Friday, July 1, 2022

Supreme Court Rules Against EPA, Limits Agency’s Authority To Regulate Carbon Dioxide Emissions

The Roberts Court, April 23, 2021 Seated from left to right: Justices Samuel A. Alito, Jr. and Clarence Thomas, Chief Justice John G. Roberts, Jr., and Justices Stephen G. Breyer and Sonia Sotomayor Standing from left to right: Justices Brett M. Kavanaugh, Elena Kagan, Neil M. Gorsuch, and Amy Coney Barrett. Photograph by Fred Schilling, Collection of the Supreme Court of the United States 

On Thursday, the Supreme Court of the United States ruled in West Virginia v. The Environmental Protection Agency that the Environmental Protection Agency (EPA) does not have the constitutional authority to regulate carbon dioxide emissions from power plants in order to bring about a transition away from coal energy throughout the country because it was not specifically granted that power by Congress.

“The Supreme Court sharply curtails the authority of the EPA to regulate greenhouse-gas emissions that cause climate change,” SCOTUSBlog tweeted. “In a 6-3 ruling, the court sides with conservative states and fossil-fuel companies in adopting a narrow reading of the Clean Air Act.”

As noted by SCOTUSblog, the central question was whether or not Congress granted “the Environmental Protection Agency in Section 111(d) of the Clean Air Act the authority to devise emissions caps based on the generation shifting approach the agency took in the Clean Power Plan.” The court ruled Congress did not grant that authority.

SCOTUSblog also explained that the “dispute began in 2015 with the Obama administration’s adoption of the Clean Power Plan, a rule that sought to combat climate change by reducing carbon pollution from power plants. The plan never went into effect, however: Several states and private plaintiffs challenged it in federal court, and a divided Supreme Court put it on hold in February 2016.”

Once President Donald Trump came into power, his administration repealed the Clean Power Plan and instituted a different set of rules known as the “ACE Rule.”

In January 2021, “the U.S. Court of Appeals for the District of Columbia Circuit vacated the repeal of the Clean Power Plan, vacated the ACE Rule, and sent the issue back to the EPA for more proceedings. The Supreme Court then granted a request by Republican-led states and coal companies to review that ruling; meanwhile, the Biden administration EPA has indicated that it will not reinstate the Clean Power Plan and is instead drafting its own rules on greenhouse-gas emissions from power plants,” according to SCOTUSblog.

Chief Justice Roberts wrote the majority decision and was joined by Justices Clarence Thomas, Amy Coney Barrett, Samuel Alito, and Neil Gorsuch. Justices Elena Kagan, Stephen Breyer, and Sonia Sotomayor dissented.

“Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible ‘solution to the crisis of the day,'” Roberts concluded. “But it is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme in Section 111(d). A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body. The judgment of the Court of Appeals for the District of Columbia Circuit is reversed, and the cases are remanded for further proceedings consistent with this opinion.”

Daren Bakst, a Heritage Foundation senior research fellow focusing on environmental policy and regulation, told The Daily Wire that if the EPA wanted the authority to enact the kind of regulation found in the Clean Power Plan, then the answer is “really simple.”

“Congress would need to enact a law that gives the EPA the necessary statutory authority to impose a Clean Power Plan-like scheme,” Bakst explained. “That’s it.”

“And this is the heart of the entire issue,” he added. “Congress, not the EPA, has the lawmaking power under the United States Constitution.  The EPA forgot this. In fact, it too often forgets that it is an agency of bureaucrats charged with implementing laws, not elected officials charged with creating laws.”

Bakst clarified that Supreme Court’s decision rested on what is known as “the Major Questions Doctrine.” As described by one law firm, “The concept behind the Major Questions Doctrine is that the Court should not assume that Congress delegated important policy decisions to government agencies unless it has done so explicitly.”

“The Court looked to the Clean Air Act and examined the actions the EPA was trying to take,” Bakst explained. “The agency wanted to in effect regulate the entire electricity grid of this nation and restructure the energy market through the Clean Air Act. There’s nothing in the Clean Air Act that authorizes such action. But the key point is that the Court applied the major questions doctrine, which means that it deemed the agencies actions to be of such importance and magnitude that it would need to have clear-cut statutory authority for taking such action.”

Bakst said that in this case, the EPA “wasn’t acting pursuant to clear delegation” from Congress.

In reaction to the news, Missouri’s Attorney General Eric Schmitt tweeted, “BIG VICTORY! Today, SCOTUS ruled in our favor in West Virginia v. Environmental Protection Agency, a critically important case that we joined West Virginia in filing that pushes back on the Biden EPA’s job-killing regulations.”

“We joined WV to fight the EPA’s overreach & challenged the agency’s overly-broad interpretation allowing them to regulate almost any part of the economy, the consequences would lead to higher utility bills, job loss and overall increased energy prices. This is a huge win for MO!” he added.

Alfredo Ortiz, Job Creators Network President and CEO, also praised the decision.

“This is a big victory for small businesses and a big defeat for the Biden administration and the regulatory state,” Ortiz said in a statement provided to The Daily Wire. “Whether it’s greenhouse gas emissions, Covid lockdowns, vaccine mandates, or scores of other issues, the Biden administration keeps claiming authority it does not possess, as the Supreme Court ruled today.”

“This is an important rollback of Biden’s Big Government policies that will give some certainty for America’s small business community, which can in turn, improve the climate for job growth.,” Ortiz added. “Whether the administration will learn from their mistake, however, remains to be seen.  On key issues like fighting inflation and the supply chain crisis, the Supreme Court will not be coming to the rescue.  We need pro-growth policies from the President and Congress including spending cuts and making the Tax Cuts and Jobs Act permanent.  We’re still about one million jobs short of where we were pre -Covid so the time to act is now.”

Thursday, June 30, 2022

Metals set for worst quarter since 2008 on global downturn angst

Metals set for worst quarter since 2008 on global downturn angst

Qinghai copper smelter in China. (Stock image) 

Base metals headed for the worst quarterly slump since the 2008 global financial crisis as China’s economy recovered only gradually and fears of a world recession intensified. 

The London Metal Exchange Index has tumbled 23% since the end of March, although the decline has been magnified due to prices spiking that month following Russia’s invasion of Ukraine. Tin has been the worst performer, plummeting 38%, while aluminum is down by around a third, and copper has fallen by about a fifth. It will be the first quarterly decline for the entire index since the start of the pandemic. 
LMEX m,etals index

A gauge of Chinese factory activity expanded in June for the first time since February, as virus controls were eased. The improvement was fairly muted, however, and a weak property market continues to weigh on metals demand. The Covid Zero policy also remains intact, despite relaxation of quarantine rules, meaning there’s a constant risk of more restrictions if case numbers pick up again. 

China’s lockdowns have also caused severe knock-on impacts in Japan, where industrial output slumped 7.2% in May, undershooting estimates of a 0.3% decline. The nation is Asia’s biggest importer of aluminum, and stockpiles of the metal in major ports have swelled to the highest in more than six years as automotive demand slumps due to supply-chain constraints. 

The looming threat of a recession in the US, and perhaps even globally, also continues to hang over the market. Federal Reserve Chair Jerome Powell and other central bankers warned the world is shifting to a regime of higher inflation at the European Central Bank’s annual forum in Portugal. At the very least, major economies are heading for a slowdown that will curb construction activity.  

Zinc pared some of its declines Thursday on the London Metal Exchange, trading 2.8% lower to $3,265 a ton at 10:02 a.m. local time. Copper fell 0.9% to $8,324 a ton, while aluminum was 0.9% lower. Despite the chunky quarterly drop, the LMEX gauge is only down about 13% so far this year.

Tuesday, June 28, 2022

Why Is There a Decrease of Worldwide Oil-Refining? 

Drivers around the world are feeling pain as fuel prices greatly increase. Costs for heating buildings, power generation, and industrial production are also rising sharply.

Prices were already up before Russia invaded Ukraine on February 24. But since the middle of March, fuel costs have greatly increased while crude prices are only moderately high.

A big reason for the cost increase is the lack of refining ability to process crude into gasoline and other fuel to meet high worldwide demand.

Crude oil is oil as it exists in the ground. It is not yet ready to be used as fuel. Refining oil involves removing unwanted substances so that oil can be used as fuel.

Production per day

Information from the International Energy Agency (IEA) shows that the world can refine about 100 million barrels of oil a day. A barrel contains 159 liters of oil.

But almost 20 percent of that is not useable. Much of the unusable oil comes from places where there is a lack of investment.


The refining industry estimates that the world lost a total of 3.3 million barrels worth of daily refining ability since the start of 2020.

About a third of these losses happened in the United States, with the rest in Russia, China, and Europe, the experts say. Fuel demand crashed early in the pandemic. Before that, oil refining ability had not fallen in any year for at least 30.

However, global refining ability is set to expand by 1 million barrels per day in 2022 and 1.6 million barrels per day in 2023.

In April, 78 million barrels were processed each day. That is down from the pre-pandemic average of 82.1 million barrels per day.

The IEA expects refining to rise during the summer to 81.9 million barrels per day, when Chinese refiners return to normal operations.

The United States, China, Russia, and Europe are all operating refineries at a lower ability than before the pandemic. Nearly 30 percent of Russia’s processing ability was stopped in May, sources told Reuters. Many Western nations are not accepting Russian fuel.

Other reasons for high prices

The cost to carry products on ships overseas has risen because of high demand around the world and sanctions on Russian ships. In Europe, refineries are limited by high prices for natural gas, which powers their operations.

Who benefits

Refiners that export a lot of fuel to other countries, such as U.S. refiners, are benefiting from the current situation. World fuel shortages have increased refining profit margins to historic highs. Companies like U.S.-based Valero and India-based Reliance Industries have seen large profits.

The IEA said India, which refines more than 5 million barrels per day, has been importing cheap Russian crude for in-country use and export.

China Deal with Aramco Could Help Country Meet Its Energy Needs: Top Executive 

A long-term partnership with Saudi Aramco could help China meet its energy security, economic development, and climate change mitigation goals, according to an official from the firm.

Aramco senior vice president Mohammed Al Qahtani made the claim while speaking at the third Qingdao Multinationals Summit in the Shandong Province, saying his firm’s support will allow China to create a modern, efficient downstream sector in Shandong, with lower emissions.

“This includes our special interest in large, integrated downstream projects with high conversion into chemicals. In fact, with SABIC joining the Aramco family, and with nearly 3,000 chemical enterprises already in Shandong Province, we could jointly create a chemicals sector to rival any in the world,” he added.

Shandong is China’s third-largest province in terms of gross domestic product and accounts for 26 percent of the nation’s refining capacity.

Al Qahtani said: “Saudi Vision 2030 offers major new supply chain opportunities for Shandong companies in the Kingdom. The impact of an Aramco ‘one-stop shop’ on Shandong would be profound. And it would solidify Shandong’s crucial role in making some of China’s most important goals a reality.”

U.S. Oil Refining Capacity Down in 2021 for Second Year -EIA 

Capacity for U.S. oil refiners fell in 2021 for the second year in a row, the most recent government data showed on Tuesday, as plant shutdowns kept whittling away on their ability to produce gasoline and diesel.

Pump prices are near $5 a gallon nationwide as soaring demand for motor fuels collides with the loss of about 1 million barrels of processing capacity in the last three years due largely to closings to plants that were unprofitable when fuel demand cratered at the height of the COVID-19 pandemic.

The U.S. Energy Information Administration figures showed a capacity decline of 125,790 barrels per day (bpd) last year on top of the 800,000 bpd drop in 2020.

Sky-high gasoline prices may soon crimp fuel demand as if drivers cut travel, a Dallas Federal Reserve Bank economist said. The nationwide average for a gallon of regular unleaded was $4.968 on Tuesday, up 62% from a year ago.

While current pump prices are not historically high in inflation-adjusted terms, they may be “closer to consumers’ pain threshold than inflation-adjusted prices might suggest,” wrote Garrett Golding, senior business economist with the Dallas Fed. “And if prices climb higher, expect consumers to respond by cutting back on fuel consumption and overall spending sooner than later.”

U.S. refining capacity has fallen by 5.4%, or 1.03 million bpd to 17.9 million bpd since it peaked in 2019 at 18.98 million bpd. Capacity in 2021 dropped 4.5% to 18.13 million bpd.

Profit margins at U.S. refiners are up sharply despite higher oil and gas costs as demand soars for gasoline, diesel and jet fuel. Analysts say the demand could continue to rise with low U.S. unemployment and pent-up demand for travel.


The biggest factor in the latest decline of refining capacity was closure of the 255,600-bpd Alliance, Louisiana, refinery, following extensive damage from last year’s Hurricane Ida. That was only partially offset by capacity expansions at other refineries, the EIA said.

With capacity down, fuel demand is up thanks to the global recovery from the COVID-19 pandemic. Also, shifts in market flows due to the Russian invasion of Ukraine have placed new strains on U.S. refiners. The nation’s plants are running at about 94% of operable capacity, the highest since September 2019.

The high level of capacity utilization and relatively low levels of storage have experts worried about possible fuel shortages given this year’s forecasts for a well-above average hurricane season. About half of the nation’s refining capacity is on U.S. Gulf Coast, where storms often make landfall.

National capacity could decline further if there is an early shutdown of Lyondell Basell Industries (LYB.N) 263,776 barrel-per-day (bpd) Houston refinery.

Lyondell announced in April it will permanently close the refinery at the end of 2023. Sources familiar with plant operations have told Reuters the refinery would also permanently close if a major production unit shuts down prior to December 2023 and can not be quickly returned to operation.

Six refineries, accounting for the shut capacity, have permanently shut since the pandemic began in 2020, with two converting to renewable diesel production.

One other refinery, Shell Plc’s (SHEL.L) Convent, Louisiana, refinery is under consideration for conversion to renewable diesel production.

Phillips 66 is converting the Alliance refinery to a refined fuels terminal.

US court upholds Arizona land swap deal for Rio Tinto copper mine


 US court upholds Arizona land swap deal for Rio Tinto copper mine

Welcome to Arizona sign. (Image from Pxhere). 

A US appeals court has ruled that the federal government may give thousands of acres in Arizona to Rio Tinto Plc for a copper mine, upholding a lower court’s ruling and rejecting a request from Native Americans who said the land has religious and cultural import.

The 2-1 ruling from the San Francisco-based 9th US Circuit Court of Appeals, issued late Friday night, essentially defers to a 2014 decision made by the US Congress and then-President Barack Obama to give the land to Rio for its Resolution Copper project as part of a complex land swap deal.
Apache Stronghold, a nonprofit group comprised of members of the San Carlos Apache tribe and others, said it would appeal to the US Supreme Court.

The Arizona dispute centers on the federally owned Oak Flat Campground, which some Apache consider home to deities and which sits atop a reserve of more than 40 billion pounds of copper. If a mine is built, it would create a crater 2 miles (3 km) wide and 1,000 feet (304 m) deep that would destroy that worship site.

Rio and minority partner BHP Group Plc have already spent more than $1 billion on the project without producing any copper.

While two judges said they were sensitive to Apaches’ religious concerns, they stressed their ruling was narrowly tailored to the question about whether the government can do what it wants with its own land and whether the land transfer would prevent Apaches from practicing their religion.

“As we reach this conclusion, we do not rejoice. Rather, we recognize the deep ties that the Apache have to Oak Flat,” the court said it its 58-page ruling. “This dispute must be resolved as are most others in our pluralistic nation: through the political process.”

The dissenting judge said it was “absurd” and “illogical” to think the land swap would not impede Apaches’ religious rights.

A bill under consideration in the US Congress would undo the 2014 land swap, though its fate is unclear. President Joe Biden took steps to pause the land swap last year, though he has few options to delay it indefinitely.

“All the evidence suggests that the land exchange was meant to facilitate mineral exploration activities – nothing more and nothing less,” the court said in the ruling. The proposed mine project comes as demand jumps for copper to make electric vehicles (EVs) and other electronic devices.

Wendsler Nosie, one of the leaders of Apache Stronghold, denounced the decision. “My children, grandchildren, and the generations after them deserve to practice our traditions at Oak Flat,” he said.

Rio, which is based in Australia and Britain, said it would continue to talk with Apaches and others opposed to the mine. “There is significant local support for the project, however, we respect the views of groups who oppose it and will continue our efforts to understand, address and mitigate these concerns,” said Rio spokesperson Simon Letendre.

Mila Besich, the Democratic mayor of Superior, the town closest to the campground, and a supporter of the mine, said she was relieved by the ruling. “The 9th Circuit ruling provides further confirmation that the permitting must continue,” Besich said.

Representatives for BHP were not immediately available to comment. Terry Rambler, chairman of the San Carlos Apache tribe, was not immediately available to comment.

(By Ernest Scheyder; Editing by Chizu Nomiyama)