Court forces U.S. EPA to reconsider three refinery biofuel waivers

MOSCOW (MRC) -- A U.S. appeals court has ruled that the Environmental Protection Agency must reconsider three of the biofuel waivers it recently granted to small oil refineries, arguing the agency’s justification for approving the exemptions was flawed, as per Hydrocarbonprocessing.

The decisihere from the U.S. Court of Appeals for the 10th Circuit dated Jan. 24 came after a coalition of biofuel industry groups had challenged the 2016 exemptions for Holly Frontier's Woods Cross and Cheyenne refineries, as well as CVR Energy's Wynewood refinery.

The biofuel industry has been incensed by a surge in biofuel waivers granted under President Donald Trump’s administration, which it says is hurting farmers by undermining demand for corn-based ethanol.

Under the U.S. Renewable Fuel Standard, the nation’s oil refineries are required to blend billions of gallons of biofuels such as ethanol into the fuel or buy credits from those that do. But the EPA can waive their obligations if they prove compliance would cause them financial distress.

According to the court’s decision, the EPA overstepped its authority to grant the Holly Frontier and CVR waivers because the refineries had not received exemptions in the previous year. The court said the RFS is worded in such a way that any exemption granted to a small refinery after 2010 must take the form of an "extension".

"Because an ‘extension’ requires a small refinery exemption in prior years to prolong, enlarge or add to, the three refinery petitions in this case were improvidently granted," according to the court’s 99-page decision. "We remand these matters to the EPA for further proceedings consistent with this opinion."

Biofuel groups cheered the decision and said it could raise questions about numerous other waivers granted to small refiners in recent years. The Trump administration has roughly quadrupled here the number of waivers it has handed out to small refiners.

"Although RFA will be digesting the opinion and the implications for other proceedings, we are pleased to see judicial agreement with our long-held position that EPA’s recent practices and policies regarding small refinery exemption extensions were completely unlawful," according to a statement from the Renewable Fuels Association.

Consultancy ClearView Energy Partners said in a note to clients it expects the decision to raise prices for biofuel blending credits required for RFS compliance, called Renewable Identification Numbers.

As MRC informed earlier, Rosneft said that its German subsidiary Rosneft Deutschland GmbH had completed the deal to acquire a 3.57% stake in Germany’s Bayernoil Raffineriegesellschaft mbH from BP.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.
MRC

MOSCOW (MRC) -- Belarus received the first batch of Norwegian oil at its Naftan refinery, state oil company Belneftekhim said following a row with Belarus’s main oil supplier Russia, reported Reuters.

Moscow suspended oil supplies to refineries in Belarus from Jan. 1, though it partially restored them on Jan. 4, after both countries failed to agree terms on supplies for 2020.

Minsk has arranged an import of 86,000 tonnes of crude from Norway’s Johan Sverdrup field via Lithuania’s Klaipeda.

On Sunday Naftan, one of the two major Belarusian refineries that have been running at minimum load this year, received 3,500 tonnes in the first batch, Belneftekhim said.

According to ICIS-MRC Price report, lower capacity utilisation at Polymir (part of Naftan) did not affect the balance of the local low density polyethylene (LDPE) market, there was no shortage of polyethylene (PE). Local companies partially compensated for the absence of domestic PE by higher shipments from Russia.

Polymir (part of Naftan) is Belarus' largest petrochemical company, producing a wide range of chemical products, such as LDPE, acrylic fibers, products of organic synthesis, hydrocarbon fractions, etc. Polymir was founded in 1968. The producer uses technologies of the largest foreign companies from Great Britain, Japan, Germany, Italy (Courtaulds, Asahi Chemical Co. Ltd, Kanematsu Gosho, SNIA BPD, etc.), as well as the developments of scientific research institutes and design institutes of the CIS countries. The plant"s annual production capacity is 130,000 tonnes.
MRC

MOSCOW (MRC) -- Linde (Guildford, UK) has announced it has started up a new air separation plant to supply nitrogen, high purity oxygen and argon to the 12-in. wafer product line of Shanghai Huali Microelectronics Corporation (HLMC) in Shanghaim reported Chemical Engineering.

In addition, Linde will supply hydrogen and helium to HLMC.

The new plant includes on-site nitrogen generators and a compressed dry air (CDA) system. The compact and energy efficient nitrogen generator has been specially designed by Linde to meet the increasing demands of electronics and semiconductor customers for higher purity industrial gas products.

"Recently, China’s electronics industry has significantly advanced in technology, innovation and production capabilities, and the reliable supply of high-quality gases is crucial to the success of our customers," said Will Li, Head of Linde Greater China. "At the same time, our customers are keen to ensure that their operations are as sustainable and energy efficient as possible and are seeking solutions which help them address this challenge. We are proud to be a trusted partner for leading semiconductor companies like HLMC and we look forward to expanding our relationship in the future as we continue to build our network density in China."

"The start-up of the plant marks yet another milestone in our successful collaboration with Linde which spans many years. Linde’s reliable supply, safe operations and technological innovation gives us full confidence," said Mr. Lei Haibo, President of HLMC. "We look forward to strengthening our relationship with Linde in the future phases of our project."

As MRC informed earlier, in June 2017, the heads of TAIF Group and Linde AG, the German holding, signed a memorandum of strategic cooperation for the period up to 2025 and a total investment of up to EUR12 billion. The document implies contracts on gas separation, industrial gases, but most importantly - on four stages of the construction of a new ethylene complex in Tatarstan.

Ethylene is the main feedstock for the production of polyethylene (PE).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers.

Linde is a leading industrial gases and engineering company with 2018 pro forma sales of USD 28 billion (EUR 24 billion). The company employs approximately 80,000 people globally and serves customers in more than 100 countries worldwide. Linde delivers innovative and sustainable solutions to its customers and creates long-term value for all stakeholders. The company is making our world more productive by providing products, technologies and services that help customers improve their economic and environmental performance in a connected world.
MRC

MOSCOW (MRC) -- Equinor, Shell and Total vowed to press on with projects in Vaca Muerta, even as policy uncertainty and price controls make it harder to plan investment in Argentina's biggest shale play, raising concerns of a slowdown in oil and natural gas production growth, reported S&P Global.

Representatives of the three companies expressed their determination for the play, one of the world's largest, in meetings with Omar Gutierrez, the governor of Neuquen, a southwestern province where most of the acreage is located.

Gutierrez met with executives of the three companies during a visit to Madrid last week.

Total told him it is delineating an undisclosed block as a step toward entering into mass production, building on a pilot and other developments in the play. The French company also plans to seek unconventional licenses for blocks it is developing for conventional resources in the province at the north end of Patagonia, Gutierrez said in a statement.

Norway's Equinor said it plans to drill six more wells in Bajo del Toro, building on two already in production for oil on the block, which it is developing in partnership with Argentina's state-backed YPF, according to Gutierrez. The partners are seeking a 35-year development license for the block, while Equinor looks for opportunities "to expand their participation in Vaca Muerta," Gutierrez said.

The governor said Shell told him that they will be completing five pre-development wells on Bajada de Anelo in July, a final step before evaluating whether to move into full-scale production on the block. That would build on its first project in the play, the development of the three adjoining blocks where the company said it plans to complete the expansion of an oil treatment plant to take processing capacity to 42,000 b/d from 12,000 b/d, Gutierrez said.

The decisions come after most companies put investments on hold in the play following the introduction of price controls last year that have reduced the price of oil and gas to near breakeven levels.

President Alberto Fernandez, a left-leaning moderate, extended the controls soon after taking office December 10, and he has yet to announce a plan to ease out of them or for the oil sector as a whole. This has left companies guessing what he could do.

"Companies invest when they can see that the future is predictable," said Hugo Giampaoli of Giga Consulting, an energy consultancy outside Buenos Aires. "When they feel that the rules are going to change, they rein in investment. Today, the conditions are not in place to invest."

The result, he said, should be slower production growth this year than in 2019.

Argentina produced a total of 507,412 b/d of oil in the first 11 months of 2019, up 3.7% from 489,159 b/d in all of 2018, according to the latest data from the Argentina Oil and Gas Institute, an industry group. Over the same period, gas production rose 5.6% to 136 million cu m/d from 128.8 million cu m/d, the data show.

The start of several new oil and gas processing plants in Vaca Muerta should boost output this year, but that will be offset by slower growth in blocks where rigs have been sidelined as companies wait for more certainty on policy and pricing.

Fernandez has said he is working on legislation designed to provide stable conditions for investing in Vaca Muerta over the long term.

The bill should gain approval in Congress, where the ruling party has a majority, Giampaoli said. "But until then, there are going to be announcements and meetings, but everything is going to continue at a slow pace like now."

As MRC informed before, in November 2019, Total disclosed that it is evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

MOSCOW (MRC) -- U.S. manufacturers and freight haulers were hit last year by the sharpest slowdown since the 2008/09 recession and it filtered through into a noticeable dip in energy consumption, said Hydrocarbonprocessing.

Use of electricity, natural gas and diesel by industrial customers all showed large declines, or at least sharp slowdowns, in the nine months ending in September 2019. In July to September, industrial users’ total energy consumption fell 1% compared with the same period a year earlier, according to statistics from the U.S. Energy Information Administration.

That was the biggest decline since the mid-cycle manufacturing slowdown in 2015/16 and before that the recession of 2008/09 (“Monthly energy review”, EIA, Dec. 23).

Within the total, industrial consumers’ electricity consumption fell by almost 5% in the third quarter from a year earlier, easily the biggest decline since the recession. Power consumption exhibits a lot of short-term variability based on both the weather (which affects heating and cooling demand) and the state of the economy, so the data must be interpreted with care.

But industrial users’ consumption showed a much more pronounced third-quarter slowdown than for residential customers, which suggests most of the weakness was economic rather than weather-related.

In contrast to electricity, industrial users’ gas consumption continued to grow, mostly because of the strong increase in demand from petrochemical producers.

Even so, gas consumption rose by just 0.75% in July-September compared with a year earlier, down from a growth rate of 7% year on year in early 2018.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.
MRC