Asian Development Bank to end coal, oil financing
The Asian Development Bank (ADB) is planning to end financing of coal-fired power projects and oil, gas and coal mining, making it the latest financial institution to pull back from the fossil fuel sector.
The pledge is part of a new draft energy policy that focuses on supporting the low-carbon transition in Asia. The government-backed bank said it will continue to finance natural gas projects, including pipelines, LNG terminals, storage projects and gas-fired power plants, but only if no other technologies can provide the same energy service at an equivalent cost, including the social cost of carbon.
Japan and the US are the largest shareholders in the Philippines-based ADB, which lends to social and economic projects in the region. It said it will help its 68 member countries finance emissions-control technologies at existing power plants but will not invest in modernising or upgrading such plants unless they are re-engineered to use cleaner fuels, such as gas or renewables.
The bank will support its members to reduce their dependence on coal and eventually phase out coal-fired generation completely — something it acknowledged would be a tough task, given coal generated almost 60pc of electricity in Asia in 2018.
The ADB financed around $42.5bn of energy projects of all types from 2009-19, largely in the power sector, with Pakistan, India, China and Indonesia among the top recipients. The new draft policy will be considered by its board in September-October this year.
Private-sector banks in Asia have also been cutting their exposure to thermal fuels, especially coal. Singapore's largest bank DBS last month pledged to phase out its thermal coal exposure by 2039. Japan's Sumitomo Mitsui Banking and Mizuho Bank withdrew from domestic and overseas coal-fired power development projects as of May and June 2019, respectively, while Malaysia's CIMB became the first southeast Asian bank to commit to a coal-exit strategy with a deadline in December.
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Uganda aims for net zero energy sector by 2062
Uganda aims for net zero energy sector by 2062
Kampala, 18 April (Argus) — Uganda has brought forward its target for net zero carbon emissions from its energy sector by three years, to 2062, energy ministry permanent secretary Irene Batebe told an oil and gas conference in Kampala. This new deadline is still lagging some way behind a 2050 "net zero operations" target pledged by 40 oil and gas firms , including African state-owned ones such as Libya's NOC and Sudan's Nilepet, at the UN Cop 28 climate summit. Signatories to the Cop 28 charter also pledged "near-zero upstream methane emissions" by 2030. Uganda's CO2 emissions from fuel combustion were 5.7mn t in 2021, according to most recent IEA data, but this will probably increase with the development of a 230,000 b/d crude project in its western Lake Albert region. The crude project had been scheduled to begin production in late 2025 — although the head of TotalEnergies' Ugandan operations recently said the company may miss this long-standing target. Batebe said the Ugandan government has plans to increase hydroelectricity capacity to around 52GW by 2050, to increase use of solar wind and nuclear power, and has a budget of $8bn by 2030 to finance these. The IEA estimates hydroelectricity accounts for around 90pc of Uganda's generating capacity. But this installed capacity is only around 1.5GW currently. The country's nuclear ambitions remain at the planning stage, and biomass — wood and charcoal — dominates energy consumption. "We want to phase out use of coal, but… countries that produced oil and gas should get out first and we shall follow," she said. "We cannot afford to remain poor. We shall produce our oil and gas responsibly, use LPG from the [planned] refinery and then connect more than the current 57pc of our population to electricity with affordability to use it for cooking and other uses other than lighting then meet our emissions targets." Batebe said the world's longest heated crude export pipeline, which will connect its oil fields with to the port of Tanga on Tanzania's Indian Ocean coast, will be insulated to "three layers" to limit emissions. TotalEnergies' Ugandan general manager Philippe Groueix said the two Lake Albert projects, Tilenga and Kingfisher, are designed to produce crude at 13kg of CO2/bl, far below the world average of 33 kg/bl. TotalEnergies is developing the 190,000 b/d Tilenga field and and Chinese state-controlled CNOOC the 40,000 b/d Kingfisher. By Mercy Matsiko Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
NSTA fines Neo Energy for North Sea methane venting
NSTA fines Neo Energy for North Sea methane venting
London, 18 April (Argus) — UK offshore regulator the North Sea Transition Authority (NSTA) has fined UK upstream firm Neo Energy £100,000 for breaching its methane venting permit at North Sea fields. The company emitted 1,200t of methane in excess of its permit from the Donan, Lochranza and Balloch fields in the first nine months of 2022. Neo had permission to vent 378t of methane from installations at these fields in that year, but incorrectly assigned volumes vented through unlit flares to its flaring consent, the NSTA found. Neo showed a "lack of oversight" by failing to detect the licence breach for seven months, NSTA said. The company reached its annual limit by 21 March 2022, but continued venting without authorisation until October 2022. The company said it did not update its flare and vent allocation process to reflect NSTA guidance updated in 2021, and as such was still assigning its flaring and venting according to previous guidance. Neo becomes the fourth company to be fined by the NSTA over breaches relating to flaring and venting consents. The regulator in 2022 sanctioned Equinor and EnQuest and last year fined Spanish utility Repsol for consent breaches. The four companies have been fined a total of £475,000 for the breaches. And the regulator in February had four more investigations under way for breaches of vent consents. Neo Energy's fine is equivalent to £2.98/t of CO2e emitted, assuming a global warming potential of methane that is 28 times that of CO2 on a 100-year time scale, compared with a UK emissions trading system price of £34.40/t of CO2e on 17 April. The UK offshore industry targets a 50pc reduction in production emissions of greenhouse gases by 2030, from a 2018 baseline. And it intends to end all routine venting and flaring by that year. The regulator last year warned that "further, sustained action" would be needed to reach the 2030 emissions reduction goal. Methane emissions from offshore gas fell in recent years, to 1mn t in 2022 from 1.6mn t in 2018, according to NSTA data. Roughly half of methane emissions in the sector in recent years has been produced by venting, while flaring makes up about a quarter of the emissions. The UK government is a member of the Global Methane Pledge group of countries that aims to reduce methane emissions by 30pc by 2030 from a 2020 baseline. By Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia’s Queensland legislates emissions targets
Australia’s Queensland legislates emissions targets
Sydney, 18 April (Argus) — Australia's Queensland state today approved two separate laws setting renewable energy and emissions reduction targets over the next decade, as it transitions away from a coal-fired dependent power generation system. Queensland set net greenhouse gas (GHG) emissions reduction targets of 30pc below 2005 levels by 2030, 75pc by 2035 and zero by 2050 under the Clean Economy Jobs Act, while theEnergy (Renewable Transformation and Jobs) Act sets renewable energy targets of 50pc by 2030, 70pc by 2032 and 80pc by 2035. The state is on track to surpass the 2030 emissions target, latest data show, as it achieved a 29pc reduction in 2021. Even though the share of renewables in the power mix last year was the lowest across Australia at 26.9pc, it has been increasing consistently since 2015 when it was 4.5pc, according to data from the National Electricity Market's OpenNem website. Coal-fired generation has been steadily falling, down to 42.9TWh or a 65.7pc share in 2023 from 52.9TWh or 83pc in 2018. Most of Queensland's coal-fired plants belong to state-owned utilities, which the previous Labor party-led government of Annastacia Palaszczuk indicated would stop burning coal by 2035 . The new Labor party premier Steven Miles disclosed the 75pc emissions reduction target by 2035 in his first speech as leader last December. The Energy Act locks in public ownership of electricity assets, ensuring that at least 54pc of power generation assets above 30MW remain under state control, as well as 100pc of all transmission and distribution assets and 100pc of so-called "deep storage" assets — pumped hydro plants with at least 1.5GW of capacity. The government will need to prepare and publish a public ownership strategy for the July 2025-June 2030 and July 2030-June 2035 periods. A fund totalling A$150mn ($97mn) will also be set up to ensure workers at existing state-owned coal-fired power plants and associated coal mines have access to new jobs and training or financial assistance during the transition. The Clean Economy Jobs Act sees the government receiving advice from an expert panel on the measures needed to reduce emissions. The government will need to develop and publish sector plans by the end of 2025 with annual progress reports to Queensland's parliament. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US LNG growth seen stoking price volatility
US LNG growth seen stoking price volatility
Ponte Vedra Beach, 17 April (Argus) — Natural gas prices in the US and globally will face greater volatility because of LNG export expansions along the US Gulf Coast, according to speakers at the Southeast LDC Gas Forum in Ponte Vedra Beach, Florida. LNG export capacity from the US, already the largest provider of LNG into the global market, is set to expand in the coming years, putting an important source of global supply in the path of hurricanes and exposed to pipeline disruptions from key supply areas such as the Permian basin in west Texas and southeastern New Mexico. US baseload LNG export capacity was forecast to increase by the end of 2025 to about 16.7 Bcf/d (473mn m³/d), up by 46pc from the 11.4 Bcf/d of capacity at the end of 2023, according to the US Energy Information Administration (EIA). US LNG production by 2030 will meet about 5pc of global gas demand and 30pc of global LNG demand, Jill Davies, general manager of North America LNG Trading at Shell Energy, told attendees today at the conference. Most of those supplies will depart the US from the Gulf coast. That means a disruption in US exports could cause global prices to rise or domestic prices to crater. More pipelines and storage would allow LNG export terminals to access supply from different regions, defraying some of the price risk, according to speakers at the conference. The potential price volatility highlights the need for greater US political support for new gas infrastructure, Davies said on the sidelines of the conference. Pipeline projects aiming to connect key producing areas to growing demand centers have failed to clear regulatory hurdles in recent years, raising concerns about the potential for supply growth from prolific fields such as the Marcellus and Utica shales. Prices in the US market can also soar on supply disruptions or plunge on downtime at LNG export terminals. Prices have faced downward pressure this spring from ongoing maintenance at the 2.1 Bcf/d Freeport LNG export terminal in Texas. An extended, eight-month-long shutdown of that terminal that began in the summer of 2022 caused prices to fall by backing up supply into the US market. Producers that gain more exposure to exports and, in turn, the global market could "face a tenuous situation when a hurricane stirs up in the Gulf," Zach Inman, vice president of origination for BP said during a panel discussion Wednesday. By Jason Womack Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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