Biden calls for US to cut GHG emissions in half: Update

  • : Coal, Crude oil, Emissions, Natural gas, Oil products
  • 21/04/22

Updates with changes throughout

President Joe Biden is pledging the US will cut its greenhouse gas (GHG) emissions to half of 2005 levels by the end of the decade, as he seeks to spur new global actions to address climate change.

Biden today committed the US to reduce its emissions by 50-52pc from a 2005 base year by 2030, as he opened a two-day virtual climate summit attended by 40 world leaders.

"The signs are unmistakable," Biden said. "The science is undeniable. The cost of inaction keeps mounting. The United States is not waiting. We are resolving to take action."

That new commitment forms the basis of the US' new nationally determined contribution (NDC), or emissions pledge, under the Paris climate agreement, which it submitted to the UN today.

The president is hoping that by promising to make such cuts the US can persuade other nations to set their own, more aggressive targets under the agreement, framing the need for action as good economic policy.

"All of us, all of us, and particularly those of us who represent the world's largest economies, we have to step up," Biden said. "Those that do take action and make bold investments in their people, in clean energy future, will win the good jobs of tomorrow and make their economies more resilient and more competitive."

A number of world leaders have used the summit, and the days leading up to it, to announce their own new NDCs.

Canadian prime minister Justin Trudeau today said his country would cut its emissions by 40-45pc from 2005 levels by 2030, replacing a previous 30pc reduction pledge. Japanese premier Yoshihide Suga announced a new target of reducing his country's GHG emissions by 46pc from 2013 levels, compared with 26pc previously.

UK prime minister Boris Johnson called the new US goal a "game changing" announcement but noted that raising global ambitions for emissions cuts and climate finance will be a "political challenge" that leaders must overcome.

"It is vital for all of us to show that this is not all about some expensive, politically correct green act of bunny hugging," he said.

The White House said it developed the US target after consulting with relevant agencies and stakeholders to determine what level of emissions reductions are possible across the economy, accounting for factors such as technologies, future costs and the potential standards and incentives that could be used to reduce emissions.

An administration official said the target does not envision any specific sector-by-sector emissions cuts, but instead recognizes there are "multiple paths" to reducing US emissions.

A White House fact sheet accompanying the announcement highlights the president's proposal to eliminate GHG emissions from the electricity sector by 2035, as well as his support for setting more aggressive fuel economy and tailpipe CO2 standards for new cars and trucks, the top two sources of US emissions.

The transportation sector accounted for 29pc of US emissions in 2019, followed by electricity generation at 25pc, according to the latest US Environmental Protection Agency (EPA) data.

The US under former president Barack Obama pledged to cut its GHG emissions by 26-28pc by 2025 from 2005 levels to help achieve the Paris agreement's goal of keeping global temperatures from rising by more than 2°C above pre-industrial levels.

The White House said the country is on track to meet Obama's pledge, with the new target keeping the US on pace to help limit the global increase in temperature to 1.5°C.

US emissions totaled just under 6.6bn metric tonnes in 2019, nearly 12pc below 2005 levels, with net emissions, accounting for carbon stored in forests and cropland, about 13pc lower than 2005. The administration's updated NDC estimates net emissions last year were 17pc below 2005. That would mean to reach the new 2030 goal, the US would have to cut its emissions by about 40pc from last year's total.

A 50pc cut would put the US pledge on par with the near-term commitments made by many of the major economics under the Paris agreement, according to a recent Rhodium Group analysis.

While many environmental groups have already cheered the announcement, some are pushing back against Biden's new target, saying it falls short of what is needed to limit the rise in global temperatures.

"While many will applaud the president's commitment to cut US emissions by at least half by 2030, we have a responsibility to tell the truth: It is nowhere near enough," environmental group Sunrise Movement political director Evan Weber said.

The White House noted that the 50pc target is being supported by hundreds of businesses, along with many US state and local leaders and scientists.

Republicans in the US Congress are warning that Biden's efforts could hurt the country's economy.

"President Biden's decision to force America back into the Paris climate accord and increase our commitments could severely hamper our global competitive edge to the benefit of the Chinese Communist Party, the world's top carbon polluter," said US representative Cathy McMorris Rodgers of Washington state, the top Republican on the House Energy and Commerce Committee.


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24/04/23

US-led carbon initiative misses launch date

US-led carbon initiative misses launch date

Houston, 23 April (Argus) — The Energy Transition Accelerator (ETA), a global initiative to use voluntary carbon market revenue to speed the decarbonization of developing countries' power sectors, has missed its planned Earth Day launch but continues to prepare for doing business. At the Cop 28 climate conference in Dubai last year, the initiative's leaders said they hoped to formally launch the program on 22 April 2024 . That didn't happen, but the program's leaders last week announced that the US climate think tank Center for Climate and Energy Solutions will serve as the ETA's new secretariat and that former US special presidential envoy for climate John Kerry will serve as the honorary chair of an eight-member senior consultative group that will advise the ETA's design and operations. The ETA plans to spend 2024 "building" on a framework for crediting projects they released last year. ETA leaders said the initiative could ultimately generate tens of billions of dollars in finances through 2035. The ETA also said the Dominican Republic had formed a government working group to "guide its engagement" as a potential pilot country for investments and that the Philippines would formally participate as an "observer country" rather than as a direct participant immediately. The ETA is still engaging Chile and Nigeria as potential pilot countries too, the initiative told Argus . The ETA is being developed by the US State Department, the Rockefeller Foundation, and the Bezos Earth Fund and would be funded with money from the voluntary carbon market. The initiative's ultimate goal is to allow corporate and government offset buyers to help developing countries decarbonize their power sectors through large projects that accelerate the retirement of coal-fired power plants and build new renewable generation. As of now, the ETA's timeline for future changes and negotiations with countries and companies is unclear. The program's goals are ambitious, especially at a time when scrutiny of some voluntary carbon market projects from environmentalists has weighed on corporate offset demand. By Mia Westley Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Vancouver Aframax rates at 6-month lows ahead of TMX


24/04/23
24/04/23

Vancouver Aframax rates at 6-month lows ahead of TMX

Houston, 23 April (Argus) — An oversupply of Aframax-size crude tankers on the west coast of the Americas in anticipation of the Trans Mountain Expansion (TMX) pressured Vancouver-loading rates to six-month lows on 19 April. With the 590,000 b/d TMX project expected to commence commercial service on 1 May, shipowners have positioned more vessels to be on the west coast to satisfy anticipated demand in Vancouver, but that demand has yet to materialize, leaving the Aframax market oversupplied for now, market participants said. Aframax rates from Vancouver to the US west coast began falling in mid-to-late March as an increase of ballasters added to tonnage in the region, helping drop the rate to ship 80,000t of Cold Lake on that route to $1.50/bl on 19 April from $2.55/bl on 21 March, according to Argus data. The rate held at $1.50/bl on 22 April, the lowest since 2 October and just 3¢/bl higher than the lowest rate since Argus began assessing the route on 21 April 2023. Similarly, the Vancouver-China Aframax rate also fell to a six-month low of $6.59/bl for Cold Lake on 19 April, down from $7.78/bl on 2 April, according to Argus data. In addition to the ballasters, two Aframaxes — the Jag Lokesh and the New Activity — are hauling Argentinian crude to the US west coast and are expected to begin discharging on 3 and 6 May, respectively, according to Vortexa. The Argentinian port of Puerto Rosales is mostly restricted to Panamaxes but can accommodate smaller Aframaxes. Downward pressure from across canal A recent slump in the Gulf of Mexico and Caribbean Aframax market, due in part to falling Mexican crude exports to the US Gulf coast , has exerted additional downward pressure, a shipowner said. "Though markets at each side of the (Panama) Canal are different, softer sentiment looms in the region," the shipowner said. Last week, a charterer hired two Aframaxes for west coast Panama-US west coast voyages, the first at WS102.5 and the second at WS95, equivalent to $12.71/t and $11.78/t, respectively, as multiple shipowners competed for the cargoes. The Vancouver Aframax market typically draws from the same pool of vessels as the west coast Panama market. For example, the Yokosuka Spirit , one of the Aframaxes hired to load in west coast Panama, discharged a Cold Lake cargo in Los Angeles on 21-22 April after loading in Vancouver in mid-March, according to Vortexa and market participants. By Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US oil and gas deals slowing after record 1Q: Enverus


24/04/23
24/04/23

US oil and gas deals slowing after record 1Q: Enverus

New York, 23 April (Argus) — US oil and gas sector mergers will likely slow for the rest of the year following a record $51bn in deal in the first quarter, according to consultancy Enverus. Transactions slowed in March and the second quarter appears to have already lost momentum, according to Enverus, following the year-end 2023 surge in consolidation that spurred an unprecedented $192bn of upstream deals last year. The Permian shale basin of west Texas and southeastern New Mexico continued to dominate mergers and acquisitions, as companies competed for the remaining high-quality inventory on offer. Acquisitions were led by Diamondback Energy's $26bn takeover of closely-held Endeavor Energy Resources . Others include APA buying Callon Petroleum for $4.5bn in stock and Chesapeake Energy's $7.4bn takeover of Southwestern Energy . The deal cast a spotlight on the remaining private family-owned operators, such as Mewbourne Oil and Fasken Oil & Ranch, which would be highly sought after if they decided to put themselves up for sale. "However, there are no indications these closely held companies are looking to exit any time soon," said Andrew Dittmar, principal analyst at Enverus. "That leaves public explorers and producers (E&P) looking to scoop up the increasingly thin list of private E&Ps backed by institutional capital and built with a sale in mind — or figuring out ways to merge with each other." Deals including ExxonMobil's $59.5bn takeover of Pioneer Natural Resources, as well as Chevron's $53bn deal for Hess, have attracted the attention of anti-trust regulators. The Federal Trade Commission has also sought more information on the Chesapeake/Southwestern deal. "The most likely outcome is all these deals get approved but federal regulatory oversight may pose a headwind to additional consolidation within a single play," said Dittmar. "That may force buyers to broaden their focus by acquiring assets in multiple plays." By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

USGC LNG-VLSFO discount to steady itself


24/04/23
24/04/23

USGC LNG-VLSFO discount to steady itself

New York, 23 April (Argus) — The premium for US Gulf coast (USGC) very low-sulphur fuel oil (VLSFO) to LNG is expected to linger but not widen this spring, maintaining interest in LNG as a bunkering fuel. US Gulf coast LNG prices slipped from a premium to a discount to VLSFO in March 2023 and have remained there since. The discount surpassed 200/t VLSFO-equivalent in January (see chart). Both LNG and VLSFO prices are expected to remain under downward pressure due to high inventories, which could keep the current LNG discount steady. The US winter natural gas withdrawal season ended with 39pc more natural gas in storage compared with the five-year average, according to the US Energy Information Administration (EIA). Henry Hub natural gas monthly average prices dropped below $2/mmBtu in February, for the first time since September 2020, Argus data showed. The EIA expects the US will produce less natural gas on average in the second and third quarter of 2024 compared with the first quarter of 2024. Despite lower production, the US will have the most natural gas in storage on record when the winter withdrawal season begins in November, says the EIA. As a result, the agency forecasts the Henry Hub spot price to average less than $2/mmBtu in the second quarter before "increasing slightly" in the third quarter. EIA's forecast for all of 2024 averages about $2.20/mmBtu. US Gulf coast VLSFO is facing downward price pressure as demand falls and increased refinery activity signals a potential supply build . Rising Gulf coast refinery activity was likely behind some of the drop in prices. Gulf coast refinery utilization last week rose to 91.4pc, the highest in 12 weeks and up by 0.9 percentage points from the prior week. US Gulf coast suppliers are also eyeing strong fuel oil price competition from eastern hemisphere ports such as Singapore and Zhoushan, China, importing cheap Russian residual fuel oil. In general, LNG's substantial discount to VLSFO has kept interest in LNG for bunkering from ship owners with LNG-burning vessels high. The EIA discontinued publishing US bunker sales statistics with the last data available for 2020. But data from the Singapore Maritime & Port Authority, where the LNG–VLSFO discount widened to over $200/t VLSFOe in February, showed Singapore LNG for bunkering demand increase 11.4 times to 75,900t in the first quarter compared with 6,700t in the first quarter of 2023 and 110,900t for full year 2022. By Stefka Wechsler US Gulf coast LNG vs VLSFO $/t VLSFOe Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

India’s Chhara LNG terminal faces commissioning delay


24/04/23
24/04/23

India’s Chhara LNG terminal faces commissioning delay

Mumbai, 23 April (Argus) — Indian state-owned refiner HPCL's 5mn t/yr Chhara LNG import terminal is again facing delays in receiving and unloading its commissioning cargo, a market source told Argus . Fender failure at the terminal has caused problems in berthing the LNG vessel. The fender acts as a buffer or cushion between the ship hull and the dock, and prevents damage as a result of contact between the two surfaces. HPCL on 22 April issued a tender offering the commissioning LNG cargo , which is onboard the 160,000m³ Maran Gas Mystras. The vessel is currently laden offshore the terminal and ready to redeliver to another Indian LNG terminal on 25-30 April, according to HPCL. The company is seeking bids at a fixed price, and custom duty has already been paid by the firm. Indian firm Gujarat State Petroleum (GSPC) facilitate HPCL's purchase of the cargo on 26 March, with the cargo for delivery over 9-12 April. HPCL has put up the commissioning cargo for auction, and it can be discharged from any alternative port in India. LNG terminals closer to Chhara include Indian state-controlled importer Petronet's 17.5mn t/yr Dahej, Shell's 5.2mn t/yr Hazira or state-owned gas distributor Gail's 5mn t/yr Dhabol LNG terminal. HPCL also has not awarded a tender that is seeking another early-May delivery cargo , which closed on 19 April. Commissioning of the Chhara LNG terminal has been delayed since September 2022 owing to pipeline issues. The terminal is the country's eighth LNG import facility, which would lift total regasification capacity to 52.7mn t/yr from 47.7mn t/yr currently. The pipeline runs from the terminal and connects the city gas distribution network from Lothpur to Somnath district in Gujarat. There has been a delay in opening the pipeline as it passes through the eco-sensitive zone of the Gir wildlife sanctuary for 25.816km, a government document shows. The facility was completed in February, but is set to be closed from 15 May-15 September ahead of the completion of a breakwater facility , which is required to ensure safe LNG tanker berthing during India's monsoon season. No specific timeline has been given for building the breakwater, but the terminal will be able to operate year-round once it is completed. By Rituparna Ghosh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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