Appeals court upholds California LCFS again
A federal court today upheld California's Low-Carbon Fuel Standard (LCFS), turning away the latest attempt by refiners and ethanol producers to overturn the program.
A three-judge panel of the 9th US Circuit Court of Appeals unanimously dismissed the legal challenge from the American Fuels and Petrochemical Manufacturers (AFPM) and other groups, saying they had no legal ground on which to wage their fight. Previous court decisions and changes California has made to the program rendered the appeal moot, the judges said.
"To the extent plaintiffs raise new arguments on this appeal, we conclude that they are without merit," the judges said in their ruling.
AFPM, the American Trucking Associations and ethanol industry group Growth Energy had argued that the LCFS is unconstitutional because it unfairly discriminates against out-of-state crude oil and ethanol through its life cycle greenhouse gas emissions analysis, which California uses to set carbon intensity scores for fuels sold in the state.
But the court previously upheld the LCFS in 2013, dismissing similar arguments. And less than a month before holding oral arguments in the case in September, it rejected a similar challenge to Oregon's Clean Fuels Program.
Those decisions, along with the fact the California Air Resources Board amended and readopted its regulations in 2012 and 2015, left the court with little choice but to dismiss the appeal, the judges said.
Lawyers for the groups acknowledged as much during the oral arguments last year, suggesting they were likely to seek help from the full 9th Circuit or appeal to the US Supreme Court. AFPM, which was a party to the Oregon lawsuit, recently petitioned the high court to take that case. The group said it is reviewing today's decision.
The 9th Circuit previously upheld the program in 2013, saying it did not violate the Constitution's Commerce Clause, but sent the case back to a lower court to consider any unresolved issues. That court dismissed the case in 2017 year and the groups appealed that decision.
The LCFS requires a 20pc reduction in the carbon intensity of transportation fuels by 2030.
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Mexico economy showing 'timid growth': IMEF
Mexico economy showing 'timid growth': IMEF
Mexico City, 3 July (Argus) — Indicators of Mexico's non-manufacturing and manufacturing sectors suggested the economy recovered "some dynamism" in June, while maintaining the slow pace of growth of the second quarter, according to domestic financial association IMEF. "The trend suggested by the IMEF indicators suggest a moderate growth for the second quarter of the year," IMEF said. "The economy finds itself in an evident pause compared with the solid dynamism observed during 2022 and a large part of 2023." Manufacturing "stagnated" in the second quarter, it said. "It is very probable that economic activity will undergo additional slowdown in the second half of the year that will extend into 2025." IMEF's June manufacturing purchasing managers index (PMI) increased by 0.4 points to 49.5 points, still beneath the 50-point breakeven that shows contraction. This has been the third consecutive month of contraction. PMI adjusted to compensate for variations in company size was more positive, growing by 0.8 points to 51.2 in June, the group said. Manufacturing accounts for about a fifth of the Mexican economy. The non-manufacturing PMI, which covers the lion's share of the economy, rose by 0.6 points to 51 in June, marking a 29th month of expansion, IMEF said. Adjusted for company size, the headline services PMI rose by 0.9 to 5.18. Economic activity in Mexico continues to surprise downwards. After growth came in at an annual 1.6pc in the first quarter from a year earlier, the first data for April showed a monthly contraction of 0.6pc, IMEF said. Headwinds and tailwinds IMEF representatives highlighted growing market uncertainty following the Mexican election and ahead of the US presidential election in November. On the upside, said IMEF, Mexico should benefit from continued strength in the US economy, adding the incoming administration looks to bring down the current fiscal deficit, which is equal to 5.9pc of GDP. For which, it will not reach the government's 3pc target for the budget coming out in November, but progress is expected with next year's budget and moving forward. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU’s centre-right EPP mulls Green Deal tweaks
EU’s centre-right EPP mulls Green Deal tweaks
Brussels, 3 July (Argus) — The European Parliament's largest group, the centre-right EPP, is working to complete the bulk of its strategy programme on 4 July at a meeting in Portugal. Key elements in the party's 2024-29 policy agenda include significant changes to the bloc's climate and energy policy for 2030. A draft of the five-point policy plan lists revising CO2 standards for new cars and vans to "allow for the use of alternative zero-emission fuels beyond 2035". The EPP also calls for a new e-fuel, biofuel and low-carbon fuel strategy "with targeted incentives and funding to accompany the EU hydrogen strategy". Additionally, the EPP wants the incoming European Commission to create a "single market for CO2" with a market-based framework for carbon capture and storage (CCS) and carbon capture and utilisation (CCU), through an accompanying legislative package similar to that adopted for the EU's gas and hydrogen markets. The strategy document discusses a "Green Growth Deal" aiming to achieve the EU's 55pc emission reduction target by 2030 — from 1990 levels — and climate neutrality by 2050, while boosting the EU's competitiveness and ensuring technological neutrality. The draft document emphasises the need to transition "away from fossil fuels towards clean energy", also by ramping up international hydrogen production. And the draft advocates for a "simple, technology-neutral, and pragmatic definition for low-carbon hydrogen" in upcoming technical legislation from the commission. More controversial points include postponing application of the EU's deforestation regulation and addressing problems related to its implementation. The EPP also wants to split the EU's industrial emissions directive into "industrial and agricultural parts", conduct a "full-scale" inquiry into why farmers are not receiving fair prices for their products, and require robust impact assessments for the economic viability of farms for any new animal welfare proposals. The group's members of parliament are meeting until 5 July. Commission president Ursula von der Leyen is also attending. She was [recently nominated](https://direct.argusmedia.com/newsandanalysis/article/25825320 by EU leaders for re-election. The EPP programme will significantly influence policy priorities that von der Leyen would support, if she is approved by an absolute majority of 361 votes at a session in Strasbourg on 15-18 July. But von der Leyen may need to drop more controversial points to secure a majority with liberal, centre-left and green support. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Oman's Duqm refinery on track to run above capacity
Oman's Duqm refinery on track to run above capacity
Dubai, 3 July (Argus) — Oman's 230,000 b/d Duqm refinery is looking to operate at 10pc above nameplate capacity and is considering diversifying its product portfolio, according to its operator. Omani-Kuwaiti joint venture OQ8's chief executive David Bird told Argus the capacity expansion would be pursued in the near term, with some already opening up in coking and hydrocracker units. The 10pc crude capacity increase is "my COO's [key performance indicator] for this year and I think we all have very high confidence that we'll be able to sweat the assets further," Bird said. "We may even look at intermediate feedstocks and bring in VGOs and residues in order to load up these two conversion units." The $9bn refinery, which hit capacity in February, uses feedstock comprised of 65pc Kuwaiti crude and 35pc Omani crude. Bird said Duqm may add new products to its existing, middle distillates-focused, output of jet fuel, gasoil, naphtha and LPG. "We are looking at structuring, doing something with naphtha," he said. "We are evaluating either reformate or gasoline, which have already gone through feasibility and are now under stage-gate review to decide if we should pursue those investment decisions." Bird also pointed to possibilities in base oils, which he said will be needed "as long as things are moving." "The Middle East has a unique opportunity to capitalize on Group I and Group III base oils," he said, noting Duqm's proximity to growing demand markets in Africa. "If Duqm was to look at expanding capacity, which definitely would still be in middle-distillate oriented space, we would talk about another hydrocracker that might be orientated towards base oil," Bird said. Oman is also developing a petrochemical complex with Saudi Arabia's Sabic and Kuwaiti state-owned KPI, which will use some of the Duqm refinery's production as feedstock. Feasibility for the project has concluded and has been "intimately evaluated" along with a naphtha upgrade, and Bird described them as "very complimentary." Close eye on Europe Bird said that while there is a "huge thirst of our products right at our doorstep", Duqm cargoes are finding their way to destinations that were not previously envisaged. Around 45pc of Duqm's diesel goes to east Africa, but loadings for Europe have begun more recently. Duqm can make European grade winter-specification diesel and is on track to capitalise on demand during the switch from summer grade this year. "When it comes to winter-spec diesel, if the arbitrage opens we can supply that competitively versus anyone else," Bird said. "So we always have an eye on Europe but we're also going to make sure that we are active in markets that are closer to home." By Rithika Krishna Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India’s Gail seeks swap for August-loading LNG
India’s Gail seeks swap for August-loading LNG
Singapore, 3 July (Argus) — Indian state-controlled gas distributor Gail is offering a LNG cargo loading in the US in August, in exchange for a cargo for delivery to India in the same month. Gail is offering a cargo loading on 9 August from the US' 33mn t/yr Sabine Pass terminal in exchange for a 15-18 August delivery to the 5mn t/yr Dhamra terminal, through a tender that will close on 4 July. The firm was last in the market to seek a swap just last month, for the exact same delivery windows. Gail already issued this tender twice in June, but may have been unsuccessful in awarding the tender both times. Gail remains focused on issuing destination swap tenders to optimise its contracted US volumes. But falling spot prices may compel the firm to emerge for outright spot purchases in time to come. Indian state-controlled firm Gujarat State Petroleum (GSPC) likely purchased a 20-31 August delivery to the 5mn t/yr Mundra terminal at around $11.60-11.70/mn Btu, through a tender that closed on 2 July, traders said. The requirement was likely to fulfil captive demand from its subsidiary city gas supplier Gujarat Gas, they added. This transaction level is markedly lower than the previous spot transaction to India just last week. Indian state-controlled refiner BPCL purchased a delivery either on 30 July or 7, 8, 9, 11 August at around low-$12s/mn Btu, through a tender that closed on 26 June. Spot demand from India will likely fall in the weeks and months to come as the monsoon season has began in the country. More rains will increase hydropower generation, weigh on the need for additional gas-fired power generation as well as lower temperatures and reduce cooling demand, traders said. The Argus -assessed price for deliveries to India and the Middle East was last at $11.89/mn Btu for the second half of August on 2 July, about 3¢/mn Btu higher than a week earlier, but 20¢/mn Btu lower than a recent peak on 27 June. By Rou Urn Lee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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