Judge blocks federal flaring rule in 5 states
A federal judge has blocked the US Bureau of Land Management (BLM) from enforcing restrictions on the volume of natural gas that can be lost to flaring on federal lands in North Dakota, Montana, Texas, Wyoming and Utah.
Those states were likely to prevail in a lawsuit that said BLM was "arbitrary and capricious" in finalizing a rule that limited the amount of natural gas that producers could flare on federal land, US District Court for the District of North Dakota judge Daniel Traynor in North Dakota wrote in an order on Thursday. The judge issued a preliminary injunction blocking the rule in those states while the litigation is pending.
BLM said it was reviewing the court's ruling.
The ruling deals another blow to BLM's efforts to stop operators from flaring vast amounts of natural gas on federal land without paying any royalties. The agency tried to limit the practice through a rule in 2016, but a federal judge blocked those limits in 2020 for veering too far into climate policy, rather than focusing on a mandate to prevent waste of natural resources.
BLM's latest attempt at the rule sought to limit leaks from oilfield equipment, in addition to imposing strict limits on "royalty-free" flaring that would have started to apply in December. The agency expected the rule would capture an additional 1.2mn cf/d of natural gas and generate an additional $51mn/yr in royalties.
Traynor, in his ruling, said the flaring restrictions and other parts of the rule "add nothing more than a layer of federal regulation on top of existing federal regulation" and was not "reasonably explained". The judge faulted BLM for differences in the regulatory treatment of flaring and venting — releasing gas directly into the atmosphere — even though the two practices would result in the same volumes of natural gas lost to waste.
Oil and gas producers largely opposed BLM's regulations, which they argued were duplicative of other regulations and would raise operating costs. US senator John Hoeven (R-North Dakota) said the court ruling was welcome for stopping "overregulation that is handcuffing our domestic energy producers". Routine flaring is set to be largely prohibited under a separate methane rule from the US Environmental Protection Agency, but that rule will not fully take effect until 2029 at the earliest.
Related news posts
Pipeline fire reported in La Porte, Texas
Pipeline fire reported in La Porte, Texas
Houston, 16 September (Argus) — A pipeline fire is underway in La Porte, Texas, near a junction of several refined products, NGLs, chemicals, and natural gas pipelines. The fire, which was first reported at 11:24am ET by the La Porte Office of Emergency Management via the X social media platform is near the intersection of Somerton Drive and Spencer Highway, near a dense collection of pipelines. First responders, including Harris County hazardous materials officials, were on the scene at the time of the post. Large orange flames coming from a compressor station were visible on local news broadcasts and on social media. The source of the fire is not immediately clear. The right of way includes a refined products pipeline system, various petrochemicals pipelines, a Shell butadiene line, a Chevron ethylene line, as well as an Energy Transfer-owned natural gas liquids (NGLs) line and an Enbridge Energy natural gas pipeline. The city of La Porte was not immediately available for comment. A shelter in place order has been issued for the nearby San Jacinto College campus and La Porte is recomending an evacuation between Luella and Canada roads. By Gordon Pollock Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Firms bet on US LNG bunkering growth
Firms bet on US LNG bunkering growth
London, 16 September (Argus) — Demand for LNG as a marine fuel in the US and Central America is set to grow sharply in the coming years, as the global LNG-fuelled fleet expands rapidly and with firms keen to lock in capacity as new environmental standards on maritime emissions take effect. LNG bunkering capacity and infrastructure — onshore terminals, and LNG bunkering barges and bunkering vessels (LNGBVs) — in the US and Central America has expanded rapidly in recent years. And the global LNG-fuelled fleet is projected to expand to 1,154 vessels by 2033 from around 675 presently, according to DNV's Alternative Fuels Insight platform. The US Gulf coast and east coast are already home to several LNG bunkering facilities, utilising onshore terminals, bunkering barges and LNGBVs. Access to LNG as a marine fuel will be critical as the fleet grows, with Matt Jackson, vice-president of US firm Crowley's advanced energy division, telling Argus that North America needs up to 15-20 LNGBVs over the next 10 years to meet demand. Crowley recently launched the 12,000m³ Progress LNG bunkering barge, which uses LNG supply from the Elba Island facility and is under charter with Shell; Jackson said car carriers and containerships are expected to be the Progress ' primary users. US needed for global LNG bunker network Infrastructure in the US will also be key in creating a worldwide supply chain, and "by 2032 or so, the North American market will be the second-largest bunker market after Asia", Jackson said. More LNG bunkering assets will be required in the US to meet that demand, he added. Jonathan Cook, chief executive at US firm Pilot LNG, which has two LNG bunkering projects in the region — the Galveston LNG Bunker Port (GLBP) in Texas and the Salina Cruz LNG terminal in Mexico — has a similar view on growth in the Americas. The US is attractive as a hub because its Henry Hub spot price is typically a lot less volatile than the Dutch TTF gas hub, Cook said, providing customers with more certainty over long-term price movements. Pilot is looking to price supply from GLBP, which is being built with US firm Seapath, and from Salina Cruz against the Henry Hub, he said. This low-cost gas, coupled with predictable fixed costs for terminal usage and barge costs, also makes additional expenditure to ensure compliance with the US Jones' Act less of a problem, he added. Crowley's Jackson has a similar view, as US gas is some of the most affordable in the world, and — despite the Jones Act — pricing stability can draw in major companies, he added. The Central American market is key in developing a network, with more LNG-powered vessels poised to pass through the Panama Canal. Pilot LNG's Salina Cruz terminal on Mexico's Pacific coast will supply LNG to demand hubs around Central America, including Panama, Cook said. Salina Cruz is due to be fed by Mexican gas — mostly associated gas — so the Jones Act will not be a consideration and the project will help to reduce flaring, Pilot added. Development of the US and Central American LNG bunkering market will be key in encouraging uptake of the fuel globally, with more supply points required to support the fleet as corporations seek to decarbonise. Hurdles such as the Jones Act do impose large costs on firms, but the lower cost of gas and availability of LNG in the region mean that many firms say they believe LNG bunkering demand will grow sharply in the region. By Eleanor Holbrook Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
German China UER probe involves 6mn t CO2e
German China UER probe involves 6mn t CO2e
Hamburg, 16 September (Argus) — The German Federal Environment Agency (UBA) said today its investigation into possible fraud in the upstream emission reduction (UER) market involves certificates for around 6mn t of CO2 equivalent (CO2e), of which two thirds could be recovered if needed. The UBA has been investigating UER projects in China since September 2023 on suspicion that many either do not exist or cannot generate the appropriate amount of certificates to be counted towards the greenhouse gas (GHG) emission reduction quota. This has almost completely halted trade in UER credits. The UBA has identified 45 projects with certificate capacity of around 6mn t CO2e. Of these, 1.3mn t CO2e have not been issued, and 2.6mn t CO2e have been issued but can theoretically be recovered. The remaining 2.1mn t CO2e are associated with completed projects that cannot be recovered or deleted. The latter would be "cases for the public prosecutor's office," the UBA said. Any reclaim procedure is dependent on irregularities being proven, and will mean the UER certificates are deleted, the UBA said. An issuer must purchase new certificates to compensate for its missing GHG savings or pay a penalty of €600/t CO2e. But retrieving certificates that have been traded involves proving that the buyer, typically a fuel supplier, has intentionally acquired fraudulent certificates, the Federal Environment Ministry (BMUV) told Argus . The UBA is examining 35 new project entries for 2024. It is unclear how many certificates will be available on the market in 2024 and 2025. The application for new projects ended on 1 July, and the crediting period for UER evidence ends on 1 September 2025, according to the UER regulation. by Nik Pais dos Santos Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Energy firms on alert after flooding in Europe: Update
Energy firms on alert after flooding in Europe: Update
Adds details throughout Warsaw, 16 September (Argus) — Torrential rain has led to major flooding across large swathes of central and eastern Europe, causing power outages and significant damage to transport infrastructure in southwest Poland and the Czech Republic. Parts of Austria, Germany, Hungary, Slovakia and Romania are also affected. In Poland, most of the affected areas so far are in the southwest of the country close to the border with the Czech Republic including the towns of Jelenia Gora, Klodzko, Nysa and Glucholazy. Urban areas further down the Odra river are also at risk including the cities of Wroclaw and Opole, where elevated water levels are expected in the coming days. The Polish government held an emergency meeting earlier today and a state of emergency has since been declared in the affected areas. Polish utility company Tauron, which operates the electricity distribution network in the worst affected area, said some of its infrastructure was disconnected in several towns including Klodzko and Glucholazy. But Poland's power grid operator PSE said there has been no damage to transmission infrastructure. Likewise, Polish gas pipeline operator Gaz-System said it has not suffered any damage but remains in crisis mode. Polish train operator PKP Intercity suspended passenger rail traffic to and from the Czech Republic on 15 September until further notice, while local TV showed images of damaged road and waterways infrastructure, including bridges and dams as well as retail fuel stations. Poland's wholesale coal market, which is usually busy in the autumn, could stall in flood-hit areas for a few weeks as priority is given to the clean-up operation and repairing transport infrastructure, according to traders in the country. But Polish biofuel firm Bioagra, which operates a bioethanol plant near the flood-hit town of Nysa, told Argus that the facility continues to operate normally. In the Czech Republic, Orlen Unipetrol — operator of 108,000 b/d Litvinov and 66,000 b/d Kralupy refineries — said all its production sites continue to operate although the company has shut 11 of its service stations in the country. The firm said its crisis management team at each production site is monitoring the situation and it is in contact with authorities. Elsewhere in the Czech Republic, utility Veolia has had to shut plants in Ostrava and Krnov. Hungarian oil firm Mol — which operates service stations in Poland, the Czech Republic and Slovakia, as well as refineries in Hungary and Slovakia — told Argus that preparatory flood prevention works are underway. It is in contact with authorities and there is currently no threat to security of fuel supply, it said. Hungarian authorities expect water levels on the river Danube at Budapest to continue rising until the weekend, which could affect Veolia's 428MW gas-fired power plant at Gonyu upstream from the capital and potentially power firm MVM's 2GW Paks nuclear plant downstream from Budapest. Floods on smaller rivers Lajta and Raba in northwest Hungary are also yet to peak. Austrian refiner OMV said it has put in place precautionary safety and mitigation measures at its 193,700 b/d Schwechat refinery and two other sites at Gansendorf and Lobau in the federal state of Lower Austria, which was declared a disaster region on 15 September. No damage to property or people has been reported so far but OMV has closed four retail stations temporarily in the state as a precaution, it said. By Tomasz Stepien and Bela Fincziczki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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