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Biden under pressure to quickly regulate methane

  • Spanish Market: Crude oil, Emissions, LPG, Natural gas
  • 09/12/20

US president-elect Joe Biden needs to move fast on controlling methane from the oil and gas sector, according to environmentalists who say there is little time to spare on a process likely to take years to complete.

Dozens of environmental groups sent a letter today to Biden's transition team urging them to "move swiftly" on regulating methane emissions. They say oil and gas operators could install existing technology to slash the industry's methane emissions by 65pc below 2012 levels by 2025

Oil industry officials, in contrast, say the incoming administration should carefully weigh the complexities of regulating methane under the Clean Air Act, before rolling out standards they say might eventually require operators to retrofit more than 1mn existing oil and gas facilities with emission controls.

"No one really knows how that would work in an oil and gas production world," Independent Petroleum Association of America executive vice president Lee Fuller said.

The push-and-pull over timing comes as Biden sets course on his strategy to achieve a campaign promise to impose "aggressive" methane rules on new and existing oil and gas sources, which are responsible for releasing methane equivalent to about 3pc of the annual greenhouse gas emissions of the US. Methane is a potent greenhouse gas.

The US Environmental Protection Agency (EPA) would lead the regulatory initiative on two closely related rules. The first step would be reinstating methane rules for newly built oil and gas facilities that Trump rescinded this summer. That "new source" rule legally has to be on the books before EPA can adopt rules for existing facilities. The agency then might have to wait years to enforce the rules in states that refuse to cooperate.

That time-consuming process means that Biden's EPA will need to get to work quickly if it wants to have a shot at meeting its methane goals within four years. Environmentalists who signed the letter today say they have asked the incoming administration to work concurrently on the two rules, rather than waiting to finish one before starting the other.

"The pitch we made to the Biden administration is that you do not need to do ‘new' first," Earthworks policy director Lauren Pagel said. "Doing both new and existing source rules simultaneously could get us on a trajectory to have rules in place by late 2021."

But oil industry officials say they want EPA to incorporate lessons learned over the past four years into any regulations, such as new equipment that can detect methane at lower cost and data on methane from marginal wells. Industry officials say an ongoing two-track litigation process over Trump's rollback of the methane rules might slow down Biden's timeline for action.

"I do not know that they can, in fact, step as quickly as they might like to step to pursue those rules,"Fuller said.

Oil industry groups have yet to back down from their opposition to EPA directly regulating methane under the Clean Air Act, instead preferring indirect rules and voluntary industry-led approaches. The oil industry lobbied the Trump administration to dismantle every methane regulation on the books, including the EPA rule and a separate rules affecting. public lands.

"We look forward to working with the Biden administration on policy solutions that enable further methane emissions reductions that are consistent with the Clean Air Act," American Petroleum Institute regulatory affairs senior vice president Frank Macchiarola said. "Reducing methane emissions is a priority for our industry."

Biden's transition team did not respond to a request for comment.


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20/09/24

Climate finance from MDBs at record $125bn in 2023

Climate finance from MDBs at record $125bn in 2023

London, 20 September (Argus) — Ten multilateral development banks (MDBs) provided a record $125bn in climate finance in 2023, up from just under $100bn in 2022, according to a report led by the European Investment Bank (EIB). The report combines data from the EIB, the African Development Bank, the Asian Development Bank, the Asian Infrastructure Investment Bank, the Council of Europe Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, the Islamic Development Bank, the New Development Bank and the World Bank Group. The MDBs provided $74.7bn in climate finance for low- and middle-income economies in 2023, up by 23pc on the year. Half of this was from the World Bank. Of the total, a third was for climate adaptation — adjusting to the effects of climate change where possible — with the remainder for mitigation, or cutting emissions. The amount of private finance mobilised for this group was $28.5bn in 2023. MDBs allocated $50.3bn to high-income economies last year, up by nearly a third from $38.8bn in 2022. The EIB provided most of the total, at $42.1bn. The vast majority — 94pc — went to mitigation, with the remainder for adaptation. Private finance mobilised for high-income countries was significantly higher, at $72.7bn, reflecting the challenges faced by developing economies to pull in finance from the private sector. Climate finance will take centre stage at the UN Cop 29 summit in Baku, Azerbaijan, in November. Countries must decide on the next stage of a climate finance goal , after developed countries agreed to deliver $100bn/yr in climate finance to developing nations over 2020-25. MDBs are often called on by governments and campaign groups to do more to tackle climate change. The same 10 MDBs said earlier this year they will implement "new innovative climate finance approaches", including guarantees, sustainability-linked bonds, disaster clauses and mechanisms to access emergency finance. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Singapore’s GenZero, Rwanda tie up on carbon credits


20/09/24
20/09/24

Singapore’s GenZero, Rwanda tie up on carbon credits

Singapore, 20 September (Argus) — Singaporean investment platform GenZero has signed an agreement with Rwanda and carbon registry Gold Standard to develop Article 6-compliant carbon credit projects in Rwanda. GenZero, a subsidiary of state-owned investment firm Temasek, signed the agreement with Rwanda Green Fund, the country's financing vehicle for attracting and co-ordinating climate finance through investments, and the Rwanda Environment Management Authority, the country's national authority under Article 6, GenZero said on 19 September. The projects under the agreement will cover both carbon reduction and removal activities whitelisted by the Rwanda government for Article 6. Rwanda and GenZero will assess the potential for the Article 6 projects, which will "go through a robust due diligence and screening process," said GenZero, before undertaking certification by Gold Standard. Eligible projects must utilise Gold Standard's methodologies and comply with its requirements to achieve certification. These projects should first meet Rwanda's national carbon market framework, and will subsequently be able to issue credits that come with corresponding adjustments to ensure no double counting. GenZero will also assess proposals for commercial viability, based on the project's mitigation potential, project maturity and financial returns, it said. This "partnership between a government, a standard-setting body and an investor reflects the shared commitment of the partners to catalyse international investment in high-integrity Article 6 projects in countries such as Rwanda, while generating sustainable benefits for the local economy, environment and communities," said GenZero. Singapore and Rwanda signed an agreement in December last year to collaborate on creating carbon credit frameworks and Article 6-compliant credits. Singapore has also signed multiple agreements with other countries such as the Philippines , Ghana and Papua New Guinea , signalling the country's commitment to establishing cross-border trades of carbon credits as part of its decarbonisation efforts. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Iraq’s Somo sells rare Qayara crude cargo in tender


20/09/24
20/09/24

Iraq’s Somo sells rare Qayara crude cargo in tender

Singapore, 20 September (Argus) — Iraq's state-owned oil marketer Somo sold a rare cargo of heavy sour Qayara crude via tender to US firm Valero Energy for loading in October. Somo had offered up to 2mn bl of Qayara (Qaiyarah) crude, to load between 25 September to 15 October, through a tender on the platform of price reporting agency Platts on 19 September. US firm Valero Energy was awarded 500,000 bl of Qayara for loading on 8-10 October at a $28.30/bl discount to the average of Dubai and Oman assessments, traders said. It was unclear if Valero intends to process the cargo at one of its refineries in northern America or the United Kingdom, or if the firm plans to resell the cargo. The Qayara volumes offered by Somo had been marked as free-destination and available for resale. Details of the cargo's specification was not listed in Somo's latest tender, but in a previous tender issued by Somo in 2023, the grade was specified as being of about 15.6°API and with sulphur content of about 6.3pc. By YouLiang Chay Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

LNG-burning vessels well positioned ahead of 2025


19/09/24
19/09/24

LNG-burning vessels well positioned ahead of 2025

New York, 19 September (Argus) — Vessels outfitted with dual-fuel LNG-burning engines are poised to have the lowest marine fuel expense heading into 2025 when the EU will tighten its marine EU emissions trading system (ETS) regulations and add a new regulation, " FuelEU", from 1 January 2025. Considering both regulations, at current price levels, fossil LNG (also known as grey LNG) will be priced the cheapest compared with conventional marine fuels and other commonly considered alternative fuels such as biodiesel and methanol. The EU's FuelEU maritime regulation will require ship operators traveling in, out and within EU territorial waters to gradually reduce their greenhouse gas (GHG) intensity on a lifecycle basis, starting with a 2pc reduction in 2025, 6pc in 2030 and so on until getting to an 80pc drop, compared with 2020 base year levels. The FuelEU GHG intensity maximum is set at 85.69 grams of CO2-equivalent per MJ (gCO2e/MJ) from 2030 to 2034, dropping to 77.94 gCO2e/MJ in 2035. Vessel pools exceeding the FuelEU's limits will be fined €2,400/t ($2,675/t) of very low-sulphur fuel oil (VLFSO) energy equivalent. GHG emissions from grey LNG vary depending on the type of marine engine used to burn the LNG, but ranges from about 76.3-92.3 gCO2e/MJ, according to non-governmental environmental lobby group Transport & Environment. This makes a number of LNG-burning, ocean-going vessels compliant with FuelEU regulation through 2034. The EU's ETS for marine shipping commenced this year and requires that ship operators pay for 40pc of their GHG generated on voyages within, in and out of the EU. Next year, the EU ETS emissions limit will increase to 70pc. Even with the added 70pc CO2 emissions cost, US Gulf coast grey LNG was assessed at $639/t VLSFOe, compared with the second cheapest VLSFO at $689/t, B30 biodiesel at $922/t and grey methanol at $931/t VLSFOe average from 1-18 September (see chart). "In 2025, we expect [US natural gas] prices to rise as [US] LNG exports increase while domestic consumption and production remain relatively flat for much of the year," says the US Energy Information Administration. "We forecast the Henry Hub price to average around $2.20/million British thermal units (mmBtu) in 2024 and $3.10/mmBtu in 2025." Provided that prices of biodiesel and methanol remain relatively flat, the projected EIA US 2025 LNG price gains would not affect LNG's price ranking, keeping it the cheapest alternative marine fuel option for ship owners traveling between the US Gulf coast and Europe. LNG for bunkering global consumption from vessels 5,000 gross tonnes and over reached 12.9mn t in 2023, according to the International Maritime Organization (IMO), up from 11mn t in 2022 and 12.6mn t in 2021. The maritime port authority of Singapore reported 111,000t of LNG bunker sales and the port authorities of Rotterdam and Antwerp reported 319,000t in 2023 from all size vessels. Among vessels 5,000 gross tonnes and over, LNG carriers accounted for 89pc of LNG bunker demand globally, followed by container ships at 3.6pc, according to the IMO. The large gap between LNG global and LNG Singapore, Rotterdam, and Antwerp bunker demand, is likely the result of most of the demand taking place at the biggest LNG export locations where LNG carriers call, such as the US Gulf coast, Qatar, Australia, Russia and Malaysia. By Stefka Wechsler USGC bunkers and bunker alternatives $/t VLSFOe Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US court asked for third Citgo auction extension


19/09/24
19/09/24

US court asked for third Citgo auction extension

Houston, 19 September (Argus) — The court-appointed special master overseeing the auction of US refiner Citgo has asked the court to delay the announcement of a successful bidder to 26 September and a sale hearing to December. Special master Robert Pincus planned to make an announcement of the proposed buyer on or about 16 September followed by a November sale hearing, but last minute legal challenges derailed what have otherwise been "robust negotiations with a bidder," according to a court filing today. "The special master is continuing to negotiate sale documentation with a bidder," today's motion said. Pincus previously requested a second extension in August and a first extension in late July . 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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