India to cut taxes to boost domestic fracking and oil drilling
In this newsletter:
1) Defying US sanctions and EU lawmakers, Russian ship lays Nord Stream 2 pipe in Danish Waters
New Europe, 26 January 2021
2) Biden bans new permits for drilling on federal lands, waters for one year
Fox News, 27 January 2021
3) China increases coal production & imports
MenaFM, 24 January 2021
4) Meanwhile, India to cut taxes to boost domestic fracking and oil drilling
Economic Times of India, 27 January 2021
5) As Biden bans fracking, Iran oil exports rise
Reuters, 26 January 2021
6) EU Parliament and Biden Administration pressure Germany to stop Russian pipeline
Euro News, 27 January 2021
7) 'Climate champion' Germany defends Russian gas pipeline despite US sanctions and EU opposition
EurActiv, 26 January 2021
8) China is fuelling South America’s oil boom
OilPrice, 1 January 2021
9) Liam Denning: Biden's fracking freeze risks driving up energy costs, helping Russia and Saudi Arabia
Bloomberg, 26 January 2021
10) And finally: Boris Johnson’s ‘Green Revolution’ in chaos
The Guardian, 26 January 2021
Full details:
1) Defying US sanctions and EU lawmakers, Russian ship lays Nord Stream 2 pipe in Danish Waters
New Europe, 26 January 2021
Despite US sanctions and a European Parliament resolution, Russian pipe-laying ship Fortuna has started work in Danish waters ahead of the resumption of construction of the Nord Stream 2 gas pipeline which would bring Russian gas to Germany under the Baltic Sea.
“The laybarge Fortuna has started works in the construction corridor in the Danish EEZ, ahead of the resumption of the Nord Stream 2 construction. All works are performed in line with relevant permits,” a spokesman for Nord Stream 2 told New Europe on January 25.
He referred to the notice to mariners by the Danish Maritime Authority (DMA). “The authorities announced construction works from January 15 onwards, including preparatory works and tests before pipelay works start,” he said.
MEPs passed a resolution on January 21 calling on the EU to immediately stop the completion of Nord Stream 2. MEPs also underline that the EU should no longer be a welcoming place for Russian wealth of unclear origin,” the European Parliament said in a press release.
With a view to the new administration in Washington, MEPs stressed that the EU should use this momentum to strengthen transatlantic unity in protecting democracy and fundamental values against authoritarian regimes.
The Nord Stream 2 pipeline is already facing US sanctions under its Countering America’s Adversaries Through Sanctions Act (CAATSA). Washington has said that the Nord Stream 2 would make Europe more dependent on Russian gas, undermining EU energy security. At the same time, however, the US is trying to promote sales of its own liquefied natural gas (LNG).
Full story
2) Biden bans new permits for drilling on federal lands, waters for one year
Fox News, 27 January 2021
The Biden Administration is set to extend a ban on new leases for oil and gas drilling and fracking on federal lands and waters for one year as it attempts to combat climate change, a source told FOX Business.
The decision comes days after President Biden signed an executive order that putting drilling and fracking on hold for 60 days. Biden on the campaign trail called for the U.S. to phase out its dependence on fossil fuels.
“I would transition away from the oil industry,” Biden said at a presidential debate in October. “
Biden has called Rep. Alexandria Ocasio-Cortez’s Green New Deal, which calls for the U.S. to reach net-zero carbon emissions by 2050 a “framework” for his energy plan. He has repeatedly called on a shift away from oil toward renewable energy.
A fracking ban on federal lands would deliver a devastating blow to the U.S. economy, according to the American Petroleum Institute.
The organization projects a $700 billion hit to U.S. gross domestic product should the ban be extended through 2030. Such action would also erase $9 billion of revenue, some of which is used to fund education and conservation programs.
API projects 1 million job losses would occur by 2022 with the states of Texas, Wyoming and New Mexico seeing the biggest impact. The U.S. oil and gas industry supports 10.3 million jobs, with workers making an average salary of $101,181, according to a 2015 study from PricewaterhouseCoopers and the American Petroleum Institute.
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3) China increases coal production & imports
MenaFM, 24 January 2021
China's raw coal production increased by 0.9 percent year on year in 2020, while its coal imports augmented 1.5 percent, statistics from the National Bureau of Statistics (NBS) revealed.
A total of 3.84 billion tons of raw coal were manufactured in China last year, reporting a year-on-year expansion of 90 million tons, according to the NBS statistics.
In December alone, the raw coal production increased 3.2 percent from a year ago to 350 million tons, 1.7 percentage points higher than the upsurge seen in November.
4) Meanwhile, India to cut taxes to boost domestic fracking and oil drilling
Economic Times of India, 27 January 2021
Cess on domestic crude is currently levied at the rate of 20 per cent of the value of oil. Official sources said the proposal by the Union Oil Ministry is to reduce it to 10 per cent
New Delhi: The government may give a 'Make in India' push to oil and gas explorers, as it is considering a proposal to almost halve cess on domestic crude oil to encourage exploration activity and allow Covid-hit oil producers to protect their margins.The glut in the oil market and deep suppression of demand during the peak of pandemic in 2020 had pushed down crude oil prices to unprecedented levels.
Though crude prices have recovered over the vaccination drive against Covid and a pick in demand coupled with unilateral production cut announced by Saudi Arabia, cess puts domestic crude at a disadvantage against imported oil.
Cess on domestic crude is currently levied at the rate of 20 per cent of the value of oil. Official sources said the proposal by the Union Oil Ministry is to reduce it to 10 per cent. If this is accepted by the Finance Ministry, the changes may be announced as part of Budget 2021-22 proposals, sources said....
The government is looking to reduce the tax burden on oil companies to push up domestic production that has stagnated for past several years at around 30-35 million tonne.
Full story
5) As Biden bans fracking, Iran oil exports rise
Reuters, 26 January 2021
LONDON (Reuters) - Iranian oil exports are climbing in January after a boost in the fourth quarter despite U.S. sanctions, three assessments showed, in a sign that the end of Donald Trump’s term as U.S. President may be changing buyer behaviour.
Iran’s exports have shrunk since Trump in 2018 withdrew the United States from a nuclear deal with Iran and reimposed sanctions. New President Joe Biden has said if Tehran resumed compliance with the deal, Washington would too.
Figures from SVB International and two other firms that estimate Iranian supply by tracking tankers indicated exports are rising.
Full story
6) EU Parliament and Biden Administration pressure Germany to stop Russian pipeline
Euro News, 27 January 2021
The controversial Nord Stream 2 pipeline is once again the target of criticism by policy-makers, both in and outside the European Union.
Following the poisoning and imprisonment of opposition gurehead Alexei Navalny, Members of the European Parliament voted overwhelmingly in favour of a non-binding resolution calling for an immediate halt on the infrastructure project, which is 95% completed.
During a parliamentary debate last week centred on the arrest of Navalny, MEPs from across the political spectrum didn't mince words when describing their opposition to the pipeline.
Kati Piri, a Dutch MEP from the S&D group, said that “anyone who still believes that we should continue with Nord Stream 2 is blind to what kind of regime we are dealing with in Moscow.”
Sergey Lagodinsky, a German MEP from the Greens group, argued the project “undermines democracy and solidarity” with Russian, Ukrainian and Polish society. And Urmas Peat, an Estonian representative of the liberal group Renew Europe, urged the EU to be united in its approach to Russia, including in its energy policy.
The resolution of the European Parliament, passed with 581 votes in favour and just 50 against, contains high praise of Alexei Navalny and strong condemnation of the government of President Vladimir Putin. By unambiguously demanding a halt to the Nord Stream 2 route, MEPs take aim at one of Russia's most valuable assets: its profitable gas exports.
Full story
7) 'Climate champion' Germany defends Russian gas pipeline despite US sanctions and EU opposition
EurActiv, 26 January 2021
The German government said it will not abandon the Nord Stream 2 project, despite US sanctions and calls by the European Parliament to impose EU measures against the Russian-backed gas pipeline project over the Navalny case.
“There is no direct connection between the Navalny case and Nord Stream 2,” government spokesman Steffen Seibert said in Berlin on Monday (25 January), adding that the attitude of the government to the project has not changed.
Berlin condemns “the harsh, disproportionate actions of the Russian security forces against peaceful demonstrators” and continues to demand the “immediate” investigation of the chemical weapons attack on Alexei Navalny, Seibert added.
The German government “took note of” the European Parliament’s resolution demanding the suspension of Nord Stream 2, but this has “not changed” its position regarding the pipeline project, Seibert said.
Despite US sanctions against companies involved in the construction of the pipeline, German Chancellor Angela Merkel said last week she would not abandon the project and will discuss it with the new Biden administration.
The new leader of Germany’s ruling Christian Democrats, Armin Laschet, said on Monday he would not reconsider his support for the Russian-backed pipeline, despite US and European opposition to its completion.
Full story
8) China is fuelling South America’s oil boom
OilPrice, 1 January 2021
Oil demand from China has been one of the few bright spots for a global petroleum industry severely impacted by a long-term global supply glut and the economic fallout from the COVID-19 pandemic.
The world’s second-largest economy hunger for energy keeps growing despite the global COVID-19 pandemic and a resultant sharp decline in global economic activity during 2020.
Data from China’s General Administration of Customs show oil imports for January to November 2020 grew by 9.1% year over year to an average of 13.5 million barrels daily. The top five suppliers of crude oil to China during the period were Saudi Arabia, Russia, Iraq, Brazil, and Angola.
Despite weaker global energy demand, primarily because of the COVID-19 pandemic and related lockdowns, China’s demand for energy is expected to continue soaring during 2021. Even recent oil discoveries, estimated to hold 1.5 billion barrels of crude oil and growing domestic oil production, will not reduce demand for petroleum imports.
A key reason is despite the fallout from the pandemic sharply impacting the economic performance of many countries around the world, China’s economy is returning to growth.
Full post
9) Liam Denning: Biden's fracking freeze risks driving up energy costs, helping Russia and Saudi Arabia
Bloomberg, 26 January 2021
A fracking ban raises the risk of alienating American drivers and leaves Biden open to criticism that he’s helping the likes of Saudi Arabia and Russia.
There are two basic routes to an energy transition: encouraging new forms and discouraging old ones. President Joe Biden’s legislative agenda, centered on stimulus spending, will focus on the former. His executive agenda has moved swiftly on the latter already. But in targeting the oil and gas business, Biden’s eyes appear fixed on the horizon.
Exploration and production stocks took fright at Biden’s 60-day freeze of new federal leases and permits for drilling. The fear is that this tees up a bigger move as soon as this week: a “fracking ban,” or outright end to new leasing and permitting for federal areas, which account for about a quarter of current U.S. oil production and roughly a tenth of its natural gas.
The freeze certainly raises that possibility. And it should be set alongside Biden’s other energy-related orders from last week targeting the Keystone XL pipeline and the revival of social-cost calculations for greenhouse gases in permitting.
A growing segment of climate activism has coalesced around a strategy of choking off funding for oil and gas. One method is pressuring money managers to divest from the sector. Two others are delay and doubt. The first erodes an investment’s value via the magic of the time value of money. The second does it by raising the cost of capital going in; if something looks riskier, it must clear a higher hurdle before anyone cuts a check to finance it. [...]
On the other side, Biden is taking big risks of his own. Curbing drilling and pipeline construction limits oil and gas supply, putting upward pressure on prices (especially if Biden gets his big stimulus package approved). Indeed, any oil company without exposure to federal lands (or Alberta) may benefit in the near term. This raises the risk of alienating American drivers and leaves Biden open to criticism that he’s helping the likes of Saudi Arabia and Russia. Moreover, no state has more to lose from a federal fracking ban than New Mexico, which provided Biden with only five electoral college votes but also, crucially, sent two blue senators.
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10) And finally: Boris Johnson’s ‘Green Revolution’ in chaos
The Guardian, 26 January 2021
England’s much-hyped £2bn green homes grant is in chaos, renewable energy installers say, with some owed tens of thousands of pounds and struggling to stay in business.
Members of the public have been left waiting nearly four months, in some cases, to take advantage of the scheme to fit low carbon heating systems. Some installers say customers are pulling out after losing faith in the green grants.
Boris Johnson touted the grants as one of the key programmes in his ten 10-point plan for a green industrial revolution. It aims to help 600,000 households switch their energy to low carbon and help the UK meet its commitment to reach net zero carbon emissions by 2050.
Ministers awarded the contract to run the programme to ICF, a large American consulting corporation based in Virginia. Details of the value of the government contract have not yet been published.
But renewable energy businesses say the administration of the grants is chaotic, inefficient, confused and is creating long delays for the public and installers. Emails from the administrators are being sent during US office hours; in the evening and late at night, making communication impossible, businesses say.
Companies involved in installing heat pumps and solar thermal heating say they are laying off workers and struggling to stay afloat. Some are refusing to do more work until they are paid the tens of thousands of pounds owed for work dating back to last autumn.
Full story
The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.thegwpf.com.
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