US House starts work on permitting package

Market: Crude oil, Emissions, Natural gas
28/02/23

Republicans in the US House of Representatives today began debate on nearly two-dozen energy and permitting bills that could serve as their opening bid for a bipartisan deal later this year.

Republicans today are holding five hearings at three different House committees on bills that seek to fast-track permitting, expand federal oil and gas leasing and remove most climate-related analysis from federal environmental reviews. The flurry of committee work aligns with a goal by Republicans to bring a combined bill to the House floor in the coming months.

"We cannot achieve the full benefits of an American energy expansion without reforms like these," House Energy and Commerce Committee chair Cathy McMorris Rodgers (R-Washington) said at the start of a hearing on nine bills. "This is a solid start to our energy agenda."

The sweeping changes sought by Republicans have little chance of becoming law, given the likely opposition from President Joe Biden and Democrats who hold the US Senate. But Republicans believe passing legislation can strengthen their hand on permitting ahead of potential negotiations with Democrats, who are looking for ways to speed the use of $369bn in climate-related spending from last year's Inflation Reduction Act.

Faster permitting "is something that both sides of the aisle want," US representative Mariannette Miller-Meeks (R-Iowa) said at an event held by the nonprofit Center for Climate and Energy Solutions.

Republicans are seeking to use legislation to reverse Biden's restrictions on fossil fuel production, seeking a mandate to hold quarterly oil and gas lease sales in nine states and twice-a-year lease sales in the Gulf of Mexico. They want to relax environmental reviews for drilling on federal land and make it harder to challenge that development in court. Republicans also want to ease the regulatory thresholds to approve US LNG export facilities and allow cross-border energy projects like the canceled 830,000 b/d Keystone XL pipeline.

Democrats say the legislation reads like an industry "wish list" that would undermine efforts to address climate change and make it harder for marginalized groups to have a say in nearby development. They are also alarmed at deep changes proposed to the National Environmental Policy Act, including a push to eliminate the federal analysis of the climate-related effects of burning fossil fuels.

"These bills seek to gut these processes, just so dirty energy projects can start producing profits a lot faster," House Natural Resources Committee ranking member Raul Grijalva (D-Arizona) said.

Oil industry groups back much of the legislation drafted by Republicans. A bill under consideration in the House Committee on Natural Resources would give certainty to industry and "ultimately lead to a more streamlined process" for federal oil and gas development, Independent Petroleum Association of America chief operating officer Dan Naatz said at the hearing.

Democrats made some progress on permitting legislation last year, with US senator Joe Manchin (D-West Virginia) getting bipartisan support for a bill to expedite permitting, speed electric transmission approval and approve the $6.6bn Mountain Valley natural gas pipeline. Manchin is likely to play a role on potential permitting negotiations again this year as head of the Senate Energy and Natural Resources Committee.

By Chris Knight

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21/11/24

Cop: EU says finance draft text not acceptable

Baku, 21 November (Argus) — The latest draft of the text on climate financing presented at the UN Cop 29 climate summit is not ambitious enough on mitigation — reducing emissions — and "clearly unacceptable," EU energy commissioner Wopke Hoekstra said today. Parties must agree at Cop 29, in Baku, Azerbaijan, on a new collective quantified goal (NCQG) — a new climate finance target — building on the $100bn/yr that developed countries agreed to deliver to developing countries over 2020-25. The text is the main outcome for the summit. "What we had on our agenda was not just to restate the [Cop 28] consensus but actually to enhance that and to operationalise that," but the text goes in the opposite direction, Hoekstra said. Parties to last year's Cop 28 summit in Dubai made an historic pledge to "transition away" from all fossil fuels. The EU has warned against any backsliding on this pledge . "We cannot accept the view that the previous Cop did not happen," Hoekstra said. A draft text on the mitigation work programme — a process that focuses on emissions reduction — was released by the Cop 29 presidency in the early hours of this morning. It does not mention phasing out or reducing fossil fuels in energy systems, or reference the agreement reached on the latter point at Cop 28 last year. Hoekstra indicated today's text does not provide enough clarity to allow the EU to put a concrete number on the amount of climate finance that should be available. The bloc has insisted the final number for climate financing can come only when other elements, including the structure and contributor base, are settled. But recipient country groups such as the G77 and Like-Minded Developing Countries (LMDC) groups have expressed impatience at the lack of a concrete number. Minor bright spots in the numerous draft texts released overnight include those on Article 6, which governs international carbon credits, Hoekstra said. But the commissioner is "sure there is not a single ambitious country who thinks this is nearly good enough." By Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Cop: Talks on Article 6 near final agreement

21/11/24

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21/11/24

Cop: Talks on Article 6 near final agreement

Washington, 21 November (Argus) — Negotiators at the UN Cop 29 climate summit in Baku, Azerbaijan, appear close to a final agreement on the details of an international carbon market under the Paris Agreement. The ministers leading the final discussions on 21 November released updated texts for Article 6.2 and Article 6.4 of the accord that attempt to bridge the gap on remaining issues. It is not yet clear if these are the final texts, but any work left may only involve some "small tweaks", International Emissions Trading Association (Ieta) international policy director Andrea Bonzanni said. Those two sections of the Paris Agreement govern how countries can use carbon credits to meet their greenhouse gas (GHG) emissions-reduction pledges, known as nationally determined contributions (NDCs). Article 6 aims to help set rules on global carbon trade. EU energy commissioner Wopke Hoekstra called Article 6 one area of the talks "where at least the text is a bit encouraging." "We've always been pleading for more progress on Article 6," he said. "We've stressed the tremendous importance of transparency, predictability, credibility of these items." On the key issue of the Article 6 credit registry, the text reflects the idea of a "dual layer" approach that Singapore environment minister Grace Fu suggested on 20 November . The text calls for the creation of a registry to issue and trade credits that would be run by the UN and would be separate from the Article 6 registry, which would only serve an accounting function. "It looks like they managed to make both sides happy," Bonzanni said. The text also says that the inclusion of any emissions credits — known as internationally transferable mitigation outcome (Itmo) units — in the UN registry does not represent any sort of validation of their environmental integrity, in response to concerns raised by the US and others. "There was a concern that if the Itmos are in a UN registry, they may be seen as automatically having legitimacy or UN endorsement," Bonzanni said. The US should be happy with that language, he added. But the EU got only some of what it has sought over the past year. Most notably, the latest text does not include a definition of a "cooperative approach," essentially what it means for countries to buy and sell emissions units under Article 6. An earlier draft of the text included a definition, but there were concerns that it "could have restrained the markets significantly" and created confusion around certain requirements for when countries authorise Itmos, Bonzanni said. "I believe the presidency did a good job by making tough calls." Ieta is not happy with everything in the text, but at the same time "there is nothing harmful" to trading in it, Bonzanni said. By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Cop: New climate finance draft does not bridge divide

21/11/24

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21/11/24

Cop: New climate finance draft does not bridge divide

Baku, 21 November (Argus) — The UN Cop 29 presidency has released a new draft text on the key issue of climate finance, but entrenched positions remain with no agreement on an amount, and no explicit reference to reducing fossil fuels in energy systems. The outcome of the finance discussions are inextricably linked to progress on mitigation, or cutting emissions. Developing countries have long said they cannot decarbonise or implement an energy transition without adequate finance. Developed countries are calling for substantially stronger global action on emissions reduction. Countries are working at Cop 29 to decide the next stage of a climate finance goal. Developed countries agreed to deliver $100bn/yr in climate finance to developing nations over 2020-25. The draft, released in the early hours today, streamlines previous iterations. But countries' views on details such as the amount beyond 2025 are set out in separate 'options', illustrating a lack of common ground. The text does not overtly reference phasing out or reducing fossil fuels, although it does call on the fossil fuel industry to align itself with the Paris Agreement and for phasing out inefficient fossil fuel subsidies. It is unclear if there was wide agreement on these points. Countries agreed at Cop 28 last year to "transition away" from fossil fuels. The first option, which roughly covers developing country views, sets out a climate finance goal of upwards of $1 trillion over 2025-35, broken down into provision and mobilisation. The provision element — which developed countries would be called on to provide — is in the billions of dollars, from a $100bn/yr floor, and should be grant or grant-equivalent, according to the draft. Mobilised finance, which could be private finance or even from carbon markets, would make up the rest — although no specific figures are in this part of the draft text. The second option, broadly covering developed countries' position, focuses on the Paris climate agreement that seeks to limit the global rise in temperature to 1.5°C above pre-industrial levels. This option sets a floor of $100bn/yr by 2035 for "collectively mobilising" finance "from a wide range of sources". It outlines a goal of $1 trillion or more for "global finance in climate action… from all sources of finance". The contributor base has long been a point of contention. UN climate body the UNFCCC delineated developed and developing countries in 1992, and the former group has consistently argued that economic circumstances have since changed, requesting a wider contributor base for climate finance. But positions on this appear not to have changed. The first option "invites developing country parties willing to contribute" to do so voluntarily, but says this will not be counted in the official finance goal. The second option notes that developed countries take the lead, but contributions from "countries with the economic capacity to contribute" will be counted. "This is not a text that aims to bridge", non-profit WRI director of international climate action David Waskow said today. He sees "a lot of work to be done". Cop 29 is scheduled to finish on 22 November, but many participants said it is likely to overrun. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Mexico to keep some energy regulator independence

20/11/24

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20/11/24

Mexico to keep some energy regulator independence

Mexico City, 20 November (Argus) — Mexico's lower house constitutional affairs commission changed its draft bill on eliminating independent regulators to keep the energy regulatory commission (CRE) independent on technical issues even after the energy ministry absorbs it. In an earlier draft, respective ministries would take over the functions of previously independent regulators. With the change, CRE will become a "decentralized body," said President Claudia Sheinbaum. It will retain technical independence but will no longer be an autonomous regulator able to set its budget, the president added. Sheinbaum did not mention hydrocarbons regulator CNH, which could take up a similar position as CRE. Antitrust watchdog Cofece and telecommunications regulator IFT would become similarly decentralized bodies with technical independence from the economy ministry. Transparency watchdog Inai will disappear but a new anticorruption ministry will take over its functions. Inai in recent years has forced state-owned oil company Pemex to release more detailed data about harmful emissions and fuel theft, among other issues. Mexico's independent regulators and watchdogs still formed part of the 2025 budget proposal the government revealed this week. The actual independence of Mexico's energy regulators has been questioned since the previous government, as the number of permits granted by CRE to private companies has dropped in favor of state-owned companies . Critics have raised concerns regarding the bill, arguing it will destabilize Mexico's balance of power and undermine investor confidence. The proposal also fueled concerns that this change could weaken Mexico's standing in the 2026 review of the US-Mexico-Canada free trade agreement (USMCA), as the US and Canada may see the exit of independent regulators as a risk to their business interests in Mexico. Sheinbaum said she met with US president Joe Biden and Canadian president Justin Trudeau during the G20 summit and discussed the importance of the USMCA. She did not mention any concerns the trade partners had regarding the bill. Morena previously tried to absorb the independent regulators early on during the previous administration. The ruling party saw its efforts strained because it lacked the two-thirds supermajority required to pass constitutional changes. Morena and its allies are now expected to secure the votes swiftly, as they have passed other constitutional reforms in the previous weeks. By Cas Biekmann Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Cop: Developing nations deplore finance 'radio silence'

20/11/24

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20/11/24

Cop: Developing nations deplore finance 'radio silence'

Baku, 20 November (Argus) — With just a few hours to go before a draft text on a new climate finance goal for developing countries is due at the UN Cop 29 climate summit, there is still "radio silence" from developed nations and an absence of plans, said Adonia Ayebare, chair of the group of 77 (G77) and China negotiating group. Parties must agree at Cop 29, in Baku, Azerbaijan, on a new collective quantified goal (NCQG) — a new climate finance target — building on the current $100bn/yr that developed countries agreed to deliver to developing countries over 2020-25. There is a strong hope that the forthcoming text will clearly define financial commitments detailing the amount, quality and mechanism for delivery, Ayebare said. A perfect text does not exist, he said, adding that developing countries have already put forth a figure that reflects their needs. They are broadly calling , for 1.3 trillion/yr while developed countries have not indicated an amount. "We need a figure for the headline of the text [in trillions], the rest will follow." The EU today insisted that the precise number for the goal will depend on agreement on other issues, including progress on mitigation and financing structure. In response to a question about uncorroborated rumours that developed countries may be considering a figure of $200bn/yr, Bolivia's negotiator Diego Pacheco said: "Is this a joke?" Developed country representatives have so far refuted this figure , or that they have settled on an amount. The "super red line" for the Like-Minded Developing Countries (LMDC) group is to not reinterpret or rewrite the Paris Agreement, said Pacheco, representing the group. The NCQG should be grounded in the mandate of the Paris accord, which states finance should flow from developed to developing countries. "Negotiations don't need to reopen the Paris agreement, but we can look at another area [such as] voluntary contributions for example, but that comes after the headline [figure], Ayebare said. Pacheco also talked about developed countries' attempts on mitigation, for example, to "move from the facilitative nature of the Paris Agreement to a prescriptive, intrusive mitigation… cherry-picking some elements of the [global stocktake]," he added. The EU and other developing nations are pushing for language on transitioning away from all fossil fuels that was included in the outcome of Cop 28 in Dubai last year to be included in this year's outcomes. By Prethika Nair and Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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