Not enough renewable energy to meet global demand: Aramco chief
RIYADH: The amount of renewable energy coming to the international market falls short of fulfilling the rising demand, according to Saudi Arabian Oil Co.’s CEO.?
Speaking on a panel at the Saudi Green Initiative Forum on the sidelines of the 2023 UN Climate Change Conference, Amin Nasser highlighted that more investments are needed in the oil and gas sector to ensure a smooth energy transition.
“Even with all the renewable coming to the market, it is still not enough to handle the additional demand we are seeing,” said Nasser.?
He added: “If you compare the investments in the energy sector, it was around $740 billion. Right now, we are doing 40 percent below that at around $500 billion. Considering the higher demand we are anticipating in the future, I think we need more investments.”
Patrick Pouyanné, CEO of TotalEnergies, who was also present on the panel, said that investments in the energy sector are rising, but the industry should learn how to split investments between renewables and hydrocarbons.?
“Investments in the energy sector are growing. The question is, how do we split these investments? Because we want to triple renewables, and at the same time, we need to maintain the production of oil and gas, which is the energy of today. Let us do more investments in the energy sector, but in an orderly manner,” said Pouyanné.?
During the talk, Nasser highlighted that the demand for clean energies like green hydrogen remains low due to its high associated costs.
Regarding the world’s energy divide based on socio-economic characteristics, Nasser said: “Today, 60 percent of what we produce goes to the global south, and 40 percent goes to the global north. By 2050, almost 70 percent will go to the Global South, and in hydrocarbons, 80 percent will be going to the Global South.”?
Nasser added: “We need to take care of all stakeholders in terms of making sure that we provide affordable, sustainable, and secure energy for the whole world.”?
The Aramco chief further noted that Saudi Aramco is one of the energy companies in the world that has made significant strides in ensuring sustainability in its operations.?
“Today, we have the lowest methane and CO2 emissions globally at Saudi Aramco. We will continue to drive it down. We have made the commitment to zero methane by 2030. We are building the carbon capture and storage. We are getting into e-fuels.” said Nasser.
Last year, Saudi Aramco partnered with the Kingdom’s Ministry of Energy to establish a carbon capture and storage hub in the region.?
Following the launch, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said the hub will have a storage capacity of up to 9 million tons of carbon dioxide annually by 2027.?
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One Supreme Court Case Could Mess Up Chunks of the Tax Code
Justices will debate the meaning of ‘income’ under the 16th Amendment
By Richard Rubin - Jess Bravin - Dec. 3, 2023
WASHINGTON—A case that could punch holes in the federal tax code heads to the Supreme Court on Tuesday.?
The court will hear arguments in Moore v. U.S., which challenges a piece of the 2017 tax law that imposed a one-time levy on profits that companies had accumulated outside the U.S. But its implications could reach much further, providing the justices an opportunity to define what Congress can tax under the Constitution—and what it can’t.?
The case, brought by a Washington state couple seeking a $14,729 refund, raises a seemingly simple question: Must income be “realized,” or received, before it can be taxed??
Charles and Kathleen Moore argue that when the law passed, they hadn’t realized income from their investment in an India-based company and thus couldn’t be taxed. Some conservative groups have backed them, seeing a chance to block future Congresses from taxing wealth or unrealized capital gains. A broad ruling for the Moores could create a constitutional bar against some popular Democratic proposals to tax the superrich.?
Tax lawyers and the government say a sweeping ruling could also upend many longstanding rules affecting partnerships, multinational companies and bond investors. Former House Speaker Paul Ryan, a Wisconsin Republican who helped write the 2017 tax law , warned in September that the case could damage a third of the tax code.?
If the Moores win, investors and companies could demand billions of dollars in refunds tied to the 2017 law. And a loss for the government could prompt a wave of lawsuits over other tax-code provisions, according to lawyers.
“It’s hard to see how this is going to turn out well,” said David Rosenbloom, a tax lawyer at Caplin & Drysdale. “They really are opening up a can of worms.”
Uncontroversial provision
The Moore case stems from a piece of the 2017 tax law written by Republicans and signed by President Donald Trump . The provision itself was relatively uncontroversial.
Before then, U.S. companies paid foreign taxes on foreign profits but could defer any U.S. taxes until they brought earnings back home. Republicans switched to a system with a minimum annual U.S. tax on foreign profits and tax-free repatriation. In that transition, to deal with 30 years of profits companies had accumulated overseas that hadn’t faced U.S. taxation, Congress imposed a one-time levy.?
The bulk of the estimated $338 billion in revenue that change generated is being paid by large companies such as
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. But the tax also applied to some individuals, including those who owned more than 10% of a foreign corporation.??
That group includes the Moores, who had invested in KisanKraft, a friend’s company in India. The couple, backed by the Competitive Enterprise Institute and other conservative groups, sued for a refund. They say that they hadn’t realized any of KisanKraft’s profits, so the one-time tax wasn’t within Congress’s 16th Amendment power to tax income.?
Lower courts disagreed, saying income doesn’t have to be received to be taxed. The pair appealed to the Supreme Court, which will decide what the Constitution says about taxing income.?
What is ‘income’?
The Constitution, as ratified, gave Congress broad national taxing power. But it required that any “direct taxes,” such as per-capita taxes, be apportioned among the states by population.?
After the Civil War, Congress sought to impose an individual income tax, but the Supreme Court ruled in 1895 that such a move was an unconstitutional direct tax. A response was the 16th Amendment, which says “income, from whatever source derived,” can be taxed without apportionment. That led to the modern federal income tax.?
The 1913 amendment doesn’t specify what “income” means, nor does it say income must be realized.?
The government contends that plenty of tax-code provisions already don’t require Americans to see income hit their bank accounts. That includes rules governing the taxation of futures contracts and bonds with original-issue discounts.?
Tax lawyers point to other examples. Since the 1960s, significant U.S. investors in foreign companies have faced taxes on those corporations’ passive income, even if the Americans didn’t get money directly. That is a way of keeping U.S. taxpayers from dodging taxes by stashing assets in foreign corporations.?
Partners are taxed on partnerships’ annual profits, even if they don’t get a check for their portion. Some people who renounce their citizenship owe taxes as if they sold assets. Certain securities dealers can pay income taxes on changes in asset value. Even basic accrual accounting—booking income before it is literally received—could be considered a form of unrealized income. Recent minimum taxes on large U.S. corporations or international income could also be in jeopardy.
Some think-tank estimates tally the potential revenue impact of a sweeping ruling in favor of the Moores in the trillions.?
“A holding that the realization rule is constitutionally required could well cause massive parts of the current tax system to become invalidated,” said David Schizer, a Columbia law professor.
The Moores argue that the 2017 tax is unique because it reaches back to capture years of accumulated earnings. The problem, their lawyers contend, is that taxes fell on whoever owned assets when the law was passed, not people who actually earned or received income.?
Court’s options
In briefs and at conferences, tax lawyers have suggested ways the court could decide the case without jeopardizing other tax-code provisions.?
The simplest would be to say the Constitution doesn’t require income to be realized for it to be taxed. But that could conflict with a previous ruling from 1920 that has been limited by subsequent cases.?
Another option: The court could avoid the broader question by saying that KisanKraft realized income and that the Moores can be taxed on it because they are significant investors.
The court also could say that realization is necessary but that the one-time foreign-profit tax meets the definition. That might not disrupt existing law, but it could offer a warning against taxes on wealth or unrealized capital gains that are percolating in Congress and Democratic policy circles.?
“If they say realization is required and it’s satisfied here, then it’s probably going to be satisfied nearly everywhere at least under existing law,” said Andy Grewal, a University of Iowa law professor.?
One other option could let the justices sidestep the realization argument. They could declare that the 2017 tax is neither an income tax governed by the 16th Amendment nor a direct tax subject to apportionment. That is similar to what the court did in 2012, when it upheld Obamacare’s individual mandate for purchasing health insurance as a constitutional tax.?
Rosenbloom, the tax lawyer, said he expects the justices to overrule lower courts, perhaps in a narrower way that will nonetheless spur new challenges to tax-code provisions.?
“This is the beginning of the story, not the end. And it could be a long story,” he said. “The court will be writing on a very, very blank slate.”
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