New E15 push expected from White House: Update
Adds RIN price context.
President Donald Trump's administration will within weeks renew efforts to allow the year-round sale of higher-ethanol gasoline blends, according to multiple sources in biofuels and refining industries.
The administration will announce changes to allow the year-round sale of 15pc ethanol gasoline in October, according to sources familiar with the plan but not authorized to discuss it publicly. Exactly what they would offer US refiners and importers to support the change remained unclear and under discussion today. Strategies for quick approval of the change risk an almost certain court challenge.
Neither the White House nor the Environmental Protection Agency (EPA), which administers the fuel regulations, responded to questions about the plan.
US air quality laws restrict gasoline's Reid Vapor Pressure (RVP) — a measure of how easily the fuel evaporates — in certain markets during high-demand summer months. The law included a specific waiver for gasoline with up to 10pc blends of ethanol.
Ethanol groups seeking greater market share have demanded EPA expand that waiver to 15pc blends.
Approving the waiver could ease some of the farm-country displeasure with Trump administration trade actions ahead of fall elections. Battles with China have cut off major soy and corn markets for US farmers. Agribusiness and renewable fuels companies have pushed the administration, rather than Congress, to make the change.
Refiners have said they would support a change — as a package with changes that reduce their costs or obligations under the program.
But industry representatives have repeatedly warned that any unilateral change to the waiver would head to court. Critics of the environmental consequences of the change, including US senators Peter Welch (D-Vermont) and Tom Udall (D-New Mexico) also warned that the EPA could not make such a change.
"Previously, EPA has publicly concluded that it does not have the statutory authority to issue such a waiver, and the reported decision to reverse this conclusion appears to be driven by political considerations, rather than scientific or legal analysis," the senators said in July. "The plain reading of the Clean Air Act and EPA's long-standing interpretation strongly suggest that EPA lacks authority to unilaterally allow year-round sales of E15."
Agriculture supporters carefully targeted Pruitt, not Trump, in this year's push for the waiver. Senators and trade groups singled out the increasingly embattled administrator, casting him as interfering with presidential directions drawn from occasional Trump comments in support of the policy this year. But acting administrator Andrew Wheeler has not moved on the proposal since assuming EPA leadership in July. Agriculture secretary Sonny Perdue told farmers in Iowa last month that Trump supported the change as part of a larger fuel sector bargain.
Increasing fuel blending would increase the number of available renewable identification numbers (RINs) needed to comply with federal fuel blending mandates called the Renewable Fuel Standard. The risk of more RINs has helped to pressure already-low prices for the credits lower. RINs associated with ethanol blending fell by 8pc to 14.5¢/RIN today, the lowest settlement since late January 2013, based on Argus assessments.
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Venezuela's Maduro open to talks with the US
Venezuela's Maduro open to talks with the US
Caracas, 2 July (Argus) — Venezuelan leader Nicolas Maduro plans to talk with US envoys on Wednesday to discuss allowing the South American country to increase oil exports in exchange for free and fair elections, he said late on Monday. But Maduro's call for dialogue comes less than a month before the 28 July election in which polls show him up to 40 percentage points behind his main challenger. It is also after the US rescinded a six-month reprieve on sanctions in April, accusing Venezuela of violating a commitment to hold a fair vote. Maduro said that the US had sought dialogue with him "for two months in a row", and, "after thinking about it, I have accepted". The head of the pro-Maduro assembly elected in 2020, Jorge Rodriguez, will represent him in the talks, Maduro said. The US State Department declined to directly confirm Maduro's statement but said that the US welcomed "dialogue in good faith, and we support the Venezuelan people's desire for competitive and inclusive elections on July 28." The US ties sanctions relief to Maduro's observing the 2023 Barbados agreement with the Venezuelan opposition, which promised to hold a competitive presidential election. The US in April reimposed sanctions against Venezuela because the Maduro government did not allow the main opposition contender, Maria Corina Machado, to run for president. Former Venezuelan diplomat Edmundo Gonzalez is the sole presidential candidate representing the opposition Unitary Platform. "We are clear-eyed that democratic change will not be easy, and certainly requires a serious commitment," the US State Department said. "This is something that we will continue to focus on when we will engage in dialogue with with a broad range of Venezuelan actors." Venezuela in recent weeks has barred an additional 10 city mayors from running for office for 15 years after they expressed support for Gonzalez, according to the CNE electoral authority and the comptroller general's office. During the first six months of 2024 Maduro has arrested 39 people connected to Gonzalez's campaign, the last one as recently as 30 June, a campaign source told Argus, using figures from Venezuelan non-governmental organizations. Police over the weekend also detained Machado for several hours while leaving a rally for Gonzalez. Venezuela's oil output increased by around 4pc in May to 911,700 b/d from 878,000 b/d in April as drilling campaigns showed results after three months of flat production, according to the oil ministry. But US sanctions are expected to keep a cap on much additional growth. By Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
LPG industry urged to invest to build EU credibility
LPG industry urged to invest to build EU credibility
Tapping into funding for renewable fuels is seen as key for the industry, but investment decisions must not be made in haste, writes Matt Scotland London, 2 July (Argus) — The LPG industry has been urged to work more closely with the sustainable aviation fuel (SAF) and other nascent renewable fuel sectors to establish bioLPG and renewable LPG and DME production plants as soon as possible. "It would be great if the LPG industry could embrace other renewable liquid fuels" as these often already have governmental backing and financing, Vertimass board adviser Neil Murphy told delegates at European LPG association Liquid Gas Europe's Congress in Lyon, France, over 18-20 June. US-based Vertimass aims to commercialise the conversion of ethanol into SAF, renewable diesel and renewable gasoline components. The LPG sector, in its efforts to develop renewable forms of LPG and DME, needs to move from "great intent" to the "earthiness of investment and putting plants down in the ground", Murphy said. Doing so will build credibility among policy makers, he said. But the sector was also warned about making hasty investments that turn out to be "mistakes", hurting the prospects for renewable LPG in the medium to long term. "The US saw huge failures in its early solar panel manufacturing efforts — billions of dollars were wasted. So, we can't advocate for things just to get steel in the ground, we need the steel in the ground to be successful," US start-up BioLPG LLC's chairman Kimbal Chen said. BioLPG LLC and Chicago-based research institute GTI Energy have jointly developed the "Cool LPG" process to convert biogas into bioLPG. Italian consortium Green LG Energy is adopting the technology to develop a pilot plant in Chicago and later a larger demonstration facility in Italy, chief executive Francesco Franchi told delegates. The Chicago facility could open before the end of this year and the Italian plant within the next two years. Once operational, the latter will "show policy makers and stakeholders that we can produce bioLPG, allowing us to secure funding and support to develop an industrial-scale plant", he said. Credibility was a core theme of the conference in Lyon as the industry continues to work to enshrine LPG and renewable alternatives in EU and national legislation. The question the sector needs to ask itself is how to make its proposals and voice credible to EU policy makers after the recent European Parliament elections, LGE president Audrey Galland said. France could play a vital role, as despite having a 10pc share of the European LPG market, it has a strong voice in Brussels, according to French LPG association FGL president Julie de Fazio. A growing recognition that electrification of heating will not be suitable in most rural areas, and that rural customers want to decarbonise, should benefit the LPG sector, she said. But it still needs "financial incentives and mandates" that encourage investment in renewable liquid gases, she said. Hearing the possibility for mandates in a positive rather than restrictive sense was "music to my ears", renewable DME company Dimeta's advocacy director Sophia Haywood said. Combining supportive mandates for renewable liquid gases at the same time as financial incentivisation could be key to unlocking growth, she said. Pragmatic shift? The recent parliamentary election could be a boon for the LPG industry, according to former EU MEP and UK member of the regulatory policy committee Daniel Dalton. The shift in power from centre-left to centre-right should result in "more pragmatic energy policy" that benefits the LPG sector, he told delegates. And the ascent of the cost-of-living and energy security issues up the EU's agenda should also lead to a "watering down of the hard edges" when it comes to the paths to meeting the EU's bold targets under its Green Deal. "You as an industry are well placed" in assisting the EU in its efforts to enhance energy security and lower energy costs, while also moving towards decarbonised renewable liquid gases, he said. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UK bitumen production at highest since July 2021
UK bitumen production at highest since July 2021
London, 2 July (Argus) — UK bitumen production in April hit its highest in nearly three years even though there is only one remaining bitumen-producing refinery in the country, in Eastham. The UK government's latest provisional data showed production at 68,000t in April, up by 7pc compared with the same month last year. Bitumen production declined overall last year by 147,000t on the year to just 373,000t, the lowest since records began in 1995, after UK energy company Prax Group ceased all bitumen production at its Lindsey refinery in the northeast of England in early 2023. In January-April this year, the UK produced 77,000t of bitumen, a decrease of 10,000t from the same period last year. UK consumption in April was at 122,000t, up 7,000t since the other refineries in the UK closed by April 2023. With the UK's general election taking place on 4 July, parties have made promises which could support bitumen consumption. The UK government this year committed £8.3bn ($10.52bn) to fill potholes and resurface roads by 2034, and the UK opposition party Labour last month pledged to keep this plan in place if elected while additionally funding councils £320m over five year by deferring the planned A27 Arundel bypass works in Sussex. Asphalt Industry Alliance (AIA) in March 2024 published a report stating that the total number of potholes filled in 2022 was 1.4mn, down from 1.7mn in 2021 and the equivalent of one every 22 seconds. Spending on pothole repairs fell to £93.7mn last year from £107.4mn in 2021. By Fenella Rhodes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Prompt European gasoline forward curve in contango
Prompt European gasoline forward curve in contango
London, 2 July (Argus) — Prompt Eurobob gasoline time spreads have entered a contango structure — where prompt values are at a discount to forward prices — signalling the weakest structure for the time of year since the pandemic year of 2020. July Eurobob swaps were at a 75¢/t discount to August swaps at the close on 1 July. The spread had been in a relatively shallow backwardation — when prompt prices are at a premium to later dates — in recent sessions, although it has been narrowing steadily from $6.50/t on 1 June. It is uncommon for the forward structure to be in contango at this time of year. In the corresponding session last year the July swap was at a $19/t premium to the August swap, and since 2009 the current scenario has occurred only twice — in 2020 when much of Europe was under Covid-19 lockdown measures, and in 2016 when the front of the curve was pressured by high European inventories and high US supply. The contango structure reached $5.50/t on both occasions. The recent move builds on weakness exhibited last month , when the front of the forward curve between June and July moved into contango, a structure which was maintained through the rest of June. Demand for gasoline has failed to meet traders' expectations this European summer. Stock levels have been robust, particularly in the US where high refinery utilisation rates have boosted supply and stifled the requirement for European product. This was shown in gasoline crack spreads to North Sea Dated crude in June , which moved sharply lower — counter-seasonally — to an average of $14.87/bl, $5.83/bl lower than in May and down by $9.68/bl compared with year ago. There are already signs of this reversing however. In early trading today the front of the forward curve strengthened, with July marked at parity to August, according to brokers. Discounts in the spot barge market at the Amsterdam-Rotterdam-Antwerp (ARA) hub have narrowed relative to August Eurobob swaps today, indicating firmer demand, with participants saying there is a more workable transatlantic arbitrage. By Jonah Sweeney Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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