Saudi Arabia Halts Red Sea Oil Shipments After Attacks
Last Wednesday, two Saudi crude tankers were attacked by Iran-allied rebels, the Temeni Houthi militia. Each tanker was carrying 2 million barrels of oil. Saudi Arabia then announced they will be halting all oil shipments through the Bab el-Mandeb strait temporarily, which connects the Red Sea to the Gulf of Aden. Despite the attack, it was reported that there were no injuries nor an oil spill.
Crude oil benchmarks ticked up slightly due to the conflict. Traders are not anticipating that this is causing a shortage, but more of a delay in time as the oil will travel around the Horn of Africa. Before the incident, roughly 4.8 million barrels per day (mmbd) travel through the Bab El-Mandab straight. This is the fourth largest choke point in the world for crude transportation via marine.
Florida Republican to Introduce Carbon-Tax Bill
Florida Representative Carlos Curbelo is proposing a carbon-tax bill (Market Choice Act) in Congress this week. The plan would replace the federal fuel tax with a tax on businesses including refineries, powerplants and steel mills based on how much oil, coal, and other fossil fuels they buy. The carbon tax would add roughly 11 cents to the average pump price, and simultaneously reduce the amount of greenhouse gasses (GHG) emitted. The bill will help gain traction for climate change in the face of GOP leadership pushing the other way. However, Mr. Curbelo also views the bill as an infrastructure bill. The Market Choice Act is written to raise additional revenue for bridges, roads, and other projects. Mr. Curbelo states, “For some it will be a clean energy bill. For some it will be an infrastructure bill. … For others, it will be the bill that saves the planet. And all of those characterizations will be accurate.” Specifically, the proposal would price carbon at $24 per metric ton, with it increasing every year by 2% plus the rate of inflation. If implemented, it is estimated to raise an additional $57 to $106 billion per year or roughly $700 billion in the next decade.
In Other News
A Florida Republican is set to propose a carbon-tax bill in Congress next week, hoping to generate new traction for climate-change efforts in the face of GOP leadership pushing firmly the other way. Also see, Republican introduces bill calling for carbon tax
The world’s largest listed energy firm by market capitalization anticipates that LNG can take up to 10% of global bunker mix by 2040. But there are infrastructure challenges that need to be overcome, according to marine fuels venture manager Luca Volta
Oil producers are ordering more equipment and lining up drilling rigs for later this year, according to top industry executives, indications that international activity is picking up.
Trucking companies are hoping to turn the most robust freight market in a generation into stronger long-term financial footing. Carriers are raising rates and investing in new equipment as a month’s long rally in transportation demand gives them the upper hand in setting prices with shippers.
The world’s largest oil companies are pumping more natural gas than ever before, helping to spur a rise in profits while sating rising global demand for fuels that can mitigate global greenhouse gas emissions.
U.S. refiners and producers are seeking ways to counter efforts by BNSF Railway Co to limit use of retrofitted oil tank cars following an Iowa derailment last month, Reuters. The crackdown by the country’s largest railroad, could take thousands of tank cars off a key rail line at a time when producers and refiners are scrambling to hire them.
Tighter rules on shipping emissions around China’s coastlines from the start of next year is a clear sign the world’s No. 2 economy will strive for 100 percent compliance when the global sulfur emissions cap starts in 2020, consultants Wood Mackenzie said on Tuesday.
The Trucking Alliance, a coalition of some of the country’s largest trucking companies, has issued a policy statement calling for use of electronic logging devices to be required for truckers who drive exclusively intrastate.
Indonesia, the world’s biggest palm oil producer, is offering incentives to developers of a new 100 percent palm oil-based “green diesel”, which the net oil importer hopes can replace costly fuel imports within three years, the country’s industry minister said.
A Google executive wearing white jeans and a navy T-shirt stood before a roomful of suit-clad oil executives here last month and delivered a blunt sales pitch: We can manage your data better than you. Darryl Willis, part of a new group Google has created to court the oil and gas industry, said energy companies have reams of data but only use 5% of it, a serious problem in the digital economy.
Autonomous truck developer Embark Trucks raised $30 million in a funding round led by Sequoia Capital, a Silicon Valley-based venture capital firm. Embark has raised $47 million since its 2011 founding, according to Crunchbase, a platform for finding business information on public and private companies.
The Los Angeles Department of Water and Power wants to spend $3 billion to build a pipeline and a pump station connected to the Hoover Dam. The infrastructure would be powered by the sun and the wind and it would turn the dam into an energy storage unit similar to a battery. The project is set for completion in 2028.
From the wheels to the engines and right into their cabs, big rigs rolling on U.S. highways are getting smart. Just as everyday appliances such as refrigerators and thermostats are starting to connect to the internet, the latest heavy-duty trucks are shipping out streams of information, turning 18-wheelers into data hubs moving at 60 mph.
Norfolk Southern Corp.’s second-quarter profit soared 43%, far ahead of a 10% gain in volume. The company attributed the net income growth to an 18 percent increase in income from railway operations and a lower effective income tax rate.
Saudi Arabia is temporarily halting all oil shipments going through an important Red Sea waterway, accusing Iran-allied rebels of attacking two crude tankers on Wednesday. Also see, Oil Rises After Saudi Tankers Attacked
President Donald Trump wants Europe to buy more U.S. gas, but Vladimir Putin’s Russia stands in the way. Surging U.S. LNG exports and Europe’s desire to reduce its dependence on Russian fuel was widely expected to help break Moscow’s dominance on the continent. However, in recent years, Russia has increased its exports to Europe, and U.S. LNG has failed to take any meaningful market share.
Mexican President-elect Andrés Manuel López Obrador said Friday his government will earmark 175 billion pesos ($9.4 billion) in additional investment next year at state-run energy companies and will start work on a new oil refinery in southern Mexico.