PolyMet and Teck form JV to develop Minnesota mining projects
July 20 (Reuters) - PolyMet Mining Corp and Teck Resources Ltd said on Wednesday they will form a joint venture to develop their Minnesota copper and nickel mining projects.
The new company, known as NewRange Copper Nickel LLC, will share costs to develop the two proposed mines, which aim to produce metals used to make electric vehicles and other green technologies.
Shares of St. Paul, Minnesota-based PolyMet jumped 6.8% on Wednesday morning after the news, while shares of Vancouver, British Columbia-based Teck fell 1.9%.
PolyMet's $1 billion NorthMet project is by far the most advanced of the two, as it has received most of its permits. It does face some regulatory and legal opposition. Teck's Mesabi project has yet to be fully studied and does not yet have permits.
Both projects are located in Minnesota's Iron Range region, which has a long history of mining taconite ore for steel production. The area is about 200 miles (322 km) north of Minneapolis.
Both companies have agreed to fund the JV with an initial budget of $170 million for permitting and engineering work.
As part of the deal, PolyMet will remain an independent company and Glencore Plc will remain its largest shareholder. Glencore has committed to funding up to $105 million of PolyMet's share of the JV's costs.
Glencore controls about 71% of PolyMet's shares. As part of the JV announcement on Wednesday, PolyMet said that Glencore may eventually exercise its options to convert debt into equity, steps that would boost its stake to 78%.
(Reporting by Ernest Scheyder; editing by David Evans)
Saturday, July 23, 2022
Ukraine war spurs LNG demand in Japan despite fossil fuel activism
Green activists have put in a record number of demands to Japanese companies for action over fossil fuel investment — just as experts warn that liquefied natural gas (LNG) project financing will be necessary for several years because of the war in Ukraine.
During this year’s round of annual general meetings, climate activist groups, including Australia’s Market Forces and Japan’s Kiko Network, submitted shareholder proposals to four companies listed on the Tokyo Stock Exchange urging stronger commitment to tackling climate change.
Among the companies were Japan’s second-biggest lender, SMFG, and Tepco, a provider of electricity to Tokyo. According to the activists, the lifetime emissions from 10 LNG projects planned by these businesses will be around 1.2bn tonnes of carbon dioxide.
“Japan is on the front line of a global economy-wide transition driven by the need to adapt to the threats and opportunities of the climate crisis,” said Sachiko Suzuki, a researcher at Market Forces, in a statement in April. “Change is happening fast and those companies that fail to align their strategy are creating a grave risk to their future. Investors are alive to these threats and demanding action.”
Lenders say they are caught in the middle. In an interview with the FT in the same month, Masahiro Kihara, the chief executive of Japan’s third-largest lender, Mizuho, said the government should speed up the creation of a post-Ukraine energy plan, stressing it was indispensable.
“What I’d like to be done is for the government and the private sector to have a very serious discussion about this,” said Kihara. “And I think that’s one thing that’s not being accomplished right now by the politicians. There’s no debate on energy policy.”
“There has to be a discussion with a specific timeframe in mind: for example, ‘until here, we’ll use LNG, after that, we’ll use renewables, etc’. We need to have that kind of grand design. And relying on other countries has become very risky,” he added.
Amendments proposed by activists at the AGMs required two-thirds majority support and they did not pass. Still, corporate executives privately say they cannot ignore strong shareholder backing of climate motions even if they are not agreed.
A case in point is a motion from 2020, when a climate group filed the first such proposal to Mizuho. The motion prompted the country’s three largest banks to refrain from financing future fossil fuel projects.
Since Russia’s invasion of Ukraine in February, however, there have been several clear signs that the world is shifting back to more LNG, as gas prices on the spot market soar and Russia threatens to cut supplies to more countries.
Late last month, the G7 group of industrialised nations said investment in LNG was a “necessary response to the current crisis”, adding that, “in these exceptional circumstances, publicly supported investment in the gas sector can be appropriate as a temporary response.”
Another indicator, says Kaushal Ramesh, gas and LNG analyst at consultancy Rystad Energy, is France’s state-backed utility Engie signing a 15-year deal with Houston-based NextDecade — even though the talks were suspended in 2020 after the French government raised environmental concerns.
“The biggest sign of reversal is that European buyers are now signing 20-year contracts with the US,” says Ramesh. “We are starting to see clear signs of a reversal of the ‘no fossil fuel’ policy.”
Ramesh cites a string of deals by US LNG companies as American exporters position themselves to fill the gap as Europe turns away from Russian imports.
Venture Global, an exporter on the Gulf of Mexico coast, says it has struck a deal to sell 1.5mn tonnes a year to EnBW, one of Germany’s largest energy companies, in the first binding long-term agreement by a German company to buy US LNG.
More stories from this report
Gas prices in Europe have jumped after Russia cut capacity on its main gas export pipeline to Germany, fuelling concerns that Moscow is weaponising its gas exports in response to EU sanctions.
The International Energy Agency said Europe must prepare immediately for the complete severance of Russian gas exports this winter, urging governments to take measures to cut demand and keep nuclear power stations open.
Rystad Energy warns that LNG demand will outstrip supply by the end of this year. The consultancy adds that “although soaring demand has spurred the greatest rush of new LNG projects worldwide in more than a decade, construction timelines mean material relief is unlikely only after 2024”.
Scott Neilson, partner at law firm Allen & Overy, says banks are “in a tough spot because they know that a lot of their clients want to be developing their businesses and their countries, and they’re given limited options”.
Neilson adds that it remains unclear whether resistance to lenders investing in LNG projects will affect funding at such a critical time, but adds: “Certainly not in the short run — maybe longer term when there’s viable alternatives but, at the moment, there’s a need for Asia-Pacific to transition away from coal, frankly.”
Canada Will Impose a New Tax on Private Jets, Yachts and Luxury Cars
ROBB REPORT
High-end vehicles are about to get a little more expensive north of the border.
The Canadian government unveiled its 2022 tax budget last month, which included a new luxury levy for any organization buying high-cost vehicles. This week, the Canadian government released more details on how it will implement the tax, which goes into effect on September 1.
The Select Luxury Items Tax Act will apply to all new cars and aircraft with retail prices exceeding $100,000 and boats that cost more than $250,000. The new rate would equate to 10 percent of the full value of the item. The move would also apply the tax retroactively to any “written sales agreements” made after January 1, 2022.
Retailers, importers, wholesalers and manufacturers would be required to register with the Canada Revenue Agency (CRA) on the first day of sale or importation of all orders moving forward under the new guidance, even if they are already registered as a recognized vendor within one of the three sectors.
The tax is a part of the new Bill C-19 law, which includes several other corporate tax measures. Among these are reductions for profits on zero-emission technology manufacturing.
Various experts have criticized the bill, with some predicting it could result in the loss of at least 900 jobs. Anthony Norejko, president and CEO of the Canadian Business Aviation Association, wrote in a statement warning the government that “the economic impact of the luxury tax will be significant and have not been studied with a comprehensive understanding of our industry.”
“We urge this government to return to the table and, at the very least, consult with our sector on reasonable timelines for tax policy changes that should not be punitive but indeed supportive for all Canadians,” Norejko’s statement continued.
Whether those costs outweigh the benefits to the environment remains to be seen. According to a Legislative Costing Note by the Parliamentary Budget Office, the tax would generate $600 million in revenue over five years.
High-end vehicles are about to get a little more expensive north of the border.
The Canadian government unveiled its 2022 tax budget last month, which included a new luxury levy for any organization buying high-cost vehicles. This week, the Canadian government released more details on how it will implement the tax, which goes into effect on September 1.
The Select Luxury Items Tax Act will apply to all new cars and aircraft with retail prices exceeding $100,000 and boats that cost more than $250,000. The new rate would equate to 10 percent of the full value of the item. The move would also apply the tax retroactively to any “written sales agreements” made after January 1, 2022.
Retailers, importers, wholesalers and manufacturers would be required to register with the Canada Revenue Agency (CRA) on the first day of sale or importation of all orders moving forward under the new guidance, even if they are already registered as a recognized vendor within one of the three sectors.
The tax is a part of the new Bill C-19 law, which includes several other corporate tax measures. Among these are reductions for profits on zero-emission technology manufacturing.
Various experts have criticized the bill, with some predicting it could result in the loss of at least 900 jobs. Anthony Norejko, president and CEO of the Canadian Business Aviation Association, wrote in a statement warning the government that “the economic impact of the luxury tax will be significant and have not been studied with a comprehensive understanding of our industry.”
“We urge this government to return to the table and, at the very least, consult with our sector on reasonable timelines for tax policy changes that should not be punitive but indeed supportive for all Canadians,” Norejko’s statement continued.
Whether those costs outweigh the benefits to the environment remains to be seen. According to a Legislative Costing Note by the Parliamentary Budget Office, the tax would generate $600 million in revenue over five years.
‘It is a little eerie.’ Tree in ‘enchanted’ NC forest is growing in a knot. Why?
Hans Rohr photo
Mark Price
Thu, July 21, 2022
A tree tied in a knot is growing in eastern North Carolina — and a state forester says it’s one of the most mystifying sights you can find in the “enchanted forest.”
It’s accessible only by foot in Bladen Lakes State Forest, about 45 miles southeast of Fort Bragg, and a photo shared on Facebook by the N.C. Forest Service shows its whimsical curves.
Bladen Lakes State Forest Supervisor Hans Rohr says it’s a very strange longleaf pine.
“It has been in this position for about as long as I can remember, just shy of 20 years,” he says. “It’s about 25 feet tall, but if you straightened it out, it would be about 50 to 60 feet tall.”
Social media reactions to the Facebook photo have included comparisons to “a huge snake.” Some have also suggested the state collect the seeds to see what may grow from them.
But seeing it in person is disconcerting, Rohr says.
“You just don’t expect that,” he says. “I’ve spent a lot of time in the woods and I have never seen a tree shaped like that. It is a little eerie looking.”
There are other trees in the same area that are similarly off-putting, he says, including one that appears to have a head and two arms raised in the air.
As for the knotted tree, Rohr has some theories.
“One theory could be that an older tree or something maybe fell on it, but didn’t break it. It just bent it in this manner and the tree was able to make this 360 (degree) ring around it. Another theory is there was some kind of damage, maybe insect damage, which made the top branch die and a side branch took over.”
Theory No. 1 unravels when considering there are no signs of an older tree that fell nearby, he says.
Longleaf pine can reach 110 feet in height and have been known to live more than 450 years, according to the Longleaf Alliance.
They are widespread in Bladen Lakes State Forest, a 33,500-acre “working forest” that funds itself with “sales of timber, pine straw and charcoal,” the state says.
The knotted tree is behind a gate in an area known as the Addie Barnes red-cockaded woodpecker area,
Hans Rohr photo
Mark Price
Thu, July 21, 2022
A tree tied in a knot is growing in eastern North Carolina — and a state forester says it’s one of the most mystifying sights you can find in the “enchanted forest.”
It’s accessible only by foot in Bladen Lakes State Forest, about 45 miles southeast of Fort Bragg, and a photo shared on Facebook by the N.C. Forest Service shows its whimsical curves.
Bladen Lakes State Forest Supervisor Hans Rohr says it’s a very strange longleaf pine.
“It has been in this position for about as long as I can remember, just shy of 20 years,” he says. “It’s about 25 feet tall, but if you straightened it out, it would be about 50 to 60 feet tall.”
Social media reactions to the Facebook photo have included comparisons to “a huge snake.” Some have also suggested the state collect the seeds to see what may grow from them.
But seeing it in person is disconcerting, Rohr says.
“You just don’t expect that,” he says. “I’ve spent a lot of time in the woods and I have never seen a tree shaped like that. It is a little eerie looking.”
There are other trees in the same area that are similarly off-putting, he says, including one that appears to have a head and two arms raised in the air.
As for the knotted tree, Rohr has some theories.
“One theory could be that an older tree or something maybe fell on it, but didn’t break it. It just bent it in this manner and the tree was able to make this 360 (degree) ring around it. Another theory is there was some kind of damage, maybe insect damage, which made the top branch die and a side branch took over.”
Theory No. 1 unravels when considering there are no signs of an older tree that fell nearby, he says.
Longleaf pine can reach 110 feet in height and have been known to live more than 450 years, according to the Longleaf Alliance.
They are widespread in Bladen Lakes State Forest, a 33,500-acre “working forest” that funds itself with “sales of timber, pine straw and charcoal,” the state says.
The knotted tree is behind a gate in an area known as the Addie Barnes red-cockaded woodpecker area,
home to the endangered red-cockaded woodpecker.
Native Americans may have originated from China, says new study on 14,000-year-old human fossils
Jane Nam
Thu, July 21, 2022
A new study suggests that Native Americans may have originated from Southern China, based on the discovery and DNA analysis of 14,000-year-old human fossils.
The journal “Current Biology” published the study on July 14, which stated that the discovered fossils are thought to belong to an extinct maternal branch to which Native Americans are also possibly related.
Researchers compared the genome of the bones to people from around the world and came to the conclusion that they matched those of an individual deeply linked with East Asian ancestry.
Archaeologists had previously found fossils in China’s Yunnan Province three decades ago; however, it was not until 2018 that a team was able to extract DNA from the ancient skull and use genome sequencing to prove that the individual belonged to an extinct species of modern humans whose descendants were now in East Asia, the Indo-China peninsula and the Southeast Asian islands.
The same team proposed that some people from southern East Asia had traveled north along the coastline of present-day eastern China, went through Japan, reached up to Siberia and then crossed the Bering Strait between the continents of Asia and North America.
While a previously discovered infant’s remains from an archaeological site in Alaska in 2013 proved that modern Native Americans came from Asia, the recent findings narrow down from which parts of Asia they may have originated.
Bing Su from the Kunming Institute of Zoology explained, “Such data will not only help us paint a more complete picture of how our ancestors migrate but also contain important information about how humans change their physical appearance by adapting to local environments over time, such as the variations in skin color in response to changes in sunlight exposure.”
More from NextShark: Anti-Asian hate still a widespread problem in Canada, polls show
Featured Image via UW (University of Washington) (left) and Inside Edition (right)
More from NextShark: Anti-Asian hate incidents up by 47% in Canada, report reveals
U.S. launches probe of Houston illegal dumping over alleged discrimination
The Houston skyline is seen beyond a railroad yard by the
The Houston skyline is seen beyond a railroad yard by the
Houston Ship Channel in Houston
Fri, July 22, 2022
Fri, July 22, 2022
By Valerie Volcovici and Kanishka Singh
WASHINGTON (Reuters) -The Justice Department on Friday opened an investigation into whether the city of Houston's response to illegal dumping discriminated against Black and Latino communities, citing environmental and health risks.
The Justice Department's civil rights division will lead the environmental justice investigation with support from the U.S. Attorney's Office for the Southern District of Texas. It will examine whether Houston's environmental enforcement and solid waste management operations, policies and practices resulted in discriminatory dumping in Black and Latino communities.
"Illegal dump sites not only attract rodents, mosquitoes and other vermin that pose health risks, but they can also contaminate surface water and impact proper drainage, making areas more susceptible to flooding," said Assistant Attorney General Kristen Clarke of the department’s civil rights division.
"No one in the United States should be exposed to risk of illness and other serious harm because of ineffective solid waste management or inadequate enforcement programs," Clarke added.
Houston Mayor Sylvester Turner said the launch of the probe was disappointing. He described the investigation as "absurd, baseless, and without merit." He added the city will cooperate with the Justice Department and was confident the outcome would show no discrimination from Houston.
The investigation is part of a broader Biden administration effort to prioritize environmental justice in its policymaking. The Justice Department in May announced the launch of a new office to help low-income areas and communities of color battle the disproportionate impact of air and water pollution.
"This investigation exemplifies the department's commitment to alleviating disproportionate environmental burdens or an all too often by communities of color, low income communities and to tribal communities," said U.S. Attorney Jennifer Lowery in a press conference.
Clarke said the complaints of illegal dumping, including reports of dead bodies and animals, came from northeast Houston and extend back years. She said the investigation will examine citywide data and focus on disparities between the specific neighborhood and the rest of the city.
If the Justice Department finds violations of the Civil Rights Act, it will work with city officials to come up with a voluntary compliance plan for the city, Clarke said.
(Reporting by Kanishka Singh in Washington; Editing by Jonathan Oatis, Matthew Lewis and Aurora Ellis)
Despite efforts to scapegoat Biden, Keystone XL Pipeline wouldn’t mean cheaper gas
Ted Williams
The Spectrum
Fri, July 22, 2022
Pipeline used to carry crude oil is shown at the Superior, Wis., terminal of Enbridge Energy. The sponsor of the Keystone XL crude oil pipeline said last summer that it's pulling the plug on the contentious project, after Canadian officials failed to persuade the Biden administration to reverse its cancellation of the company's permit.
”A report that the Biden administration is weighing greater imports of Canadian oil is putting a renewed focus on the canceled Keystone XL pipeline and whether it would have made any difference with today’s tight oil supply.” -- Energywire
Ever since boycotts started blocking Russian petroleum products, social media has been rife with memes that blame rising gasoline prices on “the cancellation of the Keystone Pipeline.”
Example: “Sooo, if shutting down Russia’s pipeline(s) will hurt their economy, wouldn’t shutting down ours hurt our economy? Asking for a buddy.”
Most of the criticism comes from people who recycle truthiness. Former vice president Mike Pence: “Gas prices have risen across the country because of this administration's war on energy — shutting down the Keystone Pipeline.” Republican Rep. Jim Jordan: “Biden shut off the Keystone Pipeline.”
Here’s what really happened: No one shut down, canceled, or shut off the Keystone Pipeline. It is fully operational, daily delivering 590,000 barrels of tar-sands oil in Canada to U.S. refineries.
What some pipeline advocates think is the “Keystone Pipeline” is a 1,700-mile “shortcut” called Keystone XL, or KXL. It would have sliced through Montana, South Dakota, Nebraska, Kansas and Oklahoma to the Texas Gulf Coast, delivering 830,000 barrels of tar sands oil per day. Many residents of those states fought fiercely against the pipeline cutting through their land.
Now, “Build the Keystone Pipeline” has become a social-media mantra, as if the United States could so decree. It is the Canadian firm, TC Energy, formerly TransCanada, that officially terminated the project once President Biden withdrew its permits.
Even if construction on the pipeline began tomorrow, KXL could not be up and running in less than five years. The KXL pipeline was a project developed by a foreign company that would have delivered foreign oil products to mostly foreign markets.
When President Trump re-permitted KXL in 2017, his own State Department reported that it would not lower gasoline prices. The price of oil is set by the global market and certainly not by U.S. presidents. What’s more, the project was just about dead for a number of reasons, including litigation from aggrieved property owners whose land TC Energy seized by eminent domain.
We should also remember that rendering gasoline from tar-sands oil, the planet’s dirtiest petroleum, is far more polluting and energy-intensive than conventional refining. Some carbon content is burned off in a process that belches greenhouse gases and generates toxic waste called petcoke, which is dumped around the United States in piles six stories high. Petcoke billows through neighborhoods and infiltrates schools and houses even when windows are shut.
Bitumen, basically asphalt, continues to be strip-mined from what used to be Canada’s boreal forests in Alberta. Too thick to be piped, it’s spiked with volatile liquid condensate from natural gas and thus converted to a toxic tar-sands cocktail called ”dilbit,” short for diluted bitumen.
Dilbit, sent through the existing Keystone pipeline, contains chloride salts, sulfur, abrasive minerals and acids, and must be pumped under high pressure. It’s murder on pipes.
In addition to greenhouse gases and petcoke, tar-sands waste products include lakes, rivers, fish, wildlife and people. Between 1995 and 2006, when tar-sands extraction was accelerating, Alberta’s First Nations suffered a sudden 30 percent increase in cancer rates.
KXL, if built, also threatened the world’s largest aquifer — the Ogallala. Anyone who thinks Nebraska lacks water should visit Green Valley Township, where I encountered Ogallala water so close to the surface it flowed along dirt roads and ditches. Pintails, mallards, and widgeon billowed out of them. But parts of the aquifer are now depleted, and a major dilbit spill could finish those parts off.
In 2011 a pipeline representative named Shawn Howard assured me that ramming a dilbit pipe through the Ogallala aquifer would be risk free.
“Why,” he demanded, “would we invest $13 billion in a pipeline and put a product in it that was going to destroy it like these activists are trotting out? It makes absolutely no business sense.”
The existing Keystone pipeline has ruptured 22 times, including spills in 2017 and 2019 that fouled land and water with 404,000 gallons of dilbit. Business sense, as the oil industry consistently reminds us, is an attribute more often desired than possessed.
Ted Williams is a contributor to Writers on the Range, writersontherange.org, an independent nonprofit dedicated to spurring conversation about the West. He writes about fish, wildlife and the environment for national publications.
This article originally appeared on St. George Spectrum & Daily News: Writers on the Range: 'Keystone Pipeline' wouldn't make gas cheaper
Fri, July 22, 2022
Pipeline used to carry crude oil is shown at the Superior, Wis., terminal of Enbridge Energy. The sponsor of the Keystone XL crude oil pipeline said last summer that it's pulling the plug on the contentious project, after Canadian officials failed to persuade the Biden administration to reverse its cancellation of the company's permit.
”A report that the Biden administration is weighing greater imports of Canadian oil is putting a renewed focus on the canceled Keystone XL pipeline and whether it would have made any difference with today’s tight oil supply.” -- Energywire
Ever since boycotts started blocking Russian petroleum products, social media has been rife with memes that blame rising gasoline prices on “the cancellation of the Keystone Pipeline.”
Example: “Sooo, if shutting down Russia’s pipeline(s) will hurt their economy, wouldn’t shutting down ours hurt our economy? Asking for a buddy.”
Most of the criticism comes from people who recycle truthiness. Former vice president Mike Pence: “Gas prices have risen across the country because of this administration's war on energy — shutting down the Keystone Pipeline.” Republican Rep. Jim Jordan: “Biden shut off the Keystone Pipeline.”
Here’s what really happened: No one shut down, canceled, or shut off the Keystone Pipeline. It is fully operational, daily delivering 590,000 barrels of tar-sands oil in Canada to U.S. refineries.
What some pipeline advocates think is the “Keystone Pipeline” is a 1,700-mile “shortcut” called Keystone XL, or KXL. It would have sliced through Montana, South Dakota, Nebraska, Kansas and Oklahoma to the Texas Gulf Coast, delivering 830,000 barrels of tar sands oil per day. Many residents of those states fought fiercely against the pipeline cutting through their land.
Now, “Build the Keystone Pipeline” has become a social-media mantra, as if the United States could so decree. It is the Canadian firm, TC Energy, formerly TransCanada, that officially terminated the project once President Biden withdrew its permits.
Even if construction on the pipeline began tomorrow, KXL could not be up and running in less than five years. The KXL pipeline was a project developed by a foreign company that would have delivered foreign oil products to mostly foreign markets.
When President Trump re-permitted KXL in 2017, his own State Department reported that it would not lower gasoline prices. The price of oil is set by the global market and certainly not by U.S. presidents. What’s more, the project was just about dead for a number of reasons, including litigation from aggrieved property owners whose land TC Energy seized by eminent domain.
We should also remember that rendering gasoline from tar-sands oil, the planet’s dirtiest petroleum, is far more polluting and energy-intensive than conventional refining. Some carbon content is burned off in a process that belches greenhouse gases and generates toxic waste called petcoke, which is dumped around the United States in piles six stories high. Petcoke billows through neighborhoods and infiltrates schools and houses even when windows are shut.
Bitumen, basically asphalt, continues to be strip-mined from what used to be Canada’s boreal forests in Alberta. Too thick to be piped, it’s spiked with volatile liquid condensate from natural gas and thus converted to a toxic tar-sands cocktail called ”dilbit,” short for diluted bitumen.
Dilbit, sent through the existing Keystone pipeline, contains chloride salts, sulfur, abrasive minerals and acids, and must be pumped under high pressure. It’s murder on pipes.
In addition to greenhouse gases and petcoke, tar-sands waste products include lakes, rivers, fish, wildlife and people. Between 1995 and 2006, when tar-sands extraction was accelerating, Alberta’s First Nations suffered a sudden 30 percent increase in cancer rates.
KXL, if built, also threatened the world’s largest aquifer — the Ogallala. Anyone who thinks Nebraska lacks water should visit Green Valley Township, where I encountered Ogallala water so close to the surface it flowed along dirt roads and ditches. Pintails, mallards, and widgeon billowed out of them. But parts of the aquifer are now depleted, and a major dilbit spill could finish those parts off.
In 2011 a pipeline representative named Shawn Howard assured me that ramming a dilbit pipe through the Ogallala aquifer would be risk free.
“Why,” he demanded, “would we invest $13 billion in a pipeline and put a product in it that was going to destroy it like these activists are trotting out? It makes absolutely no business sense.”
The existing Keystone pipeline has ruptured 22 times, including spills in 2017 and 2019 that fouled land and water with 404,000 gallons of dilbit. Business sense, as the oil industry consistently reminds us, is an attribute more often desired than possessed.
Ted Williams is a contributor to Writers on the Range, writersontherange.org, an independent nonprofit dedicated to spurring conversation about the West. He writes about fish, wildlife and the environment for national publications.
This article originally appeared on St. George Spectrum & Daily News: Writers on the Range: 'Keystone Pipeline' wouldn't make gas cheaper
Mexican official seeks 'open, frank,' dialogue with U.S. and Canada in energy dispute
Deputy Economy Minister Luz Maria De la Mora
Deputy Economy Minister Luz Maria De la Mora
Fri, July 22, 2022
By Anthony Esposito
MEXICO CITY (Reuters) - Mexico's government will hold frank and open discussions to resolve a dispute with the United States and Canada over Mexican energy policies that they argue breaches a regional trade pact, a senior trade official said.
The U.S. and Canadian demands come after years of concern among those nations' private firms that Mexican President Andres Manuel Lopez Obrador's drive to tighten the state's grip on oil and electricity output treated them unfairly and was in violation of the United States-Mexico-Canada Agreement (USMCA).
The U.S-led request for consultations with Mexico marks the most serious trade spat between Washington and Mexico City since the USMCA trade pact took effect two years ago. If unresolved, it could ultimately lead to costly U.S. tariffs.
Deputy Economy Minister Luz Maria De la Mora, who handles trade disputes for the Mexican government, said she hoped talks with U.S. officials would yield a breakthrough.
"We want to take advantage of this consultation phase ... to see how we can reach a mutually satisfactory solution through an open, frank and constructive dialogue, which will allow us to overcome these differences," she told Reuters in an interview.
Though De la Mora said Mexico would seek to argue that its energy policies are not in breach of the trade deal, her conciliatory tone contrasts with Lopez Obrador's defiant push back against the complaints.
A combative leftist, Lopez Obrador said on Friday "we will not yield" on the matter, promising to continue a robust defense of his nationalist energy vision.
Lopez Obrador has pledged to revive state oil producer Petroleos Mexicanos (Pemex) and power utility Comision Federal de Electricidad, which he argues his predecessors deliberately "destroyed" to cede Mexico's energy market to foreigners.
The U.S. Trade Representative says the moves to bolster the state-run firms have undermined American companies in Mexico.
De la Mora said Mexico would not use a separate dispute with Washington over the auto industry as a bargaining chip.
"We hope this issue will be resolved before the end of the year and we are very optimistic that we have a very solid case and that we will have a favorable resolution for Mexico," said De la Mora, referring to the auto spat.
Canada said in January it would join Mexico in requesting a dispute settlement panel to iron out their differences with the United States over how to apply automotive sector content requirements under the treaty.
Asked if Lopez Obrador's energy policies were spooking investors, De la Mora pointed to recent announcements of investments in Mexico by U.S. energy company Sempra Energy and Canada's TC Energy.
She argued that the USMCA's dispute settlement mechanism gave investors certainty because if differences arise, like they have now, its use would help clear things up.
"The dispute resolution mechanism is a very solid mechanism, it is a mechanism that allows the investor to have greater certainty and this is very positive for the business climate," she said.
The U.S. requested consultations under the USMCA over Mexico's energy policies on July 20.
Under USMCA rules, the United States and Mexico would enter into consultations within 30 days of the U.S. request, unless the parties decide otherwise. If they do not resolve the matter through consultations within 75 days of the U.S. request, the United States may request the establishment of a dispute panel.
(Reporting by Anthony Esposito; Additional reporting by Dave Graham; Editing by Kim Coghill and Alistair Bell)
By Anthony Esposito
MEXICO CITY (Reuters) - Mexico's government will hold frank and open discussions to resolve a dispute with the United States and Canada over Mexican energy policies that they argue breaches a regional trade pact, a senior trade official said.
The U.S. and Canadian demands come after years of concern among those nations' private firms that Mexican President Andres Manuel Lopez Obrador's drive to tighten the state's grip on oil and electricity output treated them unfairly and was in violation of the United States-Mexico-Canada Agreement (USMCA).
The U.S-led request for consultations with Mexico marks the most serious trade spat between Washington and Mexico City since the USMCA trade pact took effect two years ago. If unresolved, it could ultimately lead to costly U.S. tariffs.
Deputy Economy Minister Luz Maria De la Mora, who handles trade disputes for the Mexican government, said she hoped talks with U.S. officials would yield a breakthrough.
"We want to take advantage of this consultation phase ... to see how we can reach a mutually satisfactory solution through an open, frank and constructive dialogue, which will allow us to overcome these differences," she told Reuters in an interview.
Though De la Mora said Mexico would seek to argue that its energy policies are not in breach of the trade deal, her conciliatory tone contrasts with Lopez Obrador's defiant push back against the complaints.
A combative leftist, Lopez Obrador said on Friday "we will not yield" on the matter, promising to continue a robust defense of his nationalist energy vision.
Lopez Obrador has pledged to revive state oil producer Petroleos Mexicanos (Pemex) and power utility Comision Federal de Electricidad, which he argues his predecessors deliberately "destroyed" to cede Mexico's energy market to foreigners.
The U.S. Trade Representative says the moves to bolster the state-run firms have undermined American companies in Mexico.
De la Mora said Mexico would not use a separate dispute with Washington over the auto industry as a bargaining chip.
"We hope this issue will be resolved before the end of the year and we are very optimistic that we have a very solid case and that we will have a favorable resolution for Mexico," said De la Mora, referring to the auto spat.
Canada said in January it would join Mexico in requesting a dispute settlement panel to iron out their differences with the United States over how to apply automotive sector content requirements under the treaty.
Asked if Lopez Obrador's energy policies were spooking investors, De la Mora pointed to recent announcements of investments in Mexico by U.S. energy company Sempra Energy and Canada's TC Energy.
She argued that the USMCA's dispute settlement mechanism gave investors certainty because if differences arise, like they have now, its use would help clear things up.
"The dispute resolution mechanism is a very solid mechanism, it is a mechanism that allows the investor to have greater certainty and this is very positive for the business climate," she said.
The U.S. requested consultations under the USMCA over Mexico's energy policies on July 20.
Under USMCA rules, the United States and Mexico would enter into consultations within 30 days of the U.S. request, unless the parties decide otherwise. If they do not resolve the matter through consultations within 75 days of the U.S. request, the United States may request the establishment of a dispute panel.
(Reporting by Anthony Esposito; Additional reporting by Dave Graham; Editing by Kim Coghill and Alistair Bell)
Mexico denies energy policies unfair after Canada joins U.S. demand
Mexico's President Lopez Obrador attends daily news conference
Mexico's President Lopez Obrador attends daily news conference
at the National Palace
Thu, July 21, 2022 at 7:59 AM·2 min read
MEXICO CITY (Reuters) - Mexican President Andres Manuel Lopez Obrador on Thursday denied his energy policies breached a regional trade agreement after Canada challenged them, and said that he had reached agreement with a host of American investors in the sector.
Speaking at a regular news conference, Lopez Obrador said Mexico would defend control of its oil as well as its power market policies, responding to news that Canada had joined a U.S. demand for dispute settlement talks over his energy agenda.
The demand was the culmination of years of concern among U.S. and Canadian companies that Lopez Obrador's drive to tighten state control of energy treated them unfairly and was in breach of the United States-Mexico-Canada Agreement (USMCA).
Lopez Obrador said there had been "no violation" of the USMCA trade pact, and that his government had been successfully dealing with concerns among U.S. energy companies in Mexico.
"We have to make our sovereignty count," he said.
Canada's International Trade Minister Mary Ng on Thursday reiterated that Canada had "consistently raised its concerns regarding Mexico's change in energy policy".
"We agree with the United States that these policies are inconsistent with Mexico's USMCA obligations," Ng said in a statement.
Lopez Obrador said that about a month ago, he had spent two weeks meeting with 19 energy companies, and had reached agreement with 17 of them. He did not identify any of them.
Lopez Obrador also said the energy issue was "not discussed" when he met business executives in Washington last week.
However, the U.S. Chamber of Commerce, which helped to organize the talks, said executives had voiced "serious concern" over a worsening investment climate in Mexico and urged it to uphold its USMCA commitments, particularly on energy.
Among concerns raised at the meeting were policies that executives said unfairly favored Mexico's state-owned energy companies at the expense of private rivals, as well as delays in securing permits for companies, the Chamber said in a statement.
(Reporting by Dave Graham and Brendan O'Boyle; additional reporting by Steve Scherer in Ottawa; editing by Diane Craft and Marguerita Choy)
Thu, July 21, 2022 at 7:59 AM·2 min read
MEXICO CITY (Reuters) - Mexican President Andres Manuel Lopez Obrador on Thursday denied his energy policies breached a regional trade agreement after Canada challenged them, and said that he had reached agreement with a host of American investors in the sector.
Speaking at a regular news conference, Lopez Obrador said Mexico would defend control of its oil as well as its power market policies, responding to news that Canada had joined a U.S. demand for dispute settlement talks over his energy agenda.
The demand was the culmination of years of concern among U.S. and Canadian companies that Lopez Obrador's drive to tighten state control of energy treated them unfairly and was in breach of the United States-Mexico-Canada Agreement (USMCA).
Lopez Obrador said there had been "no violation" of the USMCA trade pact, and that his government had been successfully dealing with concerns among U.S. energy companies in Mexico.
"We have to make our sovereignty count," he said.
Canada's International Trade Minister Mary Ng on Thursday reiterated that Canada had "consistently raised its concerns regarding Mexico's change in energy policy".
"We agree with the United States that these policies are inconsistent with Mexico's USMCA obligations," Ng said in a statement.
Lopez Obrador said that about a month ago, he had spent two weeks meeting with 19 energy companies, and had reached agreement with 17 of them. He did not identify any of them.
Lopez Obrador also said the energy issue was "not discussed" when he met business executives in Washington last week.
However, the U.S. Chamber of Commerce, which helped to organize the talks, said executives had voiced "serious concern" over a worsening investment climate in Mexico and urged it to uphold its USMCA commitments, particularly on energy.
Among concerns raised at the meeting were policies that executives said unfairly favored Mexico's state-owned energy companies at the expense of private rivals, as well as delays in securing permits for companies, the Chamber said in a statement.
(Reporting by Dave Graham and Brendan O'Boyle; additional reporting by Steve Scherer in Ottawa; editing by Diane Craft and Marguerita Choy)
Mexico Is Seen Risking $30 Billion Hit in US-Canada Trade Spat
Nacha Cattan and Max de Haldevang
Thu, July 21, 2022
(Bloomberg) -- Mexico could be hit with between $10 billion and $30 billion in tariffs if it loses a trade spat with the US and Canada, according to two former officials who negotiated the pact under which the dispute was brought.
The US and Canada have requested dispute settlement talks under the US-Mexico-Canada Agreement, known as USMCA, arguing that Mexico is violating the North American free trade deal with its moves to prioritize energy from its state utility over private renewables companies. They argue the policies of President Andres Manuel Lopez Obrador, known as AMLO, have led to denials and revocations of US firms’ abilities to operate in Mexico’s energy sector.
If there is no resolution and Mexico loses the dispute, then in the summer of 2023, the US and Canada can slap tariffs equal to the losses their companies have faced, Kenneth Smith Ramos, who was Mexico’s chief USMCA negotiator through 2019, said in an interview. Former Economy Minister Ildefonso Guajardo, now an opposition lawmaker, said the same in an interview with Mexican journalist Carmen Aristegui.
US officials have already quoted losses of anywhere between $10 billion and $30 billion, which Canada would only add to, and BloombergNEF has calculated at least $22 billion in all private investment is at risk.
“This looks very difficult to be resolved during the consultation period because the violations are so precise, specific,” said Ramos, who saw this as one of the most potentially expensive trade spats since USMCA’s predecessor took effect in 1994.
Thu, July 21, 2022
(Bloomberg) -- Mexico could be hit with between $10 billion and $30 billion in tariffs if it loses a trade spat with the US and Canada, according to two former officials who negotiated the pact under which the dispute was brought.
The US and Canada have requested dispute settlement talks under the US-Mexico-Canada Agreement, known as USMCA, arguing that Mexico is violating the North American free trade deal with its moves to prioritize energy from its state utility over private renewables companies. They argue the policies of President Andres Manuel Lopez Obrador, known as AMLO, have led to denials and revocations of US firms’ abilities to operate in Mexico’s energy sector.
If there is no resolution and Mexico loses the dispute, then in the summer of 2023, the US and Canada can slap tariffs equal to the losses their companies have faced, Kenneth Smith Ramos, who was Mexico’s chief USMCA negotiator through 2019, said in an interview. Former Economy Minister Ildefonso Guajardo, now an opposition lawmaker, said the same in an interview with Mexican journalist Carmen Aristegui.
US officials have already quoted losses of anywhere between $10 billion and $30 billion, which Canada would only add to, and BloombergNEF has calculated at least $22 billion in all private investment is at risk.
“This looks very difficult to be resolved during the consultation period because the violations are so precise, specific,” said Ramos, who saw this as one of the most potentially expensive trade spats since USMCA’s predecessor took effect in 1994.
“Mexico would need to completely overhaul two pieces of legislation that are essential to AMLO.”
The fight could have a wide-ranging impact beyond Mexico’s energy sector, hitting automakers and farmers, Guajardo added.
Ultimately, the battle could hurt Mexico and North America’s attractiveness to investors just as the region is expected to see a boom in trade.
Amid disrupted global shipping networks, the re-routing of supply chains from Asia could boost exports by billions of dollars for Latin America’s No. 2 economy, but the trade dispute puts some of that at risk, Luis de la Calle, Guajardo’s former deputy, said in an interview. A report by the Inter-American Development Bank estimates the annual value to Mexico of over $35.3 billion.
China and Europe’s economic problems have made North America the “most competitive region in the world” at the moment, De la Calle said. If the three countries fail to come to an agreement, “the main cost is the opportunity cost for Mexico and North America to not take advantage of the international context that tremendously favors North America.”
Under the trade accord’s rules, such a request would give Mexico up to 30 days to agree to schedule consultations. If after 75 days no agreement is reached, the US could request that a formal panel hear arguments from the two nations. While that process focuses on getting Mexico to agree to corrective actions, dragged-out conflicts can ultimately lead to the US imposing punitive tariffs on imports from Mexico under the two-year-old trade pact.
Lopez Obrador, known as AMLO, defended his policies Thursday, saying the oil sector was excluded from the trade pact, an argument Smith and other trade experts dispute. At a daily press conference Wednesday after the US announced its complaint, he played a song titled “Oh, so scary,” seeming to downplay his concerns. He also said he was protecting the country against “voracious companies” and added that by starting the dispute, the Biden administration risked looking like it was supporting “corrupt” firms.
Lopez Obrador has worked to return Mexico to energy independence by supporting state-owned oil and gas producer Petroleos Mexicanos, known as Pemex, and state power company CFE. The government has refused to hand out permits to several all-but-finished foreign energy projects.
“We are watching a potential train crash between the US, Mexico and Canada,” Smith Ramos said.
The fight could have a wide-ranging impact beyond Mexico’s energy sector, hitting automakers and farmers, Guajardo added.
Ultimately, the battle could hurt Mexico and North America’s attractiveness to investors just as the region is expected to see a boom in trade.
Amid disrupted global shipping networks, the re-routing of supply chains from Asia could boost exports by billions of dollars for Latin America’s No. 2 economy, but the trade dispute puts some of that at risk, Luis de la Calle, Guajardo’s former deputy, said in an interview. A report by the Inter-American Development Bank estimates the annual value to Mexico of over $35.3 billion.
China and Europe’s economic problems have made North America the “most competitive region in the world” at the moment, De la Calle said. If the three countries fail to come to an agreement, “the main cost is the opportunity cost for Mexico and North America to not take advantage of the international context that tremendously favors North America.”
Under the trade accord’s rules, such a request would give Mexico up to 30 days to agree to schedule consultations. If after 75 days no agreement is reached, the US could request that a formal panel hear arguments from the two nations. While that process focuses on getting Mexico to agree to corrective actions, dragged-out conflicts can ultimately lead to the US imposing punitive tariffs on imports from Mexico under the two-year-old trade pact.
Lopez Obrador, known as AMLO, defended his policies Thursday, saying the oil sector was excluded from the trade pact, an argument Smith and other trade experts dispute. At a daily press conference Wednesday after the US announced its complaint, he played a song titled “Oh, so scary,” seeming to downplay his concerns. He also said he was protecting the country against “voracious companies” and added that by starting the dispute, the Biden administration risked looking like it was supporting “corrupt” firms.
Lopez Obrador has worked to return Mexico to energy independence by supporting state-owned oil and gas producer Petroleos Mexicanos, known as Pemex, and state power company CFE. The government has refused to hand out permits to several all-but-finished foreign energy projects.
“We are watching a potential train crash between the US, Mexico and Canada,” Smith Ramos said.
Mexico’s president taunts Biden over energy policy trade fight: ‘Ooooh, I’m so scared’
Will Daniel
EXPLAINER: US energy sector dispute with MexicoWill Daniel
Thu, July 21, 2022
There's a brewing trade dispute between the U.S. and Mexico on energy policy, and it’s getting ugly fast.
“Ooooh, I’m so scared,” Mexican President Andrés Manuel López Obrador (AMLO) said at a Wednesday press conference, referencing a popular Mexican song and taunting the Biden administration by ordering his staff to play it.
When reporters asked him how he proposes to solve the policy spat, AMLO was defiant: “Nothing will happen.”
What is going on here?
It started early on Wednesday, when U.S. officials argued that AMLO’s energy policies favor Mexico's state-run electrical utility and oil companies and undermine American business.
The U.S. said it was seeking “dispute settlement consultations” under the U.S.-Mexico-Canada Agreement (USCMA), a trade agreement meant to ensure balanced, reciprocal trading between North American nations. It was a first step in a process that could lead to tariffs on some Mexican products.
The news comes just over a week after Biden and AMLO put out a joint statement reaffirming their commitment to the USMCA.
Mexico’s president laughed off the White House’s rhetoric, saying that Biden has always respected Mexican sovereignty and the trade fight was merely a result of corrupt right-wing lobbying, the Wall Street Journal first reported.
Mexico has been attempting to prop up its state-run electrical utility, the Comisión Federal de Electricidad (CFE), and its national oil and gas company, Petróleos Mexicanos (PEMEX), with policies that U.S. trade ambassador Katerine Tai argues “prioritize the distribution” of energy from these firms, disincentivizing market competition and clean-energy production in the country.
“We have tried to work constructively with the Mexican government to address these concerns, but, unfortunately, U.S. companies continue to face unfair treatment in Mexico,” Tai said in a statement on Wednesday.
Canada's trade ministry is also launching energy consultations with Mexico, with officials telling Reuters they are "supporting the U.S. in their challenge."
The Alliance for Trade Enforcement, a trade group made up of various U.S. industry associations, also stood by the Biden administration’s trade fight.
“The Alliance for Trade Enforcement applauds USTR’s request for consultations with Mexico. President López Obrador’s efforts to nationalize the country’s energy sector directly violate the USMCA, obstruct clean energy initiatives in the region, and threaten America’s economic prosperity,” they wrote in a Wednesday statement.
Republican senators applauded the move by the Biden administration as well, but argued it should have been done sooner.
“Under the USMCA, Mexico agreed to level the playing field and [to] allow American companies to compete with Mexican companies to meet Mexico’s energy needs. But the government of Mexico has been violating this agreement. It was well past time for the United States to respond, and it was right for the U.S. Trade Representative to finally act,” U.S. Senator Ted Cruz (R.-Texas) said in a Wednesday statement.
Mexico's economy ministry responded to U.S. and Canadian requests for consultation late on Wednesday night, with officials saying that they are hoping to reach a "mutually satisfactory solution" to the energy dispute. President López Obrador remained defiant on Thursday, however, arguing that Mexico has not violated the USMCA trade agreement.
This story was originally featured on Fortune.com
There's a brewing trade dispute between the U.S. and Mexico on energy policy, and it’s getting ugly fast.
“Ooooh, I’m so scared,” Mexican President Andrés Manuel López Obrador (AMLO) said at a Wednesday press conference, referencing a popular Mexican song and taunting the Biden administration by ordering his staff to play it.
When reporters asked him how he proposes to solve the policy spat, AMLO was defiant: “Nothing will happen.”
What is going on here?
It started early on Wednesday, when U.S. officials argued that AMLO’s energy policies favor Mexico's state-run electrical utility and oil companies and undermine American business.
The U.S. said it was seeking “dispute settlement consultations” under the U.S.-Mexico-Canada Agreement (USCMA), a trade agreement meant to ensure balanced, reciprocal trading between North American nations. It was a first step in a process that could lead to tariffs on some Mexican products.
The news comes just over a week after Biden and AMLO put out a joint statement reaffirming their commitment to the USMCA.
Mexico’s president laughed off the White House’s rhetoric, saying that Biden has always respected Mexican sovereignty and the trade fight was merely a result of corrupt right-wing lobbying, the Wall Street Journal first reported.
Mexico has been attempting to prop up its state-run electrical utility, the Comisión Federal de Electricidad (CFE), and its national oil and gas company, Petróleos Mexicanos (PEMEX), with policies that U.S. trade ambassador Katerine Tai argues “prioritize the distribution” of energy from these firms, disincentivizing market competition and clean-energy production in the country.
“We have tried to work constructively with the Mexican government to address these concerns, but, unfortunately, U.S. companies continue to face unfair treatment in Mexico,” Tai said in a statement on Wednesday.
Canada's trade ministry is also launching energy consultations with Mexico, with officials telling Reuters they are "supporting the U.S. in their challenge."
The Alliance for Trade Enforcement, a trade group made up of various U.S. industry associations, also stood by the Biden administration’s trade fight.
“The Alliance for Trade Enforcement applauds USTR’s request for consultations with Mexico. President López Obrador’s efforts to nationalize the country’s energy sector directly violate the USMCA, obstruct clean energy initiatives in the region, and threaten America’s economic prosperity,” they wrote in a Wednesday statement.
Republican senators applauded the move by the Biden administration as well, but argued it should have been done sooner.
“Under the USMCA, Mexico agreed to level the playing field and [to] allow American companies to compete with Mexican companies to meet Mexico’s energy needs. But the government of Mexico has been violating this agreement. It was well past time for the United States to respond, and it was right for the U.S. Trade Representative to finally act,” U.S. Senator Ted Cruz (R.-Texas) said in a Wednesday statement.
Mexico's economy ministry responded to U.S. and Canadian requests for consultation late on Wednesday night, with officials saying that they are hoping to reach a "mutually satisfactory solution" to the energy dispute. President López Obrador remained defiant on Thursday, however, arguing that Mexico has not violated the USMCA trade agreement.
This story was originally featured on Fortune.com
Thu, July 21, 2022
MEXICO CITY (AP) — The U.S. government has forced Mexico into negotiations over what Washington considers unfair practices that are effectively excluding U.S. and other foreign companies from the Mexican energy sector in violation of the free trade agreement they signed with Canada. Mexico says it has received a similar notice from Canada related to its electricity law.
WHAT IS THE U.S. GOVERNMENT COMPLAINING ABOUT?
The U.S. government says a change to Mexican law last year gives an unfair advantage to Mexico’s state-owned Federal Electricity Commission and puts energy sold by private companies, including cleaner energy from solar or wind, at a disadvantage.
The U.S. also says a 2019 regulation gives only state oil and gas company Petroleos Mexicanos extra time to comply with tougher environmental standards limiting the sulfur allowed in automotive diesel fuel.
Mexico has also delayed, rejected or failed to act on private companies’ applications for permits to operate in the energy business and has revoked or suspended existing permits, according to the U.S. government.
HOW DID WE GET HERE?
Private companies, mainly from Spain and the United States, invested billions of dollars in Mexico to build wind, solar and gas-fired electricity plants under the terms of a 2013 reform opening the energy sector during the administration that preceded the current one under President Andrés Manuel López Obrador.
Before that overhaul, Mexico faced several problems: high electricity rates, scarce generating capacity and dirty power plants that often burned fuel oil to produce electricity. So the government built pipelines to import cleaner U.S. natural gas, allowed companies to buy electricity from independent generators and gave foreign and private firms incentives to install cleaner wind-power turbines or gas-fired plants.
Mexico may have given private and foreign firms too many incentives. They received preferential treatment in pricing and purchasing, and didn’t have to pay the Federal Electricity Commission fees for distributing power through government-owned transmission lines. The state-owned utility lost market share and income, but still had to maintain transmission lines.
WHAT IS MEXICO'S POSITION?
The energy sector is a point of national pride for Mexico's president, who frequently speaks fondly of large state-owned entities.
López Obrador has made propping up Mexico’s deeply indebted state oil company a top priority, and he has railed against foreign companies that flooded the electricity sector when it was opened to competition.
López Obrador doesn’t want the Federal Electricity Commission to go bankrupt or lose more market share. Last year, his allies in Mexico’s congress made legal changes that give preference to the state power utility, requiring it to buy power from its own plants first, while often cleaner energy from private generators would be last in line.
The president tried to enshrine some of those changes in the constitution, but those failed to get the required two-thirds majority in congress earlier this year.
Mexican law had required free competition in the power industry. And the U.S.-Mexico-Canada free trade agreement prohibits member nations from favoring domestic producers or state-owned firms.
WHAT DO THE SIDES SAY ABOUT THEIR DISPUTE?
In announcing the formal U.S. complaint Wednesday, the office of the U.S. Trade Representative said in a statement: “Mexico’s policies have largely cut off U.S. and other investment in the country’s clean energy infrastructure, including significant steps to roll back reforms Mexico previously made to meet its climate goals under the Paris Agreement. Mexico’s policy changes threaten to push private sector innovation out of the Mexican energy market.”
López Obrador downplayed the dispute Wednesday, framing it as fairly routine in relations between the two countries. He noted that no complaint was mentioned to him when he visited President Joe Biden in Washington earlier this month.
On Thursday, López Obrador said the issue is “about the interests dedicated to plundering Mexico.” He said he doesn’t believe it is the companies that are complaining, but rather that this is a “political issue.”
“We have many elements to respond (with),” López Obrador said. “We are going to defend ourselves.”
Mexico’s Economy Ministry said Wednesday, “The government of Mexico expresses its willingness to reach a mutually satisfactory solution during the consultation phase.”
Mexico announced later Wednesday that it had received a similar notice from Canada related to its electricity law.
WHAT HAPPENS NOW?
The consultation phase between the sides is supposed to start within 30 days.
If the two countries cannot reach an agreement after 75 days of talks, the U.S. can request intervention by a dispute resolution panel under the U.S.-Mexico-Canada Agreement that could result in sanctions against Mexico if the United States prevails.
The pact, negotiated by President Donald Trump, replaced the 1994 North American Free Trade Agreement.
NY's fossil fuel use soared after Indian Point plant closure. Officials sound the alarm
Thomas C. Zambito,
New York State Team
Lohud | The Journal News
Fri, July 22, 2022
The 2021 shutdown of the Indian Point nuclear power plant led to near-total dependence on fossil fuels to produce electricity in New York's energy-hungry downstate region, and surging amounts of heat-trapping carbon dioxide in the air.
A report issued last month by the New York Independent System Operator, which runs the state’s electric grid, shows that in 2021, 89% of downstate energy came from natural gas and oil, up from 77% the previous year when both of Indian Point’s two reactors were still running.
The newly released figures demonstrate in stark detail just how much work the state will need to do in the coming years if it's to achieve its ambitious climate-related goals − reducing carbon-producing emissions to zero while clearing the way for renewables like wind and solar power to make a larger contribution to the electric grid.
And they have pro-nuclear advocates urging the state to clear a path to allow nuclear power play a larger role in the state's energy future.
“If we’re serious about dealing with climate change, then we’re going to need all the tools in the toolbox, which includes nuclear, not just now but in the future,” said Keith Schue, an electrical engineer and a leader of Nuclear New York, a pro-nuclear group allied with James Hansen, a leading climate scientist. “We do believe that closing Indian Point was a mistake. But are we going to continue making mistakes or can we learn from them?”
Work on the equipment hatch enlarging project, proceeds on the containment dome for Indian Point 2 at the Indian Point Energy Center in Buchanan, Jan. 12, 2022. Holtec International is in the process of decommissioning the property.
The shift to greater fossil fuel reliance comes as little surprise.
A 2017 NYISO study predicted the 2,000 megawatts of power lost when Indian Point closed would be picked up by three new natural gas plants – in Dover Plains, Wawayanda and Bayonne, N.J. One megawatt powers between 800 and 1,000 homes.
And Indian Point’s former owner, Louisiana-based Entergy, noted that the year after its Vermont Yankee plant shut down in 2014, natural gas-fired generation jumped 12 percent, just as it has since the Buchanan plant closed. The first of Indian Point’s two working reactors shut down in April 2020, followed by the second in April 2021.
With Indian Point eliminated from the energy mix, it has become even harder to wean a downstate region that includes New York City off fossil fuels.
Why did the plant close?
Drone photo of Indian Point Power Center in Buchanan on Tuesday, April 28, 2020.
Former Gov. Andrew Cuomo's administration brokered the 2017 deal with Entergy that led to Indian Point’s shutdown, with Cuomo citing fears of a nuclear mishap at a power plant located some 35 miles from New York City. He chose to keep open three upstate nuclear plants – two on Lake Ontario and another near Rochester − by arranging for some $7.6 billion in subsidies over 12 years.
But the agreement that shuttered Indian Point came when natural gas was cheap. Entergy cited competition from natural gas in the energy market as the prime mover behind its decision to close a plant that had generated electricity for Westchester County and New York City for six decades.
Today, with natural gas prices surging, electricity is not so cheap.
“We got used to having historically cheap natural gas in the United States,” said Madison Hilly, the founder and executive director of the Campaign for a Green Nuclear Deal in Chicago. “So places that shut down their nuclear plants, even if they were replaced with gas, consumers really didn't feel that in their pocketbooks. Now the era of nonprofit natural gas − as I call it − seems to be over. It's really expensive.”
The push to reconsider nuclear power
In 2021, the average wholesale price of electricity in New York was $47.59 per megawatt hour last year, nearly double what it was the previous year. NYISO’s independent monitor credited the increase in wholesale electric prices to the Indian Point shutdown, the NYISO report said.
California, which is pursuing a slate of clean energy goals like New York’s, appears to be rethinking its decision to do away with nuclear power.
In May, California Gov. Gavin Newsom said he would support keeping the Diablo Canyon nuclear plant open beyond its planned 2025 closure to ensure the reliability of the state’s electric grid. Researchers from Stanford University and the Massachusetts Institute of Technology have concluded keeping the plant open for another ten years could limit carbon emissions and save the state $2.6 billion in power costs.
Hilly has teamed with Nuclear New York, a coalition of scientists, engineers and labor and management from the nuclear industry, to urge the state to give nuclear power a larger role in the state’s energy mix. In April, Hansen, a former NASA scientist who was among the first to identify the consequences from climate change, appeared at an Albany press conference to urge the state to include nuclear in a plan being drafted for the Climate Leadership and Community Protection Act.
“We're trying to prevent the situation from getting that bad – that reality that forces politicians to eat crow,” Hilly said. “Eventually, if we keep going down this path, ratepayers and voters are not going to tolerate it and politicians will quickly have to get on board or get out.”
A spokesman for Gov. Kathy Hochul said the state is forging ahead with its twin goals of having 70% of the state’s electric demand met by renewables by 2030 and 100% zero emissions by 2040.
“These goals, which are being met through solar, wind, and hydroelectricity along with the continued use of the state’s three existing upstate nuclear plants, were developed to reduce emissions from fossil fuels, combat the dangerous impacts of climate change and benefit New Yorkers by reducing volatility in electricity pricing,” spokesman Leo Rosales said. “Planning for these goals took into account the necessary closure of Indian Point following dozens of safety and operational hazards and in no way jeopardizes New York’s clean energy goals or the reliability of the state’s electric grid."
Transmission: Power lines will bring wind and solar energy from upstate but will it be enough to help NY achieve green energy goals?
NY's electric grid under siege
NY Transco's New York Energy Solution project in Claverack is set to bring clean energy from upstate into the Hudson Valley.
Increased energy costs are only part of the problem.
NYISO’s June "Power Trends" report offers a sobering assessment of grid reliability in the years ahead.
The amount of energy resources the state can access each day is decreasing, and that trend is expected to worsen in the years to come as the demand for electricity surges. Electricity needed to charge cars and heat buildings will shift peak usage to the winter instead of summer, which typically sees the highest energy usage as air conditioners run around the clock.
Adding to the problem are environmental regulations that will impact the output of the state’s peaker plants, fossil-fuel generated plants that take their name from delivering energy at times of peak demand. Roughly half of the 3,300 megawatts these plants generate in the lower Hudson Valley, Long Island and New York City will be unavailable during the summer of 2025, NYISO notes.
“The margins that we see on our system are shrinking,” NYISO president and chief executive officer Rich Dewey told reporters at a media briefing last month.
The grid is in perhaps the most transformative moment in its history.
Older generating plants are being shut down while the state introduces a slate of renewable energy projects – offshore wind on Long Island, wind power upstate, batteries to store solar energy.
A network of transmission lines stretching from western New York to New York City is currently under construction, part of an effort to remove a bottleneck that kept clean energy stuck north of Albany. Upstate’s energy mix is decidedly cleaner than downstate’s. Upstate, three nuclear power plants and hydropower from the Robert Moses Niagara Hydroelectric Power Station contribute to a 91% carbon-free energy grid.
There are also plans to deliver hydropower to New York City from Canada by way of 340 miles of underground cable that will run in the Hudson River. Another 174-mile transmission line will bring upstate wind down to Queens along upstate rights-of-way.
But it will be years before these projects are up and running.
The NYISO report anticipates a 10% gap in the amount of renewable power that will be available on an as-needed basis in the winter of 2040.
“We've identified there is a need for dispatchable, emissions-free resources,” Dewey said. “That technology does not yet exist and there's a gap that needs to be closed. We're only going to get so far with wind, solar and storage, due to the intermittent nature of those resources.”
And by next year, a heatwave with an average temperate of 95 degrees may result in thin margins and “significant deficiencies,” NYISO says.
A 98-degree heatwave would test the system’s limits today and exceed grid capabilities next year, the report adds.
“We're taking on a little bit more risk in our ability to manage unplanned, unforeseen events on the power system, or potentially severe weather events,” Dewey added.
NYISO isn’t alone in its concerns about grid reliability. The state’s utilities have been raising their concerns.
A group representing most of the state’s major utilities recently studied energy production for the month of January, an especially cold month and the first winter when Indian Point wasn’t producing power. The plant’s Unit 2 shut down in 2020 and Unit 3 the following year.
Wind and other renewables contributed 5% of total generation. There was less wind and less solar generation due to shorter daylight hours and heavy cloud cover.
“Today’s renewable resources are emissions-free, but their output is weather-dependent,” the Utility Consultation Group analysis says. “This intermittency and the need for electric supply to meet customer energy demand every hour of the day may result in reliability issues if not proactively addressed.”
The group represents Central Hudson, ConEdison, Rochester, Niagara Mohawk, NYSEG and Orange and Rockland utilities.
'Closing Indian Point was a mistake'
Older electricity transmission towers like the one at far right will be replaced across New York with modern steel poles like the ones at left. The Indian Point power plant can be seen in the background in this view from Tomkins Cove on July 27, 2021.
Critics of the deal that led to Indian Point’s closure question why the plant couldn’t remain open while the state pursued a renewable buildout.
“Maybe someday renewables could be a big factor in the energy market,” said Theresa Knickerbocker, the mayor of the lower Hudson Valley village of Buchanan, home to Indian Point. “But, right now, two gas plants were opened up to compensate for the loss of Indian Point, which has zero carbon emissions. It’s kind of hypocritical, right?”
Buchanan faces the loss of some $3.5 million in property taxes that Entergy paid the village while the reactors were still operating.
Business groups fear the thinner energy surplus could impact a factory’s ability to deliver goods on time, while driving away companies that are considering relocating.
“The renewable buildout is a multi-decade process,” said Ken Pokalsky, the vice president of the Business Council of New York. “It's probably going slower than we would like. Every one of these project is complicated…It would be safe to say it's moving forward. But fast enough is a subjective evaluation.”
Nuclear New York wants the state to work with the federal government to encourage and develop new nuclear reactors, which don't produce the nuclear waste that older generation reactors do.
This week, Entergy announced it was partnering with Holtec, the New Jersey company that is tearing down Indian Point, in a deal to build small nuclear reactors. Their plan envisions building one of the first reactors at Oyster Creek, a shutdown nuclear power plant in New Jersey.
And the nuclear group wants New York to continue the subsidies that have allowed the three upstate nuclear power plants to continue beyond 2029.
Schue said other nations have been adopting the next generation of nuclear energy generation into the mix. "We'd like to change that," Schue said. "We'd like to see New York step up to the plate. We've got the skills. We've got the spirit of innovation, we have the manpower."
Climate:Hudson Valley to get hearing for New York state's climate change plan
This article originally appeared on New York State Team: NY's fossil fuel use soared after Indian Point nuclear plant closure
Fri, July 22, 2022
The 2021 shutdown of the Indian Point nuclear power plant led to near-total dependence on fossil fuels to produce electricity in New York's energy-hungry downstate region, and surging amounts of heat-trapping carbon dioxide in the air.
A report issued last month by the New York Independent System Operator, which runs the state’s electric grid, shows that in 2021, 89% of downstate energy came from natural gas and oil, up from 77% the previous year when both of Indian Point’s two reactors were still running.
The newly released figures demonstrate in stark detail just how much work the state will need to do in the coming years if it's to achieve its ambitious climate-related goals − reducing carbon-producing emissions to zero while clearing the way for renewables like wind and solar power to make a larger contribution to the electric grid.
And they have pro-nuclear advocates urging the state to clear a path to allow nuclear power play a larger role in the state's energy future.
“If we’re serious about dealing with climate change, then we’re going to need all the tools in the toolbox, which includes nuclear, not just now but in the future,” said Keith Schue, an electrical engineer and a leader of Nuclear New York, a pro-nuclear group allied with James Hansen, a leading climate scientist. “We do believe that closing Indian Point was a mistake. But are we going to continue making mistakes or can we learn from them?”
Work on the equipment hatch enlarging project, proceeds on the containment dome for Indian Point 2 at the Indian Point Energy Center in Buchanan, Jan. 12, 2022. Holtec International is in the process of decommissioning the property.
The shift to greater fossil fuel reliance comes as little surprise.
A 2017 NYISO study predicted the 2,000 megawatts of power lost when Indian Point closed would be picked up by three new natural gas plants – in Dover Plains, Wawayanda and Bayonne, N.J. One megawatt powers between 800 and 1,000 homes.
And Indian Point’s former owner, Louisiana-based Entergy, noted that the year after its Vermont Yankee plant shut down in 2014, natural gas-fired generation jumped 12 percent, just as it has since the Buchanan plant closed. The first of Indian Point’s two working reactors shut down in April 2020, followed by the second in April 2021.
With Indian Point eliminated from the energy mix, it has become even harder to wean a downstate region that includes New York City off fossil fuels.
Upstate: Oswego rescued a nuclear power plant and thrived. A downstate village may not be as lucky.
Why did the plant close?
Drone photo of Indian Point Power Center in Buchanan on Tuesday, April 28, 2020.
Former Gov. Andrew Cuomo's administration brokered the 2017 deal with Entergy that led to Indian Point’s shutdown, with Cuomo citing fears of a nuclear mishap at a power plant located some 35 miles from New York City. He chose to keep open three upstate nuclear plants – two on Lake Ontario and another near Rochester − by arranging for some $7.6 billion in subsidies over 12 years.
But the agreement that shuttered Indian Point came when natural gas was cheap. Entergy cited competition from natural gas in the energy market as the prime mover behind its decision to close a plant that had generated electricity for Westchester County and New York City for six decades.
Today, with natural gas prices surging, electricity is not so cheap.
“We got used to having historically cheap natural gas in the United States,” said Madison Hilly, the founder and executive director of the Campaign for a Green Nuclear Deal in Chicago. “So places that shut down their nuclear plants, even if they were replaced with gas, consumers really didn't feel that in their pocketbooks. Now the era of nonprofit natural gas − as I call it − seems to be over. It's really expensive.”
Lawsuit: Riverkeeper pledges legal action against efforts to replace Indian Point energy with gas
The push to reconsider nuclear power
In 2021, the average wholesale price of electricity in New York was $47.59 per megawatt hour last year, nearly double what it was the previous year. NYISO’s independent monitor credited the increase in wholesale electric prices to the Indian Point shutdown, the NYISO report said.
California, which is pursuing a slate of clean energy goals like New York’s, appears to be rethinking its decision to do away with nuclear power.
In May, California Gov. Gavin Newsom said he would support keeping the Diablo Canyon nuclear plant open beyond its planned 2025 closure to ensure the reliability of the state’s electric grid. Researchers from Stanford University and the Massachusetts Institute of Technology have concluded keeping the plant open for another ten years could limit carbon emissions and save the state $2.6 billion in power costs.
Hilly has teamed with Nuclear New York, a coalition of scientists, engineers and labor and management from the nuclear industry, to urge the state to give nuclear power a larger role in the state’s energy mix. In April, Hansen, a former NASA scientist who was among the first to identify the consequences from climate change, appeared at an Albany press conference to urge the state to include nuclear in a plan being drafted for the Climate Leadership and Community Protection Act.
“We're trying to prevent the situation from getting that bad – that reality that forces politicians to eat crow,” Hilly said. “Eventually, if we keep going down this path, ratepayers and voters are not going to tolerate it and politicians will quickly have to get on board or get out.”
A spokesman for Gov. Kathy Hochul said the state is forging ahead with its twin goals of having 70% of the state’s electric demand met by renewables by 2030 and 100% zero emissions by 2040.
“These goals, which are being met through solar, wind, and hydroelectricity along with the continued use of the state’s three existing upstate nuclear plants, were developed to reduce emissions from fossil fuels, combat the dangerous impacts of climate change and benefit New Yorkers by reducing volatility in electricity pricing,” spokesman Leo Rosales said. “Planning for these goals took into account the necessary closure of Indian Point following dozens of safety and operational hazards and in no way jeopardizes New York’s clean energy goals or the reliability of the state’s electric grid."
Transmission: Power lines will bring wind and solar energy from upstate but will it be enough to help NY achieve green energy goals?
NY's electric grid under siege
NY Transco's New York Energy Solution project in Claverack is set to bring clean energy from upstate into the Hudson Valley.
Increased energy costs are only part of the problem.
NYISO’s June "Power Trends" report offers a sobering assessment of grid reliability in the years ahead.
The amount of energy resources the state can access each day is decreasing, and that trend is expected to worsen in the years to come as the demand for electricity surges. Electricity needed to charge cars and heat buildings will shift peak usage to the winter instead of summer, which typically sees the highest energy usage as air conditioners run around the clock.
Adding to the problem are environmental regulations that will impact the output of the state’s peaker plants, fossil-fuel generated plants that take their name from delivering energy at times of peak demand. Roughly half of the 3,300 megawatts these plants generate in the lower Hudson Valley, Long Island and New York City will be unavailable during the summer of 2025, NYISO notes.
“The margins that we see on our system are shrinking,” NYISO president and chief executive officer Rich Dewey told reporters at a media briefing last month.
The grid is in perhaps the most transformative moment in its history.
Older generating plants are being shut down while the state introduces a slate of renewable energy projects – offshore wind on Long Island, wind power upstate, batteries to store solar energy.
A network of transmission lines stretching from western New York to New York City is currently under construction, part of an effort to remove a bottleneck that kept clean energy stuck north of Albany. Upstate’s energy mix is decidedly cleaner than downstate’s. Upstate, three nuclear power plants and hydropower from the Robert Moses Niagara Hydroelectric Power Station contribute to a 91% carbon-free energy grid.
There are also plans to deliver hydropower to New York City from Canada by way of 340 miles of underground cable that will run in the Hudson River. Another 174-mile transmission line will bring upstate wind down to Queens along upstate rights-of-way.
But it will be years before these projects are up and running.
The NYISO report anticipates a 10% gap in the amount of renewable power that will be available on an as-needed basis in the winter of 2040.
“We've identified there is a need for dispatchable, emissions-free resources,” Dewey said. “That technology does not yet exist and there's a gap that needs to be closed. We're only going to get so far with wind, solar and storage, due to the intermittent nature of those resources.”
And by next year, a heatwave with an average temperate of 95 degrees may result in thin margins and “significant deficiencies,” NYISO says.
A 98-degree heatwave would test the system’s limits today and exceed grid capabilities next year, the report adds.
“We're taking on a little bit more risk in our ability to manage unplanned, unforeseen events on the power system, or potentially severe weather events,” Dewey added.
NYISO isn’t alone in its concerns about grid reliability. The state’s utilities have been raising their concerns.
A group representing most of the state’s major utilities recently studied energy production for the month of January, an especially cold month and the first winter when Indian Point wasn’t producing power. The plant’s Unit 2 shut down in 2020 and Unit 3 the following year.
Wind and other renewables contributed 5% of total generation. There was less wind and less solar generation due to shorter daylight hours and heavy cloud cover.
“Today’s renewable resources are emissions-free, but their output is weather-dependent,” the Utility Consultation Group analysis says. “This intermittency and the need for electric supply to meet customer energy demand every hour of the day may result in reliability issues if not proactively addressed.”
The group represents Central Hudson, ConEdison, Rochester, Niagara Mohawk, NYSEG and Orange and Rockland utilities.
'Closing Indian Point was a mistake'
Older electricity transmission towers like the one at far right will be replaced across New York with modern steel poles like the ones at left. The Indian Point power plant can be seen in the background in this view from Tomkins Cove on July 27, 2021.
Critics of the deal that led to Indian Point’s closure question why the plant couldn’t remain open while the state pursued a renewable buildout.
“Maybe someday renewables could be a big factor in the energy market,” said Theresa Knickerbocker, the mayor of the lower Hudson Valley village of Buchanan, home to Indian Point. “But, right now, two gas plants were opened up to compensate for the loss of Indian Point, which has zero carbon emissions. It’s kind of hypocritical, right?”
Buchanan faces the loss of some $3.5 million in property taxes that Entergy paid the village while the reactors were still operating.
Business groups fear the thinner energy surplus could impact a factory’s ability to deliver goods on time, while driving away companies that are considering relocating.
“The renewable buildout is a multi-decade process,” said Ken Pokalsky, the vice president of the Business Council of New York. “It's probably going slower than we would like. Every one of these project is complicated…It would be safe to say it's moving forward. But fast enough is a subjective evaluation.”
Nuclear New York wants the state to work with the federal government to encourage and develop new nuclear reactors, which don't produce the nuclear waste that older generation reactors do.
This week, Entergy announced it was partnering with Holtec, the New Jersey company that is tearing down Indian Point, in a deal to build small nuclear reactors. Their plan envisions building one of the first reactors at Oyster Creek, a shutdown nuclear power plant in New Jersey.
And the nuclear group wants New York to continue the subsidies that have allowed the three upstate nuclear power plants to continue beyond 2029.
Schue said other nations have been adopting the next generation of nuclear energy generation into the mix. "We'd like to change that," Schue said. "We'd like to see New York step up to the plate. We've got the skills. We've got the spirit of innovation, we have the manpower."
Climate:Hudson Valley to get hearing for New York state's climate change plan
This article originally appeared on New York State Team: NY's fossil fuel use soared after Indian Point nuclear plant closure
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