Alleged ‘deal’ offer from Trump to big oil could save industry $110bn, study finds

Oliver Milman and Dharna Noor

THE GUARDIAN
Thu, 16 May 2024 

Donald Trump in Nashville, Tennessee, on 22 February 2024

.Photograph: Jon Cherry/Getty Images


A “deal” allegedly offered by Donald Trump to big-oil executives as he sought $1bn in campaign donations could save the industry $110bn in tax breaks if he returns to the White House, an analysis suggests.

The fundraising dinner held last month at Mar-a-Lago with more than 20 executives, including from Chevron, Exxon and Occidental Petroleum, reportedly involved Trump asking for large campaign contributions and promising, if elected, to remove barriers to drilling, scrap a pause on gas exports, and reverse new rules aimed at cutting car pollution.

Congressional Democrats have launched an investigation into the “ethical, campaign finance and legal issues” raised by what one Democratic senator called an “offer of a blatant quid pro quo”, while a prominent watchdog group is exploring whether the meeting warrants legal action.

But the analysis shared with the Guardian shows that the biggest motivation for oil and gas companies to back Trump appears to be in the tax system, with about $110bn in tax breaks for the industry at stake should Joe Biden be re-elected in November’s election.

Biden wants to eliminate the tax breaks, which include long-standing incentives to help drill for oil and gas, with a recent White House budget proposal targeting $35bn in domestic subsidies and $75bn in overseas fossil fuel income.

“Big oil executivess are sweating in their seats at the thought of losing $110bn in special tax loopholes under Biden in 2025,” said Lukas Ross, a campaigner at Friends of the Earth Action, which conducted the analysis.

Ross said the tax breaks are worth nearly 11,000% more than the amount Trump allegedly asked the executives for in donations. “If Trump promises to protect polluter handouts during tax negotiations, then his $1bn shakedown is a cheap insurance policy for the industry,” he said.

Some of the tax breaks have been around for decades, and are a global issue, but the US oil and gas industry benefited disproportionately from tax cuts passed by Trump when he was president in 2017.

Next year, regardless of who is president, a raft of individual tax cuts included in that bill will expire, prompting a round of Washington deal-making over which industries, if any, will help fund an extension.

Lobbying records show that Chevron, Exxon, ConocoPhillips, Occidental, Cheniere and the American Petroleum Institute (API) have all met lawmakers this year to discuss this tax situation, likely encouraging them to ignore Biden’s plan to target the fossil fuel industry’s own carve-outs.

Chevron and ConocoPhillips, the analysis shows, lobbied on a deduction for intangible drilling costs, the largest federal subsidy for US oil and gas companies, which is worth $10bn, according to federal figures.

Other lobbying centered on more generalized tax breaks that the oil and gas industry has taken advantage of. ExxonMobil lobbied for a little-known bill that would restore a bonus depreciation deduction to its full value, which, according to Moody’s, would allow big oil to avoid Biden’s newly established corporate minimum tax.

“Unlike previous administrations, I don’t think the federal government should give handouts to big oil,” Biden said following his inauguration in 2021. But Congress and the president will have to agree to any new tax arrangements next year, and the fossil-fuel industry continues to have staunch support from Republicans and some Democrats.

The API insisted its industry gets no favorable treatment in the tax system. “America’s energy industry proudly invests in communities, pays local, state and federal taxes and receives no special tax treatment from the federal government,” an API spokesperson said.

“This nonsense report is another attempt to distract from the importance of all energy sources – including oil and natural gas – to meet America’s growing energy needs.”
Who was at Mar-a-Lago?

The high stakes for the fossil-fuel industry, as well as for the climate crisis, have placed scrutiny upon those who attended Trump’s dinner at Mar-a-Lago. Although representatives of large oil companies were present, the majority of known attendees were executives of smaller firms focused on specific subsections of the fossil-fuel industry, such as fracking or gas exporting.

Those companies are not often held to account in international forums such as the UN climate talks or the Oil and Gas Climate Initiative, which means they are less likely to make buzzy climate pledges. They may also be more threatened by regulations on individual parts of the US fossil fuel economy, such as auto-emissions standards aiming to quell gas-car usage.

“The oil majors … see their future in plastic [production]. That doesn’t apply to the smaller companies who don’t work across the industry,” said Kert Davies, director of special investigations at the Center for Climate Integrity. “They’ve got nothing to shift to.”

Among other reported attendees were the head of the company Venture Global, which rivals Qatar as one of the world’s leading liquefied natural gas exporters. This year, the company came under fire after it was revealed to have been using millions of gallons of water to construct a Louisiana LNG terminal while a nearby community faced extreme shortages. The firm was also accused late last year of reneging on its contracts by Shell and BP.

Another attendee: Nick Dell’Osso, CEO of Chesapeake Energy, which after years of court fights had to pay $5.3m to Pennsylvania landowners who say they were cheated out of gas royalties. The company’s earlier CEO, John McClendon, was indicted in 2016 on charges of conspiring to rig bids on oil and gas leases in Oklahoma.

Billionaire oil tycoon Harold Hamm, who founded fossil fuel exploration company Continental Resources, was also present. He helped raise money for Trump’s 2016 presidential run and was under consideration to be Trump’s energy secretary, and was reportedly one of the seven top donors who had special seats at Trump’s inauguration. Though he eschewed the former president after his 2020 loss, he donated to his primary campaign in August.

Asked about the meeting, API spokesperson Andrea Woods said the organization “meets with policymakers and candidates from across the political spectrum on topics important to our industry”. She said the premise of Democrats’ investigation into the meeting is “patently false and an attempt to distract from a needed debate about America’s future – one that requires more energy, including more oil and natural gas”.

Amid the scrutiny of last month’s Mar-a-Lago dinner, Trump is continuing to court oil-tied funders. On Tuesday evening, he held a Manhattan fundraising dinner that cost a minimum of $100,000 to attend.

Among the event’s hosts, advocacy group Climate Power noted, was John Catsimatidis, the chief executive of the much-scrutinized gas refiner United Refining Company and owner of two grocery chains, a radio station and holding company Red Apple Group.

Between 2017 and 2023, United Refining Company’s small refinery in western Pennsylvania was the most dangerous refinery in the country, with federal data showing it reported 10 times the average number of injuries for a refinery – 63% higher than the next-most dangerous facility.

The company also reportedly sought to dodge environmental regulations using a process championed by Trump’s EPA administrator Scott Pruitt.

Catsimatidis has also been criticized for neglecting vacant gas-station properties and for blaming gas prices on “open” borders, corporate taxes and worker benefits. The Pennsylvania town home to United Refining pays some of the highest gas prices in the state, despite the presence of the refinery, raising suspicions among some residents about the company’s practices.

Trump this week also held a fundraiser hosted by the US senator JD Vance, who is one of the largest recipients of big-oil funding in Congress, and another with Joe Craft, a major Trump donor who owns massive coal producer Alliance Resource Partners. In 2016, Craft reportedly gifted Pruitt courtside basketball tickets after the agency crafted pro-coal regulations.

11,000% Return: Trump’s $1 Billion Offer Could Yield $110 Billion Windfall for Big Oil

A new analysis explores the possible payout if fossil fuel companies—who have already shown a willingness to put a price tag on the value of planet Earth—agree to the presumptive Republican nominee's election year "quid pro quo" deal.

By Jon Queally

May 16, 2024

Source: Common Dreams

A new analysis reveals that the alleged $1 billion election year “quid pro quo” offer that presumptive Republican nominee Donald Trump made to executives of major oil company’s could, if they agreed to the deal, bank them a handsome profit.

According to the study by Friends of the Earth Action, first reported by The Guardian on Thursday, the “remarkably blunt and transactional” offer from Trump—in which $1 billion in campaign funding put together by the nation’s major oil companies would be repaid upon his election with massive deregulation of the oil and gas sector as well as tax relief for the industry—would yield a major windfall for those same corporations, including an estimated $110 billion from the tax breaks alone.

As The Guardian reports:

Biden wants to eliminate the tax breaks, which include long-standing incentives to help drill for oil and gas, with a recent White House budget proposal targeting $35bn in domestic subsidies and $75bn in overseas fossil fuel income.

“Big oil executivess are sweating in their seats at the thought of losing $110bn in special tax loopholes under Biden in 2025,” said Lukas Ross, a campaigner at Friends of the Earth Action, which conducted the analysis.

Ross said the tax breaks are worth nearly 11,000% more than the amount Trump allegedly asked the executives for in donations. “If Trump promises to protect polluter handouts during tax negotiations, then his $1bn shakedown is a cheap insurance policy for the industry” he said.

Republicans in Congress last year confirmed that if Trump wins back the White House and the GOP resume control of both chambers, they will move aggressively to make the Republican’s 2017 tax cuts, which largely benefited the wealthy and corporations, permanent. As some of the most profitable companies in the U.S., oil and gas companies stand to benefit greatly from that outcome.

In Florida last month, not long before his meeting with oil executives, Trump told a different crowd of “rich as hell” supporters gathered at Mar-a-Lago: “We’re gonna give you tax cuts, we’re gonna pay of our debt.” The problem with the second half of that claim is presented in a recent CBO report which found that another wave of tax cuts like those passed by the GOP in 2017 would skyrocket the national debt by an estimated $4.6 trillion over the next ten years.

Earlier this week, House Democrats, led by Oversight Committee Ranking Member Rep. Jamie Raskin (D-Md.), launched a probe into the “quid pro quo” allegations between Trump and Big Oil, including letters to company executives believed to have been in attendance.

The blatant nature of Trump’s corrupt intent, according to some political observers, is an opportunity that Democrats and champions of climate action and other progressive causes should not miss.

Writing about the circumstances in The New Yorker on Wednesday, journalist and veteran climate activist Bill McKibben argued that the stakes of this election are made plain in what Trump has offered the fossil fuel industry in exchange for its financial backing.

“Trump’s reported billion-dollar offer to fossil-fuel executives shows that this is the key year to save the planet,” McKibben writes.

“Given four years to finish the implementation of the Inflation Reduction Act, a second-term Biden Administration might finally be able to break the hold of fossil fuel’s political influence,” his essay explains. “Another term of Trump, however—and with all that it means for undercutting global efforts at climate regulation, as well—offers an entirely plausible and entirely opposite outcome: climate chaos combined with continued fossil-fuel dependence.”

What’s true, according to McKibben, is that the fossil fuel industry “might well decide that defeating Biden in November is worth a lot of money.” Citing recent profits by Chevron of $21 billion and ExxonMobil’s $36 billion, he said the oil giants will “definitely give Trump something, and the return on investment on that donation—if successful—would be better than the luckiest well they ever hit.”

The new analysis by Friends of the Earth Action shows that McKibben—once again—probably has the math right.

 

After Close Scrutiny, Russian "Ghost Fleet" Ships May Be Changing Tactics

General Skobelev off Portugal, May 2024 (Portuguese Air Force)

PUBLISHED MAY 14, 2024 9:54 PM BY GIANGIUSEPPE PILI AND ALESSIO ARMENZONI

 

 

After the attention paid to the sanctioned freighter Sparta IV and other ships in the "Ghost Fleet", Russia’s covert military logistics vessels may be starting to get more cautious. A ship known to OSINT analysts, the Russian-flagged oil tanker General Skobelev (IMO: 9503304), departed from Baltyisk, Russia, on April 21, with a declared destination of Port Said, Egypt. It may have stopped its AIS transmission in the middle of the Sicilian Channel on May 8, a week ago.  

Maritime OSINT analyst RussianForcesSpotter pointed out on X that “civilian” tankers were being escorted in the English Channel by the Russian frigate Neustrashimy, which is assigned to the Baltic Fleet and stationed in Baltyisk. Later, the Russian frigates Grigorovich, Merkuriy and Kildin departed from the Russian naval base of Tartus, Syria, heading west, possibly to meet and escort General Skobelev. After this, General Skobelev appears to have stopped its transmission, going dark in the middle of the Strait of Sicily.

Fig. 1: General Skobelev's route from April 21 to May 8, 2024. Sources: AIS data provided by Global Fishing Watch, annotated by the authors.

After almost a week, General Skobelev is still missing and it is unclear where it is heading to at this point, though it is worth noting that there is an established presence in Tartus, Syria. Historically, Russian ships sailing to military bases in Syria are reported to possibly turn their AIS off close to the final destination. This time, perhaps because of the timely observations of multiple, independent marine OSINT trackers, there could be an adaptation in tactics.

Giangiuseppe Pili (Ph. D.) is an Assistant Professor in the Intelligence Analysis Program at James Madison University. He is an Associate Fellow at Open Source Intelligence and Analysis at the Royal United Services Institute.

Alessio Armenzoni is a geospatial intelligence analyst working on projects related to maritime security. He studied at the Centre for Higher Defense Studies from the Italian MoD.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.

Report: Indian Class Withdrawn on Sanctioned Russian Tankers

Report indicates 12 of the 14 tankers blocked by the U.S. have switched to Russian class

PUBLISHED MAY 13, 2024 4:55 PM BY THE MARITIME EXECUTIVE

 

 

Russian shipping interests continue to shuffle around the registry details of their large crude tankers in an apparent effort to address the Western sanctions on vessels. Reuters conducted an analysis and found that 12 of the 14 tankers listed by the United States in February 2024 have been moved to the Russian Maritime Register of Shipping, some having changed class societies or flags twice in a matter of months.

The U.S. and its allies in the G7 reported at the end of February they were moving against both Russian shipping company Sovcomflot and tankers that had regularly transported oil in violation of the price cap imposed by the West as a punishment for the invasion of Ukraine. The U.S. blocked 14 tankers controlled by Sovcomflot on February 28. Before that, they had listed 20 tankers being run through third-party management companies in locations such as Dubai and elsewhere. 

The review of the databases conducted by Reuters shows the Indian Register of Shipping which had stepped in to class the ships now shows 12 of the tankers with the notations class withdrawn. The vessels are appearing in the Russian Maritime Register with new names. Flags on the vessels also appear to have been shifted to Russia.

The shell game with the vessels shuffling them between flags and class societies is so complicated most databases have not yet caught up with the vessels. Some of the vessels, such as the NS Bravo (IMO:9412359) is now the Belgorod having entered Russian class as of April. The well-known Equasis database reflects the ship had been in the Liberian registry since it was built in 2010 until January 2024 when it shifted to Gabon and now in April to Russia. 

Most of the vessels identified in the report by Reuters show a similar history. Most moved into the Gabon registry earlier this and now over the Russian flag. The tanker Sakhalin Island appears to have been in the Panama registry until moving to the Russian flag.

The United States had a dialog with the officials in Panama seeking to win their support to clampdown on more of the tankers violating sanctions. American officials reported they encouraged Panama to continue efforts to withdraw registry from vessels violating the sanctions.

The report that the Indian Registry had withdrawn vessels goes counter to a report last month that India had provided access to insurance for the Russian vessels. India’s refineries appeared to stop imports on Russian vessels fearing the sanctions but resumed the imports in April.

Reports have said that Russia wants to keep the exports on its own tankers to earn the transportation fees. However, the shadow fleet of tankers also continues to grow.

In recent days there have been numerous reports that the EU and the UK are looking at new sanctions. Among the steps being prepared by the EU are moves against Russian LNG exports while the UK Treasury is investigating steps against price cap violators. 

The U.S. continues to also impose ever-increasing rounds of sanctions including a massive wave at the beginning of May against the Russian oil sector.  It continues to be a back-and-forth effort with Russia shuffling around the assets and the West trying to close loopholes and snare more individuals and ships.
 

Glencore seeks Australian carbon capture approval amid farmer protests

Reuters | May 13, 2024 | 

Carbon capture and storage project. Credit: Glencore

Australia’s Queensland state will decide this month whether to give Glencore a key approval to bury liquefied carbon dioxide in the country’s largest aquifer, a plan farm groups say must be blocked because it risks poisoning water supplies.


Carbon capture and storage (CCS) is needed to achieve the world’s net-zero goals and contain global warming, governments say. Its rollout has been slow but is gathering pace.

Swiss commodities giant Glencore plans a three-year, A$210 million ($135 million) pilot project that would pump 330,000 metric tons of CO2 from a coal-fired power plant in the northeastern state into an aquifer 2.3 km (1.4 miles) underground.

“This is an important test case for onshore CCS in Australia,” said Glencore spokesperson Francis De Rosa.

Glencore says there is no demand for the low-quality, expensive-to-reach water in its pumping site and the CO2 is extremely unlikely to spread significantly from where it is put.

“Our project is based on very robust data, fieldwork and analysis,” De Rosa said, adding that several government agencies had reviewed the plan.

But farm groups say it risks poisoning part of the Great Artesian Basin, a network of groundwater deposits spanning much of eastern Australia that supports agriculture and communities. They say the acidic CO2 in the rock could release and spread toxic substances like lead and arsenic.

The project is “unthinkable,” said Michael Guerin, whose AgForce farm association launched a court case in March to force the federal government to review Glencore’s plans.

Speaking at a beef industry conference this month, Queensland’s premier Steven Miles said the project “doesn’t sound like a good idea to me” and was unlikely to satisfy the state’s environmental rules – prompting a complaint by Glencore that he was interfering in the regulatory process.

“Our project should be judged on the science, not misinformation or political opportunism,” the company said.

Miles’s office declined to comment further. The federal environment ministry declined to comment.

Queensland’s environment department said the state’s independent environmental regulator had considered the potential impacts to groundwater and the Great Artesian Basin and was preparing its final assessment report.
Consequences

The Queensland government will decide by the end of May whether to approve Glencore’s environmental impact assessment. If approved, further permissions would be needed but the main hurdle would be cleared.

Glencore’s plan would capture 2% of the emissions of the Millmerran power plant but could eventually store 90%, the company said.

The site for the project was originally identified as suitable for carbon storage by a government body.

Australia has only one active CCS project, the world’s largest, at Chevron’s Gorgon liquefied natural gas (LNG) project, on an island off the northwest coast.

Two more are under construction, including the first onshore operation from Santos to inject CO2 into a depleted gas field in South Australia state, and 14 are in development, according to the Global CCS Institute. Most target offshore storage and about half plan to store in depleted oil or gas reservoirs.

The use of aquifers to store carbon is becoming more common, said Alex Zapantis at the CCS Institute. The porous rock of many aquifers can host huge amounts of liquefied CO2. But only those where water is so deep and low quality that it is unsuitable for other use would be chosen or approved by regulators, he said.

The project is being managed by a Glencore subsidiary, Carbon Transport and Storage Corporation (CTSCo). Japan’s Marubeni Corp and J-POWER each committed A$10 million to it in 2022.

($1 = 1.5404 Australian dollars)

(By Peter Hobson and Melanie Burton; Editing by Jamie Freed)

UK CLIMATE CHOIR DISRUPTS STANDARD CHARTERED ANNUAL GENERAL MEETING

Protest over funding for environmental destruction

May 12, 2024


Security was very tight at the Standard Chartered AGM in London on Friday morning. Shareholders had to wait in queues for up to 30 minutes, were subjected to intrusive searches and airport-style scanning, and the Chairman was forced to announce that the meeting would begin 20 minutes late. Among the attendees were dozens of activists from the UK Climate Choir, authorised to attend as proxy voters. Despite proper paperwork and photo identification, many of these were turned away and prevented from exercising their vote.

Supposedly random extra security body searches, conducted in a separate room, appeared to target journalists, researchers and activists – they were asked to ‘consent’ to a body search, but told their entry would be subject to agreeing. One of these was Avril de Torres (environmental lawyer and Deputy Executive Director at the Philippine Centre for Energy, Ecology and Development), who had travelled to raise issues around the bank’s funding for San Miguel Conglomerate’s coal and gas developments which threaten the ecology and community of the Verde Island Passage. She told us in her interview that she brought it to the bank’s attention at a previous AGM and has even had closed meetings with their sustainability officers, but that nothing much has changed.

Verde Island Passage (VIP) is known as the Amazon of the Oceans due to its rich biodiversity, but the San Miguel Conglomerate (funded by Standard Chartered) is causing degradation of the important marine and coastal ecosystems as well as threatening the livelihoods of Batangas communities in its operation of fossil-gas power plants and increased shipping in the area.

Another Standard Chartered investment under scrutiny is the Mozambique LNG project where resettled communities face human rights violations. LNG extraction invariably increases methane emissions, many times more warming than carbon, and researchers from Justiça Ambiental say this project is expected to increase Mozambique’s domestic emissions by up to 10% per year.

Standard Chartered is possibly second only to HSBC in its involvement in controversy, with accusations of money laundering and currency manipulation. It recently pulled out of a UN Science Based Targets Initiative which (although itself accused of greenwashing) is supposed to scrutinise and validate companies which adhere to the IPCC Paris Agreement targets.

The UK Climate Choir, founded in Bristol, has grown over the past 18 months into a movement of more than a dozen choirs with hundreds of singers across the UK. They sometimes come together in spectacular and peaceful protest at venues such as airports, courts and even Parliament.

 

Momentum is Building for Ammonia as Technology Matures

Strong demand is driving development but emissions issues remain

PUBLISHED MAY 12, 2024 12:47 PM BY RENÉ SEJER LAURSEN

 

 

Demand for ammonia is being transformed by the energy transition. Until recently used as an input for fertilizer and chemical products, new markets for green and blue ammonia are emerging, replacing coal in power generation, in green steel production and as a marine fuel.

Today some 200 million tonnes per annum is produced worldwide, with 20 million transported in LPG carriers. The scale of the emerging and potential demand will see these figures rise; how quickly this can be achieved will determine its take-up within shipping.

The interest in ammonia stems both from its zero emissions when used as fuel and because its production isn’t dependent on biogenic carbon sources. As the global economy transitions away from fossil-based fuels, biogenic carbon – from captured CO2, electrolysis and even waste sources – will be subject to increasing competition from different industries.

Biogenic carbon will increasingly replace fossil-based carbon in many of the products in use today in industry and consumer goods. Competition from the energy and aviation sectors will inevitably lead to increased prices but production capacity will need to come from industrial sources rather than biomass harvested for this purpose.

The rise of ammonia also creates potential for green hydrogen as a fuel. But because ammonia is significantly cheaper to transport over long distances – and considering the loss of energy when hydrogen is turned into ammonia via the Haber-Bosch process – it seems likely that a majority of hydrogen will be produced by cracking green ammonia at the location where the hydrogen will be consumed.

Ammonia Production

To realize large-scale production of green ammonia to serve new markets, its production capacity, along with that of renewable electricity and green hydrogen, will need to grow tremendously. The current global installed capacity of wind and solar farms and especially the electrolyzers needed to produce the necessary green hydrogen for ammonia production, are dwarfed by the required capacity needed.

Renewable electricity for electrolysis will need to be produced at locations around the globe that have favorable conditions for wind and solar energy generation and also have large land areas available. Those locations tend to be in remote areas; locations such as Western Australia, Chile, West Africa, Oman and Saudi Arabia are the areas that are expected to dominate production. Ammonia needs to be shipped from these locations to demand centers, in the first instance North/East Asia and Europe. 

Current projections for the growth in global production indicate there will be enough renewable electricity to produce the volumes of green ammonia needed for the maritime fleet alone by 2040. However, because shipping will also be competing with many other industries for both the renewable electricity and green hydrogen necessary to produce ammonia, as well as with other sectors that depend on the consumption of green ammonia such as agriculture and coal-fired power plants, supply is expected to be constrained.

Propulsion Technology

The first tests have been performed using ammonia as fuel in combustion engines by several of the main engine manufacturers. The tests have been very promising and no showstoppers have been discovered for the use of ammonia as a combustion fuel in internal combustion engines.

Though the amount of pilot fuel and levels of NOx, NH3 slip and N2O emissions have yet to be quantified for the commercial marine engines, marine engine makers generally agree that the Diesel cycle is best suited for combustion of ammonia

Research is ongoing for both diesel and Otto cycle combustion concepts. Optimizing emissions reductions is foreseen as a challenge, and control of N2O and ammonia slip requires high-temperature combustion, which also generates high NOx levels. Tests on two-stroke engines have shown that NOx is less of a problem using the Diesel cycle combustion principle when burning ammonia. When ammonia is injected into the combustion chamber, it expands and generates a cooling effect that removes the high peak temperatures in the combustion zones that generated the high NOx.

Pilot fuel is necessary to ignite ammonia and it is also needed to keep combustion stable. For smaller four-stroke engines, 10% pilot fuel is required once engine optimization has been completed and after the engine is in service. For large two-stroke engines using Diesel cycles, just 5% pilot fuel is required, and some engine makers expect that this amount can be further reduced.

Assessing Emissions

The actual amount of NH3 and N2O emissions is therefore still to be accurately assessed, however, emissions are expected to be low, particularly for the diesel combustion cycle. Even so, with N2O having a 20-year global warming potential (GWP) of 264 and a 100-year GWP of 265 according to IPCC 2013-ARS, the emitted levels may negate much of the CO2 benefit of using ammonia as a fuel. This remains a significant potential barrier to adoption.

Two-stroke marine engine designers have, however, found in their tests that N2O level are low - in the same range as we see for other fuels including marine diesel, LNG and methanol. Overall it seems that the diesel combustion principle is ideal for use of ammonia since the temperature in the combustion chamber hits a ‘sweet spot’ where the NOX, N2O and ammonia slip levels are recorded at a very low level. It is therefore expected that those engines will be able to operate to IMO NOx Tier II standards without any need for an abatement system.

As of Q1 2024, the main marine engine makers have the following development plans and lead times for ammonia fuelled engines:

• Two-stroke ammonia dual fuel engines covering power ranges from 5 MW to 31 MW. These engines will be available for delivery starting from Q4 2024/Q1 2025.
• Four-stroke ammonia engines as dual fuel gensets engines are also becoming available. Two engine manufacturers will launch this type of engine at the end of 2024 or beginning of 2025.

Safety and exhaust treatment

Most engine designers expect that exhaust gas after-treatment will be needed to comply with the IMO NOx Tier III standard, and all of them expect to specify selective catalytic reduction (SCR) as the preferred means of cleaning the exhaust gas after it has left the combustion chamber, rather than exhaust gas recirculation (EGR) which changes the combustion conditions thereby limiting NOX formation. The EGR is reducing the amount of oxygen in the intake air, and the fear is that this will have a very negative impact on the performance of ammonia combustion, but this is still to be investigated.

In addition to main engines and gensets operating on ammonia, designs are also emerging for auxiliary engines required to complete the transition to vessels running on ammonia. Boilermakers are preparing dual-fuel boilers for use with ammonia as fuel to be able to generate steam and heat from burning ammonia. 

Working with ammonia onboard on a day-to-day basis requires a solution to collect ammonia vapor in a safe manner. This vapor will be released in case of a normal engine stop if the piping system needs to be purged or in case of a malfunction somewhere in the fuel supply system.

Different solutions for vapor handling are under development from several manufacturers, including water scrubber designs that can remove ammonia vapor from the purge air. In this solution, ammonia vapor is stored in dedicated tanks as a water-ammonia solution. However, this approach would require dedicated infrastructure at the port to receive and store it.

All those systems described above are being prepared for newbuilding projects for different ship types and the expectation is that we will see those systems in service by the end of 2025/beginning of 2026. We estimate that approximately 50-70 ships are under order as of April 2024.

René Sejer Laursen is the Director Fuels & Technology at American Bureau of Shipping (ABS).

 

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.

Pembina Pipeline says potential Trans Mountain purchase not a priority


The Canadian Press
Fri, May 10, 2024 


CALGARY — Exploring a potential purchase of the Trans Mountain oil pipeline is not a major priority right now for Pembina Pipeline Corp., the Calgary-based company said.

On a conference call with analysts to discuss first-quarter financial results, Pembina's chief financial officer Cameron Goldade acknowledged the recent completion of the $34 billion Trans Mountain expansion, which marked its official opening last week.

But he reiterated Pembina's previously stated stance that there are still too many questions surrounding the pipeline to support pursuing a purchase at this point.

"From our perspective, there still exists a tremendous amount of uncertainty around that asset. And so you know, frankly, nothing has changed from our prior messaging in terms of that as an investment opportunity," Goldade said on Friday.


"It's not something we're spending a great deal of time on right now."

Pembina formed a partnership in 2021 with Western Indigenous Pipeline Group for the purpose of pursuing an Indigenous-led equity stake in Trans Mountain.

The pipeline is currently owned by the federal government, which bought it in 2018 to get the expansion project over the finish line.

But the government has said it does not wish to be the long-term owner and has already launched the first of what is expected to be a two-phase divestment process.

Pembina is not eligible to participate in this first phase, which involves talks with more than 120 Indigenous nations located along the Trans Mountain route to see if any of them are interested in an equity stake.

The second phase, for which the timing is unclear, will involve the consideration of commercial offers.

Some analysts have suggested Pembina would be the most logical buyer for the 890,000-barrel-per-day pipeline, which opens up new global export markets for Canadian oil companies.

But during the course of the four years it took to construct the mega-project, the pipeline expansion ran into multiple regulatory snags, delays and budget overruns.

And even though the project is complete, the Crown corporation that built it is still locked in a dispute with oil companies over the tolls it wishes to charge to use the pipeline.

Tolls are the way a pipeline earns revenue, so the final tolling structure for Trans Mountain will directly impact the pipeline's value as well as the price a prospective buyer is willing to pay.

Trans Mountain is looking to charge higher tolls to offset some of the project's budget overruns, but oil companies don't want to be held responsible for construction-related challenges.

The Canada Energy Regulator has approved Trans Mountain's proposed higher tolls on an interim basis to ensure a tolling structure was in place for the start-up of the pipeline, but it has yet to make a final decision.

Pembina's comments on Trans Mountain came one day after the company announced it earned $439 million in the first quarter, up from $369 million a year earlier.

Pembina said its revenue for the quarter ended March 31 was $1.54 billion, down from $1.62 billion during the same quarter last year.

Diluted earnings per common share were 73 cents, up from 61 cents.

During the quarter, Pembina entered into long-term agreements with Dow Chemical to supply and transport up to 50,000 barrels per day of ethane to support the recently announced construction of Dow's new integrated ethylene cracker and derivatives facility in Fort Saskatchewan, Alta.

Pembina and its project partner, the Haisla Nation of B.C., also announced recently that they have achieved a number of positive milestones on Cedar LNG, a proposed floating liquefied natural gas facility to be built near Kitimat.

Pembina said a final investment decision on Cedar LNG will be made by June 2024.

This report by The Canadian Press was first published May 10, 2024.

Companies in this story: (TSX:PPL)

Amanda Stephenson, The Canadian Press

ARGENTINA

YPF’s $2.5 Billion Shale Oil Pipeline Moves Ahead After Approval


Jonathan Gilbert
Fri, May 10, 2024 


(Bloomberg) -- Argentina’s biggest oil and gas producer, state-run YPF SA, is moving ahead with plans to build a $2.5 billion cross-country pipeline that’s key to unlocking exports of crude from the vast Vaca Muerta shale patch in Patagonia.

YPF recently received environmental authorization for the so-called Vaca Muerta Sur pipeline and is seeking bids from contractors to build it, said Max Westen, head of strategy and business development.

For years, YPF has spearheaded drilling in Vaca Muerta by teaming up with other oil companies. Now, it’s doing the same for building pipelines and a liquefied natural gas plant, both of which require partners to proceed.

“The environmental permit is a key milestone, and we are in discussions with the rest of the oil industry — there’s a lot of interest in participating,” Westen said on an earnings call.

Read More: YPF 1Q Net Income Beats Estimates

Pipeline capacity is the chief bottleneck holding back Vaca Muerta, a heralded but underdeveloped formation often likened to the Permian in the US.

Last year, the government built a new trunk line for shale gas that’s helping to reduce the country’s LNG imports. It’s also reversing the flow of a pipeline originally designed to bring in fuel from Bolivia, so that Argentina’s northern provinces can instead be supplied by domestic shale. The two projects may one day enable Argentina to send its gas to neighboring Brazil.

But shipments of crude are a quicker way to generate the billions of dollars a year that Argentina is seeking to help turn around its struggling economy.

That’s why drillers, including YPF, are shifting their attention to Vaca Muerta’s oil window. Already, the companies have resumed crude sales to neighboring Chile after a years-long hiatus.

They are also investing — via Oldelval SA — in expanding existing facilities to ship crude overseas from Argentina’s Atlantic coast. That route will soon have an extra 45,000 barrels a day of capacity, plus another 200,000 barrels next year, Westen said.

Vaca Muerta Sur will run from the shale heartland of Neuquen province across northern Patagonia to Punta Colorada, where a port must be built to load tankers. The conduit is expected to transport 180,000 barrels a day in 2026 and may eventually have capacity for 700,000 barrels.

“Vaca Muerta Sur is the most competitive evacuation route to monetize the crude in Vaca Muerta,” Westen said. “That’s why YPF is pursuing it as a priority over any other project.”

YPF’s net shale oil production in the first quarter hit a record of 112,000 barrels a day, an increase of 3% from the previous quarter.

YPF’s new management — appointed by President Javier Milei — is divesting aging, conventional oil fields to focus on Vaca Muerta in a bid to boost its stock price and resume dividend payments to shareholders.

The company pitched the blocks at an investor roadshow in Houston and Calgary last month, generating interest from about 70 companies, Westen said. YPF is preparing to receive bids in June and hopes to complete sales by the end of the year.

 

China Trounces Korea Taking Three-Quarters of Shipbuilding Orders in April

China is taking the lead in shipbuilding orders (CSSC)

PUBLISHED MAY 8, 2024 6:00 PM BY THE MARITIME EXECUTIVE

 

 

The competition for new orders in the shipbuilding market continues to grow with Chinese shipyards pulling dramatically ahead of the South Korean yards for the second consecutive month. Analysts highlight that it illustrates the differences in strategies between the two countries, a position that China is likely to expand on going forward.

Clarkson Research released the latest monthly figures showing the growing divergence. Total orders they calculated reached 4.71 million compensated gross tons for a total of 121 vessels. Overall, the market was up 24 percent year-over-year.

The two countries typically dominate the market with some months a nearly even split in orders or at the beginning of 2024 South Korea was booking larger total orders. However, in April the Chinese yards booked 76 percent of the total orders. Clarksons calculates a total of 91 ships representing 3.58 million CGT. South Korean yards by comparison only received orders for 13 ships or just 670,000 CGT. That represented only a 14 percent market share. By comparison, in March, Chinese yards received 43 percent compared to the South Korean’s 38 percent.

The global order book Clarksons reports stands at 129.9 million CGT, with the backlog down just one percent in April. Chinese yards hold 50 percent of the orderbook (64.9 million CGT). South Korean yards have 30 percent of the orderbook (39 million CGT).

The Export-Import Bank of Korea’s Overseas Economic Research Institute highlights that South Korea’s industry is following a selective order-taking strategy. The yards are focusing on high-value new builds as well as emerging technologies for eco-friendly and technologically advanced vessels. In the first quarter of 2024, just over half of the orders received by the South Korean yards were for liquified petroleum gas (LPG) carriers. The emerging category of very large ammonia carriers was just over 20 percent of the orders. Korean shipbuilders failed to take any orders for VLCCs last year and are now seeing a slowing in containership construction orders.

Analysts are questioning South Korea’s strategy. They note that orders for LNG carriers which have been among the highest-priced vessels have likely peaked driven by the 104 orders placed mostly with the Korean yards linked to Qatar’s expansion.  Qatar Energy reported it has completed the second tranche of its orders signing a massive contract with China for 18 Q-Max carriers, the largest LNG vessels.

China’s yards have built large production capacities and are very competitive on price. Analysts highlight that China is now targeting more of the mid-sized vessel construction orders previously led by Japanese yards. In addition to the Q-Max order last month, Chinese yards received the only large orders for new containerships in 2024. China’s yards are also breaking into new technologies including methanol-fueled vessels.

All of this comes as the United States announced it would start a trade investigation into the Chinese government’s support of its shipbuilders. Five U.S. labor unions lead the protest alleging unfair competition and subsidized steel helping China to build its dominance in shipbuilding. They are calling for tariffs and more U.S. government support to rebuild domestic shipbuilding capabilities. 

What Trump promised oil CEOs as he asked them to steer $1 billion to his campaign

Donald Trump has pledged to scrap President Biden's policies on electric vehicles and wind energy, and other initiatives opposed by the fossil fuel industry.  

By Josh Dawsey and Maxine Joselow Washington Post

 

MAY 9, 2024 — 3:36PM

JABIN BOTSFORD, WASHINGTON POST

Former President Donald Trump shakes hands with North Dakota Gov. Doug Burgum (R), who is leading the Trump campaign’s development of its energy policy, at a rally in Laconia, N.H., on Jan. 22.

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As Donald Trump sat with some of the country's top oil executives at his Mar-a-Lago Club last month, one executive complained about how they continued to face burdensome environmental regulations despite spending $400 million to lobby the Biden administration in the last year.

Trump's response stunned several of the executives in the room overlooking the ocean: You all are wealthy enough, he said, that you should raise $1 billion to return me to the White House. At the dinner, he vowed to immediately reverse dozens of President Joe Biden's environmental rules and policies and stop new ones from being enacted, according to people with knowledge of the meeting, who spoke on the condition of anonymity to describe a private conversation.

Giving $1 billion would be a "deal," Trump said, because of the taxation and regulation they would avoid thanks to him, according to the people.

Trump's remarkably blunt and transactional pitch reveals how the former president is targeting the oil industry to finance his reelection bid. At the same time, he has turned to the industry to help shape his environmental agenda for a second term, including the rollbacks of some of Biden's signature achievements on clean energy and electric vehicles.

The contrast between the two candidates on climate policy could not be more stark. Biden has called global warming an "existential threat," and over the last three years, his administration has finalized 100 new environmental regulations aimed at cutting air pollution and greenhouse gas emissions, restricting toxic chemicals, and conserving public lands and waters. In comparison, Trump has called climate change a "hoax," and his administration weakened or wiped out more than 125 environmental rules and policies over four years.

In recent months, the Biden administration has raced to overturn Trump's environmental actions and issue new ones before the November election. So far, Biden officials have overturned 27 Trump actions affecting the fossil fuel industry and completed 23 new actions affecting the sector, according to a Washington Post analysis. The Interior Department, for instance, recently blocked future oil drilling across 13 million acres of the Alaskan Arctic.

Despite the oil industry's complaints about Biden's policies, the United States is now producing more oil than any country ever has, pumping nearly 13 million barrels per day on average last year. ExxonMobil and Chevron, the largest U.S. energy companies, reported their biggest annual profits in a decade last year.

Yet oil giants will see an even greater windfall — helped by new offshore drilling, speedier permits and other relaxed regulations — in a second Trump administration, the former president told the executives over the dinner of chopped steak at Mar-a-Lago.

Trump vowed at the dinner to immediately end the Biden administration's freeze on permits for new liquefied natural gas (LNG) exports — a top priority for the executives, according to three people present. "You'll get it on the first day," Trump said, according to the recollection of an attendee.

The roughly two dozen executives invited included Mike Sabel, the CEO and founder of Venture Global, and Jack Fusco, the CEO of Cheniere Energy, whose proposed projects would directly benefit from lifting the pause on new LNG exports. Other attendees came from companies including Chevron, Continental Resources, Exxon and Occidental Petroleum, according to an attendance list obtained by the Post.

Trump told the executives that he would start auctioning off more leases for oil drilling in the Gulf of Mexico, a priority that several of the executives raised. He railed against wind power, as the Post previously reported. And he said he would reverse the restrictions on drilling in the Alaskan Arctic.

"You've been waiting on a permit for five years; you'll get it on Day 1," Trump told the executives, according to the recollection of the attendee.

At the dinner, Trump also promised that he would scrap Biden's "mandate" on electric vehicles — mischaracterizing ambitious rules that the Environmental Protection Agency recently finalized, according to people who attended. The rules require automakers to reduce emissions from car tailpipes, but they don't mandate a particular technology such as EVs. Trump called them "ridiculous" in the meeting with donors.

The fossil fuel industry has aggressively lobbied against the EPA's tailpipe rules, which could eat into demand for its petroleum products. The American Fuel & Petrochemical Manufacturers, an industry trade group, has launched a seven-figure campaign against what it calls a de facto "gas car ban." The campaign includes ads in battleground states warning that the rule will restrict consumer choice.

"Clearly, if you are producing gasoline and diesel, you want to make sure that there's enough market there," said Stephen Brown, an energy consultant and a former lobbyist for Tesoro, an oil refining company. "I don't know that the oil industry would walk in united with a set of asks for the Trump administration, but I think it's important for this issue to get raised."

Although the repeal of the EPA rule would benefit the fossil fuel industry, it would probably anger the auto industry, which has invested billions of dollars in the transition away from gasoline-powered cars. Many automakers are under increasing pressure to sell more EVs in Europe, which has tightened its own tailpipe emissions rules, and they are eager to avoid a patchwork of regulations around the globe.

"Automakers need some degree of regulatory certainty from government," said John Bozzella, president and CEO of the Alliance for Automotive Innovation, which represents Ford, General Motors, Stellantis, Toyota and other car companies.

"What has emerged instead is a wholesale repeal … and then reinstatement … and then repeal again of regulations every four or eight years," Bozzella said in an email.

Biden's EV policies have also sparked opposition in rural, Republican-led states such as North Dakota, where there are far more oil pump jacks than charging stations. A key figure leading the Trump campaign's development of its energy policy is Republican North Dakota Gov. Doug Burgum, who has been talking extensively to oil donors and CEOs.

At a fundraiser on Saturday in Palm Beach, Fla., Burgum told donors that Trump would halt Biden's "attack" on fossil fuels, according to a recording of his remarks obtained by the Post.

"What would be the No. 1 thing that President Trump could do on Day 1? It's stop the hostile attack against all American energy, and I mean all," Burgum said. "Whether it's baseload electricity, whether it's oil, whether it's gas, whether it's ethanol, there is an attack on liquid fuels."

Burgum also criticized the Biden administration's policies on gas stoves and vehicles with internal combustion engines, falsely claiming that they would prevent consumers from buying both technologies.

"They've got some liberal idea about what products we need," Burgum said. "You all need EV cars. You don't need internal combustion. We'll decide what kind of car you're going to drive, and we're going to regulate the other ones out of business. I mean, it's just in every industry, not just in cars, not just in energy. They're telling people what stoves you can buy. This is not America."

While the Energy Department recently set new efficiency standards for gas stoves, they would not affect the stoves in people's kitchens or those currently on the market. The Biden campaign declined to comment for this story.

Burgum has pushed harder to address climate change than many other Republicans, setting a goal in 2021 for North Dakota — the third-largest oil-producing state — to become carbon-neutral by 2030. He has stressed, however, that the goal won't be achieved via government mandates or the elimination of fossil fuels.

Burgum's approach to climate policy makes him an unusual messenger for Trump, who has falsely called global warming a hoax invented by China. But many oil executives view Burgum — a possible contender to lead the Energy Department in a second Trump term — as sympathetic to their concerns, and he has cultivated deep support among oil donors.

Despite Trump's huge fundraising ask, oil donors and their allies have yet to donate hundreds of millions to his campaign. They have contributed more than $6.4 million to Trump's joint fundraising committee in the first three months of this year, according to an analysis by the advocacy group Climate Power. Oil billionaire Harold Hamm and others are scheduling a fundraiser for Trump later this year, advisers said, where they expect large checks to flow to his bid to return to office.

One person involved in the industry said many oil executives wanted Florida Gov. Ron DeSantis or another Republican to challenge Biden. But now that Trump is the nominee, this person said, they are going to embrace his policies and give.

Dan Eberhart, chief executive of the oil-field services company Canary and a Trump donor, said the Republican onslaught of donations was not surprising.

"Biden constantly throws a wet blanket to the oil and gas industry," Eberhart said. "Trump's 'drill baby drill' philosophy aligns much better with the oil patch than Biden's green-energy approach. It's a no-brainer."

Alex Witt, a senior adviser for oil and gas with Climate Power, said Trump's promise is he will do whatever the oil industry wants if they support him. With Trump, Witt said, "everything has a price."

"They got a great return on their investment during Trump's first term, and Trump is making it crystal clear that they're in for an even bigger payout if he's reelected," she said.

John Muyskens contributed to this report.