The Hague eyes sector agreement to support gas output

Spanish Market: Natural gas
16/09/24

The new Dutch government aims to reach agreement with the oil and gas sector on support for domestic North Sea production, while introducing a new law to make gas supply more secure.

The government in its new longer-term plan set out a new policy approach to its promise to "scale up" domestic gas production from the North Sea. A sector agreement would "increase investment security and the predictability of government policy", the cabinet said.

Dutch domestic gas production is in long-term decline, although the climate and green growth ministry, and research organisation TNO, forecast some scope for domestic production to stay stable until around 2030 before dropping, depending on overall investment. Much like the previous government, the current administration has stated its intention to boost North Sea production. Former mining minister Hans Vijlbrief said last year that the government was moving to slow the rate of gas output decline "as much as possible".

The previous coalition government had already been using tailor-made agreements with companies involving decarbonisation, while the new incoming coalition cabinet in May announced its intention to use this policy tool in other areas as well. The government released a more detailed outline of planned policies and legislative changes on 13 September, after the previous coalition agreement was published in mid-May.

And by the fourth quarter, the government plans to consult on a new law to "strengthen crisis preparedness in the field of gas market and increase robustness for the gas system". This includes some EU-level developments, such as a focus on energy savings in the new European regulation on security of gas supply, the government said.

And the cabinet said it would examine how "the government, in addition to the market, can take a more proactive role in ensuring that gas storages are filled". The Netherlands does not presently have a strategic gas reserve, unlike other countries such as Austria or Italy. And in the coalition agreement, the parties had set out to "establish reserves" for gas, in order to keep the giant Groningen gas field closed.

By Till Stehr

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15/01/25

Inpex wins Norwegian offshore exploration licences

Tokyo, 15 January (Argus) — Japanese upstream firm Inpex has won eight oil and gas exploration permits offshore Norway, expanding its operations in the country, Inpex said today. Inpex was awarded exploration licences PL1263, PL318D, PL1264, PL1257, and PL636D located between the northern North Sea and the southern Norwegian Sea, along with PL 1276, PL1274 and PL1194C in the northern Norwegian Sea through its local subsidiary Inpex Idemitsu Norge (IIN). The successful bid was part of the awards in the pre-defined areas (APA) 2024 licensing round . IIN secured five licenses in the 2023 APA round . The APA rounds are held every year and focus on mature areas of the Norwegian continental shelf. The aim is to facilitate the discovery and production of remaining oil and gas resources in these areas before existing infrastructure is shut down. In the latest round, 33 of the licences are in the North Sea, 19 in the Norwegian Sea and one in the Barents Sea. The latest licences will contribute to expanding its Norwegian business portfolio, Inpex said, given the potential of jointly developing the new assets with existing assets in the surrounding area. The company has continued stable production at the Snorre and Fram oil fields in the northern North Sea. The Japanese firm aims to strengthen its upstream business as part of its long-term strategy, while it invests in renewable energy such as green ammonia. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

New York to propose GHG market rules in 'coming months’

14/01/25

New York to propose GHG market rules in 'coming months’

Houston, 14 January (Argus) — Draft rules for New York's carbon market will be ready in the "coming months," governor Kathy Hochul (D) said today. Regulators from the Department of Environmental Conservation (DEC) and the New York State Energy Research and Development Authority (NYSERDA) "will take steps forward on" establishing a cap-and-invest program and propose new emissions reporting requirements for sources while also creating "a robust investment planning process," Hochul said during her state of the state message. But the governor did not provide a timeline for the process beyond saying the agency's work do this work "over the coming months." Hochul's remarks come after regulators in September delayed plans to begin implementing New York's cap-and-invest program (NYCI) to 2026. At the time, DEC deputy commissioner Jon Binder said that draft regulations would be released "in the next few months." DEC, NYSERDA and Hochul's office each did not respond to requests for comment. Some environmental groups applauded Hochul's remarks, while also expressing concern about the state's next steps. Evergreen Action noted that the timeline for NYCI "appears uncertain" and called on lawmakers to "commit to this program in the 2025 budget." "For New York's economy, environment and legacy, we hope the governor commits to finalizing a cap-and-invest program this year," the group said. State law from 2019 requires New York to achieve a 40pc reduction in greenhouse gas (GHG) emissions from 1990 levels by 2030 and an 85pc reduction by 2050. A state advisory group in 2022 issued a scoping plan that recommended the creation of an economy-wide carbon market to help the state reach those goals. By Ida Balakrishna Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

AI may boom on gas power, then turn to nuclear

13/01/25

AI may boom on gas power, then turn to nuclear

New York, 13 January (Argus) — The first tranche of new US data centers coming on line this decade to run electricity-intensive artificial intelligence (AI) software will probably rely mostly on power generated by natural gas, while the nuclear renaissance hoped for by Big Tech comes later in the 2030s. Microsoft, Amazon, Facebook-parent Meta and Google-parent Alphabet want clean, reliable power as quickly as possible so they can be early movers in the development of AI, which is rapidly advancing and finding new user bases around the world. While these companies do not relish the optics of powering AI development with fossil fuels, gas-fired power is widely expected to fulfill most of the gap between current supply and future demand through at least 2030. Unlike wind and solar, gas can be relied upon for steady, baseload power, a necessary ingredient for always-on data centers. And crucially, unlike nuclear, gas-related infrastructure can be built out quickly. The most recent additions to the US nuclear fleet, Vogtle units 3 and 4 in Georgia, took 15 years to build and cost $30bn, double the expected time and cost. A few decommissioned nuclear reactors can be restarted, as Microsoft is paying to do with a unit of Three Mile Island in Pennsylvania. But this low-hanging fruit will be quickly exhausted. Questions around the meter While there is broad agreement that gas will power the AI data center boom through at least 2030, questions remain about what this rapid gas-fired power build-out will look like. Data center operators can secure power in two ways: wade through the long, arduous interconnection process through which new customers connect to the grid, or bypass the grid altogether and secure their own personal electricity supply through so-called "behind-the-meter" agreements. Many in the gas industry are betting tech companies' need for speed will force them to opt for the latter. "The data centers are not going to wait," Alan Armstrong, chief executive of Williams, the largest US gas pipeline company, told Argus in an interview. "They are going to go to states that allow you to go behind the meter." In this scenario, construction of an AI data center in a state like Louisiana, for instance, might accompany construction of a new intrastate pipeline connecting the state's prolific Haynesville gas field with a new gas-fired power plant. Intrastate pipelines bypass the federal oversight triggered by interstate pipeline construction, and new gas power plants only take 2-3 years to build, East Daley Analytics analyst Zachary Krause told Argus . Most of the incremental power needed to run AI data centers this decade will be generated by new gas plants, Krause said. Even ExxonMobil in December said it was in talks to provide "fully islanded" gas-fired power to AI data centers. It claimed it could even capture 90pc of the CO2 emissions from power generation, appeasing tech companies' climate ambitions. ExxonMobil's non-grid gas generation fleet is "independent of utility timelines, so they can be installed at a pace that other alternatives — including US nuclear — just can't match," ExxonMobil chief financial officer Kathy Mikells said. But connecting to the grid may offer better reliability and economics than behind-the-meter gas power. If an off-grid gas generator trips off line, for instance, an always-on data center without back-up generation depending on that facility would be in trouble. Grid connection also allows generators to sell excess power into the grid. For those reasons, most new data centers this decade will rely on the grid as their primary power source, Adam Robinson, research associate at consultancy Enverus, told Argus . Small modular future But if the 2020s become the decade of gas-powered AI, the 2030s may be when nuclear-powered AI gets its due. The long-awaited nuclear renaissance may come not from conventional reactors, but from next-generation small modular reactors (SMRs), which can theoretically be built much faster and cheaper. No US SMRs yet exist, but given the number of SMR start-ups with expected start dates before 2030, and money pouring into the sector from the likes of Google and Microsoft, at least one of these next-generation reactors should be operating by 2030, Adam Stein, director of nuclear energy innovation at research center Breakthrough Institute, told Argus . SMRs' smaller price tag relative to conventional 1 GW nuclear reactors may also accelerate their adoption, Stein said. "Not every utility needs a GW-scale plant of any kind, but they might need a 300 or 600MW plant," he said. "So the total addressable market is larger for SMRs." By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US issues 45Z tax guidance for low-carbon fuels

10/01/25

US issues 45Z tax guidance for low-carbon fuels

Washington, 10 January (Argus) — US producers of low-carbon fuels can start claiming the "45Z" tax credit providing up to $1/USG for road use and $1.75/USG for aviation, following the US Treasury Department's release today of proposed guidance for the credit. The guidance includes proposed regulations and other tools to determine the eligibility of fuels for the 45Z tax credit, which was created by the Inflation Reduction Act to replace a suite of incentives for biofuels that expired at the end of last year. Biofuel producers have been clamoring for guidance from the US Treasury Department so they can start claiming the tax credit, which is available for fuels produced from 1 January 2025 through the end of 2027. "This guidance will help put America on the cutting-edge of future innovation in aviation and renewable fuel while also lowering transportation costs for consumers," US deputy treasury secretary Wally Adeymo said. "Decarbonizing transportation and lowering costs is a win-win for America." The creation of the 45Z tax credit has already prompted a change in US biofuels markets by shifting federal subsidies from blenders to producers. Because the value of tax credit increases for fuels with the lowest lifecycle greenhouse gas (GHG) emissions, it could encourage refiners to source more waste feedstocks such as used cooking oil, rather than conventional crop-based feedstocks. While the guidance is still just a proposal, taxpayers are able to "immediately" use the guidance to claim the 45Z tax credit, until Treasury issues additional guidance, an administration official said. The guidance on 45Z released today affirms that only the producer for the fuel is eligible to claim the credit, not blenders. To be eligible for the tax credit, the fuel must have a "practical or commercial fitness for use in a highway vehicle or aircraft" by itself or when blended into a mixture, Treasury said. Marine diesel and methanol suitable for highway or aircraft use are also eligible for 45Z, as is renewable natural gas that can be used as a transportation fuel. Treasury also released an "annual emissions rate table" offering providers a methodology for determining the lifecycle GHG of fuel. Treasury said a key emissions model from the US Department of Energy, called 45ZCF-GREET, used to calculate the value of the 45Z tax credit is anticipated to be released today, although industry officials said it may be delayed until next week. Treasury said it intends to propose regulations at "a future date" for calculating the GHG emissions benefits of "climate smart agriculture" practices for "cultivating domestic corn, soybeans, and sorghum as feedstocks" for fuel. Those regulations could lower the calculated lifecycle emissions of fuel from those crop-based feedstocks and increase the relative 45Z tax credit. US biofuel producers said they are still awaiting key details on the 45Z tax credit, including the update to the GREET model. Among the outstanding questions is if the guidance released today provides "enough certainty to negotiate feedstock and fuel offtake agreements going forward", said the Clean Fuels America Alliance, an industry group that represents the biodiesel, renewable diesel and sustainable aviation fuel industries. It is unclear how president-elect Donald Trump intends to approach this proposed approach for the 45Z credit, which will be subject to a 90-day public comment period. Trump has promised to "rescind all unspent funds" from the Inflation Reduction Act. But outright repealing 45Z would leave biofuels producers and farmers without a subsidy they say is needed to sustain growth, after the expiration last year of a $1/USG blender tax credit and a tax credit of up to $1.75/USG for sustainable aviation fuel. Biofuel and soybean groups were unsuccessful in a push last year to extend the expiring biofuel tax credits. The 45Z credit is likely to be debated in Congress this year, as Republicans consider repealing parts of the Inflation Reduction Act. House Republicans have already asked for input on revisions to the 45Z credit, signaling they could modify the incentive. In a tightly divided Congress, farm-state lawmakers may hold enough leverage to ensure some type of biofuel incentive — and potentially one friendlier to agricultural producers than 45Z — survives. By Chris Knight and Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Finnish and Baltic gas consumption up by 9pc in 2024

10/01/25

Finnish and Baltic gas consumption up by 9pc in 2024

London, 10 January (Argus) — Combined Finnish and Baltic gas consumption rose by 9pc on the year in 2024, with demand higher in all four countries and Lithuania leading the increase. Consumption across Lithuania, Latvia, Estonia and Finland totalled roughly 43.6TWh in 2024, up from 40TWh in both 2022 and 2023 but still well below the 2019-21 average of 67.2 TWh/yr ( see combined consumption graph, data and download ). Demand increased across all four countries, but Lithuanian consumption rose the most in both absolute and percentage terms, jumping by 14pc on the year to nearly 17.1TWh. This was mostly driven by higher demand from fertiliser producer Achema and gas-fired power generators, transmission system operator Amber Grid's commercial director, Justas Cerniauskas, said. Achema, the region's single largest gas user, increased its consumption by roughly 1TWh on the year, while power-sector gas demand rose by around 600GWh, Cerniauskas said. Large consumers with direct connections to the grid consumed 9.8TWh last year, according to Amber Grid data, up from 8.4TWh a year earlier, while demand from the local distribution zone increased by a more moderate 600GWh. Lithuanian gas-fired power generation totalled around 820GWh, compared with 640GWh in 2023, data from Fraunhofer ISE show. In Finland, gas-fired power production fell to 1.2TWh from 1.8TWh in 2023, as much stronger renewable output reduced gas' share of the generation mix. Renewable generation rose to 40.8TWh from 34.6TWh, with onshore wind accounting for almost the entire increase. Total Finnish gas demand rose by nearly 5pc on the year to just over 14TWh, despite the fall in gas-fired generation. Given that household demand accounts for a small part of overall consumption owing to the predominance of electric and district heating in Finland, this suggests that industrial demand continued its recovery. The paper and paper products sector is Finland's most gas-intensive, and appears to have performed better than in 2023 — output on a 2021 basis of 100 averaged 87.5 in January-October compared with 82.6 in all of 2023, data from Eurostat show. In Latvia, the main demand driver is the power sector, particularly state-owned utility Latvenergo's large combined heat and power plants. Latvian gas-fired power generation rose by nearly 19pc on the year to 1.6TWh, as weaker hydro generation left more room in the mix for gas. In Estonia, the region's smallest consumer, gas demand rose by more than 8pc on the year to 3.7TWh. Total gas-fired power generation across the four countries fell to 3.68TWh from 3.84TWh in 2023 ( see table ). Combined sendout from the Inkoo, Hamina and Klaipeda LNG terminals totalled 43.4TWh last year, compared with 47TWh in 2023 and 32.4TWh in 2022 ( see data and download ). A six week dry-docking period for the Klaipeda floating storage and regasification unit (FSRU) weighed on sendout in Lithuania, which was down by around 8TWh. Conversely, a long shutdown on the Balticconnector increased the call on Finland's Inkoo terminal to fill the supply shortfall in the first quarter. Sendout from Inkoo rose to 19.3TWh last year from 14.3TWh in 2023. This pattern is likely to flip in 2025, with Inkoo's Exemplar FSRU due to undergo its own six week dry-docking, which in combination with extensive maintenance on the Balticconnector has left only slightly more than half the year's slots booked . This is likely to increase the usage of Klaipeda, where slots for 2025 are nearly fully booked . There were net withdrawals from Latvia's Incukalns storage facility of 1.54TWh in the 2024 calendar year, flipped from net injections of 6.6TWh in 2023, and compared with 776GWh of withdrawals in 2022. Nearly 4.4TWh of gas was rolled over from the 2023-24 storage year into the next. By Brendan A'Hearn Total annual gas-fired power generation GWh 2021 2022 2023 2024 Finland 4,170 1,790 1,810 1,230 Lithuania 1,110 500 640 820 Latvia 1,820 1,100 1,350 1,600 Estonia 20 30 40 30 Total 7,120 3,420 3,840 3,680 — Fraunhofer ISE Numbers rounded to nearest 10 Annual gas demand by country GWh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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