by wp_sysadmin | Jul 30, 2021 | News
Alaska-Made Natural Gas And Oil Drives U.S. Economic Recovery, Strengthens All Industries
American Petroleum Institute, July 20, 2021
ANCHORAGE, AK, July 20, 2021—The American Petroleum Institute (API) today released a new analysis of the natural gas and oil industry’s vast economic impact on Alaska’s economy and highlighted its importance to the state’s post-pandemic recovery. The study, conducted by PricewaterhouseCoopers (PwC) and commissioned by API, is based on the latest government data available and shows that Alaska’s natural gas and oil industry supported 47,300 total jobs across the state’s economy in 2019. Alaska ranked as the state with the highest percentage of total economic contributions by the natural gas and oil industry, generating $19.4 billion toward the state’s gross domestic product—including $4.6 billion added to total labor income.
“As America’s economy comes back, the natural gas and oil industry will serve as the foundation for long-term growth and prosperity in Alaska,” API President and CEO Mike Sommers said. “Every state across the country – both blue states and red states – rely on American energy to fuel each sector of the economy and support millions of U.S. jobs. This study reinforces that Alaska’s economic outlook is brighter when we are leading the world in energy production, and it serves as a reminder of what’s at stake if policymakers restrict access to affordable, reliable energy and make us more dependent on foreign sources.”
As economic activity, travel patterns and consumption continue to grow during the post-pandemic recovery, the U.S. Energy Information Administration expects global oil and liquid fuels consumption to surpass 2019 levels in 2022. The PwC report, commissioned by API, reinforces how the natural gas and oil industry—in Alaska in particular—is critical to economic revitalization and opportunities for job creation. According to the findings, in 2019, the industry directly and indirectly:
- Supported 47,300 total jobs (15,800 direct and 31,500 indirect) or 10.3 percent of Alaska’s total employment.
- Generated an additional 2 jobs elsewhere in Alaska’s economy for each direct job in the state’s natural gas and oil industry.
- Provided $4.6 billion in labor income ($2.5 billion direct and $2.1 billion indirect) to Alaska, 13.9 percent of the state’s total.
- Contributed $19.4 billion to Alaska’s total gross domestic product ($12.6 billion direct and $6.8 billion indirect), 35.7 percent of the state’s total.
In 2019, the U.S. led the world in natural gas and oil production and the benefits of that leadership permeated throughout non-producing and producing states alike. At the national level in 2019, the natural gas and oil industry:
- Supported more than 11.3 million total jobs (2.5 million direct and 8.8 million indirect) or 5.6 percent of total U.S. employment.
- Generated an additional 3.5 jobs elsewhere in the U.S. economy for each direct job in the U.S. natural gas and oil industry.
- Produced $892.7 billion in labor income ($318.6 billion direct, $574.1 billion indirect), or 6.8 percent of the U.S. national labor income.
- Supported nearly $1.7 trillion to U.S. gross domestic product ($763.3 billion direct, $925.3 billion indirect), accounting for 7.9 percent of the national total.
Click here for more information on the economic impact analysis.
Click here for a copy of the report.
API represents all segments of America’s natural gas and oil industry, which supports more than ten million U.S. jobs and is backed by a growing grassroots movement of millions of Americans. Our 600 members produce, process and distribute the majority of the nation’s energy, and participate in API Energy Excellence®, which is accelerating environmental and safety progress by fostering new technologies and transparent reporting. API was formed in 1919 as a standards-setting organization and has developed more than 700 standards to enhance operational and environmental safety, efficiency and sustainability.
by wp_sysadmin | Jul 29, 2021 | News
NEWS OF THE DAY:
U.S. economy grew at a 6.5% rate last quarter, missing expectations
Courtney Brown, Axios, July 29, 2021
The U.S. economy grew at an annualized 6.5% rate last quarter, the government said Thursday — slower than the 8.4% economists expected.
Why it matters: It came as the economy made strides toward further reopening, vaccinations rolled out and government stimulus bolstered spending. But supply crunches held the pace of growth back.
Worth noting: The economy is bigger now than it was before the pandemic, officially recovering from its pandemic-induced plunge. (But output is still less than where it could have been, had there been no pandemic.)
Details: A drop in inventory investment — what’s available for businesses to sell — weighed on growth. So did a drop-off in housing, a sign that supply shortages crimped construction.
- Consumer spending soared 11.8%, helped by the infusion of pandemic aid. That’s one of the biggest surges on record, according to Bloomberg.
- Economic growth picked up slightly from the 6.3% pace in the first quarter of 2021.
OIL:
Interior Secretary Accused of Defying Ruling to Resume Oil and Gas Leasing
Jennifer Dlouhy, Bloomberg, July 28, 2021
Six weeks after a federal judge ordered the Biden administration to resume selling oil and gas leases on federal land, there’s no sign it has and Interior Secretary Deb Haaland struggled Tuesday to explain why.
“We are evaluating our options,” Haaland told the Senate Energy and Natural Resources Committee amid sharp criticism from Republicans. “There’s a lot of work that goes into moving that forward.”
A Louisiana-based federal district judge issued a preliminary injunction June 15 against President Joe Biden’s order to pause lease sales on federal land and waters so it could be considered in light of its climate impacts. The judge ordered Interior to immediately restart leasing, but the agency hasn’t scheduled any auctions or rescheduled sales postponed earlier this year.
Haaland faced withering criticism from no fewer than seven of the 20 senators on the committee amid growing bipartisan frustration with the halt of new leasing in areas that provide roughly a quarter of U.S. oil production.
“The pause is effectively defying the federal judge’s order to continue,” Senator Bill Cassidy, a Republican from Louisiana, said.
Haaland conceded that “technically, I suppose, you could say the pause is still in place.” But she insisted the agency is complying with the court order and is moving forward on releasing an interim report to guide future leasing decisions. The report is expected to recommend boosting the royalty rates companies pay to extract fossil fuels, among other changes.
Oil industry advocates have said the Interior Department can swiftly schedule lease sales by relying on the government’s earlier environmental analysis, including assessments conducted by the Trump administration. However, conservationists argue that greater scrutiny is needed to ensure those auctions comply with federal laws, including of how oil and gas development from newly sold leases will affect climate change.
“It’s not a switch you can turn on,” Haaland said. “There’s a lot of work that goes into a lease sale.”
Senators James Lankford of Oklahoma and Cindy Hyde-Smith of Mississippi pushed unsuccessfully for a more definitive timetable.
“There’s just an expectation that when a court order stepped in and said, ‘hey this is not legal to just stop this indefinitely,’ that there’s actually going to be progress made toward this,” Lankford said.
Haaland’s repeated assurances that the report was coming “soon” provoked scoffing by Senator Lisa Murkowski, a Republican from Alaska.
“I’m not going to ask you when you think it’s going to be coming because I think I know what your answer is,” Murkowski said. “I hope you can sense the frustration that so many of us have in anticipating this and wondering when we will be able to expect that you’ll be in compliance with the judge’s order.”
The frustration crossed party lines. Chairman Joe Manchin, a Democrat from West Virginia, said that he “supported the administration’s desire to pause leases,” but “we are now well into the early summer timeline when we were told the review would be completed.”
“We need a plan to move forward with responsible oil and gas leasing, both onshore and offshore, to maintain our energy independence,” Manchin said.
GAS:
German-US pact on Nord Stream 2 ‘sensible, practical’ outcome: Shell CEO
Stuart Elliott, S & P Global Platts, July 29, 2021
Agreement removes uncertainty over gas link project
Pipeline gas provides ‘lowest-carbon’ supply to Europe
High gas prices point to need for ‘strong’ policy: CFO
The recent pact between Germany and the US on mitigating the impact of an operational Nord Stream 2 gas pipeline is a “sensible and practical” outcome that removes uncertainty around the project, Shell CEO Ben van Beurden said July 29.
Germany and the US agreed on July 21 a number of measures to protect Ukraine’s energy security and block any attempts by Russia to use energy as a “weapon” once the Nord Stream 2 gas pipeline starts up.
It paves the way for the completion and commissioning of the pipeline.
“I think it’s a sensible outcome, it’s a practical outcome, and it removes a certain degree of uncertainty that would also affect us,” van Beurden said during Shell’s Q2 results call.
“We are a financial participant in this project, and we would like to rely on the good operations of the project to get our debts serviced and ultimately repaid,” he said.
Shell, along with Austria’s OMV, France’s Engie, and Germany’s Uniper and Wintershall Dea, each initially committed Eur950 million ($1.13 billion) to the project, representing around 50% of the cost.
According to S&P Global Platts Analytics, Nord Stream 2 is expected to begin commercial flows in October this year, giving Russia’s Gazprom a new direct supply link to Germany.
Gazprom could choose to divert some of the gas it currently transits via Ukraine into Nord Stream 2. Ukraine remains strongly opposed to the pipeline’s completion, which is expected by the end of August.
‘Lowest-carbon’ supply
Van Beurden said there were “multiple ways” to look at the agreement between Germany and the US from a political perspective.
“But the agreement that Germany has struck with the US — with all the aspects of it including quite a few components to do with Ukraine — is a very strong, sensible, pragmatic, and balanced way of looking at it,” he said.
“And let’s be honest, Europe does need a significant amount of gas for some time to come. And the lowest-carbon supplies of natural gas are going to be pipeline gas, whether we like it or not. That’s the reality. The continent simply needs that supply as well.”
Europe is currently seeing record high gas prices, with S&P Global Platts assessing the day-ahead TTF contract at Eur39.80/MWh on July 28, while the day-ahead NBP price topped Eur40/MWh.
High European gas prices, Shell CFO Jessica Uhl said, point to the need for “strong energy policy in ensuring sufficient supplies to support Europe’s energy needs.”
MINING:
One Of The World’s Biggest Miners Is Throwing Billions At Lithium
Jose Rodriguez, Jr., Jalopnik, July 29, 2021
Rio Tinto Group is building a lithium mine in Serbia, and the company is going to spend a whopping $2.4 billion on its development. Rio’s Jadar project marks the first big move into lithium by a mining major, according to Bloomberg. You might recall the company, due to its destructive mining practices in Australia.
Rio Tinto is the world’s second biggest miner, behind only BHP, which partially explains the scope of the project and how much Rio is spending. For contrast, another company trying to mine lithium in Nevada planned to invest $400 million, or about $2 billion less than Rio. Jadar is a big project, set to produce almost 64,000 tons of lithium per year when it reaches full production capacity in 2029. For more contrast, one of the largest lithium miners operating right now, Ganfeng, is opening a mine in Argentina that will produce just over 22,000 tons per year. Big difference.
Except there are serious environmental concerns about the extraction of lithium that underscore the importance of being mindful of the environment, even as these megacorps start mining. And it’s really not clear that Rio Tinto will do so responsibly; they don’t have the best track record when it comes to dealing with the local environment and its stewards.
The company has been at odds with Aboriginal groups in Australia after reportedly destroying historical artifacts — among other acts of environmental destruction — so those skeptical of the company’s environmental good-will have every reason to doubt Rio’s commitment to the environment.
Rio knows this and it’s trying to head off these concerns with its own information campaign about myths and facts pertaining to the mine. A Rio Tinto researcher and geologist, Nenad Grubin, also addressed the issues in a statement:
We know there are concerns about the project, and the future of the mine. And we’re listening to the people raising these concerns with us. We take our obligations to the environment very seriously. We’re investing over $100 million on environmental protections. The future mine needs to be safe for people and the environment, or there will be no mine. It just isn’t good business not to address both the local environmental concerns and peoples’ safety.
Rio is adamant this is a net win for the environment, but we should be wary of the caveats in the green transition. The only thing certain is that the shift away from fossil fuels to renewables is going to be lucrative, per Bloomberg:
It also comes at a time when the biggest miners are looking to shift away from fossil fuels, increasingly shunned by investors. Rio sold its last coal mine in 2019 and is the only major miner to be fossil-fuel free. And its peers are slowly following. Anglo American Plc has agreed to sell its last thermal coal mines, while BHP is in the process of exiting thermal coal and is considering getting out of oil and gas.
Following the money, $2 billion worth, will easily point us to projects on the scale of Jadar, but we should be just as concerned about how these companies conduct their so-called green business.
POLITICS:
Alaska legislative leaders ask governor to delay Monday’s special session by at least a week
Sean McGuire, Anchorage Daily News, July 28, 2021
The leaders of the Alaska Legislature’s majority and minority caucuses have written to Gov. Mike Dunleavy, asking him to delay the upcoming special session by at least a week.
Dunleavy called the upcoming special session in May to resolve debates about the Permanent Fund dividend and to forge a long-term fiscal plan. He introduced his own 50-50 dividend plan, but fiscal experts say new statewide revenues will be needed to pay for it.
The session is set to start on Monday, but the caucus leaders say more time is needed for the Comprehensive Fiscal Plan Working Group to finalize its recommendations. The group was created as part of a deal to pass an effective budget and avert a state government shutdown.
The House majority coalition wants the session delayed until Aug. 9 while the Senate and House Republicans want the session to begin on Aug. 16. Jeff Turner, a spokesperson for the governor’s office, said the letter has just been received and a decision had not been made about the timing of the special session.
When the Legislature does convene, lawmakers will also need to pass a new dividend for 2021 after the governor vetoed the amount approved in June. A vote is also required to fund scholarships for Alaskan college students and to make power cost equalization payments, but that issue is also in court.
The Comprehensive Fiscal Plan Working Group has been meeting since early July to make recommendations to the Legislature for how to forge a fiscal plan. It is set to meet every day through Aug. 2.
Alaskans can provide public testimony on the dividend and the state’s fiscal situation starting on Thursday:
Anchorage – The Anchorage Legislative Information Office from 6-9 p.m. on Thursday.
Wasilla – The Mat-Su Legislative Information Office from 6-9 p.m. on Friday
Fairbanks – The Fairbanks Legislative Information Office from 1-4 p.m. on Saturday.
Juneau – The Alaska State Capitol Senate Finance Committee Room 532 from 6-9 p.m. on Monday
The Alaska House Coalition published telephone numbers for Alaskans who can’t make it in person. They’re asked to call into Monday’s evening session or send an email to fiscal.group@akleg.gov.
Juneau residents can call 907-586-9085, Anchorage residents can call 907-563-9085, and other Alaskans can call 844-586-9085 on Monday from 6-9 p.m.
CLIMATE CHANGE:
From the Washington Examiner, Daily on Energy:
CLIMATE DOWNPAYMENT: The Senate voted yesterday to advance a $1.2 trillion infrastructure package ($550 billion in new spending) after weeks of stalled efforts to reach a bipartisan deal, with 17 Republicans supporting the agreement.
Democrats and climate activists hope Senate passage of the infrastructure measure — which could happen as soon as next week — will serve as a springboard to approve a second and larger spending package unilaterally through reconciliation.
Democratic climate hawk Sen. Sheldon Whitehouse of Rhode Island, speaking at an event hosted by C2ES, said the bipartisan infrastructure agreement “doesn’t accomplish much on climate, but opens the gateway” to a reconciliation package that “does accomplish much on climate.”
There is a bunch of climate stuff though. President Joe Biden is touting the bipartisan infrastructure agreement as a significant down payment on his aggressive pledges to combat climate change.
While we are still awaiting bill text, a summary of the deal posted by Politico contains clean energy and climate measures that largely mirror a framework the bipartisan negotiating group agreed to a month ago.
The bipartisan bill would spend $7.5 billion on the first federal effort to build a network of EV chargers across the country, about half of what Biden originally asked for to build 500,000 electric vehicle charging stations nationwide.
The spending on charging falls way short of the $174 billion Biden’s American Jobs Plan promise to “win the EV market” from China, including by providing rebates for consumers (those will likely be targeted for the reconciliation bill).
The bipartisan bill would fully fund more than a dozen clean energy demonstration projects originally authorized under the Energy Act of 2020 approved at the end of last year, including for energy storage, advanced nuclear reactors, carbon capture, direct air capture, and renewables.
It also creates a $5 billion program to combat methane emissions by employing oil workers to plug leaking “orphan” oil and gas wells and establishes a $6 billion five-year credit program providing subsidies to help financially struggling nuclear plants stay alive. Both of these ideas are key Biden priorities.
The bipartisan bill provides funding for pipelines to transport captured carbon dioxide, and to support the creation of hydrogen and direct air capture infrastructure hubs.
Going big on transmission: The legislation includes $73 billion toward improving and modernizing the country’s electricity grid, enabling “the building of thousands of miles” of electric transmission lines, critical to expanding the use of renewable energy.
It would set up a new “Grid Authority” within the Energy Department to speed the approval process, which can take up to a decade, and also gives leeway for DOE to designate corridors of national interest, permitting quicker construction. Under the bill, FERC could also issue construction permits for some interstate transmission if states deny applications.
Where it falls short: The new agreement appeared to cut spending in a few areas compared to the original framework, including reducing money for public transit to $39 billion from $49 billion, and eliminating a $20 billion “infrastructure bank.”
Liberal climate activist group Evergreen Action noted the agreement allocated $2.5 billion for electric buses, short of the $7.5 billion negotiators had previously committed to invest.
Manchin gets his: The clean energy provisions in the deal are based on infrastructure legislation authored by key centrist Democratic Sen. Joe Manchin of West Virginia that was recently approved by the Energy Committee he chairs.
Manchin successfully got the bipartisan agreement to include an expansion of the 48C tax credit to retool manufacturing plants to build clean energy products, including a $4 billion carveout for use in areas where coal mines or plants have closed (i.e. West Virginia).
“Growing climate change impacts in the U.S. helped motivate moderate Democrats and a surprising number of Republicans alike to support smart grid and EV infrastructure funding in the package,” Paul Bledsoe of the Progressive Policy Institute told me. “The bipartisan deal seems to lay the policy and political ground for ambitious measures in the fall, with Biden creating trust with moderates like Manchin and Synema for more far-reaching clean energy incentives.”
by wp_sysadmin | Jul 28, 2021 | News
NEWS OF THE DAY:
Bipartisan group reaches agreement on $1.2 trillion “hard” infrastructure bill
Alayna Treen, Axios, July 28, 2021
After weeks of long nights and endless Zoom calls, a bipartisan group of senatorsfinally reached a deal on “the major issues” in their $1.2 trillion “hard” infrastructure package, GOP senators involved in the talks announced Wednesday.
Why it matters: It could be days before the group finishes writing the bill, but the Senate can begin debating the legislation in earnest now that they have resolved the outstanding issues.
- Senate Majority Leader Chuck Schumer (D-N.Y.) said Wednesday that the Senate could vote as early as Wednesday night to advance the proposal, the second time they will vote on this procedural measure.
- Schumer also insists he’s prepared to keep the Senate in session over the weekend to finish the bipartisan infrastructure bill: “It’s time for everyone to get to yes,” he announced on the floor on Monday.
Details: The deal is expected to cost $1.2 trillion over eight years, or $974 billion over five years, and offers more than $579 billion in new spending.
- $65 billion will be allocated for broadband, Sen. Susan Collins (R-Maine), said.
- $47 billion for flooding and coastal resiliency, said Sen. Bill Cassidy (R-La.).
- Language regarding enforcement of unemployment insurance fraud.
- The bill is fully paid for.
What they’re saying: “We now have an agreement on the major issues,” Sen. Rob Portman (R-Ohio), the lead GOP negotiator, announced Wednesday afternoon.
- “We are still finalizing the details, but we have reached agreement on the major issues,” Collins said. “I am delighted that we’ve been able to come together as a bipartisan group.”
- “There is a CBO official score that covers much of the bill,” Portman said, something many GOP senators deem necessary before voting on the measure.
Behind the scenes: The deal comes hours after Portman and White House counselor Steve Ricchetti huddled for hours at the Capitol Tuesday night hashing out the remaining sticking points of the bill.
- The biggest problems revolved around transit policy and how to pay for the package, among other hurdles.
- On Wednesday morning, Sens. Portman, Collins, Cassidy, Mitt Romney (R-Utah), Lisa Murkowski (R-Alaska) met with Senate Minority Leader Mitch McConnell (R-Ky.) in his office.
- McConnell so far has taken a hands-off approach to the talks. This meeting signals the group is ready to bring him into the fold.
What’s next: Schumer has made clear that both the bipartisan bill and the Senate’s $3.5 trillion budget resolution need to pass prior to August recess, which as of now is still scheduled to begin in less than two weeks.
OIL:
Manchin grills Haaland over Biden oil and gas moratorium
Zack Budryk, The Hill, July 27, 2021
Senate Energy Committee Chairman Joe Manchin (D-W.Va.) grilled Interior Secretary Deb Haaland on the status of the Biden administration’s moratorium on new oil and gas leases on public lands in a hearing Tuesday.
“While I’ve supported administration’s desire to pause lease sales to make sure the American people are getting fair returns for our shared resources, we are now well — now into the early summer timeline when we were told the review would be completed,” Manchin said during a Tuesday hearing on the Interior Department’s fiscal 2022 budget request.
“We need a plan to move forward for responsible oil and gas leasing both onshore and offshore,” he added.
In response, Haaland did not commit to a specific timeline but said “the review is being finalized internally and should be out very soon.”
Sen. Lisa Murkowski (R-Alaska), one of four GOP senators to vote to confirm Haaland, also pressed the secretary on the freeze.
“I’m not going to ask you when you think it’s coming. I hope you can sense the frustration in anticipating this and wondering when we will be able to expect you’ll be in compliance with the judge’s order,” she said, referencing a June injunction against the pause.
Sen. John Hickenlooper (D-Colo.) asked Haaland about her takeaways from her recent visit to Grand Junction, Colo., the current site of Bureau of Land Management (BLM) headquarters after its 2020 relocation.
The relocation was widely praised by Republicans in western states but criticized by Democrats who called it an attempt by the Trump administration to dilute the agency’s power. Since President Biden took office, some Democrats have called for it to be moved back to Washington, while Colorado officials of both parties have called for it to remain in Grand Junction.
Describing her takeaways from the visit, Haaland told Hickenlooper: “We need to come to a decision fairly soon” as to the location of the headquarters.
“It’s important for folks to be able to know and understand what their task at hand is, and the way we do that is make sure that folks are hunkered down and know what they’re doing,” she added.
Hickenlooper acknowledged “certain of the processes” in the relocation were mishandled and said they were seemingly designed to drive some career public servants out of the agency but added “that has nothing to do with Grand Junction and the appreciation that community … has developed with the BLM over the last year.”
GAS:
Carnival Set to Launch Its Largest-Ever Cruise Ship, Mardi Gras – Rollercoaster and All
Fran Golden, Cruise Critic, July 27, 2021
Carnival Cruise Line’s newest vessel — the much-anticipated Mardi Gras — will make history when it sets sail from Port Canaveral on Saturday, July 31, 2021. It’s the first ship in North America to operate on cleaner burning Liquified Natural Gas (LNG) and Carnival’s largest “Fun Ship” ever, large enough for nearly 6,500 passengers at full capacity.
There are signs the brand is going more upscale with this ship — including with the introduction of new top-end suites, which have previously been something of an afterthought on Carnival. But what everybody is likely to be talking about is the rollercoaster onboard.
MINING:
US metals buyers pay the price of broken supply chains
Reuters, July 27, 2021
US buyers of physical aluminum ingot are paying a record premium of 30 cents per lb, or $670 per tonne, to get metal to their plants.
The US Midwest premium is payable on top of the London Metal Exchange (LME) cash price, which at a current $2,498 per tonne is within striking distance of May’s three-year high of $2,579.50.
The premium has never been higher.
Even the Trump Administration’s 2018 double-whammy of import tariffs and sanctions on Russian producer Rusal couldn’t push the premium beyond a May peak of $485 per tonne.
There are plenty of specific drivers at work in the North American aluminum market, but it’s not just aluminum buyers who are having to pay up.
U.S. tin and lead buyers are also paying record premiums for their metal.
The common theme is one of import dependency, a vulnerability that is brutally exposed by chaos in the shipping sector that has disrupted everything from global automotive to local retail supply chains.
Out of stock
The United States has no primary tin or lead production capacity and imported 32,000 tonnes and 370,000 tonnes of refined metal last year respectively, the United States Geological Survey (USGS) found.
Tin imports accounted for around 75% of U.S. consumption last year and lead imports around 24%, lower because of the greater use of recyclable material in the all-important lead-acid battery sector.
Both tin and lead markets are experiencing global supply-side disruption.
The LME three-month tin price early on Tuesday hit a fresh all-time high of $34,990 per tonne on a combination of production hits and booming demand from the electronics sector.
LME tin inventory remains chronically low at just 1,165 tonnes, excluding the 1,150 tonnes scheduled for physical load-out. Most of those stocks – 1,080 tonnes – are located in Taiwan, close to Asia’s electronics hubs.
There is nothing at all in the United States, where Midwest buyers are now paying premiums of between $3,300 and $4,000 per tonne to get material, according to Fastmarkets’ assessments.
That, remember, is on top of the record LME price.
In a misfiring global tin supply chain, the U.S. finds itself at the back of the queue and facing the highest freight costs.
So too in the lead market, where Fastmarkets’ U.S. Midwest premiums have surged to record highs of up to 19 cents per lb over LME.
LME stocks of lead are also low and there is zero registered tonnage in the United States. Europe has stocks, but that market is still short of physical metal after Germany’s Berzelius Stolberg smelter was forced to close by last week’s flooding.
While the western lead market is caught in a rolling supply squeeze, the Chinese market is awash with the stuff. Lead stocks registered with the Shanghai Futures Exchange (ShFE) have grown from 45,900 tonnes at the end of December to 158,073 now.
There is an obvious arbitrage solution to this imbalance, but since the arbitrage will be with the LME, the bulk of any export shipments will likely head to exchange warehouses in Asia.
U.S. importers will still face high freight costs to move the metal to the domestic market, assuming there is available freight capacity.
Greater competition
Record U.S. aluminium premiums were already adding to a potent mix of bull drivers before last weekend’s strike action at the Kitimat smelter over the border in Canada.
Rio Tinto, which operates the plant, has said it will reduce production to 35% of its 432,000-tonne per year capacity, tightening an already super-tight market.
Tariffs on U.S. imports have already served to reduce flows of Canadian metal and producers everywhere are ramping up output of value-added products, meaning less production of the commodity-grade metal that determines the Midwest premium.
More fundamentally, however, the U.S. aluminium sector faces greater competition for imported metal as China, the world’s largest producer, itself turns net importer.
Just about all of the LME inventory – both on- and off-warrant – is located at Asian locations, particularly Malaysia’s Port Klang.
Accessible stocks have migrated eastward to within easy shipping distance of China’s ports. Competition for this material and the associated higher freight costs are driving premiums higher in both the Europe and the United States, but particularly the latter because it is furthest away.
Fracturing the global price
U.S. nickel premiums are also starting to move sharply higher and copper shows signs of stirring.
Only zinc seems relatively immune because of greater domestic production capacity and plenty of LME stocks in New Orleans.
Stocks of everything else are in the wrong place as U.S. manufacturing recovers from the pandemic.
The current turmoil in the global freight sector has served to make the United States an island in metals supply chains, a phenomenon that becomes most acute when the global market is itself operating in supply deficit, as is the case with tin.
Such import dependency has led the Biden administration to initiate a supply-chain task force to build domestic resilience in everything from medical supplies to lithium-ion batteries.
Critical minerals are a central part of this initiative. Tin is one of them but tends to be overshadowed by rare earths and battery metals, the current focus of U.S. government minerals policy.
Lead isn’t on the list even though it powers most of the vehicles currently on U.S. roads.
And aluminium has been deemed critical for national defence, but the Trump solution of import tariffs has exacerbated the stellar rise in the premium cost to U.S. manufacturers.
Aluminium also reveals the longer-term issues facing U.S. metal buyers. The tariffs, which remain in place under Biden, have accentuated the very import dependence they were meant to alleviate, baking it into a structurally higher domestic premium.
Trying to reshore supply chains inevitably makes them less global. That increases the significance of regional pricing – premiums – over global pricing on the LME. Such seems to be the evolving trend in aluminium pricing.
The woes in the global shipping sector will eventually pass but this underlying shift in metals pricing in a deglobalising world may be here to stay.
POLITICS:
Biden energy rules hit ‘vacuum of leadership’
Leslie Clark, Kelsey Brugger, EnergyWire, July 28, 2021
President Biden has yet to nominate anyone to lead a small White House office, a gap that is stirring debate about the pace and content of rules tied to the president’s climate and clean energy agenda.
The Office of Information and Regulatory Affairs, an arm of the Office of Management and Budget, which reviews thousands of “economically significant” rules issued by federal agencies every year, has yet to secure an administrator. The delay follows the Senate’s March rejection of Neera Tanden, the president’s choice to be OMB director.
In comparison, former President Trump, who was the slowest president in modern history to name an OIRA head, had nominated someone to lead the agency by May 2017. Biden has yet to name a permanent OMB director either, or White House press secretary Jen Psaki said this week there was no update on a nominee.
The leadership of OIRA — and the pace of Biden’s rulemaking on energy issues — are under scrutiny as Biden climate adviser Gina McCarthy said this month thatthe administration would tap “regulatory authority” to move its climate agenda if Congress stalls on the issue.
“We have lots of regulatory authority that we intend to use, regardless, and we’ll move forward with those efforts to try to tackle the climate crisis,” McCarthy said at the Bloomberg Sustainable Business Summit.
Some climate advocates have praised the administration’s rulemaking process, saying it already is going a long way to moving Biden’s clean energy agenda.Others say, however, they are concerned the office is moving too slowly and that the leadership gap gives too much control to career staff, who have always enjoyed considerable authority at the office, which has long been a target of progressives who have criticized its cost-benefit analyses as too favorable to corporate America.
“The vacuum of leadership means that the OIRA line staff are being left to their own devices,” said James Goodwin, an analyst at the Center for Progressive Reform, adding, “they are not elected. And they are not professionally independent people. They have an ideological ax to grind. There are all the things percolating beneath the surface.”
Since taking office, Biden has released multiple regulations that influence the energy sector. The White House’s first regulatory agenda last month, formally known as the Unified Agenda, included rules aimed at cutting emissions, such as Department of Energy efficiency standards and a plan targeting the Bureau of Land Management’s leasing process to ensure protection of public lands (Greenwire, June 11). Some regulatory scholars noted at the time that roughly 1 in 5 current active rulemakings originated under Biden and that the administration had abandoned 10% of active rulemakings from the Trump administration.
This week, DOE said it has “moved swiftly” to set new energy efficiency guidelines, including on a Trump-era rule that determines how the agency writes standards for an array of household appliances and commercial equipment.
The department “will continue our efforts to craft policies that reduce wasted energy, save consumers money, and contribute to solving the climate crisis,” a spokesman said in an email.
DOE also gave notice in the Federal Register yesterday that it would revise the Trump era’s DOE’s test procedure interim waiver process, which environmentalists said gave too much power to manufacturers by giving them automatic waivers in certain circumstances.
Additionally, OIRA has conducted reviews of dozens of climate-related regulatory actions, including DOE rules. Currently an efficiency rule for manufactured housing has been on the docket for about 60 days, which is within the agency’s 90-day standard.
“This is the process operating the way this is supposed to operate,” said Stuart Shapiro, a former OIRA staffer and current Rutgers University professor.
Yet Shapiro expressed concern about the lack of a Senate-confirmed boss at OIRA and OMB, which has caused people in what he called the “OIRA world” to be “continually scratching our heads and exchanging worried looks.”
“Who does Congress call if they are upset about energy efficiency regulation at OMB?” Shapiro added. “Right now there is no easy answer.”
On his first day in office, Biden issued a memo to “modernize regulatory review” to ensure “regulatory initiatives appropriately benefit and do not inappropriately burden disadvantaged” communities. But so far nothing has come of it.
At DOE, advocates first raised alarms last month on Biden’s rulemaking pace, arguing that the release of the first regulatory plan showed an administration behind the curve when it came to tightening conservation standards for household appliances.
“It’s alarming that they haven’t yet published proposed rules to reverse the harmful Trump actions,” said Andrew deLaski, executive director of the Appliance Standards Awareness Project at the American Council for an Energy-Efficient Economy, at the time (Energywire, June 15).
Similar pushback occurred earlier this week from green groups after the Biden administration announced a Trump-era rule governing toxic wastewater pollution for coal-fired power plants would remain in place while EPA crafts a stronger replacement. Others have complained the administration has yet to repeal Trump’s changes to the National Environmental Policy Act — a law that drives energy regulations across the federal government — even as environmental groups continue to sue the government over 2020 rules.
Brett Hartl, government affairs director at the Center for Biological Diversity, which is tracking Biden’s promises on the environment, said it has been disappointed: “They are moving at the slow steady pace of agencies, but that is not sufficient to meet the moment we are in.”
Former Obama and Trump aides
Currently, Sharon Block — an Obama labor official who most recently helmed Harvard Law’s labor program — is serving as the acting administrator at OIRA. Progressives like Goodwin praised her initial appointment and hoped it signaled that the Biden team might overhaul the regulatory review process.
Some OIRA observers say they are concerned that the agency’s career staff hold too much influence without an administrator in place. Efficiency advocates, for instance, are pointing to OIRA career desk officer Sofie Miller, a former adviser at DOE during the Trump administration, as a potential reason why some DOE efficiency standards are not moving more quickly under Biden.
Before joining the Trump administration in May 2018, Miller spent six years as a senior policy analyst at the George Washington University Regulatory Studies Center, where she regularly published papers criticizing energy efficiency standards before joining the Trump administration in May 2018 (Energywire, March 13, 2019).
“OIRA is supposed to be a fair broker, focused on cost-benefit analysis, and instead you have a person doesn’t believe any standard is cost-justified and who has a paper trail saying the program shouldn’t exist,” said deLaski.
Shapiro, though, dismissed worries that Miller — or any single staffer — could stall work.
“None of that is to say problems could not occur down the road or that Sofie couldn’t decide to be a roadblock at some point,” Shapiro said. “But these are fairly complicated rules. Her job is to look through all of them carefully. That is not a simple task.”
An OMB spokesperson pushed back against the assertion anyone was holding up Biden’s agenda.
“OIRA’s team of dedicated experts continues to charge full steam ahead delivering on the president’s ambitious climate agenda, and any assertion otherwise is misinformed,” the spokesperson wrote in an email.
Bridget Dooling, a research professor at GW who served on the Biden OIRA transition team, also stressed that every desk officer reports to a branch officer who reports to the deputy administrator and the political leadership at OMB.
“In my experience desk officers do not control the pace of regulatory reviews, but they’re an easy target because they’re often the ones communicating with the agency and meeting with the public,” she wrote in an email.
What is clear is that pending energy-related rules across the federal government could sway the U.S. emissions trajectory, particularly with congressional action uncertain on clean energy policy. In addition to two dozen DOE efficiency standards that the Trump administration did not address, another 20 products are coming up for review shortly, for example.
Updating standards for nearly 50 products would cut as much carbon over the next three decades as mothballing as many as 25 coal-fired power plants, according to a study last November by the Appliance Standards Awareness Project and the American Council for an Energy-Efficient Economy.
“It’s going to require an aggressive pace to get caught up to speed, and we’re just not seeing action that is consistent with that,” Joe Vukovich, an attorney and clean energy advocate for the Natural Resources Defense Council’s climate and clean energy program, said of the pace of energy efficiency efforts. “This is such a huge opportunity, and the Biden administration has set an ambitious climate goal.”
CLIMATE CHANGE:
Red states seek to block Biden’s social cost of carbon
Maxine Joselow, ClimateWire, July 28, 2021
Ten Republican attorneys general yesterday asked a federal court to swiftly block President Biden from raising a key metric for greenhouse gases.
In a motion for preliminary injunction, the red states urged the U.S. District Court for the Western District of Louisiana to prevent Biden’s interim social cost of carbon from taking effect across the federal government.
“Plaintiff States are substantially likely to prevail on the merits of their claims and preliminary injunctive relief is necessary to avoid imminent and substantial injuries to their sovereign, quasi-sovereign and proprietary interests,” the motion says.
The 10 states sued in April over Biden’s plans to increase the social cost of carbon, a key metric that assigns a dollar value to the harm caused by emitting 1 ton of greenhouse gases (Climatewire, April 23).
The metric is used in cost-benefit analyses underpinning major federal actions, such as EPA’s emissions rules for coal-fired power plants.
Biden signed a Jan. 20 executive order that established an interagency working group tasked with recommending an interim social cost of carbon within 30 days — and a final social cost of carbon by January 2022.
The working group in March endorsed raising the social cost of carbon to $51 per ton. Under former President Trump, the figure had fallen to as little as $1 per ton (Climatewire, March 1).
The lawsuit alleges that Biden’s moves violated federal rulemaking requirements and the intent of Congress. Led by Louisiana Attorney General Jeff Landry (R), the suit was also brought by the attorneys general of Alabama, Florida, Georgia, Kentucky, Mississippi, South Dakota, Texas, West Virginia, and Wyoming.
A coalition of 12 other attorneys general launched a separate legal challenge to Biden’s interim social cost of carbon in March (E&E News PM, March 8).
That complaint, which was spearheaded by Missouri Attorney General Eric Schmitt (R), asserts that Biden lacked the authority to raise the climate metric under the Constitution, which gives that power to Congress.
The Missouri-led coalition has also asked the U.S. District Court for the Eastern District of Missouri to prohibit Biden’s interim social cost of carbon from being used in agency rulemakings.
Judge Audrey Fleissig, who was appointed during the Obama administration, has scheduled an Aug. 20 hearing on its request.
The Department of Justice doesn’t comment on pending litigation.
by wp_sysadmin | Jul 27, 2021 | News
NEWS OF THE DAY:
Review of federal oil, gas leasing program being ‘finalized internally – Haaland
Reuters, July 27, 2021
A highly anticipated review by the Interior Department of the federal oil and gas leasing program is undergoing final internal review and should be released “very soon,” Interior Secretary Deb Haaland told a Senate hearing on Tuesday.
President Joe Biden announced the review shortly after taking office in what was widely viewed as a first step to fulfilling his campaign promise of banning new federal drilling leases to fight climate change and rapidly slashing greenhouse gas emissions over the next decade.
Haaland had said previously that the review would be completed by “early summer.” (Reporting by Valerie Volcovici, Editing by Franklin Paul)
OIL:
Shell Greenlights First Project Since Defeat In Dutch Court
Julianne Geiger, OilPrice.Com, July 27, 2021
Energy transition or no, Shell has given the go-ahead of its Whale deepwater project in the Gulf of Mexico, according to a Shell press release on Monday.
It would be the first greenlighted project since its defeat in a Dutch court last month that ordered Shell to reduce its emissions targets at a pace quicker than it had planned.
Royal Dutch Shell owns 60% of the Whale project, while Chevron owns the remaining 40%. The expected production—set for 2024—is estimated at 100,000 bpd, with an estimated recoverable resource volume of 490 million boe.
Shell said that Whale would be Shell’s 12 deepwater project in the Gulf of Mexico.
Whale is located next to Shell’s Silvertip field, about 10 miles from its Perdido platform.
Shell is a leading deepwater oil and gas producer in the Gulf of Mexico, producing 150 million barrels of oil equivalent per year—which is about half of Shell’s total U.S. oil and gas production.
With the climate pressure now on full tilt, Shell is now focusing its efforts on going after high rate of return projects and those that are more efficient.
For this project, Shell expects an internal rate of return of more than 25%–significantly higher than the industry standard, according to Reuters.
“Whale is the latest demonstration of our focus on simplification, replication and capital projects with shorter cycle times to drive greater value from our advantaged positions,” Wael Sawan, Shell Upstream Director said in Monday’s release. “We are building on more than 40 years of deep-water expertise to deliver competitive projects that yield high-margin barrels so that we are able to meet the energy demands of today while generating the cash required to help fund the development of the energy of the future.”
GAS:
Scientists unveil ‘big step’ in slashing natural gas emissions
Ester Wells, Energywire, July 27, 2021
A team of scientists have reported an advance in converting methane into methanol, a development they say could help change how the world uses natural gas and cut the fuel’s greenhouse gas emissions, according to a new study.
The researchers used iron zeolites, crystals that convert natural gas — which is made up primarily of methane — to methanol at room temperature and discovered that the smaller the pore size in the zeolites, the more they were able to prolong the reaction and produce more methanol. This pore size-reactivity relationship is known as the “cage effect.”
Zeolites with large pores — which allow molecules up to about 1.6 times larger to pass through than zeolites with small pores — deactivate after a single reaction cycle. But with the cage effect, the scientists were able to regenerate 40% of the deactivated sites, according to the study, published this month in Science.
Edward Solomon, professor of chemistry and of photon science at Stanford University and co-author of the paper, said the research is a significant step toward both industrial-scale production of methanol and reduction of methane emissions.
The discovery establishes “a really key component of design on what you need to do to be able to efficiently make a methanol molecule,” said Solomon.
Methanol, which is rich in hydrogen, powers fuel cells and is more easily stored and transported than natural gas, the researchers said. If natural gas could be used as a feedstock and converted efficiently into liquid methanol, it would be a step forward in creating industrial-scale production of methanol for use as a lower-carbon transportation fuel, they said. Currently, methane leaks from gas pipelines and processing plants are considered a challenge for addressing climate change.
Solomon said the team was not only able to improve zeolite performance but make the conversion to methanol, which is currently an energy-intensive, two-step process, into a low-energy, one-step process.
But Rob Jackson, professor of Earth system science at Stanford, said he sees a more exciting application for the research in removal of atmospheric methane from burning natural gas. Gas operations were responsible for about 45 million metric tons of methane emissions in 2020, according to the International Energy Agency.
“We collaborate in trying to look for ways to remove methane from the atmosphere, and this paper provides encouraging news for the potential to do that more cheaply,” Jackson said.
Solomon noted that the study took place under controlled lab conditions using nitrous oxide, and the next step is to create methanol using oxygen so that the reaction can be more easily replicated.
“It’s a big step toward understanding what you need to do to turn this into an efficient process … and it might make methane abatement more accessible,” he said.
MINING:
Drills turning at critical Graphite Creek
Shane Lasley, North of 60 Mining News, July 27, 2021
With the massive growth in global demand for mined graphite predicted over the coming two decades, Graphite One Inc. has crews collecting the final bits of data that will be needed for a feasibility study for its Graphite Creek project about 35 miles north of Nome, a western Alaska mining town famous for the gold found along the beaches and under the icy waters of the Bering Sea.
“The 2021 field program is a very important and exciting milestone for our stakeholders as it is advancing the Project towards the feasibility study while providing economic benefit to the local businesses,” said Graphite One CEO Anthony Huston.
The centerpiece of the summer 2021 program at Graphite Creek is 3,000 meters of core drilling focused on upgrading inferred resources to the higher confidence measured and indicated resource categories ahead of the feasibility study, which will come on the heels of a prefeasibility study due out later this year.
These advanced engineering and economic studies will build upon a 2017 preliminary economic assessment that outlined plans for a mine at Graphite Creek that would produce roughly 60,000 metric tons of 95% graphite concentrate per year and a separate processing facility to refine these annual concentrates into 41,850 metric tons of the coated spherical graphite used in the lithium-ion batteries powering electric vehicles and storing renewable energy, plus 13,500 metric tons of purified graphite powders annually.
According to a 2019 calculation, Graphite Creek hosts 10.95 million metric tons of measured and indicated resources averaging 7.8% (850,534 metric tons) graphitic carbon; plus 91.89 million metric tons of inferred resource averaging 8% (7.34 million metric tons) graphitic carbon.
The infill drilling planned for this year is expected to upgrade large portions of the inferred resources into the measured and indicated category, which could, in turn, be elevated to reserves with the completion of a feasibility study.
“Previous drilling has identified long intercepts of high-grade graphite at surface, and results will continue to provide Graphite One with invaluable data to progress the project towards a production decision,” said Huston.
In addition to resource upgrade drilling, the 2021 program includes a sonic rig collecting geotechnical data at the location of the proposed open pit mine and infrastructure sites on the property. This will provide vital ground conditions information to engineers working on the design of the operation for the upcoming feasibility level studies.
“We’re working simultaneously to complete our PFS, and to generate additional data for our FS to further demonstrate the strong value proposition of our Graphite Creek deposit,” Huston added.
While the drills are turning, the engineering team is carrying out access route surveys and environmental specialists are collecting additional ecological baseline data.
The 2021 program will also include community outreach activities.
By the end of the program, Graphite One expects to have all the information needed to continue advancing the design and engineering for a mine at Graphite Creek, a flotation process facility to produce graphite concentrates from the mined material, as well as the secondary treatment plant that will upgrade those concentrates into the coated spherical graphite used in the anodes of lithium-ion batteries.
The closing in on a mine decision for Graphite One‘s mining and refining facilities comes at a time when the electric mobility and renewable energy sectors are expected to need massive quantities of the coated spherical graphite that serves as the anode material for most lithium-ion batteries.
According to the International Energy Agency, roughly 146 lb of graphite goes into the average EV battery. With annual EV sales forecast to climb to 82 million by 2040, the automotive sector alone will need around 5.4 million metric tons of battery-grade graphite each year, roughly five times more than produced at all the mines on Earth.
For the United States, this staggering growth figure is compounded by the fact that there are currently no graphite mines, leaving the burgeoning EV and renewable energy supply chains in the U.S. dependent on imports for their supplies of this critical battery mineral.
A mine at Graphite Creek and an associated facility producing battery-ready spherical graphite would help meet a portion of this growing domestic need.
POLITICS:
Alaska Legislature will take public testimony on the future of the state budget and Permanent Fund dividend this week
James Brooks, Anchorage Daily News, July 26, 2021
Alaskans interested in sharing their opinions about the future of the state budget and Permanent Fund dividend are being invited to testify 6-9 p.m. Thursday in Anchorage at the Legislative Information Office at 1500 W. Benson Boulevard.
The meeting is the first of four that will collect input from Alaskans across the state before a special session scheduled to begin Aug. 2 in Juneau. Legislators have organized an eight-member group whose job is to set the agenda for that session, and public testimony is part of the process.
In the session, lawmakers will attempt to come up with a new long-term formula for the Permanent Fund dividend and a way to pay for that formula, if needed. Without agreement, there may not be a Permanent Fund dividend this year, and there may not be funding for the Power Cost Equalization fund, which subsidizes home electricity prices in rural Alaska.
Between 1982 and 2016, Alaska relied on a formula in state law to set the amount of the annual dividend. Since a 2017 Alaska Supreme Court decision, the governor and legislators have set the dividend manually.
The three other opportunities for public testimony:
* 6-9 p.m. Friday at the Mat-Su Legislative Information Office, 600 Railroad Ave. No. 1 in Wasilla.
* 1-4 p.m. Saturday at the Fairbanks Legislative Information Office, 1292 Sadler Way, Suite 308.
CLIMATE CHANGE:
China’s New National Carbon Trading Market: Between Promise and Pessimism
Jane Nakano, Center for Strategic and International Studies, July 23, 2021
After a decade of planning and trials, China officially launched a national carbon trading market last week. Called the national emissions trading scheme (ETS), it initially targets carbon emissions from the power sector. While the Chinese ETS launch comes more than 15 years after the European Union launched the world’s first international carbon trading market, China’s carbon market will be the largest in the world once it is fully implemented. That said whether the program will actually deliver on the promise of the Chinese government being better able to control CO2 emissions and facilitate decarbonization of its economy is another matter.
Q1: Why is China taking this step?
A1: China first embarked on the effort to test emissions trading as a key means to manage its CO2 emissions about a decade ago, with pilot programs launched in seven provinces and cities starting in 2013 (Beijing, Tianjin, Shanghai, Chongqing, Hubei, Guangdong, and Shenzhen). Managing and reducing national emissions intensity became the basis for China’s mitigation pledges under the global climate mitigation frameworks, starting with the Copenhagen Accord in 2009, where China committed to 40–45 percent reduction in CO2 emissions intensity by 2020. Leading up to the Paris Agreement in 2015, China updated its emissions intensity reduction commitment to 60–65 percent by 2030 and announced a fresh pledge to peak emissions by 2030—albeit without specifying its level.
The official announcement to implement emissions trading at the national level came in 2017.
As China strives to meet its climate commitments, including reaching carbon neutrality by 2060, its policymakers view managing CO2 emissions through national trading as a viable tool to help the government deliver on these key climate pledges.
Q2: How will the national ETS work?
A2: China’s ETS is a rate-based system, meaning that it targets reductions in CO2 emissions per unit of output rather than total CO2 emissions (a mass-based system). As such, enterprises under the ETS would need to provide information on the volume of emissions as well as economic output on a regular basis. Under this scheme, enterprises receive allowances whose allocation is based on historical emissions levels and output, as well as allowances that are adjusted according to actual output during a specified period. Allowance allocation has begun free of charge, but the official plan suggest that enterprises will need to purchase them over time.
Initially, the ETS will focus on the electricity sector and its 2,200-plus large firms that account for 40 percent of China’s total annual CO2 emissions. Once fully implemented, however, the national carbon market will cover large firms in seven additional sectors: petroleum refining, chemicals, non-ferrous metal processing, building materials, iron and steel, pulp and paper, and aviation. No official timeline has been set as to when each of these additional sectors will join the national carbon trading market, although sectors with relatively homogenous products like iron, steel, and cement are frequently mentioned as the likeliest candidates for inclusion sooner.
According to a nonprofit survey quoted by the top Chinese business media outlet Caixin, carbon credits will likely be traded at around 50 yuan/ton, with a subsequent rise to 71 yuan/ton in 2025, and 93 yuan/ton by 2030. The price on the opening day was 49 yuan/ton, or $7.6/ton—roughly at the levels of trading on the Regional Greenhouse Gas Initiative (RGGI) market in the United States. Moreover, similar to the limits on most of China’s stock markets, the carbon credit pricing will not be allowed to swing beyond 10 percent in a daily session.
Q3: Is the national ETS likely to work?
A3: Key factors that make a carbon trading market effective include: (1) whether the system has a sound monitoring, reporting, and verification (MRV) capability; (2) how non-compliance is dealt by the regulatory authority; and (3) whether the price of credits is high enough to incentivize producers to reduce their carbon emissions (or improve efficiency). Similar to the EU ETS, firms under the Chinese ETS are required to monitor and report the amount of CO2 emissions, which are then inspected and verified by government-certified technical experts. In an effort to discourage collusion, the Chinese program requires randomized matches between reporting enterprises and their verifiers, for example. While punitive measures against non-compliance appear to include both financial and non-financial penalties, it is unclear whether the fines are set high enough to compel compliance.
Will the ETS have a desired effect on CO2 management? China has been the top emitter of greenhouse gasses (GHG) since 2006, accounting in 2019 for 27 percent of the global total. The 14,093 gigatons of GHG emissions in 2019 not only meant a 25 percent increase over the last decade, but also put China’s emissions level over the combined total of GHG emissions by all other advanced, industrialized countries. One of the key features of the Chinese ETS is that the program incentivizes the improvement in emissions intensity. On one hand, the intensity-based approach would allow Chinese economy to continue to grow while managing CO2 emissions. On the other hand, relying on the intensity reduction but not capping emissions, either at a fixed level or declining over time, would not guarantee overall emissions reduction even if it led to improved energy efficiency. Also, an ETS has limited room for success if the emissions it allows are not significantly lower than the emissions currently in place even if the aforementioned factors worked well. The International Monetary Fund estimates that the price of carbon credits will need to reach around $50/ton to effectively drive down carbon emissions in China. Given China’s current and forecast rates of economic growth, there is good reason to doubt that China’s focus on intensity will satisfactorily facilitate a rapid energy transition.
Q4: What are the implications for global firms in the related sectors and beyond?
A4: In the near term, the implications for global firms will be relatively small, and their path to carbon neutrality will be primarily driven by measures put forward by the United States, European Union, and other advanced economies.
In the pilot programs, foreign-invested firms in some sectors were included, but the programs were not very ambitious. So complying was not particularly difficult for multinational corporations (MNCs). Even in cases where foreign firms did not fully comply (such as with Hyundai Mobis, Parkson, and Microsoft in the Beijing pilot), the financial penalties given to them were modest, especially relative to the other costs of doing business in China. On first glance, the initial list of roughly 2,000 energy generation firms covered in the new national ETS does not appear to include any foreign firms, but authorities have said they will gradually grow the list of covered firms and expand to other industries, such as chemicals, where there are numerous large MNCs that will likely need to comply. Based on past experience with China’s other regulatory schemes in the environment, intellectual property rights, and antitrust, one can expect Chinese authorities to require stricter adherence by MNCs relative to domestic firms, especially state-owned enterprises.
More relevant for most MNCs is the possibility that the ETS will in general raise the cost of energy and electric for business consumers and their customers. Of course, the purpose of these new rules and other related regulations is to incentivize all parts of the supply chain to be greener; this transition will inevitably have adjustment costs, but it is also possible that companies will be both greener and have lower energy costs over the longer term.
Finally, although the national ETS is a significant step for China, it is only a small step for the world. This program is unlikely to result in a dramatic reduction in carbon emissions in China by either domestic or foreign companies. Also, this scheme is far less ambitious than Europe’s ETS or the border-adjustment carbon tax schemes the European Union has implemented, and United States is considering. More significant for the world is China’s bid in electric vehicles (cars and buses) and batteries, which is driving the global auto industry and regulators elsewhere to transition from internal combustion-based vehicles to new-energy vehicles and the related infrastructure. In short, China is likely to continue having a larger voice in schemes that involve new productive investment and less in those that more directly involve conservation of resources.
by wp_sysadmin | Jul 22, 2021 | News
NEWS OF THE DAY:
Oil Search Urged to Keep Talking After $6 Billion Takeover Snub
James Thornhill, Bloomberg, July 21, 2021
Oil Search Ltd. has been urged by investors to pursue takeover talks after rejecting an initial approach from Santos Ltd. to create a A$22 billion ($16 billion) liquefied natural gas export giant.
The Sydney-based producer, with oil and gas assets in Papua New Guinea and a development project in Alaska, described an all-share proposal which valued the company at A$8.8 billion as too low, though remains open to discussions.
“This is only the start, not the end,” John Ayoub, portfolio manager at Wilson Asset Management International Pty, which owns shares in both companies, said by phone. “I’d expect at a minimum that dialog is to be ongoing, with a deal to be explored further.”
TotalEnergies SE and Exxon Mobil Corp., partners with the target in projects in Papua New Guinea, could be potential alternative suitors, according to Allan Gray Australia Pty., which holds Oil Search and said it was supportive of talks to sell part or all of the company.
Oil Search shares rose 6.3% in Sydney trading Tuesday, the most in almost five months. Adelaide-based Santos declined 5%, to the lowest since Jan. 6.
“Santos continues to believe that the merger proposal represents an extremely attractive opportunity,” the company said in a statement on Tuesday. A combined entity would rank among the world’s top 20 oil and gas producers by market capitalization and have a portfolio of long-life assets, Santos said.
Oil Search, which on Monday announced the abrupt departure of Managing Director Keiran Wulff, has come under pressure from investors to deliver better returns after it plowed cash into its Alaska project.
The target agrees with Santos “that there is strategic logic in a combination of the two companies,” and would consider a higher proposal, Oil Search said in a statement.
“A higher bid could come from Santos,” said Jamie Hannah, deputy head of investments and capital markets in Sydney at Van Eck Associates Corp., which owns shares in both companies through its exchange-traded funds. “Oil Search is trading at very low levels and Santos can afford to bid more.”
Oil Search saw its value plunge in early 2020 as oil slumped on weaker demand as a result of the global coronavirus outbreak and shares remain well below pre-pandemic levels even as fuel prices have recovered.
Both Santos and Oil Search are junior partners in the Exxon-operated PNG LNG project, which produces as much as 8 million tons of LNG a year. Oil Search is also a partner TotalEnergies-led Papua gas project in Papua New Guinea.
OIL:
The Real Reason Oil Prices Aren’t At $80
Yahoo Finance, July 22, 2021
The UAE’s awarding last week of a slew of huge drilling contracts aimed at increasing its crude oil output capacity from around 4 million barrels per day (bpd) to 5 million bpd underlines that the principal market risk from an oil trader’s perspective is still skewed towards further supply against a backdrop of an uneven bounce back in demand following the height of the global COVID-19 crisis in 2020. In the short- and medium-term, significant supply increases are likely to come from ongoing failures in the OPEC decision and implementation structure, and in the longer term from a potential flood of new crude from Iran in the official oil markets and increases from non-OPEC crude producers.
This trader-centric view is the basic reason that, despite the huge recent buying in the crude oil market by some leading investment banks and their fund manager clients (and their frantic bidding of oil on dips) with a view to hitting the much-vaunted US$80 per barrel point, crude has failed to meaningfully threaten that level or the once-steady US$100 per barrel price that prevailed for years before the Saudis launched the 2014-2016 Oil Price War. This inability to threaten these key price levels is also a function of the political reality that, however much the supposedly environmentally-friendly U.S. President Joe Biden might, in theory, be happy to see oil prices go higher to narrow the retail pricing discrepancy between it and more ‘green energy’ alternatives, in the cold light of political reality the fact remains that he is acutely aware of how damaging for any presidency such a price rise would be.
As was very clearly demonstrated under the government of former President Donald Trump – but pertains to all U.S. presidencies of recent years – the top person in the White House does not, in general, want oil prices on the higher side. The economic reason for this is that for every US$0.01 that the U.S.’s national average price of gasoline rises, more than US$1 billion per year in discretionary additional consumer spending is estimated to be lost. As a general historical rule of thumb, it is estimated that every US$10 per barrel change in the price of crude oil results in a US$0.25 change in the price of a gallon of gasoline. Based on more recent historical precedent, a US$90-95 per barrel of Brent oil price equates to around US$3 per gallon of gasoline and a US$125-130 per barrel of Brent equates to around US$4 per gallon of gasoline. The ‘danger zone’ for U.S. presidents starts at around US$3.00 per gallon and at US$4.00 per gallon they are being advised to pack their bags in Pennsylvania Avenue or start a war to divert the public’s attention. The point was underlined by Bob McNally, the former energy adviser to the former President George W. Bush that: “Few things terrify an American president more than a spike in fuel [gasoline] prices.”
This is the key reason why an unofficial White House oil price cap of around US$75-80 per barrel of Brent has operated since the end of the 2014-2016 Oil Price War. On the only notable occasion when the Brent crude oil price rose significantly above the US$70 per barrel level for any sustained period and looked like threatening the cap – in the second half of 2018, with the Saudis ramping up prices in concert with Russia – President Trump sent the first threatening message in a speech aimed at the Saudis. The message made clear that in the U.S.’s view Saudi Arabia was contravening the foundation 1945 agreement on Bitter Lake between Roosevelt and Abdulaziz and, therefore, put at risk the U.S. support of the Al-Saud ruling family as the monarchy of Saudi Arabia. This came shortly after a similar comment from Trump in a speech before the U.N. General Assembly: “OPEC and OPEC nations are, as usual, ripping off the rest of the world, and I don’t like it. Nobody should like it,” he said. “We defend many of these nations for nothing, and then they take advantage of us by giving us high oil prices. Not good. We want them to stop raising prices. We want them to start lowering prices and they must contribute substantially to military protection from now on.”
Oil’s inability to break these key levels is also a significant reason why the U.S. shale oil sector producers and their Wall Street backers are under no government pressure to ramp up production right now. If Brent crude oil started to rise decisively above the US$80 per barrel level for a sustained period and looked like it was heading for US$90-100 per barrel, though, this status quo would likely change very quickly. At the same time, huge pressure would be brought to bear by the White House on Saudi Arabia and the rest of the OPEC producers to increase production and lower oil prices, as has been highlighted repeatedly by OilPrice.com.
Aside from the domestic political reasons why the U.S. government is happy to accommodate a big increase in the UAE’s crude oil output capacity in a relatively short time, the Emirates’ ambition also aligns perfectly with Washington’s new policy in the Middle East as a whole, which began with the ‘relationship normalization’ deals forged between the U.S., Israel, and various Arab states in the last days of the presidency of Donald Trump. In its most basic terms, this policy is aimed at engaging with anchor Arab states that are not already too tied into the rampant China-Russia-Iran power axis, whilst also trying to at least partially loosen the grip of Beijing and Moscow on Iran (and therefore Iraq). If the policy is successful – although the part of it relating to Iran and Iraq seems also certain to fail despite clearly being worth a try – the U.S. will also be able to further reduce any significant dependence on Saudi Arabia, at least whilst it is under the control of Crown Prince Mohammed bin Salman. In all eventualities, though, the UAE is vital to the U.S. plans, which is why it was one of the first countries to be approached for the normalized relations program.
Related: Oil Dips After EIA Reports Crude Inventory Build
Since that point, the UAE has broadened and deepened its relationship with India – which the U.S. is sponsoring as the prime regional political and economic alternative to China – embarked on a huge economic expansion project (‘Operation 300 Billion’), established a new global benchmark trading platform for its oil (ICE Futures Abu Dhabi platform) in partnership with the U.S.-based Intercontinental Exchange, and begun to expand the Fujairah oil export hub as a counterpoint to Iran’s new Goreh-Jask oil export route. More broadly, the UAE has also removed the previous impediments to the speedy realization of its oil ambitions by reorganizing its Supreme Petroleum Council and has increased its activities as part of a joint intelligence initiative between the UAE and Israel (and, by extension, the U.S.) of the purchase of commercial and adjunct residential properties in Iran’s southern Khuzestan province. The area is a vital hub for Iran’s oil and gas reserves and the influx of UAE-registered businesses, particularly those based in Abu Dhabi and Dubai, but in large part funded by Israel, provides a forward operating platform for various ongoing intelligence-gathering operations. Building on this, last month saw a landmark US$510 million deal with Italy’s Saipem to expand the capacity of the UAE’s flagship Shah Sour Gas Plant, which will ensure that the UAE becomes self-sufficient in gas. This is aimed at safeguarding it from any external pressure that might be brought upon it by the big gas powers in the region, notably Iran, were it to lack this self-sufficiency.
Exactly the same theme of major contracts being given to companies of countries supporting the U.S.’s new policy in the Middle East is seen in the awarding last week of US$764 million in drilling contracts aimed at boosting crude oil output to 5 million bpd as soon as possible on or before 2030. The UAE’s principal oil firm, the Abu Dhabi National Oil Company (ADNOC), through its Offshore trading unit, awarded the contracts to U.S. companies Schlumberger, and Halliburton, in addition to its own ADNOC Drilling. The contracts will provide integrated rigless services across six of ADNOC Offshore’s artificial islands in the Upper Zakum and Satah Al Razboot fields, according to ADNOC. “These important awards for integrated rigless services will drive efficiencies of drilling and related services and optimize costs in our offshore operations as we ramp up our drilling activities to increase our production capacity and enable gas self-sufficiency for the UAE,” concluded ADNOC Upstream’s executive director, Yaser Almazrouei, last week.
GAS:
Japan To Cut LNG, Coal In Power Sector As It Bets On Renewables
Tsvetana Paraskova, OilPrice.Com, July 22, 2021
The world’s largest importer of liquefied natural gas (LNG) and one of the biggest importers of coal, Japan, aims to significantly raise the share of renewable power in its electricity sector and reduce its reliance on fossil fuels, according to a draft energy policy plan through 2030.
Japan, like many other developed nations, aims to achieve net-zero emissions by 2050, or as Japan’s Ministry of Economy, Trade, and Industry (METI) said last month “a carbon neutral society by 2050.”
Under the draft new policy, Japan will target to have renewable energy sources make up between 36 percent and 38 percent of the country’s power generation by the end of this decade. The previous target was to have renewable energy generate between 22 percent and 24 percent of Japan’s electricity mix by 2030.
The new plan hasn’t changed the target for nuclear power generation, which was left at 20-22 percent of electricity generation. But the share of coal is now targeted to drop to 19 percent by 2030, from 26 percent now, while the share of LNG is planned to decline to 41 percent from 56 percent.
The world’s top LNG importer aiming to reduce the use of the super-chilled fuel for power generation is likely to rattle the market.
According to estimates from Lloyd’s List Intelligence, Japan was the single largest importer of LNG in the world in the first half of 2021, holding a 20.49-percent share of all LNG imports globally. To compare, all 27 members of the European Union (EU), plus the UK, combined, accounted for 20.94 percent of global LNG imports.
The fastest-growing market for LNG, China—which is expected to soon surpass Japan as the largest LNG importer—accounted for 18.22 percent of LNG imports in the first half this year, Lloyd’s List Intelligence data showed.
Reduced future use of coal and LNG in Japan is set to create disturbances in the Asian markets of those fossil fuels, especially for Australia, which supplies two-thirds of Japan’s thermal coal and is Japan’s top LNG supplier, too, Reuters columnist Clyde Russell notes.
MINING:
US judge to rule by July 29 on request to block Lithium Americas mine
Reuters, July 21, 2021
A U.S. federal judge said on Wednesday she will rule by July 29 on whether to temporarily block Lithium Americas Corp from excavating its Thacker Pass site in Nevada, which could become one of the country’s biggest lithium mines.
Environmentalists sued earlier this year to block the proposed lithium mine, arguing that it could threaten sage grouse habitats and that the former President Donald Trump’s administration erred when it approved it in January.
Top of Form
Chief Judge Miranda Du of the federal court in Reno held a Wednesday hearing to determine whether excavation work at the mine site should first be blocked while she considers the broader question of whether approval should have been issued in the first place.
After a nearly three-hour hearing, Du said she will rule by next Thursday. The company had previously agreed to pause digging through that date, pending the court review.
Environmentalists hope to stop Lithium Americas from minor excavation work needed to determine whether the land holds historical import for Native Americans and others. The project cannot move forward until that work is complete.
Du, an appointee of former President Barack Obama, gave little hint as to which way she may rule and asked probing questions of attorneys for the Vancouver-based company, environmental groups, and the Bureau of Land Management, which is supporting Lithium Americas.
Thacker Pass would be one of the largest lithium mines in the United States if completed, producing 30,000 tonnes of lithium.
Laura Granier, an attorney for Lithium Americas, argued that temporarily blocking the project would harm President Joe Biden’s efforts to address climate change, including promoting a switch to cleaner electric vehicles which use lithium-based batteries.
Talasi Brooks, who represented the environmental groups, told Du that any excavation – even if small – could cause irreparable harm to the area’s wildlife.
Rival projects from Pioneer Ltd and Piedmont Lithium also face opposition.
POLITICS:
Senate braces for a nasty debt ceiling fight
Naomi Jagoda, Jordain Carney, Sylvan Lane, The Hill, July 22, 2021
Republicans are digging in on the federal debt limit, warning Democrats that it will be up to them to avoid a default as President Biden pushes for trillions more in spending.
GOP senators are taking a firm line as Democrats plot a path for their $3.5 trillion spending measure, which the party plans to pass with budget reconciliation rules that will prevent the GOP from blocking it with a filibuster.
Given those plans, Republican senators say they won’t lift a finger to help Democrats raise the debt ceiling.
“I’m not sure why there’s much of an incentive right now given what the Democrats are doing, trying to run roughshod over the minority in the Senate, to help them,” said Sen. John Thune (S.D.), the No. 2 Senate Republican.
Thune added that if Democrats are going to use a go-it-alone approach to push through a sweeping spending package, which is expected to include other priorities like immigration reform, then Republicans believe “the debt limit can ride on it, and they can own it all.”
Senate Minority Leader Mitch McConnell (R-Ky.) previewed the GOP tactics to Punchbowl News, in remarks confirmed by his office.
“I can’t imagine there will be a single Republican voting to raise the debt ceiling after what we’ve been experiencing,” he said.
The government will reach its spending limit on July 31, though the Treasury Department will be able to shuffle funds for an additional period to prevent the U.S. from breaking the ceiling. Actually, doing so would cause a severe disruption to markets and the economy, as the U.S. government would be unable to meet demands from its creditors and pay its bills.
The limit on how much debt the federal government can owe has been suspended for nearly two years thanks to a bipartisan deal struck under former President Trump. The Congressional Budget Office estimated Wednesday that the Treasury would most likely run out of cash in October or November, though that is just an estimate.
Experts have said that the coronavirus pandemic is making it harder to estimate precisely when the U.S. would default on its obligations absent any action.
“There is so much spending that is going out in a relatively short period of time, and because there’s lots of uncertainty about when that spending is going out the door, it makes it even more difficult than usual to predict what spending patterns in August, September, October, etc. are going to look like,” said Shai Akabas, director of economic policy for the Bipartisan Policy Center, a nonpartisan think tank.
Republican senators are planning to use the specter of crisis to secure major fiscal concessions, in a throwback to the Obama years.
Sen. Lindsey Graham (R-S.C.), the top Republican on the Senate Budget Committee, is expected to put forward a proposal next week, accusing Congress of “spending like drunken sailors.”
“We need to make some structural reforms down the road. … About half the time the debt ceiling has been increased has been accompanied by something, and I think now is the time to put some ideas on the table,” he said.
The effort comes after a GOP Congress approved a massive tax-cut bill during the Trump years that added to the deficit. It also follows a series of big spending bills signed by Trump and Biden that were intended to help the economy survive the pandemic.
Republicans are digging in on the federal debt limit, warning Democrats that it will be up to them to avoid a default as President Biden pushes for trillions more in spending.
GOP senators are taking a firm line as Democrats plot a path for their $3.5 trillion spending measure, which the party plans to pass with budget reconciliation rules that will prevent the GOP from blocking it with a filibuster.
Given those plans, Republican senators say they won’t lift a finger to help Democrats raise the debt ceiling.
“I’m not sure why there’s much of an incentive right now given what the Democrats are doing, trying to run roughshod over the minority in the Senate, to help them,” said Sen. John Thune (S.D.), the No. 2 Senate Republican.
Thune added that if Democrats are going to use a go-it-alone approach to push through a sweeping spending package, which is expected to include other priorities like immigration reform, then Republicans believe “the debt limit can ride on it, and they can own it all.”
Senate Minority Leader Mitch McConnell (R-Ky.) previewed the GOP tactics to Punchbowl News, in remarks confirmed by his office.
“I can’t imagine there will be a single Republican voting to raise the debt ceiling after what we’ve been experiencing,” he said.
The government will reach its spending limit on July 31, though the Treasury Department will be able to shuffle funds for an additional period to prevent the U.S. from breaking the ceiling. Actually, doing so would cause a severe disruption to markets and the economy, as the U.S. government would be unable to meet demands from its creditors and pay its bills.
The limit on how much debt the federal government can owe has been suspended for nearly two years thanks to a bipartisan deal struck under former President Trump. The Congressional Budget Office estimated Wednesday that the Treasury would most likely run out of cash in October or November, though that is just an estimate.
Experts have said that the coronavirus pandemic is making it harder to estimate precisely when the U.S. would default on its obligations absent any action.
“There is so much spending that is going out in a relatively short period of time, and because there’s lots of uncertainty about when that spending is going out the door, it makes it even more difficult than usual to predict what spending patterns in August, September, October, etc. are going to look like,” said Shai Akabas, director of economic policy for the Bipartisan Policy Center, a nonpartisan think tank.
Republican senators are planning to use the specter of crisis to secure major fiscal concessions, in a throwback to the Obama years.
Sen. Lindsey Graham (R-S.C.), the top Republican on the Senate Budget Committee, is expected to put forward a proposal next week, accusing Congress of “spending like drunken sailors.”
“We need to make some structural reforms down the road. … About half the time the debt ceiling has been increased has been accompanied by something, and I think now is the time to put some ideas on the table,” he said.
The effort comes after a GOP Congress approved a massive tax-cut bill during the Trump years that added to the deficit. It also follows a series of big spending bills signed by Trump and Biden that were intended to help the economy survive the pandemic.
Democrats would need at least 10 GOP votes to defeat a filibuster on a stand-alone debt limit increase, and several progressives have ruled out ceding to Republican spending-cut demands. Several top Senate Democrats — including Majority Leader Charles Schumer (N.Y.) — accused McConnell of holding the U.S. economy hostage.
“The leader’s statements on the debt ceiling are shameless, cynical and totally political,” Schumer said at the Capitol on Wednesday.
“This debt is Trump debt. It’s COVID debt. Democrats joined three times during the Trump administration to do the responsible thing,” Schumer added. “And the bottom line is that leader McConnell should not be playing political games with the full faith and credit of the United States.”
Republicans have suggested that Democrats add a debt-limit increase to the budget reconciliation process.
Doing so would make it easier for Democrats to lift the ceiling but would also shield GOP senators from a vote that is necessitated by spending decisions by both parties.
Senate Budget Committee Chairman Bernie Sanders (I-Vt.) said that Democrats are “looking at various approaches” while also criticizing Republicans’ comments on the debt limit.
“It goes without saying, I think the world expects the strongest economy in the world to pay its debts,” he said.
It’s unclear whether Democrats could pass such a bill before a debt ceiling deadline.
Democrats are expected to vote on a budget resolution, which greenlights the party-line bill, before they leave for an August recess. But once they return, they will likely be negotiating for weeks on a separate deal to fund the government.
Passing a bill under reconciliation is already filled with challenges: Democrats need total unity in the Senate and near-total unity in the House, a tricky balance that will take time to negotiate. And proposals in the Senate need the greenlight from the Senate parliamentarian, who makes decisions on what does or does not qualify and who isn’t expected to start making rulings on what can be included in the spending plan until after Democrats pass their budget resolution next month.
Graham predicted that Democrats would ultimately try to find another way to raise or suspend the debt ceiling, arguing that folding it in with their $3.5 trillion plan would be a political gift to Republicans.
“I doubt if they’ll take them up on that … I think it would be a great add there,” Graham said, asked about McConnell’s suggestion Democrats do it through reconciliation. “You’re raising taxes, you’re growing the government, you’re raising the debt all by yourself.”
Trillion of dollars in Treasury bonds held by foreign governments and investors are underpinned by faith in the federal government’s ability to pay its bills. A default on the national debt could shatter that confidence and trigger a catastrophic financial crisis.
“At that point we would be purely playing defense, trying to figure out how to best salvage a potentially catastrophic economic scenario,” Akabas, of the Bipartisan Policy Center, said.
In testimony before a Senate panel last month, Yellen warned that a federal default “would have absolutely catastrophic economic consequences” and cause “unthinkable” economic damage.
It’s not unusual for Republicans to take a hard-line stance on the debt limit when Democrats are in power. Most notably, S&P downgraded the United States’ credit rating from AAA, the highest level, to AA+ during the Obama administration in 2011 shortly after a debt limit standoff was resolved only days before the U.S. would have defaulted.
But the debt limit was suspended several times during the Trump administration without much difficulty.
Democrats accused Republicans of a double standard after 23 GOP senators voted for a deal that included a debt ceiling suspension in 2019.
“It is not business as usual. When Donald Trump was president of the United States we didn’t say we’re going to have a political agenda of one, two, three before we pay our bills,” Senate Finance Committee Chairman Ron Wyden (D-Ore.) said.
The White House said that Congress should address the debt ceiling on a bipartisan basis, like it did when Trump was president.
CLIMATE CHANGE:
U.S. Chamber of Commerce lays out clean energy standard plan
Ben Geman, Axios, July 22, 2021
The U.S. Chamber of Commerce is laying out what it wants to see in Democrats’ brewing push to mandate escalating amounts of zero-carbon electricity.
Why it matters: The K Street powerhouse is closer to Republicans, but its views could influence some moderate Democrats, so that’s important given Democrats’ razor-thin Capitol Hill margins.
Driving the news: The Chamber explained its posture on a “clean energy standard” (CES) in a letter to lawmakers that comes as the White House and Congress hope to move a CES in a reconciliation package.
- One noteworthy part: It wants “partial credit for electricity generation resources that feature a reduced (rather than zero) carbon footprint.”
- That means, among other things, natural gas, which emits far less CO2 when burned than coal.
Yes, but: “This conflicts with the path sought by Democrats working on a CES such as Sen. Tina Smith of Minnesota, who has said natural gas should only be credited if plants are equipped with carbon capture technologies,” notes the Washington Examiner, which first reported on the letter.
Elsewhere, the Chamber letter says the CES should “insulate” existing power plants from “conflicting” regulations and provide a “realistic” timeframe for emissions cuts.
