Aemetis optimistic about LCFS update, tax credit
US biofuels producer Aemetis expects supportive regulatory changes to boost profits, which have struggled recently on lower prices.
Chief executive Eric McAfee said Thursday that expected policy changes in the next year will "significantly increase the value of our products," which include ethanol and renewable natural gas. He cited the California Air Resources Board's (CARB) upcoming meeting in November in which regulators will consider updates to the state's low-carbon fuel standard (LCFS), as well as an Inflation Reduction Act federal tax credit for clean fuels kicking off in January and Environmental Protection Agency action to approve higher E15 ethanol blends in more of the country next year.
In California, regulators are weighing tougher targets for the LCFS program, where sagging credit prices over the last year could deter investments in decarbonizing transportation. They have floated an initial step down in carbon intensity limits in 2025 of 7pc or more. McAfee predicted that CARB would ultimately determine that a 9pc stepdown "basically is the minimum required, not the maximum, but the minimum required to move major oil companies forward on buying more credits now".
He said that in discussions with CARB officials, it was "pretty clear" that the growth in unused credits available for compliance in future years had exceeded expectations. The bank of credits, which do not expire, hit a record high at the end of the first quarter, according to data released this week.
The Inflation Reduction Act's 45Z tax credit, which will tie incentives to a fuel's lifecycle greenhouse gas emissions, could also benefit the company's expanding biogas business. McAfee said there is a "wide range" of potential outcomes, since it is unclear how federal regulators will account for fuels with negative carbon intensity. But he expects a worst-case scenario would still be a subsidy of around $7.20/mmBTU.
That credit will also be more generous to sustainable aviation fuel (SAF), although it is unclear when Aemetis' planned SAF and renewable diesel production facility in Riverbank, California, will come on line. The company received key air permits from local regulators in the first quarter this year and that it was "discussing the use of innovative pricing structures with our airline customers to accelerate the financing, construction, and operation of the SAF plant", McAfee said. Aemetis has signed offtake agreements with companies such as Delta Air Lines and Alaska Airlines.
The company did not immediately respond to a request for comment on its timeline for starting up the plant, which could produce 90mn USG/yr of SAF and renewable diesel.
Aemetis this week reported a net loss of $29.2mn in the second quarter this year, up from a net loss of $25.3mn during the same period last year. The company sold more ethanol and renewable natural gas in the US and less biodiesel in India but received lower prices for many of its products.
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US Gulf producers curb operations before storm: Update
US Gulf producers curb operations before storm: Update
Adds latest NOAA forecast data, BP update. New York, 9 September (Argus) — Oil companies started to evacuate workers and halt some operations in the US Gulf of Mexico ahead of an expected hurricane later this week. Tropical storm Francine, which is forecast to strengthen to hurricane status as it moves north toward the Texas and Louisiana coasts by mid-week, threatens an offshore region that accounts for about 15pc of US crude output and 5pc of US natural gas production. Shell said it paused some drilling operations at the Perdido and Whale platforms, located about 190 miles south of Houston, and is withdrawing non-essential workers from its Enchilada/Salsa and Auger facilities. ExxonMobil said all staff had been transported off the Hoover platform, located about 200 miles south of Houston, and operations shut-in. And Chevron said it is evacuating non-essential workers from its Anchor, Big Foot, Jack/St. Malo and Tahiti facilities, though production from company-operated assets remains at normal levels. Those facilities are located about 280 miles south of New Orleans. "We continue to supply our customers at our onshore facilities, where we are following our storm preparedness procedures and paying close attention to the forecast and track of the storm," Chevron said. So far no major problems are reported for BP's offshore facilities in the region. Francine is forecast to approach the Louisiana and upper Texas coast on Wednesday, according to the National Hurricane Center. In a 2pm ET NHC advisory, the storm was about 450 miles south-southwest of Cameron, Louisiana, with maximum sustained winds of 60 mph. Strengthening is expected over the next day and Francine is forecast to be a Category 1 hurricane, with winds of 85mph, on Wednesday evening, when it is expected to make landfall along the Louisiana coast. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU needs to shake up energy markets: Draghi report
EU needs to shake up energy markets: Draghi report
Brussels, 9 September (Argus) — The EU should take measures in energy markets that are "dominated by vested interests", including antitrust investigations, a report from former European Central Bank president Mario Draghi found today. The call came as part of Draghi's report into the EU's future competitiveness, which was requested last year by European Commission president Ursula von der Leyen. It identified cost-efficient decarbonisation as a major challenge, and said the bloc must focus on accelerated innovation and growth and overcome geopolitical dependence and vulnerability. The report, which runs to more than 300 pages, says the EU should carry out antitrust investigation into electricity and gas markets, and into energy imports, to deter "anti-competitive behaviour and tacit collusion" among companies, it said. There should be a common maximum level of energy surcharges in the EU covering all energy taxes, levies and network charges, the report found. Draghi — a former Italian prime minister — put forward specific proposals for energy markets including the development of an EU-level gas strategy, progressively moving away from spot-linked sourcing and increasing EU bargaining power, and reinforcing long-term contracts. He argues for decoupling inframarginal generation from natural gas prices through long-term power purchasing agreements (PPAs) and contracts for difference (CfDs). Draghi wants compensation mechanisms for offering flexibility on markets as well as joint purchasing of energy in addition to demand aggregation. Other ideas tackle speculative behaviour via position limits and dynamic caps as well as an EU trading rule book with "an obligation to trade in the EU". A further proposal is a review of a so-called "ancillary activities" exemption, under EU financial regulation, whereby non-financials, typically energy, firms can trade energy derivatives more freely without being authorised as investment companies. Speaking alongside Draghi today, von der Leyen noted the need to shift away from fossil fuels and support industry through decarbonisation, also by bringing down energy prices. Draghi's report noted the difficulty of cutting emissions in hard-to-abate industries, as well as in the transport sector. Planning is crucial, the report noted. For industry, it recommended "a mixed strategy that combines different policy tools and approaches for different industries", importing some "necessary technology" while ensuring the bloc retains some manufacturing capacity. It called for "a joint decarbonisation and competitiveness plan where all policies are aligned behind the EU's objectives." Von der Leyen did not react to specific proposals put forward by Draghi, and she is not obligated to act on the report's proposals. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US Gulf producers curtailing operations on storm threat
US Gulf producers curtailing operations on storm threat
New York, 9 September (Argus) — Oil companies started to halt offshore operations in the US Gulf of Mexico ahead of an expected hurricane strike later this week. Shell said it paused some drilling operations at the Perdido and Whale platforms — located about 190 miles south of Houston — as a precaution as tropical storm Francine threatened to develop into a hurricane as it moves north from the Bay of Campeche toward the Texas and Louisiana coasts. ExxonMobil said all staff had been transported off the Hoover platform, located about 200 miles south of Houston, and operations shut-in. And Chevron said it is evacuating non-essential workers from its Anchor, Big Foot, Jack/St. Malo and Tahiti facilities, though production from company-operated assets remains at normal levels. Those facilities are located about 280 miles south of New Orleans. "We continue to supply our customers at our onshore facilities, where we are following our storm preparedness procedures and paying close attention to the forecast and track of the storm," Chevron said. Francine, which formed off the east coast of Mexico over the weekend, is forecast to become a hurricane as it moves north toward the Texas coast and northwestern Gulf, according to the National Hurricane Center. Current forecasts have it coming ashore somewhere between the Texas/Louisiana border and New Orleans Wednesday evening. A hurricane watch is in place for parts of southern Louisiana as Francine is expected to bring heavy rainfall and the risk of flash flooding across the region. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Venezuelan vote ends in opposition leader's exile
Venezuelan vote ends in opposition leader's exile
Caracas, 9 September (Argus) — Venezuelan opposition leader Edmundo Gonzalez landed in Spain on Sunday after an arrest warrant accused him of terrorism as President Nicolas Maduro continues to crack down on dissent despite international condemnation. Gonzalez fled to Spain after several days of shuttling between foreign embassies in Caracas "to save his liberty, integrity and life," Maria Corina Machado, Gonzalez's ally and the key opposition figure blocked by Maduro from running in the election, said on social media. "My departure from Caracas was surrounded by episodes of pressure, coercion and threats in order to not allow me to leave," Gonzalez said in an audio post to his followers. "I am confident that in the near future we will continue the struggle to achieve freedom and recover democracy in Venezuela." The US and other countries have not recognized official election results from 28 July and backed the opposition coalition's claim that Gonzalez likely was the winner. But Washington has refrained from taking any action, including enforcing an even stricter regime of oil and other sanctions, to force Maduro to cede power. "The United States strongly condemns Maduro's decision to use repression and intimidation to cling to power by brute force rather than acknowledge his defeat at the polls," secretary of state Antony Blinken said. Gonzalez's departure highlighted pessimism over the possibility of a negotiated departure for Maduro, who claims that he won a third term. "Today is a sad day for democracy," EU foreign affairs representative Josep Borrell said, saying that removing Gonzalez from Venezuela was the only solution for now. Oil minister and vice-president Delcy Rodriguez confirmed Gonzalez's departure late on 7 September, labeling Gonzalez an "opposition citizen" who was granted safe passage after requesting political asylum. In the days after the election, 23 demonstrators and one national guard member were killed, according to figures from the Organization of American States. Maduro boasted of arresting 2,500 "terrorists", but human rights non-governmental organizations say the detainees are demonstrators, election workers, politicians and journalists. According to the human-rights group Foro Penal, more than 1,700 are still in jail. By Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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