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US energy secretary urges oil sector to diversify

  • : Crude oil, Emissions, Natural gas
  • 21/04/26

Oil companies that are slow to shift toward cleaner energy source risk of being left behind as the world reduces carbon emissions, US energy secretary Jennifer Granholm said.

Her remarks today are the latest from cabinet members serving under President Joe Biden who are urging the industry to decarbonize. Granholm said diversifying would help the oil sector remain competitive over the long term, as the US steps up efforts to reach new commitments under the Paris climate accord.

"The bottom line is you have got to move," Granholm said today during an event hosted by news outlet Politico. "You cannot hang on and be the Kodak or the Blockbuster Video of the energy world. You have got to diversify."

Blockbuster and Kodak were household names in video rental and film but lost business as their industries went digital. The companies sought bankruptcy protection in 2010 and 2012, respectively.

The US over time will shift to clean electricity as it reduces carbon emissions, Granholm said, with a likely continued role for biofuels in hard-to-decarbonize industries such as air travel. Granholm said companies like ExxonMobil are offering proposals like a hub for carbon capture in Houston because they see where the world is headed.

"Some of the oil companies have decided that they are going to diversify and become diversified energy companies," she said. "The proof will be in the pudding. You do not want to just assume that somebody is greenwashing."

ExxonMobil, Chevron, BP and other major oil companies have urged the US to put a price on carbon emissions to achieve its climate goals. Biden has sought to increase an existing tax credit for carbon sequestration as part of a $2 trillion infrastructure plan named the "American Jobs Plan," but he has yet to embrace an economy-wide price on carbon.

"A lot of economists believe this is the most efficient thing to do, but this administration is not there yet," Granholm said. "They want to use the American Jobs Plan using the carrots that they have to incentivize and move away from carbon polluting industries."

Despite the lack of an existing price on carbon, Biden is "particularly interested" in evaluating whether to deploy a US border adjustment mechanism that would reflect carbon emissions, White House climate envoy John Kerry said last week during an interview with Bloomberg TV. The EU is considering its own carbon adjustment on trade, which could offset the economic incentive to shift carbon-intensive businesses outside of the trading bloc to avoid carbon pricing.


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25/01/29

US Fed pauses, awaits Trump policy fallout: Update

US Fed pauses, awaits Trump policy fallout: Update

Adds Powell comments. Houston, 29 January (Argus) — The US Federal Reserve today paused in its course of rate cuts begun last year while signaling it would wait to see the impacts of President Donald Trump's new policies — ranging from tariffs to expulsions of foreign farm workers — on the labor market and inflation before considering any changes to its "policy stance." In its first meeting of 2025, the Fed's Federal Open Market Committee (FOMC) held its federal funds rate unchanged at 4.25-4.50pc after cutting it by a quarter point each in December and November last year following a half-point cut in mid-September, the first cut since 2020. "In the current situation, there is probably some elevated uncertainty because of, you know, significant policy shifts in those four areas that I mentioned: tariffs, immigration, fiscal policy and regulatory policy," Fed chairman Jerome Powell told reporters. "The committee is very much in the mode of waiting to see what policies are enacted," Powell said. "We need to let those policies be articulated before we can even begin to make a plausible assessment of what their implications for the economy will be." "The economy is strong, the labor market is solid and the downside risks to the labor market we think has abated and continues on a sometimes slow and bumpy path," Powell said. "The broad sense of the Committee is we don't need to be in a hurry to adjust the policy stance." In December, the Fed penciled in 50 basis points worth of cuts for 2025, down from 100 basis points projected in the September median economic projections of Fed board members and Fed bank presidents. Fed fund futures have also indicated a likelihood of only 50 basis points of rate cuts this year on strong job growth and an uptick in inflation at the end of last year, along with concerns over Trump's plans to hike tariffs, expel illegal immigrants — many of whom work in agriculture, construction and services industries — and cut taxes. Those are all measures economists say are likely to unleash inflation and boost interest rates. Powell said Fed policymakers had heard that "businesses that are dependent on immigrant labor are saying that it is suddenly getting harder to get people," but that it had not showed up yet in aggregate labor data. Trump during his first term was openly critical of the Fed, which is independent of the executive branch, saying he wants a "say" in making monetary policy. "With oil prices going down, I'll demand that interest rates drop immediately, and likewise they should be dropping all over the world," Trump told the World Economic Forum last week in Davos, Switzerland. Asked if the Fed would continue to act independently of the executive branch, Powell replied: "This is who we are, this is what we do. We study the data, we analyze how it will affect the outlook, and the balance of risks, and we use our tools." The consumer price index (CPI) accelerated to an annual 2.9pc in December, a third month of gains from 2.4pc in September, which was the lowest since early 2021 before the economic reopening after Covid-19 lockdowns caused a supply-chain shock that sent CPI as high as 9.1pc in June 2022. The Fed, slow to react, began a series of rate hikes in March 2022 that took the target rate from near zero to more than five percentage points higher by July 2023, keeping it at 5.25-5.5pc through August 2024. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US Fed holds rate flat, signals vigilance on inflation


25/01/29
25/01/29

US Fed holds rate flat, signals vigilance on inflation

Houston, 29 January (Argus) — The US Federal Reserve held its target interest rate unchanged today, pausing its cycle of rate cuts begun last year while signaling it would be on guard against any outbreak of renewed inflationary pressures as policies enacted by President Donald Trump — ranging from tariffs to expulsions of foreign farm workers — are widely expected to spur inflation. In its first meeting of 2025, the Fed's Federal Open Market Committee (FOMC) held its federal funds rate unchanged at 4.25-4.50pc after cutting it by a quarter point each in December and November last year following a half-point cut in mid-September, the first cut since 2020. "The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid," The FOMC said in its statement. "Inflation remains somewhat elevated." "In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook," it said, repeating stock language from prior statements. "The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge" that could impede attainment of achieving the goal of 2pc annual inflation and low unemployment. In December, the Fed penciled in 50 basis points worth of cuts for 2025, down from 100 basis points projected in the September median economic projections of Fed board members and Fed bank presidents. But Fed fund futures have since indicated the likelihood of only 50 basis points of rate cuts this year on strong job growth and an uptick in inflation at the end of last year, along with Trump's plans to hike tariffs, expel illegal immigrants — many of whom work in agriculture, construction and services industries — and cut taxes. Those are all measures economists say are likely to unleash inflation and boost interest rates. Trump during his first term was openly critical of the Fed chief Jerome Powell and has made remarks signaling he wants a "say" in making monetary policy. "With oil prices going down, I'll demand that interest rates drop immediately, and likewise they should be dropping all over the world," Trump told the World Economic Forum last week in Davos, Switzerland. The consumer price index (CPI) accelerated to an annual 2.9pc in December, a third month of gains from 2.4pc in September, which was the lowest since early 2021 before the economic reopening after Covid-19 lockdowns caused a supply-chain shock that sent CPI as high as 9.1pc in June 2022. The Fed, slow to react, began a series of rate hikes in March 2022 that took the target rate from near zero to more than five percentage points higher by July 2023, keeping it at 5.25-5.5pc through August 2024. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Switzerland targets 65pc emissions cut by 2035


25/01/29
25/01/29

Switzerland targets 65pc emissions cut by 2035

Berlin, 29 January (Argus) — Switzerland has set a new greenhouse gas (GHG) reduction target, aiming to cut emissions by at least 65pc by 2035 across all sectors, compared with 1990 levels. The country submitted its new climate plan under the Paris agreement — its nationally determined contribution (NDC) — to the UN climate body the UNFCCC today. Countries party to the Paris accord are due to submit new NDCs including sectoral GHG reduction targets for 2035 by 10 February. "The target corresponds to a greenhouse gas budget of 106.8mn t of CO2 equivalents, which is equivalent to an average reduction of GHG emissions by at least 59pc over the period 2031–2035," according to the NDC. The targets are to be achieved "primarily" through domestic measures, but the country has the option of including reductions achieved abroad. "In this respect, Switzerland wishes to continue using internationally transferred mitigation outcomes (ITMO) — emission credits — from cooperation initiatives under article 6 of the Paris Agreement," the NDC said. Switzerland's dependence on the use of some non-domestic measures to meet its goals once again drew criticism, with environmental group 350.org today slamming the country's "unquantified" reliance on international carbon trading mechanisms. This raises "serious concerns" about the "credibility" of Switzerland's reduction commitment, 350.org said. The government said that the targets correspond to the recommendations of the Intergovernmental Panel on Climate Change (IPCC). The measures to achieve the reduction in emissions will be enshrined primarily in the amended CO2 law for the period from 2030. The government will send a draft bill to parliament "in due time". The long-term climate strategy assumes that in 2050 Switzerland will still be emitting about 11.8mn t/yr of CO2 equivalent (CO2e), mainly from the agriculture, industry, and waste sectors. The country will therefore need negative emissions exceeding these residual emissions to reach a net-negative balance. The country has already held its first tenders for net negative emissions technologies. Switzerland's climate policy last year came under fire as the European Court of Human Rights ruled that the country's authorities violated Article 8 of the European Convention on Human Rights by insufficiently protecting its citizens from the serious adverse effects of climate change. Switzerland's government rejected the ruling, arguing among other things that the court did not take into account the country's revised CO2 law, which came into force a month before the ruling in March 2024. The government also warned against extending the right of appeal to associations to include climate issues, as this would make the realisation of "urgently needed" infrastructure even more difficult. By Chloe Jardine Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

DeepSeek undermines AI power demand forecasts


25/01/29
25/01/29

DeepSeek undermines AI power demand forecasts

New York, 29 January (Argus) — Unexpected efficiency achievements by Chinese artificial intelligence (AI) company DeepSeek have cast a shadow over a bullish narrative on booming US electricity demand in the coming decade to power data centers running AI software. Share prices for US independent power producers, natural gas producers and gas pipeline companies fell sharply at the beginning of the week as investors feared DeepSeek's achievement implied significantly less electricity might ultimately be needed to run and train AI models than has been expected. This greater efficiency "calls into question the significant electric demand projections for the US," as the investment case for independent power producers and most integrated utilities is "entirely dependent on data centers," US bank Jefferies said in a note to clients this week. DeepSeek's apparent ability to achieve comparable results to some major US AI companies using far less computing power — and thus far less electricity — may also be bad news for what is widely expected to be the main fuel source to generate incremental power for AI this decade: natural gas. EQT, one of the largest US gas producers by volume, has called growing power demand from planned data centers the "cornerstone" to its "natural gas bull case." Large US gas pipeline companies like Williams, operator of the Transcontinental pipeline, have also touted recent forecasts showing surging demand for gas-fired power, as greater gas generation would require greater pipeline capacity to move those incremental volumes from wellhead to generator. DeepSeek's achievement could even cast doubt on the investment case for nuclear power, which has been recast as something of a silver bullet for major technology companies looking to secure zero-emission electricity to enable their AI development efforts. While investors have generally assumed significant premiums for nuclear power, to the tune of more than $100/MWh, new demonstrated efficiencies might cause those assumptions to be questioned, Jefferies said. A loss in power demand for AI data centers may also undercut the investment case for next-generation small modular reactors (SMRs), into which tech companies like Google and Microsoft have poured substantial capital. Revising the revisions News of DeepSeek's efficiency achievements are a shock to prevailing expectations for surging US power demand in the coming decade, when those expectations have already been substantially revised over the past year, following decades of stagnant power demand. US grid operator PJM, which serves 65mn customers and is the largest US electric grid, on 24 January released a report showing significant upward revisions in its peak seasonal power demand projections. Peak summer power demand in PJM's territory in the mid-Atlantic was projected to surge to 210GW in 2035 and 229GW in 2045, substantially steeper than PJM's load forecast just one year earlier, which showed peak summer power demand in PJM rising to 177GW in 2034 and 191GW in 2039. Consultancy firm McKinsey in November forecast US data center power demand to reach 606TWh by 2030, up from 147TWh in 2023. Under this scenario, data centers at the end of the decade would comprise 11.7pc of total US power demand. If efficiency gains in AI reduce power demand as much as some investors fear, those big forecasts might require big revisions. But efficiency improvements can go two ways — they can reduce demand for fuel, or simply increase output. In the case of AI, more efficient operations could be exploited to accelerate the development of more powerful AI models — using the same amount of power that was previous expected, but to far greater effect. That latter explanation is why, "despite uncertainties," FactSet head of power markets Matthew Hoza tells Argus he remains "bullish" on power demand growth in the coming years. "With AI's increasing integration into company tech stacks and its growing presence in daily life through AI agents, we anticipate continued growth in AI adoption and the resulting power needs," Hoza said. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

ECA's green export finance bypasses developing nations


25/01/29
25/01/29

ECA's green export finance bypasses developing nations

Berlin, 29 January (Argus) — The "greening" of export credit agency's (ECA) finance which occurred in the past decade has largely bypassed developing countries, with investments mainly flowing to higher-income countries, according to a study on ECA transactions. The study, carried out by researchers from the business schools HEC Lausanne, ETH Zurich and HEC Paris, shows that ECA energy finance going to lower-income countries dropped to below 30pc in 2022-23 from 47pc in 2013-15. ECAs, including export-import banks, are state-backed agencies that help national exporters finance deals abroad by providing guarantees or loans. The share of ECA renewables commitments — mostly offshore wind and, increasingly, green hydrogen — rose to around 40pc in 2022–23, from under 10pc in 2013. The complete phase-out of fossil fuel financing appears "distant", the researchers noted. While ECAs handle financing volumes "on a par with multilateral development banks such as the World Bank", the scope and direction of their energy investments have largely remained "opaque", the researchers said. The study is based on an analysis of almost 1,000 transactions between 2013-23 which financed energy-related infrastructure and were supported by ECAs. For some key ECA countries such as China or Canada, data is only partially available. The study also reveals "notable" disparities between countries. Most members of the Export Finance for Future coalition (E3F), a group of European countries committed to aligning their export finance with the Paris climate agreement, have introduced stricter fossil fuel exclusions and are boosting their renewable portfolios. At the same time, major players like South Korea, Japan, and China have maintained significant levels of oil and gas lending. OECD countries should introduce "more rigorous climate policies" and renew international cooperation, the researchers said, particularly with non-OECD countries such as China. The OECD — where ECA terms and conditions are negotiated — could relaunch the International Working Group on ECAs, they said, to help ensure that countries phasing out support for fossil fuels do not see their market shares grabbed by others. Better renewable investment support via ECAs could help scale up the new collective quantified goal (NCQG) on climate finance, set at a minimum of $300bn annually by 2035 at the last UN Cop 29 climate summit in November, the researchers said. And ECA mandates could also be broadened to accommodate the needs of lower-income regions. "It is high time for ECAs to complete the shift to renewable energy, and through carefully designed policies and international cooperation, become true catalysts for a rapid and just energy transition," lead author Philipp Censkowsky from HEC Lausanne said. By Chloe Jardine Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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