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Viewpoint: California dairy fight spills into 2025

  • Spanish Market: Emissions, Natural gas
  • 24/12/24

California must begin crafting dairy methane limits next year as pressure grows for regulators to change course.

The California Air Resources Board (CARB) has committed to begin crafting regulations that could mandate the reduction of dairy methane as it locked in incentives for harvesting gas to fuel vehicles in the state. The combination has frustrated environmental groups and other opponents of a methane capture strategy they accuse of collateral damage. Now, tough new targets pitched to help balance the program's incentives could become the fall-out in a new lawsuit.

State regulators have repeatedly said that the Low Carbon Fuel Standard (LCFS) is ill-suited to consider mostly off-road emissions from a sector that could pack up and move to another state to escape regulation. California's LCFS requires yearly reductions of transportation fuel carbon intensity. Higher-carbon fuels that exceed the annual limits incur deficits that suppliers must offset with credits generated from the distribution to the state of approved, lower-carbon alternatives.

Regulators extended participation in the program to dairy methane in 2017. Dairies may register to use manure digesters to capture methane that suppliers may process into pipeline-quality natural gas. This gas may then be attributed to compressed natural gas vehicles in California, so long as participants can show a path for approved supplies between the dairy and the customer.

California only issues credits for methane cuts beyond other existing requirements. Regulators began mandating methane reductions from landfills more than a decade ago and in 2016 set similar requirements for wastewater treatment plants. But while lawmakers set a goal for in-state dairies to reduce methane emissions by 40pc from 2030 levels, regulators could not even consider rulemakings mandating such reductions until 2024.

CARB made no move to directly regulate those emissions at their first opportunity, as staff grappled with amendments to the agency's LCFS and cap-and-trade programs. That has meant that dairies continue to receive credit for all of the methane they capture, generating deep, carbon-reducing scores under the LCFS and outsized credit production relative to the fuel they replace. Dairy methane harvesting generated 16pc of all new credits generated in 2023, compared with biodiesel's 6pc. Dairy methane replaced just 38pc of the diesel equivalent gallons that biodiesel did over the same period.

The incentive has exasperated environmental and community groups, who see LCFS credits as encouraging larger operations with more consequences for local air and water quality. Dairies warn that costly methane capture systems could not be affordable otherwise. Adding to the expense of operating in California would cause more operations to leave the state. California dairies make up about two thirds of suppliers registered under the program.

Dairy supporters successfully delayed proposed legislative requirements in 2023. CARB staff in May 2024 declined a petition seeking a faster approach to dairy regulation. Staff committed to take up a rulemaking considering the best way to address dairy methane reduction in 2025.

Before that, final revisions to the LCFS approved in November included guarantees for dairy methane crediting. Projects that break ground by the end of this decade would remain eligible for up to 30 years of LCFS credit generation, compared with just 10 years for projects after 2029. Limits on the scope of book-and-claim participation for out-of-state projects would wait until well into the next decade. Staff said it was necessary to ensure continued investment in methane reduction.

The inclusion immediately frustrated critics of the renewable natural gas policy, including board member Diane Tarkvarian, who sought to have the changes struck and was one of two votes ultimately against the LCFS revisions.

Environmental groups have now sued, invoking violations that effectively froze the LCFS for years of court review. Regulators and lawmakers working to transition the state to cleaner air and lower-emissions vehicles will have to tread carefully in 2025.


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11/02/25

BP promises strategy reset after sharp drop in profit

BP promises strategy reset after sharp drop in profit

London, 11 February (Argus) — BP today promised to "fundamentally reset" its strategy later this month after reporting a drop in underlying profit last year. The company alluded to what the reset might entail, noting that last year it had "laid the foundations for growth" by committing capital to new oil and gas projects and "refocusing" its investments in low-carbon assets. Details of the strategy shift will be outlined at a capital markets day for investors on 26 February. Key actions in 2024 included taking a final investment decision on the 80,000 b/d Kaskida oil field in the US Gulf of Mexico and raising its exposure to biofuels in Brazil . The company also took steps via a joint venture with Japanese utility Jera that will see it commit less capital to its wind energy investments. BP reported an underlying replacement cost profit — excluding inventory effects and one-off items — of $1.2bn for the fourth quarter of 2024, compared with $3bn a year earlier. For the full year, underlying replacement cost profit fell by 36pc compared with 2023 to $8.9bn, while cash flow from operations dropped to $27.3bn from $32bn. The company benefited from higher oil and gas production last year — up by 2pc on 2023 at 2.36mn b/d of oil equivalent (boe/d). But lower prices, a drop in refining margins and lower contributions from both oil and gas trading weighed on profitability. BP said it expects upstream production to be lower this year and refining margins "broadly flat". It expects a similar level of refinery maintenance in 2025, with the work "heavily weighted towards the first half" and the second quarter in particular. For now, BP is sticking with its share repurchasing programme, announcing a further $1.75bn of share buybacks for the fourth quarter. It has maintained its quarterly dividend at 8¢/share. The company's capital expenditure remained steady at $16.2bn last year. It will provide guidance on this year's investment budget at the strategy day later this month. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Natural gas industry hedges US-Canada tariff risk


10/02/25
10/02/25

Natural gas industry hedges US-Canada tariff risk

New York, 10 February (Argus) — North American natural gas producers and LNG importers are evaluating their exposure to impending tariffs on Canadian gas flowing into the US, including how they could benefit from uncertainty around the policy. Marketers responsible for managing gas supplies across the US-Canada border and at least one North American LNG importer are holding internal meetings to discuss risks and opportunities related to the potential tariffs, according to sources who asked to remain anonymous because they are not allowed to speak publicly. President Donald Trump on 3 February delayed 10pc tariffs on energy from Canada and Mexico by a month, a day before they were set to be imposed. One of the largest US gas producers is reviewing its supply contracts with Canadian customers to evaluate its exposure to possible retaliatory tariffs by Canada, a person with knowledge of the matter told Argus . The company is particularly concerned with its ability to achieve price certainty given a lack of clarity around which party would pay the tariff and how such a transaction might be audited by regulators, the person said. Some large US gas producers are also looking to exploit the so-called "uncertainty premium" by strategically timing when they hedge their output — ideally, when rhetoric and anxiety over tariffs mounts, so they can lock in higher prices, sources in the banking sector said. Internal meetings to discuss potential tariffs are also being held at US utility Constellation Energy, owner of the Everett LNG import terminal near Boston, Massachusetts, sources said. Tariffs could make Everett LNG more competitive by modestly raising New England pipeline gas prices, thereby making LNG imports more economical when the price for local pipeline capacity is high. Tariffs could also hurt demand for gas from the Saint John LNG import terminal in New Brunswick, Canada, owned by Spanish energy conglomerate Repsol, since most of Saint John's imported gas supplies are shipped via pipeline across the US border into New England. Constellation and Repsol did not respond to requests for comment. New England relies on gas imported from abroad by Everett LNG and Saint John LNG during particularly cold winter days because of insufficient pipeline capacity connecting the region to prolific gas fields in Pennsylvania and the surrounding states. Goldman Sachs estimates Trump's 10pc tariffs on Canadian energy products would reduce Canadian gas exports to the US by about 160mn cf/d (5mn m³/d), while investment bank RBC Capital Markets said the tariffs could cause "mildly higher US gas prices". By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Most nations miss NDC deadline, while ambition varies


10/02/25
10/02/25

Most nations miss NDC deadline, while ambition varies

London, 10 February (Argus) — The majority of countries that are party to the Paris climate agreement have missed the deadline to submit new national climate plans, while research group Climate Action Tracker (CAT) found that several are not aligned with Paris accord goals. Just 12 countries had submitted new climate plans, known as nationally determined contributions (NDCs), by time of writing today — the UAE, Brazil, the US, Uruguay, Switzerland, the UK, New Zealand, Andorra, Saint Lucia, Ecuador, Singapore and the Marshall Islands. UN climate body the UNFCCC had set 10 February as the deadline for countries to submit their third NDCs, setting out climate action and targets up to 2035. CAT said that of the six NDCs it analysed, just the UK's was aligned with the Paris agreement. The UK plan is "about the only bright spot" among the countries it tracks, CAT noted. But it warned that the UK government "has inherited a vast implementation gap" and must take "urgent action" to introduce and strengthen policies to ensure emissions reduction targets are reached. The UK aims to cut emissions by 81pc by 2035, from a 1990 baseline. The country should support its goals with more international climate finance to be "a fully 1.5°C aligned contribution", CAT said. The Paris agreement seeks to limit the rise in global temperature to "well below" 2°C above pre-industrial levels, and preferably to 1.5°C. CAT noted "a significantly more ambitious" target for 2035 from the UAE , compared with its 2030 goal, but flagged the need for details on the country's planned emissions cuts. It noted a "lack of transparency" in Brazil's NDC and found that, despite an increase in ambition, New Zealand's 2035 NDC "falls short". Switzerland's new NDC "is diverging from a 1.5°C aligned pathway", CAT said. And it said that while the US is leaving the Paris agreement, the country"s NDC "can still be a guiding document for the roughly half of the US states who support continued climate action." But many climate policy observers have emphasised that higher ambition and comprehensive plans are far more important than timeliness. The EU, Canada, Mexico and Norway committed to new, Paris-consistent NDCs at the UN Cop 29 climate summit in November. Climate Action Tracker tracks around 40 countries and the EU, covering around 85pc of global emissions and 70pc of global population. The Paris agreement has a ratchet mechanism, which requires countries to review and revise climate plans every five years, increasing ambition. The UNFCCC deadline for NDC submissions is not enforceable. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US rescinds UN climate fund pledges


10/02/25
10/02/25

US rescinds UN climate fund pledges

Washington, 10 February (Argus) — The US has canceled about $4bn in pledged money to the UN's Green Climate Fund, the latest sign a sharp policy shift under President Donald Trump. The State Department late last week said the US "has rescinded outstanding pledges to the Green Climate Fund," but did not provide any further details. The US under former presidents Joe Biden and Barack Obama had pledged about $6bn combined to the GCF, with the most recent commitment announced at the Cop 28 climate talks in Dubai. But the two administrations were able to deliver only $2bn of the funding. The cancellation of the GCF pledges is just the latest step by Trump to quickly reverse course for US climate and clean energy policies. Among his first acts after taking office last month Trump ordered the US to exit the Paris climate agreement and to pause spending on renewable energy projects. In addition, secretary of state Marco Rubio said the US would stop engaging in climate diplomacy. The GCF finances projects in developing and emerging countries with a focus on mitigation, adaptation and resilience efforts, such as climate-friendly agricultural methods, reforestation or coastal protection. It operates under the UN Framework Convention on Climate Change and was originally capitalized with $10.3bn in 2015. In two replenishment rounds since then, it has gathered more than $20bn in additional pledges. The fund has to date approved nearly $16bn for project in more than 130 countries and expects to approve another $3bn-worth this year. The fund said it "remains determined" to help developing countries achieve the highest level of ambition possible. "If pledges are not fully realized, our ability to support the climate ambitions of developing countries will be constrained," the GCF said. Finance for developing countries has been a major issue at UN climate talks. At last year's Cop 29 in Baku, Azerbaijan, countries agreed to a "new collective quantified goal" of "at least" $300bn/yr for developing countries by 2035, with developing countries "taking the lead." The goal is meant to build on the $100bn/yr that developed countries agreed to deliver over 2020-25. The finance will come from "a wide variety of sources, public and private, bilateral and multilateral, including alternative sources". By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Noboa's tight lead triggers runoff in Ecuador


10/02/25
10/02/25

Noboa's tight lead triggers runoff in Ecuador

Quito, 10 February (Argus) — Ecuador will hold a second-round presidential election on 13 April after incumbent President Daniel Noboa had a closer-than-expected lead over his main challenger in Sunday's election, the electoral authority said. Noboa had 44.5pc of votes as of 11:30pm ET on Sunday, closely followed by Luisa Gonzalez, the candidate for the Citizens' Revolution party with 44.1pc, with 80pc of votes counted, the national electoral council (CNE) said. Ecuador's presidential election goes to a second round if the winning candidate does not have more than 50pc of votes or 40pc of votes with a 10-percentage point lead over the runner-up. Gonzalez' party was founded by exiled former president Rafael Correa, a close friend and supporter of Venezuelan president Nicolas Maduro. Correa guided taking on crude-backed loans from China during his term and oversaw a rewrite of the constitution, allowing him to serve for 10 years. Gonzalez in brief comments said she was optimistic about winning the second round, while Noboa did not speak publicly. This is the first time since 2006 that the candidate with Correa's party did not win at least the initial round of a presidential race. Pachacutik candidate Leonidas Iza was in third place with 4.8pc of votes. His party is the political arm of the Confederation of Indigenous Nationalities (Conaie) that led an 18-day national strike in June 2022, cutting Ecuador's crude production by 17pc that month. The remaining 13 candidates obtained about 6.6pc of the valid votes. About 13.7mn Ecuadorians were required to appear at the polls. Voting is mandatory in the South American country, but only around 85pc actually voted. Ecuadorians also voted for 151 members of the national assembly. Gonazalez' party and Noboa's National Democratic Action party are forecast to win the biggest shares, but officials results will not be known for several days. By Alberto Araujo Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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