Trump taps oil services head as US energy secretary

Market: Crude oil, Emissions, Natural gas, Oil products
17/11/24

President-elect Donald Trump intends to nominate oil services company Liberty Energy's chief executive Chris Wright to lead the US Department of Energy (DOE), giving him oversight over LNG export facilities and a vast portfolio of federally-backed energy projects.

Wright also will serve on Trump's planned Council of National Energy, which will oversee policies across the federal government affecting energy production, permitting, transportation and regulation. Trump said he wants Wright to work alongside North Dakota governor Doug Burgum, who Trump has nominated as US interior secretary, to oversee "the path to US ENERGY DOMINANCE" by cutting regulations and supporting investments from the private sector.

"As Secretary of Energy, Chris will be a key leader, driving innovation, cutting red tape, and ushering in a new 'Golden Age of American Prosperity and Global Peace,'" Trump said.

Liberty Energy, which was founded in 2011, focuses on hydraulic fracturing services and earned $1.2bn last year. Wright has downplayed the urgency for the world to address climate change or transition away from fossil fuels. He has criticized the use of phrases like "climate crisis" and "carbon pollution", which he says are impeding projects that could alleviate energy poverty.

Those terms "are not only deceptive, they are in fact destructive deceptions," Wright said in a video he posted last year on YouTube. "Destructive because they drive centrist politicians and regulators to oppose life-critical infrastructure, like building pipelines and natural gas export terminals."

If confirmed by the US Senate, Wright would be responsible for deciding how to resolve a "pause" on US LNG export licensing that President Joe Biden put in place in January. DOE has been studying whether allowing more gas exports would exacerbate climate change or hurt consumers by increasing domestic natural gas prices.

The vast majority of DOE's budget goes to maintaining the US stockpile of nuclear weapons and cleaning up contaminated nuclear sites. DOE also manages the four facilities that make up the US Strategic Petroleum Reserve, which currently holds 387.8mn bl of crude, and oversees 17 national laboratories that are spread across the US.

In the last four years, the US Congress substantially increased DOE's role in energy. DOE is currently managing billions of dollars in funds provided by the 2021 infrastructure law, such as an $8bn initiative meant to support "hydrogen hubs" and a $2.5bn carbon capture demonstration program. The Inflation Reduction Act expanded DOE authority to issue loans for clean energy projects by about $100bn.

By Chris Knight

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28/02/25

Trader curbs US-Canada gas trade on tariff risk

New York, 28 February (Argus) — A major European energy trading company has redirected about 1 Bcf (28mn m³) of natural gas that was scheduled to flow across the US border into Canada to reduce the company's exposure to the threat of impending tariffs, a person with knowledge of the matter told Argus . The trading company originally planned to flow about 30mn cf/d of gas from the US Midwest into Enbridge's Dawn storage hub in Ontario, Canada, every day in March. But the company has decided to cancel that contract and drop the gas off at another location in Chicago, Illinois, instead, because it did not think the slim profit margin of that trade was worth the risk of having to incur potential tariffs imposed by Canada in retaliation to President Donald Trump's threatened 10pc tariffs on energy products flowing across the border. Trump's tariffs are set to take effect on 4 March. The canceled gas flows across the US-Canadian border illustrate the precautions some industry participants are taking to reduce their exposure to price uncertainty resulting from what appears to be a looming trade war between the close energy trading partners. Such precautions are being taken despite the fact that most analysts think the impact on gas prices and cross-border volumes from Trump's tariffs would be modest. If the tariffs are not imposed and the cross-border trades in March are profitable, the European trading company may choose to resume the trade and send gas from the US into Canada on a daily basis, the person said. Opting out of trades that risk tariff exposure is sometimes the most prudent decision, although it slows dealmaking, the person said. The company is still doing deals that move gas from Canada south into the US Pacific Northwest, because those trades are profitable enough to offset the risk of potential tariffs. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Weak Canadian dollar may offset US tariffs: MEG

28/02/25

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28/02/25

Weak Canadian dollar may offset US tariffs: MEG

Calgary, 28 February (Argus) — The impact of the US' planned 10pc tariff on Canadian energy imports is likely to be "relatively muted" with a weaker Canadian dollar helping to cushion the impacts on US dollar-denominated Western Canadian Select crude, according to Canada's largest pure-play oil sands producer today. "You might see a $2-4/bl widening in the WCS diff, but we're also seeing a weakening in the Canadian dollar at the same time. That's going to offset that," MEG Energy chief financial officer Ryan Kubik told analysts. The Canadian dollar, on average, was worth C$1.37 to the US dollar in 2024, weakening from C$1.35 to the greenback in 2023 and the weakest since 2003, according to the Bank of Canada. The Canadian dollar has since depreciated further to C$1.43 to the US dollar in February, a benefit to Canadian producers selling crude in US dollars. Heavy sour Western Canadian Select (WCS) in Alberta was under pressure in early February when tariffs looked likely, but were subsequently postponed to 4 March. WCS trades at a discount to the US light sweet benchmark and this week has been hovering around a $13/bl discount, roughly $2/bl narrower than before the tariff threat nearly one month ago. US president Donald Trump said he plans to impose a 10pc tariff on energy, and a 25pc tariff on all other imports from Canada, next week. That has caused confusion for the market with little details on how it would work. Additionally, it is unclear who may bear the brunt of the added tax, but Canadian producers seem likely to share in that cost along with refiners and consumers, to a varying degree. Kubik discussed the prospect of hedging more volumes at current WCS prices, but said participants are limited by the "very illiquid" nature of the market. "There's not a lot of appetite to get out there and put a position on because it's just not that meaningful," said Kubik. "And when you consider the impact of tariffs, we actually think it may be relatively muted." For the moment, most of the volume moving westbound on the 890,000 b/d Trans Mountain system, which enables Canadian producers to bypass the US entirely by exporting to the Pacific Rim, is on existing contracts, according to MEG's senior vice president of marketing Erik Alson. "I think where you're likely to see spot shipments moving would be more around the time when, if, tariffs come into effect," said Alson. "That's when you'd see the extra incentive to move a significant amount of spot capacity." MEG is a committed shipper on TMX but also routes crude through the US Gulf coast, and more than half of MEG's sales could be non-tariffed, depending on the details in the executive order. MEG reported Friday its bitumen output fell to 100,100 b/d in the fourth quarter , down from 109,100 b/d in the fourth quarter of 2023. The Calgary-based company posted a profit of C$106mn ($73mn) in the fourth quarter, up from C$103mn in the fourth quarter of 2023. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Energy a priority for Uruguay’s new government

28/02/25

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28/02/25

Energy a priority for Uruguay’s new government

Montevideo, 28 February (Argus) — Energy will play a central role as Uruguay's new president Yamandu Orsi begins his five-year term on 1 March. Orsi, of the left-wing Broad Front coalition, takes over one of South America's most economically and politically stable countries. The economy is forecast to expand by 3pc this year, above the regional average, and the government wants to attract investment to maintain growth. The energy sector is a priority. Uruguay already has one of the region's cleanest grids, with 99pc of power coming from renewable sources, and in February reached the goal of 100pc electrification nationwide, according to the state-run electric company, UTE. The Orsi administration is studying options for the second phase of the energy transition, which includes adding capacity to meet increasing demand from electrification of transportation and clean fuel production. New finance minister Gabriel Oddone said the administration would focus on reducing red tape and potentially provide incentives for investment in the energy sector. Uruguay currently has close to 5.3GW of installed capacity, with 78pc in renewable sources, for its population of 3.5mn. The UTE, which had a profit of $315mn in 2024, is adding 100MW in wind power in the next two years. The Orsi administration plans to prioritize solar capacity. The new government is keenly following the development of low-carbon hydrogen and e-fuel projects. The most advanced project is for production of 700,000 tonnes (t) of synthetic fuel by Chile's HIF Global and ALUR, the biofuel arm of the state-owned Ancap. Investment is estimated at $6bn, making it the largest planned single investment in the country's history. The company requested approval in January of environmental permits for the project's solar park that would include 1.84mn bifacial solar panels. It would produce a peak of 1,162MW. Construction would take 18 months from approval. The municipal council in Paysandu, in northwestern Uruguay where the project is planned, on 27 February approved a change in land use to facilitate plant construction. Ancap, which lost an estimated $130mn last year because its only refinery was closed for six months, has proposed offshore production of low-carbon hydrogen. The Orsi administration has not yet committed to the project. Reverse transition? The new government will also have to also have to decide on the future of seven offshore exploration blocks, with seismic testing planned for late this year, and the possible construction of a gas pipeline that would link Argentina and Brazil. A pipeline exists from Argentina to Uruguay, but it could be expanded and extended to supply southern Brazil. It would require an additional 415km (258mi) in Uruguay, and around 500km in Brazil's Rio Grande do Sul state. Orsi has taken a wait-and-see attitude toward exploration, while a gas pipeline would likely have more popular support because it could expand service from only a section of the coast to a wider region. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Low flood risk expected for upper Mississippi River

28/02/25

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28/02/25

Low flood risk expected for upper Mississippi River

Houston, 28 February (Argus) — The spring flood risk is low along the upper Mississippi River, as area soils and streams have amble capacity to accommodate seasonal precipitation, according to the National Weather Service (NWS). Precipitation in the Corn Belt has been below normal this winter, keeping the region abnormally dry, the NWS said Thursday in its second Spring Flood Outlook . Minimal snow pack has formed in the Northern Plains following lackluster winter precipitation. Both these factors have reduced the risk for March-April flooding along the upper Mississippi River. Around 0-2in of water equivalent are in the snowpack along the northern stretches of Minnesota, Wisconsin and Michigan. In addition, stream flows are below normal, giving them more capacity to handle spring rains and snow melt. In other areas of the Corn Belt and the Northern Plains, unfrozen soil is expected to soak up precipitation, asmoisture levels remain below normal. Southern Illinois and Missouri have no frozen soil, completely thawing since the previous outlook . Iowa has 16-24in of frozen soil, slightly higher over the past two weeks. Northern states such as Minnesota and Wisconsin still have an average of 24-36in of frost depth. These states have the entire month of March to defrost and gain moisture levels, since the majority of spring planting for the Corn Belt begin in April. Normal precipitation is projected for the upper Mississippi River basin through the first half of March, according to the NWS' Climate Prediction Center. The seasonal temperatures outlook for March-April are near normal, while precipitation is anticipated to be above average. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Muted Norwegian gas flows in Jan-Feb follow forecast

28/02/25

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28/02/25

Muted Norwegian gas flows in Jan-Feb follow forecast

London, 28 February (Argus) — Nominated flows to Europe from Norway have held below 2024 so far this year, but this decline is roughly in line with the Norwegian Offshore Directorate's (NOD) revised forecast for gas output. Nominated Norwegian flows to Europe, including the UK, averaged 327.5mn m³/d on 1 January-27 February, down by 4pc from 340.4mn m³/d a year earlier ( see flows graph ), data from Norwegian offshore system operator Gassco show. But nominated deliveries from the Norwegian continental shelf (NCS) to Europe were particularly high in January last year at 348.2mn m³/d — the second-highest for any month since January 2017. Norwegian flows to Europe held in a range of 295-318.2mn m³/d per year in 2021-23 and averaged 317.4mn m³/d across last year. But factoring out May and September last year, when maintenance on the shelf was the heaviest, average flows were 329.5mn m³/d. Unplanned maintenance has cut into exports On top of already scheduled works, unplanned maintenance has cut into production availability at several Norwegian fields so far this year. Average capacity cuts at Norwegian fields were 11.9mn m³/d in January and 6mn m³/d on 1-27 February, the latest Gassco data show. This is up on the year from capacity reductions of 4.2mn m³/d and 5.6mn m³/d for the respective periods. Gassco's schedule of works does not include capacity restrictions of less than 5mn m³. And past and scheduled Remit messages on the Gassco website include maintenance at 21 producing fields, but there are "currently above 65 producing units delivering into system", the operator has said. Norwegian exports to Europe can also be limited by works at processing plants, although this impact is difficult to assess as production from some fields can be processed at more than one processing plant,is processed at the field or at a receiving terminal. As such, available Norwegian export capacity can at times be lower than works at fields suggest. Nominated flows to Europe peaked at 360.3mn m³ on 19 December 2023 in recent years, even though technical capacity of export infrastructure is higher. Taking this figure as maximum export capacity to Europe, there has been a gap between actual and potential flows in recent months ( see actual versus potential flows graph ). NOD revised down forecast gas output for 2025 The NOD forecast that gas output on the NCS will fall faster on the year in 2025 than previously projected. The NOD forecast NCS gas production to fall this year from 2024 by 5pc to 118.45bn m³ or 324.5mn m³/d this year, according to data published on 20 February. This is a downward revision from its previous projection of 120.4bn m³ or 329.7mn m³/d. This would correspond to a year-on-year decline of 3pc from 2024. The forecast decline in output may have contributed to the drop in exports so far this year, although there is no confirmed production data yet available. The NOD forecast does not factor in commercial flexibility, where firms producing on the shelf may defer some production volumes in reaction to market conditions. In particular, production at the giant Troll field and fields in the Oseberg area, which account for a significant share of overall NCS production, are important flexible assets. Troll produced 119.5mn m³/d and Oseberg fields 24.2mn m³/d last year. While the shape of the TTF forward-price curve has changed in recent days as TTF prompt prices have fallen more than contracts further out along the curve, there remains an incentive to maximise production now looking longer term ( see price graph ), suggesting limited scope for production deferrals. In addition, forecasts by the NOD are likely based on the schedule of works at the time of modelling, but further gas works are often added over time and unplanned outages can occur, as has been the case so far this year. Maintenance at Norwegian fields is scheduled to be significantly lighter in March-December than in the period last year. Capacity cuts at the fields were scheduled as of today to be 14mn m³/d over the next 10 months, peaking at 48.6mn m³/d in September. This is down from realised capacity cuts of 29.7mn m³/d in March-December last year and a peak of 111.9mn m³/d in September 2024. In any event, the 4pc on-the-year decline so far this year is not far from the forecast decrease of 5pc. LNG could fill in for lower Norwegian exports LNG deliveries might need to step up this year to fill in for lower Norwegian exports to Europe. Given the expected reduction of NCS gas output of 5.79bn m³ this year from 2024, assuming an average LNG vessel size at 174,000m³ and accounting for boil-off and heel — LNG which remains in the vessel when unloading — Europe would need an additional 61 LNG cargoes this year to substitute the drop in Norwegian pipeline deliveries. And given the halt in Ukrainian transit of Russian gas at the start of the year, combined with continental storage stocks at a multi-year low approaching the end of the winter, it is likely Europe will need to attract even more LNG cargoes to comply with EU-mandated storage filling targets for 1 November. By Jana Cervinkova Norwegian nominated flows to Europe from Jan '21 until 1-27 Feb '25 mn m³/d Actual nominated vs potential daily Norwegian exports to Europe mn m³ Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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