Shell urged to drop appeal over landmark climate ruling
A Dutch activist group that won a legal battle against Royal Dutch Shell over its climate strategy has urged the company to ditch its appeal and hold joint talks on how to reduce its emissions, according to a letter seen by Reuters. A court in The Hague ordered Shell on May 26 to reduce greenhouse gas emissions from burning oil and gas by 45% by 2030, significantly faster than its current plans, in a landmark case filed by seven groups including Greenpeace and Friends of the Earth Netherlands. Shell CEO Ben van Beurden said the company planned to appeal the ruling but that the Anglo-Dutch company would also accelerate its energy-transition strategy and deepen emission cuts. The court ruling came amid mounting pressure from investors and activist groups on the world top oil companies including Exxon Mobil to tackle their emissions. In the letter sent on Thursday, Friends of the Earth Netherlands called on Shell not to appeal against the ruling. “It is important to act swiftly and not to wait for legal proceedings to finish. We have very little time left to turn the tide,” the group said in the letter addressed to van Beurden. “We are convinced that it is in everyone’s interest – especially that of the climate – to avoid an appeal.” Friends of the Earth Netherlands said it would be “constructive” for both sides to “discuss the new reality in light of the verdict, its implementation, and our shared interest in preventing dangerous climate change.” Shell said in response that it still expected to appeal the ruling. “We agree that urgent action is needed on climate change and, while we expect to appeal the ruling, we want to rise to the challenge and accelerate our existing strategy,” it added. “We have previously offered to engage with Milieudefensie (Friends of the Earth) and will of course consider their proposal.”
Fossil fuels giant Reliance has a $10 billion plan to own the renewable energy space in India
After running one of the world’s largest petroleum businesses for more than two decades, India’s richest man Mukesh Ambani today (June 24) announced he’s steering his company, Reliance Industries (RIL), towards renewable energy with an investment of 750 billion Indian rupees ($10 billion) over the next three years. At the company’s 44th annual general meeting, live streamed to a global audience, the 64-year-old billionaire also told investors about plans to develop a 5000-acre complex in the city of Jamnagar, Gujarat, which is already home to a giant Reliance oil refinery. “It will be amongst the largest such integrated renewable energy manufacturing facilities in the world,” Ambani said during his speech. Ambani’s renewables plan The RIL chairman said that his company plans to build four giga factories to manufacture and integrate all critical components of the New Energy ecosystem. The four factories will make or use: • Solar photovoltaic modules, for the production of solar energy. • Energy storage batteries, for intermittent energy. • Electrolysers, for the production of green hydrogen. • Fuel cells, for converting hydrogen into mobile and stationary power. “Reliance will thus create and offer a fully integrated, end-to-end renewables energy eco-system,” Ambani added. Apart from these new plants, Reliance will also build two additional renewable energy divisions to support the ecosystem of its new business. These include a dedicated project management and construction division, and a project finance division. Reliance will also build solar capacity of at least 100 GW by 2030. “Made in India, for India” If everything goes according to Ambani’s ambitious plan, the new Reliance factories will help India fulfill a fifth of its 2030 new energy target by 2030. Last year, prime minister Narendra Modi announced a target of 450 GW of green energy by 2030. At present, India’s energy sector is heavily coal-dependent; however, the country still aims to achieve the ambitious goal of net-zero greenhouse gas emissions by the end of the decade. Additionally, echoing Modi’s “self-reliant India” campaign, Ambani also announced that the products and equipment in his new factories will be all made in India. “All our products will proudly proclaim made in India, by India, for India, and for the world,” he added.
Rapid fuel price hikes boost oil companies’ net marketing margins on petrol and diesel
Rapid price hikes since the beginning of last month have boosted state oil companies’ net marketing margin on petrol and diesel to nearly Rs 3 per litre, nearly six times the average margin in May. Companies raised prices of petrol and diesel yet again on Tuesday, by 26-28 paise per litre. Fuel prices have been at record levels for months due to a combination of climbing oil prices in the international market, steep taxes and expanding marketing margins of oil companies. Net marketing margin on auto fuels rose to Rs 2.98 per litre on Monday from an average of 48 paise in May, according to ICICI Securities. The average for the first 21 days of June is Rs 2.96. Companies have raised fuel prices almost every alternate day since May 3 when the margin had plunged to minus 97 paise per litre. The price hike of Rs 7.1-7.5 per litre since May 3 has helped companies take their margin closer to the annual average of Rs 3.05 in 2020-21. Analysts feel the government allows state oil companies to expand marketing margins to make up for weak refinery margins and to ensure high valuation for BPCL that’s being privatised. Net margin of Rs 2-2.5 a litre in the initial period of the current fiscal year “may be crucial for the government to realise a high price in BPCL privatisation,” ICICI Securities said in a note on Monday. Higher profits help state companies pay increased dividends to the government. Traditionally, oil companies have enjoyed slim marketing margins. In the year 2019-20, it was Rs 2.22 per litre but for each of the four years between April 2014 and March 2018, it remained around Rs 1 per litre. It would be hard for the government to permit inflated marketing margins while imposing steep taxes in the face of rapidly climbing oil prices. Higher fuel prices have triggered complaints from industries and retail consumers and are showing up in wider inflation. Crude oil rose above $75 a barrel on Tuesday, the highest since April 2019, on a strong global fuel demand outlook. Bank of America expects prices to hit $100 per barrel as the lifting of lockdown restrictions would release a lot of pent up demand in the market while supply is expected to stay restricted. Oil companies’ auto fuel marketing margin (Rs/litre) Jan Feb March April May June* 1.1 2.3 0.4 0.7 0.48 2.96 *Until June 21, 2021. Source: ICICI Securities (Source: Economic Times) Petrol price on a Roll, consumers spared big hike in diesel June 25, 2021: Fuel prices increased again across the country on Thursday, adding more misery for the common man already grappling with rising food prices amid shrinking income. But in the latest round of fuel price hike, oil marketing companies have spared diesel users from a big spike while maintaining regular increase in the retail price of petrol. On Thursday, the oil marketing companies (OMCs) raised the price of petrol by 26 paise per litre to Rs 97.76 a litre in Delhi but kept diesel price hike relatively lower at just 7 paise per litre that has raised its retail level at Rs 88.30 a litre in the national capital. With the rise, petrol price has reached very close to hitting the century mark all across the country extending the scope of historic high prices that had already made the fuel rate cross the Rs 100 per litre mark in certain cities and towns of Maharashtra, Madhya Pradesh, Rajasthan, Telangana and Andhra Pradesh. In the city of Mumbai, where petrol crossed Rs 100 a litre mark for the first time on May 29, the fuel price reached new high of Rs 103.88 per litre on Thursday. Diesel price also increased marginally in the city to reach Rs 95.80 a litre, the highest among metros. Across the country as well petrol and diesel prices increased on Thursday but its retail prices varied depending on the level of local taxes in different states. Petrol prices in three other metros apart from Mumbai have also reached closer to Rs 100 per litre mark and OMC officials said that if international oil prices continue to firm up, this mark could also be breached in other places by month end. With Thursday’s price hike, fuel prices have now increased on 29 days and remained unchanged on 26 days since May 1. The 29 increases have raised petrol prices by Rs 7.37 per litre in Delhi. Similarly, diesel price has increased by Rs 7.57 per litre in the national capital. With global crude prices also rising on a pick up demand and depleting inventories of world’s largest fuel guzzler – the US, retail prices of fuel in India are expected to firm up further in coming days. The benchmark Brent crude reached multi year high level of over $75 on ICE or Intercontinental Exchange.
Middle East’s share of India’s oil imports hits 25-month low
The share of Middle Eastern crude in India’s oil imports fell to a 25-month low in May, tanker data provided by trade sources showed, as refiners tapped alternatives in response to the government’s call to diversify supplies. India, the world’s third biggest oil importer, in March directed refiners to diversify crude sources after the Organization of the Petroleum Exporting Countries (Opec) and its allies, led by top exporter Saudi Arabia, ignored New Delhi’s call to ease supply curbs. Asia’s third-largest economy imported about 4.2 million barrels per day (bpd) of oil in May, just below the previous month but about 31.5% higher than a year earlier, the data showed. The Middle East’s share dropped to 52.7%, the lowest since April 2019 and down from 67.9% in April, the data showed. Imports from Saudi Arabia, India’s second-largest supplier after Iraq, slipped by about a quarter from a year earlier, while supplies from the United Arab Emirates, which dropped to No. 7 position from No. 3 in April, fell by 39%, the data showed. This comes after Indian state refiners nominated to lift less oil from Saudi Arabia in May. Lower purchases of oil from the Middle East dragged Opec’s share of Indian oil imports to a record low. To replace Middle Eastern oil, refiners hiked imports from Latin America, the United States and the Mediterranean. Indian refiners bought higher volumes of gasoline-rich US oil in March, expecting a recovery in local gasoline demand to continue in the months ahead, said Ehsan Ul-Haq, lead analyst for Oil Research and Forecasts at Refinitiv. Strong demand for light crude saw Nigeria improving its ranking by two notches to become the No. 3 supplier to India in May. Private Indian refiners Reliance Industries and Nayara Energy, however, boosted purchases of Canadian heavy oil to a record 244,000 bpd, equivalent to about 6% of India’s overall imports. “Indians bought Kazakhstan’s CPC blend and Canadian oil due to attractive discounts in comparison to dated Brent and WTI, respectively,” Ul-Haq said. Tanker arrival data showed higher imports in contrast to preliminary government data, as cyclones along India’s coast line last month delayed discharge of cargoes. Diversification drive India’s oil demand has risen by 25% in the last seven years – more than any other major buyer – and the country has surpassed Japan as the world’s third-largest oil importer and consumer. The country has already curbed its reliance on the Middle East from more than 64% of imports in 2016 to below 60% in 2019. That trend reversed in 2020, however, when the pandemic pummelled fuel demand and forced Indian refiners to make committed oil purchases from the Middle East under term contracts, shunning spot purchases. As India shifts gears again after oil minister Dharmendra Pradhan’s call for faster diversification, refineries are looking for new suppliers, the oil ministry official said.
India presses oil cartel OPEC for affordable fuel prices
India has again requested the Organisation of Petroleum Exporting Countries (OPEC) to increase supplies to rein in prices, three months after the producers’ cartel ignored New Delhi’s call. In a meeting with OPEC secretary-general Mohammed Sanusi Barkindo on Thursday, oil minister Dharmendra Pradhan flagged concerns over increasing crude oil prices and its impact on consumers and the economic recovery, the oil ministry said in a statement. OPEC had ignored India’s call to ease production cuts in March, with Saudi oil minister asking New Delhi to use oil it bought cheaply last year to deal with higher prices. Oil prices have since gained about $7 to $75 a barrel, helping set new records in domestic fuel prices. Prices of petrol and diesel rose yet again on Thursday by 26 paise and 7 paise per litre respectively. Steep taxes and expanding marketing margins of oil companies are also a key contributor to rising domestic fuel prices that are up about Rs 7.5 per litre since the beginning of May. Given the global demand recovery, OPEC and its allies, led by Saudi Arabia and Russia, have begun easing production curbs and review the market situation every month. The reopening of economies following wider Covid vaccination has brought back demand, mainly in the US, the UK and China, doubling oil prices since the beginning of November. There is a growing expectation that prices could rise to $100 a barrel and consumers like India are mounting pressure on producers to ease supply cuts faster than planned. Pradhan told Barkindo that high crude prices were adding significant inflationary pressure. “Pradhan reiterated his request of phasing out production cuts and also emphasised that crude prices should remain within a reasonable band, which will be in the collective interests of both consumers and producers and will encourage a consumption-led recovery,” the oil ministry statement said.
Gas infrastructure across Europe leaking planet-warming methane
The potent greenhouse gas methane is spewing out of natural gas infrastructure across the European Union because of leaks and venting, video footage made available to Reuters shows. Using a 100,000 euro ($119,000) infrared camera, non-profit Clean Air Task Force (CATF) found methane seeping into the atmosphere at 123 oil and gas sites in Austria, Czech Republic, Germany, Hungary, Italy, Poland and Romania this year. Methane, the biggest cause of climate change after carbon dioxide (CO2), is the main component of natural gas and over 80 times more potent than CO2 in its first 20 years in the air. Currently, the EU does not regulate methane emissions in the energy sector, meaning companies running the sites surveyed by CATF are not breaking laws because of leaks or venting. While some member states require firms to report some emissions there is no overarching framework forcing them to monitor smaller leaks, or fix them. That’s set to change. The EU is proposing laws this year that will force oil and gas companies to monitor and report methane emissions, as well as improve the detection and repair of leaks. In the energy sector, methane is emitted intentionally through venting and by accident from sites such as gas storage tanks, liquefied natural gas (LNG) terminals, pipeline compressor stations and oil and gas processing sites. CATF visited over 200 sites in seven EU countries and filmed emissions with the infrared camera in public vantage points to detect hydrocarbons invisible to the naked eye, such as methane. “Once you see it, you can’t unsee it,” said CATF’s James Turitto, who filmed the emissions. “If we have any hope of achieving only a 1.5 Celsius rise in average global temperatures, we must stop these leaks.” Altogether, CATF counted 271 incidents, with some sites leaching methane from several places. Turitto said over 90% of the sites he visited in the Czech Republic, Hungary, Italy, Poland and Romania were emitting methane while his hit rate in Germany and Austria was lower. LEAKS AND HOLES A selection of the CATF thermography, which shows hydrocarbons and volatile organic compounds, was reviewed by five technical experts contacted by Reuters. Given emissions were at installations handling natural gas – and methane is its main component – they concluded the emissions recorded by CATF were almost certainly methane. At one gas plant owned by Italy’s Eni near the town of Pineto on the country’s Adriatic coast, methane appears to be leaking from a rusty hole in the side of a tank. The footage captures a snapshot of each site’s emissions on a given day so it cannot quantify the amount of methane being emitted over longer periods. What it does reveal is emissions that could be avoided if infrastructure owners used commercially available measurement and abatement technology, emissions experts said. “If there are cracks in the storage tanks, it is a relatively easy fix to patch the tanks,” said Jonathan Dorn, an air quality expert at Abt Associates. Turitto said he called an emergency number for reporting leaks at the Eni site but the line was dead. Eni said the leak at Pineto was from a water tank which would have had negligible amounts of gas and that it had been detected and fixed during regular maintenance. “We are strengthening our efforts in the implementation of periodic leak detection and repair monitoring campaigns,” Eni said, adding that it was supportive of EU regulations to address methane emissions. COMPANIES ON NOTICE Brussels put energy companies on notice in October that it would target them with new rules on gas leaks and was also considering restrictions on venting or flaring of methane. “The Commission calls on companies in the oil, gas and coal sectors to set up more robust leak detection and repair programmes to prepare for upcoming proposals for legislation that would make such programmes mandatory,” it said. An EU official told Reuters this month that because the EU has few methane “super emitters”, the legislation would focus on tackling the smaller but far more frequent emissions that occur throughout energy sector infrastructure. “The first thing is to really try to address these more diffused emissions of methane, covering the whole energy sector,” the official, who declined to be named, said. Experts say the new rules will shake things up for every oil and gas firm in Europe, not least because the EU is considering forcing companies to find and fix even the smallest leaks. “Each company has a lot to do,” said Andris Piebalgs, professor at the Florence School of Regulation and a former EU energy commissioner. It is unlikely the new rules would take effect before 2023 but Brussels wants to get them in place early enough to contribute to its goal of cutting net emissions of all greenhouse gases by 55% by 2030 from 1990 levels. INTENTIONAL EMISSIONS The EU is not alone. U.S. President Joe Biden’s administration plans to propose new rules this year to reduce methane emissions. The New York Times used an infrared camera to identify large methane leaks at U.S. oil and gas sites in 2019 while satellite footage made available to Reuters revealed massive methane leaks from Russian gas pipelines. https://nyti.ms/3iCpJyn CATF’s footage shows Italian energy company SNAM was venting hydrocarbons consistently over three dates during a two-week period from two stacks at its Panigaglia LNG terminal near La Spezia on the Mediterranean coast. Tim Doty, a consultant in thermographic imaging in the energy sector and a former official at the Texas Commission on Environmental Quality, said the footage showed the stacks were “openly venting hydrocarbon emissions”. At a SNAM underground storage facility at Minerbio near Bologna, the infrared footage showed a plume of methane flowing out of a vent stack. SNAM said it was a member of the Oil and Gas Methane Partnership (OGMP), a voluntary group of energy companies that is committed to improving methane measurement and abatement. Eni is also a member. “Emissions recorded by CATF at the Minerbio and Bordolano storage sites