SPR oil purchases 'difficult' this year: Granholm

Market: Crude oil
23/03/23

The US is unlikely to take advantage of a recent drop in prices to start buying crude for the US Strategic Petroleum Reserve (SPR) this year, US energy secretary Jennifer Granholm said today.

President Joe Biden last year laid out plans to buy crude to start refilling the SPR whenever spot prices were below $72/bl. But a pending drawdown from the SPR and ongoing maintenance at two storage facilities are posing obstacles to start executing the crude purchase plan this year.

"This year it will be difficult for us to take advantage of this low price," Granholm said in testimony on Capitol Hill today. "But we will continue to look for that low price into the future."

Nymex WTI prompt crude futures settled at a 15-month low of $66.61/bl on 17 March, and prompt futures today were trading around $70/bl. Those prices are well below Biden's targeted price, but administration officials say SPR facilities are already tied up handling a congressionally mandated sale of 26mn bl that is set for delivery from 1 April to 30 June.

Granholm said another challenge to starting crude purchases this year is that two SPR facilities — the Bayou Choctaw site in Louisiana and Bryan Mound storage site in Texas — are "down for maintenance."

The SPR currently holds 371.6mn bl at four storage sites in Texas and Louisiana, the lowest level in nearly 40 years. The Biden administration intends to purchase crude using the remaining $4.5bn it has left from the emergency sale last year of 180mn bl from the SPR. Most of the sale revenue went toward a deal to cancel earlier congressional mandates to sell 140mn bl of crude from the SPR by fiscal year 2027.

The Biden administration has said its intended crude purchase price of $67-72/bl will be a good deal for taxpayers because the US earned an average of $95/bl for last year's emergency crude sales. The crude purchases will also provide support for domestic producers, administration officials said.

Even if no crude purchases happen this year, the SPR could still begin partially refilling this summer. ExxonMobil has been scheduled to return more than 3mn bl of crude it borrowed from the SPR in the wake of Hurricane Ida in 2021, according to contracts obtained through a public records request.

Granholm said the administration wants to refill the SPR back to the level it would have been without the emergency sales within "a few years," which suggests that 40mn bl may be added to the SPR after accounting for the 140mn bl of canceled crude sales. Another official at the Energy Department earlier this month said the administration wants to start buying "within the next year."

By Chris Knight

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21/11/24

Cop: EU, four countries commit to 1.5°C climate plans

Baku, 21 November (Argus) — The EU, Canada, Mexico, Norway and Switzerland have committed to submit new national climate plans setting out "steep emission cuts", that are consistent with the global 1.5°C temperature increase limit sought by the Paris Agreement. The EU and four countries made the pledge at the UN Cop 29 climate summit in Baku, Azerbaijan today, and called on other nations to follow suit — particularly major economies. Countries are due to submit new climate plans — known as nationally determined contributions (NDCs) — covering 2035 goals to the UN climate body the UNFCCC by early next year. The EU, Canada, Mexico, Norway and Switzerland have not yet submitted their plans, but they will be aligned with a 1.5°C pathway, EU climate commissioner Wopke Hoekstra said today. The Paris climate agreement seeks to limit the global rise in temperature to "well below" 2°C and preferably to 1.5°C. Canada's NDC is being considered by the country's cabinet and will be submitted by the 10 February deadline, Canadian ambassador for climate change Catherine Stewart said today. Switzerland's new NDC will also be submitted by the deadline, the country's representative confirmed. Pamana's special representative for climate change Juan Carlos Monterrey Gomez also joined the press conference today. Panama, which is designated as carbon negative, submitted an updated NDC in June. It is planning to submit a nature pledge, Monterrey Gomez said. "It is time to streamline processes to get to real action", he added. The UK also backed the pledge. The UK announced an ambitious emissions reduction target last week. The UAE — which hosted Cop 28 last year — released a new NDC just ahead of Cop 29, while Brazil, host of next year's Cop 30, released its new NDC on 13 November during the summit. Thailand yesterday at Cop 29 communicated a new emissions reduction target . Indonesia last week said that it intends to submit its updated NDC ahead of the February deadline, with a plan placing a ceiling on emissions and covering all greenhouse gases as well as including the oil and gas sector. Colombia also indicated that its new climate plan will seek to address fossil fuels, but it will submit its NDC by June next year . 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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Cop: EU says finance draft text not acceptable

21/11/24

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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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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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Baghdad clamps down on 'illegal' oil smuggling to Iran

20/11/24

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20/11/24

Baghdad clamps down on 'illegal' oil smuggling to Iran

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Cop: EU warns on fossil fuel ambition backsliding

20/11/24

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20/11/24

Cop: EU warns on fossil fuel ambition backsliding

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