LNG

The US Supreme Court ruling just before the July 4 holiday weekend to limit the regulatory powers of the Environmental Protection Agency (EPA) over emissions from power plants is seen reducing legal challenges on the US hydrocarbon industry, including against LNG export developments and natural gas pipeline infrastructure.

In a 6-3 opinion the Supreme Court in Washington DC ruled in the case of West Virginia versus the EPA that the federal agency did not have the authority to regulate industry greenhouse-gas emissions that would affect individual power plants.

The case stems from former President Barrack Obama's Clean Power Plan (CPP), which would have enforced mandates for how much GHG emissions from power plants were allowed.

The policy was never officially implemented as it faced legal challenges and was side-lined under the Administration of President Donald Trump.

Analysts said the Court ruling leaves the Administration of President Joe Biden dependent on passing legislation if it wants to introduce regulations to reduce GHG emissions at plants and facilities.

“A decision of such magnitude and consequence rests with Congress itself,” the Court ruled,

The justices stated that they doubted Congress intended to delegate the question of “how much coal-based generation there should be to any administrative agency” of the federal government.

Biden setback

Analysts added that the Court ruling marked a setback for Biden, who was elected President on an anti-hydrocarbon platform and several of his first moves included blocking oil and gas projects.

The most high-profile Biden cancellation was of the Keystone XL pipeline extension to deliver more cheap Canadian oil for refining in the US into petroleum products such as gasoline.

Biden and his Democratic Party also opposed LNG, a policy they have now rowed back on, and blocked the Jordon Cove LNG export project proposed for the northwest state of Oregon as an outlet to Asia for abundant US natural gas.

Biden has also pledged to remove carbon from the US power grid by the middle of the next decade, setting the country on a path to net-zero emissions.

However, his efforts to implement more extreme climate-mitigation legislation in Congress have stalled and could disappear after the mid-term elections in November 2022.

US lawyers were quick to comment and asserted that the Supreme Court ruling in the case for West Virginia, the US coal state, should be interpreted as a warning to federal agencies not to overstep their explicit statutory authority in crafting new regulations.

Though the Obama CPP never took effect, its opponents were concerned that a similar policy against coal, oil and gas could be enacted unless the courts intervened and this led to the West Virginia case.

The petitioners in the case were West Virginia, supported by the state of North Dakota, along with two coal companies and they asked the Court to decide whether the EPA had blanket authority to force changes in the power generation mix in the name of GHG reductions and the answer was no.

Norway, the LNG producer and a main supplier of natural gas and petroleum in Western Europe, praised the progress of its Northern Lights carbon-capture joint venture, one of the largest in the world to capture and store carbon dioxide, the main greenhouse gas.

Norwegian Minister of Petroleum and Energy Marte Mjøs Persen has just made a speech on the progress of the Northern Lights CCS project.

“Despite living in the grasp of the pandemic, I consider climate change and the energy transition as the challenges of our lifetime,” she stated.

“Last month, I had the pleasure to visit the Northern Lights facility at Øygarden,” explained the Minister.

The Northern Lights joint venture is the storage part of an even larger project called Longship.

Northern Lights will receive captured CO2 transported on ships to the Øygarden municipality on the Western Coast of Norway.

NCS site

The CO2 will then be temporarily stored at Øygarden before being sent through a pipeline to the storage site on the Norwegian Continental Shelf.

At the storage site CO2 will be pumped down to a sealed reservoir for permanent storage 2,600 metres below the seabed.

“What I already knew, and which certainly became even clearer there, is that CCS is a crucial part of the solution to the climate challenge,” said Mjøs Persen.

“And, that Norway can offer an open access storage solution that is built on the knowledge and experience we have developed on the Norwegian Continental Shelf,” she stated.

The Minister added that CCS can also make an important contribution to the development of new and green industries, such as carbon neutral cement production and hydrogen.

“The government is committed to following up the Longship-project and invest in CCS to cut emissions and create jobs and to develop a robust value-chain for CCS and the storage in the North Sea,” she declared.

“However, as we all know, if CCS is to become an efficient instrument in reducing emissions, the Norwegian CCS project must be a catalyst for other European projects and for international technology development,” said Mjøs Persen

The Norwegian CO2 reservoir site is located in the northern part of the North Sea, southwest of the Troll oil and gas field, one of the largest on the NCS.

The estimated total investment under the development plan is close to 6 billion Norwegian crowns ($780 million) and annual operating costs will be around 370M crowns ($44M).

The approved plan has the capacity to store 1.5 million tonnes of CO2 annually and has a planned operational period of 25 years.

Northern Lights will be built and operated by the Northern Lights joint venture, comprising energy companies Equinor of Norway, and the Norwegian subsidiaries of Shell and France’s TotalEnergies.

Woodside Petroleum, the operator of two liquefied natural gas plants in Western Australia, has joined nine other global oil and gas majors in signing guiding principles that commit it to further reduce methane emissions from the natural gas assets it owns.