Page 5 - LatAmOil Week 47 2021

LatAmOil COMMENTARY LatAmOil

The Global Methane Pledge does not place any to accelerate North American deployment of
obligations on its signatories to cut their own renewable energy, including catalysing finance
emissions; rather, it states that they must sup- and technology in service of renewable energy,”
port the global 30% reduction target. Nonethe- the statement said.
less, countries such as the US and Canada are Meanwhile, the Biden administration has
already taking steps at home to pursue methane moved one step closer to establishing disincen-
emissions cuts. (Canada in particular has set tives for methane emissions, though it will still
a considerably more ambitious goal than the face a political battle over this issue. On Novem-
global 2030 target.) ber 19, the same day as the summit, members of
the US House of Representatives voted 220-213
US, Canadian and Mexican policy to approve the Build Back Better Act, a $2 tril-
In the US, the Environmental Protection Agency lion spending bill that calls for imposing a tax
(EPA) recently proposed a Clean Air Act rule on methane emissions. The measure will now
aimed at sharply reducing methane emissions move on the Senate, as it must pass in the upper
from oil and gas operations. Commenting on chamber before it can become law. Methane
the rules earlier this month, investment bank Canada, for its part, recently pledged to emissions have
Morgan Stanley noted that the US oil and gas invest $10mn in the Climate and Clean Air
industry had already made “significant” reduc- Coalition (CCAC) Trust Fund over the next five not been a high
tions in methane emissions in recent years, with years. This plan was announced on November
many of the larger producers having set targets 9 by Canada’s Minister of Environment and priority for Lopez
in excess of the Biden administration’s goals. Climate Change Steven Guilbeault, during a
Ottawa, for its part, unveiled a new goal in meeting with US Special Presidential Envoy Obrador, who
October, saying it aimed to cut methane emis- for Climate John Kerry and Ghana’s Minister of has focused
sions from oil and gas by 75% on 2012 levels by Environment, Science, Technology and Innova-
2030. Few additional details on how the goal was tion Kwaku Afriyie. The officials were attending on ramping
to be achieved were announced at the time. the Climate and Clean Air Ministerial meeting,
Meanwhile, methane emissions – and cli- which took place shortly after the end of COP26. up Mexico’s
mate change more broadly – have been less of
a priority for Lopez Obrador, who has focused Practical obstacles production of
on ramping up Mexico’s production of crude oil It remains to be seen whether last week’s high- crude oil and
and refined petroleum products instead. Mexi- level meeting – or the high-level statements
co’s state-owned Pemex has come under fire for uttered by Trudeau, Biden and Lopez Obrador refined fuels
its record on gas flaring – and on environmen- at the meeting – have any significant impact.
tal, social and governance (ESG) issues more In the US, at least, climate commitments have
broadly. A study released by the Environmental the potential to founder as a result of practical
Defense Fund (EDF) this year concluded that obstacles in the form of political battles. Mem-
gas-processing facilities owned by Pemex were bers of the US Senate are hoping to secure the
emitting methane at 10 times the rate being bill’s passage through the reconciliation pro-
reported by the Mexican government. cess, which requires only a simple majority for
approval. However, that simple majority may be
Other plans difficult to achieve.
Despite this lacklustre track record, Lopez Obra- The proposed methane tax has drawn strong
dor did talk about climate change during the opposition from oil and gas industry groups, and
summit. According to the statement issued by Republicans don’t favour it either. But with the
the White House, the Mexican president and his upper chamber split, for all practical purposes,
US counterpart outlined their visions of North evenly between Republicans and Democrats, the
America’s future energy strategy, including legislation could falter – or pass only with the
plans for addressing climate issues. “Both noted help of a tie-breaking vote from Vice-President
their commitment to work closely together Kamala Harris. ™

Week 47 25•November•2021 www. NEWSBASE .com P5