Fast Track for White House Energy & Climate Rules Targets Alaska.

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Today’s Key Takeaways:  Saudis dominate in largest-ever carbon credit auction.  Economic case for lowering cap on Russian oil   TotalEnergies makes big investments in U.S. LNG.  Visualizing world’s largest lithium producers.   Fast pace for Biden administration on energy and climate rules. 


Saudi Aramco Buys Carbon Credits At Largest-Ever Auction
Tsvetana Paraskova, OilPrice.Com, June 15, 2023

Aramco and 15 other Saudi and international companies this week bought more than 2.2 million tons of carbon credits in the largest-ever voluntary carbon credit auction, the organizers of the auction said.

The Regional Voluntary Carbon Market Company (RVCMC), the organizer of the auction held in Kenya, was launched at the end of last year by the Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, the Saudi Tadawul Group Holding Company.

In the auction this week, Saudi Aramco, the world’s largest oil firm, purchased the largest number of credits, along with Saudi Electricity Company and ENOWA, a subsidiary of NEOM, the carbon market company said.

The basket of credits in the auction included 18 projects representing a mix of carbon dioxide (CO2) avoidance and removal, including projects such as improved clean cookstoves and renewable energy projects. Three-quarters of the carbon credits originated from countries across the Middle East, North Africa, and Sub-Saharan Africa, including Kenya, Uganda, Burundi, Rwanda, Morocco, Egypt, and South Africa.

“Our aim is to be one of the largest voluntary carbon markets in the world by 2030, one that enables compensation of hundreds of millions of tonnes of carbon emissions per year and contributes to global Net Zero goals,” said Riham ElGizy, Chief Executive Officer of RVCMC.

Last year, Aramco signed a Memorandum of Understanding (MoU) with PIF to support the establishment of the Regional Voluntary Carbon Market in Riyadh and participated in its inaugural auction, where 1.4 million carbon credits were sold, of which 650,000 were purchased by Aramco, the Saudi oil giant said in its 2022 Sustainability Report published on Thursday.

Carbon credits are a growing business for companies from all industries, and this market could be worth more than $50 billion in 2030, McKinsey has said.


THE CASE FOR A LOWER PRICE CAP ON RUSSIAN OIL: A leading group of economists is proposing the Russian oil price cap be reduced to $45 per barrel, outlining the theory and evidence that the cap is crimping Vladimir Putin’s war funding while also keeping supply flowing to the global market.

The paper, circulated this week by the National Bureau of Economic Research, argues that the price cap has decreased Russia’s oil surplus, while also keeping extraction and production steady, or even above- average— the ideal scenario envisioned by leaders.

“Depending on its success, the price cap on Russian oil could become a blueprint for future sanctions, as well as international economic and trade policy more generally,” wrote the group, which includes Simon Johnson, the MIT professor who was a top outside proponent for the cap in its early stages last summer.

Why it’s timely: The working paper comes six months after the price cap came into force. Treasury is also taking a victory lap on the cap, and Deputy Secretary Wally Adeyemo is expected to play up its successes and outline next steps tomorrow.

A key insight from the paper – Russia’s supply curve may be downward sloping: If anything, Russia’s oil production has increased since the cap took force and has not shocked markets or caused the price pain that many leaders had feared. That’s because, outside of oil,Russia has few, if any, alternatives to prop up its economy.

Even though it cannot command a higher price, Russia has little choice but to extract and produce oil at the same or a higher rate than normal to keep revenue flowing. The economists call this the “want cash now” effect.

Accordingly, the authors say lowering the price cap from $60 to $45 per barrel would further dent Russia’s revenue.

But the illegal “shadow fleet” could undercut the cap’s efficacy: The paper warns, though, that the cap may not be effective in the long run if Russia is able to amass enough tankers to ship its oil outside of Western shipping services. Estimates as to the size of Russia’s shadow fleet have varied wildly, with some putting the number as high as 600 ships, and others, as low as 100.

From the Washington Examiner, Daily on Energy


TotalEnergies buys $219 million stake in LNG developer NextDecade
America Hernandez, Reuters, June 14, 2023

TotalEnergies (TTEF.PA) will buy a 17.5% stake in U.S. liquefied natural gas developer NextDecade (NEXT.O) for $219 million, the French group said on Wednesday, part of a broader deal to enable the Texas company’s Rio Grande LNG export project to proceed.

NextDecade said it had entered into framework agreements with Global Infrastructure Partners (GIP) and TotalEnergies to facilitate the final investment decision for the Rio Grande LNG project, expected to be confirmed by the end of June.

Editor’s Note:  Governor Dunleavy recently met with TotalEnergies in Paris to discuss potential investments in Alaska. 


Visualizing the World’s Largest Lithium Producers
Bruno Vendetti, Visual Capitalist, June 11, 2023


White House sets fast pace for energy, climate rules
Brian Dabbs, Heather Richards, ENERGYWIRE, June 14, 2023

The administration’s updated regulatory agenda includes plans to finalize rules on methane emissions and gas stoves, as well as to propose new habitat protections near the recently green-lighted Willow oil project.

The Interior and Energy departments will spend the coming months trying to cement some of the White House’s critical energy ambitions, ahead of an election year in which Republicans are likely to attack President Joe Biden’s focus on boosting renewables and cutting planet-warming emissions.

In the semiannual Unified Agenda— released Tuesday — the Biden administration outlines a packed energy policy agenda in the second half of 2023 and early 2024, targeting the natural gas sector with regulations on gas stoves and methane emissions. Federal regulators will also turn their attention to a flurry of other areas, including transmission, heat pumps and protections for the public lands in Alaska, where the White House recently green-lighted a massive oil project.

“We feel this huge sense of urgency,” Energy Secretary Jennifer Granholm said Tuesday in Port Arthur, Texas, where DOE was hosting an environmental justice event.

The Department of Energy is aiming to finalize a regulation on gas stoves by January 2025. The proposed rule, released earlier this year, sets standards for energy efficiency levels rather than emissions — and could prohibit sales of roughly half the current gas stove models on the market.

The proposal continues to fuel a firestorm on Capitol Hill. Later this week, House Republicans are set to pass a bill that would block the DOE regulation and “any substantially similar rule.” And on Tuesday, 29 House Democrats joined Republicans to pass legislation that would ban a separate agency, the Consumer Product Safety Commission, from implementing gas stove regulations. Neither bill is likely to pass the Democratic-controlled Senate.

Meanwhile, the Biden administration is sparking anger among environmental groups after a series of approvals of major fossil fuel projects, most notably the Willow oil project on the North Slope of Alaska. Some environmentalists and political experts say the moves could dampen turnout among progressives at the polls next year.

At the DOE event in Port Arthur, many local residents blasted the oil and gas sector, which they blame for decades of pollution in one of the biggest industrial hubs in the country.

“It’s a little too late for us in some ways,” said one resident of the city, which is home to numerous oil, liquefied natural gas and petrochemical facilities. “Everything that we needed has been taken away from us.”

Granholm has said the approvals of fossil fuel projects are necessary for energy security and emphasized the administration’s support for the clean energy transition. That includes billions of dollars in grants from DOE and the clean energy tax credits in last year’s Inflation Reduction Act.

DOE is also steadily making progress on a backlog of efficiency regulations.