Friday, August 30, 2024

 

This New Methane Conversion Innovation Could Be Huge for Shale

The U.S. Department of Energy’s (DOE) Brookhaven National Laboratory and scientists at several collaborating institutions have engineered a highly selective catalyst that can convert methane into methanol in a single, one-step reaction at a temperature lower than required to make tea. This discovery marks a big step forward over more complex traditional conversions that typically require three separate reactions, running at vastly higher temperatures. On an industrial scale, the simplicity of the system could mark a breakthrough in tapping “stranded” natural gas reserves in isolated rural areas, far from chemical refineries and other costly infrastructure, says Brookhaven chemist and study co-author Sanjaya Senanayake. Such local deployments would remove the need to transport high-pressure, flammable liquified natural gas. According to the scientists, such local deployments would remove the need to transport high-pressure, flammable liquified natural gas. Methane is a major component of natural gas and a potent greenhouse gas while methanol is used as an alternative biofuel for internal combustion and other engines.  "We could scale up this technology and deploy it locally to produce methanol that can be used for fuel, electricity, and chemical production," Senanayake said.

Brookhaven Science Associates, which manages Brookhaven Lab on behalf of DOE, and the University of Udine have filed a patent cooperation treaty application on the use of the catalyst for one-step methane conversion and are exploring ways to work with entrepreneurial partners to bring the technology to market. This discovery builds on results from previous studies with the new recipe for the catalyst containing an additional ingredient: a thin layer of "interfacial" carbon between the metal and oxide.

"Carbon is often overlooked as a catalyst. But in this study, we did a host of experiments and theoretical work that revealed that a fine layer of carbon between palladium and cerium oxide really drove the chemistry. It was pretty much the secret sauce. It helps the active metal, palladium, convert methane to methanol," said chemical engineer Juan Jimenez, a Goldhaber postdoctoral fellow in Brookhaven Lab's Chemistry Division and the lead author of the paper published in the Journal of the American Chemical Society.

Also known as wood alcohol, methanol (CH3OH) is considered an alternative fuel under the Energy Policy Act of 1992 with chemical and physical fuel properties similar to ethanol. Methanol was used in the 1990s as an alternative fuel for compatible vehicles; however, current research mainly focuses on its potential use as a sustainable marine fuel.

Lowering Methane Emissions

It’s too early to determine the scalability and economic viability of the one-step catalytic conversion technology. However, if successful, it could prove useful in helping the U.S. shale patch clean up its act by cutting methane emissions. 

The U.S. Oil & Gas sector is producing 8x above the volume of methane many operators have pledged to achieve by 2030 to reach their climate goals, a fresh study by non-profit Environmental Defense Fund recently revealed. The environmental advocacy group conducted ~30 flights between June and October 2023, covering oil and gas basins that account for nearly three-quarters of onshore production. The data collected showed that, on average, around 1.6% of gross gas production is released as methane into the atmosphere, about eight times higher than pledged by producers under the Oil and Gas Climate Initiative and the Oil & Gas Decarbonization Charter

Over the past couple of decades, methane concentrations in the atmosphere have increased sharply, from 1,700 parts per billion (ppb) in 1990 to 1,930 ppb currently. Although methane is much less plentiful in the atmosphere compared to CO2, it’s still able to do plenty of damage at even lower concentrations thanks to being more than 80x more powerful at warming the earth than CO2 over 20 years and 28x more powerful on a 100-year timescale. The fossil fuel sector has been a major contributor to the rapid buildup of methane in the atmosphere, with emissions from venting, leakage, and flaring in the oil and gas sector currently estimated to be responsible for ~25% of global anthropogenic methane emissions. A single gas leak can be quite devastating: Last year, environmental intelligence firm Kayrros SAS deployed National Oceanic and Atmospheric Administration's Geostationary Operational Environmental Satellites (GOES) to quantify a gas pipeline by the Williams Companies Inc. (NYSE:WMB) spewed about 840 metric tons of methane into the atmosphere after a farmer in Idaho accidentally ruptured it while using an excavator. Currently used for weather forecasts, scientists recently discovered that GOES is effective at detecting large methane emissions of around tens of metric tons an hour or larger. 

Last year, the U.S. pipeline regulator unveiled new rules aimed at lowering methane leaks from the vast network of 2.7 million miles of natural gas pipelines in the country. The proposal could "significantly improve the detection and repair of leaks from gas pipelines... deploy pipeline workers across the country to keep more product in the pipe, and prevent dangerous accidents,"  the Transportation Department's Pipeline and Hazardous Materials Safety Administration said.

By Alex Kimani for Oilprice.com

 

EPA Extends Emergency Waiver for Midwest Gasoline Supply

The U.S. Environmental Protection Agency (EPA) has renewed for a second time an emergency waiver for the summer spec gasoline requirements in four Midwest states following the supply emergency after the shutdown of ExxonMobil’s Joliet refinery in Illinois in July and early August.

The waiver for Illinois, Indiana, Michigan, and Wisconsin lifts the federal anti-smog rules that require more expensive summer gasoline to be sold in the U.S. during the hottest months of the year.

The waiver, first issued on July 31 after ExxonMobil’s Joliet refinery was closed on July 15, is now extended for a second time until September 15.

Exxon’s Joliet refinery 40 miles southwest of Chicago is equipped to handle 275,000 barrels of crude per day, producing about 11 million gallons of gasoline and diesel fuel every day.

The facility was shut down in the middle of July following a power outage caused by a storm.

Following a three-week outage, Exxon began to restart on August 7 some units at the refinery.

As a result of the outage, and other outages in the Midwest, regional gasoline prices rose earlier in August, the U.S. Energy Information Administration (EIA) said last week.

A series of refinery outages in Chicago and Ohio raised Midwest prices for petroleum products, particularly gasoline, compared to the U.S. average, the EIA said.

While retail gasoline prices in the Midwest are typically lower than the U.S. average, due to production from local refineries and lower regional fuel taxes, the average retail gasoline price in the Midwest has been within 1% of the U.S. average for three consecutive weeks following the outages, the EIA noted.

Apart from Exxon’s Joliet refinery, operators also reported temporary unit shutdowns at facilities in Ohio, including Cenovus’s 183,000-bpd Lima and 150,800-bpd Toledo refineries.

Midwest refinery utilization decreased 11 percentage points to 86% because of these outages, reducing refinery production of gasoline, diesel, and other refined petroleum products.

After these refineries resumed operations in the second week of August, Midwest refinery utilization increased more than 10 percentage points the following week, to 97% as of August 16.

By Charles Kennedy for Oilprice.com

CAPITAL STRIKE

Equinor Warns Windfall Tax May Discourage Its UK Investments

  • Equinor is uncertain about future investments in the UK North Sea due to the Labour government's proposed tax changes.

  • The increased windfall tax and removal of tax relief could make investments less economically viable for Equinor.

  • The company is considering the impact of these changes on its Rosebank oilfield project and may adjust its investment plans accordingly.

North Sea

Equinor awaits clarity on the UK tax regime by the Labour government before strategizing and committing to investments in the UK North Sea, a senior executive at the Norwegian company told Reuters on Wednesday.

The Labour Party has pledged to further raise the already high windfall tax on oil and gas profits in the North Sea and scrap tax relief for operators for part of the investments in oil and gas assets they have made.

“We need to look at our appetite to invest further in the UK based on the fiscal regime ... it could be that the economics are really, really hard impacted,” Philippe Francois Mathieu, Executive Vice President, Exploration & Production International at Equinor, told Reuters on the sidelines of an industry conference in Stavanger, Norway.

Last month, the Labour government said that it intends to raise the rate of the Energy Profits Levy (EPL) to 38% from 1 November 2024, from 35% now, bringing the headline rate of tax on upstream oil and gas activities to 78%, up from 75% currently. The levy will be further extended by a year to

31 March 2030, while the EPL’s investment allowance will be removed.

The plans have led to a backlash from North Sea oil and gas producers who have signaled that the uncertainty in the tax regime in the UK will further drive investments away and undermine investments in low-carbon technology and solutions, too.

Producers have already warned they are considering moving to more fiscally stable jurisdictions such as Norway.

Norway’s Equinor operates the Mariner field offshore the UK and decided last year to invest $3.9 billion (£3 billion) in the first phase of development of the Rosebank oilfield, one of the biggest offshore oil and gas projects in the region in years.

If the UK fiscal regime changes again with higher taxes, Equinor will “need to look into what we want to do further with the Rosebank project,” Mathieu told Reuters.

By Charles Kennedy for Oilprice.com

Small Tax on Super-Rich Could Yield Billions for Caucasus, Central Asia

  • A proposed wealth tax on the top 0.5% of earners globally could raise over $2 trillion, with significant implications for Caucasus and Central Asia.

  • The tax revenue could be used to address pressing social and economic challenges, particularly those related to climate change.

  • Wealthier nations like Kazakhstan could generate billions in additional revenue, while even the poorest countries stand to gain millions.

A recent study published by an advocacy group finds that imposing a modest tax on top earners can generate hundreds of millions of dollars in much needed revenue for countries in the Caucasus and Central Asia. The added revenue could go a long way in addressing social and economic challenges connected with global warming and climate change, the study adds.

The working paper, titled Taxing extreme wealth: What countries around the world could gain from progressive wealth taxes, contends that a comparatively small tax paid by the top 0.5 percent of income earners in every country around the globe could collectively raise more than $2 trillion. The paper, published by the UK-based Tax Justice Network (TJN), uses the example of Spain’s wealth tax as the basis for its global model of super-rich taxation.

“Global challenges, in particular the climate crisis, inequality, and the cost-of-living crisis come along with substantial financial needs,” the report states. “A moderate, progressive wealth tax could help countries to raise these urgently needed funds. The proposed tax would seek a reasonable contribution from the top 0.5 percent wealthiest individuals in each country, who, on average, possess more than 25 per cent of a society’s total wealth.”

Under the TJN plan, the super-rich in every nation would pay taxes on assets above a pre-determined threshold, calculated on a sliding scale ranging from 1.7 percent to 3.5 percent. The plan sets a high net-worth threshold to ensure that the middle class is not punished by the tax. 

According to the working paper’s estimates, wealthier states of the Caucasus and Central Asia could raise hundreds of millions of dollars in added revenue. In Kazakhstan, the richest state in the two regions, over 61,000 citizens would be eligible to pay the wealth tax. The minimum asset threshold for those facing the tax in Kazakhstan would be $819,381. TJN’s estimate, adjusted for existing taxes and other factors, indicates that its proposed wealth tax could generate an additional $3.7 billion in revenue for the Kazakh government. Those funds could have come in handy to speed recovery efforts for areas of Kazakhstan that were devastated by flooding this spring. Residents of at least one hard-hit area staged protests in May over what they contended was inadequate government assistance.

Elsewhere, the introduction of the TJN plan could generate roughly $695 million in added revenue for the Uzbek government, which has been running up big deficits of late as it strives to retool the country’s economy. Under the TJN formula, the Caucasus’ richest state, Azerbaijan, could add more than $241 million to its state coffers. The poorest nation in the two regions, Tajikistan, could generate about $54 million.

The working paper makes an argument that the super-rich should feel a moral obligation to help defray the consequences of global warming. “The wealthiest citizens bear more responsibility for carbon emissions, both due to their more excessive consumption, as well as to their investment habits,” the report states.

TJN does not outline an action plan to secure international adoption of its super-rich taxation proposal. For the proposal to work, the introduction of stringent international transparency rules would be needed, the report acknowledges, urging the creation of a Global Assets Registry. The chances that any such mechanism will come into being in the foreseeable future seem slim to none. 

“Existing tax systems offer opportunities for the super-rich to engage in international tax abuse, primarily through the use of secrecy jurisdictions to shield their fortunes,” the report states. “Therefore, the implementation of a moderate, progressive wealth tax must be accompanied by a move towards full beneficial ownership transparency for all types of companies and assets.”

By Eurasianet.org


Liberty Steel's Polish Plant Faces Bankruptcy

  • Liberty Steel's Polish plate producer, Huta Cz?stochowa, was recently declared bankrupt for the second time in its history.

  • Ukrainian metals and mining group Metinvest and Polish coal producer W?glokoks have expressed interest in leasing the plant.

  • Liberty Steel is appealing the bankruptcy ruling, citing procedural issues and ongoing restructuring efforts.

 

Big changes seem on the way for the Polish steel industry. Recently, local steel news outlets reported that several companies have expressed interest in leasing Polish plate producer Huta Cz?stochowa, which Liberty Steel acquired in 2021, after a local court declared the plant bankrupt in July.

Among the potential suitors for the plant is the Ukrainian metals and mining group Metinvest. “We can confirm that we were invited to consider leasing the steel plant, with the possibility of later acquiring it,” daily newspaper ?ycie Cz?stochowy quoted Metinvest’s chief commercial officer Dmitriy Nikolayenko as saying on August 15. “At present, we don’t have information on what condition the previous owner left the site in. We need to conduct a thorough assessment, including a comprehensive due diligence study, which would determine the launch date of the steelworks,” Nikolayenko added.

Metinvest officials were not available for comment, despite several attempts. Other parties interested in leasing Huta Cz?stochowa include Katowice-headquartered coal producer W?glokoks, which has stakes in other Polish rolling assets. One official at that company would only tell MetalMiner that the company is analyzing the possibility and declined o comment further.

Metinvest Could Expand Non-Ukraine Capacity

Information on the group’s website showed that Metinvest’s assets outside of Ukraine include Italian plate producers Ferriera Valsider and Metinvest Trametal. The latter is in the Friuli Venezia Giulia region and has a 600,000 metric tons per year capacity to roll plate in 4-180mm and a maximum width of 3200 mm.

Ferriera Valsider, in the Veneto region, can roll up to 400,000 metric tons per year of heavy plate in 8-200mm gauges and widths of up to 3,000 mm as well as 600,000 metric tons of HRC in 1.8-25mm gauges per year to a maximum width 1,555mm.

Huta Cz?stochowa is 80 kilometers north of Katowice, the Silesian Voivodeship’s capital, and can produce about 1.2 million metric tons per year of plate in 5-20 mm gauges on two rolling mills. Information on Liberty Steel’s website indicated that products from the plant target wind towers and unpressurized tanks.

Yellow goods, construction, as well as vehicular and water transport sectors are also targets for Huta Cz?stochowa’s production. In addition, the plant can produce welded pipes in 1,000-3,000mm diameters.

The Plant Has a Checkered Financial History

The Cz?stochowa District Court placed Huta Cz?stochowa into bankruptcy on July 25. Reports from Polish media and steel news outlets stated that this was because the plant had not operated in six months and had not received any new orders. A source with GFG Alliance told MetalMiner that the plant was working at minimal levels earlier in the year, but worsening market conditions in Europe created cash flow problems.

Plate produced in northern Europe is currently about €605 ($675) per metric ton EXW, down from €700 ($780) earlier in the month. This is due partly to lower seasonal demand in the European summer as well as declining input prices.

The current bankruptcy is not Huta Cz?stochowa’s first. Indeed, the same court that announced the current bankruptcy also placed the plant into bankruptcy in September 2019 after its board filed for bankruptcy in June.

Liberty Hopes to Retain its Steel Industry Positions

Sunningwell International Polska reportedly expressed interest in taking over the plant’s lease in 2019, after Polish courts previously placed the plant into bankruptcy. The company withdrew from the planned sale in 2020, after which Liberty Steel acquired it for the reported sum of z?. 190 million ($43.3 million).

Liberty Steel originally took over the lease for Cz?stochowa in December of that year and then fully acquired the plant in May 2021. Liberty’s parent company, GFG Alliance, stated on August 15 that it had filed an appeal against the bankruptcy proceeding.

“Liberty is appealing because it believes the business proved it had strong support from its largest creditor, had a Letter of Intent from a credible financial institution for a €100 million [$111 million] working capital loan, and was already undergoing a restructuring and restart process,” the company stated in an announcement.

“Liberty’s appeal also highlights a number of court procedural issues which have a significant impact on the validity of the proceedings,” the company stated.

By Christopher Rivituso

 

Is China Losing Its Dominant Position in the Global Steel Market?

  • China's government has suspended approvals for new steel plants due to overproduction and weak demand.

  • The Chinese steel industry, despite being the world's largest, is facing significant challenges, including a struggling property sector and increased international pressure due to rising exports.

  • Iron ore prices have plummeted as a result of decreased demand from Chinese steel mills.
Steel Plant

Via Metal Miner

Amidst continuing reports of an economic downturn with little or no sign of improvement now comes a report that the Chinese Government has suspended the system allowing approval of new steel plants. It is a move that could have significant implications for the Chinese steel industry and global steel manufacturing as a whole.

According to Bloomberg, China’s Ministry of Industry and Information Technology recently stated that it had decided to pause the current mechanism wherein new steel plant construction was allowed as long as steelmakers first shut down some of their existing facilities. The ministry also mentioned plans to create a new approval process, but provided no timeline. For years, the Chinese Government has insisted on eliminating existing capacity as a pre-condition before allotting permission to construct a new plant.

Seems like those rules are history, for now.

The move surprised almost everyone in the steel sector, but resulted in mostly muted reactions. As frequently reported by MetalMiner in the past, steel exports from China have shot up in the last couple of years and currently stand at their highest rate since 2016.

China Relies on Exports to Buoy Steel Manufacturing

China is the world’s largest steel producer, accounting for over 50% of the global output, or roughly a billion tons a year. But post-COVID, Chinese steel mills struggled to find domestic customers and are now resorting to dumping cheap steel products into as many markets as possible. In response, many of those countries’ steel industry leaders continue to protest.  

According to one estimate by the Bank of America, five Southeast Asian countries, including Vietnam, Thailand, and Malaysia, absorbed 26% of China’s steel exports in 2023 alone. Steel manufacturing titans like ArcelorMittal SA, too, have complained about these exports. Furthermore, the lack of concrete measures announced at China’s high-profile Third Plenum dimmed hopes that the country’s struggling property sector would recover from its downturn.

In fact, just a few days ago, Hu Wangming, head of China Baowu Steel Group Corp., told employees at the company’s biannual meeting that conditions in the country were like a “harsh winter” that could become longer and colder and even more difficult. He also warned that China’s steel industry faced a situation worse than the crises it endured in 2008 and 2015.

Iron Ore Prices Plunge Amid Falling Demand

The aforementioned Bloomberg report also covered the Chinese Ministry warning that the steel industry was staring at challenging times, particularly in terms of the supply and demand relationship. It stated that numerous problems still remain, such as inadequate policy implementation and imperfect supervision and implementation mechanisms.

With domestic steel consumption down, iron ore prices have fallen substantially, losing about 10% this quarter and touching their lowest point since 2022. So far, ore prices have dropped by over 28% in 2024.

Reasons for the Chinese Steel Industry’s Decline

One of the biggest disappointments for Chinese steel mills has been China’s property sector, which continues to be sluggish despite best efforts made by the government to pull it out of its quagmire. In an interview with CNBC, Sabrin Chowdhury, head of commodities analysis at BMI, said that Chinese demand for steel and iron ore remains disappointing because the ongoing downturn in China’s property market negatively impacts industrial metals needed for infrastructure.

According to a recent report from Greece’s Ursa Shipbrokers, China’s steel industry suffers from weak demand, lower profitability for mills, and government directives to limit annual production growth. Ursa’s analysts highlight that only 5% of Chinese steel producers are in profit today, especially as steel prices continue to plummet, with rebar futures reaching a four-year low. The continued downturn in the country’s property sector, which has seen a 10.2% drop in investment, has significantly reduced steel demand.

By Sohrab Darabshaw

 

UK

Drax to Pay £25 Million Following Ofgem Biomass Probe

Power station operator Drax has agreed to pay £25m after an investigation by energy watchdog Ofgem found it failed to report data adequately.

Drax, which receives hefty Government subsidies from burning biomass wood chips, lacked the necessary data governance and controls in place, according to Ofgem.

This meant it did not give the regulator accurate and robust data on the type of wood it uses.

Ofgem did not find any evidence that Drax’s biomass is not sustainable or that Drax had been issued renewables obligation certificates (ROCs) incorrectly.

Ofgem said Drax will pay £25m to its voluntary redress fund as a result of the findings.

The fine comes after an investigation into the sustainability of the biomass it uses at its wood-burning power plant, which was subject of a major BBC Panorama documentary.

Drax Group chief executive, Will Gardiner said: “It is welcome that Ofgem has found no evidence that our biomass failed to meet the sustainability criteria of the Renewables Obligation (RO) scheme, nor that the ROCs we received for the renewable power we produced had been provided incorrectly.”

“Although Ofgem has noted there is no evidence to suggest Drax deliberately misreported its profiling data, we recognise the importance of maintaining a strong evidence base and are continuing to invest to improve confidence in our future reporting.”

Ofgem chief executive Jonathan Brearley said: “This has been a complex and detailed investigation. Energy consumers expect all companies, particularly those receiving millions of pounds annually in public subsidies to comply with all their statutory requirements. 

“There are no excuses for Drax’s admission that it did not comply with its mandatory requirement to give Ofgem accurate and robust data on the exact types of Canadian wood it utilises. The legislation is clear about Drax’s obligations – that’s why we took tough action. 

“Drax has accepted that it had weak procedures, controls and governance which resulted in inaccurate reporting of data about the forestry type and sawlog content being used. It has agreed to make a significant payment of £25m to our voluntary redress fund and carry out an independent external audit of its global profiling data reporting.  

“This report will be submitted to Ofgem for our independent assessment and findings published, so the conclusions are fully transparent.? While Ofgem currently has no reason to believe there have been further instances of non-compliance we won’t hesitate to act if required.” 

A spokesperson for the Department for Energy Security and Net Zero said: “We expect full compliance with all regulatory obligations – consumers rightly expect the highest standard of accountability from generators.

“The size of the redress payment underscores the robustness of the regulatory system and the requirement that generators abide by both the spirit and the letter of the regulations.

“The detail of the investigation and subsequent findings are a matter for Ofgem.” 

With contribution from Press Association

By City AM