Norfolk Southern replaces CEO with CFO
Eastern Class I railroad Norfolk Southern (NS) has appointed a new chief executive, replacing former executive Alan Shaw after determining he violated company policies by having a consensual relationship with the company's chief legal officer.
NS' board announced late Wednesday that it had promoted chief financial officer Mark George to replace Shaw. The board said Monday it was investigating Shaw for potential misconduct in actions not consistent with NS' code of ethics and policies, but did not provide details.
The railroad yesterday clarified that Shaw's departure was not related to the railroad's "performance, financial reporting and results of operations".
Instead, the board voted unanimously to terminate Shaw with cause, effective immediately, for violating policies by engaging in a consensual relationship chief legal officer Nabanita Nag. She was also dismissed by NS.
Shaw worked at NS for 30 years and was appointed chief executive in May 2021, following six years as chief marketing officer.
Earlier this year he led NS through a proxy fight with a group of activist investors that sought his replacement. The overall effort failed but the challengers secured three seats on the board. The investors had been displeased with the railroad's financial performance and "tone deaf response" to the February 2023 derailment in East Palestine, Ohio.
New chief executive George had served as NS' chief financial officer since 2019. Prior to that, he held roles at several companies including United Technologies Corporation and its subsidiaries.
"The board has full confidence in Mark and his ability to continue delivering on our commitments to shareholders and other stakeholders," NS chairman and former Canadian National chief executive Claude Mongeau said.
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Hurricane Francine brings rain to the lower Miss. River
Hurricane Francine brings rain to the lower Miss. River
Houston, 13 September (Argus) — Hurricane Francine dropped 4-8 inches of rain around the lower Mississippi River, raising forecast water levels on the river and potentially improving shipping conditions for barges. Points between Cairo, Illinois, and Vicksburg, Mississippi, that were at their low water thresholds over the week are now forecast to exit those thresholds in the coming week according to the National Weather Service (NWS). Increased rainfall from Hurricane Francine has locations like Greenville, Mississippi and Helena, Arkansas entering regular water levels as soon as this weekend. Other locations, such as Memphis, Tennessee, will see a bump in water levels, but will remain at its low water threshold, said NWS. The US Coast Guard has not made any changes to the draft and towing restrictions since 10 September when they changed the point for heavier loading from Greenville, Mississippi, to Vicksburg for southbound limits. More water is likely to enter the lower Mississippi River through its tributaries in the coming days, after Francine has passed the Mississippi Delta. The storm made landfall as a hurricane on the Louisiana coast the evening of 11 September but downgraded to a tropical storm as it moved northward. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US to impose 25pc tariffs on Chinese critical minerals
US to impose 25pc tariffs on Chinese critical minerals
Houston, 13 September (Argus) — The US plans to impose 25pc tariffs on Chinese minerals including indium, tantalum, chromium, cobalt and tungsten, citing China's efforts to dominate global supply chains, according to the office of the US Trade Representative (USTR). The USTR determined not to exclude any critical minerals from the proposed Section 301 tariffs. The USTR said the concentration of mining and refining capacity of these minerals in China, as well as China's effort to dominate the global supply chains for these minerals, endangers US national security and clean energy goals. The Section 301 tariffs on indium, tantalum, chromium, cobalt, and tungsten will go into effect on 27 September. Tariffs on natural graphite and permanent magnets will go into effect on 1 January 2026. China is the leading producer and exporter of indium, producing an estimated 650t in 2023, about 66pc of the global total, according to the US Geological Survey (USGS). The US imported 219 metric tonnes (t) of unwrought indium in 2023, including 10t from China. So far in 2024 the country has imported 148t, of which 45t originated in China, according to data from the US Commerce Department. Indium is primarily used globally for its electric conductivity in a variety of screens including liquid crystal displays (LCDs) as well as fiber-optic cables and other technical components. US consumption is more focused around solders and specialty alloys. The US imports more tantalum powders, alloys, and metals from China than any other country. The US imported 321t of unwrought tantalum in 2023, including 132t from China and has imported 269t between January and July 2024, including 178t from China. Tantalum is primarily used in high-temperature alloys and capacitors. Although China accounted for only 3.3pc — 79t — of global 2023 mine production, the USGS estimated the country had a world-leading 240,000t of tantalum reserves. Chromium is primarily used in stainless and heat-resistant steels. China is the world's largest producer of ferrochromium and stainless steel. The US imported 103,034t of chromium ores and concentrates in 2023, including just 10t from China. Still, the US did import 9,302t of unwrought chrome metal from China so far in 2024, which accounted for 74pc of total volumes, and US reliance on China for the metal has increased since sanctions forced Russian supplies off the table. Although China does not mine a significant amount of cobalt, it is the world's leading cobalt refiner and consumer. The US imported 18t of cobalt ores and concentrates in 2023, including 11t from China, and imported 11t between January and July 2024, including 6t from China. The US imported 1.6mn contained kilograms (ckg) of tungsten carbides in 2023, including 906,000ckg from China and imported 1mn ckg between January and July 2024, including 491,000ckg from China. Tungsten is primarily used in carbide parts for construction, metalworking, mining, and drilling applications. Tungsten is also used in specialty steel fabrication as well as in electrodes, filaments, and wires for various electrical and electronic products. By Cole Sullivan Critical Mineral Tariffs metric tonnes, t HTS Code Resource Name Imports from China, 2023 Imports from China, 2024 through July 2605.00.00 Cobalt ores and concentrates 11 6 2610.00.00 Chromium ores and concentrates 10 52 2611.00.60 Tungsten concentrates 139 46 2825.90.30 Tungsten oxides 212 19 2841.80.00 Tungstates (wolframates) 0 0 2849.90.30 Tungsten Carbide* 906,375 491,371 8101.10.00 Tungsten, powders 0 0 8103.20.00 Tantalum, unwrought 132 178 8112.92.30 Indium, unwrought; powders 10 45 Source: US Commerce Department *unit of measure is kilograms contained Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
About 42pc of US Gulf oil output still shut on Francine
About 42pc of US Gulf oil output still shut on Francine
New York, 13 September (Argus) — About 42pc of oil output in the Gulf of Mexico was still shut-in on Friday, just days after Hurricane Francine passed through the region. Around 732,316 b/d of offshore oil output was off line as of 12:30pm ET Friday, according to the Bureau of Safety and Environmental Enforcement (BSEE), while 973.20mn cf/d of natural gas production, or 52pc of the region's output, was also off line. The volume of crude production shut in rose slightly from yesterday, by about 2,000 b/d, while curtailed gas output fell. Operators evacuated workers from 144 platforms this week ahead of the storm. Shell said today it is ramping up production at its Appomattox, Mars, Vito, Ursa and Olympus platforms after resolving downstream issues. However, the company's Perdido, Auger and Enchilada/Salsa assets remain shut-in due to other downstream issues. And drilling remains on hold at its Whale asset, which is scheduled to begin operations later this year. The port of New Orleans resumed all normal operations Thursday evening. Preliminary damage assessments showed no significant damage to facilities or infrastructure, port officials said, while onshore refinery operational issues appear to be minor . By Stephen Cunningham and Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Fulcrum Bioenergy files for Chapter 11 relief
Fulcrum Bioenergy files for Chapter 11 relief
New York, 13 September (Argus) — A US company that had set ambitious plans to convert garbage into sustainable aviation fuel (SAF) and attracted investments from major airlines and energy companies filed for Chapter 11 bankruptcy protection this week. Fulcrum Bioenergy and subsidiaries filed for relief before the US Bankruptcy Court for the District of Delaware on Monday, estimating outstanding obligations to over 200 creditors at more than $456mn. A lawyer representing Fulcrum, Robert Dehney, said at a Thursday hearing that the company was on the verge of declaring Chapter 7 bankruptcy, which typically involves liquidation of assets, before a late-breaking bid from an interested company prompted a change in plans. Fulcrum chief restructuring officer Mark Smith said in a declaration to the court that the company wants to initiate the sales process and move through the chapter 11 process on an "expeditious timeline." Judge Thomas Horan on Thursday preliminarily approved various first-day motions, including a request to continue paying Fulcrum's handful of remaining employees. Fulcrum began initial operations at its flagship Nevada facility in 2022, becoming the first company to commercialize a clean fuels pathway based on gasifying garbage and signing offtake agreements with BP, United Airlines, and others. The process at the Nevada site involved receiving and sorting landfill waste, converting that to a synthetic crude oil through a gasification process, and then sending that feedstock to a Marathon Petroleum refinery to be processed into a usable low-carbon fuel. Fulcrum eventually wanted to be able to upgrade the synthetic crude into SAF on site. An archived version of the Fulcrum website, which is no longer online, also set plans for eventual biorefineries and feedstock processing facilities in Indiana, along the US Gulf coast, and in the UK and said its suite of facilities could ultimately support 400mn USG/yr of production capacity. But Fulcrum has reported few updates on its progress more recently, and there were signs of financial struggles. Multiple contractors have filed lawsuits alleging missed payments, while UMB Bank indicated in October last year that Fulcrum had defaulted on debt obligations. The Nevada site ceased operations in May and plans for other US facilities are apparently on hold, though filings indicate that Fulcrum has not yet determined whether to begin restructuring proceedings for any subsidiaries outside the US. Fulcrum's business "represents a revolutionary idea," Smith said in his declaration, but "as with all cutting-edge businesses, the cost of innovation has been born through delays in operations and the inability to anticipate issues based on prior ventures and experiences." There were necessary equipment changes after initial operations begun, but these were expensive and affected by supply chain delays, he said. It is unclear how much feedstock was successfully delivered to Marathon, which declined to comment. The Hong Kong-based airline Cathay Pacific, which had signed an offtake agreement with Fulcrum, told Argus that it never received any SAF. Other companies that had signed offtake agreements did not immediately respond to requests for comment or declined to comment. Fulcrum had been soliciting interest from potential buyers for months and finalized an agreement with a company called Switch LTD, which agreed this month to offer a "stalking horse" bid to purchase Fulcrum's assets for $15mn and issue a loan of up to $5mn to fund Fulcrum's bankruptcy cases. A stalking horse bidding method is a way to arrive at a minimum bid price that other prospective buyers then must exceed. Filings before the court this week did not elaborate on the nature of Switch's business or its reasons for wanting to acquire Fulcrum's assets. Dehney described Switch as a "disinterested third party" and said that Fulcrum has received other interest from prospective buyers, some eyeing all of Fulcrum's assets and some just looking at physical property, intellectual property, or the UK subsidiary specifically. Failure to launch The idea of gasifying waste to produce fuel has long been attractive, since feedstock costs would be low and the Fischer-Tropsch chemical process to convert synthetic gas to liquids has been known for decades. Demand for low-carbon alternatives to jet fuel is high among major airlines, some of which have government mandates to meet or voluntary goals to rapidly scale up SAF consumption by 2030. While Fulcrum's Chapter 11 filing "was not really a surprise" given its recent financial troubles, it could give investors pause about future projects aiming to use similar technology, according to BloombergNEF renewable fuels senior associate Jade Patterson. The large majority of SAF capacity currently and the bulk of planned capacity additions through 2030 come from the more established method of hydroprocessing non-petroleum feedstocks like fats, oils, and greases, Patterson said. Efforts to build gas-to-liquids facilities, by comparison, have faced delays and financial challenges. Red Rock Biofuels had aimed for a refinery converting forest waste to begin operations in 2020 , but the company that later acquired the Oregon site at auction is now targeting a 2026 launch for its clean fuels facility. And Fulcrum's plans for converting waste into fuel go back more than a decade, having inked its first deal with a municipal solid waste supplier in 2008. Kickstarting a market for a novel fuel pathway has also not been helped by a dip over the last year for prices of US federal and state environmental credits, which function as a crucial source of revenue for biofuel producers. There is also uncertainty about how much federal subsidy certain fuels will earn when an Inflation Reduction Act tax credit for low-carbon fuels kicks off next year. But other gas-to-liquids companies are marching on — including DG Fuels, whose president told Argus last month that the company plans to reach a final investment decision by the first quarter next year on a potentially 178mn USG/yr SAF plant in Louisiana that will gasify biomass. The company has earlier-stage plans for similar facilities in Maine and Nebraska. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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