US to analyze carbon 'cost' of federal programs

Spanish Market: Crude oil, Emissions, Natural gas, Oil products
21/09/23

President Joe Biden is ordering federal agencies to start folding in estimates of the "social cost of carbon" into their annual budgets, procurement decisions and in environmental reviews.

The new directive from the White House would require federal agencies to take a closer look at how their activities and purchases could affect the climate, using an estimate that finds emitting a metric tonne of CO2 causes $120-340 of damage to society. Federal agencies will be able to make "clear-eyed decisions" by using the metric, the White House said.

The US government began using the "social cost of carbon" more than a decade ago, offering a way to estimate in dollar terms how a regulation would affect the climate. Former president Donald Trump cut its value to a fraction of what many scientists say is backed by evidence, an action Biden reversed after taking office.

Federal agencies have started using the climate estimate more often, such as to review the effects of expanding oil and gas projects. Biden's directive encourages agencies to use the metric for regular activities, such as discretionary grants and regular programs, while also incorporating the estimate in reviews prepared under the National Environmental Policy Act.

Democrats support using the estimate more often because using the full costs of carbon emissions will cut "taxpayers' bills for climate-related disasters over the long term," US senator Sheldon Whitehouse (D-New York) said. But Republicans believe the estimate is not sufficiently supported and will be used to block fossil fuels.

"The math doesn't add up, and in fact, doesn't exist," US Senate Energy and Natural Resources Committee ranking member Shelley Moore Capito (R-West Virginia) said.

Biden's order comes as the US Climate Alliance, a coalition of governors from 25 states, made commitments to decarbonize buildings in part by increasing the use of heat pumps. New York, Washington, California and Massachusetts are among the states that made new commitments.

By Chris Knight

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11/10/24

Opec+ cuts hit 4mn b/d

London, 11 October (Argus) — Opec+ has reduced its crude production by 4mn b/d since it started cutting output almost two years ago, Argus' latest output survey shows. Crude output by members subject to cuts fell by 220,000 b/d in September to 33.52mn b/d, driven by reductions in Iraq and Nigeria (see table). This compares with 37.52mn b/d in October 2022, when the alliance announced what would prove to be the in a series of production cuts. September output was not only the lowest since April 2021, but also 330,000 b/d below the group's collective production target. But even with the removal of such a vast amount of crude from the market, oil prices remain $11-15/bl below where they were when Opec+ announced its October 2022 cut. This is partly because production from non-Opec members such as the US, Guyana and Brazil has surged. The US alone has boosted production by 830,000 b/d over the past two years. The lower prices are also partly down to lower-than-expected oil demand, particularly in China. The IEA has made and sees global oil demand growing by under 1mn b/d this year and next, well below the 2.1mn b/d increase seen in 2023. Despite the gloomy demand picture, eight Opec+ members are scheduled to start unwinding 2.2mn b/d of production cuts from December — two months later than initially planned. This is not a foregone conclusion — the group has said this could change depending on market conditions — but a decision to push ahead would only widen an expected supply surplus next year. The eight members are expected to decide on whether to start returning production in early November. Opec+ will be keenly watching how the conflict between Israel and Iran plays out over the coming days and weeks. Rising tensions propelled Atlantic basin benchmark North Sea Dated above $81/bl on 7 October. There are fears that Israel could strike Iran's oil infrastructure in retaliation for . This would put Iranian production — which rose to 3.37mn b/d in September — at risk. Any attack on Iran's oil sector could conceivably see Tehran disrupt regional oil flows through the strait of Hormuz , through which more than 15mn b/d of crude and products are exported. Compensation questions Another factor that could influence Opec+ policy in the coming weeks is the extent to which serial overproducers Iraq, Kazakhstan and Russia can show they are for exceeding their targets. In an effort to start complying with its commitments, Iraq reduced its production by 130,000 b/d in September, Argus estimates. But this was still 70,000 b/d above its Opec+ target of 4mn b/d, and 170,000 b/d above its effective target in September under its compensation plan. Kazakhstan's output rose by 40,000 b/d to 1.48mn b/d in September, 10,000 b/d above its Opec+ quota and 40,000 b/d above the effective target in its compensation plan. All eyes are now on the country's October output, when it is due to deliver the largest chunk of its compensation commitment, which has been designed to coincide with maintenance at its Kashagan field . Russia's production edged down by 10,000 b/d to 8.97mn b/d, in line with its target. Libya's output fell by a hefty 370,000 b/d to 550,000 b/d in September as an oil blockade declared in late August took its toll. But with the blockade lifted in early October, production has already returned close to the country's normal level of about 1.2mn b/d. Venezuela's production rose by 20,000 b/d to 900,000 b/d — the highest since February 2019. Both Venezuela and Libya are exempt from production targets. Opec+ crude production mn b/d Sep Aug* Target† ± target Opec 9 21.18 21.45 21.23 -0.05 Non-Opec 9 12.34 12.29 12.62 -0.28 Total 33.52 33.74 33.85 -0.33 *revised †includes additional cuts where applicable Opec wellhead production mn b/d Sep Aug* Target† ± target Saudi Arabia 8.92 8.96 8.98 -0.06 Iraq 4.07 4.20 4.00 +0.07 Kuwait 2.46 2.40 2.41 +0.05 UAE 2.95 2.98 2.91 +0.04 Algeria 0.91 0.91 0.91 0.00 Nigeria 1.36 1.45 1.50 -0.14 Congo (Brazzaville) 0.24 0.26 0.28 -0.04 Gabon 0.21 0.23 0.17 +0.04 Equatorial Guinea 0.06 0.06 0.07 -0.01 Opec 9 21.18 21.45 21.23 -0.05 Iran 3.37 3.33 na na Libya 0.55 0.92 na na Venezuela 0.90 0.88 na na Total Opec 12^ 26.00 26.58 na na *revised †includes additional cuts where applicable ^Iran, Libya and Venezuela are exempt from production targets Non-Opec crude production mn b/d Sep Aug* Target† ± target Russia 8.97 8.98 8.98 -0.01 Oman 0.76 0.76 0.76 +0.00 Azerbaijan 0.49 0.48 0.55 -0.06 Kazakhstan 1.48 1.44 1.47 +0.01 Malaysia 0.32 0.31 0.40 -0.08 Bahrain 0.16 0.15 0.20 -0.04 Brunei 0.09 0.09 0.08 0.01 Sudan 0.02 0.02 0.06 -0.04 South Sudan 0.05 0.06 0.12 -0.07 Total non-Opec 12.34 12.29 12.62 -0.28 *revised †includes additional cuts where applicable Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Pemex Deer Park refinery H2S leak kills 2: Update

11/10/24

Pemex Deer Park refinery H2S leak kills 2: Update

Adds comment from Mexican energy minister, context from regulatory filings. Houston, 11 October (Argus) — A hydrogen sulfide (H2S) leak at Pemex's 312,500 b/d Deer Park, Texas, refinery on 10 October killed two workers and injured 35 more. The leak occurred accidentally during maintenance, according to a regulatory filing submitted by Pemex this morning. Several units, including an amine unit, an alkylation unit, a hydrocracker and a sulphur recovery unit were promptly shut and flaring was initiated so the leak could secured. Mexican energy minister Luz Elena Gonzalez said in a press conference in Mexico City Friday morning that the refinery was expected to restart operations later today. Deadly accidents at US refineries usually require extensive regulatory investigations by federal agencies, however, which require facilities or certain units at a plant to remain shut down. H2S is an extremely hazardous gas commonly produced as a byproduct of refining, which can be processed into pure sulphur in a sulphur recovery unit (SRU) or removed by hydrotreating. Shell's Deer Park petrochemical facility, located adjacent to Pemex's refinery, said it was doing a "controlled slowdown" of its operations as of 8:52pm yesterday in response to the accident as a precaution. A flaring event was initially reported by a Deer Park Office of Emergency Management (OEM) social media account at 6:23pm ET on 10 October. A shelter in place advisory was issued for all Deer Park residents in a follow-up notice and Texas State Highway 225 running adjacent to the refinery was also closed to traffic. Areas of nearby Pasadena were also placed under a shelter in place advisory. The Deer Park shelter in place was lifted at 10pm ET. The Pemex refinery had previously reported an aromatic concentration unit (ACU) leak on 6 October. Amine units strip H2S from methane gas generated by hydrotreaters. Alkylation units produce high-octane blendstocks used in gasoline. Hydrocrackers use hydrogen, pressure, and catalyst to produce distillates and gasoline low in contaminants like sulphur. SRUs help to remove sulphur and other impurities from refinery products and gas streams. By Gordon Pollock Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Iran slows oil exports as it braces for Israeli attack

11/10/24

Iran slows oil exports as it braces for Israeli attack

Dubai, 11 October (Argus) — Iran's crude exports have slowed down dramatically this month as the country braces for a possible strike on its oil facilities in retaliation for its large-scale missile attack against Israel on 1 October. Although US president Joe Biden has suggested Israel should think about an alternative response , potential strikes on Iranian oil facilities have been up for discussion and the Israeli government appears to be still weighing up its options. In the meantime, there has been a noticeable drop off in Iranian exports. Crude loadings from Iran only averaged about 600,000 b/d in the first 10 days of October, around a third of the amount it has exported in the past few months, according to Armen Azizian, senior oil risk analyst at trade analytics firm Vortexa. "The first 10 days has been very slow compared to what we usually see," Azizian said. "Normally, over this period, we see an average of 5-8 tankers load ꟷ a mix of VLCCs and Suezmaxes. But so far, we have only seen just 3-4 load." A VLCC typically carries 1.9mn-2.2mn bl, while a Suezmax can carry 800,000-1mn bl. Of the three VLCCs that have loaded this month, two did so at Iran's Kharg Island terminal in the Mideast Gulf and the third co-loaded between Kharg Island and the Soroush terminal, also in the Mideast Gulf. An Aframax also loaded at Kharg this month but it is a tanker that typically engages in domestic trade. The Kharg terminal is Iran's largest and most important by some distance, handling more than 90pc of Iranian crude and condensate exports. All of the vessels that have loaded at Iranian terminals this month have been sanctioned. "It seems like the operators of the non-sanctioned tankers are being more cautious," Azizan said. "The thinking being that the value of the sanctioned tankers is so low anyway, that they are more worth taking a risk with." The slowdown in exports coincides with Iran moving many of its empty tankers away from Kharg Island. "It was likely done as a precaution, in the event of an Israeli retaliation," said Homayoun Falakshahi, senior oil analyst at trade analytics firm Kpler. Iran's crude exports have been rising in recent years, notably since the start of 2023. Vortexa puts them s at 1.7mn b/d in July-September, while Kpler's estimate is slightly higher at 1.75mn b/d. September was a particularly strong month — 1.83mn b/d according to Kpler and 1.75mn b/d according to Vortexa. Kpler's September estimate is the highest since the fourth quarter of 2018 and Vortexa's is just 50,000 b/d short of a six-year high of 1.8mn b/d in June. This month's exports will be much lower. Even if Iran's loading activities were to return to normal for the rest of October, it would struggle to breach the 1.35mn b/d mark for the full month, a level it has surpassed consistently since the fourth quarter of last year. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japanese firms eye developing CCS project in Alaska

11/10/24

Japanese firms eye developing CCS project in Alaska

Tokyo, 11 October (Argus) — Two Japanese firms are looking to develop a carbon capture and storage (CCS) value chain between Japan and US' Alaska state to help achieve Japan's 2050 decarbonisation goal. Japanese trading house Sumitomo and Japanese shipping firm Kline today reached a deal to sign a joint research agreement with US independent Hilcorp, for a strategic partnership to capture CO2 in Japan and transport it on a large liquefied CO2 (LCO2) carrier to storage and injection facilities in Alaska. Oil and gas fields have been developed in Alaska since the 1950s and the total storage capacity of the CCS project is expected to be 50 gigatonnes, equivalent to 50 years' worth of Japan's CO2 emissions, Sumitomo said. The world's first LCO2 transportation for CCS is scheduled to start next year ahead of this project, Kline said. Japanese companies are gearing up efforts to seek overseas storage sites for CO2, as domestic storage sites would be insufficient to store all of the country's possible emissions. Tokyo aims to add 6mn-12mn t/yr of CO2 storage capacity domestically and internationally from 2030, with a target of 120mn-240mn t/yr by 2050. The government has projected that Japan will be able to store up to 70pc of its forecasted CO2 emissions of approximately 240mn t/yr in 2050. Japan's parliament in May allowed the government to ratify the 2009 amendment to the International Maritime Organization's London Protocol that will enable the export of CO2. By Reina Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Florida ports, fuel supplies, begin recovery: Update 2

10/10/24

Florida ports, fuel supplies, begin recovery: Update 2

Updates more port and terminal conditions, adds daily CBOB/ULSD prices. Houston, 10 October (Argus) — Port Tampa Bay, Florida, docks did not sustain significant damage from Hurricane Milton, the port authority said Thursday, a positive sign for resuming fuel imports into the storm ravaged state. Some port buildings were damaged and power remains out, according to preliminary assessments, but the port docks appear to have escaped major damage, according to the port authority. Many roads leading to the port remain flooded, but the port's main gates are accessible. There is no current timeline for the port's re-opening. Damage to Global Partners' Florida fuel terminals is less severe than the company expected, a spokesperson said Thursday afternoon. Global is loading cargoes from its three Port Everglades terminals. Its Tampa terminal is offline and running on generator power due to power outages, but staff are on site working to restore operations. Kinder Morgan is continuing to assess its terminals and pipeline, a spokesperson said Thursday afternoon. Chevron's Tampa refined products terminal remains closed and damage assessments will begin once crews can safely access the facility, a company spokesperson said Thursday morning. The company's terminals in Panama City and Port Everglades are operational. Citgo said it found no major damage at its Tampa terminal after an initial assessment but a more detailed inspection is ongoing as it works to restore operations. Buckeye, which shut Tampa terminals ahead of the hurricane, did not immediately respond to requests for information on the status of its operations. Tampa spared the worst Florida governor Ron DeSantis said Thursday that Port Tampa avoided the worst-case scenario in terms of storm surge and that eastern Florida ports on the opposite side of the state from where Milton made landfall appear largely undamaged. Nearly half of Florida's supply of petroleum and refined products passes through Port Tampa Bay, the majority via waterborne cargo from the US Gulf coast. Tampa Bay is also the site of major fertilizer operations, including Mosaic's Riverview phosphate plant. The state has 1.5mn USG of diesel and about 1.1mn USG of gasoline available to deploy in its emergency response, DeSantis said. Florida's highway patrol continues to escort fuel tankers making deliveries to gas stations and has completed about 130 escorts after some stations ran dry earlier this week as Floridians stocked up on fuel and evacuated coastal regions. DeSantis said he expects gas stations to reopen "very quickly, at least that's our hope." Prices for Florida CBOB delivered at Tampa and Port Everglades rose by 8.51¢/USG to $2.17/USG today while prices for Florida ULSD rose by 7.09¢/USG to $2.39/USG. Cash differentials in the waterborne ULSD markets and gasoline cargo markets were little changed. About 3.4mn Floridians were without power early today after Hurricane Milton came ashore south of Tampa Bay late Wednesday night as a category 3 storm. Utility crews are assessing the damage from high winds, tornadoes and flooding, and starting to restore power. The number of customers without power dipped below 3mn Thursday afternoon. Restrictions were lifted Thursday at a number of Florida ports closed for the storm, the Coast Guard said, while others are expected to open in the next day. By Nathan Risser and Cooper Sukaly Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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