Australian Greens eye banning new thermal coal projects
The Australian Greens party has focused on a ban on new thermal coal developments or a climate trigger in planning approvals, as key to its support for the ruling Labor Party's climate legislation.
The Greens — which hold the balance of power in the Senate — demanded that all new coal and gas projects be banned in return for their support for the safeguard mechanism, which is central to Canberra's plans to cut emissions by 43pc of 2005 levels by 2030. But minister of climate change and energy Chris Bowen ruled this out last month, and the two parties are negotiating to get the mechanism passed before federal parliament stops sitting on 31 March.
The Greens, which want more ambitious carbon reduction plans, risk derailing the 43pc target if they block the safeguard mechanism. The opposition Liberal party, which had a 26-28pc target by 2030 when they lost power in May 2022, will vote against the mechanism.
Greens party leader Adam Bandt told ABC national radio that he is open to suggestions on how to deal with new coal and gas projects, including a climate trigger, a pause on new approvals, and hiving off thermal coal from coking coal and gas for a ban.
A climate trigger would see the impact of climate change being taken into account when approving any coal or gas project. A ban on just thermal coal — while leaving the option of new coking coal and gas projects — would allow Labor to address concerns about a shortage of domestic gas on the east coast of Australia and maintain supplies of coking coal for steelmaking, which is required in many renewable power projects.
Labor is reviewing 19 coal and gas project development approvals, with greater emphasis on their potential to add to climate change. It has not approved any coal mine developments or extensions since it came to power in May 2022, and instead used a 22-year old environmental law for the first time to block a new coal mine proposal. But the environment minister Tanya Pilbersek in February approved Australian firm Santos' Surat Basin plan to drill 116 new wells to provide gas for its Gladstone LNG plant in Queensland.
The Australian Senate is due to vote on the safeguard mechanism in March and needs the support of the Greens and at least two crossbenchers for the legislation to be passed, with the opposition Liberal coalition opposed to the bill.
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Australia’s Woodside pledges extra domestic gas in 2025
Australia’s Woodside pledges extra domestic gas in 2025
Sydney, 24 April (Argus) — Australian independent Woodside Energy has promised to increase gas flows to domestic customers with a predicted national shortfall. The firm promises to make an extra 32PJ (854mn m³) available to the Western Australia (WA) domestic market by the end of 2025, Woodside chief executive Meg O'Neill said at its annual meeting in Perth on 24 April, following criticism of the state's LNG projects' contribution to WA supplies . Woodside produced 76PJ for the WA market in 2023. The company has initiated an expression of interest process for an additional 50PJ of gas from its Bass Strait fields offshore Victoria state for supply in 2025 and 2026 when a tight market is expected for east Australia . Woodside also said its Sangomar oil project offshore Senegal is 96pc complete with 19 of 23 initial wells complete. WA's Scarborough project is 62pc complete with trunkline installation and well drilling having started in the offshore Carnarvon basin. It last month awarded the sub-sea marine installation contract for its 100,000 b/d Trion project offshore Mexico, which is targeting its first oil in 2028. Woodside's 2023 operating revenue was $14bn , resulting in a profit of $1.7bn. Climate tensions Woodside's climate transition action plan saw 58.36pc opposition from shareholders at the annual meeting but is non-binding on the company. Woodside's 2021 climate report also faced significant opposition with 48.97pc voting against its adoption. The company did not put its 2022 climate report up for vote at last year's annual meeting. Its new emissions abatement target aims to reduce Woodside's customers' scope 1 and 2 emissions by 5mn t/yr by 2030, along with a $5bn investment in new energy projects by the same date. Net equity scope 1 and 2 greenhouse gas emissions rose to 5.53mn t carbon dioxide equivalent (CO2e) in 2023 from 4.61mn t CO2e in 2022 because of its merger with BHP Petroleum in mid-2022. Several major institutional shareholders including large domestic and international pension funds had already flagged their vote against Woodside's climate report, citing an insufficient urgency to reduce the firm's emissions. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US-led carbon initiative misses launch date
US-led carbon initiative misses launch date
Houston, 23 April (Argus) — The Energy Transition Accelerator (ETA), a global initiative to use voluntary carbon market revenue to speed the decarbonization of developing countries' power sectors, has missed its planned Earth Day launch but continues to prepare for doing business. At the Cop 28 climate conference in Dubai last year, the initiative's leaders said they hoped to formally launch the program on 22 April 2024 . That didn't happen, but the program's leaders last week announced that the US climate think tank Center for Climate and Energy Solutions will serve as the ETA's new secretariat and that former US special presidential envoy for climate John Kerry will serve as the honorary chair of an eight-member senior consultative group that will advise the ETA's design and operations. The ETA plans to spend 2024 "building" on a framework for crediting projects they released last year. ETA leaders said the initiative could ultimately generate tens of billions of dollars in finances through 2035. The ETA also said the Dominican Republic had formed a government working group to "guide its engagement" as a potential pilot country for investments and that the Philippines would formally participate as an "observer country" rather than as a direct participant immediately. The ETA is still engaging Chile and Nigeria as potential pilot countries too, the initiative told Argus . The ETA is being developed by the US State Department, the Rockefeller Foundation, and the Bezos Earth Fund and would be funded with money from the voluntary carbon market. The initiative's ultimate goal is to allow corporate and government offset buyers to help developing countries decarbonize their power sectors through large projects that accelerate the retirement of coal-fired power plants and build new renewable generation. As of now, the ETA's timeline for future changes and negotiations with countries and companies is unclear. The program's goals are ambitious, especially at a time when scrutiny of some voluntary carbon market projects from environmentalists has weighed on corporate offset demand. By Mia Westley Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US oil and gas deals slowing after record 1Q: Enverus
US oil and gas deals slowing after record 1Q: Enverus
New York, 23 April (Argus) — US oil and gas sector mergers will likely slow for the rest of the year following a record $51bn in deal in the first quarter, according to consultancy Enverus. Transactions slowed in March and the second quarter appears to have already lost momentum, according to Enverus, following the year-end 2023 surge in consolidation that spurred an unprecedented $192bn of upstream deals last year. The Permian shale basin of west Texas and southeastern New Mexico continued to dominate mergers and acquisitions, as companies competed for the remaining high-quality inventory on offer. Acquisitions were led by Diamondback Energy's $26bn takeover of closely-held Endeavor Energy Resources . Others include APA buying Callon Petroleum for $4.5bn in stock and Chesapeake Energy's $7.4bn takeover of Southwestern Energy . The deal cast a spotlight on the remaining private family-owned operators, such as Mewbourne Oil and Fasken Oil & Ranch, which would be highly sought after if they decided to put themselves up for sale. "However, there are no indications these closely held companies are looking to exit any time soon," said Andrew Dittmar, principal analyst at Enverus. "That leaves public explorers and producers (E&P) looking to scoop up the increasingly thin list of private E&Ps backed by institutional capital and built with a sale in mind — or figuring out ways to merge with each other." Deals including ExxonMobil's $59.5bn takeover of Pioneer Natural Resources, as well as Chevron's $53bn deal for Hess, have attracted the attention of anti-trust regulators. The Federal Trade Commission has also sought more information on the Chesapeake/Southwestern deal. "The most likely outcome is all these deals get approved but federal regulatory oversight may pose a headwind to additional consolidation within a single play," said Dittmar. "That may force buyers to broaden their focus by acquiring assets in multiple plays." By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
USGC LNG-VLSFO discount to steady itself
USGC LNG-VLSFO discount to steady itself
New York, 23 April (Argus) — The premium for US Gulf coast (USGC) very low-sulphur fuel oil (VLSFO) to LNG is expected to linger but not widen this spring, maintaining interest in LNG as a bunkering fuel. US Gulf coast LNG prices slipped from a premium to a discount to VLSFO in March 2023 and have remained there since. The discount surpassed 200/t VLSFO-equivalent in January (see chart). Both LNG and VLSFO prices are expected to remain under downward pressure due to high inventories, which could keep the current LNG discount steady. The US winter natural gas withdrawal season ended with 39pc more natural gas in storage compared with the five-year average, according to the US Energy Information Administration (EIA). Henry Hub natural gas monthly average prices dropped below $2/mmBtu in February, for the first time since September 2020, Argus data showed. The EIA expects the US will produce less natural gas on average in the second and third quarter of 2024 compared with the first quarter of 2024. Despite lower production, the US will have the most natural gas in storage on record when the winter withdrawal season begins in November, says the EIA. As a result, the agency forecasts the Henry Hub spot price to average less than $2/mmBtu in the second quarter before "increasing slightly" in the third quarter. EIA's forecast for all of 2024 averages about $2.20/mmBtu. US Gulf coast VLSFO is facing downward price pressure as demand falls and increased refinery activity signals a potential supply build . Rising Gulf coast refinery activity was likely behind some of the drop in prices. Gulf coast refinery utilization last week rose to 91.4pc, the highest in 12 weeks and up by 0.9 percentage points from the prior week. US Gulf coast suppliers are also eyeing strong fuel oil price competition from eastern hemisphere ports such as Singapore and Zhoushan, China, importing cheap Russian residual fuel oil. In general, LNG's substantial discount to VLSFO has kept interest in LNG for bunkering from ship owners with LNG-burning vessels high. The EIA discontinued publishing US bunker sales statistics with the last data available for 2020. But data from the Singapore Maritime & Port Authority, where the LNG–VLSFO discount widened to over $200/t VLSFOe in February, showed Singapore LNG for bunkering demand increase 11.4 times to 75,900t in the first quarter compared with 6,700t in the first quarter of 2023 and 110,900t for full year 2022. By Stefka Wechsler US Gulf coast LNG vs VLSFO $/t VLSFOe Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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