Biden under pressure to quickly regulate methane
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 The first step would be reinstating methane rules for newly built oil and gas facilities that Trump rescinded this summer.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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Q&A: Corporate reporting and certification schemes
Q&A: Corporate reporting and certification schemes
London, 28 June (Argus) — Corporate reporting standards and obligations are becoming more granular and falling under greater scrutiny across the EU, after new rules came into force at the start of 2024. Argus spoke to net zero adviser Nils Holta at environmental solutions provider Ecohz to review changes to EU legislation and consider their impact on wholesale energy attribute certificates markets. Edited highlights follow: Let's start by decoding the acronyms and taking stock of changes to reporting standards this year. What do the principles of the CSRD and ESRS look like? How do these align with the EU Taxonomy? These are all thematically related pieces of legislation, that are not formally linked to each other. The Corporate Sustainability Reporting Directive (CSRD) and the EU Sustainable Investment Taxonomy are two of the angles of a sustainability transparency triangle completed by the Green Claims Directive (GCD). Through these policy mechanisms, the EU seeks to cover sustainability reporting, sustainability criteria for investments, and marketing information to consumers. Essentially, the EU is trying to add sustainability as a new dimension of the single market, alongside standardised comparisons on quality and price. The CSRD relates more to the finance side. Through the annex with the European Sustainability Reporting Standards (ESRS), it details how companies should report on their sustainability impact, their sustainability-related risks, and any financial opportunities that arrive as a result of sustainability matters. It has been developed as an addition to European financial disclosure requirements, and in Norway, for instance, it has been transposed through amendments to the "accounting law" (Regnskapsloven). For financial undertakings, the Sustainable Finance Disclosure Regulation (SFDR) plays much the same role, albeit at a higher level of granularity. On the consumer-facing side, companies will soon be required to adhere to the GCD when promoting their products' environmental profiles to final consumers in what the EU calls "explicit environmental claims". While not quite the same as sustainability reporting, it fits in a market dynamic where the EU expects economic actors to be more transparent about the environmental qualities of their products — like we are used to for price and quality. Finally, we have the EU Taxonomy for sustainable activities, or just the Taxonomy. The Taxonomy is a list of economic activities with clear criteria on how they can be performed sustainably, and, in some cases, how they can be considered a transitional activity to more sustainable options. The Taxonomy also mandates that large undertakings and financial actors disclose the percentage of their Capex [capital expenditure], Opex [operating expenditure], and turnover that is invested in, finances, or derives from activities that are considered sustainable under the Taxonomy. Here is the link to the CSRD (ESRS), GCD and SFDR. If you are required to report on the percentage of your investments or turnover that is associated with sustainable activities, you need to know how all the companies you invest in are performing. And through the CSRD they are required to share this information in a transparent and streamlined manner. If, as a company, you want to make a claim about a product's environmental profile, you are now also required to possess and sort the information necessary to found that claim through the same directive. So here we have the triangle — the Taxonomy and SFDR push investors towards sustainable investments. The GCD provides consumers with a choice to consume sustainably, and the CSRD and ESRS ensure that companies have the information necessary for the other two to work. So the EU wants you to base Taxonomy reporting or environmental claims on the information published in your CSRD reporting? Not quite. I should stress at this point that EU law does not require companies to use the same methodologies for their CSRD reporting as for explicit environmental claims under the GCD or for showing criteria alignment with the Taxonomy. The simple reason is that communication to different audiences — shareholders, financial sector institutions, consumers — might require different approaches. It is, however, very simple to base claims under the Taxonomy or GCD on information gathered for CSRD reporting, and I have seen companies rely on CSRD reporting for claims of Taxonomy-alignment in their annual reports. How are things changing within the CSRD in terms of how industrial and corporate (I&C) companies will need to document energy — power and gas — consumption throughout their supply chains? What does it mean in terms of scope 2 and 3 emissions? This is a good place to clarify terminology. The CSRD is an EU directive that mandates sustainability reporting, sets out how member states are responsible for making sure companies report, and details which categories of companies need to report. All in all, we are taking about at least 50,000 EU-based companies and maybe another 10,000 non-EU companies with operations in the EU, as a rough assessment. The ESRS are the technical standards, outlining — over some 300 pages — how companies can assess what information they need to report and how this can be reported. The ESRS go into detail regarding how questions about energy consumption and climate transition plans or supply chains are asked and framed. Thank you for the clarification, and now back to the market-based vs location-based reporting? In general, the ESRS move towards market-based reporting. Emissions are to be reported by scope — 1, 2 and 3 — separately and using both market-based and location-based methodologies for Scope 2. They are also to be reported against total turnover, so investors can see the greenhouse gas intensity of their investments' turnover. At the same time, the ESRS clearly state that energy consumption must be reported using the market-based methodology in the case of Scope 2, and that it "can" be market-based in Scope 1, which for most companies would primarily relate to gas. The latter is highly technical and is tied to the EU emissions trading system monitoring and reporting requirements. Disclosing companies must report Scope 3 as it was reported to them. There is no option to not report on Scope 3 emissions outside of Europe, which means that these 60,000 or so companies will push their own reporting requirements through their entire value chain. It also means that oil and gas companies will finally need to include emissions from combustion of their own products in their sustainability reporting. Considering that changes to the CSRD will lead to greater focus on Scope 3 emissions, how is this likely to impact the energy attribute certificates (EAC) markets? Are you already seeing changing approaches to EAC procurement? How do biomethane and hydrogen fit into the picture, and is there a role for carbon offsets? What we are seeing is a greater corporate interest in understanding their own value chain and getting their suppliers to cover Scope 2 consumption with EACs. They can even use the divergence between location and market-based reporting to stress how much they actually achieve by sourcing renewable energy. The result is quite literally the difference between the two numbers. The ESRS do not open for carbon offsets as a way of reducing total emissions. Any offsets must be reported separately. Biomethane and hydrogen would both serve to decarbonise your gas combustion, so mainly Scope 1. However, the requirements for credible claims to consumption are tied to a bundled model, so we expect less focus on certificate trade and more focus on efficient value chains to deliver the product as a whole. There are a lot of open questions here tied to member state transposition of the Renewable Energy Directive (RED) III — and in some cases RED II — and to the coming Union Database for renewable fuels. How will the GCD impact consumer disclosure requirements and how does it tangentially relate to the Taxonomy? Do you expect this to also drive more granular purchases in EAC markets? When procuring EACs, will additional specifications such as eco labels become more prominent in the market? There is no specific link between the GCD and the Taxonomy, but Taxonomy-alignment would definitely be one of the things that can be communicated and substantiated in a way that is aligned with the GCD. Using an eco-label is a way to distinguish your product among several who all use renewable electricity. However, it is difficult to assess exactly how companies and consumers will react to this information in the long term. In the near future, we expect the GCD to lead to a reduction in environmental performance claims overall, at least until companies have a decent understanding of what and how they should communicate. The fine is up to 10pc of total turnover. There are often questions around how nuclear power is viewed in the EU Taxonomy — can you clarify that? And how do you see nuclear power — through scope 2/3 — playing a role in I&C companies documenting carbon neutrality through disclosure mechanisms? There has been a growing trend of energy suppliers offering carbon-neutral tariffs as opposed to renewable owing to the greater cost of documenting renewables through EACs, on top of already higher outright power and gas prices. Do you see I&C customers taking a similar route? Under the Taxonomy, nuclear is not considered renewable. It is, however, acknowledged as carbon-neutral, and we see several EU initiatives targeted at promoting "low-carbon" rather than renewable solutions. There is also an addendum to the Taxonomy, where nuclear and gas-fired power plants can be considered Taxonomy-aligned under certain circumstances. For gas, this relates to replacing coal and being time-limited in nature; while for nuclear, it is tied to a series of environmental and waste-treatment requirements. As long as the market recognises a qualitative difference between renewable and nuclear, EACs for each will be priced differently. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Libya’s oil minister asks PM to clarify who's in charge
Libya’s oil minister asks PM to clarify who's in charge
London, 28 June (Argus) — Libya's sidelined oil minister Mohamed Oun has called on Tripoli-based prime minister Abdelhamid Dbeibeh to clarify who is in charge of the ministry. The question of who runs the oil ministry has been unclear since Oun returned to work on 28 May after a temporary suspension was lifted by a state watchdog. During his absence, Oun was replaced by oil ministry undersecretary Khalifa Rajab Abdulsadek, who represented Libya at the latest Opec+ meeting on 2 June. Dbeibeh has continued to recognise Abdulsadek as oil minister since Oun's return to work. In a lengthy statement defending his record, Oun complained that Dbeibeh has cut off all communication with him and that it is impossible to carry out his duties under such conditions. "The presence of a legitimate minister and an illegal minister" is creating confusion in the sector, Oun added. Dbiebeh was seen as a key player behind the initial removal of Oun. Argus understands that Oun's suspension was part of an attempt to clear the way for state-owned NOC to move ahead with key oil and gas projects the he opposed. But the move received pushback from powerful figures including the head of Libya's presidential council and the country's central bank governor, leading to Oun's suspension being lifted. "I don't expect this issue to be resolved any time soon. Dbiebeh is unlikely to want to get into a fight given his weakening position over the past few weeks," Jalel Harchaoui, a Libya specialist at the UK's Royal United Services Institute, told Argus . Although the position of oil minister in Libya has been largely relegated to a nominal role — and much less powerful than the chairman of NOC — Oun has successfully used his role to galvanise public opinion against deals and policies promoted by the government and NOC. Libya remains politically fragmented, with rival governments based in the east and west of the country, and control of Libya's oil sector is coveted by a wide array of factions tussling for power. The north African country produces just above 1.2mn b/d of crude and wants to boost this to around 2mn b/d, but this will only be possible if it can advance long-stalled projects. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s KHI delivers LPG-fuelled LPG, NH3 carrier
Japan’s KHI delivers LPG-fuelled LPG, NH3 carrier
Tokyo, 28 June (Argus) — Japanese shipbuilder Kawasaki Heavy Industries (KHI) has delivered an LPG-fuelled LPG and ammonia carrier to domestic shipping firm Nippon Yusen Kaisha (NYK Line) and LPG importer Astomos. KHI announced on 28 June that it built the 86,700m³ very large gas carrier (VLGC) Gas Amethyst at its Sakaide shipyard in Kagawa prefecture, and has delivered it to NYK Line and Astomos. NYK Line and Astomos will hold the vessel under a joint ownership. The ship is equipped with a dual fuel engine, which can burn LPG and conventional marine fuel. The VLGC can reduce sulphur oxide emissions by more than 95pc and CO2 emissions by over 20pc by consuming LPG, as compared to burning heavy oil. The VLGC can also be retrofitted to consume ammonia as shipping fuel. The vessel is designed to carry LPG and ammonia at the same time, given prospects of future demand growth of ammonia as a carbon neutral fuel. Japanese companies have accelerated efforts in seeking alternative fuels for shipping to achieve decarbonisation. Shipping firm Mitsui OSK Line (Mol) conducted a joint study with domestic shipbuilders to develop ammonia-fuelled mid-sized ammonia and LPG carriers , targeting commissioning of the first vessel by 2026. Mitsubishi Shipbuilding plans to build two methanol-fuelled coastal roll-on roll-off vessels and deliver them within the April 2027-March 2028 fiscal year. Mol, KHI and their partners have been developing a hydrogen-fuelled multi-purpose ship . Shipbuilder Japan Marine United in May delivered an LNG-fuelled Capesize bulk carrier to domestic shipping firm Kawasaki Kisen Kaisha. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Biden, Trump trade attacks in presidential debate
Biden, Trump trade attacks in presidential debate
Washington, 28 June (Argus) — The first presidential debate of the 2024 election drew out few new details on energy policy, as President Joe Biden and former president Donald Trump hammered each other on issues such as inflation and the state of the US economy. The debate, held in Georgia on Thursday without a live audience, marked the first time Biden and Trump have shared a stage since their last debate in 2020. Biden, who is trailing Trump in many polls, at times struggled to clearly articulate his policy positions — or even to be heard — while Trump repeatedly sought to blame Biden for issues such as high inflation and the outbreak of military conflicts in Ukraine and Israel. "He has not done a good job," Trump said. "And inflation is killing our country. It is absolutely killing us." The substance of the debate was largely overshadowed by the candidates' inability to dispel voters' concerns about them. Needing to put to rest worries about his age, the 81-year-old Biden often appeared feeble and confused. Trump refused to acknowledge he lost the last election and continued to defend the mob that attacked the US Capitol on 6 January 2021. Biden throughout the debate defended his record on the economy, while focusing many of his attacks on Trump's personal conduct, including Trump's conviction on 34 counts in a case involving alleged hush money payments to an adult film star. Biden also criticized Trump's handling of the Covid-19 pandemic, which Biden said ultimately contributed to high inflation. "He didn't do much at all," Biden said. "By the time he left, things were in chaos." The debate repeatedly focused on federal tax policy, particularly a range of tax cuts enacted during Trump's presidency that are set to expire in 2025. A key provision of that tax package cut the top corporate tax rate to 21pc from 35pc. Biden said he would make the tax system more fair by increasing taxes on the wealthy, while arguing that Trump's policies would result in higher inflation and additional costs for consumers. Trump has said he would extend the expiring tax cuts, which are expected to cost $4 trillion over a decade, in addition to seeking deeper tax cuts and a 10pc tariff on all imports. Trump said he rejected the findings of many independent economists that such a tariff would drive up prices for consumers and add to inflation. "It's just going to cause countries that have been ripping us off for years — like China and many others, in all fairness to China — it's going to just force them to pay us a lot of money." Biden argued Trump's policies would result in higher inflation and additional costs for consumers. "He now wants to tax you more by putting a 10pc tariff on everything that comes into the United States of America," Biden said. Trump pivoted to issues such as energy and regulations when he was asked about his actions during the attack on the Capitol. "On January 6, we were energy independent," Trump said. And when pressed on whether he would pursue policies to deal with climate change, Trump focused on having "clean air" and "clean water", while defending his decision to pull the US out of the Paris climate accord. "It was a rip off of the United States, and I ended it because I didn't want to waste that money," Trump said. Biden said Trump did not do a "damn thing" when in office to clean up the air and water and criticized his inaction on climate change. Biden defended his suite of climate rules and support for clean energy, but he failed to tout passage of the Inflation Reduction Act, which provided support for electric vehicles, renewable energy and advanced manufacturing. On foreign policy, Trump insisted that a variety of global conflicts would have never occurred if he was in office. He contended that the war in Ukraine would abruptly be resolved if he were re-elected. "I'll have that war settled," Trump said. "I will get it settled, and I'll get it settled fast before I take office." Biden defended his record on foreign policy, saying he ushered through crucial support that has helped in the defense of Ukraine and Israel. Biden said that stood in contrast to Trump, who he said "encouraged" Russian president Vladimir Putin to invade other countries and has threatened to undermine Europe's defenses against military attacks. "This is a guy who wants to pull out of NATO," Biden said. The debate occurred just days before the US Supreme Court is expected to decide whether Trump, or any other president, should be immune from criminal prosecution for actions taken in office. Trump's attorneys have argued he should be immune from prosecution for any official acts while holding office, which could affect a criminal charge that he sought to undermine the 2020 election. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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