Latest market news

Pilot fears rail crisis will cut US DEF, biofuel supply

  • Market: Biofuels, Fertilizers, Oil products, Petrochemicals, Petroleum coke
  • 28/04/22

Refined products retailer Pilot Travel Centers fears a move to cut rail traffic by western US railroad Union Pacific (UP) will drive a shortage of diesel exhaust fluid (DEF) and ethanol in the US.

UP this month ordered Pilot to cut rail shipments by 50pc or face embargoes on shipments of DEF — an important solution used to cut NOx emissions from diesel engines without hurting fuel efficiency — as well as ethanol, biodiesel and renewable diesel, Pilot chief executive Shameek Konar told the US Surface Transportation Board (STB) yesterday .

UP's "restrictions will prevent Pilot from keeping many markets adequately supplied with DEF, likely causing shortages that will sideline trucks and reduce trucking capacity," Konar said on the second of STB's two-day hearing on the rail service crisis.

Pilot has not cut volumes so far but UP also hasn't implemented an embargo. But Konar said he worries about the effect on Pilot and the trucking industry.

UP this month told some of its largest shippers that it will start limiting their rail volume if the carrier is unable to clear railcar congestion from its system.

UP told Pilot one day this month it had shipped about 160 cars during the prior week and wanted the shipper to reduce that by about 46 cars/week, or 6 cars/day.

"We have not reduced the cars because we would be in deep trouble," he said, adding that UP has not responded. Each railcar of DEF translates to about 5mn miles of trucking.

"If you lose 100mn USG of DEF, it would be absolutely catastrophic because we do not just supply ourselves," Konar said. He estimated the cuts would equate to removing 10pc of the trucks on the road today.

Pilot estimates it supplies 30pc of the DEF in the US. The company provides more than 300mn USG of DEF to the trucking industry annually, with about 74pc of that shipped by rail. Pilot also provides roughly 20pc of the nation's highway diesel, renewable diesel and biodiesel.

Cutting Pilot's renewable diesel volume, with about 50pc being shipped by rail, would increase fuel prices in certain states and potentially dry up supply, he said.

Cutting ethanol shipments from Pilot's plant in Nebraska to Arizona, Nevada and a few other regions is also expected to remove the amount of ethanol available to blend with gasoline, potentially raising prices.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
22/11/24

Cop: Brazil eyes $300bn/yr for climate finance goal

Cop: Brazil eyes $300bn/yr for climate finance goal

Baku, 22 November (Argus) — Brazil has set out a suggestion of "at least" $300bn/yr in climate finance to be provided by developed countries to developing nations. Brazilian representatives set out their proposal today, in response to a draft text on a new climate finance goal. Brazil's proposal of $300bn/yr in climate finance by 2030 and $390bn/yr by 2035 are in line with the recommendations of a UN-mandated expert group. Negotiations at Cop are continuing late into the evening of the official last day of the conference, with no final texts in sight. Discussions centre around the new collective quantified goal (NCQG) — the climate financing that will be made available to developing countries in the coming years to help them reduce emissions and adapt to the effects of climate change. The presidency draft text released this morning put the figure at $250bn/yr by 2035, with a call for "all actors" to work towards a stretch goal of $1.3tn/yr. Representatives of developing countries have reacted angrily to the figure put forward in the text, saying it is far too low. Brazil's proposal appears to call for all of the $300bn-$390bn to be made up of direct public financing, which could then mobilise further funding to reach the $1.3tn/yr. It was inspired by the findings of a UN report, Brazil said. The UN-backed independent high-level group on climate finance today said that the $250bn/yr figure was "too low," and recommended the higher $300bn-390bn/yr goal. Brazil's ask would be a significant step up in the required public financing. The $250bn/yr target includes direct public financing and mobilised private financing, and potentially includes contributions from both developed and developing countries. Wealthier developing countries have been hesitant to see their climate financing fall in this category, which they say should be made up exclusively of developed country money, in line with the Paris Agreement. But $300bn/yr would represent an increase in ambition, Brazil said, while the $250bn/yr called for in the draft text would be very similar to the $100bn/yr goal set in 2009, after taking into account inflation. Delegates at Cop look set to continue discussions into the night. A plenary session planned for late in the evening, which would have allowed parties to express their positions in public, has been cancelled, suggesting groups still have differences to hammer out. By Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Find out more
News

Blenders credit extension stalled in US Senate


22/11/24
News
22/11/24

Blenders credit extension stalled in US Senate

New York, 22 November (Argus) — A push for US lawmakers to extend various biofuel incentives before the end of the year has met resistance in the Senate. A growing coalition of biofuel and soybean groups has endorsed extending for one year a $1/USG federal tax credit for blenders of biomass-based diesel, which would otherwise expire after December and be replaced by the Inflation Reduction Act's carbon-intensity-based "45Z" credit. But lawmakers have various other priorities in the final weeks of this legislative session, and a staffer with the Democratic-controlled US Senate Finance Committee confirmed that prospects for a deal to extend biofuel tax credits are slim. "Republicans have showed very little interest in working with Democrats on much of anything related to tax," said Ryan Carey, chief communications advisor and deputy policy director at the Committee on Finance. "Their focus is primarily on the next Congress, when they're going to attempt to pass an extension of the first Trump tax law on a partisan basis." Another Senate office acknowledged on background that it is "unlikely" Congress will come to any major tax deal before the end of the year. Congress has other priorities for its brief lame duck session before president-elect Donald Trump begins his second term, including government funding, the federal debt limit, and a new farm bill. Tax policy could still fit into an end-of-year package, with some less controversial tax provisions and a bipartisan business tax proposal backed by Senate Finance Committee chair Ron Wyden (D-Oregon) still under discussion. But prolonging the biodiesel blenders credit — plus other biofuel credits benefiting sustainable aviation fuel and cellulosic fuels that some groups have also pushed to extend — appears to be a tougher lift. With Trump in the White House and Republicans set to control both chambers of Congress, Republicans are now preparing major tax policy legislation next year to prolong tax cuts passed during Trump's first term that are set to expire at the end of 2025. Lawmakers are likely to look at repealing some Inflation Reduction Act clean energy subsidies to help offset the cost of that proposal. Republicans on the House tax-writing committee this week requested public input on the 45Z credit specifically, a signal that they are at least open to modifications — and are already looking to tax policy next year. Biofuel subsidies are seen by analysts and lobbyists as less likely targets for repeal than other Inflation Reduction Act credits, given support for the industry among farm state lawmakers. But the request-for-information this week suggested that Republicans are wary of elements of the current 45Z credit and could support changes that benefit agribusiness. Even biofuel groups generally supportive of the 45Z credit's structure have been frustrated by President Joe Biden's administration, which has yet to issue guidance clarifying how it will calculate the carbon intensities of different fuels and feedstocks. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Cop: Drafts point to trade-off on finance, fossil fuels


22/11/24
News
22/11/24

Cop: Drafts point to trade-off on finance, fossil fuels

Baku, 22 November (Argus) — The new draft on the climate finance goal from the UN Cop 29 climate summit presidency has developed nations contributing $250bn/yr by 2035, while language on fossil fuels has been dropped, indicating work towards a compromise on these two central issues. There is no mention of fossil fuels in either the new draft text on the global stocktake — which follows up the outcome of Cop 28 last year, including "transitioning away" from fossil fuels — or in the new draft for the climate finance goal. Developed countries wanted a reference to moving away from fossil fuels included, indicating that not having one would be a red line. The new draft text on the climate finance goal would mark a substantial compromise for developing countries, with non-profit WRI noting that this is "the bridging text". Parties are negotiating the next iteration of the $100bn/yr that developed countries agreed to deliver to developing nations over 2020-25 — known as the new collective quantified goal (NCQG). The new draft sets out a figure of $250bn/yr by 2035, "from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources". It also notes that developed countries will "take the lead". It sets out that the finance could come from multilateral development banks (MDBs) too. "It has been a significant lift over the past decade to meet the prior, smaller goal... $250bn will require even more ambition and extraordinary reach," a US official said. "This goal will need to be supported by ambitious bilateral action, MDB contributions and efforts to better mobilise private finance, among other critical factors," the official added. India had indicated earlier this week that the country was seeking around $600bn/yr for a public finance layer from developed countries. Developing countries had been asking for $1.3 trillion/yr in climate finance from developed countries, a sum which the new text instead calls for "all actors" to work toward. The draft text acknowledges the need to "enable the scaling up of financing… from all public and private sources" to that figure. On the contributor base — which developed countries have long pushed to expand — the text indicates that climate finance contributions from developing countries could supplement the finance goal. It is unclear how this language will land with developing nations. China yesterday reiterated that "the voluntary support" of the global south is not part of the goal. The global stocktake draft largely focuses on the initiatives set out by the Cop 29 presidency, on enhancing power grids and energy storage, though it does stress the "urgent need for accelerated implementation of domestic mitigation measures". It dropped a previous option, opposed by Saudi Arabia, that mentioned actions aimed at "transitioning away from fossil fuels". Mitigation, or cutting emissions, and climate finance have been the overriding issues at Cop 29. Developing countries have long said they cannot decarbonise or implement an energy transition without adequate finance. Developed countries are calling for substantially stronger global action on emissions reduction. By Georgia Gratton and Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Bangladesh issues new phosphate tenders


22/11/24
News
22/11/24

Bangladesh issues new phosphate tenders

London, 22 November (Argus) — Bangladesh's ministry of agriculture has issued a new private-sector tender to buy DAP and TSP, closing on 27 November. The ministry did not specify the total quantities sought but specified that each private importer can offer a maximum of 30,000t of TSP and 40,000t of DAP in the tender. The cargoes offered under the tender are to be shipped by 30 December, and nominated importers must issue letters of credit within seven working days of receiving the work order. The ministry closed a private-sector tender to buy DAP and TSP on 18 November and has probably awarded at least 40,000t of Moroccan DAP at $678.40/t cfr in the tender. It had received offers for 120,000t of DAP at prices ranging from $678.40-711.00/t cfr and 113,000t of TSP at prices ranging from $561.90-585.00/t cfr. BCIC seeks 10,000t of phosphoric acid in tender Bangladeshi state-owned importer BCIC has issued a fresh tender to buy 10,000t of phosphoric acid containing 52-54pc P2O5, closing on 8 January. It wants the cargo to be shipped within 30 days of issuing the letter of credit for delivery to Chattogram. Trading firm Sun International submitted the only offer in BCIC's 20 November tender for 20,000t of the same grade of acid. It offered South African or Chinese acid at $620.87/t cfr (equivalent to $1,150-1,194/t P2O5 cfr), or $530.87/t fob. In its 18 November tender to buy 10,000t of 52-54pc P2O5 acid, BCIC received offers of $1,163-1,213/t P2O5 cfr equivalent. By Tom Hampson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Singapore light distillate stocks hit seven-week high


22/11/24
News
22/11/24

Singapore light distillate stocks hit seven-week high

Singapore, 22 November (Argus) — Singapore light distillate and middle distillate inventories rose to multi-week highs while residual fuel stocks fell to a three-week low for the week ending 20 November, according to Enterprise Singapore. Singapore's light distillates stocks rose to a seven-week high, boosted by increased naphtha imports and an onslaught of gasoline cargoes from Saudi Arabia into the city-state. Naphtha imports rose by 21pc on the week to 1.98mn bl. Kuwait, India, and the UAE were the top three suppliers to Singapore this week. Kuwait likely exported more naphtha to Asia this month, as an issue at its reformer resulted in more spare naphtha on hand for exports. More Saudi Arabian gasoline cargoes entered Singapore, adding to stocks. Singapore received another 800,000 bl of gasoline from the Mideast Gulf nation after already receiving similar volumes last week. Middle distillates stocks rose further to a six-week high, as jet fuel exports fell while imports rose. Swing supplies of jet fuel continued to arrive from India, with a 494,000 bl India jet fuel cargo imported into Singapore in the past week. Singapore's onshore fuel oil inventories retreated to a three-week low after climbing for two consecutive weeks, as imports fell sharply this week. But total inventories for November remained marginally higher at 17.78 mn bl,compared to 17.55 mn bl last month. Brazil, Indonesia, and Iraq were the top origin countries for fuel oil arrivals, while the majority of exports were bound for the Philippines and Hong Kong. No exports were recorded to China this week. By Aldric Chew, Asill Bardh, Cara Wong and Lu Yawen Singapore onshore stocks (week to 20 November '24) Volume ± w-o-w ± w-o-w (%) Light distillates Stocks 15.16 1.04 7.37 Naphtha imports 1.98 0.35 21.36 Naphtha exports 0.61 0.60 8,689.57 Gasoline imports 3.04 -0.53 -14.91 Gasoline exports 4.74 -0.35 -6.91 Middle distillates Stocks 10.27 0.63 6.56 Gasoil imports 0.61 -1.12 -64.79 Gasoil exports 3.48 1.36 63.82 Jet fuel imports 0.5 0.1 39.34 Jet fuel exports 0.20 -0.28 -58.34 Residual fuels Stocks 16.98 -1.37 -7.45 Fuel oil imports 2.19 -4.36 -66.61 Fuel oil exports 1.23 -2.04 -62.53 Source: Enterprise Singapore Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Generic Hero Banner

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more