© Reuters. FILE PHOTO: Workers put the final touches on a natural gas well platform owned by Encana south of Parachute, Colorado, December 8, 2014. . REUTERS/Jim Urquhart/File Photo
By Timothy Gardner and Jarrett Renshaw
WASHINGTON (Reuters) – The Biden administration is holding talks with global energy companies and foreign officials in an effort to set standards for certified , a form of the fuel that producers market as climate friendly.
The effort comes as the United States seeks to sustain its liquefied natural gas, or LNG, exports to Europe to displace Russian fuel, while also promoting efforts to fight global warming.
A credible market for certified natural gas could help it tackle both goals at once. Gas can be certified as low- or no-carbon if its producers can prove they have reduced greenhouse gas emissions associated with getting it to market, or if they purchase carbon offsets to cut its net climate impact.
“It’s a big priority for us to make sure that the role we’re playing in … supplying natural gas to our allies at a time of great energy security need is done in a way that is climate responsible,” said Brad Crabtree, an assistant secretary for the U.S. Department of Energy’s (DOE) fossil energy and carbon management office.
The United States has become the world’s top gas producer in recent years, and competes with Qatar to be top LNG exporter.
Crabtree said he hosted a workshop in October with gas industry representatives, including a new industry group called the Differentiated Gas Coordinating Council (DGCC), to discuss standards for certified gas.
His office has also had talks with European Union representatives, Japan, Norway, the United Arab Emirates, and Britain, and others on approaches to reduce methane emissions from the industry, a spokesperson said.
On March 9 Crabtree will also host a private meeting on certified gas at the CERAWeek energy conference in Houston with about 20 speakers, according to a copy of the invitation seen by Reuters.
Gas producers have attempted to market certified gas at a premium for years, using third-party certifiers – like non-profit MiQ and startup Project Canary – to prove the fuel has been produced and transported in ways that minimize emissions.
But a lack of unified standards on measuring and verifying emissions across the gas supply chain, and Europe’s energy crisis following Russia’s invasion of Ukraine, have prevented low-carbon gas markets from taking off.
While gas burns cleaner than other fossil fuels, its main component is the powerful greenhouse gas methane, which can leak into the atmosphere from drilling, processing, shipping and distribution.
Certifiers rely on a dizzying array of competing measurement technologies to evaluate those emissions, including satellites, planes, drones and land-based systems, along with differing methodologies for how to interpret the data.
“The downside of all the innovation and creativity is that it also is very chaotic,” Crabtree said.
Tom Hassenboehler, a lobbyist who helped form the DGCC industry group said the administration can help promote the certified gas market by laying out practices and standards to boost trust in the product.
During the Obama administration, the DOE helped build confidence in fracking by collaborating on a report and website on the disclosure of fracking fluids. It could play a similar role in certification markets, said Hassenboehler.
Williams Cos Inc, a gas processing and transportation company aligned with DGCC, says it will certify emissions cuts across the gas supply chain, to be verified by the auditor KPMG, LLP.
“The market is driving that because our customers want to see a credible documentation of the of the emissions,” said Chad Zamarin, a Williams executive vice president. Any government help to “verify that or provide additional comfort … is something that makes a lot of sense.”
PureWest Energy, a private gas producer aligned with DGCC, did not immediately comment.
MiQ, which says it certifies nearly 20% of U.S. gas output, said Washington needs to show leadership.
“Any silence from the administration on this only results in more opacity and blurriness,” said Ben Webster, MiQ’s director of policy.
At Project Canary, which is in DGCC and says it certifies nearly 11% of U.S. gas output, Chief Commercial Officer Tanya Hendricks said the administration should use funding from the Inflation Reduction Act to deploy advanced monitoring technologies.
The U.S. does not endorse any one verification system, Crabtree said.
‘TRAIN HAS LEFT THE STATION’ If successful, certified gas could help sustain U.S. LNG exports to European markets and put perhaps put pressure on Russia to clean its gas once the war in Ukraine ends, experts said.
The thousands of miles of pipelines from Russian gas fields to Europe leak methane but there is little transparency about how much, said Leslie Palti-Guzman, president and founder of the research group Gas Vista.
Meanwhile, U.S. LNG is not only linked to methane leakage, but takes large amounts of energy to supercool and ship, adding to its carbon footprint.
Nobody knows which is cleaner, “but certified gas could strengthen the case for the U.S. and challenge the Russians to report credible numbers” on its methane emissions, said Robert Kleinberg, a Columbia University research scholar who advises DGCC, free of charge.
Palti-Guzman said certified gas could also be key to securing a longterm role for U.S. LNG in Europe where carbon prices last month hit a record 100 euros per tonne.
“The train left the station,” she said. “It’s only a matter of time before Europe makes (climate change) a priority again.”
French climate investments to drive up national debt burden – think-tank
© Reuters. FILE PHOTO: French President Emmanuel Macron visits Institut Curie laboratory ahead of announcements on biomedical research in Saint-Cloud, France, May 16, 2023. REUTERS/Benoit Tessier/Pool
PARIS (Reuters) – Investments that France needs to finance its transition to a low-carbon economy are set to add 25 percentage points to its debt burden by 2040, a report from the government-funded France Strategie think-tank said on Monday.
France will need to make additional annual investments of about 67 billion euros ($74 billion) – more than 2% of economic output – by 2030 to meet its objectives for reducing its dependence on fossil fuels, France Strategie calculated.
The think-tank, which is part of the prime minister’s office, said the financial effort would weigh heavily on public finances partly because the investments imply lower potential growth, which would cut tax revenues.
As a result, the debt burden would rise by 10 percentage points by 2030 and 25 percentage points by 2040, which France Strategie suggested might need to be financed in part by a temporary tax on wealthy households.
President Emmanuel Macron’s government has hoped to chip away in the coming years at France’s national debt, which currently stands at slightly more that 111% of gross domestic product after surging during the COVID crisis.
The report said the financial burden of investing in Europe’s energy transition also posed a risk in terms of international economic competition, as other major economies such as the United States and China were less concerned about budgetary constraints.
About 100 experts in French and European research groups as well as public French institutions participated in the report, which was led by economist Jean Pisani-Ferry, who previously helped Macron draft his economic programme.
($1 = 0.9084 euros)
Crude oil largely flat; Caution ahead of debt ceiling meeting
Investing.com — Oil prices traded largely unchanged Monday, with traders cautious ahead of the resumption of U.S. debt ceiling negotiations while supply concerns add support.
By 09:30 ET (13:30 GMT), futures traded 0.1% lower at $71.59 a barrel, while the contract fell 0.1% to $75.52 a barrel.
U.S. President Joe Biden and Republican House Speaker Kevin McCarthy are set to meet later this session to try and agree on a deal to raise the more than $31 trillion debt ceiling.
Concerns that a failure to come up with an acceptable compromise have weighed heavily on the market over the recent weeks, as this would result in the U.S. defaulting on its debt obligations, likely plunging the global economy into recession.
The U.S. Treasury has warned that the government could run out of money to pay its bills as soon as June 1.
That said, both crude benchmarks managed to post gains last week, ending four straight weeks of heavy declines, helped by the U.S. starting to refill its Strategic Petroleum Reserve as well as the supply disruptions in Canada, due to early wildfires in the crude-rich Alberta province.
Additionally, the latest data from showed the U.S. oil rig count fell by 11 over the last week, to its lowest count since June 2022.
“A slowdown in U.S. drilling activity is a concern for the oil market, which is expected to see a sizable deficit over the second half of the year,” said analysts at ING, in a note.
“Producers appear to be responding to the weaker price environment, rather than expectations for a tighter market later in the year.”
This brings the Organization of Petroleum Exporting Countries and allies, known as OPEC+, firmly into focus, with its next meeting in early July.
The cartel surprised the market with an output cut at the last meeting, which came into effect at the start of this month. However, this has done little to support crude prices, implying the members may be looking at a further reduction in production.
The fact U.S. producers are not increasing in number will be good news for OPEC+, ING added, “as it suggests that they will be able to continue supporting prices without the risk of losing market share to U.S. producers.”
California grid operator signs off on $7.3 billion of power lines
© Reuters. FILE PHOTO: A woman jogs by power lines, as California’s grid operator urged the state’s 40 million people to ratchet down the use of electricity in homes and businesses as a wave of extreme heat settled over much of the state, in Mountain View, Californi
(Reuters) – California’s electric grid operator has approved a plan expected to cost $7.3 billion for 45 new power transmission projects over the next decade and made it easier for new power plants in high-priority areas to connect to the grid.
The projects will support the development of more than 40 gigawatts (GW) of new generation resources, the California Independent System Operator (CAISO) said on Thursday.
“With electrification increasing in other sectors of the economy, most notably transportation and the building industry, even more new power will be required in the years ahead,” the CAISO said.
The vast majority of the transmission projects will be built in California, with some in neighboring Arizona, it said.
The power lines recommended by CAISO’s 2022-2023 Transmission Plan will allow the state’s grid to add more than 17 GW of solar resources, 8 GW of wind generation, 1 GW of geothermal development, and battery storage projects.
CAISO will prioritize connecting power plants to the grid in specific geographical zones identified by its plan where developing new power lines and plants “make the most economic and operational sense.”
The grid operator also approved proposed reforms to account for “increasing levels of net load forecast uncertainty between day-ahead and real-time markets … as the generation fleet evolves towards a cleaner, but more variable, resource mix.”
It projected that its transmission plan next year could include the need to add 70 GW of new power to the grid by 2033, rising to 120 GW as the state seeks to meet its goal of a carbon-free power system by 2045.
Power supply in the U.S. West is vulnerable to extreme heat as it relies on regional energy transfers to meet demand at peak or when solar output is diminished, the North American Electric Reliability Corp (NERC) said in its summer outlook on Wednesday.
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