US to weaken carbon limits on new coal plants

  • Market: Coal, Electricity, Emissions, Natural gas
  • 06/12/18

President Donald Trump's administration is trying to make it cheaper to build coal-fired power plants by rolling back a rule that effectively required new plants to capture and store a portion of their carbon dioxide emissions.

The pending change, which the US Environmental Protection Agency (EPA) announced today, seeks to relax a 2015 emissions rule that industry perceived as a de facto ban on new coal plants. Power sector officials said the carbon capture technology needed to comply is so expensive that nobody would ever take the risk to build a new coal-fired plant.

EPA administrator Andrew Wheeler said the proposal would replace "onerous regulations" with achievable standards that would keep energy prices affordable and encourage investments in new coal technology. EPA said that carbon capture and sequestration was "unproven," economically prohibitive and not feasible in all locations in the US.

The rule issued under former president Barack Obama said new coal plants could not exceed a carbon dioxide emissions rate of 1,400 lbs/MWh. That rate would require conventional coal plants to capture about 35pc of their carbon. But critics cited problems with carbon capture, such as the abandoned coal gasification effort at the Southern Company Kemper plant in Mississippi, to argue the technology did not meet the statutory definition of being "adequately demonstrated."

EPA's proposal today would instead set a carbon dioxide emissions rate of 1,900 lbs/MWh for large coal plants and 2,000 lbs/MWh for smaller coal plants. The agency says that rate could be achieved with state-of-the-art coal plants running at high efficiency. EPA would set a 2,200 lbs/MWh emissions rate for plants that burn coal refuse.

Environmentalists say even if the revisions go through, the changes will be largely symbolic. That is because utilities and independent power generators have shown almost no interest in building coal plants because of their relatively high costs compared with other power sources and the looming prospect of policies such as a carbon tax. Environmentalists still say the move sends the wrong signal.

"This is just one more foolhardy move by a misguided administration that will be judged harshly by future generations," Natural Resources Defense Council senior strategic director David Doniger said.

The all-in cost of electricity from a new coal plant in the US is expected to range between $60-$143/MWh over its lifetime, according to a study published by the financial consultancy Lazard that was updated last month. That compares to $41-$75/MWh for a combined-cycle natural gas plant, $29-$56/MWh for onshore wind and $32-$44/MWh for utility-scale solar photovoltaic.

The proposal was cheered by Republicans who accused Obama's EPA of overreaching with its earlier carbon restrictions on coal plants. US Senate majority leader Mitch McConnell (R-Kentucky), whose state accounted for 5pc of US coal production last year, said the Obama-era regulations would have made it "nearly impossible" to build coal plants and disadvantaged the fuel against other energy resources.

"This is a crucial step toward undoing the damage and putting coal back on a level playing field," he said.

EPA's new proposal will be less consequential than a separate agency proposal, named the Affordable Clean Energy rule, that would weaken greenhouse gas restrictions that apply to the existing fleet of coal-, gas- and oil-fired power plants. That rule is projected to increase US power sector carbon emissions by 3pc by 2030, when compared to the emission cuts that would occur if regulations issued under Obama were enforced.

The proposal's release comes a day after the release of research showing a surge in climate-warming emissions around the globe. Carbon dioxide emissions from fossil fuels are set to increase by 2.7pc globally and 2.5pc in the US this year, according to new research from a major scientific initiative named the Global Carbon Project. Coal last year was the largest source of fossil fuel emissions at 40pc of the total.


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27/03/24

Louisiana pipeline crossing bill nears vote: Update

Louisiana pipeline crossing bill nears vote: Update

Updates scheduled timing of vote in first paragraph. New York, 27 March (Argus) — The Louisiana state senate is scheduled to vote next week on a bill seeking to clarify pipeline servitude rights and expedite pipeline crossing disputes, advancing legislation promoted by three natural gas pipeline companies involved in a legal battle with US midstream giant Energy Transfer. Natural gas transmission projects by Williams, Momentum Midstream and DT Midstream — which aim to connect growing production out of the prolific Haynesville shale to a wave of new LNG export terminals along the US Gulf coast — have been put on hold while legal proceedings between Energy Transfer and DT Midstream play out. All three companies' proposed pipelines would cross Energy Transfer's own Tiger pipeline in northern Louisiana. The three pipeline companies' projects propose an excessive number of crossings over the Tiger line, an attorney for Energy Transfer argued in a Louisiana senate committee last week, and Energy Transfer has the servitude rights to stop them. But Energy Transfer's "unique" interpretation of the civil code on pipeline crossings is hurting the economy of Louisiana, the author of the bill , Louisiana senator Alan Seabaugh (R), said last week. By blocking the construction of new pipelines out of the Haynesville, Energy Transfer is eliminating jobs and taxes that would be created by new infrastructure, he said. Moreover, by arguing its servitude rights extend above and below its existing pipeline "to the center of the earth," Energy Transfer is "asserting a right that nobody has ever asserted before," Seabaugh said. The Seabaugh bill clarifies that, unless explicitly stated otherwise in a contract, pipeline servitude rights extend only to the physical space occupied by the pipeline and any space necessary to maintain it. The contract stipulating Energy Transfer's servitude rights for the Tiger pipeline is silent on the subject of that vertical, underground space, according to bill supporters. "This really isn't about pipeline crossings — this is about controlling market share," said Jimmy Faircloth, attorney for Momentum Midstream. But the pipeline industry has been amicably working together for decades to allow for reciprocal crossings, Energy Transfer attorney Kay Medlin said. By ripping up this convention over a dispute involving so many crossings, and forcing an expedited legal proceeding for something which "is not a minor process," the Seabaugh bill threatens an industry "that ain't broke," she said. "This legislation will break it, and you will likely spend years trying to fix it, if you ever can," Medlin said. The Seabaugh bill is a companion to two bills which passed 100-0 and 99-0, respectively, in the Louisiana House of Representatives on 21 March. Those bills seek to clarify the law on pipeline crossings and to expedite proceedings on pipeline crossing disputes. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Hampton Roads may have space for Baltimore coal exports


27/03/24
News
27/03/24

Hampton Roads may have space for Baltimore coal exports

Houston, 27 March (Argus) — Terminals in Hampton Roads, Virginia, may have some available capacity to take rerouted coal shipments from Baltimore, Maryland, despite increasing exports from a year earlier for the seventh consecutive month in February. Coal loadings at Hampton Roads reached an estimated 3.31mn short tons (st) (3mn metric tonnes) last month, rising 7.8pc from February 2023, according to the Virginia Maritime Association. Still, historic Hampton Roads export data going back to 1993 showed that combined shipments from the three terminals in the region peaked at 5.48mn st in April 2012, which is nearly 66pc higher than last month's exports. This suggests that Hampton Roads terminals may have capacity to load additional coal volumes that were originally booked to ship out of terminals upstream from the Francis Scott Key Bridge in Baltimore, which collapsed on Tuesday morning, closing the Port of Baltimore for an indefinite period of time. The two Baltimore coal terminals cut off by the bridge collapse, Consol Energy's Consol Marine Terminal and CSX's Curtis Bay Coal Piers, have a combined export capacity of about 34mn st. Railroad Norfolk Southern (NS), which operates the Lamberts Point terminal at Hampton Roads, said today it is working with impacted international customers and port partners to "provide alternate routing solutions." "Ports on the east coast are resilient and have the capacity to serve the flow of freight," NS said. Lamberts Point terminal handled 1.19mn st of coal in February, a 20pc jump from February 2023. Despite this increase, that is still down from the 2.18mn st exported from the terminal in April 2012. Dominion Terminal Associates (DTA) exported 1.24mn st of coal in February from the Hampton Roads area, which is down 30pc from April 2012, while exports from the nearby Pier IX terminal were down 53pc to 727,023st last month. DTA's co-owners, Alpha Metallurgical Resources and Arch Resources, and Pier IX's owner Kinder Morgan all did not respond for immediate comment. By Anna Harmon Hampton Roads coal exports in 2012 st Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Louisiana pipeline crossing bill nears senate vote


27/03/24
News
27/03/24

Louisiana pipeline crossing bill nears senate vote

New York, 27 March (Argus) — The Louisiana state senate is scheduled to vote tonight on a bill seeking to clarify pipeline servitude rights and expedite pipeline crossing disputes, advancing legislation promoted by three natural gas pipeline companies involved in a legal battle with US midstream giant Energy Transfer. Natural gas transmission projects by Williams, Momentum Midstream and DT Midstream — which aim to connect growing production out of the prolific Haynesville shale to a wave of new LNG export terminals along the US Gulf coast — have been put on hold while legal proceedings between Energy Transfer and DT Midstream play out. All three companies' proposed pipelines would cross Energy Transfer's own Tiger pipeline in northern Louisiana. The three pipeline companies' projects propose an excessive number of crossings over the Tiger line, an attorney for Energy Transfer argued in a Louisiana senate committee last week, and Energy Transfer has the servitude rights to stop them. But Energy Transfer's "unique" interpretation of the civil code on pipeline crossings is hurting the economy of Louisiana, the author of the bill , Louisiana senator Alan Seabaugh (R), said last week. By blocking the construction of new pipelines out of the Haynesville, Energy Transfer is eliminating jobs and taxes that would be created by new infrastructure, he said. Moreover, by arguing its servitude rights extend above and below its existing pipeline "to the center of the earth," Energy Transfer is "asserting a right that nobody has ever asserted before," Seabaugh said. The Seabaugh bill clarifies that, unless explicitly stated otherwise in a contract, pipeline servitude rights extend only to the physical space occupied by the pipeline and any space necessary to maintain it. The contract stipulating Energy Transfer's servitude rights for the Tiger pipeline is silent on the subject of that vertical, underground space, according to bill supporters. "This really isn't about pipeline crossings — this is about controlling market share," said Jimmy Faircloth, attorney for Momentum Midstream. But the pipeline industry has been amicably working together for decades to allow for reciprocal crossings, Energy Transfer attorney Kay Medlin said. By ripping up this convention over a dispute involving so many crossings, and forcing an expedited legal proceeding for something which "is not a minor process," the Seabaugh bill threatens an industry "that ain't broke," she said. "This legislation will break it, and you will likely spend years trying to fix it, if you ever can," Medlin said. The Seabaugh bill is a companion to two bills which passed 100-0 and 99-0, respectively, in the Louisiana House of Representatives on 21 March. Those bills seek to clarify the law on pipeline crossings and to expedite proceedings on pipeline crossing disputes. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Grupo Carso expande su huella en energía


27/03/24
News
27/03/24

Grupo Carso expande su huella en energía

Mexico City, 27 March (Argus) — En los últimos años Grupo Carso, dirigido por Carlos Slim, ha expandido sus operaciones en el sector de petróleo y gas natural, destacándose como uno de los pocos operadores que han fortalecido su presencia a pesar de las restricciones del presidente mexicano Andrés Manuel López Obrador a la inversión del sector privado. A medida que los independientes y las grandes empresas petroleras han empezado a cerrar sus negocios en medio de la falta de nuevas oportunidades en subastas de la fase de exploración y producción, el Grupo Carso ha adquirido dos de los mayores contratos de aguas someras en los últimos 12 meses y ha expresado interés en hacer nuevas adquisiciones. Durante una conferencia de prensa de cuatro horas en febrero, Slim confirmó el interés de la empresa en desempeñar "un papel más importante en el sector de los hidrocarburos y, finalmente, participar en los productos petroquímicos." Slim, la persona más rica de México y director de un conglomerado que abarca desde las telecomunicaciones hasta la minería, también expresó su interés por "ser socio de alguien con experiencia" y por aumentar la participación de la empresa en el operador independiente estadounidense Talos Energy. La división de energía de Grupo Carso, Carso Energy, tenía un papel marginal en el sector aguas arriba de México antes de esta administración, con derechos de producción y exploración de dos bloques terrestres asegurados tras la reforma energética de 2014. A pesar de que los contratos se adjudicaron en 2017, los bloques 12 y 13 de Veracruz siguen en fase de exploración en medio de la falta de equipos de perforación disponibles y la presencia del crimen organizado en la zona, que ha impedido el acceso al emplazamiento, el operador informó al regulador de petróleo CNH el pasado diciembre. Pero los dos bloques terrestres son pequeños en comparación con los bloques de aguas poco profundas que Grupo Carso compró el año pasado. En septiembre, Grupo Carso completó la compra por $124 millones de una acción de 49.9pc en la filial mexicana de Talos Energy, involucrada también en el mega yacimiento de aguas superficiales de Zama que se está desarrollando con la paraestatal Pemex. Con un pico pronosticado de producción de 180,000 b/d de crudo para 2026, el yacimiento sería el segundo campo de producción de crudo más importante de México según las cifras de enero. El pasado diciembre, Carso Energy llegó a un acuerdo de $530 millones para adquirir el bloque de aguas someras 4 del conglomerado mexicano Petrobal en la cuenca sureste. El bloque es el tercer contrato de producción de crudo más alto, con una producción de 11,784 b/d en enero, según la CNH. Inversiones en gas En el sector del gas, Carso Energy también opera el gasoducto de gas natural Sasabe-Samalayuca de 472mn cf/d y es socio en las líneas estadounidenses de interconexión Waha-Presidio y Waha-San Elizario. Pero mientras que la mayoría de las empresas del sector de la energía han visto un colapso de las oportunidades de inversión durante la administración de López Obrador, el Grupo Carso parece ser una de las pocas empresas del sector privado con las que el presidente permitirá que las empresas estatales Pemex y CFE hagan negocios. CFE adjudicó directamente un nuevo contrato de gasoducto al operador en diciembre del año pasado, con un acuerdo para ampliar la línea de gas Sasabe-Samalayuca de 416km y 472mn cf/d de Sasabe, Sonora a Mexicali, Baja California. López Obrador, a menudo crítico de las empresas del sector privado dentro del sector de la energía, incluso ha elogiado el papel creciente de Slim en el mercado del petróleo y el gas, celebrando su adquisición del contrato Petrobal por permitirle "permanecer en manos mexicanas." Mirando hacia el futuro, los profundos bolsillos del Grupo Carso podrían convertirlo en un socio potencial para desarrollar el campo de gas de aguas profundas de Lakach tras la decisión de New Fortress Energy de retirarse el pasado mes de noviembre. Pero el entorno de bajos precios del gas podría complicar el proyecto en el que Pemex ya ha invertido $1.4 mil millones, mientras que la falta de experiencia de Carso en aguas profundas plantea preguntas sobre su viabilidad como socio. Carso Energy representó sólo 1.6pc de los Ps55.4 mil millones ($3.29 mil millones) totales de ventas del Grupo Carso durante el cuarto trimestre del año pasado, pero la estrategia de adquisición del grupo y el estatus favorecido frente a la administración podrían ver esa cuota aumentar en los próximos años. Por Rebecca Conan Proyectos de energía de Carso Proyecto Tipo de proyecto Tamaño/capacidad Bloque 12 E&P en tierra Fase de exploración Bloque 13 E&P en tierra Fase de exploración Zama E&P en aguas someras 180,000 b/d crudo en 2026 Bloque 4 E&P en aguas someras 11,784 b/d crudo en enero Sasabe-Samalayuca Gasoducto 472mn cf/d Waha-Presidio Gasoducto 1.4 Bcf/d Waha-San Elizario Gasoducto 1.1 Bcf/d Grupo Carso Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Serica CEO warns on UK offshore investment


27/03/24
News
27/03/24

Serica CEO warns on UK offshore investment

London, 27 March (Argus) — The lack of a stable offshore fiscal regime is creating shareholder pressure on UK-focused independent oil and gas operators to invest abroad, according to outgoing Serica Energy chief executive Mitch Flegg. "The feedback I get from shareholders and from banks is: 'What are you doing in the UK? We want you to invest in other parts of the world'," Flegg told attendees at a meeting of industry group Offshore Energies UK (OEUK) today. "That's the elephant in the room. We can't ignore that." The UK government introduced an Energy Profits Levy (EPL) windfall tax on oil and gas profits in summer 2022 in response to the jump in energy prices resulting from Russia's invasion of Ukraine. Initially the levy meant profits were taxed at 65pc, but by the start of last year this was 75pc. In February, UK finance minister Jeremy Hunt extended the duration of the EPL for a year to 2029. Flegg said the offshore oil and gas sector is "not whining about the levy itself" but it is concerned about "the continual changes in the fiscal regime and it's the instability, rather than the rate, that we're worried about". Serica, which in recent months has averaged production of 45,500 b/d of oil equivalent (boe/d) in the UK offshore, is now facing pressure to look at other countries, such as Norway. While that country has always had a 78pc tax rate, "that doesn't put us off at looking at working [there]", Flegg said. "What makes it more attractive is that it's been stable and the allowances that go with that are well thought through and have been there for years and years," he said. Flegg said another concern is offshore regulator NSTA's new emissions reduction plan, announced today , which could see the authority require operators to cease production of assets with high-emissions intensity as part of an increased drive for electrification at offshore facilities. Flegg acknowledged the industry has needed encouragement "to move in the right direction" on emissions, but said some elements of the NSTA plan "have gone too far" and that important infrastructure could be lost if facilities shut down because of a lack of electrification. "This is a fragile industry. We all depend upon each other and we've built upon the supply chain," he said. "The supply chain depends on operators and operators depend upon the infrastructure that's out there. "If the infrastructure doesn't exist then we're not going to be able to tie back new discoveries." Flegg, who will step down as Serica chief executive in mid-April, was speaking at the launch of OEUK's Business and Supply Chain Outlook report. This said UK offshore oil and gas production will continue to decline at double-digit rates if measures are not taken to improve the investment environment. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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