissions of 14.1mn-14.5mn t/yr of CO2 equivalent, according to the environmental impact statement Woodside released in 2022. This necessitates a CO2 solution for it to progress under Canberra's net zero scope 1 emissions rule instituted last year. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Lower fuel costs lift Indian cement producers' margins
Lower fuel costs lift Indian cement producers' margins
Singapore, 21 May (Argus) — Lower prices of petroleum coke and thermal coal, the two key fuels used in producing cement, helped raise margins at Indian cement producers over January-March compared with a year earlier. India's largest cement producer Ultratech increased its January-March profit by more than 35pc from a year earlier to a record 22.58bn rupees ($271mn) because of subdued kiln fuel costs. The company's blended coke and coal fuel costs for the quarter fell to $150/t, down by 22.7pc from a year earlier. Ultratech's overall energy costs for cement during the quarter fell by 21pc from a year earlier to Rs1,025/t, with total power and fuel costs down by nearly 9pc to Rs48.39bn. Fuel typically accounts for about a third of cement production costs. The Argus cfr India 6.5pc sulphur coke assessment averaged $116.50/t in the quarter ended 31 March, down by nearly 32pc from the year-earlier average of $170.92/t. This price was last assessed at $109.50/t on 15 May. Thermal coal prices were also lower from a year earlier across most origins. Ultratech sold 35.08mn t of cement during January-March, up by 11pc on a year earlier. Higher cement sales typically boost coke and thermal coal consumption as cement producers use these as fuel in kilns. Industry participants were able to realise a higher profit despite a lower cement price during January-March, primarily because of a cushion from the reduced fuel costs. Ultratech realised Rs5,170/t of cement for January-March, down by 3.8pc from the year earlier and 6pc lower from October-December. Fellow producer Shree Cement raised its sales by 8pc from a year earlier to 8.83mn t over January-March. But the firm realised Rs4,721/t of cement during January-March, down by 3pc from a year earlier. Lower fuel costs helped it to boost the latest quarter's profits by 21pc from the previous year to Rs6.62bn. Fuel costs eased by 28pc to Rs1.82/unit. Shree expects fuel prices to remain stable in the coming months. Cement prices in key markets fell by an average 7.5pc over January-March from the previous quarter, while exit prices in March were lower by 9-10pc compared with average rates for the same period, said cement producer Dalmia Bharat. The price drop during January-March was far more than what the firm had seen in similar period in any previous year. Cement producers resorted to price cuts to gain more market in the latest quarter with rising production capacity. But cement demand growth is expected to outpace the rate of capacity additions in the coming years. The industry is expected to grow capacity at a compounded growth rate of 7-8pc/yr in the next few years, said Adani, which owns and operates listed cement companies Ambuja Cement and ACC. The group forecasts India's cement demand to grow at 8-9pc/yr over the next five years. Adani's power and fuel costs fell by 13pc from a year earlier to Rs1,219/t during January-March. A high share of coal from domestic captive mines and opportunities to buy imported coke will further lower its fuel costs, the company said. Ambuja doubled its January-March profit from a year earlier to Rs15.26bn. Firmer April-June outlook Lower priced coke cargoes purchased during January-March are expected to help cement producers partly offset the impact of pressured cement realisation for April-June, said a market participant. Cement prices remain weak as demand is affected because of India's 19 April-1 June general elections . Cement plants typically hold fuel inventories of 60-90 days, including supplies in the pipeline and cargoes on the water. The full benefit of reduced fuel prices comes with a lag of up to three months. This is especially true of coke cargoes coming from the US where the transit time is around 45 days. By Ajay Modi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia pauses pro-upstream offshore oil, gas reforms
Australia pauses pro-upstream offshore oil, gas reforms
Perth, 21 May (Argus) — Australia's federal resources minister Madeleine King acknowledges the political situation in the nation's upper house of parliament the Senate prevents any deal to clarify consultation requirements for the nation's offshore oil, gas, carbon capture and storage (CCS) and renewables sectors. The Senate last week passed the Labor party-led federal government's legislation on changes to deductions permitted under the Petroleum Resources Rent Tax (PRRT) and a new fuel efficiency standard for light commercial and passenger vehicles . But the deal struck with the Greens party and two independent senators meant the government withdrew amendments designed to specify which stakeholders must be consulted under law before receiving environmental permits. King blamed the Greens for her government removing the amendments from the agenda. "My disappointment is not for the industry but the community that will remain subject to inadequate and inappropriate consultation requirements for longer," King said on 21 May at the Australian Energy Producers conference in Perth. "The Greens political party and the crossbench independents and others promoted widespread misinformation in relation to the proposal that would ensure the community had the benefit of clarity and certainty in consultation." Environmental lawyers delayed field drilling and pipeline laying for Australian independent Santos' $4.6bn Barossa backfill project from late 2022 until early 2024, citing insufficient consultation with traditional owner groups, in a case ultimately dismissed by the Federal Court of Australia. Changes to offshore laws were promised by the federal government in January with concerns legal tactics could lead to further lawsuits aimed at driving up costs for LNG backfill, offshore wind power projects or CCS. Climate campaigners saw the changes as a vehicle for easing scrutiny on developers and its politicians promised to oppose any changes. But having dealt with the Greens instead of the Liberal-National coalition on legislation for fuel efficiency and the PRRT because of the latter's demands that the approvals process for oil and gas be expedited, Labor is less likely to now receive support for changes to consultation ahead of next year's federal election. The future gas strategy released by the federal government this month said new supplies are urgently needed, as gas-fired power generation will likely replace firming capacity provided by retiring coal-fired power plants. The report also found multiple reasons for Australia's low gas exploration investment, including difficulties with the approvals processes, legal challenges and market interventions that may lead international companies to focus on lower cost and lower risk fields in other jurisdictions. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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