US to revive broad reviews of pipelines, leasing
President Joe Biden's administration is seeking to reinstate wide-ranging reviews of climate effects when federal regulators are deciding whether to authorize new oil and gas pipelines, expand federal fossil fuel leasing or make other major decisions.
The proposed changes, issued today, would formally undo a sweeping rollback to regulations under the National Environmental Policy Act (NEPA) that former president Donald Trump issued in 2020 that are not fully in effect. The move has won praise from environmentalists but revived complaints about increasing "red tape" during the construction of highways and other infrastructure.
"At a time when our country is desperately trying to build, why announce these changes now and throw states and private builders into limbo?" US Senate Environment and Public Works Committee ranking member Shelley Moore Capito (R-West Virginia) said.
Federal agencies tasked with reviewing highway projects, authorizing pipelines and managing oil leasing must take a "hard look" at the potential environmental effects by preparing reviews under NEPA. Decades of court rulings and on-the-ground implementation guide what regulators must evaluate, resulting in reviews that can take years to finish and exceed hundreds of pages for complex projects.
Trump tried to reset implementation of NEPA and focus on near-term effects, while halting the review of effects such as climate change that are geographically distant and remote in time. But many agencies have yet to implement the 2020 changes. Biden's proposal would undo the rollback, while a subsequent "Phase 2" rule would pursue broader changes.
"The basic community safeguards we are proposing to restore would help ensure that American infrastructure gets built right the first time and delivers real benefits — not harms — to people who live nearby," White House Council on Environmental Quality chair Brenda Mallory said.
The White House proposal would reinstate a requirement for federal agencies to consider direct, indirect and cumulative effects of their actions, reversing the 2020 changes that virtually eliminated the need to look into potential effects on climate change. The proposal would set baseline standards under NEPA but instruct federal agencies they could prepare more robust reviews when warranted.
The proposal is unlikely to affect the Biden administration's work on high-profile reviews where work has already started, such as reviews of the 750,000 b/d Dakota Access crude pipeline, a planned rerouting of the 540,000 b/d Line 5 crude and NGL pipeline, and a supplemental review of oil leasing within the Arctic National Wildlife Refuge in Alaska.
The $1.5 trillion bipartisan infrastructure bill, which is awaiting a final vote in the US House of Representatives, includes language to fast-track environmental reviews under NEPA for a subset of highways and other projects funded under the legislation.
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New Zealand’s Genesis Energy to resume coal imports
New Zealand’s Genesis Energy to resume coal imports
Sydney, 8 May (Argus) — New Zealand's upstream firm and utility Genesis Energy plans to resume thermal coal imports later this year to feed its dual gas- and coal-fired Huntly power plant. The resumption was because of lower domestic gas production and rapidly declining coal stockpiles, and will mark the firm's first coal imports since 2022. Coal inventories at the 953MW Huntly plant, — New Zealand's largest power station by capacity and the country's only coal-fired facility — recently slipped below 500,000t, down from 624,000t at the end of March, and will fall below 350,000t by the end of the winter. This will trigger a need to purchase more coal to maintain a target operational stockpile of around 350,000t ahead of winters in 2025 and 2026, the company said on 8 May. Imports are currently the most efficient option for the quantity the company will need, with a delivery time of around three months, chief executive Malcolm Johns said. Genesis typically imports from Indonesia, the company told Argus . Gas production in New Zealand has dropped at a faster rate than expected, with major field production in April down by 33pc on the year, Genesis said. Lower gas availability typically leads to more coal burn, because the Huntly plant runs on gas and coal. This is in addition to an extended period of low hydropower inflows in recent months, which required higher thermal generation to ensure supply security. A prolonged outage at Huntly's unit 5 gas turbine between June 2023 and January 2024 also led to an even greater need for coal-fired generation, Genesis said. Biomass transition The company — which is 51pc owned by the state — is the second-largest power retailer in New Zealand, behind domestic utility Mercury, according to data from the Electricity Authority. It has a NZ$1.1bn ($659mn) programme for renewable power generation and grid-scale battery storage , which includes a potential replacement of coal with biomass at Huntly. But the transition to biomass "will take some years," Johns said. Genesis has successfully completed a biomass burn trial at Huntly last year and has collaboration agreements with potential New Zealand pellet suppliers, but there is currently no local source for the type of pellets needed for the plant. Genesis is hoping to move to formal agreements "as soon as counterparties are able". The company will not consider importing pellets, it told Argus . "We will only use biomass if we can secure a local New Zealand supply chain that is sustainable and cost-effective," it said. Domestic gas production New Zealand's three-party coalition government said separately on 8 May that the "material decline" in local gas production threatens energy security, blaming the previous Labour party-led government for "policy decisions which have disincentivised investment in gas production." The decisions — which were part of the former government's pledge to achieve a carbon-neutral economy by 2050 — led to a reduction in exploration for new gas resources since 2021, while suppressed maintenance drilling reduced production from existing gas fields, according to a joint release from energy minister Simeon Brown and resources minister Shane Jones. "Due to this significant reduction in gas production, the government has also been advised that some large gas consumers are expressing concern about their ability to secure gas contracts," the government said. Major industrial users such as Canada-based methanol producer Methanex have been forced to reduce production as a result, it noted. "We are working with the sector to increase production, and I will be introducing changes to the Crown Minerals Act to parliament this year that will revitalise the sector and increase production," Jones added. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Arcadium witnesses firm January-March lithium demand
Arcadium witnesses firm January-March lithium demand
Singapore, 8 May (Argus) — US-based Arcadium Lithium said demand was "quite strong" during January-March despite the bearish tone at the start of the year, while acknowledging weaker short-term lithium demand compared with previous forecasts. "Market demand was actually quite strong and certainly not reflective of some of the ‘doomsday' scenarios," said Arcadium chief executive Paul Graves with its first-quarter results, citing still growing electric vehicle (EV) sales globally and in China. Arcadium is the merged entity of Australian lithium firm Allkem and US lithium producer Livent, which completed their merger earlier this year. Global EV sales during January-March were up by around 25pc to over 3mn units, according to the IEA, mainly driven by China. China's new energy vehicle production and sales for the quarter rose by 28pc and 32pc from a year earlier to 2.114mn and 2.089mn units respectively, according to China Association of Automobile Manufacturers data. Expectations for EV sales in China are even higher in the second quarter partly because of "new economic incentives", said Graves, likely referring to China's new automobile trade-in subsidies that has boosted the prices of some battery feedstock metals. Some industry analysts opted to lower their short-term demand forecasts to account for the higher recent sales mix of plug-in hybrid electric vehicles (PHEVs), Graves said, as sales of battery EVs (BEVs) seem to be losing ground. But Graves countered this by stating that lower BEV sales, which he concedes are expected to be lower by on average 20pc globally in 2024 and 2025 compared with forecasts a year ago, will lead to lower lithium demand that will largely be made up by demand from PHEVs and non-automotive such as stationary energy storage. Arcadium predicts only around 5pc lower demand in terms of GWh in 2024 and 2025 compared with previous forecasts, with demand to remain unchanged or even slightly higher in 2026. Output boost Arcadium is still on track to raise its combined lithium carbonate and hydroxide delivered volumes by about 40pc to 50,000-54,000t lithium carbonate equivalent this year, with volume growth weighted towards the second half of the year. It sold during January-March 30,000 dry metric tonnes (dmt) of spodumene concentrate at $827/dmt on a 5.4pc grade basis and 9,300t of lithium hydroxide and carbonate at around $20,500/t. Contrary to the prevailing view that lithium hydroxide is trading at a discount compared with lithium carbonate, Graves said that is "absolutely not the case" in their portfolio but rather it is at a "significant premium to carbonate". The company has fully commissioned the first 10,000 t/yr expansion at its Fenix lithium carbonate facility in Argentina, which is producing at close to full capacity. Its Olaroz stage two expansion in Argentina, with a nameplate capacity of 25,000 t/yr technical-grade lithium carbonate, is producing at lower rates given a longer ramp-up period. Its lithium hydroxide facilities in US North Carolina's Bessemer and China's Zhejiang with a combined 20,000 t/yr of capacity are still undergoing qualification. Arcadium is planning to expand in Argentina and Canada and expects to add 95,000 t/yr of additional nameplate production capacity by the end of 2026, which will span across spodumene, lithium carbonate and lithium hydroxide. By Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Doubts abound over US midcon E15 shift: NATSO
Doubts abound over US midcon E15 shift: NATSO
Houston, 7 May (Argus) — An effort by eight US midcontinent states to start selling 15pc ethanol (E15) gasoline blends year-round starting in 2025 remains unlikely, according to US fuel retailer trade association NATSO. The US approved last month the request from Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin for year-round E15 gasoline sales starting next year. But even with that approval there are many barriers to making those sales a reality, said David Fialkov vice president of government affairs for NATSO, which represents truck stops and travel center operators. This includes a lack of investment from pipelines and refiners to prepare for the changes, as well as the higher costs of separating and selling different gasoline specifications at the retail level. "I remain pessimistic that it will come to fruition," Fialkov said Tuesday at a conference held by fuel retail industry group SIGMA in Austin, Texas. Political pressure to delay or abate the change in the midcontinent states will probably continue until refiners, pipeline companies and retailers begin to make the investments necessary, said Fialkov. E15 has been available for sale across the US since 2019, but a federal court in 2021 found that the Clean Air Act offers a fuel volatility waiver to refiners to produce only 10pc ethanol gasoline. The Environmental Protection Agency (EPA) has worked around this ruling for the last two summers by issuing temporary emergency orders allowing the sale of E15 because of the war in Ukraine's squeeze on crude prices. A group of midcontinent refiners has petitioned the EPA to delay implementation of the E15 rule until the summer of 2026. The EPA has not yet ruled on the request. Fialkov said a legislative solution to the issue at the federal level would provide a clear and uniform pathway to E15, as opposed to the the EPA's rule which leaves some states still relying on the waiver and others opting to go with year-round E15. By Zach Appel Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EPA sets new oil and gas methane reporting rules
EPA sets new oil and gas methane reporting rules
Washington, 7 May (Argus) — Federal regulators have updated emissions reporting requirements for oil and gas facilities as they prepare to implement a methane "waste" fee for the industry. The US Environmental Protection Agency (EPA) on Monday finalized new rules it says will improve the accuracy of data from the oil and gas sector under the federal greenhouse gas emissions reporting program. Oil and gas facility owners and operators will be required to estimate emissions from additional types of equipment under the rule, and they can draw on newer technologies, like remote sensing, to help estimate emissions. "EPA is applying the latest tools, cutting edge technology, and expertise to track and measure methane emissions from the oil and gas industry," agency administrator Michael Regan said. "Together, a combination of strong standards, good monitoring and reporting, and historic investments to cut methane pollution will ensure the US leads in the global transition to a clean energy economy." Data to support new fee The revisions to the "Subpart W" reporting requirements will be used to determine the amount of methane that will be subject to a "waste emissions charge" created by the Inflation Reduction Act. Under the law, the charge will be calculated based on the annual data that about 8,000 oil and gas sources are now required to report. The charge will begin at $900/t for 2024 methane emissions above a minimum threshold using current measurement data. It will then rise to $1,200/t in 2025 and $1,500/t in subsequent years. Industry officials had raised "serious concerns" about several aspects of the original proposal , warning it could lead to inflated emissions data. "We are reviewing the final rule and will work with Congress and the administration as we continue to reduce GHG emissions while producing the energy the world needs," American Petroleum Institute vice president of corporate policy Aaron Padilla said. The industry group previously said it will ask Congress to repeal the fee, which is only likely to occur if Republicans win control of the White House. Data collected since 2010 Oil and gas facilities have reported emissions under Subpart W since 2010. To simplify reporting, operators often count the equipment they have deployed, and use industry-wide averages to estimate emissions, in addition to other direct and indirect measurements. The industry has argued the Subpart W data is not accurate enough to collect the methane charge, which is expected to cost operators more than $6bn over the next decade. Environmental groups have had their own criticisms of the data, which they say omits vast amounts of emissions such as those from "super-emitter" events and poorly maintained flares. The final rule seeks to respond to some of those concerns by relying on updated emission factors, incorporating additional empirical data on emission rates, collecting data at a more granular level and relying on remote sensing technologies to detect large emission events. EPA also revised Subpart W to include more types of sources, including produced water tanks, nitrogen removal units and crankcase venting. The final rule also sets a threshold of 100 kg/hr of methane for requiring the reporting of emissions from "other large release events." The new data rules will take effect on 1 January 2025 and will first apply to reports submitted in early 2026 for next year's emissions. EPA is allowing the use of the new methodologies for calculating 2024 emissions, but operators can still use the existing rules. By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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