Petrol pumps bonanza: Dealers to move court
Barely 72 hours after the Centre announced a pre-election bonanza of distributing a staggering 55,649 new petrol pumps in the country, the apex body of their dealers plans to challenge the move in court, a top office-bearer said here on Wednesday. The All India Petrol Dealers Association (AIPDA) President Ajay Bansal said that the government’s latest move (of November 25) appeared contrary to its own policy and the dealers would question its legal validity. “On one hand, the Centre has announced the closure of petrol pumps in India replacing them with alternative fuels by 2025. But, now they are publishing advertisements for allotting the second string of new petrol pumps. So what exactly is this policy?” Bansal said. Presently, India has 56,000 retail petrol pumps of the three government oil marketing companies — Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd (HPCL), and Indian Oil Corporation Ltd (IOCL), besides another 6,000 outlets owned by private companies. From these fuel stations, the average monthly sales for the three Oil Marketing Companies (OMCs) are between 120-130 kilolitre with an average increase in demand on petrol-diesel of around four per cent per annum.
EPA will not reallocate waived biofuel volumes to 2019 mandate
The US Environmental Protection Agency (EPA) has rejected requests from the corn lobby to reallocate biofuel volumes waived under its small refinery exemption program into its 2019 mandate, an agency official told Reuters on Tuesday. The official also said the 2019 biofuel mandate figures, due to be released this week, would be largely in line with the agency’s June proposal of 19.88 billion gallons, which includes 15 billion gallons of convention biofuels like ethanol. The powerful corn lobby and top officials in the US Department of Agriculture have complained for months that the Trump administration’s expansion of the EPA refinery waiver program threatens demand for crucial farm products like ethanol. Under the US Renewable Fuel Standard, oil refiners must blend increasing amounts of biofuels into their fuel each year or purchase blending credits from those that do. Small refineries can be exempted from the RFS if they prove that complying would cause them financial strain. “It is an issue of timing,” said the EPA official, who declined to be named due to the sensitivity of the issue. “The primary reason why we’re not reallocating in this rule is because we have no idea what the volume of SREs (Small Refinery Exemptions) will be for calendar 2019 and we won’t know that late 2019, early 2020. All we could do is guess, and we don’t do regulations by guessing here.” The refinery waiver program is among the most controversial issues dividing the US corn lobby and the oil industry. Since President Donald Trump’s election, the EPA has vastly expanded the number of waivers it has handed out to small refineries in a bid to reduce the refining industry’s regulatory compliance costs. The move has infuriated another key Trump constituency, the Farmbelt, which argues the program erodes demand for biofuels. Under pressure, the EPA earlier this year began studying a potential overhaul in which biofuels blending obligations eliminated under the waiver program would be reallocated, possibly in the following year, to other facilities, to ensure there was no net loss in overall blending volumes. “We would like to make everybody happy. It is not often the case we can,” the EPA official said. The EPA is set to formally announce its 2019 biofuels mandate volumes by November 30.
Murphy Oil Corporation in talks to sell Malaysian oil and gas assets
Murphy Oil Corporation is in talks to sell its Malaysian oil and gas assets after an unsolicited bid that could fetch between $2 billion to $3 billion, people familiar with the matter said, in the latest energy M&A deal in the Southeast Asian nation. The independent U.S. oil and gas exploration and production company has tapped banks for the potential sale of its majority interests in eight separate offshore production sharing contracts in Malaysia, said the people, who declined to be identified because the matter is confidential. “Murphy wasn’t considering a sale but was approached by a party that put forward a very compelling bid. They are in negotiations,” said one of the people. Murphy, which has been in Malaysia since 1999, could agree on a deal in a couple of weeks, the person said. Others familiar with the matter suggested Spanish oil major Repsol, whose presence in Malaysia is focused on its upstream business, or other global majors could be potential buyers for Murphy’s assets. The possible transaction comes as M&A activity is heating up in Malaysia’s oil and gas sector, where international companies pursuing expansion plans are spotting opportunities. Repsol and Murphy Oil declined to comment on any potential sale or talks. There was no immediate response to a query sent by Reuters to Malaysian state-owned Petronas, who partners Murphy in Malaysia. In September, Austrian oil and gas company OMV agreed on a joint venture with Sapura Energy Bhd, paying $540 million for a 50 percent stake in the exploration assets of the Malaysian firm. In August, citing sources, Reuters reported that U.S. company Hess Corp’s Southeast Asian offshore natural gas assets had attracted bid interest from the likes of Thailand’s PTTEP PCL and OMV. Hess later said it had no plans to sell its Southeast Asian assets. People familiar with Murphy’s business said the company could use the sale proceeds to fund its global expansion plans. Last month, Brazil’s state-controlled oil company Petrobras and Murphy announced a joint venture to explore oil and gas fields in the Gulf of Mexico. In September 2014, Murphy announced the sale of a 30 percent stake in its Malaysian assets to Indonesian state-oil company Pertamina for $2 billion as it cut its overseas holdings. Murphy produced nearly 46,700 barrels of oil equivalent a day in the quarter ended Sept. 30 in Malaysia, the company said in response to a query from Reuters. “The potential exit seems like a strategic decision based on where Murphy sees greater growth potential. These are high quality assets and of a good size for companies looking for a strong footprint in the region,” said one banker familiar with Murphy’s business. Murphy’s deal with Pertamina was announced when oil prices were hovering around $90 a barrel. On Wednesday, U.S. oil prices were trading near $52 a barrel, having lost almost a third of their value since early October.
France’s Macron tries to ease popular anger over gas prices
French President Emmanuel Macron is trying to defuse protests over rising fuel taxes by explaining his plans to wean the country off fossil fuels and promising to shift out of cheap nuclear energy more slowly. After days of sometimes violent protests over high energy prices, Macron stuck to the small tax increases on gasoline and fuel that had prompted the popular anger. But he proposed a mechanism to regularly review the tax when global oil prices are rising. “I have a deep understanding of the expectations and frustrations, the resentment of citizens … Our duty is to bring a response,” Macron said in a speech at the presidential palace. Macron insisted he will show “no weakness” toward troublemakers who used the protests to damage businesses and clash with police – including in the heart of Paris, on the famous Champs-Elysees avenue. “I don’t confuse thugs with fellow citizens who want to send out a message. I feel understanding for these fellow citizens but I will not indulge those who want destruction and disorder,” he said. Outlining France’s energy strategy for the next 30 years, Macron said the government will by 2035 shut down 14 nuclear reactors out of the 58 now running at 19 plants. Yet he said France would cap the amount of electricity it derives from nuclear plants at 50 percent by 2035. That is a delay compared with the goal of 2025 set by his predecessor, Francois Hollande. France depends more on nuclear energy than any other country, getting about three-quarters of its electricity from the plants. The delay on the cap would in theory help move France from fossil fuels, which Macron wants to do to fight global warming, and toward renewables without increasing the price of energy too much. Germany saw an increase in energy prices after it started a big push from nuclear to renewable energy. Macron confirmed the first nuclear reactors to close will be those of Fessenheim, on the border with Germany, in a process that will start by 2020. Germany has long called for the plant to be shut down. The state government of Baden-Wuerttemberg, on the German side of the Rhine river that separates the countries, has warned that if there were a large-scale incident at France’s oldest still operating nuclear plant it would be forced to evacuate the nearby city of Freiburg. “It’s encouraging that President Macron has personally vouched for the closure of Fessenheim in the summer of 2020,” German Environment Minister Svenja Schulze said in a statement. “What’s important now is that actions follow these words as well.” In an attempt to calm protesters in France, Macron also proposed a three-month consultation with associations and activist groups, including the so-called “yellow jackets” who have led the recent protests, about how best to handle the rising energy costs. Environment minister Francois de Rugy will meet with some of the “yellow jackets” leaders later on Macron’s request, the president’s office said. Jason Herbert, a spokesman for the protesters, told BFM Television that Macron’s speech “didn’t meet the expectations of the yellow jackets.” He said the consultation offer is a step “in the right direction” but “not enough given the urgency of the situation.” Greenpeace said in a statement that Tuesday’s measures “don’t help rapidly reduce greenhouse gas emissions” and “don’t accelerate the transition toward renewable energy. On the contrary, Emmanuel Macron continues to provide a blind support to the nuclear (sector).”
World’s largest pork company to convert pig manure into renewable natural gas
The world’s largest pork company is teaming up with a major energy company to turn pig manure into renewable natural gas. Smithfield Foods and Dominion Energy announced a joint venture partnership on Tuesday to trap methane from hog waste and convert it into power for heating homes and generating electricity. Smithfield previously announced that its company-owned and contract farms over the next decade will cover waste-treatment pits to capture the gas and keep out rainwater. The gas will be channeled to processing centers and converted into natural gas. The joint venture with Dominion will operate initially in North Carolina, Virginia and Utah. The first projects are scheduled to be operating by late 2019.
Algeria’s Sonatrach awards gas contract to Britain’s Petrofac
Algerian state energy firm Sonatrach awarded a contract worth 60 billion dinars ($506 million) on Tuesday to Britain’s Petrofac to boost gas output at the Tinhert field by 4.7 million cubic metre per day, Sonatrach’s CEO said. The value was about $100 million less than originally announced. Sonatrach CEO Abdelmoumen Ould Kaddour said the difference in value was because part of the work, worth 10 billion dinars, had been awarded to Algeria’s GCB. The project in the Illizi region was expected to come online in 36 months, he told reporters.
India Is Losing The Natural Gas Race To China
Coal as the primary fuel in both China and India is a reality that will not change anytime soon. But these giants have committed to using more natural gas, a cleaner fuel that is quickly becoming the world’s go-to source of energy thanks to its positive environmental attributes. Gas today is just 6-8% of China’s and India’s energy usage, compared to nearly 30% in the developed countries. India’s switch to using more gas to reduce an over reliance on coal has been much slower than China’s. Over the past decade, for instance, India’s gas demand has been rising at less than 5%, well below China’s growth of 15%. Immense India is the most energy-deprived nation on Earth. The need for all energy will be central to economic goals to lift hundreds of millions of Indians out of poverty. For example, some 300 million Indians have no electricity, with hundreds of millions more lacking adequate access. The average Indian uses just 1/20 of the electricity that the average American does. Having some 400 million kids under the age of 15, India will become the world’s most populated country before 2025. The future for gas in India is therefore very bright: PM Modi says that India has a plan to “increase the use of natural gas by 2.5 times by the end of next decade.” The main consuming sectors are electricity, city gas distribution, refineries, and petrochemicals. Cleaner gas will be critical to clearing India’s hazy skies. India has some of the worst air pollution in the world, especially particulate matter resulting from over coal use. Despite being so energy-deprived, India also has impressively strong commitments for the Paris climate accord signed in 2015 to cut CO2 emissions. With gas having 50% lower CO2 emissions than coal and 30% less than oil, more gas in India will be required. Although India wants to double gas production over the next four years, the import percentage of all domestic gas usage (today at 50%) should be expected to increase. Overall, tightly regulated gas prices have discouraged private sector interest in upstream gas production, particularly more costly offshore where huge deposits sit. For demand to significantly increase, gas must be reliable and affordable. Low cost energy solutions are especially important for poorer countries like India where residents have just 10% of the incomes that we rich, energy-fulfilled Westerners do. Building more gas pipelines and infrastructure in such an overwhelmingly coal-based economy like India’s is slow but ongoing: ” What India can learn from China: Experience of cross border gas pipeline projects.” LNG has generally been higher cost, hindering the chance of using more gas over coal. LNG though is normally linked to oil prices, so falling oil prices will help. In any event, partnerships to buy flexible and low cost U.S. LNG will be key for India. Russia and Iran also seek to supply. India better move quick, or China and others could snatch up too many of the gas buying contracts. Looking forward, India’s gas demand should rise 6-8% per year, which of course is the same rate of real GDP growth. Within a decade, if the focus can be maintained, gas could soar to being 20% of India’s total energy demand. The impact on the rapidly globalizing natural gas market will be huge: “What If India And China Used Natural Gas And Oil Like The U.S.”
Brace yourself! Oil is below $60 but petrol, diesel prices may still not fall; here’s what govt’s planning
Crude oil price fell below $60 a barrel — unexpectedly and in less than two months from $86.74. At the beginning of October, when oil prices were hovering around $85 a barrel, little did anyone, let alone the Indian government, know that oil will take a sudden u-turn. However, the government is in Catch-22 position as it announced an excise duty cut of Re 1 a litre on both petrol and diesel on October 4, which hurt its fiscal position in a poll year. With the oil prices falling drastically now, the government is now considering hiking excise duty by Re 1- Rs 2 a litre on fuel, The Indian Express reported. According to the national daily, the 30% fall in crude oil prices in the last two months has given room to the government to hike excise duty by Rs 1-2 per litre on petroleum products. “When we hiked the excise duty last month, crude oil prices were hovering above $85 a barrel and now it has come down to around $60 a barrel. The government may consider hiking the excise duty (on petroleum products) as there is a window to raise it by Rs 1-2 per litre,” The Indian Express reported quoting sources. Interestingly, while announcing the excise duty cut of Re 1 in October, Finance Minister Arun Jaitley had said that it would impact the centre’s coffer only by 0.05% and won’t impact the fiscal deficit target of 3.3% of the GDP. At the beginning of this week, the petrol price in Mumbai fell below Rs 80 a litre in a series of cuts following the crude oil price fall and the appreciation in the rupee. The excise duty currently being levied by the central government is Rs 18.48 a litre on petrol and 14.33 a litre on diesel, while VAT levied on fuel varies from state to state.