US wants answers on Mexican energy aims: Granholm

  • Market: Crude oil, Natural gas, Oil products
  • 21/01/22

Clean energy cooperation and questions over Mexico's proposed power reform topped the agenda during a meeting between President Andres Manuel Lopez Obrador and US energy secretary Jennifer Granholm in Mexico City.

"We see a great opportunity to work together on clean energy, to work together towards decarbonization as a North American block," Granholm said about the meeting yesterday at an event with women in the energy industry today. "But we also expect questions around the electricity reform to be resolved."

Ahead of the meetings, US senators called on Granholm to confront Mexico about inaction on climate change and emissions reductions as well as the threat to US investments posed by the electricity reform being debated in congress.

As Biden is pushing a net-zero greenhouse gas emissions target by 2050 and a global leadership role on climate change, Lopez Obrador's government has largely rejected renewable energy development, instead championing fuel oil and coal use and building the 340,000 b/d Olmeca refinery.

But Mexican energy minister Rocio Nahle defended Mexico's ambitions on the energy transition today, confirming it was a priority but that it "cannot happen overnight."

Lopez Obrador sent a constitutional electricity reform bill to congress on 1 October that would restore state-owned power utility CFE's market dominance by prioritizing its dispatch and capping private-sector participation at 46pc.

The reform would revoke all private-sector generation permits — some 40,924MW, or 48pc, of Mexico's installed capacity — and threaten at least $44bn in private investment and potentially violate the US-Mexico-Canada free trade agreement (USMCA).

But Lopez Obrador characterized the meeting with Granholm as a success, saying she "understood that our mission was to end corruption and to show that we are open to dialogue."

Lopez Obrador confirmed that Mexico was open to negotiating "case by case" with US and Canadian companies affected by the power reform.

"Where they believe an injustice has been made, we can reach an agreement," Lopez Obrador said.

A handful of US and Canadian companies such as Sempra Infrastructure operate in Mexico's power market but Lopez Obrador accused European companies such as Iberdrola of scaremongering about the reform.

"They should be embarrassed, talking about expropriation and power cuts, saying Mexico is Venezuela and that we have communist ideas," Lopez Obrador said.

CFE argues that self-supply rules that pre-date the 2014 energy reform and allowed large companies to generate power on site at preferential transmission rates have been abused, costing the utility $347mn/yr.


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28/03/24

'Weeks, months' to reopen Baltimore waterway: professor

'Weeks, months' to reopen Baltimore waterway: professor

Houston, 28 March (Argus) — It could take weeks or even months to clear debris and reopen the waterway under the collapsed Francis Scott Key Bridge in Baltimore, Maryland, according to a engineering professor at the nearby Johns Hopkins University. As of Wednesday, there was no official timetable for the reopening of the Port of Baltimore after a major highway bridge over the Patapsco River was hit in the early hours of 26 March by a container ship and collapsed, with the debris and ship blocking the waterway. "I'd be shocked if it's weeks, but I don't think it'll take even a year" to clear the waterway, structural engineer and Johns Hopkins professor Benjamin Schafer said Wednesday. He expects the rebuild of the bridge to take significantly longer. "I've lived through quite a few civil infrastructure projects and they're rarely less than 10 years. So I think that's what we're looking at," Schafer said. He noted that it took five years to build the original Francis Scott Key Bridge and seven years to repair the Sunshine Skyway Bridge in Tampa Bay, Florida, after a similar collapse in 1980. Still, "this is definitely not a national supply chain crisis," John Hopkins operations management professor Tinglong Dai said Wednesday. "The effect will be mostly local, mostly minimal and mostly temporary." The bridge collapse and port closure is also unlikely to trigger a global supply chain crisis, he said. The Port of Baltimore is an important but "niche" port specializing in automobile imports and exports, Dai added. "The supply chain has evolved...I have already seen a lot of rerouting happening." Automakers started adjusting their supply routes away from the top port for US vehicle imports the day of the collapse, including General Motors, Ford and Mercedes-Benz. Baltimore is also a major port for coal exports, which may start to shift to terminals to the south in Hampton Roads, Virginia. Freight rates for ships that carry coal could see increases in global markets Other commodities like asphalt and caustic soda that move through the port will see challenges, while organic agriculture imports may see less problems due to seasonal flows. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Baltimore probe includes potential contaminated fuel


28/03/24
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28/03/24

Baltimore probe includes potential contaminated fuel

New York, 28 March (Argus) — Federal authorities are examining whether the containership that crashed into the Francis Scott Key Bridge in Baltimore, Maryland, was burning contaminated marine fuel at the time of the incident. The National Transportation Safety Board (NTSB) said it will collect a sample of the fuel on board the 116,851-dwt container vessel Dali as part of its investigation into why the ship lost power and hit the bridge support early on 26 March, taking down the span. "That sample will be taken, and we will analyze the quality, any sort of contaminants, we will look at viscosity," NTSB chair Jennifer Homendy said this week. "That will be part of our investigation." Shipboard power is generally generated by turbines connected to the same engines driving propulsion. There are a number of issues related to fuel that could have led to a loss of power on the ship, according to Wajdi Abdmessih, chief executive at Seahawk Services, a marine fuel testing company based in New Jersey. The fuel on the ship could have been contaminated, as was the case last year when contaminated very low-sulphur fuel oil was found on a number of ships fueld through a Houston, Texas, bunkering operation, or it could have been a compatibility issue with the vessel's engine, where the fuel was not optimized for the equipment. "If the vessel switches between different types of fuels, compatibility and stability issues could occur, which may cause a problem with the engine," Abdmessih said. "Unstable fuel could cause increased sludging and high sediment, which could clog the filter and cause fuel starvation and engine downturns." Singapore-based Synergy Marine Group, which manages Dali , said it is taking part of this investigation but declined to comment possible causes of the accident, including possible fuel contamination. The pilots on board the vessel lost control because of a loss of propulsion, according to the Maritime and Port Authority of Singapore (MPA), which is assisting in the investigation because Dali was sailing under the Singapore flag. An issue with the ship's propulsion and auxiliary machinery was discovered during its June 2023 inspection in San Antonio, Chile , according to Equasis, a vessel information database. The problem involved the vessel's gauges and thermometers, according to the data. Its most recent inspection was in September 2023, but there are no indications of issues from the inspection. The vessel's next inspection was due in June 2024, the MPA said. By Luis Gronda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Mosaic plant sustains minor damage from fire


28/03/24
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28/03/24

Mosaic plant sustains minor damage from fire

Houston, 28 March (Argus) — Florida-based phosphate and potash fertilizer producer Mosaic anticipates limited damage to a production plant near Tampa and minimal disruption to operations in the coming weeks following a brushfire on Monday. The brushfire ignited Monday evening during routine maintenance near Mosaic's Riverview phosphate production facility and was initially contained before rekindling Tuesday morning because of heavy winds. The fire was fully under control by Tuesday afternoon, according to local first responders. Mosaic told Argus on Tuesday the fire was not considered a threat to the facility initially, but now expects the plant sustained "limited damage to ancillary operations" and the impact could last between four to six weeks. The Riverview plant has a production capacity of 1.8mn metric tonnes (t) of processed phosphate products, and produces 30,000 t/week, according to Mosaic. The facility was producing phosphates primarily for exports to Brazil at the time of the fire, the company added. Smoke was observed Monday from the fire as a result of foam retardants used by local fire officials to cool the high-density polyethylene pipes. Polyethylene gas piping is often used for natural gas distribution. Natural gas flows delivered to the plant fell slightly Wednesday at 2.42mn cf/d, down from 2.45mn cf/d on Monday, once the fire was extinguished, according to data from Florida Gas Transmission. Flows at the plant on Thursday rebounded to 2.45mn cf/d, in line with expectations that affected phosphate output at the plant should only be temporary. By Taylor Zavala Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Long-term contracts needed to stabilise gas prices: MET


28/03/24
News
28/03/24

Long-term contracts needed to stabilise gas prices: MET

London, 28 March (Argus) — Germany and Europe need more LNG and business-to-business long-term contracts to even out supply shocks and stabilise gas prices, even as demand is unlikely to reach historical heights again, chief executive of Swiss trading firm MET's German subsidiary Joerg Selbach-Roentgen told Argus . Long-term LNG contracts have a "stabilising effect" on prices when "all market participants know there is enough coming", Selbach-Roentgen said. He is not satisfied with the amount of long-term LNG supply contracted into Germany, arguing that stabilisation remains important even now that the market has "cooled down" after the price shocks of 2022. Long-term contracts are important for the standing of German industry, Selbach-Roentgen said — not to be reliant on spot cargoes is a matter of global competitiveness for the industrial gas market, he said. The chief executive called for more long-term contracts in other areas as well, such as for industrial offtakers, either fixed price or index-driven. Since long-term LNG contracts are concluded between wholesalers and producers, the latter need long-term planning security for their projects, which usually leads to terms of about 20 years. But long-term LNG contracts in general do not represent a major risk for MET nor for industrial offtakers in Europe, Selbach-Roentgen said. LNG is a more flexibly-structured "solution" to expected demand drops in regard to the energy transition as the tail end can be shipped to companies on other continents such as Asia if European demand wanes, he said. Gas demand is not likely to recover to "historical heights" again, mostly driven by industrials "jumping ship", Selbach-Roentgen said. When talking to large industrial companies, the discussion is often about the option that they might divert investments away from the German market as the price environment is "not attractive enough" for them any longer in terms of planning security, the chief executive said. This trend started out of necessity in reaction to the price spikes but may now be connected to longer-term "strategic" considerations, he said. In addition, industrial decarbonisation — as well as industrial offtakers' risk aversion because of the volatile gas market following Russian gas supply curtailments — leads companies to invest less into longer-term gas dependencies in Germany, Selbach-Roentgen said. In addition, MET advocates for a green gas blending obligation of 1-2pc green gas or hydrogen, in line with legislative drafts under discussion by the German government. This has already met with interest by offtakers, despite uncertainties around availability and prices, and would provide a regulatory framework that allows firms to prepare for the energy transition, Selbach-Roentgen said. By Till Stehr and Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Stalling climate finance an energy security risk : WRI


28/03/24
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28/03/24

Stalling climate finance an energy security risk : WRI

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