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Producción y mercados energéticos 07/05/19

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Latest Energy News 07 May 2019
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Canadian court rules federal carbon pricing plan constitutional

The Saskatchewan Court of Appeal (Canada) has ruled that Canada’s federal carbon-pricing plan is constitutional, rejecting a challenge from the Saskatchewan provincial government that claimed that the federal government could not impose such a tax. The government of Ontario is also challenging the federal carbon pricing policy in courts, while Alberta has committed to remove the provincial levy recently created.

In October 2018, the federal government of Canada announced that it would impose a «backstop» carbon tax on fuels in the provinces and territories that have no adequate carbon emission pricing plans and refused to adopt the country-wide CO2 pricing system. This «backstop» mechanism will apply in Manitoba, Ontario, New Brunswick and Saskatchewan as of April 2019, and in Nunavut and Yukon as of July 2019: in these provinces, proceeds from the new tax will go directly back to taxpayers (direct rebates named «Climate Action Incentive payments»).

The other provinces, namely Quebec, Alberta, British Columbia, Nova Scotia, Prince Edward Island and Newfoundland and Labrador will comply with the federal benchmark. Canada’s nationwide climate-change strategy includes a carbon tax, which has to be either adopted by the provinces or imposed by the federal government. The tax will rise by CAD10/tCO2eq (around US$7.6/tCO2eq) each year from CAD20/tCO2eq (around US$15.3/tCO2eq) in 2019 to CAD50/tCO2eq (around US$38/tCO2eq) by 2022.

Policy & Regulatory

China plans to close more small coal mines by 2021

The National Development and Reform Commission (NDRC) of China plans to shut down all small coal mines (i.e. with capacities below 300,000 t/year) in large coal producing regions such as Inner Mongolia, Shanxi, Shaanxi and Ningxia by the end of 2019 if they don’t meet safety and environmental standards.

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Energy Markets

India’s oil import dependence rose to 84% in 2018-2019

According to the Indian Oil ministry’s Petroleum Planning and Analysis Cell (PPAC), India’s oil import dependence increased from around 81% in 2015-2016 (April 2015-March 2016) to 83% in 2017-2018 and to 84% in 2018-2019, in a context of rising oil consumption and stagnant domestic production.

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China’s gas consumption rose by 12% in the first quarter of 2019

According to the National Development and Reform Commission (NDRC) of China, China’s apparent gas consumption rose by nearly 12% (to 77 bcm) in the first quarter of 2019 compared to the same period of 2018. Gas consumption had already increased by 18% in 2018 to 275 bcm, as the country is promoting the use of gas for power generation, industrial uses and transports.

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Infrastructure & Investments

French and Irish regulators back 700 MW power interconnection project

The energy regulatory authorities of Ireland (Commission for Regulation of Utilities (CRU)) and France (Commission de Régulation de l’Energie (CRE)) have made a coordinated decision on the cross-border cost allocation request submitted by the Celtic Interconnector project, a proposed 700 MW HVDC undersea power cable project expected from 2026. …

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Dominion seeks to resume works on 15.5 bcm/year US gas pipeline project

US energy group Dominion Energy expects to resume construction works on the 1.5 bcf/d (15.5 bcm/year) Atlantic Coast gas pipeline project in North Carolina (United States) in the third quarter of 2019. …

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ExxonMobil goes ahead with Liza-2 oil project off Guyana

Global oil and gas company ExxonMobil has received government and regulatory approvals for the development of the second phase of the Liza oil project in the Stabroek block offshore Guyana. Liza Phase 2 will tap around 600 mbl of oil resources thanks to a 220,000 bbl/d floating storage, production and offloading vessel (FPSO).

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Egypt expects 1.6 GW solar project to be fully operational in 2019

The Ministry  of Investment and International Cooperation of Egypt expects the 1.6 GW Benban solar project in the Aswan governorate to be fully operational at the end of 2019. The US$2bn project is partly financed by the World Bank through the IFC (US$653m support) and is being built in stages.

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