-Demand for ethanol and the profitability of E85 could take big hits as ethanol’s discount to gasoline falls. Via Reuters, the price spread between gasoline and ethanol fell to 17 cents per gallon this week, down from a two-year high of $1.11 at the end of September. The EPA could cut its required ethanol blending volumes this year due to weak demand for gasoline.
-The EPA would have to do so amid strong pushback from the biofuels industry, which called on the Obama Administration to “reverse the damage it has already done.” At an industry event in San Francisco, Advanced Biofuels Association President Mike McAdams said 2015 could be a “seminal year” for the U.S. government in re-affirming or turning away from its commitment to biofuels. The EPA last November proposed a reduced Renewable Fuel Standard (RFS) for the first time but has yet to implement an RFS for 2014. There were indications prior to the oil price slump that the RFS would be higher than what was proposed last year. It was reported today the RFS biodiesel mandate for 2014 would come in far lower than the industry’s production capacity.
-Cheniere Energy secured $2.5 billion in funding for the construction of its proposed LNG export facility in Corpus Christi, Texas. Cheniere in October cleared an environmental review of the project by the Federal Energy Regulatory Commission and it now awaits construction approval. Cheniere CEO Charif Souki said construction would begin in early 2015.
-A federal judge approved Anadarko Petroleum Corp.’s $5.15 billion settlement over environmental liabilities related to its subsidiary Kerr McGee Corp. Via FuelFix, it is the largest environmental enforcement payment in U.S. history. Approximately $4.5 billion of the settlement will go to clean up about 2,000 sites that are contaminated with toxic waste. Kerr McGee operated the sites before it spun off the cleanup operations to Tronox Inc., which later went bankrupt. Tronox sued Kerr McGee in 2009.
-Venezuela is scrambling to buy up diesel and gasoline after power outages hit its Paraguana refining complex, Reuters reports. PDVSA's 650,000-barrel-per-day Amuay plant was shut down last week after a blackout and a storm disrupted the adjacent 310,000-barrel-per-day Cardon plant over the weekend. Power has since been restored and officials expect to restart the plants by Thursday. The buying spree has boosted U.S. and European fuel prices.
