Today’s Key Takeaways: CA elevates climate fight against big oil to new level. Oil nears $95 on supply shortage. Full production at Australian LNG plant as strike continues. Biden invests in Africa for Graphite while Bering Straits supports Alaska’s graphite mining project. New Zealand to tax EV’s to make up for lost revenues from petrol tax.
NEWS OF THE DAY:
The new front in Big Oil’s courthouse climate fight
Ben Geman, Axios, September 18, 2023
California is hardly the first state to sue Big Oil over climate change, but a new case is worth watching, nonetheless.
Catch up fast: The Golden State’s Democratic governor and attorney general on Saturday unveiled litigation against Exxon, Chevron and other oil giants.
- It alleges decades of deception about the effects of their products, and seeks damages for ways global warming is hurting California.
Why it matters: The complaint — which follows a suite of other ongoing cases by state and local governments — has legal, political, and financial ramifications.
The politics can’t be ignored. Gov. Gavin Newsom has worked to create a national political profile and reportedly has presidential aspirations.
- The rollout was a choreographed, multiday affair, and even included a video.
The breadth is something. The case filed in state court goes into great detail seeking to tie oil companies to vast damages in the country’s most populous state.
- They include extreme heat, wildfires, flooding, harms to the state’s huge farm sector, public health impacts and much more.
The stakes are immense. California has spent tens of billions on adapting to and addressing climate damage, with multiples of that expected in years ahead, the suit claims.
- The complaint seeks an industry-funded abatement fund, and other “equitable relief” and damages.
- It also asks the state court to force companies to prevent “further pollution, impairment and destruction” of state resources.
The other side: The American Petroleum Institute, one of the defendants, said Congress, not the courts, should make policy.
- API General Counsel Ryan Meyers, in a statement, called it part of a “coordinated campaign to wage meritless, politicized lawsuits against a foundational American industry and its workers.”
OIL NEARS $95 A BARREL: Global oil benchmark Brent Crude neared $95 a barrel this morning, touching the highest price since November as the industry grapples with a supply deficit after Saudi Arabia and Russia extended supply cuts.
Brent Crude rose to $94.71 at 11:20 a.m. EST, up $0.73 from the previous day. U.S. West Texas Intermediate rose to more than $92 a barrel today, up from $90.93 on Sunday.
Barrel prices from the two oil grades have climbed for three consecutive weeks, and could be on track for their biggest quarterly increases since Russia’s invasion of Ukraine back in the first quarter of 2022, according to Reuters.
Citigroup Inc. predicted that prices could rise as high as $100 for a short period of time, but should ease as a result of an increase in supply from countries other than Saudi Arabia and Russia.
From the Washington Examiner, Daily on Energy
Chevron LNG Plant Returns To Full Production As Strikes Continue
Charles Kennedy, OilPrice.Com, September 18, 2023
Chevron’s Wheatstone LNG export facility in Australia has returned to full production after a fault at the plant cut output by around 25% last week, the U.S. supermajor said on Monday as strikes at its two Australian facilities escalate amid labor disagreements.
Last Thursday, LNG production at Wheatstone was reduced by 25% after a fault, the day on which trade unions escalated their strikes at the plant and the other Chevron LNG facility, Gorgon.
The fault at the Australian plant coincided with the escalation of the strikes at the Chevron facilities which collectively account for 5% of global LNG supply.
Biden Pouring Money into Africa for Graphite
Institute for Energy Research, September 18, 2023
- President Biden announced loan guarantees in Mozambique for a graphite mine, and the EU has proposed to fund a railroad in the Lobito region of Africa to connect cobalt-rich Congo with copper-rich Zambia.
- Biden’s energy transition will boost the demand for graphite, an essential ingredient in EV batteries, and one where China controls 90 percent of world production.
- President Biden is spending money across the globe to spur mining he has turned his back on in the United States, having stopped the mining of cobalt and copper in the Duluth Complex in Minnesota.
Like most critical minerals, China dominates the supply picture for graphite, a nonmetallic mineral with properties akin to metals including the ability to conduct heat and electricity. New investments in the United States and Europe, however, are trying to challenge China’s stranglehold on graphite used in most electric vehicle batteries, but industry experts believe it to be an uphill battle.
Regardless, President Biden is pouring money into the endeavor. Biden is offering funding for a Mozambique project near a conflict zone that is slated to feed graphite to a processing facility in the United States. At a recent meeting, Biden announced that his administration, pending a notification to Congress, will offer a conditional loan of up to $150 million to boost mining and processing of graphite at a facility in Balama, Mozambique, a poor region facing an ongoing and deadly Islamist insurgency.
The Biden administration has been increasingly focused on building out railways and corridors connecting mineral-rich areas in Africa to global ports in order to boost “clean” energy. China, which dominates global mineral supply chains, has already built out infrastructure in Africa and other countries through its Belt and Road Initiative.
New Zealand announces road-user tax for electric vehicles
Ben Zacariah, Drive, September 18, 2023
Increasing numbers of electric and plug-in hybrid vehicles on New Zealand roads means there’s less money for infrastructure projects from the country’s petrol tax – but that’s all about to change.
Electric-vehicle owners in New Zealand will soon have to pay a road-user tax, based on the distance they travel.
From 31 March 2024, any electric car and plug-in hybrid vehicle (PHEV) weighing less than 3500kg will be required to pay the new tax, in an effort to recoup revenue lost from the petrol excise, the New Zealand Government said.
It is expected electrified cars will fall under the same road-user charge applied to diesel vehicles in the country, taxed at a rate of $NZ0.076 per kilometre ($AU0.073/km).
Electric passenger cars made up 14 per cent of new vehicles sold in New Zealand in July 2023, due to the country’s sliding-scale rebate – which charges high-polluting vehicles such as utes, SUVs, and four-wheel-drives higher sales taxes, which are passed on as rebates for buyers of PHEVs and electric cars.
The increased number of electrified vehicles has meant reduced revenue for the National Land Transport Fund, which pays for road upgrades and maintenance.
It’s understood the road-user charge will come into effect no matter which political party is voted in at the New Zealand general election being held next month.