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Mexico eases fuel permit rules for minor changes

  • Market: Electricity, Oil products
  • 16/06/22

Mexico's energy regulatory commission will allow retail fuel station owners to make minor changes to permits without approval from the body's top regulators, in a reversal from a policy that tightened requirements a year ago.

"It was a bottleneck," commissioner Guillermo Pineda Bernal told retailers at the Onexpo fuel retail convention in Merida, Mexico, on 15 June. "We had to do something to straighten it out."

The CRE's hydrocarbons unit — as well as its electricity unit for power-related permits — can again approve certain changes without getting permission from the board, according to a notice published in the official gazette to take effect on 16 June.

Rules put into place in June 2021 — order A/019/2021 — meant that CRE's top body faced thousands of applications for permit changes for issues as minor as the change of address of a permit holder.

The CRE is also committed to clearing out its backlog of these and other fuel-sector related permit applications by the end of the year, Pineda said.

He declined to specify the number of applications that have been in process for an extended time, which regulators have attributed to Covid-19-related issues and budget constraints. But Pineda noted that "it is a lot," in comments to Argus on the sidelines.

Delays also began to build after Mexican president Andres Manuel Lopez Obrador called on regulators to help support state-owned Pemex in 2020.

Pineda noted that any applications for entirely new private-sector fuel storage terminals "will be very difficult to get," Pineda said. Mexico's government has recently stopped operations at several non-state-owned terminals because of regulatory lapses which terminals owners have said are minor.

Delays in permitting for new stations or changes at existing ones have been among complaints that retailers say continue to constrain Mexico's density of retail fuel station to less than a third of that in the US. Mexico has one station for almost every 10,0000 residents, or about 12,400 in total, according to government data.

The number of retail fuel stations has grown by 3pc annually over the past six year, but stations per habitant — taking population growth into account — has only grown by 2pc over the same period, Mexico's watchdog for anti-competitive behavior (Cofece) said at the same event.

"As authorities we are looking for more stations that give better services, and this is not happening in a lot of markets," Cofece's head of planning Jose Nery Perez said at the same convention. Cofece during a regular presidential press conference on Mondays calls out retailers for the highest and lowest prices and any anti-competitive behavior.

But retailers have complained of aggressive inspections and regulatory overreach.

Mexico in 2021 seized 791 tank trucks the government found were involved in fuel theft or other regulatory violations and 145mn liters (35mn USG) of different types of fuels, Cofece said.

Yet regulators, including Mexico's environmental and workplace safety agency (ASEA), told retailers that a rigorous regulatory environment is necessary to ensure safety and protect consumers.

"Everyone here has probably had an inspection," ASEA's head of regulatory issues Julio Camelo told the gathering of retailers. "And if you haven't, you are probably afraid of having one."


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01/11/24

Latin America mulls nuclear power revival

Latin America mulls nuclear power revival

New York, 1 November (Argus) — Nuclear power is gaining traction in Latin America as countries see small modular reactors (SMRs) as options for remote regions that are not connected to power grids. "The advent of SMRs are behind Latin America's new interest in nuclear energy, because they do not need to be large and do not require large investments," said Modesto Montoya, a nuclear physicist and former president of the Peruvian Institute for Nuclear Energy. Nuclear power is not a prevalent source of electricity in Latin America, producing around 2pc of the region's power consumption. There are seven nuclear power plants with a total capacity of 5.07GW in operation in the region, located in Argentina, Mexico and Brazil. Argentina has a 32MW SMR plant under construction. But the role of nuclear could increase in the region. Argentina, Brazil and Mexico are providing technical advice to countries that are considering including the technology in their power systems. Earlier this month, El Salvador approved a nuclear energy law and signed a memorandum with the Argentinian government for scientific and technology cooperation for nuclear power. Daniel Alvarez, director of the Agency for Implementation of the Nuclear Energy Program in El Salvador, told Argus that the country was "following the book to develop nuclear power. We want to convert El Salvador into a nuclear country." The country needs to replace fossil fuels as half of the country's power capacity is fueled by bunker fuel. It has 204MW of geothermal capacity installed and, while solar energy is possible, the country's size limits the amount of physical space to add large solar plants. The government's plan is to have a research reactor and 400 people trained to manage a nuclear plant within seven years. The next step would be the construction of SMR. "We have to include alternatives for power generation and SMRs are a very good option. We want to include them in our transition to 2050,"Alvarez said. SMRs are also seen as a solution to the energy problem in the northern jungle city of Iquitos, in Peru, energy and mines minister Romulo Mucho said. It is one of the world's largest cities that is not accessible by road and not connected to the national grid, relying primarily on fuel oil for power generation. Peru has had experience with nuclear technology since 1988, when it opened the nuclear research facility, RASCO. Neighboring Bolivia has been working on a small nuclear program since the previous decade with Russia's Rosatom. It has a center for nuclear medicine and is finishing a small research reactor. Ronald Veizaga, deputy minister of electricity and renewable energies, said Bolivia began the program to improve medical treatment for cancer, but has changed gears. "Critics claim SMRs are expensive, but it is more expensive to have blackouts affecting your population and industry," he said. Traditional nuclear Paraguay is considering a more ambitious path, looking at a traditional nuclear plant. "We need to make political decisions if we want to explore a SMR or a large-scale plant to generate 1GW or more," said Jorge Molina, executive secretary of Paraguay's Radiology and Nuclear Authority. Paraguay could work with Argentina and Brazil to create a regional platform. "Our idea is part of regional integration. Our neighbors are already helping us develop our regulations," he said. But the construction of nuclear plants comes with challenges including high costs, time, labor and materials. Brazil began work on the 1.4GW Angra 3 nuclear plant in 1984 but works have been halted and resumed several times since then. The plant is roughly 67pc complete and has been in limbo since 2015. The country's Bndes development bank recently concluded that abandoning the construction of the project would be less costly than completing it. By Lucien Chauvin Countries with installed nuclear capacity in Latin America GW Country Capacity Argentina 1.64 Brazil 1.88 Mexico 1.55 — Ons, Cammesa, Cenace Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Lyondell Houston refinery closure to begin in January


01/11/24
News
01/11/24

Lyondell Houston refinery closure to begin in January

Houston, 1 November (Argus) — LyondellBasell's 264,000 b/d Houston, Texas, refinery will begin shutting units in January and complete its previously-announced exit from the crude refining business by the end of the first quarter 2025. The Houston plant will shut a crude distillation unit (CDU) and coking unit in January followed by a secondary CDU, coking unit and the refinery's fluid catalytic cracking unit (FCC) in February, the company said in an earnings presentation today. The February unit shutdowns will include the closure of "ancillary units", LyondellBasell said. The company today re-iterated its time line of exiting the refining business by the end of the first quarter and continues to evaluate an advanced recycling or renewable fuels conversion at the plant. By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Japan's Hibikinada biomass unit to trial runs in Jan


01/11/24
News
01/11/24

Japan's Hibikinada biomass unit to trial runs in Jan

Tokyo, 1 November (Argus) — Japan's 112MW Hibikinada biomass plant, which is being converted from coal and biomass co-firing to biomass-only combustion, will trial run in January 2025. The plant in southern Japan's Fukuoka prefecture, which is held by housing and energy company Daiwa House Industry, will conduct test runs to examine if exhaust gas coming from biomass-only operations can meet environmental regulations and verify that the modified boiler can be stably operated. The construction for conversion started in April and nitrogen injection systems for preventing fires have already been installed. Daiwa will resume conversion works in mid-2025 after evaluating results from the first test runs, and complete it by April 2026. It aims to start biomass-only combustion operations around April 2026 to generate 980 GWh/yr of electricity. Of this, 30pc will be sold under Japan's feed in tariff (FiT) scheme while the company is considering other ways to sell the remaining 70pc, including long-term power purchase agreements (PPAs) and electricity capacity auctions. The plant started operations as a coal and biomass co-firing power plant in February 2019, burning 70pc of coal and 30pc of imported wood pellets. Daiwa bought the operating company in January 2023 and announced it will convert the project to biomass-only combustion in April 2023, then halted operations in April 2024 for conversion. It will burn up to around 450,000 t/yr of wood pellets after converting to biomass-only combustion. Daiwa is aiming to develop more than 2,500MW of renewable energy capacity around 2030, including solar, wind, hydro, and biomass-fired power generation. By Takeshi Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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US biofuel feedstock use dips in August


31/10/24
News
31/10/24

US biofuel feedstock use dips in August

New York, 31 October (Argus) — Renewable feedstock usage in the US was down slightly in August but still near all-time highs, even as biomass-based diesel production capacity slipped. There were nearly 3.5bn lbs of renewable feedstocks sent to biodiesel, renewable diesel, and sustainable aviation fuel production in August this year, up from fewer than 3bn lbs a year prior, according to the US Energy Information Administration's (EIA) latest Monthly Biofuels Capacity and Feedstocks Update report. August consumption was 0.4pc below levels in July and 0.5pc below record-high levels in June. US soybean oil consumption for biofuels rose to 39.3mn lbs/d in August, up by 2.1pc from a year earlier on a per-pound basis and up 6.9pc from a month prior. The increase was entirely attributable to increased usage for renewable diesel production, with the feedstock's use for biodiesel slipping slightly from July. Canola oil consumption for biofuels hit 14.2mn lbs/d, up by 58.1pc from a year prior on a per-bound basis but still 19.4pc below record-high levels in July. Distillers corn oil usage, typically less volatile month-to-month than other feedstocks, bucked that trend to hit a high for the year of 13.6mn lbs/d in August. That monthly consumption is up 13.6pc from a year earlier and 20.9pc from a month earlier. Among waste feedstocks, usage of yellow grease, which includes used cooking oil, rose to 22.4mn lbs/d in August, up 13.8pc from levels a year prior and 5.8pc from levels in July. Tallow consumption for biofuels was at 18.6 mn lbs/d over the month, an increase of 27.8pc from August last year but a decrease of 13.4pc from July this year. Production capacity of renewable diesel and similar biofuels — including renewable heating oil, renewable jet fuel, renewable naphtha, and renewable gasoline — was at 4.6bn USG/yr in August, according to EIA. That total is 24.1pc higher than a year earlier and flat from July levels. US biodiesel production capacity meanwhile declined to fewer than 2bn USG/yr over the month, down by 4.3pc from a year earlier and 1.3pc from a month earlier. US biomass-based diesel production capacity has expanded considerably in recent years, but refiners have recently confronted challenging economics as ample supply of fuels used to comply with government programs has helped depress the prices of environmental credits and hurt margins. The industry is also bracing for changes to federal policy given this year's election and a new clean fuel tax credit set to kick off in January. That credit, known as "45Z", will offer a greater subsidy to fuels that produce fewer greenhouse gas emissions, likely encouraging refiners to source more waste feedstocks over vegetable oils. That dynamic is already shaping feedstock usage this year, with Phillips 66 executives saying this week that the company's renewable fuels refinery in California is currently running more higher carbon-intensity feedstocks ahead of a shift to using more waste early next year. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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US court set to weigh biofuel blend mandates


31/10/24
News
31/10/24

US court set to weigh biofuel blend mandates

New York, 31 October (Argus) — A US court on Friday will weigh some novel issues that could affect enforcement of the Renewable Fuel Standard (RFS), the federal program that sets minimum biofuel blending levels for domestic motor fuel supplies. The Environmental Protection Agency (EPA) in last year's RFS regulation required refiners and importers to blend increasing volumes of renewable fuel from 2023-2025. But the rule differed from past obligations in a crucial way. While the RFS law set annual volume targets of cellulosic, advanced and conventional biofuels through 2022, it tasked EPA with setting volumes in subsequent years by balancing factors such as the environmental impacts of biofuels, energy security, expected production and consumer costs. In a consolidated case to be heard Friday by the US Court of Appeals for the District of Columbia Circuit, environmental groups and oil refiners are separately challenging aspects of how the EPA applied those factors in setting 2023-25 volumes. The court has previously affirmed the legality of many RFS rules. "Past cases always give you some perspective on how the DC court might see it," said Susan Lafferty, a partner at law firm Holland & Knight. "But the DC court could also say, ‘not relevant anymore because this is a different part of the statute that we are working with.'" Refiners say EPA misapplied the criteria, upping compliance costs more than necessary by setting targets for cellulosic and conventional biofuels too high and targets for advanced biofuels too low. They also challenge EPA's balancing of potential impacts, noting that the agency assumed that all parties can easily pass the costs of compliance on to consumers. In a separate case this year, the DC Circuit discarded EPA rejections of program waiver petitions, in part because judges disagreed that refiners can easily pass on the cost of Renewable Identification Number (RIN) credits used to show compliance with the RFS program. EPA used this pass-through theory in the 2023-2025 rule "like a magic wand, waving it around to dismiss any argument that the rule will cause harm", the American Fuel and Petrochemical Manufacturers and small refineries said in a case filing. Lafferty expects the judges at Friday's hearing to probe the extent to which EPA's volumes relied on this pass-through theory, "a policy that now this very court has gutted." Environmentalists have similarly targeted EPA's cost analysis, arguing that the agency downplayed the environmental drawbacks of growing crops for energy. The Center for Biological Diversity and the National Wildlife Federation argue that EPA has legal discretion to set post-2022 volumes for corn- and soybean-derived biofuels as low as zero. EPA counters that the court owes the agency deference in evaluating scientific data and making predictive judgments. And biofuel groups that have intervened argue that the program is designed to require more biofuel production even if there are no formal volume requirements in law anymore. While EPA's post-2022 authority to set blend mandates is a new issue, the DC Circuit has handled various cases about EPA's implementation and has generally been deferential to the agency's volume decisions. The court this year upheld 2020-2022 targets. In a 2019 decision, the court kept volumes in place , despite telling EPA to more deeply weigh endangered species impacts. While the court might take issue with some aspects of EPA's latest rule, including the agency's lateness in finalizing volumes, judges could again be reluctant to upend fuel markets if they find only small oversights. Depending on how skeptical judges appear about EPA's arguments on Friday, the case could cause concern for biorefineries. A decision is expected next year, meaning any order for EPA to better justify its decisions or go back to the drawing board would likely fall to the next president's administration. On the panel for Friday's hearing are two judges familiar with the program: Democratic appointee Cornelia Pillard, who wrote the opinion this year upholding 2020-2022 blend mandates, and Republican appointee Gregory Katsas, who dissented and said those volumes were excessive. The third judge on the panel is Democratic appointee J. Michelle Childs. RINcrease or decrease RIN market activity has thinned as participants await the results of the court case and November's presidential election. In its latest rule, EPA aimed to provide a clearer picture over a longer timeline by finalizing volumes over multiple years. But the agency underestimated the growth in renewable diesel production, partly because of unexpectedly high feedstock imports. The result has been persistent oversupply, which took D4 biomass-based diesel credit prices from around 150¢/RIN in spring last year to as low as 42¢/RIN a year later according to Argus assessments. Multiple refiners have consequently dialed back biofuel production. In the past, RIN prices have proven sensitive to legal developments as traders anticipate supply and demand shifts. Prices softened this summer after the DC Circuit vacated small refinery waivers, leaving it unclear whether many facilities would have to buy RIN credits at all. By Cole Martin and Matthew Cope Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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