Friday, 9 December 2022

Indonesia plans using B35 biodiesel beginning 2023

Indonesia may start implementing a program to use biodiesel with 35% blend of palm oil-based fuel, known as B35, from January, 2023, a senior energy ministry official said on Friday.

Currently the world's top palm oil producer, Indonesia uses B30, containing 30% palm oil-based fuel. The overall palm oil-based fuel allocation for 2023 is estimated at around 13 million kilolitres in 2023, he said. Indonesia's 2022 allocation was 11.03 kilolitres.

Indonesian President Joko Widodo told his cabinet earlier this week to prepare the mechanism to implement B35 amid expectations that the crude oil price would remain high next year.

"The B35 policy is taken in anticipation of rising world oil prices and to reduce imports, while on the other hand this policy also aims to increase the use of renewable energy," ministry official Dadan Kusdiana said.

Southeast Asia's largest and most populous country is among the region's top importers of fuel, but authorities said import bills have been slashed significantly since Indonesia started expanding the portion of palm oil in biodiesel.

The expectation of B35 implementation helped palm oil prices in Malaysia higher, although some market participants were disappointed the blend would be lower than the anticipated 40%.

The energy ministry has been running trials for biodiesel containing 40% of fuel made using palm oil.

"Ten out of 12 of the vehicles tested had completed the road test with no significant issue and next we will determine the specification for B35 biodiesel," Dadan added, referring to the B40 trials.

“Hopefully, the B35 program can be implemented starting January 2023."

Indonesia is testing two formulation of B40, the first is a mix of diesel with 40% fatty acid methyl esters (FAME) and the second a mix of diesel with 30% FAME mixed with 10% green diesel made of refined, bleached and deodorized palm oil (RBDPO).

 

Thursday, 8 December 2022

Keystone pipeline history of oil spills

According to a Reuters report, Canadian TC Energy Corp has shut its Keystone pipeline in the United States after more than 14,000 barrels of crude oil spilled into a creek in Kansas, making it one of the largest crude spills in the United States in nearly a decade. It is unclear how long the closure will last.

The 622,000 barrel-per-day pipeline is a critical artery shipping heavy Canadian crude from Alberta to refiners in the US Midwest and the Gulf Coast.

There have been several spills on the line since it began operating in 2010. The following is a timeline of some of Keystone's biggest oil spills, based on data from the US Pipeline and Hazardous Materials Safety Administration.

2011

May: TC shut the pipeline for six days after a spill of about 500 barrels of oil due to a failed fitting at a North Dakota pumping station. (https://reut.rs/3iKr5JC)

2016

April: TC shut down the pipeline after about 400 barrels of oil leaked in Hutchinson County, South Dakota. (https://reut.rs/3W2FjUx)

2017

November: TC shut part of the Keystone pipeline system after a leak in South Dakota, caused by mechanical damage from original construction. Originally pegged at 5,000 barrels, a TC spokesperson later put the estimate at about 9,700 barrels. (https://reut.rs/3P9J6Nu)

2019

February: Portions of the Keystone pipeline were shut down after 42 barrels of oil leaked on land in rural St. Charles County, Missouri. (https://reut.rs/3HkTBLZ)

October: An estimated 9,120 barrels of oil spilled in North Dakota. The spill was one of the biggest onshore crude spills in the last decade and the largest for Keystone, according to PHMSA. (https://reut.rs/3Hq4zjH)

 

 

US approves record military spending

The US House of Representatives backed legislation on Thursday paving the way for the defense budget to hit a record US$858 billion next year, US$45 billion more than proposed by President Joe Biden.

The House passed the compromise version of the National Defense Authorization Act, or NDAA, an annual must-pass bill setting policy for the Pentagon, by 350-80, far exceeding the two-thirds majority required to pass the legislation and send it for a vote in the Senate.

The fiscal 2023 NDAA authorizes US$858 billion in military spending and includes a 4.6% pay increase for the troops, funding for purchases of weapons, ships and aircraft; and support for Taiwan as it faces aggression from China and Ukraine as it fights an invasion by Russia.

"This bill is Congress exercising its authority to authorize and do oversight," said Representative Adam Smith, the Democratic chairman of the House Armed Services Committee, in a speech urging support for the measure.

Because it is one of the few major bills passed every year, members of Congress use the NDAA as a vehicle for a range of initiatives, some unrelated to defense.

This year's bill - the result of months of negotiations between Democrats and Republicans in the House and Senate - needed a two-thirds majority in the House after disagreement from some House members over whether it should include an amendment on voting rights.

The fiscal 2023 NDAA includes a provision demanded by many Republicans requiring the Secretary of Defense to rescind a mandate requiring that members of the armed forces get COVID-19 vaccinations.

It provides Ukraine at least US$800 million in additional security assistance next year and includes a range of provisions to strengthen Taiwan amid tensions with China.

The bill authorizes more funds to develop new weapons and purchase systems including Lockheed Martin Corp's F-35 fighter jets and ships made by General Dynamics.

The Senate is expected to pass the NDAA next week, sending it to the White House for President Joe Biden to sign into law.

NDAA is not the final word on spending. Authorization bills create programs but Congress must pass appropriations bills to give the government legal authority to spend federal money.

Congressional leaders have not yet agreed on an appropriations bill for next year.

 

Saudi Arabia and China sign strategic deals

Saudi Arabia and China showcased deepening ties with a series of strategic deals on Thursday during a visit by President Xi Jinping, including one with tech giant Huawei, whose growing foray into the Gulf region has raised US security concerns.

King Salman signed a comprehensive strategic partnership agreement with Xi, who received a lavish welcome in a country forging new global partnerships beyond the West.

Xi's car was escorted to the king's palace by members of the Saudi Royal Guard riding Arabian horses and carrying Chinese and Saudi flags.

The Chinese leader held talks with Crown Prince Mohammed bin Salman, de facto ruler of the oil giant, who greeted him with a warm smile. The two stepped into a pavilion as a military band played the countries' national anthems. Xi heralded a new era in Arab ties.

The display stood in stark contrast to the low-key welcome extended in July to US President Joe Biden, with whom ties have been strained by Saudi energy policy and the 2018 murder of Jamal Khashoggi that had overshadowed the awkward visit.

The United States, warily watching China's growing sway and with its ties to Riyadh at a nadir, said on Wednesday Xi's trip was an example of Chinese attempts to exert influence around the world and would not change US policy towards the Middle East.

A memorandum with China's Huawei Technologies, on cloud computing and building high-tech complexes in Saudi cities, was agreed despite US concerns with Gulf allies over a possible security risk in using the Chinese firm's technology. Huawei has participated in building 5G networks in most Gulf states despite US concerns.

Prince Mohammed, with whom Biden bumped fists instead of shaking hands in July, has made a comeback on the world stage following the Khashoggi killing, which cast a pall over Saudi-US ties, and has been defiant in the face of US ire over oil supplies and pressure from Washington to help isolate Russia.

 

In further burnishing of his international credentials, Saudi Arabia and the United Arab Emirates said on Thursday that the prince and the UAE president jointly led mediation efforts that secured the release of US basketball star Brittney Griner in a prisoner swap with Russia.

In an op-ed published in Saudi media, Xi said he was on a pioneering trip to open a new era of China's relations with the Arab world, the Arab countries of the Gulf, and Saudi Arabia.

China and Arab countries would continue to hold high the banner of non-interference in internal affairs, and firmly support each other in safeguarding sovereignty and territorial integrity", he wrote.

Xi, due to meet with other Gulf oil producers and attend a wider gathering of Arab leaders on Friday, said these states were a "treasure trove of energy for the world economy ... and are fertile ground for the development of high-tech industries".

Several regional rulers including Egypt's president, Kuwait's crown prince and Sudan's leader, arrived in Riyadh on Thursday.

Saudi Arabia and other Gulf states like the United Arab Emirates have said that they would not choose sides between global powers and were diversifying partners to serve national economic and security interests.

China, the world's biggest energy consumer, is a major trade partner of Gulf states and bilateral ties have expanded as the region pushes economic diversification, raising US hackles about Chinese involvement in sensitive Gulf infrastructure.

The Saudi energy minister on Wednesday said Riyadh would stay a "trusted and reliable" energy partner for Beijing and the two would boost cooperation in energy supply chains by setting up a regional centre in the kingdom for Chinese factories.

Chinese and Saudi firms also signed 34 deals for investment in green energy, information technology, cloud services, transport, construction and other sectors, state news agency SPA reported. It gave no figures, but had earlier said the two countries would seal initial agreements worth US$30 billion.

Tang Tianbo, Middle East specialist at the China Institutes of Contemporary International Relations (CICIR) - a Chinese government-affiliated think tank - said the visit would result in further expansion of energy cooperation.

 

Tata to produce chip in India

India's Tata Group will begin producing semiconductors in the country within a few years, a move that the chairman of the group's main company said will make the South Asian country a key part of global chip supply chains.

In an interview with Nikkei Asia in Tokyo on Thursday, Tata Sons Chairman Natarajan Chandrasekaran revealed that the conglomerate plans to launch new businesses in emerging fields such as electric vehicles.

"We have created Tata Electronics, under which we are going to set up semiconductor assembly testing business," Chandrasekaran said, referring to an electronic components manufacturer that the group founded in 2020.

"We will have discussions with multiple players," the chairman added, raising the possibility of partnerships with existing chip manufacturers. It is believed to be highly difficult for an inexperienced company to launch a chip making business on its own.

It is thought that semiconductor manufacturers and foundries in the US, Japan, Taiwan and South Korea are potential partners in the project.

Chandrasekaran also said, “Tata will look into the possibility of eventually launching an upstream chip fabrication platform." The upstream semiconductor manufacturing process plant called wafer fabrication plant, or fab, is more challenging both technologically and financially compared with downstream process of assembly and testing. His comments reflect the group's aspiration to enter the market if it is technologically and financially feasible.

Tata's move into chip making will break new ground for India, which has virtually no semiconductor industry, other than software-based design, although demand for semiconductor-intensive products such as smartphones and EVs is growing rapidly.

There is also growing momentum to diversify chip supply chains, which are at present concentrated in East and Southeast Asia, following the global chip shortage and US-China tensions. The ongoing US-China decoupling in chip-related technology is also leading major chipmakers to seek more diversified supply-chain locations, which may well open an opportunity for India to emerge as a frontier location. Tata seems to have decided that this is an opportune time to enter the market.

Chandrasekaran explained that his group has been promoting its future ready strategy, in which existing group companies, from steel to arms, adapt to new challenges, such as digitization and climate change, while also launching new businesses.

As part of that effort, the chairman revealed that the group as a whole plans to invest US$90 billion over the next five years. In addition to semiconductors, the chairman said the company is in the process of starting up new businesses such as the manufacture of EVs and EV batteries, production of renewable energy and development of super apps that allow users to buy goods and services from groceries to financial products.

He also said the group wants to unify the management of Air India, the national flagship airline that it has bought back from the government, and Vistara and AirAsia India, which are also in the group. However, he did not say whether this meant combining their brands, simply stating that it was an issue "up for discussion going forward."

 

Biden Climate Change Obsession Threatens US Security, says Pompeo

Lately, former US Secretary of State, Mike Pompeo said that President Joe Biden’s obsession to decarbonize the United States plays into the hands of adversaries like the Chinese Communist Party (CCP), making them richer and more powerful while imposing costs on Americans and making them less safe.

In an op-ed published on December 05 in the Washington Examiner, Pompeo argued that the Biden administration’s focus on fighting climate change is misguided and will hurt US families while empowering the country’s adversaries.

He took aim at the Inflation Reduction Act, which Biden recently described as the biggest, most important climate bill in the history of our country and which Pompeo said would make life more expensive for American families.

“The statement was telling, Americans were told its purpose was to reduce inflation, but in reality, it was a gas lighting Trojan horse,” Pompeo wrote in the op-ed, referring to Biden’s characterization of the Inflation Reduction Act, which the president made at a recent climate summit in Egypt.

Biden’s description of the measure perfectly encapsulated how climate change and green energy have skewed this administration’s priorities, Pompeo wrote.

When selling the Inflation Reduction Act to the American people, the Biden administration said it was meant to reduce inflation, which has been running close to a 40-year high.

Pompeo argued that in reality, it was a gas lighting Trojan horse meant to conceal the Biden administration’s real priority, which Pompeo said is to fight fossil fuels.

Pompeo also criticized US foreign policy under Biden as being so highly focused on fighting climate change that it diverts attention from the real threats posed by America’s adversaries on the world stage.

“Biden’s obsession to decarbonize America is guaranteed to enrich and empower the Chinese Communist Party,” he argued.

“A sizable portion of the law’s handout will go toward solar energy despite this administration being well aware that Chinese manufacturers dominate 80% of the market for solar panels and that many of them have ties to forced labor in Xinjiang,” he noted as an example.

When Pompeo served as Secretary of State under then President Donald Trump’s administration, he issued a determination that the CCP was guilty of genocide and crimes against humanity over its mistreatment of Uyghurs in Xinjiang.

Chinese officials have denied such allegations.

Congress later passed the Uyghur Forced Labor Prevention Act (UFLPA), which banned the import of goods from Xinjiang and other regions with links to forced labor.

Even though Biden signed the UFLPA into law, Pompeo alleged that the current administration has displayed mixed feelings about enforcing the measure in its bid to win concessions from China on climate change.

John Kerry, the US Special Presidential Envoy for Climate, faced allegations of lobbying against the UFLPA, which his spokesperson denied.

“This is false. Secretary Kerry has a thirty-seven-year record as a Senator and Secretary of State standing up for human rights and defending democracy,” a State Department spokesperson told the Washington Free Beacon.

“As Secretary Kerry has said from the start, the United States and China have mutual interests in solving the climate crisis while there’s still time, even when we fundamentally disagree on other critical issues,” the spokesperson added.

Kerry also sidestepped a question during last year’s COP26 Climate Change Conference, saying the issue was not my lane.

He was responding to a question from a reporter if he had mentioned human rights issues, including forced labor in Xinjiang, in meetings with Chinese officials.

“Well, we’re honest. We’re honest about the differences, and we certainly know what they are and we’ve articulated them, but that’s not my lane here,” Kerry said in November 2021. “My job is to be the climate guy, and stay focused on trying to move the climate agenda forward.”

Pompeo recalled the controversy over Kerry’s remarks and called the climate czar’s comparison of the Biden administration’s climate diplomacy with China to former President Ronald Reagan’s arms reduction talks with the Soviet Union as foolish.

“Reagan was looking to make the world safer, while Biden is enabling genocide in exchange for making energy less affordable and reliable for Americans,” Pompeo said.

“And it is ironic, given the Chinese are building coal-fired power plants at a ridiculous rate and only making the problem worse,” he added.

Pompeo argued that by foolishly prioritizing climate change in its dealings with the CCP over gross human rights abuses, aggressive actions against US allies, and the CCP’s espionage activities in America, the Biden administration has empowered China.

 

Wednesday, 7 December 2022

Crude oil losing all gains made in 2022

The price of crude oil plunged to its lowest level of the year on Wednesday, losing all of the gains made in 2022. This exhibits drying demand despite sanctions on export of Russian oil and OPEC Plus keeping production at lower levels.

The world's most actively traded commodity surged to nearly US$140 a barrel in March, close to an all-time record, following the launch of what Moscow called a "special operation" in Ukraine.

The market has been steadily declining in the latter months of the year as economists brace for weakened worldwide growth in part due to high energy costs. Wednesday's losses were driven by bigger-than-expected increases in US fuel stocks.

Brent futures fell to US$77.17 a barrel, settling below the year's previous closing low of US$78.98 a barrel touched on the first day of 2022. WTI weakened further from Tuesday's close, which was already a yearly low, to US$72.01 a barrel.

The recent declines have come against what should be a supportive backdrop for prices. China, the world's biggest crude importer, announced the most sweeping changes to its anti-COVID regime since the pandemic began. The country's crude oil imports in November rose 12% from a year earlier to their highest in 10 months.

G7 nations kicked off implementation of a price cap to restrict Russian exports that could cause that nation to reduce output in the coming year.

As against this, US distillate stocks posted a build of 6.2 million barrels, according to the Energy Information Administration, far exceeding estimates for a 2.2 million barrel rise. Gasoline inventories also climbed 5.3 million barrels against expectations for an increase of 2.7 million barrels.

The build in fuel stocks outweighed a 5.2 million barrel draw in crude stocks. The American Petroleum Institute had reported a crude stocks draw of around 6.4 million barrels, according to market sources.

At least 20 oil tankers queuing off Turkey face more delays to cross from Russia's Black Sea ports to the Mediterranean as operators race to adhere to new Turkish insurance rules added ahead of a G7 price cap on Russian oil, sources said on Tuesday.

Russia, the Vedomosti daily reported on Wednesday, is considering options including banning oil sales to some countries to counter the price cap imposed by Western powers.

"There's still tons of uncertainty in the markets today," said Claudio Galimberti, senior vice-president at Rystad Energy, adding crude production in Russia may not drop as much as expected earlier.

Still, warnings from big US banks about a likely recession next year weighed. The net speculative fund long position is now at a six-year low with some prominent funds liquidating in the past few days, said Dennis Kissler, senior vice president of trading at BOK Financial.