White House confidence grows in climate law
US president Joe Biden's administration is feeling increasingly assured that climate-related tax credits in the Inflation Reduction Act (IRA) will be safe from repeal, as hundreds of projects funded through the law take root in areas represented by Republican officials.
The law — two years old last week — created an estimated $663bn of tax credits through to 2033 that are available for wind and solar projects, biofuel producers, electric vehicle (EV) manufacturers, clean hydrogen production and other energy projects. White House officials say tax credits created by the law are giving companies the certainty to invest in clean energy and zero-emission vehicle projects, prompting an estimated $282bn in investment that is creating jobs in Republican-led districts. "No Republicans voted for the IRA, but they know their constituents are receiving the benefits," Biden's climate adviser, John Podesta, says.
The majority-Republican US House of Representatives last year voted 217-215 to pass a bill that would repeal nearly all the law's clean energy tax credits. But 18 House Republicans said last week that they now believe a full repeal would be a "worst-case scenario" that would waste billions of dollars and undercut projects in their districts. Non-profit organisation Climate Power estimates that nearly 60pc of the energy jobs created since the law passed are in Republican-led districts, which tend to be in rural areas that are well suited to manufacturing or utility-scale energy projects.
Republican presidential nominee Donald Trump — now losing ground in polls to the Democratic nominee, vice-president Kamala Harris — says he aims to claw back any unspent funds for climate spending. If Trump wins, repealing the IRA's tax credits could help offset the costs of extending $4 trillion in tax cuts set to expire in 2025. But while Trump regularly attacks federal support for EVs, he has moderated his criticism after picking up an endorsement from leading EV manufacturer Tesla's chief executive, Elon Musk. "I'm for electric cars, I have to be, because Elon endorsed me very strongly," Trump says, although he adds that EVs should only have a "small slice" of the market.
There is a growing understanding that scrapping the IRA is "just bad politics", Podesta says. The White House expects repealing the law will become more difficult with time, as more businesses and consumers benefit from the tax credits. Last year, 3.4mn households received $8.4bn in energy tax credits created by the law, and the administration expects that number to grow. The White House is now pressing industry officials to speak up about the benefits of the law, which replaced short-term tax credits with incentives that will last 10 years or longer. "They need to shout that from the rooftops a little bit," Podesta says.
Work remains
The Biden administration still needs to implement key parts of the IRA, such as issuing final guidance for the ‘45V' clean hydrogen tax credit, finalising a programme to collect fees from oil and gas companies for methane emissions, and developing regulations that will govern the new ‘45Z' tax credits for clean fuels.
Federal permitting remains a major obstacle to the expansion of clean energy projects, particularly power lines that can take a decade or more to approve. The US Senate last week voted a bipartisan permitting bill out of committee that would fast-track approval of electric transmission projects, and in exchange expand federal oil and gas leasing and end the effective ‘pause' on new US LNG export licensing. Congressional negotiators expect progress on the bill during the ‘lame duck' session of Congress after the 5 November elections.
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Montoir LNG restart delayed by pipeline works: Update
Montoir LNG restart delayed by pipeline works: Update
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Operator takes reins of Kurdish gas field expansion
Operator takes reins of Kurdish gas field expansion
Dubai, 20 August (Argus) — The consortium that operates the Khor Mor gas field in Iraq's semi-autonomous Kurdistan region has issued a termination notice to the Canadian contractor it hired to increase production capacity. The Pearl Petroleum consortium issued the notice to Toronto-listed Enerflex on 19 August after "numerous performance issues" during the execution period of the $806mn engineering, procurement and construction (EPC) contract, according to consortium member Dana Gas. "The ongoing impact of these performance issues has materially affected Enerflex's ability to meet its contractual obligations, leading to unacceptable delays and hindering the progress and timely completion of the Khor Mor gas expansion project," Dana Gas said. Abu Dhabi-listed Dana Gas is one of five companies in the Pearl Petroleum consortium — the others are Sharjah-based Crescent Petroleum, Austria's OMV, Hungary's Mol and German utility RWE. Pearl Petroleum will now take direct control of the expansion project to ensure "it is brought back on track and completed in the timeliest manner", Dana Gas said. The project , which will boost capacity at Khor Mor by 250mn ft³/d to 750mn ft³/d, had been due to deliver first gas in April this year but missed that deadline. All of Khor Mor's gas production to date has been used for power generation in Iraq's Kurdish region, although the Kurdistan Regional Government (KRG) has toyed with the idea of exporting gas . "We will become a net exporter of gas to the rest of Iraq, Turkey and Europe in the near future," KRG prime minister Masrour Barzani said back in 2022, not long after Russia's invasion of Ukraine. As well as the delay to the capacity expansion project, these ambitions have been undermined by repeated drone attacks on Khor Mor in recent years, which often disrupt its production. No group has claimed responsibility for the attacks, but officials typically attribute them to pro-Iran groups within federal Iraq. Iraq has relied on gas import agreements with Iran for several years, and the two countries agreed on a new 50mn m³/d gas supply deal earlier this year. Washington has issued sanctions waivers to allow Iraq to import electricity and natural gas from Iran ever since former president Donald Trump's administration reimposed restrictions on Tehran's energy sector in 2018. Iraq relies on Iran for about a quarter of its energy needs, compared with 40pc three years ago, according to the US State Department. The US sees Iraq becoming self-sufficient in energy by 2030. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
France’s Montoir LNG restart delayed by pipeline works
France’s Montoir LNG restart delayed by pipeline works
London, 20 August (Argus) — Maintenance at France's 8mn t/yr Montoir LNG import terminal has been repeatedly delayed because of "technical difficulties" relating to the replacement of two sections of a pipeline at the terminal, operator Elengy told Argus . The pipeline links the gas odorisation station and the GRTgaz grid injection station. Gas in France is odorised at all grid network levels, including transmission, rather than solely distribution networks. The works were completed last week, and the terminal is preparing for its cool-down phase, Elengy said. The end of works has been delayed nine times , and is now scheduled to restart sendout on 21 August. The terminal has been off line since 15 June, and was initially set to resume sendout on 8 July. Sendout from the terminal is nominated to average 154 GWh/d for 21-31 August, down from the 240 GWh/d nominated for the period on 19 August, according to Elengy data (see sendout graph) . And one delivery for late August has been removed from the schedule (see stocks graph) . By Martin Senior Montoir sendout nominations Montoir LNG stocks Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Keppel, ADB to explore Asia-Pacific energy transition
Keppel, ADB to explore Asia-Pacific energy transition
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