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White House aims to enforce new sustainability standards in American aviation
09/15/2021
President Biden’s administration pledges to reduce aviation emissions by 20% by 2030, focusing at the same time on creating new jobs in the industry. The key to success in this venture is sustainable aviation fuel (SAF).
This move comes to light as a means to achieve promised climate goals and bring forward carbon-free aviation before 2050 as part of President Biden’s Build Back Better Agenda. Since modern American aviation stands for 11% of all transportation-related emissions in the region, this share of emissions will only continue to grow without appropriate actions as the volume of commercial or not flights steadily increases. And prioritizing fuel produced from waste cooking oil, plants, and animal fats may be just the right answer, considering SAF could cut up to 80% of aviation emissions.
Such problems demand comprehensive measures, and for sustainable aviation to be achievable, the industry requires efficient innovations not only in aircraft technology but also in fuel extraction. And while hydrogen and electric-powered aviation may come to fruition in the future, bold decisions especially for long-distance travel need to be taken now.
The new SAF tax credit supports a significant reduction of greenhouse gas emissions up to 50% by cutting costs while rapidly scaling domestic production of sustainable fuels for aviation. This credit will work in concert with measures taken by the aviation-related industries to reduce their carbon footprints.
The White House's commitment to the transformation of aviation stems not only from the desire to address ecological challenges, but also to create union jobs, aid airport workers in improving environmental quality, and open rural economic opportunities to use sustainable fuels derived from a wide range of feedstocks and pathways. Aviation is changing toward a zero-carbon sector. To make this transformation, however, aircraft manufacturers, airlines, fuel producers, airports, and the Federal government will have to work together. And with the upcoming executive actions, new federal programs, and private sector commitments, the industry may very well soon be on its way to that cherished goal.
It is predicted that the domestic SAF market will increase rapidly in the coming years, with production reaching well over the current 4.5 million gallons per year. But SAFs production won't scale up domestically without the support of policy and producer commitments. Growing domestic production will require a wide range of feedstocks and paths, and the industry will explore a variety of possibilities. Ethanol conversion into jet fuel is one of these alternatives.
As evident, several airports already are in hot pursuit of the infrastructure needed to enable SAF deliveries in the future. While in Los Angeles, CA (LAX) and San Francisco, CA (SFO) it is readily in use on short domestic passenger flights. Additionally, many U.S. airports have individual road maps to achieve net-zero emissions and are actively participating in the Airport Carbon Accreditation certification program.
For our part, keeping ahead of sustainable fuel initiatives, Rextag will continue to add asset and infrastructure data to enhance business development, market surveillance, and competitive awareness in the industry.
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ExxonMobil Acquires Denbury and Enhances carbon, capture, and storage efforts
ExxonMobil's joined assets speed up their Low Carbon Solutions business, offering better decarbonization options for customers. ExxonMobil's top CCS network supports their commitment to low carbon value chains, like hydrogen and biofuels. The transaction synergies will cut over 100 MTA of emissions, leading to strong growth and returns. Exxon Mobil Corporation revealed that it will acquire Denbury Inc., a company specializing in carbon capture, utilization, and storage (CCS) solutions and enhanced oil recovery. $4.9 billion deal will be completed through an all-stock transaction. Darren Woods, Chairman and CEO said “Acquiring Denbury reflects our determination to profitably grow our Low Carbon Solutions business by serving a range of hard-to-decarbonize industries with a comprehensive carbon capture and sequestration offering”.
From Beginnings to a $7.1 Billion Milestone: Deal-Making Histories of Energy Transfer and Crestwood - Complex Review by Rextag
Energy Transfer's unit prices have surged over 13% this year, bolstered by two significant acquisitions. The company spent nearly $1.5 billion on acquiring Lotus Midstream, a deal that will instantly boost its free and distributable cash flow. A recently inked $7.1 billion deal to acquire Crestwood Equity Partners is also set to immediately enhance the company's distributable cash flow per unit. Energy Transfer aims to unlock commercial opportunities and refinance Crestwood's debt, amplifying the deal's value proposition. These strategic acquisitions provide the company additional avenues for expanding its distribution, which already offers a strong yield of 9.2%. Energized by both organic growth and its midstream consolidation efforts, Energy Transfer aims to uplift its payout by 3% to 5% annually.
Kinetik Holdings recently announced a series of transactions in the energy sector. They struck a deal to buy Durango Permian infrastructure for $765 million. At the same time, they're selling their 16% share in the Gulf Coast Express Pipeline to ArcLight Capital Partners for $540 million. The total purchase cost includes $510 million in cash paid immediately and an additional $30 million that will be paid later, depending on whether they decide to expand further.
Recently, the Permian has seen significant acquisitions: Exxon Mobil purchased Pioneer Natural Resources for about $60 billion. Diamondback Energy's $26 billion deal to acquire Endeavor Energy Resources is currently on hold due to requests from the U.S. Federal Trade Commission. Occidental’s acquisition of CrownRock for $12 billion in the Midland.
EOG Resources is pushing boundaries in Ohio's Utica oil play and now drilling on the Sable pad, also located in Noble County. This site features the 3.7-mile lateral currently under construction. The company's first multi-well pads in the area Timberwolf and Xavier have each produced over 200,000 barrels of oil since their inception—Timberwolf in August and Xavier in October. A third site, the four-well White Rhino pad in Noble County, is also showing promising early results, according to Keith Trasko, EOG’s Senior Vice President of Exploration and Production, who noted the wells are performing as expected in their initial weeks.