Global methane emissions rising due to oil and gas, agriculture: Studies
U.S. oil and gas drilling along with agricultural production worldwide are driving up global emissions of methane, a potent greenhouse gas, two new studies show. That marks a shift from the 2000s, when methane output from human activity came mostly from coal mines. But from 2007 through 2017, methane emissions have climbed on leaks from fossil fuel operations and on food production as people around the world eat more meat. In the United States, now the world’s top oil and gas producer, increased drilling by the industry contributed most to the rise. In South Asia, South America and Africa, growing agricultural activities such as livestock operations and farm waste caused methane levels in those regions to spike, both studies showed. A rise over China was attributed to both agriculture and fossil fuels. “It’s more robust evidence that fossil fuels and agriculture are both equally contributing to the increase of methane contributions in the atmosphere,” said co-author Ben Paulter, and environmental scientist at NASA Goddard. The two studies – published in the journals Earth System Science Data and Environmental Research Letters – update global knowledge on both natural and human-driven methane sources, or what is known as the Global Methane Budget. The last update was in 2016, and accounted for emissions up to 2012. Methane, an invisible gas, is more efficient in trapping heat than carbon dioxide. But it lingers for less time in the atmosphere, so reducing methane emissions could help to prevent the worst impacts from climate change. The only region shown to have lowered emissions between 2000 and 2017 was Europe. This was likely due to lower meat consumption and stricter regulations on landfills, where decomposing garbage releases methane, said Euan Nisbet, an Earth scientist at Royal Holloway, University of London, who did not contribute to the reports. “There are huge, juicy targets for mitigating emissions,” Nisbet said. The studies used several ways of measuring emissions, including both ground and satellite observations as well as consumption and production trends, which are good at capturing large point sources. Harder to assess are the emissions from thousands of small farms, rice paddies and more than 1 billion head of cattle. Identifying sources of methane is an important first step in figuring out how to bring emissions down. For example, covering landfills and better managing methane-belching cattle could have a big effect, Nesbit said. Even just spreading manure around over a field, rather than having it piled up, can help fight the formation of methane. “There’s a lot policymakers and companies can do to cut methane emissions. But in most places around the world, we aren’t doing them,” said environmental scientist Rob Jackson at Stanford University, a co-author on one of the new studies and chair of the Global Carbon Project. U.S. President Donald Trump last year proposed rolled back methane regulations to help the drilling companies cut costs. While the example of Europe cutting emissions gives some scientists hope the region can serve as a blueprint for others, the reports also serve as a warning. “Given that these reports show that methane emissions are currently increasing globally, it does not encourage me that we will be able to reverse the trend and achieve the necessary reductions within the next decade,” said one study co-author Thomas Weber, at the University of Rochester in New York.
Russia’s Rosneft LNG ambitions in Arctic being held up by ministries: Kommersant
Russian oil giant Rosneft is having difficulty in acquiring three gas fields on the Taymyr peninsula, with government ministries fearing competition with Gazprom’s gas exports via pipelines, the Kommersant daily reported on Wednesday. The economic situation in target markets needs to be taken into account, the Natural Resources Minister Dmitry Kobylkin wrote in a letter to Deputy Prime Minister Victoria Abramchenko. Gazprom, which has a monopoly on gas pipeline exports, previously prevented Rosneft from undertaking a similar project, Pechora LNG, in 2016. Rosneft is seeking to transport LNG through the Northern Sea Route from the Deryabinskoye, Turkovskoye and Kazantsevskoye fields in Russia’s Arctic. Gazprom has long been arguing that LNG currently exported by Novatek, and Rosneft’s LNG plans may harm its positions on gas shipped to Europe and China via pipelines. Gazprom is also exporting LNG as a top shareholder at the Sakhalin-2 project.
Fuel-tax hikes are putting brakes on India’s recovery
Dilip Lamba, who owns a transport company in Jodhpur, has had more than three-quarters of his fleet of 50 trucks idling for months. Dharampal Nambardar, a farmer who grows wheat and mustard seed in Haryana, is worried he might not make any profit this year. The main source of their anxiety is not Covid-19, however, but rather a surge in fuel prices. The Central government has hiked import and excise taxes twice this year even as it imposed the world’s biggest coronavirus lockdown. Retail prices for diesel — the lifeblood of Indias economy — in New Delhi have jumped 30 per cent since the end of April, while gasoline has risen 16 per cent. “Diesel makes up almost 70 per cent of our operating costs,” said Lamba, whose company carries everything from cotton to cement to leather goods all over India. “Higher diesel prices means higher freight charges. But customers aren’t ready for it and we can’t absorb the costs.” The Central government raised levies on diesel and gasoline in March and then again in early May, as the coronavirus battered the economy. There’s been a staggering five-fold increase in taxes on diesel since 2014, when Prime Minister Narendra Modi came to power, while those on gasoline have more than doubled. State governments also impose fuel levies, which in Delhi account for around a quarter of the retail prices. Taxes on the two fuels now account for almost two-thirds of what Indians pay at the pump, making Indian retail prices among the highest in Asia and almost double that in Pakistan. The recovery in global crude prices, meanwhile, has boosted Indian fuel costs even further in the last few months. The high prices are adding another headwind to an economy facing the biggest contraction in four decades. Diesel powers India’s trucking fleet, which carries two-third of the country’s freight, and is also essential for construction and agriculture. Gasoline, meanwhile, fills the tanks of millions of motorbikes ridden by lower-income Indians. “While pump prices across the world have mostly followed the drop in oil prices since last year, India is an exception,” said Senthil Kumaran, a senior oil analyst at industry consultant FGE. “It’s unusual to see such a steep increase in the taxes on diesel, as the fuel is deemed to be a driver of economic growth, especially in rural areas.” There appears to be little chance that Modi will take steps to curb the rising diesel and gasoline prices even as global crude prices recover. This year’s fuel levy increases are expected to generate about $30 billion a year in revenue for the government, according to Bloomberg Intelligence, at a time when coffers are being squeezed by less income and sales tax and higher spending on welfare programmes. “The tax hike in early May is turning into a wider cost-push supply shock, reinforced by a rebound in global crude oil prices,” Abhishek Gupta, India economist at Bloomberg Economics, said in a note. “That’s likely to push up inflation over the next few months,” he said. With industrial production still fragile as Covid-19 continues to spread in India, Oil Minister Dharmendra Pradhan’s prediction last month that fuel demand will be back to pre-virus levels by September is looking tough to achieve. There’s already evidence that the high prices are curbing demand. Provisional fuel sales in June show that while Indias overall consumption of petroleum products was 8 per cent lower than a year earlier, diesel and gasoline consumption were down 15 per cent and 14 per cent, respectively. The cost of operations has increased exorbitantly and small truck operators are unable to pass it on to the consumers because demand is low, said Kultaran Singh Atwal, chairman of the All India Motor Transport Congress, the largest such grouping in the country. Almost half of India’s truck fleet is still idle, he said.
Centre to earn Rs 2250 billion more from new petrol, diesel taxes
Centre will earn an additional Rs 2250 billion from new taxes on petrol, diesel and other fuels imposed since lockdown began. This is despite global crude prices touching record lows. Experts suggest the government and the oil marketing companies are technically gaining about Rs 7.30 billion a day because of higher prices for the past month and a half. Bloomberg Intelligence says annual gains for the government would be $30 billion (Rs 2250 billion). Last fiscal, Centre and state governments’ overall tax collection from the petroleum sector in FY20 stood at Rs 5500 billion, the Petroleum Planning & Analysis Cell data suggests. The additional levies are expected to help Centre tide over economic loss due to coronavirus-infused lockdown, which has squeezed its income from taxes amid higher spending on welfare programmes for poor and migrants. Centre has increased excise duty by Rs 13 per litre on diesel and Rs 10 per litre on petrol in May, which catapulted India as the country with highest taxes (around 69 per cent) on fuel, placing it among the countries like France, Germany, Italy and Britain. The government also increased road cess on fuel by Rs 8 per litre. State governments have also increased their value added taxes on fuel to make up for revenue loss amid the COVID-19 crisis. States like Delhi, Andhra, Assam and West Bengal reported over 90 per cent fall in revenue due to the coronavirus lockdown. The increase in duty had simply subsumed the headroom left by a major fall in crude oil prices in April.
PNGRB draft regulation caps individual stake in gas exchange to 15%
No shareholder can have more than 15% stake in a natural gas exchange, as per the draft regulations by the Petroleum and Natural Gas Regulatory Board (PNGRB). The draft, hosted on the PNGRB’s website, is the maiden attempt by India to build a regulatory framework for a gas exchange that would trade physical contracts. The draft lays out in detail the regulations regarding the setting up and operation of an exchange, membership, shareholding and settlement of trades. Anybody wanting to set up an exchange would require an approval from the PNGRB, which would have the power to regulate an exchange, call for information, order investigation and cancel authorisation if needed. “No person, other than a member of an authorised gas exchange, shall at any time, directly or indirectly, either individually or together with persons acting in concert, acquire or hold more than fifteen (15) percent of the paid-up equity share capital in an authorised gas exchange,” the draft says. For a member of the exchange, the shareholding has been restricted to 5% of the equity share capital, as per the draft, which caps the aggregate shareholding at 49% for all members. At least 51% equity capital of an authorised clearing corporation shall always be held by one or more gas exchanges. But no clearing corporation can hold any stake or interest of any nature in the gas exchange, as per the draft.