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U.S. unveils crackdown on methane from oil and gas industry

By Valerie Volcovici and Nichola Groom

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U.S. unveils crackdown on methane from oil and gas industry
© Reuters. FILE PHOTO: A pipeline that moves methane gas from the Frank R. Bowerman landfill to an onsite power plant is shown in Irvine, California, California, U.S., June 15, 2021.Picture taken June 15, 2021. REUTERS/Mike Blake/File Photo

By Valerie Volcovici and Nichola Groom

(Reuters) -The Biden administration on Tuesday unveiled a plan to slash emissions of the greenhouse gas methane from oil and gas operations as part of its broader strategy to crack down on climate change, drawing cautious support from both environmental groups and drillers.

The announcement coincided with the United Nations climate conference in Glasgow, Scotland, where the United States, the world’s second-largest greenhouse gas emitter, is seeking to reclaim leadership on the world stage by demonstrating tangible steps to curb emissions at home.

President Joe Biden has set a target to slash greenhouse gas emissions by more than 50% by 2030 but is struggling to pass major climate legislation through a deeply divided Congress, making policies by federal agencies more crucial.

His administration and the European Union are also seeking to lead a new international pact to reduce methane by 30% by 2030, drawing participation https://www.reuters.com/business/environment/nearly-90-countries-join-pact-slash-planet-warming-methane-emissions-2021-11-02 from some 90 countries.

At the center of the U.S. plan to tackle methane domestically is an Environmental Protection Agency proposal that will for the first time require oil and gas operators to aggressively find and repair methane leaks. Oil and gas operations account for a third of methane emissions.

“The timing of this is critical. As we speak, world leaders are gathering right now in Glasgow and they are looking to the United States for true leadership,” U.S. EPA Administrator Michael Regan told Reuters in an interview. “This proposal is absolutely bold, aggressive and comprehensive.”

Specifically, the proposal will require companies to monitor 300,000 of their biggest well sites every three months, would ban the venting of methane produced as a byproduct of into the atmosphere, and require upgrades to equipment such as storage tanks, compressors, and pneumatic pumps.

The EPA rules would most likely take effect in 2023 and would be aimed at slashing methane from oil and gas operations by 74% from 2005 levels by 2035, an amount equivalent to the emissions created by all U.S. passenger cars and planes in 2019, according to the summary.

The American Petroleum Institute, which represents the U.S. oil and gas industry, said it was reviewing the proposals.

“We support the direct regulation of methane from new and existing sources and are committed to building on the progress we have achieved in reducing methane emissions,” it said in a statement.

Major producer BP (NYSE:) Plc, which has been seeking to burnish its green credentials and is investing heavily in clean energy, said it applauded the EPA proposals.

Washington-based environmental group Earthworks also called the proposals a positive step, but added that it would “continue to advocate for the strongest possible standards” as the EPA seeks feedback on the plan.

QUARTERLY MONITORING

Methane is the second-biggest cause of climate change after carbon dioxide. Its high heat-trapping potential and relatively short lifespan in the atmosphere means cutting its emissions can have an outsized impact on the trajectory of the world’s climate.

The EPA’s well monitoring proposal applies to sites emitting an estimated three tons of methane per year or more, a threshold the agency said would capture sites responsible for 86% of leaks. Smaller sites will require less scrutiny.

Oil and gas industry groups had pressed the EPA to exclude smaller wells from the regulations, citing the sheer number of such wells and the costs of the monitoring and repairs.

Environmental advocates, meanwhile, had pushed for all well sites to be covered, and were also seeking limits on flaring: the practice of burning off methane that comes out of the ground as a byproduct during crude oil drilling.

The administration’s methane strategy will also include a new proposal by the Pipeline and Hazardous Materials Safety Administration requiring companies to monitor and repair leaks on about 400,000 miles (643,740 km) of previously unregulated gathering lines.

The administration’s plan also proposes new voluntary measures from the Agriculture and Interior departments to tackle methane emissions from other major sources, including landfills, agriculture and abandoned wells and coal mines.

The EPA said it will release a supplemental proposal next year to flesh out the rules and possibly expand them to include additional methane sources, including abandoned oil and gas wells, flares and tank truck loading.

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Bypassing sanctions by the EU is included in the list of criminal offenses in the EU

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sanctions by EU

Bypassing European sanctions is included in the list of criminal offenses in the EUThe EU Council decided on Monday to include violations of EU sanctions in the list of criminal “offenses in the EU”.

“The EU has adopted an unprecedented European sanctions list targeting Russia’s economy (…). Their implementation requires joint efforts to achieve results, and today’s decision is an important tool to ensure that any attempts to circumvent these measures will be stopped,” said Czech Justice Minister Pavel Blazek, who holds the EU Council Presidency, as quoted in a communiqué published in Brussels.

Member states currently have different definitions of what is a violation of restrictive measures and what penalties should be imposed in the event of a violation, the document noted. “This could lead to varying degrees of sanctions and the risk of circumvention of these measures, potentially allowing sanctioned individuals to continue accessing their assets and supporting regimes against which EU measures are in effect,” the EU Council communiqué said.

It explains that listing violations of restrictive measures as “crimes in the EU” is the first of two steps aimed at making sure that sanctions are applied equally across the EU and deterring attempts to circumvent or violate EU measures.

This draft directive, Brussels reminds us, must then be discussed and adopted by the European Parliament and the EU Council.

Earlier we reported that the U.S. had decided to extract crude oil in Venezuela.

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The U.S. has decided to produce crude oil in Venezuela

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crude oil in Venezuela

The U.S. wants to give the U.S. Chevron Corp., one of the largest oil companies in the country, a license to produce crude oil in Venezuela, according to The Wall Street Journal.

There will be new American oil executives in Venezuela. This is a signal of easing sanctions against the country, the newspaper said. Chevron has decided to regain partial control over oil production in Venezuela’s fields, in which the company paid a share due to joint ventures with Petroleos de Venezuela SA.

Talk of new investment is not yetunderway, because the debts to Chevron are not repaid. This may take several years, the sources say.

In July, Diosdado Cabello, leader of the parliamentary faction and vice president of the ruling United Socialist Party of Venezuela (PSUV), accused the U.S. of attacks on the country’s oil facilities. Venezuela has been under U.S. oil sanctions since 2019. In June of this year, the State Department allowed Italian Eni and Spanish Repsol to supply oil from Venezuela to Europe.

Earlier we reported that more than 50% of Germans said they refused to buy new clothes and electronics.

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Bloomberg: UAE to boost oil production beyond plan by 2025

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UAE to boost oil production

UAE to boost oil production. One of Russia’s main competitors for oil exports plans to reach five million barrels per day by 2025. The Middle Eastern country was initially expected to reach this level only by 2030, Bloomberg reported, citing sources.

“Energy concern Abu Dhabi National Oil Co. (Adnoc), which produces almost all of the UAE’s oil, wants to be able to produce 5 million barrels a day by 2025. The company planned to reach such a level only by 2030,” – says the material.

But a crude oil production boost will be difficult without additional financing for expenses for the project. Adnoc explained the acceleration of production increase by the policy of the leading countries of the world on accelerated energy transition to renewable energy sources (RES).

“As we embrace the energy transition and focus our business on the future, we will continue to explore potential opportunities that can further add value, free up capital and improve profitability,” the Arab oil company said.

To realize the goal, Adnoc has asked international companies that are partners in its oil fields to increase long-term crude production by 10% or more, sources said. In the case of positive results of the negotiations, the UAE will be able to significantly increase the volume of oil production by 2025, concludes Bloomberg.

On September 19, the Times of India, citing sources in the Indian Ministry of Commerce, reported that the Asian country has saved since February 2022, $439.7 million on imports from Russia of oil at a discount. A total of about 62.5 million barrels of Russian crude were purchased by Indian state and private companies over the last six months. Moreover, volumes of imports have increased many times over as compared to 2021.

Earlier, we reported that Nigeria stopped benefiting from the sale of Nigerian oil due to the lack of dollars.

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