Republicans weigh two-step plan on energy, taxes

: Coal, Crude oil, Emissions, Natural gas, Oil products
24/12/06

Republicans in the US Congress are considering trying to pass president-elect Donald Trump's legislative agenda by voting first on a filibuster-proof budget package that revises energy policy, then taking up a separate tax cut bill later in 2025.

The two-part strategy, floated by incoming US Senate majority leader John Thune (R-South Dakota), could deliver Trump an early win by putting immigration, border security and energy policy changes into a single budget bill that could pass early next year without Democratic support. Republicans would then have more time to debate a separate — and likely more complex — budget package that would focus on extending a tax package expected to cost more than $4 trillion over 10 years.

The legislative strategy is a "possibility" floated among Senate Republicans for achieving Trump's legislative goals on "energy dominance," the border, national security and extending tax cuts, Thune said in an interview with Fox News this week. Thune said he was still having conversations with House Republicans and Trump's team on what strategy to pursue.

Republicans plan to use a process called budget reconciliation to advance most of Trump's legislative goals, which would avoid a Democratic filibuster but restrict the scope of policy changes to those that directly affect the budget. But some Republicans worry the potential two-part strategy could fracture the caucus and cause some key policies getting dropped, spurring a debate among Republicans over how to move forward.

"We have a menu of options in front of us," US House speaker Mike Johnson (R-Louisiana) said this week in an interview with Fox News. "Leader Thune and I were talking as recently as within the last hour about the priority of how we do it and in what sequence."

Republicans have yet to decide what changes they will make to the Inflation Reduction Act, which includes hundreds of billions of dollars of tax credits for wind, solar, electric vehicles, battery manufacturing, carbon capture and clean hydrogen. A group of 18 House Republicans in August said they opposed a "full repeal" of the 2022 law. Republicans next year will start with only a 220-215 majority in the House, which will then drop to 217-215 once two Republicans join the Trump administration and representative Matt Gaetz (R-Florida) resigns.

By Chris Knight

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25/06/13

EPA proposes record US biofuel mandates, foreign limits

New York, 13 June (Argus) — President Donald Trump's administration today proposed requiring record biofuel blending into the US fuel supply over the next two years, including unexpectedly strong quotas for biomass-based diesel. The US Environmental Protection Agency (EPA) proposal, which still must be finalized, projects that oil refiners will need to blend 5.61bn USG of biomass-based diesel to comply with requirements in 2026 and 5.86bn USG in 2027. That's a 67pc increase in 2026 and a 75pc increase in 2027 from this year's 3.35bn USG requirement, above what most industry groups had sought. The proposal alone is likely to boost biofuel production, which has been down to start the year as biorefineries have struggled to grapple with uncertainty about future blend mandates, the halting rollout of a new clean fuel tax credit, and higher import tariffs. The EPA proposal also would halve Renewable Identification Number (RIN) credits generated for foreign biofuels and biofuels produced from foreign feedstocks, a major change that could increase US crop demand and hurt renewable diesel plants that source many of their inputs from abroad. US farm groups have lamented refiners' rising use of Chinese used cooking oil and Brazilian tallow to make renewable diesel, and EPA's proposal if finalized would sharply reduce the incentive to do so. The Renewable Fuel Standard program requires US oil refiners and importers to blend biofuels into the conventional fuel supply or buy credits from those who do. One USG of corn ethanol generates one RIN, but more energy-dense fuels like renewable diesel can earn more. In total, the rule would require 24.02bn RINs to be retired next year and 24.46bn RINs in 2027. That includes a specific 7.12bn RIN mandate for biomass-based diesel in 2026 and 7.5bn in 2027, and an implied mandate for corn ethanol of 15bn RINs, similar to prior years. EPA currently sets biomass-based diesel mandates in physical gallons but is proposing a change to align with how targets for other program categories work. US soybean oil futures surged following the release of the EPA proposal, and RIN credits rallied similarly. Current year D6 credits, typically generated from conventional ethanol production, traded at 92¢/RIN near the opening of the session before peaking at 110¢/RIN and then retreating slightly. Current year biomass-based diesel D4 RINs followed a similar trajectory, trading up to 116¢/RIN and widening the gap with conventional D6 RINs. Proposed targets are less aspirational for the cellulosic biofuel category, where biogas generates most credits. EPA proposes lowering the 2025 mandate to 1.19bn RINs, down from from 1.38bn RINs previously required, with 2026 and 2027 targets proposed at 1.30bn RINs and 1.36bn RINs, respectively. In a separate final rule today, EPA cut the 2024 cellulosic mandate to 1.01bn RINs from 1.09bn previously required, a smaller cut than initially proposed, and made available special "waiver" credits refiners can purchase at a fixed price to comply. Small refinery exemptions The proposal includes little clarity on EPA's future policy around program exemptions, which small refiners can request if they claim blend mandates will cause them disproportionate economic hardship. EPA predicted Friday that exemptions for the 2026 and 2027 compliance years could total anywhere from zero to 18bn USG of gasoline and diesel. EPA plans to continue a policy from past administrations of estimating future exempted volumes when calculating the percentage of biofuels individual refiners must blend, effectively requiring those with obligations to shoulder more of the burden to meet high-level volume targets. EPA in the proposal said it plans to "communicate our policy regarding [exemption] petitions going forward before finalization of this rule". Industry groups expect the agency will try to conclude the rule-making by November. Notably though, the proposal says little about how EPA is weighing a backlog of more than a hundred requests for exemptions stretching back to 2016. Many of these refiners had already submitted RINs to comply and could push for some type of compensation if granted retroactive waivers, making this part of the program especially hard to implement. An industry official briefed on Thursday ahead of the rule's release said Trump administration officials were "coy" about their plans for the backlog. The proposed mandates for 2026-2027 will have to go through the typical public comment process and could be changed as regulators weigh new data on biofuel production and food and fuel prices. Once the program updates are finalized, lawsuits are inevitable. A federal court is still weighing the legality of past mandates, and the Supreme Court is set to rule this month on the proper court venue for litigating small refinery exemption disputes. By Cole Martin and Matthew Cope Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Limited prompt impact on LNG from Israel-Iran conflict

25/06/13

Limited prompt impact on LNG from Israel-Iran conflict

London, 13 June (Argus) — Israel has halted production at two of its major gas fields and cut pipeline exports to Egypt, but resulting LNG demand may only come later this summer when Egypt builds out its LNG import capacity. Israel's Karish and Leviathan fields have stopped production following a government order issued in the wake of Israeli airstrikes on Iran . Israel's energy ministry today said it expects the minister to declare a state of emergency in the gas sector. Pipeline exports to Egypt and Jordan have since dropped sharply, market participants said, resulting in Egypt cutting gas supply to urea plants as it prioritises gas for power generation. But Egypt has access to only one LNG import terminal at present — the 170,000m³ Hoegh Galleon floating storage and regasification unit (FSRU) at Ain Sukhna. Three carriers were holding offshore today waiting to deliver, and the terminal is importing at maximum capacity already, so Egypt cannot import more than it already is through the facility. And Jordan no longer has LNG import capacity, with the 160,000m³ Energos Eskimo having departed ahead of installation later this summer in Egypt. The FSRU at present is at a shipyard in Egypt's Ain Sukhna, unable to import LNG for either Jordan or Egypt. The gas supply cuts from Israel also come ahead of the region's peak cooling demand season. LNG demand could rise if Israeli gas supply is constrained for an extended period of time. Egypt plans to build out its LNG import terminal capacity to three FSRUs later this summer, as well as an additional temporary FSRU for summer leased from Turkey's Botas, and additional LNG import capacity would allow for stronger imports if Israeli supply remains constrained. Two of these FSRUs — the Energos Eskimo and 174,000m³ Energos Power — are at Egyptian shipyards and could be installed in the coming weeks or months. Egypt is understood to have bought at least 110 cargoes for delivery this year , which is equivalent to just under 8mn t. But the country plans to add about 18mn t/yr of LNG import capacity for its peak summer season, assuming 750mn ft³/d of regasification capacity at three FSRUs. Egypt imported 10.2bn m³, or almost 8mn t, of pipeline gas from Israel last year, according to data from the Joint Organisations Data Initiative (Jodi), meaning that with three FSRUs, Egypt has enough capacity to substitute lost Israeli volumes with LNG imports. But it remains unclear for how long Israeli gas exports will be curtailed. Iran also struck Israeli targets with missiles in early October last year , with Israel's Tamar and Leviathan fields having gone off line temporarily, although production returned after one day. Another potential impact of escalating tensions in the Middle East is disruption to shipping around the Strait of Hormuz, but LNG carriers have continued to transit the route as normal today. The tensions could compound insurance costs, adding to shipping costs from the Middle East. More than 80mn t/yr of LNG supply, mostly from Qatar, has to transit the Strait of Hormuz to reach international delivered markets. By Martin Senior Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Exomad Green starts building Bolivian biochar plant

25/06/13

Exomad Green starts building Bolivian biochar plant

London, 13 June (Argus) — Bolivian biochar producer Exomad Green has started building a 128,000 t/yr biochar production plant in the country's Guarayos region, which it expects to achieve 320,000 t/yr of CO2 removal (CDR) once fully operational. The facility will be developed in two phases. Half of the total capacity will be developed in phase one, which is scheduled to be fully operational by mid-2026, with the second phase expected to start in 2026. Exomad did not provide a timeline for the scheduled end of the latter phase. The firm plans to distribute biochar to indigenous communities and farmers to restore degraded soils, enhance food production and improve resilience to climate stress, through its "biochar donation program" it said, without specifying what share of the end product would be allocated for this program. Exomad signed a 10-year biochar CDR agreement with technology giant Microsoft to remove 1.24mn t of CO2 in late May. The contract has embedded digital monitoring, reporting and verification carried by Germany-based Carbonfuture to enable third-party verification and certification under crediting platform Puro.earth's biochar methodology. The parties had previously also signed a deal for 32,000t of biochar CDR credits in December 2023. Exomad estimates it had sequestered over 120,000t of CO2 by April through its biochar operations. The firm already operates two biochar plants in Concepcion and Riberalta, each with 60,000 t/yr of capacity. The company uses hardwood forestry residues as feedstock to produce biochar with up to 86pc fixed carbon content through pyrolysis. Exomad Green is a unit of Exomad, which is the largest wood exporter in Bolivia. By Erisa Senerdem Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

VLCC rates exposed to disruption after Israeli strike

25/06/13

VLCC rates exposed to disruption after Israeli strike

London, 13 June (Argus) — The cost of freight for Mideast Gulf-origin very large crude carrier (VLCC) voyages could increase after Israeli air and missile strikes hit Iran in the early hours of today, 13 June. The VLCC market is exposed to volatility as around 65pc of all shipments in that class are from the Mideast Gulf. In October 2024, when Iran launched more than 200 missiles against Israel, the Argus- assessed rate for the Mideast Gulf to China route increased by more than 13pc, to $14.10/t, in three days. So far is appears there is no disruption to oil flows through the Mideast Gulf and the strait of Hormuz, and remains unclear as Iran's oil infrastructure was unscathed by the Israeli air and missile strikes according to Iran's state news agency Irna and Argus sources. But some shipowners have become increasingly cautious of the region, with some market participants suggesting more risk-averse owners might avoid the area until the conflict de-escalates. This could encourage some owners to increase their offers as the risk of transiting the area mounts, and discourage some from visiting the region at all. Charterers made multiple cargoes available to the Mideast Gulf market today, but most remained unfixed. But the rise in crude prices today — front month Ice Brent is trading around 5.5pc higher having rise as much as 13pc earlier — could discourage China, the largest importer of Mideast Gulf grades, from purchasing more crude. This could curtail any jump in freight rates and perhaps create a ceiling to cap the increase. By Rhys van Dinther Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

WTI crude surges after Israel attack on Iran

25/06/13

WTI crude surges after Israel attack on Iran

Houston, 13 June (Argus) — WTI crude futures jumped by as much as 14pc today after Israel carried out strikes against Iran, sparking concerns over possible disruptions to Middle East oil supplies. WTI prices rose as high as $77.62/bl early, a nearly five-month high, but gave up some of the gains later in the morning. The July Nymex WTI contract was trading near $73/bl at 10:30am ET, about 7pc above yesterday's settlement price. In equity markets, the Nasdaq was down by 1.44pc and the S&P 500 fell by 0.97pc as of 10:30am ET. Iranian state media reported a first wave of strikes over the capital city, Tehran, at around 03:20 local time (23:50 GMT). Images and videos published by the state broadcaster showed residential towers that had been struck in the attack, causing numerous casualties. The US said it was not involved in the Israeli strikes and advised Tehran not to retaliate against US personnel in the Middle East. Iran's [oil infrastructure appeared to be unscathed from the strikes}(https://direct.argusmedia.com/article/2698642), according to Iran's state news agency Irna and Argus sources. But the attacks have raised the prospect of a broader escalation in the world's largest oil-producing region. Israel said the strikes targeted military facilities and infrastructure linked to Iran's nuclear program. It described the operation as an act of self-defense, claiming Iran is "closer than ever" to acquiring a nuclear weapon. Iranian officials said talks with US officials over its nuclear program scheduled for this weekend can no longer take place . Iran informed the International Atomic Energy Agency (IAEA) that its Bushehr nuclear power plant was not targeted and that no increase in radiation levels had been observed at its Natanz site, IAEA director general Rafael Grossi said today. The attacks have raised the risk of disruption to shipping in the region, prompting concerns over rising freight rates, insurance costs and vessel safety. Market participants warn that freight rates could surge if the conflict drags on or if Iran launches a retaliatory strike. The region includes one of the world's most critical oil and shipping corridors, centered on the Strait of Hormuz — a chokepoint for about a fifth of global oil supply. Ships operating in or transiting the Mideast Gulf and the Strait of Hormuz could face higher costs and delays. "Insurance companies could raise the cost of additional war risk premiums (AWRP) if the conflict continues for a long time," a shipbroker said. Other freight market participants echoed this view. "Mideast Gulf freight rates could spike because owners will avoid going there," another source said, adding that shipowners are likely to err on the side of caution. All Egyptian urea plants have stopped production because of a drop in natural gas flows from Israel, with suppliers withdrawing urea offers. Greek independent oil and gas producer Energean has suspended production from its Karish gas field offshore Israel in line with an Israeli government order after the strikes. Several international airlines have diverted or cancelled flights. Iran's civil aviation authority announced that the airspace over Tehran will be closed "until further notice" following the initial strikes, and all flights have been grounded across the country's airports. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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