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By David Gaffen, Editor, Energy Markets

Hello Power Up readers! Glad to be back here in a sweltering heat wave affecting a lot of the hemisphere, and the ongoing changes in the global climate make reduction in emissions paramount. That provides the setup for the first bit of news, U.S. climate envoy John Kerry’s visit to China to discuss climate cooperation.  

Today’s top headlines:

• US working with India to make investment easier for energy transition
• COLUMN: Southern Europe’s heatwave fires up solar output
• China to boost Brazil oil imports, replacing some Saudi supply

That’s U.S. climate envoy John Kerry with his Chinese counterpart Xie Zhenhua in Beijing. REUTERS/Valerie Volcovici

U.S. climate envoy John Kerry is headed to China for talks between the two biggest carbon polluters on a crucial issue – methane emissions, as Valerie Volcovici and David Stanway report here. Methane is particularly insidious as a greenhouse gas, with a greater short-term potency than carbon dioxide, but it also exits the atmosphere more quickly. Various governments have focused on getting oil-and-gas companies to tackle it.  

The U.S. Environmental Protection Agency estimated that in 2020 methane emissions from natural gas and petroleum systems, along with abandoned oil and natural gas wells, were responsible for about a third of U.S. methane emissions and about 4% of overall greenhouse gases.  

Much of China’s methane emissions come from coal mines, which account for about 28% of the world’s biggest methane emissions points, according to Antoine Halff, who co-founded the environmental research outfit Karryos. Overall, methane accounts for about 30% of global warming.  

That’s the Mohamed Enterprise office in Georgetown, Guyana. REUTERS/Sabrina Valle

Exxon Mobil was warned by the U.S. government not to do business with a father-son duo who run a big mining concern in Guyana – but they went ahead and did it anyway, as Sabrina Valle and Gram Slattery report. The two Guyanese businessmen, Nazar Mohamed and his son, Azruddin, are under investigation by U.S. authorities on suspicion of money laundering, drug trafficking and gold smuggling – and they’re close to that country’s president too. 

Exxon has a big business in Guyana after oil was discovered there some years back. But they cut a $300 million deal last year with the Mohameds despite U.S. concerns, who may face sanctions from the United States, according to sources – which would mean Exxon could be forced to sever its ties with the pair. The deal was part of an effort to expand oil production in Guyana, a tiny country that is rapidly building its output. 

Russia’s oil exports have shifted towards Asia, as Europe and North America have shunned those barrels since the Russian invasion of Ukraine. (Graphic by Nerijus Adomaitis) 

Russia’s oil exports are looking to fall by 100,000 to 200,000 barrels a day, as Reuters reports here, though it is unclear whether part of that is because its own capacity to produce has been degraded by sanctions. Russia is part of the broader deal with OPEC and other allies to lower output to try to boost prices – which has had some impact, though Brent crude has remained in the high $70s range rather than jumping into the $80s or even higher.  

Russia has not said what its baseline output was before cuts, so traders said it will be hard to monitor the reduction in exports. July oil loadings from western ports are expected to fall to 1.9 million bpd this month compared to 2.3 million bpd in June and 2.4 million bpd in May. The country also exports oil and products via the Pacific and a direct pipeline to China. 

Ethanol blends! 

The Biden Administration stuck with its view on granting refiners exemptions from having to blend biofuels into fuels – it will not. As Stephanie Kelly reports here, on Friday the White House denied almost all of the outstanding requests from oil refiners. The Environmental Protection Agency (EPA) denied 26 petitions from 15 small refineries who applied for waivers for the 2016-2018 and 2021-2023 compliance years, the agency said on Friday.  

The Renewable Fuel Standard (RFS) requires refiners to blend billions of gallons of biofuels into the nation’s fuel mix – or buy tradable credits from those that do. The EPA under Biden has not extended any waivers to any refineries, whereas former President Donald Trump’s administration granted 34 exemptions for the 2017 year alone. 

“It cannot be the focus. It’s one of the tools, but in a toolkit that has to be about deployment, massive scale up of renewable energy.” 

Tina Stege, climate envoy for the Marshall Islands, on overreliance on carbon capture and storage. 

Vietnam received its first shipment of liquefied natural gas this month, but the country has a lot of hurdles to use the super-cooled fuel to offset its long-standing power shortages, as Francesco Guarascio, Emily Chow and Khanh Vu report here.  

The Southeast Asian nation has been struggling with rolling blackouts that is slowing investment, but the country also needs to ramp up supply contracts and work out delays in plant construction to become a consistent importer of LNG. Vietnam’s industry ministry did not respond to a request for comment on implementing its LNG plan. 

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