US eyes fuel relief as Colonial plans restart: Update 2

Market: Crude oil, Oil products
11/05/21

Adds southeastern fuel detail, company update.

US regulators reviewed regulatory waivers to ease fuel shortages as Colonial Pipeline sought to restart a network supplying nearly half of US Atlantic coast's transportation fuels by the end of the week.

The pipeline operator will know by the end of tomorrow if it will be able to begin restoring service on its more than 2.5mn b/d pipeline system shut last week by a ransomware infection, US energy secretary Jennifer Granholm said today.

US leaders paused some summer gasoline requirements and may waive costlier waterborne shipping mandates to ease pressure on southeastern US gasoline supplies cut by the pipeline shutdown. Easing requirements could help to refill more isolated southeastern fuel stockpiles drained by fears that the outage could persist.

"We know that we have the gasoline, we just have to get it to the right places, and that is why these next couple of days will be challenging," Granholm said. "Things will be back to normal soon."

Operators hope to begin pumping fuel by the end of the week through the 5,500-mile (8,851km) pipeline network moving gasoline, diesel and jet fuel from the US Gulf coast along the Atlantic coast to the New York Harbor market. Colonial has staged 2mn bl of fuel from refineries for distribution upon restart, and had increased inspections and aerial reviews of the pipelines in anticipation of a start up, the company said today. The network had delivered 967,000 bl of fuel available since shutting down on 7 May to markets in Georgia, South Carolina, Maryland and New Jersey. The company did not confirm or comment on the timeline Granholm described.

The pipeline company shut the system on 7 May to prevent ransomware from spreading to its pipeline systems. Operators restarted service at 65 terminals and stub pipelines over the weekend, and yesterday began brief service to pump available fuels through a trunk line from Greensboro, North Carolina, to Woodbine, Maryland. But the key southern pipelines that feed all terminals with fuels produced at the US Gulf coast refining hub remain off line.

Shipper systems needed to schedule and store fuels along the largest pipeline network remain down. The company said in a note to shippers late yesterday it could not take new nominations or post schedules for its network as remediation work continues.

Regional shortages loom

Georgia, North Carolina, South Carolina, Tennessee and Virginia all face supply shortages with limited alternatives so long as Colonial remains offline. Georgia is among the top ten US states for gasoline demand. Georgia governor Brian Kemp and North Carolina governor Roy Cooper urged residents to only buy the fuel they needed. Trade groups in Alabama and Virginia reported stores running out of fuel.

"Panic buying is causing outages at retail stations statewide," Petroleum & Convenience Marketers of Alabama president Bart Fletcher said.

The outage has also disrupted jet fuel supplies, albeit into a market still reduced by global travel restrictions. Airlines adjusted routes and added fuel elsewhere to stretch supplies in the affected areas.

Waiver limits

Regulatory waivers may offer little immediate relief for an outage that operator Colonial Pipeline hopes will be short-lived. The administration was exploring available rail tankers and waiving trucking requirements in addition to the waterborne and fuel quality steps. The US government could waive Jones Act requirements to use US-crewed and flagged vessels to move fuels between US ports, drawing instead from a cheaper and more readily available international fleet. Every available Jones Act vessel was booked by yesterday, with the remaining fleet needing more time to crew and return to service after operators idled vessels because of lower demand.

The US Environmental Protection Agency today waived certain summer gasoline specifications in three states and the District of Columbia to allow greater supply flexibility. The Federal Energy Regulatory Commission (FERC) was also prepared to prioritize shipments into the southeast as Colonial restarted operations. Kinder Morgan's 700,000 b/d Products (SE) Pipeline, formerly known as Plantation, was operating at full capacity moving fuel from Louisiana to Virginia.

Fuel import demand cooled as transatlantic freight costs climbed and on expectations that the pipeline would return to service this week. US refiners booked vessels that may be used as offshore storage for products that would have otherwise gone into the pipeline system. The pipeline outage has added another hurdle for US Gulf coast refiners anxious to capture rising fuel margins and summer fuel demand.

Imports have meanwhile helped to send costs to comply with US renewable fuel blending mandates to new record levels. The Argus-assessed compliance cost exceeded 21¢/USG as exporters seek to cover US requirements ensuring renewable fuels blend into the gasoline and diesel they add to the transportation supply.

By Elliott Blackburn

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

16/11/24

Cop: Parties continue slow work on finance goal: Update

Updates throughout Baku, 16 November (Argus) — Parties at the UN Cop 29 climate talks in Baku have asked for more time to work on "specific proposals" for a new finance goal, working from a draft text released yesterday , but it is unlikely to yield progress on key sticking points. Country representatives are seeking to agree on a new climate finance goal for developing nations, following on from the current — broadly recognised as inadequate — $100bn/yr target. A plenary is due to take place later today in Baku. "Over the last few days some people have doubted whether collectively we can deliver. It is time for the negotiators to start proving them wrong," Cop 29 deputy lead negotiator Samir Bejanov said. The current draft text still fails to bridge the huge divide between developed and developing countries on key issues such as an amount for the goal, the contributor base and what the funds should be used for. And the new version due to come out today is unlikely to show meaningful progress on these issues, observers suggested, leaving them for ministers to tackle next week. Technical negotiators continue to try and move forward on topics such as funds' access and transparency. Developed countries have still not proposed a number for the goal, and want the contributor base broadened. Developing countries remain broadly united in calling for climate public finance of over $1 trillion/yr. Options show that developing country parties seek a new finance goal that serves mitigation — actions to reduce emissions — adaptation and loss and damage. Adaptation refers to adjustments to avoid global warming effects where possible, while loss and damage describes the unavoidable and irreversible effects of such change. Developed nations are also pushing for sub-targets of $220bn/yr for least developed countries (LDCs) and $39bn/yr for small island developing states (Sids), in which money for adaptation should come in the form of grants and highly concessional finance and funding for loss and damage "primarily in grants". Multi-layered The multi-layered approach in the draft, mostly supported by developed countries, does not mention loss and damage. On broadening the contributor base, it has options calling on "parties in a position to contribute" or "all capable parties" to "mobilise jointly $100bn/yr for mitigation and adaptation in developing countries by 2035". The UN climate body the UNFCCC works from a list of developed and developing countries from 1992 — delineating 24 countries plus the EU as developed — and many of these note that economic circumstances have changed in some countries, including China, over the past 32 years. China between 2013 and 2022 provided and mobilised $45bn in climate finance to developing countries, equivalent to 6.1pc of climate finance provided by all developed countries in the period, according to think-tank WRI. A few options in the multi-layered approach in the draft talk about "investments", language that developing countries do not support, and "investing trillions "from all sources, public, private, domestic and international". Developing nations are not against private sector financing, but they want the main figure for the new finance goal to come from public sources, observers said. Some parties on both sides are calling for an acceleration of the reforms of multilateral development banks, key to leverage billions in private sector finance, as well as for the use of taxes and levies. But these issues are largely outside of the remit of the Cop, even though they may get a boost from the upcoming G20 leaders summit on 18-19 November. UN climate body chief Simon Stiell today called on G20 to ensure the availability of more grant and concessional finance, make progress on debt relief, and push for additional multilateral development bank reforms. Brazil is looking to use its G20 presidency to advance agreement on energy transition finance, having set fighting climate change as one of its priorities. The country called for a global finance governance that includes rules for financing a "just and equitable" energy transition in developing economies and for an easier access to climate funds. Brazil has also pushing for a 2pc tax on billionaires that could generate up to $250 bn/yr in revenue. By Victoria Hatherick, Jacqueline Echevarria and Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Find out more

News

Cop: Colombia’s climate plan to address fossil fuels

16/11/24

News

16/11/24

Cop: Colombia’s climate plan to address fossil fuels

Baku, 16 November (Argus) — Colombia will seek to address the "divisive issue" of "the proliferation of fossil fuels" in its next emissions reduction plan — nationally determined contribution (NDC), environment minister Susanna Muhammad told Argus, adding that it would prompt a "strong debate" in the country. Colombia's president Gustavo Petro seeks to end the country's dependence on fossil fuels, while promoting a transition to clean and renewable energy. "Of course this is a very divisive issue, especially for a country that is looking for a whole economy transition," Muhammad said on the sidelines of the UN Cop 29 climate summit in Baku. "And trying to get the whole of society and the whole of government behind that will be a strong debate." Petro ordered an end to new hydrocarbon exploration and production contracts soon after taking office in August 2022. Petroleum association ACP said that Colombia's crude output will begin declining in 2027 as reserves are insufficient to maintain output amid falling exploratory activity. Petro's ambition to phase out fossil fuels risks sacrificing key revenues for the country. But Muhammad highlighted the need to achieve an ambitious financial goal that supports a just transition in developing economies. "We cannot continue playing with the same financial rules of the game," she said. "What we are seeing at this Cop 29 is that we need solidarity and fairness in the process of financing this transition." "We said in Dubai that we would triple renewables by 2030. The question remains, who is going to triple renewables and for whom?" she said, pointing to the significant gap in renewables expansion between developed and developing economies. Countries at Cop 28 in Dubai, the UAE, last year agreed on a deal that included transitioning away from fossil fuels, tripling renewable energy capacity and doubling annual energy efficiency gains globally by 2030. Muhammad added that the country will be submitting its NDC to the UN climate body the UNFCCC by June next year because it will "go through a very strong consultation process" with different sectors of the economy. Cop parties are expected to publish their next NDCs to the Paris climate agreement — this time for 2035 — in November-February, as part of a cycle that requires countries to "ratchet up" their commitments every five years. "Our main source of emissions is deforestation, agriculture practices, especially cattle ranching," she said, adding that the government is seeking the participation of actors that are at the forefront of the climate crisis. Risky business Talking about the possibility of the US pulling out of the the Paris Agreement and Argentina's delegation exiting negotiations in Baku, she warned that by not putting the people first in the fight against climate change, leaders are risking that other "authoritarian" regimes or "climate deniers" take more power. Brazil's secretary for climate change Ana Toni said today that private companies like policy consistency and that businesses need to look at the countries that are showing climate commitment and consistency in their NDCs. "The climate crisis is irreversible, we need to focus on climate action and implementation," Toni said. By Jacqueline Echevarria Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Cop: Parties continue work on new finance goal

16/11/24

News

16/11/24

Cop: Parties continue work on new finance goal

Baku, 16 November (Argus) — Parties at the UN Cop 29 climate talks in Baku have asked for more time to work on "specific proposals" for a new finance goal, working from a draft text released yesterday , before convening for a plenary session later today, according to the summit's presidency. Country representatives are seeking to agree on a new climate finance goal for developing nations, following on from the current — broadly recognised as inadequate — $100bn/yr target. The draft text still fails to bridge the huge divide between developed and developing countries on key issues such as an amount for the goal, the contributor base and what the funds should be used for. A plenary is due to take place later today in Baku. "Over the last few days some people have doubted whether collectively we can deliver. It is time for the negotiators to start proving them wrong," Cop 29 deputy lead negotiator Samir Bejanov said. Parties continue to stick to their positions. Developed countries have still not come forward with a number for the goal, and want the contributor base broadened. Developing countries remain broadly united in calling for climate public finance of over $1 trillion/yr. Options show that developing country parties seek a new finance goal that serves mitigation — actions to reduce emissions — adaptation and loss and damage. Adaptation refers to adjustments to avoid global warming effects where possible, while loss and damage describes the unavoidable and irreversible effects of such change. Developed nations are also pushing for sub-targets of $220bn/yr for least developed countries (LDCs) and $39bn/yr for small island developing states (Sids), in which money for adaptation should come in the form of grants and highly concessional finance and funding for loss and damage "primarily in grants". The multi-layered approach in the draft, mostly supported by developed countries, does not mention loss and damage. On broadening the contributor base, it has options calling on "parties in a position to contribute" or "all capable parties" to "mobilise jointly $100bn/yr for mitigation and adaptation in developing countries by 2035. The UN climate body the UNFCCC works from a list of developed and developing countries from 1992 — delineating 24 countries plus the EU as developed — and many of these note that economic circumstances have changed in some countries, including China, over the past 32 years. China between 2013 and 2022 provided $45bn in climate finance to developing countries, equivalent to 6.1pc of climate finance provided by all developed countries in the period, according to think-tank WRI. A few options in the multi-layered approach in the draft talk about "investments", which developing countries do not support, and "investing trillions "from all sources, public, private, domestic and international". Some parties on both sides are calling for the reforms of multilateral development banks, key to leverage billions in private sector finance, to accelerate. But these issues are largely outside of the remit of the Cop, even though they may get a boost from the upcoming G20 leaders summit on 18-19 November. UN climate body chief Simon Stiell [today urged G20 leaders to make the climate crisis](https://direct.argusmedia.com/newsandanalysis/article/262963 "order of business number one". He called on G20 to ensure the availability of more grant and concessional finance, make progress on debt relief, and push for additional multi-lateral development bank reforms. Brazil is looking to use its G20 presidency to advance agreement on energy transition finance, having set fighting climate change as one of its G20 priorities. The country called for a global finance governance that includes rules for financing a "just and equitable" energy transition in developing economies and for an easier access to climate funds. Brazil has also pushing for a 2pc tax on billionaires that could generate up to $250 bn/yr in revenue. By Victoria Hatherick and Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Cop: UN’s Stiell urges G20 to make climate its priority

16/11/24

News

16/11/24

Cop: UN’s Stiell urges G20 to make climate its priority

Baku, 16 November (Argus) — Leaders at next week's G20 summit should make the climate crisis "order of business number one" as negotiations on a new climate finance goal continue at the UN Cop 29 climate conference in Baku, Azerbaijan, UN climate body chief Simon Stiell said today. "Stepping it up on climate finance globally requires action both inside our Cop process and outside of it," Stiell said, and the G20's role is "mission critical". Stiell called on G20 leaders meeting in Rio de Janeiro, Brazil, on 18-19 November to ensure the availability of more grant and concessional finance, make progress on debt relief, and push for additional multi-lateral development bank reforms. Some delegates at Cop have noted that the outcome of the G20 meeting will be key for climate finance . G20 in India last year recognised the need to increase global climate investments to trillions of dollars from billions, from all sources, highlighting that $5.8 trillion-5.9 trillion is required before 2030 for developing countries to implement their climate plans. The communique had called on "parties" to set an ambitious goal from $100bn/yr floor, which developed countries committed to mobilise through 2025. Brazil this year is looking to use its G20 presidency to advance agreement on energy transition finance , having set fighting climate change as one of its G20 priorities. The country called for a global finance governance that includes rules for financing a "just and equitable" energy transition in developing economies and for an easier access to climate funds. Brazil has also pushing for a 2pc tax on billionaires that could generate up to $250 bn/yr in revenue. Stiell said today that there is a "long way to go" on talks to agree a new climate finance goal for developing nations in Baku. A round of informal consultations on a third draft text took place late yesterday , but the document was still far off striking a compromise between developed and developing countries on central aspects including the amount of funds to be given, which countries should contribute, and how the money should be used. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Adv Fame marine blend premiums to fossil hit year lows

15/11/24

News

15/11/24

Adv Fame marine blend premiums to fossil hit year lows

London, 15 November (Argus) — The premiums of advanced fatty acid methyl ester (Fame) 0 ARA marine biodiesel blends to fossil fuel counterparts were marked at 2024 lows on 14 November, according to Argus assessments. Calculated B30 Advanced Fame 0 dob ARA prices fell by $31.54/t to $623.25/t, the lowest since March 2023. Calculated B100 Advanced Fame 0 dob ARA values tumbled by $102.77/t to just over $820/t, their lowest since 22 November last year. Consequently, the outright premium held by the B30 blend against very-low sulphur fuel oil (VLSFO) dob ARA narrowed by $30.54/t on the day to $123.25/t on 14 November — its narrowest since 29 December 2023. B100 held a $158.52/t premium to marine gasoil (MGO) dob ARA, down by $106.77/t on the day and its lowest premium this year. EU emissions trading system (ETS) prices were assessed at $71.79/t on 14 November. Accounting for EU ETS costs on the same day, ETS-inclusive premiums held by Advanced Fame blends against their fossil counterparts hit their lowest since the introduction of EU ETS into maritime at the turn of the year. B30 Advanced Fame 0's ETS-incorporated premium against VLSFO narrowed by $31.27/t to $96.11/t on the day to 14 November. B100 Advanced Fame 0's premium against MGO dropped by $109.28/t to $66.45/t when ETS costs were accounted for. Advanced Fame marine biodiesel blend values declined with thin spot demand owing to a shift in voluntary demand east of Suez. As a result, containerships seeking to deliver proof of sustainability (PoS) documentation to their customers, to offset the latter's scope 3 emissions, shifted their marine biodiesel demand to Singapore when feasible. PoS can be obtained on a mass-balance system, allowing shipowners flexibility with regards to the port at which a blend can be bunkered. Lacklustre demand for the blends was complimented by soaring values for Dutch renewable tickets. The calculated Advanced Fame dob ARA range prices incorporate a deduction for HBE-Gs. These are a class of Dutch renewable fuels units, or HBEs, used by companies that bring liquid or gaseous fossil fuels into general circulation and are obligated to pay excise duty/energy tax on fuels. Dutch renewable HBE-G tickets were marked at €22/GJ on 14 November, their highest since Argus assessments began. Soaring HBE-G values were attributed](https://direct.argusmedia.com/newsandanalysis/article/2628738) to gains in European hydrotreated vegetable oil (HVO) prices, tight supply because of a decline in tickets from biofuels used in shipping and less overall biofuel blending in the fourth quarter. By Hussein Al-Khalisy 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