Page 11 - October 2019

international news

GAZPROM PROFITS TRUMP TO ROLL BACK OBAMA-

HIT BY RECORD ERA REGULATIONS DESIGNED
LOW PRICES AND

INCREASED SUPPLY TO REDUCE EMISSIONS

It is the latest step by the White House
to further deregulate emissions controls
on oil, gas and coal production, and
comes in the wake of reports that Mr
Trump plans to tear down Clinton-era
legislation and open up more than half
of the world’s largest intact temperate
rainforest in Alaska to allow potential
logging, energy and mining projects.
GAZPROM’S PIPELINE CONTRACTS A major study by Cornell University
ARE PEGGED TO THE OIL PRICE
suggests the boom in fracking for
STRONG COMPETITION FROM shale gas and renewed oil extraction
renewable energy and the US hit in the US has already led to a global
revenues at Kremlin-controlled gas spike in methane emissions, blamed
TRUMP IS DETERMINED
producer Gazprom in the second TO ROLL BACK OBAMA’S for accelerating a rise in average
quarter, following two years of GREEN LEGACY temperatures around the world.
record shipments. Author of the study Robert Howarth
The state-owned group relies on THE TRUMP ADMINISTRATION said: “It’s globally significant. It’s
sales to Europe for the vast majority plans to revoke Obama-era regulations contributed to some of the increase in
of its profits, but has seen demand designed to prevent hazardous global warming we’ve seen and shale
fall this year because of increased methane leaks from oil and gas drilling gas is a major player.”
competition from alternative sources operations, reports The Independent. Environmental advocates and former
of supply, such as liquefied gas Head of the Environmental Protection EPA officials had already said they
shipments from the US. Agency Andrew Wheeler said the expected the new methane plan to go
The Financial Times reports that proposed rule change was to follow further than previous proposals, with
net revenue from sales to Europe and Donald Trump’s directions to remove a goal of exempting companies from
Turkey fell nine per cent compared “unnecessary and duplicative regulatory requirements to detect and stop methane
with a year earlier to $9 billion, while burdens from the oil and gas industry”. leaks at existing oil and gas sites.
export volumes declined 2.6 per cent
to 55.5 billion cubic metres.
Benchmark gas prices are
at record lows in Europe, with SHORT-SELLERS EYE EU CARBON MARKET
increased supply from countries
such as the US and the rise of IN ANTICIPATION OF NO-DEAL BREXIT
renewable energy, putting pressure
on Gazprom. The low gas price is
especially problematic for Gazprom to tighten supplies to boost a broad
since its pipeline contracts are environmental push. But since Boris
pegged to the oil price, which is Johnson became UK Prime Minister,
currently higher. the price of one credit has slid to €26,
The group saw its shipments to according to The Financial Times.
Turkey fall 36 per cent in the first half Analysts say that as the prospect of
compared with a year earlier, as the a no-deal Brexit has grown under Mr
weak lira hit demand and customers Johnson, so have bets that the carbon
switched to cheaper alternatives such THE ODDS OF A NO-DEAL BREXIT HAVE SHORTENED price could slump. Some warn that
SINCE BORIS JOHNSON BECAME PM
as LNG and Azeri piped gas. the price could fall to €15 or less if UK
In an effort to offset falling demand, SPECULATORS ARE HOPING to reap participants in the scheme dump their
in the April-June quarter Gazprom a windfall by shorting the EU carbon credits, as a no-deal Brexit would spell
started pumping gas into European market as traders bet that prices will the end of Britain’s direct involvement
underground storage facilities and be hit in the event of a no-deal Brexit. in Europe’s carbon market.
selling significant amounts of gas — Carbon credits, introduced by the If the UK crashes out of the EU
about 10 per cent of its total monthly EU to combat pollution by companies without a deal, British companies
sales — via its electronic platform, in the bloc, rallied this summer to a holding carbon credits would be
which offers prices closer to those on 10-year high of nearly €30 a tonne pulled out of the bloc’s Emissions
the spot market. after European policymakers moved Trading System.

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News.indd 6 19/09/2019 15:06