Fed Cuts Pace Of Treasury QE To Just $10 Billion Per Day - From an initial $75 billion per day when the Fed announced the launch of Unlimited QE, the US central bank first reduced its daily buying to $60 billion per day, then three weeks ago announced another 'taper' in its bond-buying program to $50 billion per day, which was followed by a reduction to 30 billion per day, and then last week, this amount was again cut in half to $15 billion per day. Now, the Fed has slashed its daily POMO by another 33%, to "only" $10BN per day. Here is the full schedule for the week ahead. Additionally, the Fed will also taper its MBS buying from $15 billion to $8 billion on average in in MBS per day next week:
- Mon: $8.213BN from $10.709BN last Monday
- Tue: $7.68BN from $8.938BN last Tuesday
- Wed: $8.213BN from $10.709BN last Wednesday
- Thur: $7.68BN from $8.938BN last Thursday
- Fri: $8.213BN from $10.7019 last Friday
The chart below summarizes all the Fed Treasury and MBS buying completed and scheduled since the relaunch of QE on March 13: […] So, in aggregate, The Fed will buy a total of $90 billion of MBS/TSYs next week, down from $125 billion but still vastly more on a weekly basis than the largest QE programs monthly totals before this crisis, if well below the $625 billion in purchases conducted in the week starting March 23, when the financial system was once again on the verge of collapse and only the Fed could bail it out... just don't call it a bail out because nobody could have possibly anticipated an economic shock especially after banks repurchased trillions in their own stock in the past decade.
Fed Massively Tapered QE-4. Hasn’t Bought Any Junk Bonds, Was Just Jawboning -Wolf Richter -Since the Fed announced its market bailouts and interventions on March 15, it has printed and handed to Wall Street $2.06 trillion. But here is the thing: This was front-loaded, and over the past two weeks, it has cut its bailouts in half, and it has stopped lending new funds to its SPVs that were expected to buy all manner of securities, including equities, junk bonds, and old bicycles. Those loan amounts haven’t moved in four weeks. What it has bought were Treasury securities and mortgage-backed securities – and it’s cutting back on those too. Total assets on the Fed’s balance sheet rose by $285 billion during the week through April 15, reported Thursday afternoon, to $6.37 trillion. Over the past five weeks, including the partial bailout-week which started March 16 and ended March 18, total assets increased by these amounts — note the big taper from $586 billion and $557 billion early on to $287 billion in the latest week:
- $356 billion (Mar 18, partial bailout week started Mar 16)
- $586 billion (Mar 25)
- $557 billion (Apr 1)
- $272 billion (Apr 8)
- $285 billion (Apr 15)
The $6.37 trillion of assets on the Fed’s balance sheet are mostly composed of Treasury securities, mortgage-backed securities (MBS), repurchase agreements (repos), “foreign central bank liquidity swaps,” and “loans” to its Special Purpose Vehicles (SPVs). We’ll go through them one at a time. The Fed added $154 billion in Treasury securities during the week, down 47% from the $293 billion it had added the week before, and down 57% from the $362 billion it had added two week ago. This is a major factor in the Big Taper of QE-4. The sharp reduction in purchases of Treasuries confirms for now that the Fed is sticking to its announcement that it would drastically cut QE after the initial blast.Fed Chair Jerome Powell in a webcast on April 10 said that the Fed would pack away its emergency tools once “private markets and institutions are once again able to perform their vital functions of channeling credit and supporting economic growth.” Whatever that means.
"Chicago Fed National Activity Index Suggests Economic Growth Decreased Substantially in March" - From the Chicago Fed: Chicago Fed National Activity Index Suggests Economic Growth Decreased Substantially in March Led by declines in production- and employment-related indicators, the Chicago Fed National Activity Index (CFNAI) fell to –4.19 in March from +0.06 in February. All four broad categories of indicators used to construct the index made negative contributions in March, and three of the four categories decreased from February. The index’s three-month moving average, CFNAI-MA3, decreased to –1.47 in March from –0.20 in February. Following a period of economic expansion,an increasing likelihood of a recession has historically been associated with a CFNAI-MA3 value below –0.70. This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967.
How Far Will the U.S. Economy Plunge During Lockdown? - Wolf Richter - “Three times deeper than the Great Recession?” --No one has ever been through an economy where enormous shifts have occurred, from one day to the next, shutting down part of the economy but also generating sectors that are vastly more vibrant than ever before. Monthly or quarterly economic indicators leave us in the dark because they lag too far behind and are at the moment largely useless. What we need is high-frequency data – daily and weekly that track this shifting economy in near-real time. For example, there has been an enormous boom in ecommerce – but we won’t get ecommerce data for Q1 until mid-May and for Q2 until August. Best Buy reported last week that its online sales had surged by 250% but that it would furlough 51,000 hourly store employees as stores were closed to customers, allowing only for curbside pickup. That duality that is now widespread impacts the economy in strange ways. Grocery store and supermarket sales – which are normally the epitome of slow and steady growth tied to inflation and population growth – are suddenly booming. Kroger reported a 30% surge in “identical retail supermarket sales without fuel.” Anything having to do with working-at-home, including hardware sales, is booming. Everything and anything that is online is booming — as are the sectors that make it all work, including delivery services. And there are other sectors that are suddenly hot.But other parts of the economy have essentially collapsed, with near-zero revenues, such as sit-down restaurants, sports & entertainment events, or the entire travel and accommodations industry, including airlines and hotels. Some manufacturing plants are operating, but many others are not. Much of the construction industry has shut down. Housing and auto sales are still ongoing, but at far lower levels. Supply chains are misaligned, insufficient for the surging activity at supermarkets and ecommerce, but useless for commercial venues such as restaurants and schools that have been shut down.Agriculture is operating mostly. Oil drilling has collapsed because of the demand for oil has collapsed, and the entire supply chain to the oil-and-gas sector, including the equipment manufacturing sector, and the services supporting it all have ground to a halt.The New York Fed’s Weekly Economic Index (WEI), released today for the week ending April 18, is based on ten daily and weekly indicators – “timely and relevant high-frequency data,” as it says – of “real economic activity.” These indicators cover consumer behavior, the labor market, and production. The researchers putting the index together have scaled the index “to align with the four-quarter GDP growth rate.” The index has plunged over the past five weeks to -10.95%. If this reading persists for the entire second quarter, then the year-over-year GDP plunge in Q2 is expected to be around -11%:
How Bad Might It Get? Think the Great Depression - Noah Smith - As the economic carnage from the coronavirus pandemic continues, a long-forbidden word is starting to creep onto people’s lips: “depression.” In the 19th and early 20th centuries, there was no commonly accepted word for a slowdown in the economy. “Panic” was the term typically used for financial crises, while long slumps were commonly called depressions. Presidents such as James Monroe and Calvin Coolidge used the d-word to describe downturns during their administrations. There was even a slump in the 1870s that many referred to as the “Great Depression” at the time. But then 1929 came, and there was no longer any doubt as to which depression deserved the modifier “great.” The crash hit the entire world, reducing economic output 15%. And it ground on mercilessly for years -- by 1933, unemployment in the U.S. was at 25%. The Great Depression was so severe that governments permanently expanded their role in the economy. Since the 1930s, economists and commentators have used the word “recession” to describe economic slumps, and none of them have been nearly as severe as the Great Depression. The only time this convention was really challenged was after the financial crisis of 2008. The global nature of the downturn, sparked by troubles in the financial industry, led many to draw parallels with the Great Depression. In the end, the term “Great Recession” stuck. The economic damage from coronavirus, however, threatens to dwarf the 2008 downturn. More than 22 million people, or about 13% of the U.S. labor force, have already filed for unemployment: Current forecasts are for the unemployment rate to reach 20% this month. Some predict it could go as high as 30% this year. That would eclipse even the Great Depression in severity. So if severity alone is the criteria for a depression, this one will certainly deserve the moniker. President Ronald Reagan once quipped that “recession is when your neighbor loses his job; depression is when you lose yours.” There will be few people whose economic livelihoods are not hurt by the coronavirus.
Trump Instructs U.S. Navy To Fire On Iranian Boats If Harassed : NPR - President Trump says the U.S. Navy should fire on Iranian boats if they continue to harass U.S. warships in the Gulf, a move that raises the prospect of open hostilities between the two rivals. The president's Wednesday morning tweet came shortly after Iran announced it had successfully launched a military satellite into orbit for the first time. With the U.S. and Iran both battling to control a coronavirus outbreak at home, the ongoing friction between the two countries had receded from the headlines. But Wednesday's developments point to an escalation of tensions that have been building in recent days. Last week, U.S. military ships were in the northern Persian Gulf for exercises. The U.S. warships were in international waters, though relatively close to Iran. Iran sent small boats, known as "fast boats," toward the American warships, with one coming as close as 10 yards, according to the Navy, which released a video. The Pentagon accused Iran of sending 11 fast boats to make "dangerous and harassing approaches" to six American warships. These kinds of standoffs in the Gulf have been taking place for many years. The U.S. and Iran usually observe unwritten rules and the confrontations rarely escalate into actual hostilities, with occasional exceptions. However, Trump's instruction for the Navy to shoot Iranian boats raises the ante.
Coronavirus Drives Barrage of New Lobbying Activity - By Wolf Richter - When the $2.2 trillion bailout package was being put together by Congress in all haste in March, a mad scramble broke out over who would get what. Part of this deal was the $349 billion Paycheck Protection Program for “small businesses” – which can be, as we now know, a publicly traded company with over 5,700 employees, or a KKR-backed power company that, upon getting the loan, files for prepackaged Chapter 11 bankruptcy.And so, the program already ran out of money as of Thursday, according to the SBA. “Notice: Lapse in Appropriations. The SBA is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding,” it said on its website.The program dispersed 1.66 million loans, according to the SBA’s tally. There were 30.2 million small businesses in the US in 2019, so about 5.5% got loans. What’s going to happen to the remaining 94.5% of the small businesses?Congress is contemplating a $250-billion expansion of the program that would cover maybe another 4% of small businesses. In other words, most small businesses aren’t going to get any of it. A small business under the plan is a business with 500 employees or fewer. Loans were capped at $10 million. But wait… 4,412 loans were issued in amounts larger than $5 million each. And we already know which company with 5,700 employees got $20 million. Yup, a restaurant chain, because they and hotel chains were exempted from the employee limit. Restaurants and hotels got their own limit: 500 employees per location. They accomplished this through magnificent lobbying efforts. Ruth’s Chris Steakhouse with about 5,700 employees at the end of last year and 159 restaurants across the US – disclosed in an SEC filing on April 13 that on April 7, four days after the SBA opened the filing process and as the system was bogged down, it obtained a PPP loan of $20 million, spread over two loans of $10 million each for two of its entities. JPMorgan Chase was the lender. If the company follows the rules, this $20 million will be forgiven. And then there is the curious case of Longview Power LLC, in which KKR, one of the big private equity firms, has a 40% stake as a result of Longview’s bankruptcy in 2015. Longview owns a 700-megawatt coal-fired power plant in West Virginia and has about 140 employees. It was approved for a PPP loan last Friday, and on Tuesday it announced that it filed for Chapter 11 bankruptcy. It was in these bankruptcy filing documents that the PPP loan came to light, and was reported by the Wall Street Journal. Stockholders, including KKR, and holders of $44 million in unsecured bonds will be wiped out. Senior secured lenders will get 90% of the restructured company’s equity and agreed to provide $40 million in new funding. If the company follows the rules of the PPP loan, it will be forgiven and turn into pure profit for then new owners.
Emergency Grants to Small Businesses Average $4,360, Data Shows - WSJ—The federal government has issued emergency grants totaling $3.29 billion to 755,476 small businesses across the country, along with loans worth $5.57 billion to nearly 27,000 businesses, according to data released this week.The grants have averaged $4,360, according to a Wall Street Journal analysis of new data released by the Small Business Administration. The average size of the approved loans was $206,801, according to the analysis, similar to the average $206,022 approved under the Paycheck Protection Program.The grants and loans were made under the SBA’s Economic Injury Disaster Loan and EIDL Advance programs, which are separate from the larger $350 billion Paycheck Protection Program that provides forgivable loans. The emergency grants were seen as a short-term solution that would provide as much as $10,000 for businesses applying for loans. But demand has greatly outstripped supply, with SBA officials saying four million businesses have applied to the EIDL programs. New applications have been suspended due to oversubscription.States that had experienced early confirmed cases of the coronavirus infection, including Washington and California, were among the largest beneficiaries of the emergency-loan program, which started to cover the coronavirus impact in early March.Under the PPP a greater proportion of businesses in Midwest states received loans than elsewhere in the country, even though larger-population states received more money overall.With millions of business owners waiting for government assistance to survive the pandemic, the Senate on Tuesday approved additional funds for small-business relief, including $310 billion for the PPP and $60 billion for the EIDL programs.
Ruth’s Chris, Shake Shack, big hotel owners get millions in small business funds - The federal government gave national hotel and restaurant chains millions of dollars in grants before the $349 billion program ran out of money Thursday, leading to a backlash that prompted one company to give the money back and a Republican senator to say that “millions of dollars are being wasted.”Thousands of traditional small businesses were unable to get funding from the program before it ran dry. As Congress and the White House near a deal to add an additional $310 billion to the program, some are calling for additional oversight and rule changes to prevent bigger chains from accepting any more money.Ruth’s Chris Steak House, a chain that has 150 locations and is valued at $250 million, reported receiving $20 million in funding from the small business portion of the economic stimulus legislation called the Paycheck Protection Program. The Potbelly chain of sandwich shops, which has more than 400 locations and a value of $89 million, reported receiving $10 million last week. Shake Shack, a $1.6 billion burger-and-fries chain based in New York City, received $10 million. After complaints from small business advocates when the fund went dry, company founder Danny Meyer and chief executive Randy Garutti announced Sunday evening that they would return the money. They said they had no idea that the program would run out of money so quickly and that they understood the uproar.Treasury Secretary Steven Mnuchin, who has tried to defend the program in recent days, wrote on Twitter that he was “glad to see” Shake Shack return the money.In all, more than 70 publicly traded companies have reported receiving money from the program, according to filings with the Securities and Exchange Commission. Sen. Rick Scott (R-Fla.) criticized the program, saying that “companies that are not being harmed at all by the coronavirus crisis have the ability to receive taxpayer-funded loans that can be forgiven.”
Here are the largest public companies taking payroll loans meant for small businesses - Hundreds of millions of dollars of Paycheck Protection Program emergency funding has been claimed by large, publicly traded companies, new research published by Morgan Stanley shows. In fact, the U.S. government has allocated at least $243.4 million of the total $349 billion to publicly traded companies, the firm said. The PPP was designed to help the nation’s smallest, mom-and-pop shops keep employees on payroll and prevent mass layoffs across the country amid the coronavirus pandemic. But the research shows that several of the companies that have received aid have market values well in excess of $100 million, including DMC Global ($405 million), Wave Life Sciences ($286 million) and Fiesta Restaurant Group ($189 million). Fiesta, which employs more than 10,000 people, according to its last reported annual number, received a PPP loan of $10 million, Morgan Stanley’s data showed. At least 75 companies that have received the aid were publicly traded and received a combined $300 million in low-interest, taxpayer-backed loans, according to a separate report published by The Associated Press. “I think you’ve seen some pretty shameful acts by some large companies to take advantage of the system,” said Howard Schultz, former Starbucks chairman and CEO. Instead, the government should act “as a backstop for the banks to give every small business and every independent restaurant a bridge to the vaccine. And that is the money and the resources to make it through.” Statistics released by the Small Business Administration last week showed that 4,400 of the approved loans exceeded $5 million. The size of the typical loan nationally was $206,000, according to the SBA report released April 16. The SBA awarded the plurality of PPP dollars (13.12%) to the construction industry. Professional, scientific and technical services received 12.65%, manufacturing received 11.96%, health care received 11.65% and accommodation and food services received 8.9%. Congress approved the first-come-first-served PPP in March as part of the massive $2.2 trillion CARES Act, which at the time promised to ease some of the financial burden for many of the nation’s smallest business owners. But the program ran out of money on Thursday, when the SBA announced that it was “unable to accept new applications for the Paycheck Protection Program based on available appropriations funding.”
Small-Business Loans: Strip Clubs, Marijuana Stores Need Not Apply – WSJ - Whatever they are called, businesses that “present live performances of a prurient sexual nature” are among the many that don’t qualify for the Small Business Administration’s Paycheck Protection Program, according to SBA regulations. The agency makes loans to small firms and provides other assistance. Its PPP program was initially funded at about $350 billion and has already run out of money, but legislation approved by the Senate and set for House vote Thursday would add $320 billion more for the program. Some of the exclusions were inherited by the SBA when it was founded in 1953 from federal agencies that created the provisions as long as a century ago. The exclusions mostly fall into three categories: enterprises such as strip clubs and marijuana businesses that are considered morally questionable by some; those viewed as speculative, including oil wildcatting and finance companies; and some that may be a little bit of both, like casinos. Nearly all the businesses cut out of the program are lobbying or suing to get cut in—including the lobbying industry itself, which has long been ineligible for SBA loans. An SBA spokeswoman says the agency tries to offer loans “in a compliant and consistent fashion,” but didn’t comment on any specific exclusion. Government provisions against loans to speculative businesses reach back to the early 20th century, says Gary Richardson, an economic historian at the University of California, Irvine, and have been added to most every lending institution created afterward, including the Federal Reserve. At the SBA, that principle spurred rules barring loans to banks, finance companies, wildcatters and “pyramid sale distribution plans.” Research funding is also barred as too unpredictable. For issues with a moral component, the SBA employs several lawyers to decide whether loan applicants cross the line into activities of a “prurient sexual nature” or that involve “indoctrinating religion.” Establishments that hire women for their looks and require them to wear skimpy outfits probably wouldn’t pass SBA muster, says Jane Butler, who headed the agency’s main lending programs in the 1990s and is now executive vice president of the National Association of Government Guaranteed Lenders, a trade group of SBA lenders. That’s because of discriminatory hiring practices, not prurience. “If they only hire women of a particular physique, that’s not appropriate for federal lending,” she said.
Small-Business Loan Fund May Run Dry Again. Is There Another Way? – WSJ —As Congress races to provide a fresh injection of aid to small businesses, lawmakers are contemplating a simpler, faster way to supply the next round of relief. One idea that is gaining momentum: Put the existing payroll tax system into reverse. The federal government could deliver a quick subsidy to employers by telling them to stop sending in money withheld from workers’ paychecks. That could be a more efficient way of subsidizing the salaries of workers idled by the coronavirus pandemic than the Paycheck Protection Program created by Congress last month, supporters say. That popular program, run by the Small Business Administration, requires employers to apply for loans through banks and wait for approval before money is delivered. Employers who qualify for the federal wage subsidy would just stop sending withheld taxes to the government while paying employees who aren’t working. Companies would also be able to keep the income and payroll taxes they would otherwise submit on behalf of their entire workforce. The wage subsidy could be set to cover a majority of wages, even exceeding all withheld taxes, so in some cases the Internal Revenue Service could make additional payments to employers to provide them with the full amount. While the tax credit idea resembles the broad payroll tax suspension President Trump has sought, it would deliver larger subsidies to more targeted groups. Mr. Trump’s idea would cut the payroll tax itself, which amounts to up to 15.3% of wages and would reduce the overall cost of labor. This idea instead might offer little or nothing in cases where people are still working, but could offer significantly larger subsidies for employers who keep people on the payroll at full wages for little or no work. The idea mostly has support among Democrats for now, though they differ on details, and it is far from certain that any significant new wage subsidy can get through a Congress that has quickly rallied behind the PPP program. “I do think the fact that these existing programs aren’t working well enough is pushing people to say, ‘What else can we do?’ ” said Rep. Pramila Jayapal (D., Wash.), whose twist on the idea would provide up-front payments to companies based on past payroll-tax filings. Some lawmakers may also be wary of open-ended subsidies for employers. Still, supporters for the concept range from progressive Ms. Jayapal to Sen. Mark Warner (D., Va.) to conservative Sen. Josh Hawley (R., Mo.). There are signs the concept is gaining support. On Monday, House Speaker Nancy Pelosi (D., Calif.) told Democrats during a caucuswide phone meeting that “beyond this week’s bill, we will need to look at a variety of options to keep people on their feet,” and she mentioned the legislative plan from Ms. Jayapal.
Senate passes $484 billion bill that would expand small-business aid, boost money for hospitals and testing - Washington Post - The Senate passed a $484 billion deal Tuesday to replenish a small-business loan program that’s been overrun by demand and to devote more money to hospitals and coronavirus testing. President Trump said he would sign it into law. The legislation, which came together over days of intense negotiation that followed a bitter partisan standoff, would increase funding for the Paycheck Protection Program by $310 billion. It would also boost a separate small-business emergency grant and loan program by $60 billion, and direct $75 billion to hospitals and $25 billion to a new coronavirus testing program.The House is expected to approve the measure Thursday.The Paycheck Protection Program was designed to help firms with fewer than 500 workers, but a number of larger companies found ways to obtain the funds in the past two weeks, leading to bipartisan outrage. Treasury Secretary Steven Mnuchin said Tuesday that larger firms would now be blocked from using the program, and Trump called on some big companies that had already obtained taxpayer-backed loans to return the money.The new legislation comes on top of a $2 trillion coronavirus rescue law that Congress passed late last month and increases the government commitment to fighting the pandemic to close to $3 trillion. That dwarfs by far any other federal intervention of its kind and underscores the depth of the economic blight befalling the nation and the scramble by policymakers to respond.Democratic lawmakers say it should be just the beginning. Speaking on the Senate floor shortly before the legislation passed by voice vote, Senate Minority Leader Charles E. Schumer (D-N.Y.) said lawmakers needed to quickly begin work on another piece of legislation that would match the size and scope of last month’s $2 trillion Cares Act. “I’d remind my colleagues this is an interim measure,” Schumer said. “There’s plenty of hard-won provisions that we Democrats are pleased with, but it’s ultimately a building block. In the weeks ahead Congress must prepare another major bill similar in size and ambition to the Cares Act. The next bill must be big and bold and suited to the needs of a beleaguered nation.”
Houses Passes New $484 Billion Coronavirus Stimulus Bill - After some initial delays, the House overwhelmingly passed and sent to President Trump a $484 billion coronavirus relief package, even as some members were already at odds over the next phase of rescue legislation. Once he receives the bill, Trump will swiftly sign off on the fourth coronavirus-related spending measure since early March. This bill would replenish funding to the Paycheck Protection Program for small businesses and provide other spending for hospitals and virus testing. The bipartisan 388-5 vote - four Republicans Massie, Hice, Buck and Biggs voted against it; one Democrat, Ocasio-Cortez voted no and independent Justin Amash voted present - was delivered by passed wearing masks and entering the House chamber under strict health precautions. Several members lamented people who’ve died from or are critically ill with the virus, including one lawmaker’s sister. "This is really a very, very sad day,” said Speaker Nancy Pelosi, giving a less-than-triumphant sendoff to the bill on a day when about 4.4 million additional workers were reported to have applied for unemployment benefits last week. “Our nation faces a deadly virus, a battered economy,” and hundreds of thousands of ill people. “Some died, and millions out of work," said Pelosi. When asked by CNN if Dems should have held out longer, AOC who voted against the bill, said "I truly hope I’m wrong, my concern is we are giving Republicans what they want. McConnell is already talking about the deficit the moment we talk about getting people relief... That to me is a signal that Republicans are done." According to Bloomberg, the House - which had not convened as a group since March 27 - also adopted a measure creating a special subcommittee to oversee the spending of coronavirus funds. The floor action was carried out with carefully choreographed movement and spacing of lawmakers to guard against spreading any infection. Groups of 60 members entered the chamber in alphabetical order to vote, then exited on the opposite side.While the bill was destined to pass, much of Thursday’s debate centered on GOP claims that Pelosi and Democrats needlessly delayed agreement on the bill, and Democratic arguments that Senate Republicans under Majority Leader Mitch McConnell refused for too long to add items that were needed, only to agree at the end.
Maher presses Pelosi on coronavirus spending: 'Funny money' may collapse economy into depression - HBO's Bill Maher pressed House Speaker Nancy Pelosi (D-Calif.) on trillions of federal spending on the coronavirus pandemic, with the "Real Time" host saying a "house of cards" will eventually collapse, resulting in a depression. The back-and-forth comes as President Trump signed off on a $484 billion package on Friday to replenish a small business lending program prompted by the pandemic. The package also provides $100 billion for hospitals and COVID-19 testing as some states slowly reopen their economies. "I know we can bail out certain sectors as we have done in the past, I don't know how you can keep indefinitely writing checks," Maher said to Pelosi in a remote interview. "We were 20 trillion in the hole to begin with, and all world governments who are already in debt are doing this. How can the whole world be writing this funny money? "I’m worried about the whole thing collapsing and we go into a Depression,” he later added. "Because it's a matter of life and death," Pelosi replied. "This is more an investment in the lives and the livelihood of the American people. “We have to think big about that," she continued. "The more we invest in science and health, the quicker our economy will recover from the pandemic. We expect a return on this money…that’s stimulus.” "Well, it will recover unless people get wise to the fact that we're just writing checks with money that doesn't exist," Maher retorted. "I mean, what is the point of bailing out banks that are just going to loan back the money that doesn't exist to us again? It seems like it's a house of cards that could, in the end, wind up hurting more people than the disease." Pelosi reiterated that she expected a return on the loans being given, defining them as a stimulus.
Treasury Toughens Guidance on Who Can Get Small-Business Funds - Companies seeking aid from the next round of small business relief will be required to attest to their needs for the loan and could be asked to prove it, as the Trump administration seeks to prevent larger firms with other funding options from crowding out mom-and-pop operations. Treasury Secretary Steven Mnuchin has said the fund is intended for small businesses, and new guidance from Treasury and the U.S. Small Business Administration released Thursday emphasizes that companies must “certify in good faith” the economic need for a loan under the Paycheck Protection Program, or PPP. The guidance was issued after small businesses complained that large, publicly traded companies and big chains such as Shake Shack Inc. were getting loans while they were shut out in the initial $349 billion in funding for loans. That money ran out in just 13 days and the U.S. House is expected to vote today on a relief bill for the program that includes an additional $320 billion, allowing for $10 billion in bank fees and processing costs. “It is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification,” the guidance says. Lenders may rely on a borrower’s certification, and borrowers that previously applied for a PPP loan and repay it in full by May 7 “will be deemed by SBA to have made the required certification in good faith,” according to the guidance. Restaurant chains Shake Shack and Sweetgreen Inc. returned their PPP loans. Mnuchin has encouraged other companies that “may have not been clear in understanding the certification” to do the same, and he’s also said companies that took funding and didn’t really need it could be “subject to investigation.” Republican Senator Marco Rubio of Florida tweeted on Monday that “any company that doesn’t need a PPP loan but got one made a false representation.” He also announced that the Senate Committee on Small Business and Entrepreneurship that he leads will conduct “aggressive oversight” of the program this fall, including subpoena power to determine whether companies made false certifications to obtain loans.
US Will Bar Hedge Funds, Private Equity Firms From Small Business Loan Program - The Treasury Department announced on Thursday that publicly traded companies such as Ruth's Chris Steak House must repay loans received this month from the Paycheck Protection Program (PPP) designed to help struggling small businesses survive the next 8 weeks of the coronavirus pandemic. According to the Wall Street Journal, around 150 public companies have tapped nearly $600 million in loans from the PPP. 'In updated guidance issued Thursday, the Treasury Department said it was “unlikely that a public company with substantial market value and access to capital markets” would be able to demonstrate that a government-backed loan was necessary for it to support its ongoing business. –WSJ Another public company, Shake Shack, Inc., was the largest recipient of funds despite their $1.7 billion market cap. Around two dozen of the public companies have more than 500 employees, while approximately 1/3 had over $100 million in annual revenue for their last fiscal year. Update (04/24/2020): The US will bar hedge funds from participating in the Paycheck Protection Program (PPP), along with private equity firms, as they are primarily engaged in investment speculation. According to Bloomberg, the Treasury, in consultation with the Small Business Administration (SBA), believes Congress did not intend on said industries obtaining loans under the program. The Treasury Department posted the new guidance on Friday.
Luxury Hotelier Who Backed Trump Wins Big in Small-Business Aid -- A Dallas hotel executive and major donor to President Donald Trump has emerged as the biggest winner from the coronavirus bailout for small businesses. A combined total of $59 million from the small business lending package went to three lodging companies chaired by Monty Bennett, according to regulatory filings. The money went to Braemar Hotels & Resorts, which owns luxury properties including the Ritz-Carlton in St. Thomas in the U.S. Virgin Islands, Ashford Hospitality Trust Inc., which owns more than 100 hotels around the country, and the firm that manages both. The PPP has come under fire after big restaurant chains like Potbelly Corp. and Ruth’s Chris Steak House got loans, while many mom-and-pop firms were left stranded when the initial $349 billion in funding for the program ran out of money last week. The House is expected to vote Thursday on a bill approving an additional $320 billion for the initiative. For more: Small Business Relief Funds Drained Fast With Many Shut Out The loans to Bennett’s companies underscore how large firms were able to take advantage of the small business program because of a loophole nestled in the bailout package that allowed companies with multiple locations to apply for loans that can convert to grants if they maintain employees and payrolls at certain levels. That provision was inserted after lobbyists for hotels and restaurants pleaded with lawmakers designing the program, especially Republican Senator Marco Rubio of Florida, for special consideration. The carveout allowed hotels and restaurants to apply for the funds regardless of how many workers they had, so long as each location employed fewer than 500. Bennett donated $150,000 in the last six months to a fundraising committee for Trump’s reelection campaign and for Republicans, according to Federal Election Commission records. He also gave to Trump in 2016, and has made donations to prominent allies such as House GOP leader Kevin McCarthy and Senator Lindsey Graham. Ashford said in a statement that PPP “is working exactly as intended by providing much needed capital to small businesses and larger businesses that have been the hardest hit -- hotels and restaurants” with fewer than 500 employees per location. Another Trump supporter and hotelier -- Gordon Sondland -- was also a beneficiary of the small-business relief package. Provenance Hotels, the hotel chain he founded, received a PPP loan, according to a spokeswoman. Sondland is the former ambassador to the EU who played a starring role in the Trump impeachment proceedings. The group has more than a dozen properties, including three in Washington state, which has been hard-hit by the virus. Ashford Hospitality said in a regulatory filing Tuesday that it expects to receive additional loans. The $30 million it received -- the most money disclosed by a public company yet-- was in 42 PPP loans to company affiliates that own hotels. Braemar, which also owns the Ritz-Carlton in Lake Tahoe, California, received $15.8 million in eight loans. Ashford Inc., which manages properties for Ashford and Braemar Hotels, got six loans totaling $12.8 million.
As US deaths exceed 40,000, Trump escalates reckless back-to-work campaign- On Sunday, the death toll from the COVID-19 pandemic crossed 40,000 in the United States, with nearly 20,000 deaths in the past week alone. The pandemic has exposed the complete dysfunctionality of American society and its incapacity to provide the most basic necessities—medical care, protective equipment and even food—to its citizens. The government did nothing to prepare for the pandemic, Trump downplayed the disease as a “hoax,” and the media ignored it for months. While thousands of heroic healthcare workers, forced to work in unsafe conditions, fell ill and died, banks and corporations received the largest bailouts in human history. Images of mass graves in New York City and of bodies piled up in refrigerated trailers and stuffed into spare rooms at Sinai Grace Hospital in Detroit will never leave the consciousness of the health care workers who witnessed them or the working class as a whole. All over the country, hundreds of thousands of people are grieving the loss of their friends and loved ones. With millions laid off, countless households are just days away from total penury, turning to overstretched food pantries. Despite Trump’s narrative that the pandemic has been contained, the disease is spreading to new parts of the country, with every state reporting at least one death, as the disease rampages through nursing homes and prisons. In the midst of this disaster, the Trump administration is single-mindedly focused on re-opening American businesses, despite the lack of measures necessary to contain the pandemic. The Trump administration’s overriding concern is to ensure that the pandemic does not interfere with the enrichment of Wall Street and the major corporations. The White House has made clear it is calling for businesses to reopen under conditions in which the infrastructure to test all suspected cases, quarantine those infected, and trace their contacts does not exist. This is despite the warning by the World Health Organization and leading epidemiologists that it is utterly irresponsible to reopen businesses under these conditions, which would only fuel a resurgence of the pandemic. Trump’s demand for a return to work has been supported by substantial sections of the media. On Sunday, NBC’s evening news program led not with the massive death toll, but with far-right protests, some with just dozens of participants, demanding the reopening of businesses. The media ignored the role of far-right groups in calling the demonstrations, occupying state capitols bearing assault rifles and flying Confederate flags and swastikas.
Why The Shutdown Must End - The shutdown of the American economy should end as soon as possible. We have reached the point where fear and panic have precluded logic and facts. The damage from our overreaction to the Covid-19 pandemic is likely to prove greater than the death toll from the disease itself. The virus is not containable, and our attempt to achieve the unachievable grows more costly every day. Covid-19 is not proving as deadly as first imagined. Last March 16, a group of researchers at Imperial College in London predicted 510,000 deaths in the UK and 2.2 million in the US. Within ten days, these early estimates were revised downward by more than an order of magnitude. As I write, the best estimate of ultimate deaths from Covid-19 in the US is about 60,000, the same as the 61,000 people who died from influenza during the winter of 2017-2018. Yet we continue to suffer from a shutdown whose imposition was justified by a fallacious model prediction.The spread of the coronavirus is both inevitable and necessary. It is necessary because, in the absence of a vaccine, the only way to counteract the disease is to build immunity in the population. A person who contracts the infection and recovers is immune. They can no longer become ill or spread the disease. Infection and recovery is the most effective vaccination possible. The whole idea behind shutdowns and quarantines is not to reduce cumulative mortality, but to “flatten the curve” so that our health care facilities are not overwhelmed. Individuals who need intensive care may be saved by this strategy but the net mortality reduction is likely to be small. Shutdowns and quarantines will prolong the course of the pandemic. When social distancing ends, as it must eventually, the disease will simply resume its inevitable course through the population. Flattening the curve does not reduce the area under the curve.Where did we get the idea that some businesses and occupations are “non-essential?” In a market economy, every job is essential. And every job is certainly essential to the person who depends on it for their livelihood. In the midst of a pandemic it’s sensible to ban mass gatherings of hundreds and thousands of people. But local governments are now imposing restrictions that make little sense. Parks and golf courses have been closed. The imposition of evening curfews is baffling. Every government official with totalitarian instincts now has the moral justification to impose arbitrary and senseless curtailments on freedom of movement and association.
Here Are The Key Dates As The World Reopens From The Coronavirus Coma --On April 16, the Trump administration released guidelines for reopening of the US. The Administration has suggested that Governors base their plans on criteria consisting of three aspects:
- a downward trend in documented cases over 14 days, or a downward trend in testing positivity rates over 14 days while
- maintaining the testing volume;
- a downward trend in symptoms-based reporting systems, including ILI and COVID-like syndromes, for 14 days;and
- enough capacity in hospitals and testing
Of course, as we previously documented, some states - and countries - are eager to restore some semblance of normalcy starting with Georgia, which hopes to reopen its economy starting today. Below, courtesy of BofA is a tentative calendar of the most notable publicly announced reopening events in the coming month. The above table is a more detailed version of a timeline that was previously presented (and recently updated) from Deutsche Bank: As Deutsche Bank's Jim Reid previously detailed in his report “The Exit Strategy”, there is a specific step-by-step process of how reopening may work. Since then, announcements by several countries indicate they are planning for this style of gradual reopening. Spain has begun to allow construction and manufacturing staff back to work, and several countries have outlined plans to reopen schools and small stores as part of the first step. It is likely that only once countries have reopened themselves domestically will they reopen their borders. As countries begin to reopen, a key consideration is how to deal with the second wave of the virus that is likely from increased activity. This is being weighed up against the increasing awareness of the health problems associated with isolation and lockdown itself. Given various countries announcing different measures, a certain level of coordination is optimal. Hence why the EU is expected to present a continent-wide blueprint for lifting restrictions next week and is urging countries to coordinate their exit plans. Closely watched will be any recommendations for lifting the border restrictions on travellers from outside the Schengen area. The WHO this week released its six-step guide to assessing the criteria for reopening. In order to more fully reopen, many countries have pointed out that ‘test and trace’ capacity must be improved and widely implemented. Whilst testing capacity will be ramped up shortly, the ‘trace’ component could see the biggest change as people adopt new technology.
Fauci- No Recovery Possible If Virus Isn't Under Control - President Trump's top doctor on the White House coronavirus task force has pushed back against protesters demonstrating against stay-at-home orders, warning that the US economy won't recover until COVID-19 is "under control." "This is something that is hurting from the standpoint of economics," Fauci acknowledged during an appearance on ABC's "Good Morning America," in comments which sharply contrast with those by President Trump, who has encouraged the protests, Bloomberg reports. "Unless we get the virus under control, the real recovery economically is not going to happen," Fauci added. "So what you do if you jump the gun and go into a situation where you have a big spike, you’re going to set yourself back."“Clearly this is something that this is hurting …. but unless we get the virus under control, the real recovery, economically, is not going to happen.” — NIAID director Dr. Anthony Fauci on protests against stay-at-home orders. pic.twitter.com/n7x3cunEAm— Good Morning America (@GMA) April 20, 2020Fauci added that while it can be "painful" to follow federal guidelines regarding a phased re-opening, it will "backfire" if done too soon.Protests have erupted in Michigan, Minnesota, Texas and other states demanding that governors lift strict social distancing policies that have battered the U.S. economy. Some demonstrators have called for Fauci’s firing.Trump has encouraged the protests, tweeting that protesters should “liberate” Michigan, Minnesota and Virginia. The president said Sunday he watched footage of the crowded protests, called them “orderly” and said people “were all six feet apart.” –Bloomberg According to Trump, people on both sides - including state governors, have gone "too far." "Some of the things that happened are maybe not so appropriate," he said.
Former FDA Commissioner Warns Waiting For "Optimal" Testing Capacity Before Reopening Simply "Not Possible" - Eight days after oil was found in Prince William Sound in Valdez, a citizen oversight group says the initial response to the spill has been positive. "Any amount of oil hitting the water is a big deal. You can never clean up all of the oil once it's been spilled, so we won't know the full impacts of this until it's over with and we can fully determine how much was spilled, how the process went confining and cleaning up, and do more long term monitoring for any lingering oil or impacts," said Brooke Taylor, director of communications for Prince William Sound Regional Citizens Advisory Council. "To date, what we've seen is unified command, and specifically Alyeska as a responsible party, being very prompt and proactive with their response to this. We've seen they put together a great team to really respond to this. We've been very pleased with how well their containment and clean up so far has seemed to go." PWSRCAC was created in the wake up of the Exxon Valdez oil spill to provide a voice for communities impacted by the Alyeska terminal and associated tankers. In addition to long-term environmental monitoring and spill prevention planning, the group monitors spill response training, including training that prepares captains operating fishing vessels to act as first responders to a spill. "They have called out a number of fishing vessels in this response to help setup boom, to help with containment, sensitive area protections," Taylor said. "It’s one of the reasons that this contracted model is something that we’re big advocates for, because it means these people have been trained ahead of time, they know how to use the gear, they are ready to act. And in particular in light of whats happening with COVID-19 right now, it also means that there’s that much less direct interaction that Alyeska staff have to have with these operators because they’ve already been trained." As of Monday afternoon, the unified command for the incident says 798 barrels of water and oil mixture have been recovered. Further analysis shows that the amount of oil recovered from the water so far is approximately 12 barrels, or 511 gallons. An additional 30 gallons has been recovered from land. The area has been boomed since April 12 and the boom has contained the spill.
Trump Says Coronavirus ‘Might Not Come Back at All’ in Fall -- President Donald Trump expressed confidence that the coronavirus won’t hit the U.S. with the same intensity if it returns in the fall, suggesting the deadly disease “might not come back at all.” Trump’s assertion Wednesday at a White House briefing is at odds with medical experts who say the virus could pose a threat to the U.S. for months and years to come. He made the comment after accusing the Washington Post of mischaracterizing a warning to that effect from Robert Redfield, director of the Centers for Disease Control and Prevention. “We’re going to be watching for it. But it’s also possible it doesn’t come back at all,” Trump said. If Covid-19 does return, it “won’t be coming back in the form that it was” but in “smaller doses we can contain.” Asked how he could be certain, Trump said, “I didn’t say it’s not. I said if it does, it’s not going to come back on anything near what we went through.” “If it should come back in some form, we want to snuff it out very quickly before anything can happen,” the president later added. Public-health experts believe the virus, which has infected more than 846,000 people in the U.S., is likely seasonal. They have warned that a return to full normalcy could take months or years without a vaccine. But officials on the White House coronavirus task force have said the country will be better equipped to address a second outbreak, thanks in part to the development of treatments and surveillance efforts. “We will have coronavirus in the fall. I am convinced of that because of the degree of transmissibility that it has,” said Anthony Fauci, the task force’s top infectious disease expert. “What happens with that will depend on how we’re able to contain it when it occurs.” Other countries like South Korea have also said they expect another wave in the fall. A senior health ministry official in the Asian nation that’s successfully curbed its outbreak said Thursday there is a high chance of rapid spread again in the fall and winter with no vaccine available.
Democrats blast Trump team’s handling of federal workers in coronavirus crisis - As President Donald Trump tries to reopen the country after more than a month of lockdown, Democrats say the government’s top human resources office is stonewalling their efforts to understand how and when the federal government itself will return to normal. Specifically, the Office of Personnel Management is refusing to brief Capitol Hill on the status of the agency and federal employees’ teleworking arrangements, Democrats say. “Congressional oversight isn’t an optional exercise to be left up to the Trump administration,” said Rep. Gerry Connolly (D-Va.), chairman of the government operations subcommittee of the House Oversight and Reform Committee. “Our committee has serious questions about OPM’s decision-making related to Covid-19, including unclear telework guidance; a lack of actions taken to protect federal employees; and now we learn, guidance or standards to reopen government that abdicate any leadership responsibility. This lack of accountability from OPM will not be tolerated.” OPM is essentially the federal government’s HR department: It guides the 2-million-strong federal workforce, which makes up a disproportionately large percentage of employees across the Washington, D.C. area. And decisions about how to deploy federal workers are more firmly in the control of the president -- who is eager to get the U.S. economy humming again -- than are those of America’s governors and mayors. The requests for updates have come from a number of congressional committees, including Connolly’s subcommittee and the Senate Homeland Security and Governmental Affairs Committee. But in the last three weeks, Jonathan Blyth, the head of OPM’s congressional affairs shop and the former chief of staff at the agency, has twice declined the requests, citing “a very dynamic situation with our response to covid19.” “It has always been difficult to get information from this administration, but the refusal to provide Congress with a basic briefing during a pandemic is especially egregious,” said a Democratic Senate aide. “We’ve never been denied a briefing like this before.”
Health Chief’s Early Missteps Set Back Coronavirus Response – WSJ —On Jan. 29, Health and Human Services Secretary Alex Azar told President Trump the coronavirus epidemic was under control. The U.S. government had never mounted a better interagency response to a crisis, Mr. Azar told the president in a meeting held eight days after the U.S. announced its first case, according to administration officials. At the time, the administration’s focus was on containing the virus. When other officials asked about diagnostic testing, Dr. Robert Redfield, director of the Centers for Disease Control and Prevention, began to answer. Mr. Azar cut him off, telling the president it was “the fastest we’ve ever created a test,” the officials recalled, and that more than one million tests would be available within weeks. That didn’t happen. The CDC began shipping tests the following week, only to discover a flaw that forced it to recall the test from state public-health laboratories. When White House advisers later in February criticized Mr. Azar for the delays caused by the recall, he lashed out at Dr. Redfield, accusing the CDC director of misleading him on the timing of a fix. “Did you lie to me?” one of the officials recalled him yelling. Six weeks after that Jan. 29 meeting, the federal government declared a national emergency and issued guidelines that effectively closed down the country. Mr. Azar, who had been at the center of the decision-making from the outset, was eventually sidelined. Many factors muddled the administration’s early response to the coronavirus as officials debated the severity of the threat, including comments from Mr. Trump that minimized the risk. But interviews with more than two dozen administration officials and others involved in the government’s coronavirus effort show that Mr. Azar waited for weeks to brief the president on the threat, oversold his agency’s progress in the early days and didn’t coordinate effectively across the health-care divisions under his purview. The ramp-up of the nation’s diagnostic testing for the disease caused by coronavirus, which many health experts regard as critical for limiting new infections and safely reopening the economy, has been slower than promised and hampered by obstacles. As of Wednesday, more than four million government and private-lab tests had been administered. The president now says states bear the primary responsibility for testing, and that the federal government plays only a supporting role.
Special Report: Former Labradoodle breeder tapped to lead U.S. pandemic task force - (Reuters) - On January 21, the day the first U.S. case of coronavirus was reported, the secretary of the Department of Health and Human Services appeared on Fox News to report the latest on the disease as it ravaged China. Alex Azar, a 52-year-old lawyer and former drug industry executive, assured Americans the U.S. government was prepared. “We developed a diagnostic test at the CDC, so we can confirm if somebody has this,” Azar said. “We will be spreading that diagnostic around the country so that we are able to do rapid testing on site.” While coronavirus in Wuhan, China, was “potentially serious,” Azar assured viewers in America, it “was one for which we have a playbook.” Azar’s initial comments misfired on two fronts. Like many U.S. officials, from President Donald Trump on down, he underestimated the pandemic’s severity. He also overestimated his agency’s preparedness. As is now widely known, two agencies Azar oversaw as HHS secretary, the Centers for Disease Control and Prevention and the Food and Drug Administration, wouldn’t come up with viable tests for five and half weeks, even as other countries and the World Health Organization had already prepared their own. Shortly after his televised comments, Azar tapped a trusted aide with minimal public health experience to lead the agency’s day-to-day response to COVID-19. The aide, Brian Harrison, had joined the department after running a dog-breeding business for six years. Five sources say some officials in the White House derisively called him “the dog breeder.” Azar’s optimistic public pronouncement and choice of an inexperienced manager are emblematic of his agency’s oft-troubled response to the crisis. His HHS is a behemoth department, overseeing almost every federal public health agency in the country, with a $1.3 trillion budget that exceeds the gross national product of most countries. Azar and his top deputies oversaw health agencies that were slow to alert the public to the magnitude of the crisis, to produce a test to tell patients if they were sick, and to provide protective masks to hospitals even as physicians pleaded for them. The first test created by the CDC, meant to be used by other labs, was plagued by a glitch that rendered it useless and wasn’t fixed for weeks. It wasn’t until March that tests by other labs went into production. The lack of tests “limited hospitals’ ability to monitor the health of patients and staff,” the HHS Inspector General said in a report this month. The equipment shortage “put staff and patients at risk.”
How overly optimistic modeling distorted Trump team’s coronavirus response - As coronavirus cases climbed daily by the thousands and the nation entered its second month of an economic standstill, President Donald Trump latched onto a sign of hope: A pandemic model closely followed by political leaders and public health specialists projected the virus would kill as few as 60,000 Americans, a figure far below what officials previously feared.The new April forecast signaled the worst would soon be over, with some states effectively ending their bout with coronavirus as early as the end of the month. According to the model’s bell-shaped curves, hospitalizations and deaths nationwide were set to drop off nearly as quickly as they rose. Trump swiftly adopted the projection from the University of Washington’s Institute for Health Metrics and Evaluation as his newest measure of success — while top administration health officials including infectious disease expert Anthony Fauci and coronavirus response coordinator Deborah Birx touted the lower figure as a clear indication the U.S. was winning its fight with the disease.“It looks like we’ll be at about a 60,000 mark, which is 40,000 less than the lowest number thought of,” Trump said during a news briefing on Sunday, April 19, adding the next day that “the low number was supposed to be 100,000 people. We could end up at 50 to 60.” That’s not going to happen. More than 50,000 Americans are dead from the coronavirus already, following several days during which the nation’s death toll routinely topped 2,000. The U.S. is now expected to blow past the 60,000 mark around the beginning of May, earlier than the IHME model had projected and with less of the dramatic leveling-off that its forecast had initially baked in.
Poll finds Americans rate Trump negatively on coronavirus response and praise governors. - The Washington Post - Most Americans expect no immediate easing of the health risks associated with the coronavirus pandemic, despite calls by President Trump and others to begin reopening the economy quickly. A majority say it could be June or later before it will be safe for larger gatherings to take place again, according to aWashington Post-University of Maryland poll.Most Americans — 54 percent — give the president negative marks for his handling of the outbreak in this country and offer mixed reviews for the federal government as a whole. By contrast, 72 percent of Americans give positive ratings to the governors of their states for the way they have dealt with the crisis, with workers also rating their employers positively.Partisan allegiances shape perceptions of when it will be safe to have gatherings of 10 or more people and of the president’s performance during the pandemic. But governors win praise across the political spectrum for their leadership, which has sometimes put them sharply at odds with Trump and his administration. Personal health concerns are widespread, with 57 percent saying they are “very” or “somewhat” worried about becoming infected and seriously ill from the coronavirus, including at least 40 percent of people in every major demographic and political group. For those most concerned — particularly Republicans — the fear is enough to override partisanship when it comes to the safety of public gatherings. Disruptions caused by the coronavirus outbreak continue to ripple through households across the nation, with businesses and schools closed and most Americans being urged to stay at home. About 7 in 10 adults, and more women than men, say the pandemic has been a source of stress in their lives. Half of all adults say the crisis has produced financial hardship for themselves or members of their family.
How the Obama administration ignored the pandemic threat - With deaths from the coronavirus pandemic surpassing 41,000 in the US, apologists for the capitalist system have sought to pin the anarchic and criminally inadequate response of the government and health care system on the singular sociopathic figure of President Donald Trump. The Trump’s administration handling of the preventable pandemic has been reprehensible, but a review of the record of the Obama-Biden administration in dealing with deadly viruses such as H1N1, Ebola and Zika makes clear that the political responsibility for the death and suffering growing by leaps and bounds today is shared by both big business parties. In a recent Politico article, health officials from the previous two administrations, those of Obama and George W. Bush, detailed the reluctance of the government to sufficiently prepare for and develop the necessary infrastructure to combat the viruses and potential pandemics present in a modern globalized society. Upon assuming the presidency in 2001, Bush blazed a trail that Obama and Trump would follow by abolishing the White House Health and Security Office previously established by Bill Clinton. Following the events of September 11, 2001, however, the Bush administration reversed course. Through the newly created Department of Homeland Security (DHS), it established a new Office of Public Health and Emergency Preparedness, whose main purpose was to create biosecurity plans in the event of a terrorist attack. Vice President Dick Cheney advocated a vast expansion of the DHS, including a nationwide smallpox vaccination program to protect against a biological terrorist attack. This was resisted by top health officials, including Dr. Anthony Fauci, and Cheney’s plan for mandatory smallpox vaccination was eventually discarded. Even though the flu claimed over 62,000 Americans in 2001, it wasn’t until 2005 that Bush administration officials, including Health and Human Services Secretary Mike Leavitt and his deputy, lawyer Alex Azar, were tasked by the White House with implementing a “pandemic flu plan.”
Trump suggests using light, heat as coronavirus treatment -President Trump on Thursday suggested medical experts should study exposing the human body to heat and light as a treatment for the coronavirus during Thursday's White House briefing by the president's task force on the virus. Trump's remarks followed a presentation from William Bryan, undersecretary for science and technology at the Department of Homeland Security. Bryan presented the results of a study that showed the virus deteriorates more quickly when subjected to higher temperatures and humidity — a finding that quickly drew skepticism from other experts on social media and cable television given outbreaks in a number of places with warm climates, such as Singapore and Brazil. Bryan presented data that found how long the virus can live on solid surfaces or in the air was cut significantly under high temperatures, higher humidity and when exposed to sunlight. He said his office was also studying how certain disinfectants might kill the virus more effectively than others, referencing isopropyl alcohol and bleach. Trump latched onto the findings, inquiring multiple times about harnessing the light and heat as part of a potential cure. "So, supposing we hit the body with a tremendous — whether it's ultraviolet or just very powerful light — and I think you said that hasn't been checked but you're going to test it," Trump said. "And then I said, supposing you brought the light inside of the body, which you can do either through the skin or in some other way. And I think you said you’re going to test that too. Sounds interesting." Trump also asked if there was a way to use disinfectants on the body "by injection inside or almost a cleaning."
Lysol maker issues warning against injections of disinfectant after Trump comments -Lysol manufacturer Reckitt Benckiser on Friday issued a warning that “under no circumstance” should its products be administered into the human body or be used as a treatment for the coronavirus, a day after President Trump discussed whether disinfectants could be used to treat the disease. The company, which also sells Dettol in the United Kingdom, shared in a statement on its website that “due to recent speculation and social media activity,” they had “been asked whether internal administration of disinfectants may be appropriate for investigation or use as a treatment for coronavirus.” “As a global leader in health and hygiene products, we must be clear that under no circumstance should our disinfectant products be administered into the human body (through injection, ingestion or any other route). As with all products, our disinfectant and hygiene products should only be used as intended and in line with usage guidelines. Please read the label and safety information,” the company shared Friday. Trump on Thursday during a White House briefing suggested medical experts should study exposing the human body to heat and light as a treatment for coronavirus. He also asked if there was a way to inject disinfectant. “And then I see the disinfectant, where it knocks it out in a minute. One minute. And is there a way we can do something like that, by injection inside or almost a cleaning. Because you see it gets in the lungs and it does a tremendous number on the lungs. So it would be interesting to check that. So, that, you’re going to have to use medical doctors with,” Trump said during the briefing. “But the whole concept of the light, the way it kills it in one minute, that's — that's pretty powerful,” he continued.
Trump remarks on injecting disinfectants draw blowback from doctors - President Trump’s suggestion that people could inject disinfectants as a way to treat coronavirus is drawing strong criticism from doctors who warn the remarks from the White House could endanger the public.“I think we need to speak very clearly that there's no circumstance under which you should take a disinfectant or inject a disinfectant for the treatment of anything, and certainly not for the treatment of coronavirus,” Scott Gottlieb, Trump’s former FDA Commissioner, said on CNBC when asked about the president’s comments.“There's absolutely no circumstance under which that’s appropriate and it can cause death and very adverse outcomes.”In an unusual statement, the company that makes Lysol also warned against ingesting its products on Friday. “We must be clear that under no circumstance should our disinfectant products be administered into the human body (through injection, ingestion or any other route),” said the company, Reckitt Benckiser, saying it was responding to “recent speculation and social media activity.”The comment that set off the reaction came at Trump’s press briefing on Thursday. After a presentation from a Department of Homeland Security official about the effects of disinfectants and sunlight on the virus, Trump mused that the same techniques could be used as treatments inside the body. “I see the disinfectant, where it knocks it out in a minute,” Trump said. “One minute. And is there a way we can do something like that, by injection inside or almost a cleaning?”
Lawsuit filed against Trump over stimulus checks denied to those married to immigrants - The Trump administration is facing a lawsuit filed Friday over a provision in the $2.2 trillion coronavirus relief package that denies stimulus checks to more than 1 million U.S. citizens married to undocumented immigrants. The plaintiff is a man under the pseudonym John Doe who claims the administration is discriminating against him “based solely on whom he chose to marry.” The lawsuit, filed in a federal court in Chicago, cites a Migration Policy Institute report that estimates 1.2 million unauthorized immigrants in the country are married to U.S. citizens. The bill distributes stimulus checks through the Internal Revenue Service (IRS). Most people who have filed taxes in the U.S. and have a Social Security Number is eligible to receive a stimulus check. However, in order to qualify under a provision implemented by the Trump administration, both spouses in families that file joint tax returns must have Social Security numbers, unless one of them is a member of the military. John Doe, who is a U.S. citizen, claims that his wife pays taxes with a Taxpayer Identification Number, which is issued by the IRS. The litigants claim that Trump, Treasury Secretary Steven Mnuchin and Senate Majority Leader Mitch McConnell (R-Ky.) did not treat John Doe “as equal to his fellow United States citizens,”
Trump claims he will temporarily suspend immigration over coronavirus fears - Trump administration officials on Tuesday morning scrambled to finalize an executive order after President Donald Trump said in a late-night tweet he would temporarily suspend immigration to the United States as the nation battles the health and economic effects of thecoronavirus pandemic. "In light of the attack from the Invisible Enemy, as well as the need to protect the jobs of our GREAT American Citizens, I will be signing an Executive Order to temporarily suspend immigration into the United States!" he tweeted. Officials were still working to draft the executive order, according to an administration official, but hope to have it completed in the next few days for Trump to sign. While the language is still being finalized, the order is expected to temporarily halt the issuance of new green cards and work visas -- steps that had already effectively already been in place amid the coronavirus pandemic. A second administration official told CNN the executive order will be a "temporary 120 days or so" halt on "some" work visas to mitigate some of the unemployment concerns related to the pandemic. Other aspects of the order remain unclear inside the administration, including what legal authorities the President will rely upon in the order and what other elements of immigration -- including family immigration and potential exemptions -- might be included.The order is expected to include some exemptions for farm workers and health care providers, according to the official, but could also exempt some other workers deemed "essential." Meanwhile, as Trump is looking to close the border, he is encouraging protests against stay-at-home orders and has issued a call for the states to phase-in reopenings beginning May 1. In a statement on Tuesday, White House press secretary Kayleigh McEnany did not provide additional details or timing for the executive order, nor did she mention any health benefits to the ban. Instead, she emphasized employment implications of the planned immigration pause."President Trump is committed to protecting the health and economic well-being of American citizens as we face unprecedented times," she wrote. "As President Trump has said, 'Decades of record immigration have produced lower wages and higher unemployment for our citizens, especially for African American and Latino workers.' At a time when Americans are looking to get back to work, action is necessary."
Trump administration working out details of suspending immigration during coronavirus crisis, plans to close off the United States to a new extreme - The Washington Post -- Attorneys and senior Trump administration officials are meeting Tuesday to work out the logistics and legal implications of the president’s order to freeze the U.S. immigration system in response to the coronavirus pandemic, according to senior officials involved with the plans. Trump decreed via tweet late Monday that he intends to sign an executive order suspending immigration to the United States, but the president appears to have again publicly declared a U.S. policy that was not yet ready for implementation, leaving his aides rushing to deliver on his pronouncement.The order is currently with the Justice Department's Office of Legal Counsel for a review, as that office reviews all executive orders, a Justice Department spokeswoman said. It is unclear if the office's legal opinion on the matter would be released publicly, as some are.The president has broad authority to restrict entry into the United States — a point the U.S. Supreme Court affirmed in upholding his controversial travel ban in 2018 — and that power is perhaps no greater than during a public health emergency.Trump announced his intentions with a tweet at 10:06 p.m. Monday night, and he said the move to suspend immigration is needed to safeguard American jobs and defend the country from the pandemic, calling coronavirus “the Invisible Enemy.”“In light of the attack from the Invisible Enemy, as well as the need to protect the jobs of our GREAT American Citizens, I will be signing an Executive Order to temporarily suspend immigration into the United States!,” the president wrote. Trump, who is running for reelection on his immigration record and his effort to build a wall on the Mexico border, has long been frustrated with the limits on his ability to seal off the United States by decree. An executive order suspending all immigration to the country would take the president’s impulses to an untested extreme.
Trump to Bar Immigration for Family of U.S. Citizens, Foreign Workers for 60 Days – WSJ —President Trump said Tuesday that his administration would temporarily bar new immigrants, including some family members of U.S. citizens and foreign workers looking to move to the U.S., in the next 60 days under a new executive order. Mr. Trump said the immigration suspension, which he announced in a tweet Monday night but hasn’t formally signed, is designed to reduce immigration at a time when tens of millions of Americans have lost jobs as a result of the coronavirus crisis. “We must first take care of the American worker,” Mr. Trump said, adding that suspending immigration would also help “conserve vital medical resources for American citizens.” The executive order wouldn’t impact immigrants already living in the U.S. or foreigners coming on temporary visas for work or travel. That category includes H-1B visas, which allow more than 85,000 high-skilled foreigners to come to the U.S. for at least three years to work. It also includes seasonal migrant workers who come to the U.S. annually to work on farms, where they make up about one-tenth of the agricultural workforce, and at other businesses such as resorts or county fairs. The executive order is less restrictive than advocates on both sides of the immigration debate had earlier expected, and doesn’t impact most employment-based immigration, the order’s stated purpose. About 90% of employment-based green cards go to people already living in the U.S., on temporary visas that the order doesn’t touch. “It’s a PR stunt more than anything else,” said Mark Krikorian, president of the Center for Immigration Studies, a nonprofit that advocates eliminating most temporary work-based visas, which the organization believes undercut American workers. Mr. Trump said Tuesday that the order was still being written and would include certain exemptions but that he would detail them Wednesday. Mr. Trump tweeted Wednesday morning that he would sign the order later in the day. The president said he is weighing a second, more restrictive executive order on immigration but declined to offer additional details or say when he might sign it. He said migrant farmworkers wouldn’t be affected. The scope of a temporary immigration moratorium was the subject of debate inside the Trump administration Tuesday, according people familiar with the matter. They said the disagreement centered on whether to curb access to employment-based visas, which immigration hard-liners including senior adviser Stephen Miller and DHS officials have said are used to undercut American workers.
Coronavirus Border Expulsions: CDC’s Assault on Asylum Seekers and Unaccompanied Minors On March 20, the Centers for Disease Control (“CDC”) issued a largely unnoticed but sweeping order authorizing the summary expulsion of noncitizens arriving at the border without valid documents. The Order operates wholly outside the normal immigration removal process and provides no opportunity for hearings or assertion of asylum claims. It deploys a medical quarantine authorization to override the protections of the immigration and refugee laws through the use of an unreviewable Border Patrol health “expulsion” mechanism unrelated to any finding of disease or contagion. The CDC Order is based on an emergency Department of Health and Human Services (HHS) Interim Final Rule issued simultaneously with the Order under the authority of an obscure provision of the 1944 Public Health Service Act. Section 362 of that Act authorizes the Surgeon General to suspend “introduction of persons or goods” into the United States on public health grounds. Based on an unprecedented interpretation of the 1944 Act, the CDC regulation invokes the COVID-19 pandemic to redefine what constitutes “introduction of persons” and “introduction of communicable diseases” into the United States. It establishes a summary immigration expulsion process that ignores the statutory regime governing border arrivals and disregards the protections and procedures mandated by the 1980 Refugee Act and Refugee Convention as well as the special safeguards for unaccompanied minors under the Trafficking Victims Protection Reauthorization Act (“TVPRA”). The CDC Order “suspending introduction of certain persons” applies to land travel from two countries, Mexico and Canada, and only to those noncitizens defined as “covered aliens.” That definition is unrelated to infection or disease. It includes only those who arrive by land without valid travel documents and immediately “suspends” their “introduction” for a renewable period of 30 days. In actuality the Order singles out those who seek asylum – and children – to order them removed to the country from which they entered or their home country “as rapidly as possible.” A recently leaked Customs and Border Protection directive makes clear that expulsion is the goal and that no process is provided. The Order’s stated rationale is the risk alleged from “covered aliens” being crowded in “congregate settings.” The apparent justification for bypassing all legal protections and procedures is the CBP’s assertion that Border Patrol officers are “not operating pursuant to” their authority under the immigration laws. This shadow immigration expulsion regime is not part of some coherent public health or safety plan to seal our borders or to diminish the risk of COVID-19’s introduction into the U.S. A web of other proclamations and restrictions leave open many avenues for other travelers to enter the United States.
US farm relief program hands billions to agribusiness while millions lack food - The United States Department of Agriculture (USDA) announced plans on Friday, April 17, for a farm relief program. Funded largely through the CARES Act, the $19 billion package will be used to funnel funds to corporate farms while providing little assistance for the vast majority of small or working farmers.Like other government programs to help farmers, most of this money will end up in the hands of agribusiness. The majority of farmland is owned by farms grossing over $500,000 in sales, a figure that demonstrates the demise of the American family farm. In total, $16 billion will be handed directly to farmers, of which $9.6 billion goes to the livestock industry. This funding will be given largely as reimbursements for “losses” and will not be contingent upon providing food to those in need.The remaining $3 billion will be used to purchase $100 million each of produce, meat and dairy that will be distributed to food banks, nonprofits and community and faith organizations every month. This is a paltry sum, amounting to just 27 cents a day for every food insecure person, a figure that will only decline as America’s now 22 million unemployed seek assistance.It will also provide funds to distribute 1,000,000 meals a week to children in “a limited number of rural schools.” How this would actually be done given the wide dispersion of such students, many of whom rode buses for an hour or more to reach their schools, is unclear.This bailout is intended to offset financial losses from the collapse of distribution systems during the pandemic. While grocery stores are having difficulty keeping their shelves stocked, much of the food in the pipeline is packaged in bulk quantities for institutional buyers such as restaurants and schools. The closure of restaurants, schools and other institutional buyers has resulted in farmers destroying millions of pounds of food as their distribution chains are disrupted. This is not because there is no demand, but because transitioning to retail packaging is too costly. It is cheaper to destroy food than to repackage it and send it elsewhere. This mass destruction of crops and dairy products comes at a time when millions of Americans have lost their jobs and are now turning to food banks to feed their families. Some food banks are reporting an increase in demand as high as 300 percent. Lines of cars in the thousands have been reported queuing up at food banks across the country.
Social Security Costs Expected to Exceed Total Income in 2021 - WSJ —The coronavirus pandemic is expected to weigh on the financial condition of Social Security, which is currently projected to pay benefits that exceed its income in 2021 for the first time in nearly 40 years. Trustees for Social Security and Medicare in an annual report said the latest estimate for when benefits would exceed income is one year later than previously projected. But the projections don’t account for the potential effects of the coronavirus pandemic, which could substantially boost costs and accelerate the depletion of the trust funds. The trustees said the uncertainty over the virus’s impact made it impossible to adjust estimates accurately. “The actual status of the program in the near term is almost certainly somewhat less favorable than is presented in this year’s trustees’ report,” a senior administration official said of Social Security. “It’s clear that employment, earned income and payroll-tax revenue will be significantly affected, and lower for at least a portion of 2020 than estimated for the report. Additional claims for retirement, disability and survivors’ benefits might increase costs.” In their annual report, the trustees said they expect Social Security’s reserves to be depleted by 2035, which would require an automatic reduction in benefits unless Congress steps in to shore up the program. That projection remained the same from last year’s estimate, though officials said the depletion date could be earlier than projected if employment levels suffer a significant or sustained drop from the pandemic.
Trump mulls tying USPS changes to emergency coronavirus loan: report - The Trump administration is considering tying changes to the U.S. Postal Service to the emergency coronavirus loan from Congress, according to The Washington Post. Treasury Department officials told the Post they are speaking with senior officials at the USPS about using the $18 billion loan allocated to the Postal Service by Congress as leverage to influence the way the agency charges for package delivery. Treasury Secretary Steven Mnuchin is also reportedly seeking to influence the hiring process for senior officials at USPS. Trump has often said that the way the Postal Service is run benefits companies like Amazon. The administration would like USPS to increase how much it charges for package deliveries in general and double what it charges Amazon. Congress issued $10 billion in loans to USPS in the $2.2 trillion stimulus bill passed last month. Mnuchin rejected a bipartisan Senate proposal to give the Postal Service a bailout in early negotiations, according to the Post. UPS and FedEx told the Post they are in favor of USPS maintaining flexibility, but would welcome accountability from the agency. The Postal Service is projecting a $13 billion shortfall due to the pandemic while employees remain classified as essential. According to the American Postal Workers Union, 1,219 workers of the Postal Service’s 630,000-person workforce have tested positive for the coronavirus and 44 workers have died.
New evidence surfaces in Tara Reade allegation against Biden - A 1993 video has surfaced that appears to show the mother of Tara Reade, the former aide to Joe Biden who has accused him of sexual assault, talking about "problems" her daughter faced on CNN’s "Larry King Live." As first reported by the Intercept, an unnamed woman from San Luis Obispo, California, called into King's show and said, "I’m wondering what a staffer would do besides go to the press in Washington? My daughter has just left there, after working for a prominent senator, and could not get through with her problems at all, and the only thing she could have done was go to the press, and she chose not to do it out of respect for him." King asked the woman, “She had a story to tell but, out of respect for the person she worked for, she didn’t tell it?" The caller replied, "That's true." In March, Reade accused Biden of digitally penetrating her in 1993 without her consent. Last year, she told reporters that Biden inappropriately touched her at the time, including on her neck and shoulder, but did not talk about an alleged assault. Before the King video was discovered, Reade told media outlets, including POLITICO, that her mother had called into his show. She did not remember the date of the show at the time. "She called him, I think, 'a prominent senator,'" Reade said in an interview last month. “She didn’t get into the assault, she got into the harassment. She said my daughter was sexually harassed by a very prominent senator, and then they retaliated and fired her.” According to a transcript of the show and a video clip, the caller does not reference sexual harassment or firing. She does, however, talk about an unnamed “prominent senator.”
Facebook Bans Civil Disobedience, Removes Posts Organizing Anti-Lockdown Protests - Facebook has removed several pages promoting protests against state quarantine orders designed to slow the spread of coronavirus.The social media giant acknowledged removing the posts promoting protests in California, New Jersey and Nebraska which violated measures taken by governors to slow the spread of COVID-19.Facebook has been the main main hub for the coordination and promotion of these events, bringing together anti-government and conspiracy-minded fringe activists, including militia groups, religious fundamentalists and anti-vaccination proponents, with the common cause of ending state and federal efforts to restrict freedom of movement to halt the coronavirus’ spread. -NBC News"Unless government prohibits the event during this time, we allow it to be organized on Facebook," said Facebook. "For this same reason, events that defy government's guidance on social distancing aren’t allowed on Facebook," said Facebook spokesman Andy Stone in a statement to the Washington Post.Says it is working to get answers from New York, Wisconsin, Ohio, and Pennsylvania as to whether anti-quarantine protests breaks those states' social distancing measures.— Donie O'Sullivan (@donie) April 20, 2020 "We do classify that as harmful misinformation and we take that down," said Facebook CEO Mark Zuckerberg on Monday during an appearance on ABC, adding "At the same time, it’s important that people can debate policies so there’s a line on this, you know, more than normal political discourse. I think a lot of the stuff that people are saying that is false around a health emergency like this can be classified as harmful misinformation."
Treasury Department reviews bank seizures of $1,200 stimulus checks amid bipartisan criticism - The Washington Post --The Treasury Department is reviewing whether it has the legal authority to prevent banks and private debt collectors from seizing $1,200 government stimulus payments, according to a person familiar with the internal deliberations, as blowback builds over private lenders clawing back parts of the emergency financial relief package.The review is being conducted by legal counsel at the Treasury Department, said the person, who declined to speak on record because the matter had not been finalized. It was unclear when a determination about the payments would be made.Earlier this month, the Trump administration began directly depositing stimulus checks in the bank accounts of 80 million Americans to help them survive the economic downturn caused by the coronavirus. Reports quickly surfaced that some of these payments were being redirected to banks and private debt collectors from people who have overdraft fees, delinquent loans or other debt obligations. These garnishments have sparked a bipartisan backlash in Congress, with lawmakers arguing the money should be walled off from collection by banks and private debt collectors. Several large banks announced they would stop taking the money amid public criticism. USAA, which services veterans and military families, announced last week that it would return the stimulus funds and change its policy after the American Prospect reported the bank took $3,400 in payments from the family of a disabled veteran to offset an existing debt. The seizure of stimulus checks by private lenders threatens to further undermine the rocky rollout of the $2 trillion coronavirus relief package. A number of obstacles have surfaced blocking Americans from swift access to the direct payments, a massive increase in unemployment benefits and emergency loans through the Small Business Administration. The Trump administration has defended its implementation of the law, saying it sent out 80 million checks within three weeks with an error rate of under 1 percent and has successfully disbursed hundreds of billions in small-business aid.
Wells Fargo, JPMorgan among banks sued over aid to small businesses - Wells Fargo, Bank of America, JPMorgan Chase and U.S. Bancorp were sued by small businesses that accused the lenders of prioritizing large loans distributed as part of the virus rescue package, shutting out the smallest firms that sought money. The four banks processed applications for the largest loan amounts because they generated the highest fees, rather than processing them on a first-come, first-served basis as the government promised, according to lawsuits filed Sunday in federal court in Los Angeles. As a result, thousands of small businesses that were entitled to loans under the program administered by the Small Business Administration, known as the Paycheck Protection Program, were left with nothing, the plaintiffs said. JPMorgan declined to comment on the lawsuit. The bank said in a FAQ that its smallest business clients received more than twice as many loans as the rest of its clients combined. Representatives for the other lenders didn’t immediately respond to requests seeking comment. The complaints are based on two reports released by the SBA about the loans. One had data from April 3 when the program launched through April 13, when about three-quarters of the program’s funding had been claimed. The other report showed data as of April 16, after the funding was exhausted and the SBA stopped taking applications. The complaint says in the last three days before the money ran out, loan applications for $150,000 and less were processed at twice the rate of larger loans compared with the initial report, suggesting the largest loans were front-loaded. But the SBA hasn’t released data showing loan activity by lender, or how many loans and what loan amounts were processed on each day. The program, which was enacted last month as part of a $2.2 trillion relief package in response to the outbreak, offered loans of as much as $10 million that are guaranteed by the SBA and disbursed by lenders to small businesses. The loans convert to grants if proceeds are used to keep workers on the payroll and cover rent and other approved expenses for about two months, a short-term stopgap designed to help businesses get by until the economy reopens. Banks earned origination fees of 5% on loans up to $350,000; 3% on loans between $350,000 and $2 million; and 1% on loans between $2 million and $10 million. That means they earned $17,500 for processing a $350,000 loan, compared to $100,000 for a $10 million loan.
Funneling PPP money to the smallest businesses: A fintech exec's plan - John Pitts, policy lead for the data aggregator Plaid, has been one of the vocal critics of the Paycheck Protection Program who have complained that too many of the loans in its first round — which ran out of funding late last week — were made to larger companies like Shake Shack and Ruth’s Chris Steak House instead of smaller businesses. A Senate vote on legislation that would provide additional funding was expected late Tuesday, and a House vote reportedly is set for occur Thursday. Details of the Senate bill were still emerging, but Minority Leader Chuck Schumer says it would provide an additional $320 billion in PPP funding, including $125 billion aimed at rural and minority areas. Pitts in an interview this week offered two ideas to ensure that as Congress pumps more money into the program, some of it is steered to the smallest businesses through fintech lenders.
Small banks could get big break in emergency loan program's next round - Smaller banks seem a step closer to getting designated funds in the next phase of the Paycheck Protection Program. Congress is negotiating a new round of stimulus that could add up to $310 billion to the program, said sources familiar with the discussions. Lawmakers are looking at setting aside $50 billion to $60 billion for banks and community development financial institutions with less than $50 billion in assets, said one of the sources, who asked not to be named. Rebeca Romero Rainey, president and CEO of the Independent Community Bankers of America, called on legislators last week to set aside a quarter of the program’s second round of funding for those lenders. There are other efforts under way to curb how much individual lenders could originate during the PPP’s next round. Sen. Marco Rubio, R-Fla., wants to cap the volume of loans individual lenders make during the next phase of the Paycheck Protection Program. Sen. Marco Rubio, R-Fla., tweeted last weekend that he wants the Treasury Department, one of the program’s administrators, to limit the amount of Paycheck Protection loans a single lender makes to “no more than 5% of the new funds being approved.” No lenders crossed that threshold in the first round.
Something Impossible Just Happened- A CLO Failed Its AAA Overcollateralization Test - Over the weekend, we reported that in its quest to bailout the richest Americans and the country's financial system, the Fed unleashed an unprecedented array of actions meant to backstop capital markets, going so far as buying investment grade, high yield bonds and even AAA-rated CLO bonds.However, as we warned, it won't be enough, for two reasons: first, recall that the expanded Term Asset-Backed Securities Loan Facility (TALF) announced by the Fed last Thursday only buys AAA-rated bonds of CLOs, which after the coming tsunami of CLO downgrades is complete, will not only collapse in nominal size but will mean that any further attempts to stabilize the CLO space will require yet another Fed backstop of even riskier - i.e., rated AA and lower - structured products.The second reason - one which Bloomberg called a "bigger and more ominous force at work that has investors bracing for the kind of pain they’ve never experienced in the decades that the [CLO] market has existed" - is that late on Friday, in the most draconian and widespread ratings action since the financial crisis, Moody's warned it may cut the ratings on $22 billion of U.S. collateralized loan obligations - a fifth of all such bonds it grades - as a result of the collapse in cash flows due to the Covid-19 pandemic. The ratings agency took action on 859 bonds from 358 CLOs that package leveraged loans into securities of varying degrees of risk and return. The step - which according to Bloomberg affects about 19% of Moody’s-rated CLOs that purchase broadly syndicated loans - comes as the underlying debt gets downgraded at a record pace.The action followed a report by Moodys earlier in the week in which it reported that its "B3 Negative and lower list" soared to its highest tally ever — 311 companies. That tops a former peak of 291 companies, reached during the credit crisis of 2009 and the commodity-related downturn in April 2016. At 20.7% of the total rated spec-grade population, the list also shot up above its long-term average of 14.8%, and closing in on its all-time high of 26.1%. This spike is the result of the confluence of a coronavirus outbreak, plunging oil prices, and mounting recessionary conditions, which created severe and extensive credit shocks across many sectors, regions and markets, the effects of which are unprecedented. And with the underlying bonds set to suffer an unprecedented collapse in solvency, it is only a matter of time before the products where they are packaged are also hammered. Products such as CLOs.
Negative Oil Prices Pose Headache for Futures Giant CME – WSJ -Negative oil prices threaten to tarnish the image of West Texas Intermediate, the U.S. crude benchmark, and hurt the company that has long relied on it as a key source of revenue: exchange giant CME Group Inc. CME -0.51% Chicago-based CME is home to the WTI futures contract, which is a popular way for oil drillers to protect themselves against price drops or for hedge funds to speculate on the direction of energy markets. Futures are contracts that let traders bet on the future price of commodities like oil and gold, or on financial indexes like the S&P 500. Unlike stocks, futures can sometimes drop below zero, particularly in physical commodity markets when storage facilities fill up and producers pay to get rid of their excess inventories. . Negative prices have occurred in futures on natural gas, electricity and some obscure regional grades of crude oil, but until this week they had never happened in a flagship oil contract like WTI. On Monday, WTI futures for May delivery slid to minus $37.63. They later rebounded to $10.01 Tuesday when the May contract expired. CME had just changed its computer systems earlier this month to allow negative pricing in WTI, anticipating such a scenario, and many traders had discussed it as a possibility. But for many casual investors, the move was puzzling and appeared to be the latest sign of market mayhem unleashed by Covid-19. CME Chairman and Chief Executive Terrence Duffy said in an interview that WTI futures worked as designed, and their foray into negative territory was a signal of real market forces at work. “It’s not a price that makes you feel good,” he said. “But the reality is, there is oversupply, there is under-demand that’s virus-driven, and there is nowhere to put the stuff.”
Mortgage servicers remain hopeful U.S. will deliver coronavirus relief - Despite recent comments by a federal official who questioned the need to aid the mortgage sector, servicers are holding out hope that a government liquidity backstop could still be rolled out within days.Some servicers and other mortgage industry observers say a federal liquidity facility appears to be on the table to cover skipped payments by homeowners hit by the coronavirus pandemic. But several obstacles remain before a plan can be announced, they said.Many say the deadline to launch a backstop with enough time to help cover May 1 payments is approaching. “I would not be surprised to see some form of liquidity facility introduced as early as this week," said Scott Buchta, head of fixed income strategy at Brean Capital. Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell have both expressed support for aiding the mortgage market, but the Fed faces statutory limitations on whom it may lend to and what collateral it can accept. Some on Wall Street have pointed the finger at Mark Calabria, director of the Federal Housing Finance Agency, as standing in the way of any potential government solution. Earlier this month, Calabria was quoted as saying recent forbearance data does not indicate servicers are on the verge of collapse.“Nothing we are seeing as of today suggests that this is a systemic problem,” Calabria said in a recent interview with Bloomberg News. “What we are seeing suggests that for the next couple of months, this is sustainable.”But the sharp rise in forbearance requests and the potential for massive delinquencies could force the government to finally act. "It has to happen by mid-to-late April to be effective for the May collection period," Buchta said.
FHFA tries to cut liquidity-strained mortgage servicers some slack - Servicers of loans in forbearance that are backed by Fannie Mae must advance missed payments only for four months, under a policy unveiled Tuesday to addressing liquidity concerns stemming from the coronavirus.The four-month obligation announced by the Federal Housing Finance Agency aligns the duration on Fannie-backed loans with that already in place for Freddie Mac. After the four-month period, the two mortgage giants will stand ready to take over advancing payments to investors in mortgage-backed securities.“Mortgage servicers can now plan for exactly how long they will need to advance principal and interest payments on loans for which borrowers have not made their monthly payment,” FHFA Director Mark Calabria said in a press release. “The four-month servicer advance obligation limit for loans in forbearance provides stability and clarity to the $5 trillion Enterprise-backed housing finance market.” The housing finance system has been grappling since mid-March with how to recoup lost revenue from homeowners who have asked to skip payments. To help homeowners, the FHFA and lawmakers have allowed forbearance periods of between six months to a year on loans backed by Fannie and Freddie. When borrowers stop paying their mortgage, servicers are contractually obligated to advance principal and interest payments to MBS investors. Unlike banks that have access to federal liquidity facilities, nonbank mortgage servicers rely on financing from commercial banks and private firms.Servicers maintain liquid reserves to cover these advances for loans backed by Fannie and Freddie — as well as MBS backed by Ginnie Mae — that together make up the majority of the mortgage market.The FHFA said it is instructing the GSEs to maintain loans in MBS pools for the duration of a forbearance plan. Before the COVID-19 outbreak, loans in forbearance typically were bought out of MBS pools.
Housing Regulator Moves to Ease Crunch at Mortgage Companies – WSJ —The federal agency that oversees the bulk of the U.S. housing market is stepping in to help cash-starved mortgage firms—but it is exacting a price. The firms, including companies like Quicken Loans Inc. and Freedom Mortgage Corp., have been stuck with mortgages they would typically sell, as borrowers suspend payments amid the economy’s pandemic-driven downturn. The Federal Housing Finance Agency said Wednesday that mortgage firms can sell some of those loans to Fannie Mae and Freddie Mac, the government-controlled companies that buy mortgages and package them into securities. “Purchases of these previously ineligible loans will help provide liquidity to mortgage markets and allow originators to keep lending,” FHFA Director Mark Calabria said in a statement. Industry officials praised the regulator’s move but suggested that fees Fannie and Freddie will charge for the purchases—from 5% to 7% of a loan’s value—were high and should be subject to negotiation. “The new fees attached to the sale of loans may be cost-prohibitive for many credit unions and limit affordable loan options for home buyers,” Dan Berger, chief executive of the National Association of Federally Insured Credit Unions, said in a statement. Like banks and nonbank mortgage companies, credit unions originate loans that they sell to Fannie and Freddie Bob Broeksmit, chief executive of the Mortgage Bankers Association, said the move was “an important first step but more needs to be done,” both on pricing and on including all types of loans. The loans will be priced “to mitigate the heightened risk of loss” to Fannie and Freddie, the FHFA statement said.Fannie and Freddie don’t make loans but instead buy them from lenders and package them into securities that are sold to other investors. Industry officials were anticipating federal action to help banks and mortgage companies that typically lend to home buyers and then quickly sell the loans to Fannie and Freddie. Their business model was upended recently when Fannie and Freddie said they wouldn’t buy loans in so-called forbearance—meaning borrowers have stopped making payments. . The problem stems from the stimulus package passed by Congress last month. The law allows homeowners to suspend payments on government-guaranteed loans for as long as a year without penalty if they suffered a hardship related to the coronavirus pandemic.
As mortgage bailout balloons amid coronavirus outbreak, servicers finally get some relief -- For weeks, the mortgage industry has been crying for help from being left on the hook to pay for much of the government’s mortgage bailout. Now, they’re getting some relief. More than 3 million borrowers have taken advantage of the mortgage forbearance program, which allows those with government-backed loans to delay up to a year’s worth of monthly mortgage payments if they have been hurt financially by the economic fallout from the coronavirus. Borrowers would have to make those payments at a later date, or over time. Mortgage servicers, however, the companies that collect the payments, were required to advance that money to bondholders for up to a year. Now, the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, has reduced that requirement to 4 months. “The four-month servicer advance obligation limit for loans in forbearance provides stability and clarity to the $5 trillion Enterprise-backed housing finance market,” said FHFA Director Mark Calabria. “Mortgage servicers can now plan for exactly how long they will need to advance principal and interest payments on loans for which borrowers have not made their monthly payment.” The percentage of loans now in forbearance jumped from 3.74% of servicers’ portfolio volume in the prior week to 5.95% as of April 12, 2020, according to new numbers released Monday by the Mortgage Bankers Association. The share of Fannie Mae and Freddie Mac loans in forbearance increased from 2.44% to 4.64%. Since the program rolled out a little over three weeks ago, the number of loans in forbearance has tripled.
Black Knight: National Mortgage Delinquency Rate Increased in March, First Increase in March Ever - Note: Loans in forbearance will be counted as delinquent in this survey, so the delinquency rate will jump in April (see Black Knight's on this below) From Black Knight: Black Knight’s First Look: Mortgage Delinquencies See First-Ever March Increase from Early COVID-19 Impact; Foreclosures, Serious Delinquencies Hit Record Lows• In what’s typically the strongest month of the year for mortgage performance, delinquencies rose by 3.33%, the first March increase since the turn of the century, an early sign of COVID-19’s impact on the market
• Both the national foreclosure and 90-day delinquency rates set new record lows in March, a lingering reminder of the strength of the mortgage market heading into the pandemic
• At just 27,600 for the month, foreclosure starts also fell to their lowest level on record, as COVID-19-related moratoriums began to impact foreclosure inflows
• Prepayment activity jumped by nearly 40% in March, driven by record-low 30-year mortgage rates
• Note: For the purposes of this report going forward, the millions of homeowners who have since entered into forbearance will be counted as past due, but should not be reported as such to the credit bureaus by their servicers
According to Black Knight's First Look report for March, the percent of loans delinquent increased 3.3% in March compared to February, and decreased 7.3% year-over-year. The percent of loans in the foreclosure process decreased 7.7% in March and were down 18.0% over the last year.Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 3.39% in March, up from 3.28% in February. The percent of loans in the foreclosure process decreased in March to 0.42% from 0.45% in February.The number of delinquent properties, but not in foreclosure, is down 111,000 properties year-over-year, and the number of properties in the foreclosure process is down 44,000 properties year-over-year.
FHFA: House Prices up 5.7% YoY in February --From the FHFA: FHFA House Price Index Up 0.7 Percent in February; Up 5.7 Percent from Last YearU.S. house prices rose in February, up 0.7 percent from the previous month, according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI). House prices rose 5.7 percent from February 2019 to February 2020. The previously reported 0.3 percent increase for January 2020 was revised upward to 0.5 percent. For the nine census divisions, seasonally adjusted monthly house price changes from January 2020 to February 2020 were all positive, ranging from 0.3 percent in the West South Central division to +1.2 percent in the Middle Atlantic division. The 12-month changes were all positive, ranging from +4.2 percent in the West South Central division to +8.1 percent in the Mountain division.“U.S. house prices posted a strong increase in February," according to Dr. Lynn Fisher, Deputy Director of the Division of Research and Statistics at FHFA. “The growth in home prices coincides with other data showing robust housing market activity in early 2020 preceding the current crisis. House prices had positive monthly gains in every census division. Transactions still do not reflect much, if any, influence from the COVID-19 outbreak as of February."This is pre-crisis.
NAR: Existing-Home Sales Decreased to 5.27 million in March - From the NAR: Home Sales Increase Year-Over-Year Despite Expected Monthly March Sales Decline Due to Impact of COVID-19 Existing-home sales fell in March following a February that saw significant nationwide gains, according to the National Association of Realtors®. Each of the four major regions reported a dip in sales, with the West suffering the largest decrease. Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 8.5% from February to a seasonally-adjusted annual rate of 5.27 million in March. Despite the decline, overall sales increased year-over-year for the ninth straight month, up 0.8% from a year ago (5.23 million in March 2019). ... Total housing inventory at the end of March totaled 1.50 million units, up 2.7% from February, but down 10.2% from one year ago (1.67 million). Unsold inventory sits at a 3.4-month supply at the current sales pace, up from three months in February and down from the 3.8-month figure recorded in March 2019.This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993. Sales in March (5.27 million SAAR) were down 8.5% from last month, and were 0.8% above the March 2019 sales rate. The second graph shows nationwide inventory for existing homes. Existing Home InventoryAccording to the NAR, inventory increased to 1.50 million in March from 1.46 million in February. Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer. The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory. Year-over-year Inventory Inventory was down 10.2% year-over-year in March compared to March 2019. Months of supply was increased to 3.4 months in March.
Comments on March Existing Home Sales - Earlier: NAR: Existing-Home Sales Decreased to 5.27 million in March - A few key points:
1) This is mostly pre-crisis data. Existing home sales are counted at the close of escrow, so this report is mostly for contracts signed in January and February. Sales will decline sharply in April and May.
2) Existing home sales were up 0.8% year-over-year (YoY) in March.
2) Inventory is very low, and was down 10.2% year-over-year (YoY) in March. Inventory will probably stay low as people wait to list their homes - and do not want strangers in their house. This is the lowest level of inventory for March since at least the early 1990s. Signed contracts will probably be down sharply year-over-year in April and May. Note that existing home sales picked up somewhat in the second half of 2019 as interest rates declined. Existing Home Sales NSAThe second graph shows existing home sales Not Seasonally Adjusted (NSA) by month (Red dashes are 2020), and the minimum and maximum for 2005 through 2019. Sales NSA in March (415,000) were just above sales last year in March. Note that sales have been in the middle of the range recently - not absurdly high like in 2005, and not depressed like in 2010 and 2011. With the pandemic, sales will decline sharply over the next few months.
Americans Pulled Back From Home Purchases in March—Americans pulled back from purchases of previously owned homes in March as the coronavirus pandemic shut down much of the U.S. economy, triggering a decline in the biggest part of the housing market. Sales of previously owned homes decreased 8.5% in March—the biggest month-over-month decline since November 2015—from the prior month at a seasonally adjusted annual rate of 5.27 million, the National Association of Realtors said Tuesday. Previously-owned homes make up most of the housing market. Economists surveyed by The Wall Street Journal expected a 7.5% decline last month. The NAR data suggest the coronavirus is hitting the normally active spring home-selling season hard. About 40% of the year’s sales typically take place from March through June, making these months pivotal for the housing market each year. “We are missing out on the spring buying season,” said Lawrence Yun, the trade group’s chief economist. “The latter part of March is clearly indicating that sales activity will be markedly lower in coming months.” As plans emerge to reopen parts of the U.S. economy, a new WSJ/NBC News poll shows the majority of Americans think it will be a long time before the economy can return to normal. WSJ’s Gerald F. Seib explains. Photo: G. Ronald Lopez/ZUMA Wire Homes typically go under contract a month or two before the contract closes, so the March data largely reflects purchase decisions made in February or January. The U.S. entered March still riding an 11-year economic expansion. By the end of the month, millions had applied for unemployment benefits and icons of American commerce were shutting down, seeking government aid and shedding staff. The sales data suggest regions hit with early coronavirus outbreaks struggled, such as California, Washington and New York. Existing-home sales in the West dropped 13.6% on the month, while sales in the Northeast dropped 7.1%. At the current sales pace, there was a 3.4-month supply of homes on the market at the end of March.
New Home Sales Decrease to 627,000 Annual Rate in MarchThe Census Bureau reportsNew Home Sales in March were at a seasonally adjusted annual rate (SAAR) of 627 thousand. The previous three months were revised down. Sales of new single‐family houses in March 2020 were at a seasonally adjusted annual rate of 627,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 15.4 percent below the revised February rate of 741,000 and is 9.5 percent below the March 2019 estimate of 693,000." The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate. Even with the increase in sales over the last several years, new home sales are just at a normal level. The second graph shows New Home Months of Supply. New Home Sales, Months of SupplyThe months of supply increased in March to 6.4 months from 5.2 months in February. The all time record was 12.1 months of supply in January 2009. This is slightly above the normal range (less than 6 months supply is normal). Starting in 1973 the Census Bureau broke inventory down into three categories: Not Started, Under Construction, and Completed. The third graph shows the three categories of inventory starting in 1973. The inventory of completed homes for sale is still somewhat low, and the combined total of completed and under construction is close to normal. The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate). In March 2020 (red column), 61 thousand new homes were sold (NSA). Last year, 68 thousand homes were sold in March. The all time high for March was 127 thousand in 2005, and the all time low for March was 28 thousand in 2011. This was below expectations of 645 thousand sales SAAR, and sales in the three previous months were revised down. I'll have more later today. The sales in March were only partially impacted by COVID-19 crisis. Sales in April will probably be much lower.
A few Comments on March New Home Sales - New home sales for March were reported at 627,000 on a seasonally adjusted annual rate basis (SAAR). Sales for the previous three months were revised down. New home sales are counted when contracts are signed, so the impact of COVID-19 was probably in the second half of March. I expect sales will decline significantly in the April New Home sales report (to be released in May). Earlier: New Home Sales Decrease to 627,000 Annual Rate in March. This graph shows new home sales for 2019 and 2020 by month (Seasonally Adjusted Annual Rate). New home sales were down 9.5% year-over-year (YoY) in March. Year-to-date (YTD) sales are still up 6.7%, but sales will be down YTD soon. The comparisons are easy over the first five months of the year, but sales will probably be down YoY for the next several months - at least - due to COVID-19. And here is another update to the "distressing gap" graph that I first started posting a number of years ago to show the emerging gap caused by distressed sales. The "distressing gap" graph shows existing home sales (left axis) and new home sales (right axis) through March 2020. This graph starts in 1994, but the relationship had been fairly steady back to the '60s. Following the housing bubble and bust, the "distressing gap" appeared mostly because of distressed sales. Now the gap is mostly closed. However, this assumes that the builders will offer some smaller, less expensive homes. Note: Existing home sales are counted when transactions are closed, and new home sales are counted when contracts are signed. So the timing of sales is different. Over the next several months, both new and existing home sales will be negatively impacted by COVID-19.
UMich Consumer Sentiment Crashes By Most Ever, Home-Buying Conditions Worst In 37 Years - The preliminary April UMich confidence data was a bloodbath, and the final data (albeit very marginally better than the flash print) offered little hope for any change anytime soon... The University of Michigan’s final sentiment index for April slumped 17.3 points to 71.8 from a month earlier after a preliminary reading of 71, according to data Friday. The measure, while the lowest since 2011, was higher than the median projection of 68 in a Bloomberg survey of economists. The gauge of current conditions fell to 74.3, better than the 72.4 preliminary reading, while a measure of expectations dropped to 70.1. Buying Conditions collapsed across the board with home-buying intentions at their lowest since 1983 (and buying conditions for large household durables are the worst ever... While all income levels were affected, it appears the wealthiest suffered the biggest drop but the poorest are the worst levels since 2013...(4 Bloomberg graphs) Shutdowns of non-essential businesses across most U.S. states have resulted in an unprecedented 26.5 million applications for jobless benefits in the past five weeks. With thousands of storefronts closed as governments await some semblance of easing in the health crisis, consumer spending has weakened significantly. “In the weeks ahead, as several states reopen their economies, more information will reach consumers about how reopening could cause a resurgence in coronavirus infections,’’ said Richard Curtin, director of the survey, in a statement. “Consumers’ reactions to relaxing restrictions will be critical.’’
AIA: Architecture Billings Index Decreased Sharply in March --Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.From the AIA: Architecture Billings Index points to major downturn in commercial construction Reflecting the deteriorating conditions in the overall economy, demand for design services from architecture firms recorded a record fall, according to a new report today from The American Institute of Architects (AIA).AIA’s Architecture Billings Index (ABI) score of 33.3 for March reflects a decrease in design services provided by U.S. architecture firms (any score below 50 indicates a decrease in billings). During March, both the new project inquiries and design contracts scores dropped dramatically, posting scores of 23.8 and 27.1 respectively.
“Though most architecture firms have made quick transitions to remote operations, the complete shutdown of business activity is severely impacting architects,” said AIA Chief Economist Kermit Baker, Hon. AIA, PhD. “The dramatic pullback in new and ongoing design projects reflects just how quickly and fundamentally business conditions have changed across the country and around the world in the last month as a result of the COVID-19 pandemic.”
• Regional averages: West (45.3); South (44.2); Midwest (44.2); Northeast (38.4)
• Sector index breakdown: institutional (46.9); multi-family residential (43.3); commercial/industrial (41.9); mixed practice (40.6)
This graph shows the Architecture Billings Index since 1996. The index was at 33.3 in March, down from 53.4 in February. Anything below 50 indicates contraction in demand for architects' services. Note: This includes commercial and industrial facilities like hotels and office buildings, multi-family residential, as well as schools, hospitals and other institutions.This was the largest one month decline on record for this index. This also matches the lowest level for this index during the Great Recession.
Hotels: Occupancy Rate Declined 69.8% Year-over-year to All Time Record Low - From HotelNewsNow.com: STR: US hotel results for week ending 11 April Reflecting the continued impact of the COVID-19 pandemic, the U.S. hotel industry reported significant year-over-year declines in the three key performance metrics during the week of 5-11 April 2020, according to data from STR.In comparison with the week of 7-13 April 2019, the industry recorded the following:
• Occupancy: -69.8% to 21.0%
• Average daily rate (ADR): -45.6% to US$74.18
• Revenue per available room (RevPAR): -83.6% to US$15.61
“There was not much of a change from last week. As we’ve noted, RevPAR declines of this severity are our temporary new normal,” said Jan Freitag, STR’s senior VP of lodging insights. “Several weeks of data also point to occupancy in the 20% range to be the low point, and economy hotels holding at a higher occupancy level is the pattern right now.” The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average. The red line is for 2020, dash light blue is 2019, blue is the median, and black is for 2009 (the worst year probably since the Great Depression for hotels).2020 was off to a solid start, however, COVID-19 has crushed hotel occupancy.Note: Y-axis doesn't start at zero to better show the seasonal change.This is the lowest weekly occupancy on record, even considering seasonality.
TSA checkpoint travel numbers -- The TSA is providing daily travel numbers. (ht @conorsen) This is another measure that will be useful to track when the economy starts to reopen. This data shows the daily total traveler throughput from the TSA for 2019 (Blue) and 2020 (Red).On April 19th there were 105,382 travelers compared to 2,356,802 a year ago. That is a decline of 95%.
Credit Cards Start Offering Lower Limits Amid U.S. - Major U.S. credit-card issuers are starting to lower customer spending limits as the coronavirus pandemic leaves millions of Americans jobless and struggling to keep up on loans. Discover Financial Services just became the largest lender yet to acknowledge it’s begun reining in lines of credit for new customers. In a regulatory filing late Wednesday, the firm said it’s also easing off efforts to sign up consumers and that it expects to take a hit from programs letting existing borrowers skip payments or delay the accrual of interest. “As the number of loans enrolled in these programs increases, our financial results will be adversely impacted in the short term due to forgone interest,” Discover said. The announcement came a day after Synchrony Financial, the company behind cards for J.C. Penney Co., Gap Inc. and American Eagle Outfitters Inc., said it will try to stem losses by closely managing customers’ accounts. In a conference call with analysts Tuesday, Chief Financial Officer Brian Wenzel said the firm is using its own vast trove of data, as well as information from credit bureaus, to “dynamically reevaluate a customer’s creditworthiness.” That means some may be allowed to spend more, but others less. The defensive moves are a pivot for both companies, which more often give updates on marketing campaigns and their progress in building up interest-bearing balances. On a conference call with analysts Thursday morning, Discover Chief Executive Officer Roger Hochschild said efforts to curtail risk since the crisis began include conducting additional verification of employment and setting lower limits for new accounts, while offering fewer increases to existing cardholders. “As part of our credit response to Covid-19, we haven’t made any changes in terms of closing inactive accounts or doing more line decreases,” Hochschild said in a separate interview Thursday. “We think it’s very challenging to do those now. Pulling away credit when they need it most can have tremendously adverse impacts.”
Discover takes new approach to fraud as coronavirus drives more online, phone applications - As the coronavirus pandemic has forced branch closures and halted many mail-in applications, consumers have increasingly shifted to phone and digital channels to open new accounts and service existing ones — creating new challenges in fighting fraud. Discover transitioned all of its 8,600 U.S.-based call center personnel to work from home within a matter of days following the U.S. declaration of a national emergency on March 13. By March 20, Discover had 95% of its agents working from home using a thin- client device to emulate their call center desktops. While this has proved critical in keeping employees safe, it has also created a new learning challenge. Traditionally, call centers employees work in teams because it aids in the fight against fraud and improves overall customer satisfaction, since a team leader is able to provide real-time, “in the moment” teachings. In a distributed environment, this practice is much more difficult and creates an opportunity for potential fraud to be overlooked. “We’re learning a lot about how to collaborate in this environment. I think it’s forced us to become better connected in working from home than when we were all in our offices," said Dennis Michel, senior vice president of customer service and engagement at Discover. "It’s important because we’ve seen an uptick in travel-related chargeback disputes — 300% higher overall and airlines alone up over 967%. We need to address valid customer requests quickly." Addressing valid customer disputes is important, but so is figuring out if there is an attempt at first-party customer fraud. For many companies, including Discover, the amount of telephone calls received has risen significantly since mid-March, exacerbating the transition process since there has been no easy way to change a company’s operations on such short notice.
Empty Grocery Shelves and Rotting, Wasted Vegetables: Two Sides of a Supply Chain Problem In Florida, farmers are tossing away thousands of pounds of zucchini and leaving tomatoes to rot on the vine. In California, they're plowing under squash. In Wisconsin, dairy producers are dumping milk down drains. And in at least eight states, the coronavirus has sickened and killed workers at meat processing facilities, forcing operations to a halt. A single pork processing facility, in Sioux Falls, South Dakota, is now the biggest Covid-19 hotspot in the country, with more than 600 workers ill. With no place for their livestock to go and unable to afford feed, farmers are being forced to euthanize animals they raised for slaughter. "They're going back to their farms to kill birds because they can't process them," said Mary Hendrickson, an expert in food systems with the University of Missouri. "No farmer wants to do that." All this at a time when food insecurity is on the rise. As the coronavirus pandemic rips through the food system, the supply chain—from farm to supermarket—is showing signs of distress and sending up warning flares about the fragility of the world's food production system. Many analysts, farmers and researchers are now examining with fresh urgency how supply chains might be retooled or regionalized to handle disruptions, including those projected to increase with climate change. "What this immense public health crisis has done is exposed really sharply the cracks in so many of the systems we're living with, the food system among them," said Melissa Leach, a member of the Brussels-based International Panel of Experts on Sustainable Food Systems (IPES-Food). "Disaster as it is, it might be an opportunity to rethink food systems fundamentally." A decades-long trend toward mega-mergers and corporate consolidation across the food system—from seeds to processing to consumer staples—has led to a sprawling supply chain that's more easily upended when disasters hit, critics say. "Our food systems are highly vulnerable because they're so globalized," Leach added. Last week IPES-Food published a report calling for a paradigm shift in agriculture toward a more diversified system, based on principles of agroecology, in which a greater variety of crops are grown, using fewer chemicals, and often on a smaller, regional scale. The United Nations Intergovernmental Panel on Climate Change and other UN organizations have said those principles will be critical for sustainable food production as the climate continues to change. "A highly specialized, centralized, concentrated agri-business food system is never resilient, so it's vulnerable to anything that comes its way," Hendrickson said. "Farmers have to be able to make decisions; they can't be beholden to these centralized supply chains. That's going to make us better prepared for climate change and ongoing pandemics."
Egg demand shifted, and 61,000 Minnesota chickens euthanized - Kerry Mergen, a contract egg farmer near Albany, Minn., got word on a Wednesday the chickens in his barn would be euthanized. A crew showed up the next morning and started gassing the birds with carbon dioxide.The sudden drop in demand for food at restaurants, school cafeterias and caterers shut down by the pandemic has ripped through farming. Milk has been dumped, eggs smashed and ripe lettuce plowed under.Now, farms are killing animals sooner than planned. Mergen said he initially couldn’t believe it when a field manager from Daybreak Foods, the Lake Mills, Wis.-based firm that owned and paid to feed the flock of 61,000 birds, said they might be killed early. His contract called for the flock to produce eggs until fall.“I was wrong and the company decided to do it anyway,” Mergen said.A primary destination for eggs from the flock — a Cargill Inc. fluid egg plant in Big Lake, Minn. — temporarily shut down last week and laid off 300 employees there. The company cited declining demand for the decision to idle the facility, which handles 800 million eggs a year and sends containers of fluid egg to food-service companies across North America.“It is important to note that food-service orders have not stopped, but with the decline in food-service orders, Cargill and its egg suppliers are working diligently to rebalance supply to match these consumer and customer shifts,” Cargill said in a statement.Demand for eggs in grocery stores is high and the price of a dozen eggs has risen. But much of the egg-production system is built to provide fluid eggs to food service companies and changing farms to provide eggs for retail is neither simple nor quick.Mergen said his was one of five egg farms where chickens were euthanized in Minnesota in recent weeks, and that the other four were larger than his farm.That figure couldn’t be independently confirmed, and an official at the Minnesota Board of Animal Health said livestock producers do not have to report euthanizing large numbers of animals. The practice is not uncommon, particularly with hens whose egg-laying productivity is up after about two years. But the decision to cull animals while they are still productive is rare.
At Least 10 Meatpacking Plants Close In Weeks Across America Stoking Food Shortage Fears - At least ten meatpacking facilities have shuttered operations over the last several weeks, stoking fears of imminent food shortages across the country.n Hormel Foods Corporation announced Jennie-O Turkey Store, Inc., "will temporarily pause operations at its Willmar Avenue and its Benson Avenue facilities, both located in Willmar, Minn.""Based on information about the community spread of COVID-19 in the area, the company decided it was the right decision to pause operations to undergo a facility-wide cleaning that will enhance already robust safety and sanitization protocols. Under its pay program, all Jennie-O Turkey Store employees will continue to receive 100 percent of their base pay and benefits during the pause in production. Jennie-O Turkey Store is a wholly-owned subsidiary of Hormel Foods Corporation." Steve Lykken, president of Jennie-O Turkey Store, said, "The health, well-being and safety of our team members is our top priority. Out of an abundance of caution, we have decided to take a pause in operations." "During this pause, we will maintain our thorough food processing sanitation practices, as well as the enhanced procedures that we have been employing since the emergence of COVID-19. The facilities will be deep cleaned, including all common areas and high-touch surfaces," Lykken added. Both facilities are expected to close by the end of the weekend. There were reports earlier in the week that 14 employees out of 1,200 had tested positive for the virus.We noted on Thursday that "dominos are falling, with meatpacking plants shuttering operations across the country because of the coronavirus outbreak."Also, health officials in Illinois closed Hormel's Rochelle Foods plant last Friday, a move that could trigger a shortage of Spam products. In the days and or weeks ahead, more meatpacking plants will likely close for virus-related reasons – which will lead to food shortages in May.
Farmers Are Starting to Destroy Their Pigs After Factories Close A wave of shutdowns at some of North America’s largest meat plants is starting to force hog producers to dispose of their animals in the latest cruel blow to food supplies. Shuttered or reduced processing capacity has prompted some farmers in eastern Canada to euthanize hogs that were ready for slaughter, said Rick Bergmann, chair of the Canadian Pork Council. In Minnesota, farmers may have to cull 200,000 pigs in the next few weeks, according to an industry association. Carcasses are typically buried or rendered. “This is an unacceptable situation and something must be done,” Bergmann, who is also a farmer, said Thursday. The culling highlights the disconnect that’s occurring as the coronavirus pandemic sickens workers trying to churn out food supplies just as panicked shoppers seek to stock up on meat. Wholesale pork prices in the U.S. have surged in the past week. Hogs are the latest commodity that’s seeing supplies potentially go to waste as farmers in the U.S. and Canada lose money, with nowhere to sell their animals. Dairy farmers are spilling milk that can’t be sold to processors, broiler operations have been breaking eggs to reduce supplies and some fruit and vegetables are rotting in fields amid labor and distribution disruptions. In the U.S., at least eight major meat facilities have seen halts in the space of a few weeks, shuttering more than 15% of the nation’s pork processing capacity. In Canada, Olymel’s plant in Yamachiche, Quebec, that normally processes 28,000 hogs a week closed for two weeks on March 29 and is currently operating with one less shift. With packing plants closing, demand was getting hit for hogs already fattened up for slaughter, and for piglets that would typically replace those animals on the farm. Prices for 40-pound feeder pigs in the U.S. plunged to the lowest since August 2018, according to U.S. Department of Agriculture data.)
The World’s Top Pork Processor Is Battling Two Epidemics at Once - As businesses around the globe buckle under the strain of Covid-19, the world’s biggest pork producer is fighting not just one highly contagious virus, but two. And the outcome could determine whether Americans will have enough hot dogs, bacon, and ham this summer. Hong Kong-based WH Group Ltd. is struggling to cope with the virus that causes African swine fever (ASF), a deadly malady that’s devastated hog herds and helped more than double pork prices in China, while also spreading to other countries in Asia and Europe. Like Covid-19, ASF is currently incurable and researchers have yet to come up with a vaccine. China’s pork production fell 29% in the first three months of 2020; the swine disease has slashed the size of the country’s hog herd by about half. Now the coronavirus is piling on. Smithfield Foods, the Virginia-based subsidiary of WH Group, shut three of its U.S. plants this month because of Covid-19. They include a processing facility in Sioux Falls, S.D., that accounts for about a quarter of the company’s U.S. revenue. When Smithfield announced the indefinite closure, more than 200 workers were sick; that number has risen to more than 700—almost half the state’s total. With the Sioux Falls site alone handling about 5% of all hog processing in the U.S., the maker of Farmland bacon, Farmer John hot dogs, Eckrich sausage, and Armour ham warned of possible supermarket shortages. “The closure of this facility, combined with a growing list of other protein plants that have shuttered across our industry, is pushing our country perilously close to the edge in terms of our meat supply,” Smithfield Chief Executive Officer Ken Sullivan said on April 12. “It is impossible to keep our grocery stores stocked if our plants are not running.” WH isn’t the only meat company facing virus woes. Tyson Foods Inc. on April 22 said it’s closing its 2,800-worker pork plant in Waterloo, Iowa. Brazilian processor JBS SA had said it would indefinitely close its pork plant in Worthington, Minn., after employees tested positive for Covid-19. And deaths have been reported among workers at Tyson’s pork plant in Iowa and poultry plant in Georgia as well as at Cargill Inc. plants in Colorado and Alberta, Canada. Even before the coronavirus disruptions, the world wasn’t producing enough pork. The number of hogs worldwide has declined about 25% because of ASF, according to the U.S. Meat Export Federation. Now the double epidemic raises the specter of shortages that could put WH in the middle of a fight between its two biggest markets, says Brett Stuart, president of Denver-based consulting firm Global AgriTrends. “Smithfield is going to say, ‘I have X amounts of hogs to sell, and the highest bidder gets the pork,’ ” he says. “Could we get to a situation where China is outbidding U.S. consumers for pork? Potentially, yes.”
U.S. Durable-Goods Orders Drop as Economic Outlook Sours —Orders for aircraft, cars and spare parts fell sharply in March, and consumers’ souring view on the economy suggested the decline in demand related to the coronavirus pandemic could deepen in the coming months. New orders for aircraft and parts fell by more than $16.3 billion in March from February, the Commerce Department said Friday. Since orders are recorded on a net basis, the figure incorporates canceled orders. New orders for automobiles and parts fell 18.4% in March. Overall orders for durable goods—products designed to last at least three years—were down 14.4% in March, the biggest monthly drop since August 2014. Excluding the volatile transportation sector, orders were down a more modest 0.2%. New orders for nondefense capital goods excluding aircraft—a closely watched proxy for business investment—were up 0.1%. The collapse in net aircraft orders in March reflected what Boeing Co. called its biggest monthly spike in jetliner cancellations in decades as airlines started to adjust their fleets in response to the pandemic. Boeing secured deals for 31 jets last month compared with 43 in March 2019, but had cancellations for 150 of its 737 MAX planes, which have been grounded for more than a year awaiting regulatory approval to fly again after two fatal crashes. The company removed deals for 307 planes from its order book in the first quarter, while aerospace suppliers also suffered a big drop in sales of spare parts to airlines in March as the collapse in air travel forced the grounding of two-thirds of the global jet fleet. Analysts said the transportation sector appears to have been the first to bear the brunt of the economic shock related to the coronavirus. Other sectors will probably show similar sharp declines in the months ahead, said Gregory Daco, chief U.S. economist at Oxford Economics. Friday’s report covers the month of March, when the lockdowns to contain the spread of the coronavirus were in their early stages. “We’re going to see steep drops across different categories,” he said. Separately, an index measuring Americans’ outlook for the economy posted the sharpest single-month decline, according to a University of Michigan survey released Friday.
Cancellation Wave Continues, China Leasing Firm Scraps Boeing 737 MAX Order - As thousands of Boeing employees head back to work in the Puget Sound region over the last week, the Washington-based aircraft manufacturer has noticed a string of recent cancellations of the grounded 737 MAX jet. Last Tuesday (April 14), Boeing announced a total of 150 MAX cancellations in March, including 75 previously reported from Irish leasing company Avolon. Cancellations also came from other buyers, including 34 of 135 aircraft ordered by Brazil's GOL. Now on Monday morning (April 20), China Development Bank Financial Leasing Co. (CDB) has joined the cancellation party, slashing 29 MAX planes from its order, worth about $2.9 billion, reported Bloomberg.The MAX jet has been grounded globally for a little more than a year after two deadly crashes in Indonesia and Ethiopia."In light of evolving aviation market dynamics, we've been working together with Boeing over many months to re-calibrate our MAX order book to be in line with our long-term view of the market and related opportunities," Xuedong Wang, chairman of CDB Financial unit CDB Aviation, said in a statement to the Hong Kong stock exchange Monday.The statement says CDB's outstanding MAX order is now 70 after the adjustment. The coronavirus pandemic coupled with MAX groundings, has crushed Boeing. CEO Dave Calhoun recently warned that the commercial jet market could take years to recover.Boeing published a statement on Monday outlining how it continues to partner with CDB amid challenging times."As we work to return the 737 MAX to service, our focus remains on addressing our customers' fleet needs while optimizing the delivery of the more than 4,000 airplanes in our 737 backlog," it said.
The plunge in oil prices is the last thing Boeing and Airbus need right now - The coronavirus pandemic, the threat of airline bankruptcies and a global recession. Now a historic oil glut and price crash are adding to the woes of Boeing and Airbus. The duopoly that dominates most of the world’s aircraft production spent more than a decade racking up record orders for planes they boasted could save millions in fuel. “One thing that kept the industry aloft during the great financial meltdown [in 2008] is fuel prices actually rose,” said Richard Aboulafia, an aviation analyst at vice president at Teal Group, referring to record oil prices that year. Rising oil prices can help boost sales of more fuel-efficient aircraft, the opposite of sales trends for larger personal vehicles like SUVs. The Airbus A320neo and the Boeing 737 Max, each manufacturer’s best-selling narrow-body airplanes were developed after the Great Recession when fuel prices were again rising and airlines were on the hunt for models that would help them cut fuel costs. Both companies amassed years of orders for thousands of planes. But manufacturers have lost that selling point, adding to a slate of challenges that are expected to last at least into 2021, if not later, and a sharp turnaround from earlier this year when airlines couldn’t get new single-aisle airplanes fast enough.
Kansas City Fed: "Tenth District Manufacturing Activity Decreased Further" in April, Lowest Reading on Record - From the Kansas City Fed: Tenth District Manufacturing Activity Decreased Further: Tenth District manufacturing activity decreased further to the lowest reading in survey history (since 1994), while expectations for future activity improved but remained slightly negative. Month-over-month price indexes declined again in April, but District firms expected prices to rise slightly in the next six months. The month-over-month composite index was -30 in April, the lowest composite reading in survey history, and down considerably from -17 in March and 5 in February. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. The decrease in district manufacturing activity was steepest at durable goods factories such as primary and fabricated metals, and activity at non-durable goods plants including food and beverage manufacturing declined as well. All month-over-month indexes dropped further in April except for supplier delivery time which continued to increase. Year-over-year factory indexes also decreased again in April, and the composite index fell from -14 to -30. The future composite index improved from -19 April, but remained slightly negative at -6. All of the regional surveys for April have been very weak.
Weekly Initial Unemployment Claims decrease to 4,427,000 - The DOL reported: In the week ending April 18, the advance figure for seasonally adjusted initial claims was 4,427,000, a decrease of 810,000 from the previous week's revised level. The previous week's level was revised down by 8,000 from 5,245,000 to 5,237,000. The 4-week moving average was 5,786,500, an increase of 280,000 from the previous week's revised average. The previous week's average was revised down by 2,000 from 5,508,500 to 5,506,500. The previous week was revised down. The following graph shows the 4-week moving average of weekly claims since 1971.The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 5,786,500. This was higher than the consensus forecast. The second graph shows seasonally adjust continued claims since 1967 (lags initial by one week while increasing sharply).
Week 5 of the Collapse of the U.S. Labor Market --Wolf Richter -Over the past five weeks, 26.5 million initial claims for unemployment insurance have been processed. In the week ended April 18, 4.427 million unemployment claims, seasonally adjusted, have been processed, over six times the peaks during the prior unemployment crises in 1982 and 2009:m The unemployment claims reported today by the US Department of Labor are those that the state offices were able to process – not including claims that have been filed but haven’t been processed yet.Under the sudden explosion of unemployment claims a month ago, state unemployment offices fell far behind in processing the claims, amid reports of crashed websites, unanswered phones, and eternal hold-times. Since then, the unemployment offices have ramped up staffing, expanded hours of their call centers, and boosted the capacity of their servers to where they can better handle the tsunami of people trying to file claims online. And they’re gradually catching up.Nevertheless, new layoffs are constantly being announced. And the implementations of the provisions in the stimulus package to expand unemployment insurance to contract workers, the self-employed, and gig workers are just now being rolled out state by state, and will mostly fall into future initial claims data.Florida is finally making some progress in catching up in processing claims. In the report a week ago, Florida had processed only 181,000 claims. But in the current reporting week, it was able to process 505,137 claims, just behind California. The table below shows the 12 states that had the most initial claims for unemployment insurance in the week ended April 18:
U.S. Unemployment Waves Keep Hitting With Millions More Claims - The tidal waves of unemployment filings across the U.S. showed only the barest signs of abating last week as more than 4 million people applied for benefits, bringing the five-week total during the coronavirus pandemic to 26.5 million. Most states continued to see initial claims decline on an unadjusted basis, and several states did report decreases in layoffs for the prior week -- both signs that job losses are indeed slowing a bit. And government aid to small businesses could spur some employers to restore jobs in coming months. But filings might continue at an extraordinary pace for several more weeks, boosting an unemployment rate that may already be around 20%. While most of the layoffs in sectors like retail have likely already occurred, there will be “collateral damage” as companies faced with weak demand dismiss workers, said Jay Bryson, acting chief economist at Wells Fargo & Co. Bryson said he believes the U.S. is past the peak in initial claims “for the foreseeable future,” but “if we open up too soon and this coronavirus comes roaring back then we may in fact see those sorts of numbers again.” It’s still unclear to what extent the most recent claims totals reflect millions of people still losing their jobs each week or whether it’s largely a reflection of jobless Americans who are just now able to get through jammed websites and phone lines after weeks of trying. States are racing to boost the capacity to computer systems built years ago, adding workers to handle unprecedented volumes of claims and trying to get the $600 in additional weekly aid to the unemployed. Some states have taken steps such as staggering applications by alphabetical order of last name or the last digit of one’s social security number on certain days of the week in order to manage the flow. Read more: ‘Scary Time’ for American Middle Class as Office Jobs Disappear Initial jobless claims of 4.43 million in the week ended April 18 followed a slightly downwardly revised 5.24 million in the prior week, according to Labor Department figures Thursday. The median estimate of economists was for 4.5 million claims. California reported the most initial claims last week, at an unadjusted 533,600, down from 655,500 the prior week. Florida was next, followed by Texas at 280,400, up slightly from the prior week. Georgia and New York also reported more than 200,000 filings, though both down from the previous week.
Three Hours Longer, the Pandemic Workday Has Obliterated Work-Life Balance- People are overworked, stressed, and eager to get back to the office. - An executive at JPMorgan Chase & Co. gets unapologetic messages from colleagues on nights and weekends, including a notably demanding one on Easter Sunday. A web designer whose bedroom doubles as an office has to set an alarm to remind himself to eat during his non-stop workday. At Intel Corp., a vice president with four kids logs 13-hour days while attempting to juggle her parenting duties and her job. Six weeks into a nationwide work-from-home experiment with no end in sight, whatever boundaries remained between work and life have almost entirely disappeared. With many living a few steps from their offices, America’s always-on work culture has reached new heights. The 9-to-5 workday, or any semblance of it, seems like a relic of a bygone era. Long gone are the regretful formalities for calling or emailing at inappropriate times. Burnt-out employees feel like they have even less free time than when they wasted hours commuting. Some predicted the great work-from-home migration of the pandemic would usher-in a new age of flexible work arrangements. As of 2017 only 3% of full-time workers in the U.S. said they “primarily” worked out of a home office in a Census Bureau survey. Then millions sheltered at home for what was originally thought to be a temporary hiatus. Many mapped out plans to fill time they would’ve spent commuting to take up new hobbies, like learning a foreign language, baking or getting into the best shape of their lives. It looked like the beginnings of a telecommuting revolution. A month and a half later, people are overworked, stressed, and eager to get back to the office. In the U.S., homebound employees are logging three hours more per day on the job than before city and state-wide lockdowns, according to data from NordVPN, which tracks when users connect and disconnect from its service. Out of all countries that NordVPN tracks, U.S. workers had tacked on the most hours. In France, Spain, and the U.K. the day has stretched an additional two hours, NordVPN’s data found. Italy saw no change at all. The contours of the workday have changed, too. Without commutes, wake-up times have shifted later, NordVPN found, but peak email time has crept up an hour to 9 a.m., according to data from email client Superhuman. Employees are also logging back in late at night. Surfshark, another VPN provider, has seen spikes in usage from midnight to 3 a.m. that were not present before the COVID-19 outbreak.
Gov. Brian Kemp sets Georgia on aggressive course to reopen, putting his state at center of deepening national debate - The Washington Post -Georgia Gov. Brian Kemp’s move Monday to lift restrictions on a wide range of businesses, one of the most aggressive moves yet to reignite commercial activity in the midst of the coronavirus pandemic, put his state at the center of a deepening national battle over whether Americans are ready to risk exacerbating the public health crisis to revive the shattered economy.The announcement from Kemp (R), who was among the last of the nation’s governors to impose a statewide stay-at-home directive, caused blowback from public health experts, who said the state did not yet meet the criteria issued by the White House, and set up a potential confrontation with the mayor of Atlanta and leaders from other cities advising residents to stay at home.Kemp, a first-term governor, said he would allow gyms, barber shops, tattoo parlors and bowling alleys, among other businesses, to reopen on Friday, though they would be required to follow social distancing guidelines and screen their employees for signs of fever and respiratory illness. He said theaters and dine-in restaurants would be permitted to resume activity on April 27. Meanwhile, a statewide shelter-in-place order expires at the end of the month.The only other state pursuing as swift a strategy is South Carolina, where a range of retail stores were allowed to reopen Monday. The Republican governor, Henry McMaster, also lifted the state’s controls on beaches but left decisions about whether to reopen them to local officials. The decisions in those two Southern states came as scattered protests across the country have targeted governors’ stay-at-home orders, encouraged in some places by President Trump, who has chafed at the social distancing guidelines issued by his own administration. Epidemiologists say restrictions on economic activity and public assembly, combined with ramped-up testing and aggressive contact tracing to identify other potentially infected people, are necessary to contain the outbreak of the new coronavirus, which has killed more than 42,000 Americans. Many governors, including some Republicans, have heeded that advice, holding out against protesters who have descended on state capitol buildings to decry the emergency orders.
Georgia got lifting coronavirus restrictions backward, Connecticut Gov. Ned Lamont says - As states across the U.S. weigh lifting coronavirus restrictions at risk of inducing a second wave of infections, Georgia is reopening the wrong businesses first, Connecticut Gov. Ned Lamont told CNBC Tuesday.Georgia Gov. Brian Kemp, a Republican, announced Monday that the state will reopen businesses on Friday, starting with retail locations such as gyms, barber shops, fitness centers and bowling alleys. Kemp’s decision came after several states mostly in the South unveiled plans to restart parts of their economy.“I think the things that come later are the things that Georgia opened up first, which surprised me, those things that have very close personal contact,” Lamont, a Democrat, said on CNBC’s “Squawk Box.” “Bars, restaurants where you’re closed in, probably even barbershops, nail salons, places where you have close personal contact, there I think we’d have to wait until we have a little more testing and more masks.”Kemp’s office did not immediately respond to a CNBC request for comment.On Monday, Kemp said his plan is to focus on small businesses hardest hit by the lockdown. His move came amid a wave of announcements mostly by Republican governors about how states will shift into phase one of President Donald Trump’s ‘Opening Up America Again’ plan. Last week, Florida Gov. Ron DeSantis, a Republican, announced the reopening of some beaches and parks. Tennessee Gov. Bill Lee, a Republican, announced Monday he will not extend the state’s “safer-at-home” order on April 30, allowing most businesses to reopen on May 1. “Unlike other businesses, these entities have been unable to manage inventory, deal with payroll, and take care of administrative items while we shelter in place,” Kemp said Monday. “This measure allows them to undertake baseline operations that most other businesses in the state have maintained since I issued the shelter-in-place order.”
Texas governor takes heat from his right as he plots careful course on coronavirus - — Gov. Greg Abbott is charting a high-stakes conservative course through the pandemic, forcing him to navigate between influential activists motivated by new restrictions and a rising death toll.The Texas governor is set to announce a plan Monday for reopening the country’s largest conservative state. Not only will it be taken as a potential model for Republican-led attempts to balance their right flank and more cautious business interests, but how to manage a relationship with cities, largely held by Democrats.As other Republican governors in the South, like Georgia’s Brian Kemp and Florida’s Ron DeSantis, grab the spotlight with their eagerness to reopen their economies amid pressure from conservatives, Abbott appears content to let them move faster than Texas. So far his approach seems out of step for a state that prides itself on being the standard bearer of conservative politics and where the lieutenant governor was one of the loudest voices saying older Americans should be willing to sacrifice their lives for an economic revival.“I'm focusing on the next year,” Abbott said in a radio interview this week, “and making sure that Texas over the course of the next year is going to be able to open up and steps that ensure that we will be able to continue the economic expansion in the state of Texas as opposed to rushing the gate and having everybody getting sick and having to close businesses down again.” He added: “If you're looking at the long game, there are some people who want to be real impulsive and think about let's just focus on tomorrow.”
“Tourist Go Home” – Tensions Soar As Hawaiians Urge Non-Residents To Leave - Hawaiians are becoming increasingly angry, not because the tourism industry has collapsed, and 37% of the labor force has just filed for unemployment, but mostly because US mainlanders, motivated by super discounted flights and hotel rooms, continue to pour into the various Hawaiian Islands during the pandemic. Troy Kane, a local on Oahu, who was interviewed by The Guardian, said residents are abiding by the stay-at-home orders as cases and deaths surge. He points out tourists on the island are ignoring social distancing rules and risk spreading the virus to locals."Locals are following the orders, staying home. But there are people, who are clearly tourists, here by the dozens," said Kane. "They're still out here, still in groups of seven or more, still coming, and that's a problem."The Guardian says, "$100 airfares" are enticing people in quarantine in the continental US to vacation in Hawaii. Last week, nearly 800 tourists arrived on the islands. The influx triggered a nerve among locals and officials who argue tourists need to leave. As of Monday, 580 cases and ten deaths have been confirmed across the Hawaiian Islands. About 35 cases have been non-residents. Kane is a neighborhood board member and community representative of Waimanalo and says the native Hawaiian and Micronesian populations on the islands are at higher risk of contracting the disease. He worries for his community and family that tourists are blatantly disregarding the public health order. "People will always see this place as their playground. And in this moment, as a Native Hawaiian, this is very reflective of many historical circumstances, where people from outside of the islands have come in and caused real harm to the native population. It's not always with the direct intent to do so, but the impacts, especially on Hawaiian people, are very real," he said."If you take our history, it tells us that we are not very well protected."
Illinois Senate Democrats Seek Massive Federal Bailout for State, Going Far Beyond Coronavirus Impact - Wirepoints has obtained a copy of a letter detailing a federal bailout request sent by Illinois Senate President Don Harmon (D-Chicago) in substantially similar form to all members of the Illinois Congressional Delegation. The letter, which is reproduced below, was sent on April 14 on behalf of Harmon’s 40-member Democratic caucus, which holds a majority in the Illinois Senate. The requested bailout is galling in scope and shameless in purpose – a clear attempt to use the pandemic as cover to get federal money to pay for Illinois’ pre-pandemic fiscal mismanagement, particularly of its pensions. The Democratic caucus seeks well over $41.6 billion, including important crisis-related relief such as $1 billion in public-health aid to minority communities and unspecified amounts for increased Medicaid reimbursements and hardship payments to health care facilities. But the vast majority of their request amounts to a national bailout of Illinois’ pre-pandemic failures. It includes:
- $15 billion for a no-strings-attached block grant;
- $6 billion for the state’s unemployment trust fund;
- $10 billion for the state’s pension funds; and,
- $9.6 billion in unrestricted aid to Illinois municipalities, again for pensions.
The $15 billion for the state is more than double the state’s projected losses caused by the pandemic and downturn, depending on how you count it. Gov. J.B. Pritzker released estimates on Wednesday. Pritzker said total budget shortfalls for this year and next total $6.2 billion, assuming the state’s pending constitutional amendment to allow for a progressive tax increase passes in November. Harmon’s letter claims revenue losses could exceed $14.1 billion, without explanation for the difference with Pritzker’s numbers. Also notable is that the $6 billion bailout for Illinois’ unemployment trust fund stems from the state’s comparatively poor management of it. Illinois, prior to the pandemic, had the fourth-worst funding level for that state fund. The new bailout would be in addition to federal assistance already authorized by Congress and the Federal Reserve Bank. They include, for Illinois, approximately $4.9 billion under the new CARES Act and about $9.6 billion in a new Federal Reserve facility to purchase municipal bonds. Chicago may also be seeking its own federal bailout money separately.
Youth and the COVID-19 pandemic --The COVID-19 pandemic is revealing the reality of social conditions for millions of workers and youth throughout the US and around the world. In the US, nearly 40,000 people have now died from the virus. More than 5 million Americans filed for unemployment benefits last week alone, bringing the total over the past four weeks to 22 million. Dozens of videos have circulated showing families waiting in mile-long lines for food at shelters and food banks. To the shock of millions, images of coffins being lined up in a mass grave in New York have appeared on the front page of newspapers and been shared on social media hundreds of thousands of times.These horrific conditions are the result of decades of ruling class policy, which have left the US, the center of world capitalism, completely unprepared for a significant health care emergency.While the virus is known to be significantly more lethal for older people and for those with underlying conditions, it would be a horrible mistake to think that young people are somehow immune because of their age. There have been many harrowing cases of young people who caught the virus and ended up needing hospitalization and intubation, some of whom have died. In fact, according to a report published by the Centers for Disease Control (CDC) on Wednesday, over 25 percent of patients admitted to hospitals between March 1 and March 30 were less than 50 years of age. In some states, especially in the American South, the number of cases among younger patients is much higher. Recent reports coming from North Carolina show that 42 percent of reported cases in the state are between the ages of 24 and 49. An Alabama report states that 41 percent of deaths in the state were people aged between 19 and 64 years. Similar numbers have been reported for Georgia and Louisiana.
New York City mayor announces $827 million in cuts to public education -- On Thursday, New York City’s Democratic mayor Bill de Blasio announced the city was making massive budget cuts due to a steep fall in revenue brought about the COVID-19 pandemic. Of the $2 billion in cuts, some $827 million will be cut from the Department of Education (DOE), far more than the $273 million in cuts announced by the DOE on April 7. The cuts are among the earliest of a broad assault on public education funding now being discussed across the US, including in California, Colorado, Nevada, Michigan, Tennessee, Virginia, Washington, and many other states. In the coming months, virtually every state will further slash education funding due to a decline in tax revenues stemming from mass unemployment. While funneling trillions of dollars to Wall Street, they will repeat the constant refrain that “there is no money” for the social needs of the working class. The New York City school system, which teaches 1.1 million students—70 percent of whom are poor, including 114,000 homeless students—will be devastated by the immense cuts. Recovering from the emergency measures taken during the pandemic will now be virtually impossible. In a letter to staff on Thursday, Schools Chancellor Richard Carranza said that the cuts include, “all non-essential, non-mandated DOE activities, including training, overtime, and materials at schools, central and field offices.” The cuts will wipe out civics programs and health certification programs for teachers. There will be reductions in counseling for students and cuts in after-school programs that will be necessary to help students catch up when they return to their buildings next year. Even funds for the installation of air conditioners and the control of rat infestations will be cut. In addition, the DOE has ordered schools to immediately stop spending funds on any budget line not directly related to the coronavirus. This has caused widespread confusion since the DOE has issued no guidelines as to what constitutes this kind of spending. On Saturday, de Blasio announced that further cuts were coming to the city unless federal aid was forthcoming. At his Sunday press conference, Democratic Governor Andrew Cuomo said, “If we don’t get federal assistance, you’re looking at education cuts of close to 50 percent in the state of New York, where school districts would only get half of the aid they got from the state last year.” One teacher told the World Socialist Web Site: “As far as I know, we will not lose any teachers to the cuts, but will lose per session activities. I may not be able to continue after-school clubs. We will also lose professional development opportunities.
U.S. colleges brace for a devastating summer and fall - For many U.S. colleges, the worst may still be ahead. The upheaval in higher education has been unprecedented already, with campuses closed for months, graduation ceremonies scrapped and entrance exams canceled. Administrators across the nation increasingly fear their schools may not reopen for the fall semester. In the meantime, many have canceled summer programs, sports camps and on-campus weddings - all of which would be lucrative most years. The double whammy of losing summer and fall income would hurt all schools, and it could be fatal to those that were already struggling. "They will have less financial cushion because that summer revenue is no longer is there." College finances are under siege on many fronts. Endowment values have fallen with markets. Fundraising is a steep challenge now. New and returning students may have increased need for financial aid, because many families have lost income in the Covid-19 downturn. Some colleges even fear they won't be able to fill their freshman class for fall 2020 as students may decide to wait a year instead of starting online, which would strangle tuition revenue. High school counselors are advising students that planning ahead even as far as September will be difficult. "I would tell kids: Number one, the likelihood of having face-to-face classes in September is pretty darn small," said Scott White, a retired guidance director for more than 20 years at Montclair High School in New Jersey. Referring to covid-19's risk to older people, he said: "You're not going to get 65-year-old college professors going in." Northwestern University is still making that tough call. "Our return to on-campus instruction in the summer or fall quarters is also not guaranteed," the school's president, Morton Schapiro, wrote in a letter Thursday. He said the decision to refund room-and-board payments and student fees for the spring had cost more than $25 million, and the school is facing more losses from endowment declines, increased financial aid and the cancellation of some on-campus programs.
"The Hit Is Huge": Colleges Brace For 'Fatal' Blow Of Next Fall As Face-To-Face Instruction Uncertain - A viral post written by a veteran professor on Medium recently grabbed prospective students' attention in saying provocatively: "This is a message to all high school seniors (and their parents). If you were planning to enroll in college next fall — don’t.""No one knows whether colleges and universities will offer face-to-face instruction in the fall, or whether they will stay open if they do," University of La Verne law professor Diane Klein wrote. "No one knows whether dorms and cafeterias will reopen, or whether team sports will practice and play.""It’s that simple. No one knows. Schools that decide to reopen may not be able to stay that way. A few may decide, soon, not even to try. Others may put off the decision for as long as possible — but you can make your decision now," the veteran teacher said, making the case that it's the worst time ever for families to make the massive financial commitment. After all, who wants to drop an initial $50K or more to potentially sit at home for Fall 2020 and take online classes? And it's 100% accurate that colleges and universities are flying through the coronavirus economic 'pause' blindly, now slashing budgets for next year and in many instances notifying employees that drastic cuts are coming, including regarding salaries and staffing positions — possibly even reaching into faculty ranks.Colleges and universities across the nation are stuck in financial limbo at a moment that key staffing, faculty contracts, student recruiting, tuition and donor revenue-related decisions are typically made for next year, also as controversy erupts over refusal to refund student housing and campus activity fees. Crucially, endowment values have plunged along with markets.The $600 billion-plus higher education industry is expected to suffer effects of this Spring's campus shutdowns at least through next Fall, given everything down to campus tours for potential recruits have been canceled, leaving open the crucial question of incoming levels of freshmen and vital tuition revenue for next year. And now it's not a question of profitability, academic reputation or long-term growth, but of mere survival. In a new report Bloomberg warns this week: "Administrators across t he nation increasingly fear their schools may not reopen for the fall semester." This amid mass cancellations of everything from sports to summer programs and classes, to shuttering of on-campus facilities and student activities. It further details panicked institutions which were already struggling, now fearing amid coronavirus closures and 'online only' format, bracing for the "fatal" blow of next Fall, when students may opt to not return and wait things out.
Harvard And Other 'Well Endowed' Colleges Face Backlash For Tapping Tens Of Millions In Stimulus - Several US colleges with multi-billion dollar endowments have been tapping into the massive coronavirus stimulus passed by Congress and signed into law by President Trump in January.As part of the $2 trillion Coronavirus Aid, Relief and Economic Security Act (CARES), $14 billion was set aside to support higher education institutions - ostensibly those without billions already in the bank. Harvard, for example, which has a $40 billion endowment, will receive $8.7 million in federal aid. Harvard points out that at least half of which has been mandated for emergency financial aid grants to students, which we would note that they can cover themselves. Hilariously, Harvard's Crimson points to the risk that their endowment could shrink due to market volatility, and that the University's financial situation is "grave." On the other hand - buried halfway through the article, Rutgers Business School professor John Longo points out that "it is conceivable that Harvard's market neutral and long/short hedge funds actually delivered positive returns," adding "If this is the case, it would materially soften the blow from the sharp drop in equities from around the world. "So rather than going to a small business that actually needs the money, Harvard, with a $40 billion endowment and professors that keep getting arrested for giving research secrets to the Chinese Government takes $9,000,000 they don’t need so a small business can’t. What a joke! https://t.co/ozZmLp0pRM — Donald Trump Jr. (@DonaldJTrumpJr) April 20, 2020
Dentistry at ‘Virtual Standstill’ and 2021 Isn’t Safe Either -- The American Dental Association warned that the ongoing Covid-19 pandemic’s unprecedented impact is likely to slash dental spending into 2021, a stark warning that contrasts with some optimism of a quick recovery. More than 80% of dental practices reported that patient volume for the week of April 6 was less than 5% of normal, findings from the ADA showed. The organization estimates Covid-19 could lead to a two-thirds reduction in U.S. dental spending for the year, with 2021 expected to face a 32% reduction. That would be worse than investors have feared, according to Evercore ISI analysts. The ongoing plunge in spending, followed by a slower rebound, could harm companies that make and sell equipment to dentists and orthodontics. The fact that more than 80% of practices have seen such large declines “points to a more severe short-term impact than many investors have been anticipating,” Evercore ISI analyst Elizabeth Anderson wrote in a note to clients. The biggest difference compared to recent reports is the “assumption about the slower re-ramp of practice volumes in 2020 and 2021,” she continued. The caution from both the ADA and Evercore ISI was echoed by Blueshift Research findings that were published this morning, cautioning against clear-aligner manufacturers Align Technology and SmileDirectClub Inc. The firm’s report said “demand for clear aligners is nonexistent” with no new patients at either company’s practices and shops.
People who need care are not going to hospitals because of coronavirus, doctors say - The Washington Post -Soon after he repurposed his 60-bed cardiac unit to accommodate covid-19 patients, Mount Sinai cardiovascular surgeon John Puskas was stumped: With nearly all the beds now occupied by victims of the novel coronavirus, where had all the heart patients gone? Even those left almost speechless by crushing chest pain weren’t coming through the ER.Variations on that question have puzzled clinicians not only in New York, the most severe area of the U.S. outbreak, but across the country and in Spain, the United Kingdom and China. Five weeks into a nationwide coronavirus lockdown, many doctors say the pandemic has produced a silent sub-epidemic of people who need care at hospitals but dare not come in. They include people with inflamed appendixes, infected gall bladders, bowel obstructions and, more ominously, chest pains and stroke symptoms, according to these physicians and early research.“Everybody is frightened to come to the ER,” Puskas said. Some doctors worry that illness and mortality from unaddressed health problems may rival the carnage produced in regions less affected by covid-19, the disease the virus causes. And some expect they will soon see patients who have dangerously delayed seeking care as ongoing symptoms force them to overcome their fear. Evert Eriksson, trauma medical director at the Medical University of South Carolina, described a man in his 20s who tried to ignore the growing pain in his belly, toughing it out at home with the aid of over-the-counter painkillers. By the time he showed up at the Charleston hospital, perhaps 10 days after he should have, he had developed a large abscess, one that was gnawing through the muscle in his abdominal wall. A fairly routine surgery and a night in the hospital had become a lengthy and difficult inpatient stay, with doctors operating and using antibiotics to control the widespread infection, according to Eriksson. Only after they succeed in vanquishing the infection can they address the appendix itself.
Coronavirus: What Is the Risk for Asthma Patients? - Elderly people or people with previous illnesses are considered a special risk group in the current COVID-19 pandemic. And since the aggressive SARS-CoV-2 virus primarily affects the lungs, many asthma patients are afraid they might have an increased risk of infection and of a potentially severe course of the disease.Additional uncertainty has been caused by indications that the immunosuppressive drugs frequently used by asthma patients, such as cortisone sprays, may further increase the risk of infection because they downregulate the body's own immune system.Should Patients Continue to Use Cortisone Sprays?Cortisone sprays, or cortisone tablets in severe cases, are frequently used in asthma therapy because they have an anti-inflammatory effect and reduce the asthmatic hypersensitivity of the bronchial tubes. In this way, they regulate the body's own immune defense downward, giving the active substance an immunosuppressive effect.However, German lung physicians and experts have now issued a joint statement to reassure asthma patients on this score. They say the risk of infection for correctly adjusted asthma patients is not increased as long as they continue to take their medication regularly and do not stop taking it without consulting their doctor. Even in the event of deterioration, the cortisone dose should be adjusted only according to the instructions of the treating pulmonologist, they say.This assessment contrasts with recommendations that are critical of therapy with inhalable steroids (ICS). For example, the chief virologist of the Berlin Charite, Christian Drosten, has cautiously recommended that asthma patients should clarify with their treating physician whether their cortisone-based asthma medication should be replaced by one that does not interfere as much with the immune system.However, since a connection between such cortisone-based medications and increased infection risk has not yet been scientifically proven, the experts of the German Society for Pneumology and Respiratory Medicine (DGP) continue to support inhalation therapy.They say that a sudden discontinuation of the medication or a change in therapy could be considerably more dangerous than any increased risk of infection with SARS-CoV-2.
Low incidence of daily active tobacco smoking in patients with symptomatic COVID-19 – Abstract: As the pandemic of COVID-19 is still under progression, identification of prognostic factors remains a global challenge. The role of cigarette smoking has been suggested among the disease’s epidemiological risk factors, although it is highly controversial. Objective: To evaluate the correlation of daily smoking with the susceptibility to develop SARS-CoV-2 infection. Participants: We estimated the rates of daily current smokers in COVID-19-infected patients in a large French university hospital between February 28th , 2020 and March 30th , 2020 for outpatients and from March 23rd , till April 9th , 2020 for inpatients. Design: The rates from both groups were compared to those of daily current smokers in the 2018 French general population, established in 2018, after standardization of the data for sex and age. Results: The inpatient group was composed of 343 patients, median age 65 yr: 206 men (601%, median age 66 years) and 137 women (39.9%, median age 65 years) with a rate of daily smokers of 4.4% (5.4% of men and 2.9% of women).The outpatient group was composed of 139 patients, median age 44 years: 62 men (44.6 %, median age 43 years, and 77 women (55.4 %, median age 44 years). The daily smokers rate was 5.3% (5.1% of men and 5.5 % of women). In the French population, the daily smokers rate was 25.4% (28.2% of men and 22.9% of women). The rate of current daily smokers was significantly lower in COVID-19 outpatients and inpatients (80.3% and 75.4%, respectively), as compared to that in the French general population with standardized incidence ratios according to sex and age of 0.197 [0.094 - 0.41] and 0.246 [0.148 - 0.408]. These ratios did not significantly differ between the two groups (P=0.63). Conclusions and relevance: Our cross sectional study in both COVID-19 out- and inpatients strongly suggests that daily smokers have a very much lower probability of developing symptomatic or severe SARS-CoV-2 infection as compared to the general population.
Indoor transmission of SARS-CoV-2 - Abstract: By early April 2020, the COVID-19 pandemic had infected nearly one million people and had spread to nearly all countries worldwide. It is essential to understand where and how SARS-CoV-2 is transmitted. Methods: Case reports were extracted from the local Municipal Health Commissions of 320 prefectural cities (municipalities) in China, not including Hubei province, between 4 January and 11 February 2020. We identified all outbreaks involving three or more cases and reviewed the major characteristics of the enclosed spaces in which the outbreaks were reported and associated indoor environmental issues. Results: Three hundred and eighteen outbreaks with three or more cases were identified, involving 1245 confirmed cases in 120 prefectural cities. We divided the venues in which the outbreaks occurred into six categories: homes, transport, food, entertainment, shopping, and miscellaneous. Among the identified outbreaks, 53.8% involved three cases, 26.4% involved four cases, and only 1.6% involved ten or more cases. Home outbreaks were the dominant category (254 of 318 outbreaks; 79.9%), followed by transport (108; 34.0%; note that many outbreaks involved more than one venue category). Most home outbreaks involved three to five cases. We identified only a single outbreak in an outdoor environment, which involved two cases. Conclusions: All identified outbreaks of three or more cases occurred in an indoor environment, which confirms that sharing indoor space is a major SARS-CoV-2 infection risk.
CDC adds six more symptoms for coronavirus - The Centers for Disease Control and Prevention (CDC) added six new symptoms for the coronavirus to its website as officials still grapple with gauging the illness’s scope.New symptoms for the disease include “chills, repeated shaking with chills, muscle pain, headache, sore throat and new loss of taste or smell,” the CDC said. The list already included fever, cough and shortness of breath as symptoms for the coronavirus, which has infected over 905,000 people in the U.S. and killed nearly 52,000.The CDC recommends that anyone who has “trouble breathing, persistent pain or pressure in their chest, new confusion or inability to arouse or have bluish lips or face” should seek immediate medical attention. Other symptoms of the highly-infectious virus could include diarrhea, skin rash, runny nose, red eyes and fatigue. However, people are known to be able to contract the virus and remain asymptomatic.
COVID-19 Is Not Like The Flu At All -- How deadly is Covid-19 compared to seasonal flu, past pandemics, or car crashes? It's about the spike... To offer context, we have produced two charts showing coronavirus deaths along with deaths from other common causes in the past to which the disease has recently been compared. One chart shows deaths for the United States, the other for New York, the state hardest hit.Note that the data sets begin at different points in the year (as marked on the left). Also note that the figures shown here are for new deaths each week, not for cumulative deaths. The chart shows deaths per capita to allow for comparison of data from different years. Deaths are shown from:
- Covid-19, starting from February 17. (Covid Tracking Project)
- The 2017-18 flu season: This was the deadliest recent flu season. The chart shows one line for deaths attributed directly to flu, and another for deaths attributed to either flu or pneumonia. The smaller line is an undercount of flu-caused deaths, the larger is an overcount, with the real number lying somewhere in between. (More on this below.) The data begin on October 1, 2017, which the CDC considered the first week of that flu season. (CDC)
- Heart disease and cancer: The first and second leading causes of death in the United States. The chart shows total 2017 deaths averaged per week. (CDC)
- Car crashes: Weekly deaths beginning from January 1, 2018. (National Highway Traffic Safety Administration)
- 1957-58 Asian flu pandemic: Weekly influenza and pneumonia deaths beginning from August 24, 1957. These data come from a contemporary CDC program that surveilled 108 American cities with a total population of about 50 million people. We have used that figure, rather than the total U.S. population at the time, to calculate deaths per million. (CDC)
Because the number of weekly Covid-19 deaths in New York is now larger than the typical number of weekly deaths from all causes, we are omitting most of the individual causes from the chart. And because the state’s population has been highly stable over the time periods considered — decreasing by just 0.7 percent since 2017, according to the latest Census Bureau estimates — we have chosen to show both absolute deaths and deaths per capita.
Four-month-old daughter of NYC firefighter dies of coronavirus, family says -A New York City firefighter and his wife lost their 4-month-old daughter to the coronavirus this week, according to their family. Jay-Natalie La Santa, the first child for firefighter Jerel La Santa and his wife Lindsey La Santa, died on Monday after being rushed to the hospital nearly a month ago. The girl’s grandmother, Wanda La Santa, confirmed her death to NBC News. "She was very feisty. She was a little Angel with the most beautiful smile. She kept us on our toes," Wanda La Santa said. The 4-month-old was taken to the hospital on March 21 for a fever and was admitted right away due to her pre-existing heart condition. Jay-Natalie’s initial coronavirus test came back negative, as well as tests for her parents and grandmother. However, a week later she was tested again and it came back positive. Wanda La Santa told the outlet her granddaughter began showing signs of improvement. "She had broken the fever. It looked like it was subsiding," Wanda La Santa said. "Her lungs were starting to clear." Doctors believed the baby was on the mend during an April 20 meeting but "everything just started going south” within hours. "In a matter of minutes, her pulse started to drop, her breathing started to drop and she went into cardiac arrest," the grandmother said. Jay-Natalie later died that day, leaving her family devastated.thehill.com
COVID-19 possibly striking more children than expected -The number of children infected with the coronavirus is far more extensive than what is currently reported -- a hidden detail that could vastly underestimate the demand on health care systems and pediatric intensive care units (PICUs).A new study published in the "Journal of Public Health Management and Practice" from the University of South Florida (USF) and the Women's Institute for Independent Social Enquiry (WiiSE), estimates that for each child who requires intensive care for COVID-19, there are 2,381 children infected with the virus. This calculation follows a report from the Chinese Center for Disease Control and Prevention regarding its clinical study of over 2,100 children in China with COVID-19. According to the North American registry, Virtual PICU Systems, 74 children in the U.S. were admitted to PICUs between March 18 and April 6, signaling an additional 176,190 children were likely infected during this timeframe. Children younger than 2 accounted for 30 percent of the cases, 24 percent were ages 2 to 11 and 46 percent of the PICU cases were children between ages 12 and 17. Researchers say that if as many as 25 percent of the U.S. population becomes infected with the coronavirus before the end of 2020, 50,000 children with severe illness will need to be hospitalized, with 5,400 of them critically ill and requiring mechanical ventilation. Clinical reports indicate the average length of stay for pediatric COVID-19 is 14 days. According to a national survey aimed to evaluate the U.S. pediatric critical care capacity and published in "Critical Care Medicine," there are approximately 5,100 PICU beds in the U.S.
Autopsy: Santa Clara patient died of COVID-19 on Feb. 6 - Health officials said Tuesday that new autopsy results show a patient in Santa Clara, Calif., died of COVID-19 on Feb. 6, several weeks before the United States declared its first novel coronavirus death.The finding suggests that the virus was circulating in the San Francisco Bay Area earlier than previously thought.The U.S. Centers for Disease Control and Prevention reported the first fatality due to coronavirus complications in the United States on Feb. 28. The patient was a resident of Kirkland, Wash.Now, the Santa Clara County Public Health Department has identified two individuals who died of COVID-19 at home on Feb. 6 and Feb. 17. The health department said samples were sent to the CDC and the results were shared Tuesday.The department also received the results of a third autopsy finding from a patient who was confirmed to have died from COVID-19 on March 6.All three of these deaths occurred at a time when testing for the virus was extremely limited.The county originally said its first coronavirus death was on March 9. This new report finds three deaths happened before this date. "As the Medical Examiner-Coroner continues to carefully investigate deaths throughout the county, we anticipate additional deaths from COVID-19 will be identified," Santa Clara County Health Department said in a statement.
Amid Signs the Virus Came Earlier, Americans Ask: Did I Already Have It? - NYT - New revelations have left people wondering about ailments early this year. — In January, a mystery illness swept through a call center in a skyscraper on Michigan Avenue in Chicago. Close to 30 people in one department alone had symptoms — dry, deep coughs and fevers they could not shake. When they gradually returned to work after taking sick days, they sat in their cubicles looking wan and tired.“I’ve started to think it was the coronavirus,” said Julie Parks, a 63-year-old employee who was among the sick. “I may have had it, but I can’t be sure. It’s limbo.” The revelation this week that a death in the United States in early February was the result of the coronavirus has significantly altered the understanding of how early the virus may have been circulating in this country. Researchers now believe that hidden outbreaks were creeping through cities like Chicago, New York, Seattle and Boston in January and February, earlier than previously known.The new timeline has lent credence to a question on the minds of many Americans: Did I already have the coronavirus?The retroactive search is happening on many levels. People who had suffered dreadful bouts with flulike illnesses are now wondering whether it had been the coronavirus. Doctors are thinking back to unexplained cases. Medical examiners are poring over their records looking for possible misdiagnosed deaths. And local politicians are demanding investigations.
Alarmed as COVID patients' blood thickened, New York doctors try new treatments (Reuters) - As the novel coronavirus spread through New York City in late March, doctors at Mount Sinai Hospital noticed something strange happening to patients’ blood. Signs of blood thickening and clotting were being detected in different organs by doctors from different specialties. This would turn out to be one of the alarming ways the virus ravages the body, as doctors there and elsewhere were starting to realize. At Mount Sinai, nephrologists noticed kidney dialysis catheters getting plugged with clots. Pulmonologists monitoring COVID-19 patients on mechanical ventilators could see portions of lungs were oddly bloodless. Neurosurgeons confronted a surge in their usual caseload of strokes due to blood clots, the age of victims skewing younger, with at least half testing positive for the virus. “It’s very striking how much this disease causes clots to form,” Dr. J Mocco, a Mount Sinai neurosurgeon, said in an interview, describing how some doctors think COVID-19, the illness caused by the coronavirus, is more than a lung disease. In some cases, Mocco said, a stroke was a young patient’s first symptom of COVID-19. As colleagues from various specialties pooled their observations, they developed a new treatment protocol. Patients now receive high doses of a blood-thinning drug even before any evidence of clotting appears. “Maybe, just maybe, if you prevent the clotting, you can make the disease less severe,” said Dr. David Reich, the hospital president. The new protocol will not be used on certain high-risk patients because blood thinners can lead to bleeding in the brain and other organs.
Blood-pressure drugs are in the crosshairs of COVID-19 research - (Reuters) - Scientists are baffled by how the coronavirus attacks the body - killing many patients while barely affecting others. But some are tantalized by a clue: A disproportionate number of patients hospitalized by COVID-19, the disease caused by the virus, have high blood pressure. Theories about why the condition makes them more vulnerable – and what patients should do about it – have sparked a fierce debate among scientists over the impact of widely prescribed blood-pressure drugs. Researchers agree that the life-saving drugs affect the same pathways that the novel coronavirus takes to enter the lungs and heart. They differ on whether those drugs open the door to the virus or protect against it. Resolving that question has taken on new urgency after an April 8 report by the U.S. Centers for Disease Control and Prevention showed that 72% of hospitalized COVID-19 patients 65 or older had hypertension. The drugs are known as ACE inhibitors and ARBs, broad categories that include Vasotec, Valsartan, Irbesartan, as well as their generic versions. In a recent interview with a medical journal, Anthony Fauci - the U.S. government’s top infectious disease expert - cited a report showing similarly high rates of hypertension among COVID-19 patients who died in Italy and suggested the medicines, rather than the underlying condition, may act as an accelerant for the virus. Efforts to understand how the virus uses the pathway to the heart and lungs, and the role of the medicines, are complicated by a lack of rigorous studies. “There are millions of Americans that take an ACE inhibitor or AR daily,” said Dr Caleb Alexander, co-director of the Johns Hopkins Center for Drug Safety and Effectiveness in Baltimore. “This is one of the most important clinical questions.” An estimated 100 million U.S. residents suffer from high blood pressure, which increases the risk of heart disease, stroke and kidney failure. About four-fifths of them need to take prescription drugs to control it, according to the CDC. ACE inhibitors and ARBs are widely prescribed to patients with congestive heart failure, diabetes or kidney disease. The drugs account for billions of dollars in prescription sales worldwide. The absence of clear answers on how the drugs impact COVID-19 patients has sparked rampant speculation in correspondence and editorials posted on medical journal websites and those where scientists share unreviewed, pre-publication study drafts.
April 20 Update: US COVID-19 Test Results - Test-and-trace is a key criterion in starting to reopen the country. My current guess is test-and-trace will require around 300,000 tests per day at first since the US is far behind the curve. Some scientists believe we need around 800,000 tests per day. Note: The Financial Times reports that Germany is doing more than 50,000 tests per day (with about one-fourth of the US population). That would be 200,000 in the US. I rounded up to 300,000 per day since the US is so behind on testing. But there are recommendations that Germany needs 200,000 tests per day to do test-and-trace. (800,000 adjusted for population).This is just test results reported daily.There were 137,687 test results reported over the last 24 hours. This data is from the COVID Tracking Project. The percent positive over the last 24 hours was 17% (red line). The US probably needs enough tests to push the percentage below 5% (probably much lower based on testing in New Zealand). All experts agree: We need many more tests!
CDC director warns second wave of coronavirus this winter will likely be worse - Even as states move ahead with plans to reopen their economies, the director of the Centers for Disease Control and Prevention warned Tuesday that a second wave of the novel coronavirus will be far more deadly because it is likely to coincide with the start of flu season. "There's a possibility that the assault of the virus on our nation next winter will actually be even more difficult than the one we just went through," CDC Director Robert Redfield said in an interview with The Washington Post. "And when I've said this to others, they kind of put their head back, they don't understand what I mean." Having two simultaneous respiratory outbreaks would put unimaginable strain on the health-care system, he said. The first wave of covid-19, the disease caused by the coronavirus, has already killed more than 42,000 people across the country. It has already overwhelmed hospitals and revealed gaping shortages in test kits, ventilators and protective equipment for health-care workers. In a wide-ranging interview, Redfield said federal and state officials need to use the coming months to prepare for what lies ahead. As stay-at-home orders are lifted, officials need to stress the continued importance of social distancing. Officials also need to need to massively scale up their ability to identify the infected through testing and find everyone they interact with through contact tracing. Doing so prevents new cases from becoming larger outbreaks. Asked about the appropriateness of protests against stay-at-home orders and calls on states to be "liberated" from restrictions, Redfield said: "It's not helpful." He said he, along with members of the White House coronavirus task force, have been clear about the importance of social distancing "and the enormous impact that it's had on this outbreak in our nation."
Gilead Tumbles After Report That Chinese Trial Unsuccessful - Gilead Sciences Inc. shares plunged after reports that its experimental drug being tested in Covid-19 patients failed to show a positive result in a Chinese trial.The drug company and a scientist involved in the trial disputed that characterization, however.According to reports from the Financial Times and Stat, the drug, called remdesivir, didn’t make a significant difference in the amount of time it took patients to improve, or their likelihood of death. A summary of the trial results was posted and quickly removed by the World Health Organization, according to the publications. The summary posted by Stat shows results from 237 patients in the trial. Use of the drug wasn’t associated with patients getting better, faster. And 13.9% of patients getting the drug died, versus 12.8% getting standard care, according to the summary.Frederick Hayden, an infectious disease expert at the University of Virginia School of Medicine who helped the Chinese doctors conduct the study, disputed the characterization that the study had failed.“That is not correct,” Hayden said in an interview, when asked whether the results showed remdesivir had flopped. “My interpretation of them is not consistent with that headline.” Gilead, in a statement, said that the summary mischaracterizes the results of the study, which was stopped early after not enough patients could be found. A study with low enrollment can lead to results that are less conclusive.
More than 30 Amazon workers in New York warehouse test positive for coronavirus: report -An Amazon employee claimed that over 30 employees at a warehouse outside of New York City have tested positive for the coronavirus, Business Insider reports, a number that has not been confirmed by the tech giant. "We are supporting the individuals, who are recovering," Rachel Lightly, an Amazon spokesperson said in a statement to The Hill. "We are following guidelines from health officials and medical experts, and are taking extreme measures to ensure the safety of employees at our site," she continued, calling Amazon employees "heroes fighting for their communities." Employees at the Amazon fulfillment center in Carteret, N.J., said they received a text message Wednesday informing them of additional coronavirus cases. "Every other day it's the same text message," one anonymous employee told Business Insider. "Our building during one day shift has over 500 people in the building at once. There's no way to properly distance yourself when running at that capacity. And every day they're hiring more and more people." "I used to feel safe here, but not anymore," the employee continued. "They just care about putting out packages." Amazon has implemented a policy of unlimited unpaid time off and a $2-per-hour pay increase for hazard pay amid the coronavirus pandemic. The policies will both continue through the end of the month, according to multiple reports. All Amazon employees diagnosed with COVID-19 or placed into quarantine will also receive up to two weeks of pay. The company has provided workers with protective gear, including masks and gloves. It has also started checking staff temperatures at the beginning of shifts. Five lawmakers penned a letter to Amazon CEO Jeff Bezos earlier this month expressing dismay at the work conditions of Amazon employees. The letter discusses Chris Smalls, who was reportedly fired after organizing a walkout and demanding a change in conditions for warehouse employees.
New York Finds Virus Marker in 13.9%, Suggesting Wide Spread -- A New York state study seeking to find out how many people have been infected by the new coronavirus found that 13.9% of those tested across the state had signs of the virus, in one of the biggest U.S. reviews to date. In New York City, the hardest-hit area in the U.S., 21.2% of people tested positive for a blood marker showing that they had been infected at some point. Statewide, 2.7 million people may have had Covid-19, Governor Andrew Cuomo said. That’s about 10 times more than the official count based on the state’s testing of mostly very sick patients. There are broad ramifications of the study, which will need to be analyzed further by experts to give a clearer picture of the infection’s prevalence. But it appears to confirm predictions that the virus has infected far more people than New York has been able to diagnose so far. It also means that the fatality rate of the virus is likely lower than the figure that’s based only on confirmed cases and deaths. Officially, New York has reported 15,500 deaths. If 2.7 million people have been infected, that would put the fatality rate at around 0.6%. The current death count doesn’t include some people may have died at home and not been diagnosed, and may also miss people who died earlier on in the outbreak before diagnostic testing became widespread. The survey used blood tests that look for antibodies, which are markers in the blood created by the immune system after a person has been exposed. They can show whether a person was previously exposed to the virus, even after they have recovered from the illness. Antibody tests may also help find people who were infected but showed few or no symptoms. Diagnostic tests, such as the nasal swabs used on people who show up sick at the hospital, check for the virus itself. They can’t find out whether people were previously infected and recovered, however.
New York City antibody survey reveals more than a FIFTH residents have been infected and mortality rate is FIVE TIMES deadlier than the flu -More than 20 percent of New York City residents tested positive for coronavirus antibodies in a study launched by Governor Andrew Cuomo which, if accurate, means as many as 1.7million people have been infected in the city - and that the mortality rate is between 0.6 and 0.8 percent, far greater than the 0.1 percent mortality rate of the flu. The study took samples from 3,000 randomly selected people across the state who were chosen at grocery stores and had their blood taken via a finger-prick test that the state's health department made. It remains unknown how accurate it is. While private companies have given exact percentages for how accurate their own tests are, when questioned about their test, the NY health department, said only that theirs was 'very accurate'. Statewide, the virus prevalence was 13.9 percent but it was far higher in New York City, where 21.2 percent tested positive. New York City, which has a population of 8.4million, has recorded 9,944 confirmed coronavirus deaths and there are another 5,052 presumed deaths from the disease. There are currently more than 138,000 confirmed cases of the virus in the city which means that, by the study's percentage, only eight percent of the people who actually had the virus have tested positive for it. If the infection rate from the study is accurate, when combining the confirmed deaths and presumed deaths, it means the fatality rate is 0.8 percent. When counting confirmed deaths alone, the fatality rate drops to 0.6 percent. That makes it far more deadly than the flu - which has a fatality rate of 0.1 percent - and coronavirus has proven to be far more contagious. Oxiris Balbot, the New York City health commissioner, said on Thursday that she estimates up to one million New Yorkers might have been infected.
New Study Shows Nearly 9 in 10 Covid-19 Patients on Ventilators Don’t Make It - A giant study that examined outcomes for more than 2,600 patients found an extraordinarily high 88% death rate among Covid-19 patients in the New York City area who had to be placed on mechanical devices to help them breathe. The study, published in the Journal of the American Medical Association, is one of the largest reviews published to date of Covid-19 patients hospitalized in the U.S. The researchers examined outcomes for coronavirus patients who were admitted between March 1 and April 4 to 12 hospitals in New York City and Long Island that are part of the Northwell Health system. Overall, the researchers reported that 553 patients died, or 21%. But among the 12% of very sick patients that needed ventilators to breathe, the death rate rose to 88%. The rate was particularly awful for patients over 65 who were placed on a machine, with just 3% of those patients surviving, according to the results. Men had a higher mortality rate than women. “The findings of high mortality rates among ventilated patients are similar to smaller case series reports of critically ill patients in the US,” the authors wrote in the paper. With no proven drugs, ventilators are one of the go-to options for ICUs and critical care doctors in working with severe cases of Covid-19 pneumonia. But there are growing reports that few patients who get on the machines are able to get off. As a result, some doctors are questioning their use in Covid-19 patients and have been trying to find methods for keeping coronavirus patients off them when possible. The mortality rate in the study may not represent the ultimate picture that emerges. That’s because the study only included patients for whom a definite outcome is known-- those who died or were discharged. It didn’t include patients still being treated at hospitals. Outcome data were available for just 2,634 of 5,700 patients admitted during the study period.
Life After Ventilators Can Be Hell for Coronavirus Survivors - Her fever hit 105 degrees. In her delirium, Diana Aguilar was sure the strangers hovering over her, in their masks and gowns, were angels before they morphed into menacing aliens. As a doctor prepared to slide a ventilator tube down her throat, all she remembers thinking was: “I cannot breathe. I have no air. I give up, I give up.” Aguilar, in the throes of Covid-19, was starting her 10-day descent into ventilator limbo. The mechanical device to which her tube was attached is coveted for its ability to push life-saving oxygen deep into damaged lungs. Yet it also is feared and reviled for the damage it inflicts — and for the slim odds of survival it affords. “You’re going to be fine,” a voice reassured her. “Start counting now; one, two…” The voice belonged to an anesthesiologist, the last she heard before drifting off. The virus had already been ravaging her body for weeks, infecting the tiny cells in her lungs that deliver oxygen to her blood. She was struggling to breathe, and every inch of her body ached as she felt it failing. And then came the intubation, a last-resort intervention to save her life. It’s an awful moment for each of the many thousands of patients who are estimated to have undergone the procedure. Most will not survive: Studies suggest more than two-thirds die while on ventilators. As the cases of Covid-19 infection soar, already approaching 900,000 Americans, more and more patients are going through the same dreaded treatment. The lucky ones pull through, but their journey back to health is long and perilous. Doctors are only now learning about the challenges ahead for people who arrive at the hospital so breathless and low on oxygen that a ventilator, many believe, is all that’s standing between them and death. “Mechanical ventilation is a life-saving intervention,” says Hassan Khouli, chair of critical care at the Cleveland Clinic in Ohio. Yet even when patients survive, “some of them will continue to be profoundly weak,” he says. “It can get to the point where they can’t perform daily activities — shaving, taking a bath, preparing a meal — to the point they could be bedridden.’’ Some people never fully recover, says Michael Rodricks, medical director of Somerset’s intensive-care unit. And those who do often must relearn basic skills such as walking, talking and swallowing.
NYPD Confiscates Drone Belonging To Freelance Photojournalist Documenting NYC's Mass Burials --By now, many Americans have probably seen the photos of mass graves being dug at New York's Hart Island, a small island in the Bronx that has for more than a century served as a burial ground for NYC's unclaimed bodies. Over the past few weeks, the city has accelerated the burials taking place at the island from a pace of about 25 a week to more than 25 a day, as we reported a few weeks ago.To be sure, not all of those bodies are victims of the coronavirus outbreak. But many of them are, and the story has acquired a kind of lurid fascination, making it an object of widespread interest among the public.Perhaps it was this tremendous public response to certain photos, clearly taken with an aerial drone, that drew the interest of the NYPD. Because as the NY Post reported Sunday, the NYPD has seized the drone of a photojournalist documenting the mass burials on Hart Island amid the coronavirus crisis.The photographer, a freelance photojournalist presumably intending to circulate the photos to media organizations, had an FAA license to fly the drone, but his property was confiscated, and he was given a misdemeanor summons for "avigation", an ancient city ordinance prohibiting flying anywhere that's not an airport (an ordinance that's clearly in conflict with federal regulations on drone piloting). Aerial photographer George Steinmetz, who has an FAA license to fly a drone, had launched the $1,500 device from a City Island parking lot Wednesday morning to film the somber work on Hart Island when he was suddenly stopped. Just minutes after he began, Steinmetz was confronted by a group of plainclothes NYPD officers who stepped out of an unmarked van. The cops confiscated the drone and issued him a misdemeanor summons for “avigation,” an antiquated law prohibiting aircraft - including drones - from taking off or landing anywhere in New York City that isn’t an airport, the report said.When approached by Gothamist and asked why he felt compelled to document the burials on Hart Island, the photographer, whose name was George Steinmetz as noted in the above-quote, replied that: "these are human beings, and they're basically being treated like toxic waste."
Cats with coronavirus: Two in New York are first pets known to have virus in the US - Two cats in New York have been infected with the novel coronavirus, federal officials announced Wednesday. Both had mild respiratory symptoms and are expected to make a full recovery. "These are the first pets in the United States to test positive," the US Department of Agriculture said Wednesday in a joint statement with the US Centers for Disease Control and Prevention. The agencies emphasized that there is no evidence pets play a role in spreading coronavirus in the United States. "There is no justification in taking measures against companion animals that may compromise their welfare," they said. The two cats were tested after they showed respiratory symptoms, according to the agencies, and they join the ranks of eight lions and tigers who were infected at a New York zoo. A veterinarian tested the first house cat after it showed mild respiratory signs, but none of the humans in its household were confirmed to have the virus. It's possible, officials said, that the cat was infected by somebody outside the home. Someone inside the house, with mild or no symptoms, could have also transmitted the virus. The second cat, in a separate area of New York, was also tested after it showed signs of respiratory illness. The owner of that cat tested positive for Covid-19 before the cat became ill, but another cat in the household has shown no signs of illness.
2 Cats Become First Pets To Test Positive For Coronavirus In The US: Live Updates - New York has reached another grim milestone: the state's death toll has surpassed 15k on Wednesday, though the pace of deaths continued to slow. Deaths climbed to 15,302. Texas, meanwhile, reported another 18% jump in new cases. France reported 3,201 new cases on Wednesday, the highest number in four days, to right around 160k cases. The WHO noted that in the Middle East, cases are rising everywhere except Iran. Earlier in the afternoon, remarks made by WHO Director-General Dr. Tedros Adhanom Ghebreyesus drew the attention of the international press as he asked the US to "reconsider" cutting funding to the organization, insisting that the organization acts to combat discrimination and fight for human rights everywhere (except China). The organization also released a list of six conditions that should be met before countries begin to reopen.Earlier, Saudi Arabia reported 1,141 new cases of coronavirus and 5 new deaths for a total of 12,772 cases and 114 deaths, while the UAE reported 483 new cases of coronavirus and 6 new deaths for a total of 8,238 cases and 52 deaths.Meanwhile, the state of California said it recorded 86 new COVID-19-linked deaths since yesterday, an increase of 6.8% to nearly 1,300 deaths. Earlier, two cats in the US tested positive for the coronavirus, becoming the first household pets in the country to be confirmed positive for the virus after at least one tiger at the Bronx Zoo was found to be carrying strains of the virus. At least one of the cats was experiencing mild symptoms, per the CDC. Summary:
- German biotech company begins clinical trials for vaccine
- Oxford U. begins human testing for vaccine
- FT says UK coronavirus deaths 2x+ official number
- NY death toll passes 15k
- Trump: "Our Country is starting to OPEN FOR BUSINESS"
- Middle East coronavirus cases continue to climb everywhere except Iran
- WHO's Dr. Tedros asks US to reconsider cutting funding
- 2 cats become first pets in US to catch the virus
- Chinese scientist finds deadly new coronavirus mutations
- Cali officials reveal first US coronavirus death occurred weeks earlier than realized
- Dominic Raab says at least 69 health-care workers have died in the UK
- South Korea unveils 'New Deal'-style stimulus
Virus Deaths in New York Hit Lowest Level Since April 1 - Deaths from the coronavirus continued their gradual descent, Gov. Andrew M. Cuomo said on Friday, with the state recording 422 more deaths, the least since April 1. The state death toll now stands at 16,162.Other indicators of progress against the virus continue to show improvement, too, though New York is still being hit harder than any state in the nation:
- The three-day average of the number of virus patients in hospitals has fallen 11 days in a row. It has dropped by more than 3,000 since last Friday, and is down nearly 25 percent since its peak on April 13, according to statistics cited by the governor.
- The number of patients who are intubated, and therefore least likely to survive, has fallen for 12 days in a row.
One area of concern remains the number of new hospital admissions. After dropping almost 35 percent from last Friday to Tuesday, it has fallen only another 5 percent since then.“That’s basically a flat line, and that is troubling,” Mr. Cuomo said.The influx of patients reflects the fact that the state is still averaging about 6,000 new virus cases per day.That is down from almost 11,000 per day during the first week of April but still more than any other state. New York now has 271,590 confirmed cases of coronavirus.
N.J. Seeing Quicker Test Results With Cases on Brink of 100,000 - New Jersey reported quicker test results and a drop in ventilator use as it’s on the brink of exceeding 100,000 cases of the new coronavirus. The state added 4,247 positive results, for a total of 99,989. There were 307 more deaths reported, for a cumulative 5,368. It’s taking some of 21 counties more than 30 days to double cases; last month, some had doubled every three days. Governor Phil Murphy said test results now take five to seven days, rather than as long as the 14 days typical in past weeks. The state has at least 86 testing sites, some using a rapid test developed by Rutgers, the state university. New Jersey will need to double its capacity in order to prevent future cases from becoming “boomerang outbreaks,” the governor said. “I am not in a position yet to begin reopening our state,” he said Thursday at a press briefing. As the infection rate recedes in New Jersey’s northern region, health officials have warned that the peak is approaching in the center and south. The last of the state’s three Federal Emergency Management Agency field hospitals opened on April 21 in Atlantic City. Although those facilities, with 750 combined beds, are mostly empty, Murphy said they may be pressed into service if a resurgence strikes, as scientists have warned. The state this week received 500 ventilators that it had bought on its own, which should cut its dependence on a federal stockpile that was in demand nationally. Murphy reported that ventilator use dropped to 1,462, its lowest since April 5. The state was starting to examine death certificates and nursing homes were reconsidering what may be classified as virus-related fatalities. “We do expect you will see on our dashboard an increase in the number of deaths,”
Texas Cases Rise for Third Day; N.Y. Deaths Slow: Virus Update - U.S. President Donald Trump said he disagreed with the Georgia governor’s decision to begin relaxing curbs this week, a marked shift in his tone. Data showed U.S. unemployment could potentially rise as high as 20%, as lawmakers debate a $484 billion interim rescue plan.New York’s hospitalizations are relatively flat, which Governor Andrew Cuomo said “is not great news.” European Central Bank President Christine Lagarde told EU leaders they’ve done too little, too late to contain the outbreak.Spain reported the greatest number of new cases and fatalities in almost a week, while Italy saw recoveries from the coronavirus overtake new infections for the first time. The U.K. will survey 20,000 households to track the spread of the virus. Key Developments:
- Virus Tracker: Cases top 2.6 million; deaths exceed 184,000
- Trump signs executive order suspending immigration
- Mexico sees first daily rise of 1,000 new cases
- Six vaccines in human trials stage, WHO says
- Coronavirus leading to Europe’s highest deaths in decades
- Temperature checks, constant anxiety in pandemic’s city zero
- Slow pace of U.K. rescue loans sparks ire
Michigan nears 3,000 COVID-19 deaths, cases rise to 35,200 - Michigan reported 164 additional deaths stemming from the novel coronavirus on Thursday, bringing the state’s death toll due to the illness COVID-19 to 2,977. State officials said Thursday's tally included 55 older deaths identified by comparing death certificate data with the state's registry of laboratory-confirmed cases. These deaths might have occurred days or weeks earlier. The state also confirmed 1,325 new cases Thursday, bringing its cumulative total cases to 35,291, according to state data. The new case figure was the highest daily increase in Michigan since April 14 and 326 more than the new cases reported Wednesday, when the state reached 33,966 cases and 2,813 deaths. Michigan's rate of infection has been leveling off, and the state dropped in rank to seventh in the nation for its number of COVID-19 cases. But Michigan still ranks third for deaths behind New York (nearly 19,500 deaths) and New Jersey (over 5,100 deaths), according to tracking by Johns Hopkins University & Medicine Coronavirus Resource Center. Workers are seen in a side view mirror at the new rapid-testing site in the parking lot of Henry Ford Centennial Library in Dearborn.
Coronavirus in Ohio: New cases slow as DeWine builds case for May reopening - Gov. Mike DeWine continued Wednesday to build a case of economic justification for gradually reopening the state beginning May 1, saying that Ohioans have "paid a great price" in lost jobs during the coronavirus pandemic. But the public-health case that DeWine has built for reopening amid a lack of testing and failure to meet federal guidance on recording a decline in infection numbers remains a work in progress. With the state set to soon issue "stringent" virus-precaution requirements on employers and businesses being allowed to reopen, DeWine concedes that a critical component — testing — must increase. "I've been candid about that," DeWine said. "The tracing and testing pieces are starting to come together," he added, saying that he soon will have "good news" about expanded testing to help check the spread of the virus. DeWine and Dr. Amy Acton, the state health director, say the limited reopening probably will increase the number of coronavirus cases as Ohioans isolated at home for a month venture out. There are now 14,117 coronavirus cases statewide with 610 deaths, although Wednesday's case load increased by less than 3 percent. Ohio's daily case numbers, after backing out cases from two virus-riddled state prisons, have fallen into a consistent range. But they have not shown a downward trajectory over 14 days — a Trump administration guideline for states to reopen their economies. "We have hit a plateau. We would like to see it decline, but the plateau seems to be holding," the governor said. The state's reopening plan will be announced soon, but not Thursday as originally stated. Lt. Gov. Jon Husted, the administration's point person on the reopening, said that thorough virus precautions will be required of employers and businesses, and he feels comfortable. "I would encourage my own family members to go to work under conditions like this," he said. State officials credit the month-old stay-at-home order with checking the spread of the coronavirus and sparing the hospital system from being slammed with unmanageable numbers of patients. Hospitals reported a slight increase in virus admissions and ICU hospitalizations Wednesday. Although more cases are projected under a partial reopening, DeWine said that Ohio businesses and their employees no longer can afford not to get back to work. Many businesses remain leery of what reopening will bring, however. Amid the closing of nonessential businesses and declining business revenue, Ohio's number of unemployed is expected to hit 1 million — 17% of the workforce — when updated jobless figures are released Thursday.
First positive case of COVID-19 reported in Ohio's juvenile corrections population - Gov. Mike DeWine announced the state has its first positive case of COVID-19 among the juvenile corrections population on Wednesday. DeWine said the youth started showing symptoms on Monday evening and was immediately isolated. He did not give any other details about the individual or where they are being housed. DeWine added the living units do not intermingle, but all of the youth in this individual's unit are being monitored for symptoms. The Ohio Department of Health and the Cuyahoga County Health Department have begun contact-tracing, according to DeWine. DeWine said activity at our juvenile corrections locations has been limited for some time. Both youth and staff have also been provided with face masks and are required to wear them.
Response to major COVID-19 outbreak in Grand Forks, N.D., raises questions - When workers at one of the biggest companies in this Red River border city raised concerns about safety in March during the early stages of the novel coronavirus pandemic, officials didn’t send health inspectors to check it out. They sent the CEO of their regional economic development agency, who reported back that the company assured him everything was fine. A month later, Grand Forks is one of the Midwest’s largest COVID-19 hot spots, with 128 confirmed cases — including 11 Minnesota residents — linked to LM Wind Power, a major manufacturer of wind turbine blades. The North Dakota Department of Health has issued an executive order requiring all 900 LM employees to quarantine in their homes until April 30. The plant closed on April 14 and will reopen at an undetermined date after a deep cleaning. The federal Occupational Safety and Health Administration (OSHA) has opened an investigation and is working with the company to implement a safety action plan, an agency spokesman said Wednesday. Also on Wednesday, Grand Forks County reported 11 new COVID-19 cases for a total of 154, a 7.7% increase over the previous day. With about 9% of North Dakota’s population, Grand Forks County accounts for about 23% of the state’s COVID-19 cases. Now employees and residents are questioning whether the city and the company could have done more to prevent a major outbreak. Leaving the early response to a businessman was “ridiculous,” said Jim Schothorst, who retired in 2018 after more than 30 years as a city health inspector and training consultant. “He’s got no expertise whatsoever in the field of environmental health,” said Schothorst, who also questioned why the early response was coordinated by the mayor’s office rather than the city’s Public Health Department.
Mutual Aid Volunteers Are Mobilizing to Help the Most Vulnerable Communities to Deal With Coronavirus - Across the nation, people who are able to are volunteering to offer free delivery of food and household supplies to the most vulnerable members of their communities. Volunteers all over are sewing masks, distributing hand sanitizer (often from distilleries, breweries and other local businesses that have been making and donating it) and other cleaning supplies, and offering free grocery deliveries to people who are advised not to leave their homes. There is a mass mutual aid effort underway in response to the COVID-19 pandemic.“Mutual aid is like disaster relief,” he says. “It feels like picking up the pieces that are falling all over the place.”As many of the volunteer networks normally operating in Chico are largely composed of retirees, and people aged 65 and older have been advised by the governor’s office to stay indoors, Winslow says younger volunteers in the area are working to fill in the gaps however they can. And, he notes, there are several other groups in the region providing services, mutual aid offerings, and other support initiatives.At any given time, a group of between 10 and 30 DSA volunteers have been manning the phone lines of the hotline, accruing supplies and financial support, and delivering goods to the community’s most vulnerable—from low-income seniors and people with immunodeficiencies, to houseless communities who have limited-to-no access to basic supplies and information about the pandemic, with libraries and other primary resource hubs they normally have access to shutting down because of the novel coronavirus outbreak.Volunteers from the DSA have been finding or making hand sanitizer and hiking into creek beds and other areas where many of the region’s homeless encampments are located, offering them supplies and updating them on the situation.Similar efforts to those in Chico are mounting across the country. A public Google spreadsheet, the “Database of Localized Resources During COVID 19 Outbreak,” offers a catalog of mutual aid efforts underway. Anyone can search for their nearby aid groups and make a localized request for supplies or support.The database was created in a collaborative effort by local organizations and individuals across the country, with a credit line at the bottom of the welcome page that reads, “This database wouldn’t exist without the collaboration of the Rad Comms Network and without the hard work of many other folks doing what they can to catalogue efforts across the country.”
Global COVID-19 infections, deaths rise amid drive to revive corporate profit-making – Despite more than four billion people on the planet being in some form of isolation, the number of new cases throughout the world continues to grow at a steady pace of approximately 75,000 per day. The staggering daily death toll of 5,000 to 7,000 is a reminder of the deadly nature of the pandemic that has brought much of the world to a standstill. Nearly 800,000 cases have been reported in the US, representing 32 percent of all infections internationally. The death toll to date is 42,458, almost 2,000 on Monday alone. The US accounts for a quarter of overall fatalities. The number of cases in the hot spots of New York and New Jersey continues to steadily increase, with still harrowing fatalities. On Monday, nine states each confirmed over 1,000 new cases. By all accounts, given the still very limited access to testing, the figures for infections and deaths from COVID-19 are underestimates. This is the public health situation with over 90 percent of the US population under some form of stay-at-home order since President Trump declared a state of emergency over a month ago. The economic and social calamity resulting from these measures to rein in the pandemic is only partially reflected in the record number of people—over 22 million—who have filed for unemployment insurance over the past four weeks. Millions of those laid off have lost their health insurance, and thousands are lining up at food banks in cities across the country to receive food to feed their families. However, rather than using the vast riches of the country to care for the people, the political establishment, from the fascistic Trump to Congress and both big business parties, to growing numbers of state governors and mayors, is working in concert to force a premature return to work that will only add more human fuel to the viral fire. There is no evidence, despite the constant media talk of “a turn for the better,” that the pandemic is under control. The bogus “guidelines” for reopening the economy announced by Trump last week mark the end of any pretense of a nationally coordinated effort to contain the disease. In reality, they are a green light to force workers back to work, with no protections in place against the virus, to satisfy corporate America’s demands for fresh profits even at the cost of untold thousands of lives. Health care facilities in Boston, Detroit, New York City, Chicago and Los Angeles continue to be overwhelmed with COVID-19 patients. There are more than 180 refrigerated trailers stationed behind New York City hospitals to hold corpses under conditions where funeral homes and morgues are beyond capacity. In one instance, more than 20 bodies were piled on the sidewalk of a Brooklyn funeral home. Many of the dead who are not claimed will be buried in mass graves with thousands of forgotten others. The state of Ohio, with nearly 13,000 cases, made headlines reporting that 73 percent of the inmates at the Marion Correctional Institution were infected with COVID-19. Testing of inmates revealed that 1,950 prisoners were positive for the virus, accounting for 20 percent of all cases in Ohio. Along with these, 154 of the institution’s staff members tested positive.
Europe’s pandemic death toll passes 100,000 - Sunday marked a terrible milestone, as the coronavirus death toll passed 100,000 across Europe. An additional 3,287 deaths yesterday take the number of officially recorded fatalities across the continent to 102,565. Nearly 1.1 million coronavirus cases (1,088,651) have been announced, meaning the 102,000 plus deaths represent a fatality rate of nearly 10 percent. Even as the big business media pointed to a lessening of the number of deaths in some countries, the gruesome death toll rises—an indictment of the entire profit system. The five major states in Europe—Germany, France, Spain, Italy and the UK—account for around 85,000 of the 100,000 plus deaths. In Spain, 565 deaths were reported Saturday, and 410 new deaths announced yesterday. Spain’s death toll stands at 20,453 deaths—the third country to reach the horrific milestone of 20,000 behind Italy and the United States. In Italy, 482 more people were announced dead on Saturday and 433 on Sunday, with 23,660 fatalities overall. This week, the Istituto Superiore di Sanità , Italy’s leading technical-scientific body, published a report revealing that 2,724 elderly patient deaths in residential medical facilities were certified COVID-19 infections. There is no precise number of COVID-19 deaths in care homes, where doctors often do not arrive and the deaths are not reported to municipal authorities. On Saturday, France recorded 642 deaths, and 395 more on Sunday (total deaths 19,718). In Germany, 186 deaths were announced Saturday and 104, Sunday. Germany is routinely described in the corporate media as a model in how to confront the virus—but deaths there are now approaching five thousand (4,642). Some 145,184 cases of COVID-19 have been recorded by Berlin. The UK is around four weeks behind Italy and Spain in terms of the spread of the virus, but has become the pandemic’s epicentre in Europe. On Saturday, 888 deaths were announced and 596, Sunday, as the death toll reached 16,060. Some 5,589 of these deaths have occurred in the last week. Claims of a “glimmer of good news” as the “first wave” of the virus reached its peak in the UK (Daily Mail) were shot down as Saturday's 5,525 new cases represented the third highest jump since the outbreak of the pandemic in Britain. An even higher 5,850 new cases were reported Sunday.
Coronavirus live updates: NY unemployment system collapses, UK begins human vaccine trials this week -- New York’s unemployment website “collapsed” following a surge in claims after the state shuttered nonessential businesses to curb the coronavirus pandemic, putting a record number of New Yorkers out of work, Gov. Andrew Cuomo said. The state now has 1,000 people working online and through its phone system to process the high volume of unemployment claims, Cuomo said during a press conference Tuesday in Albany. “It’s unbelievable,” he said. “One thousand people just to take the incoming unemployment calls. That’s how high the volume is and they still can’t keep up with the volume.” The state has paid approximately $2.2 billion in unemployment insurance benefits to 1.1 million New Yorkers since the Covid-19 outbreak began, according to state data. . Britain’s health minister said Tuesday that the country will trial a potential vaccine for the coronavirus on people later this week. A vaccine developed by researchers at Oxford University will be tested on people on Thursday, Health Minister Matt Hancock said in a daily news briefing. “In normal times, reaching this stage would take years, and I’m very proud of the work taken so far,” he said. Hancock said he would make £20 million ($24.5 million US) available to the scientists at Oxford, as well as an additional £22.5 million in funding for researchers at Imperial College London. “Nothing about this process is certain,” he said. “Vaccine development is a process of trial and error and trial again.” That’s the nature of how vaccines are developed.” Italy is likely to start easing its coronavirus lockdown from May 4, though the long-awaited rollback will be cautious and calculated, Prime Minister Giuseppe Conte said on Tuesday. The country has been one of the hardest hit in the world by the Covid-19 pandemic, with more than 24,100 people killed since the contagion first emerged in February. Looking to contain the spread, the government introduced sweeping curbs in March, telling Italians to stay at home and shutting schools, businesses and industries nationwide. The restrictions have put a major strain on the euro zone’s third largest economy but with the number of new cases gradually slowing, Conte said he would unveil by the weekend government plans to loosen the shutdown. “I wish I could say: let’s reopen everything. Immediately. We start tomorrow morning ... But such a decision would be irresponsible,” Conte wrote in a Facebook post. He promised “a serious, scientific plan” that would include a “rethinking of modes of transport” to enable workers to travel in safety, new business rules and measures to check whether the loosening was leading to an uptick in infections.
- Global cases: More than 2.5 million
- Global deaths: At least 171,810
- US cases: More than 788,900
- US deaths: At least 42,485
Over 1,000 sailors on French carrier Charles de Gaulle sick with COVID-19 - France’s nuclear aircraft carrier Charles de Gaulle arrived at its home port in Toulon a week ago with 50 confirmed cases of COVID-19 on board. After more testing, the Defense Ministry announced that 1,081 sailors were infected with the coronavirus out of 2,010 sailors tested on the carrier and its escorting fleet. Currently, 24 sailors are hospitalized with one in critical condition, and 545 sailors are presenting symptoms. Since January 21, the Charles de Gaulle had been operating in the Mediterranean as part of Operation Chammal targeting Syria and Iraq, and then the North Atlantic for a mission slated to end on April 23. In the North Atlantic, according to the Navy, it was tasked with “deepening knowledge of the areas traversed and contributing to stabilizing the Euro-Mediterranean and Euro-Atlantic regions.” Its escorts included German, Belgian, Spanish and Portuguese frigates. There is growing anger among the carrier’s crew, whose commander was refused permission to end the mission as the ship arrived at the Atlantic port of Brest on March 13 with confirmed coronavirus cases aboard. A month before arriving at Brest, the carrier had put in at a port in Cyprus. Initial reports suggested the first cases could have emerged after a five-to-eight-day incubation period and spread very rapidly. One sailor anonymously told the press, “The armed forces played with our health and our lives. … It is impossible to respect social distancing measures aboard an aircraft carrier.” The infected sailors are victims of the imperialist war drive in the Middle East threatening Iran, Russia and China. Like Washington, Paris is sabre rattling against Russia in the Mediterranean, where Moscow backs the Syrian regime against NATO, and in the Euro-Atlantic area. Putting its imperialist geostrategic interests first, including above all intensifying war threats against Russia and China, President Emmanuel Macron’s government acted with contempt for the sailors’ health with its refusal to allow the sailors to disembark to safety.
France Reports 516 Coronavirus Deaths, Lowest Toll in Four Days - France reported deaths linked to the coronavirus rose at the slowest pace in four days, increasing by 516 to 21,856 fatalities, according to data from the Health Ministry published Thursday. The number of patients in intensive care, which health authorities have said is an indicator of the outbreak’s impact on France’s hospital system, fell by 165 to 5,053, the lowest since March 29. The overall number of hospitalized patients fell for a ninth day to 29,219, the lowest in more than two weeks. “Our efforts are starting to bear fruit,” the Health Ministry said in a statement. “We nevertheless remain at an exceptional level, above the maximum reanimation capacity in France before the crisis.” France, among the worst-hit countries in Europe with Italy and Spain, has more than doubled its intensive care beds to around 10,500 since the outbreak. The government is working on a detailed plan to progressively lift restrictions on non-essential travel and revive its economy starting May 11, after weeks of confinement to prevent the coronavirus from spreading. The country’s daily coronavirus figures have fluctuated amid inconsistent reporting from nursing homes, which were first included in the tally this month. The public-health service on Tuesday revised down the number of reported cases in nursing homes after an analysis of the data.
Italy Reports Fewest Virus Fatalities in More Than Five Weeks - Italy on Friday posted its fewest coronavirus fatalities in more than five weeks as the government paved the way for a new stimulus package to revive an economy stalled by containment measures. Civil defense authorities reported 420 deaths linked to the virus for the 24-hour period -- the fewest since March 17 -- compared with 464 the day before. That brings the total number of fatalities to 25,969. Confirmed cases now total 192,994. There were 3,021 new cases compared with 2,646 a day earlier. The number of recovered patients was 2,922. The data come weeks into a nationwide lockdown that spurred Prime Minister Giuseppe Conte’s cabinet earlier Friday to request parliamentary authorization to broaden the country’s deficit by 55 billion euros ahead of new spending, officials said. That is more than an initial 25-billion euro program last month. Conte is preparing to start easing the lockdown in the original European epicenter of the outbreak from May 4, with companies in the manufacturing, automotive and construction industries the first to restart activities, depending on health and safety measures.
Why the World’s Highest Virus Death Rate Is in Europe’s Capital - In an art-deco building in the heart of Brussels, Belgium’s leading scientists gather daily to announce the country’s coronavirus toll. It’s been grim reading. Despite having only 11 million people, the country has reported more deaths from the disease than China. With some 57 fatalities per 100,000 inhabitants, it has the highest per-capita death rate in the world -- almost four times that of the U.S. According to Belgian officials, the reason for the grisly figures isn’t overwhelmed hospitals -- 43% of intensive-care beds were vacant even at the peak of the crisis -- but the country’s bureaucratic rigor. Unlike many other countries, the home of the European Union’s top institutions counts deaths at nursing homes even if there wasn’t a confirmed infection. “We often get criticism -- oh, you’re making Belgium look bad -- we think it’s the opposite,” Steven Van Gucht, head of the viral disease division at the Sciensano public-health institute, said while maintaining the requisite distance of 1.5 meters (5 feet). “If you want to compare our numbers with a lot of other countries, you basically have to cut them in half.” About 95% of Covid-19 deaths in elderly care homes haven’t been diagnosed, yet Belgium makes the decision to register them based on the symptoms shown and who the people have been in contact with. The goal is to get a clearer picture of the outbreak and better target hot spots. At the start of each briefing at the Residence Palais, a stone’s throw from the European Commission, Belgian officials detail the day’s statistics in French and Dutch. They draw particular attention to those who die outside of hospitals -- typically around half the total. The impact of the disease on vulnerable care-home residents is a growing issue. While Europe knew it would need more ventilators and intensive-care capacity once the virus spread beyond China, the impact on nursing homes was unexpected, according to Agoritsa Baka, a senior expert at the European Centre for Disease Prevention and Control. “It’s a disaster,” she said. “We did not realize how devastating Covid would be if it entered these populations.”
Recovered, almost: China's early patients unable to shed coronavirus - A man wearing a single mask opened the door a crack and, after Du introduced herself as a psychological counsellor, burst into tears. “I really can’t take it anymore,” he said. Diagnosed with the novel coronavirus in early February, the man, who appeared to be in his 50s, had been treated at two hospitals before being transferred to a quarantine centre set up in a cluster of apartment blocks in an industrial part of Wuhan. Why, he asked, did tests say he still had the virus more than two months after he first contracted it? The answer to that question is a mystery baffling doctors on the frontline of China’s battle against COVID-19, even as it has successfully slowed the spread of the coronavirus across the country. Chinese doctors in Wuhan, where the virus first emerged in December, say a growing number of cases in which people recover from the virus, but continue to test positive without showing symptoms, is one of their biggest challenges as the country moves into a new phase of its containment battle. Those patients all tested negative for the virus at some point after recovering, but then tested positive again, some up to 70 days later, the doctors said. Many have done so over 50-60 days. The prospect of people remaining positive for the virus, and therefore potentially infectious, is of international concern, as many countries seek to end lockdowns and resume economic activity as the spread of the virus slows. Currently, the globally recommended isolation period after exposure is 14 days. So far, there have been no confirmations of newly positive patients infecting others, according to Chinese health officials. China has not published precise figures for how many patients fall into this category. But disclosures by Chinese hospitals to Reuters, as well as in other media reports, indicate there are at least dozens of such cases. In South Korea, about 1,000 people have been testing positive for four weeks or more. In Italy, the first European country ravaged by the pandemic, health officials noticed that coronavirus patients could test positive for the virus for about a month.
Renowned Microbiologist Claims Wuhan Lab 'Did Absolutely Crazy Things' With Coronavirus -- A world renowned Russian microbiologist says that the novel coronavirus responsible for the COVID-19 pandemic was the result of Wuhan scientists doing "absolutely crazy things" in their laboratory. Dr. Peter Chumakov of the Engelhardt Institute of Molecular Biology and Russian Academy of Sciences claims that while the Wuhan scientists' goal in creating the coronavirus was not malicious - instead, they were trying to study the pathogenicity of the virus, according to the Daily Mail. "In China, scientists at the Wuhan Laboratory have been actively involved in the development of various coronavirus variants for over ten years," he said. "Moreover, they did this, supposedly not with the aim of creating pathogenic variants, but to study their pathogenicity." "They did absolutely crazy things, in my opinion," he said, adding " For example, inserts in the genome, which gave the virus the ability to infect human cells. Now all this has been analyzed." He told Moskovsky Komsomolets newspaper: 'There are several inserts, that is, substitutions of the natural sequence of the genome, which gave it special properties.'It is interesting that the Chinese and Americans who worked with them published all their works in the open (scientific) press.'I think that an investigation will nevertheless be initiated, as a result of which new rules will be developed that regulate the work with the genomes of such dangerous viruses..'-Daily MailChumakov suggested that Chinese scientists were possibly searching for an HIV vaccine. The Mail notes that the professor works for Russia's Federal Research Center for Research and Development of Immunobiological Preparations - while Vladimir Putin's spokesman, Dmitry Peskov, advised against speculation that the virus was manmade.
China Denies US Request For Access To Wuhan Lab Which May Be Source Of Coronavirus Pandemic - China has denied a request by US Secretary of State Mike Pompeo to grant international inspectors access to labs in order to assess whether dangerous pathogens might be accidentally released, according to Fox News. The request comes amid a US investigation into whether the Wuhan coronavirus escaped from the Wuhan Institute of Virology, where they were conducting a host of experiments on bat coronavirus - and had collected bats in a cave over 1,000 miles away in Yunnan which carried COVID-19. "There are multiple labs inside of China that are handling these things," Pompeo said on Wednesday at the State Department. "It’s important that those materials are being handled in a safe and secure way such that there isn’t accidental release." "We have to make sure that the Chinese Government is handling those materials in an appropriate way not only in the Wuhan Institute of Virology but elsewhere," Pompeo added, according to the report. "Any objective person will see that some U.S. politicians have been peddling lies that discredit China's anti-epidemic efforts to fuddle people's minds and deflect attention from the fact that they fell short of fulfilling their own anti-epidemic responsibilities," said Chinese Foreign Ministry spokesman Geng Shuang on Thursday in response to Pompeo's call for inspections at the Wuhan Institute of Virology and other Chinese labs studying coronaviruses and other pathogens.
Africa Has a Troubling Shortage of Ventilators, Masks and Soap - The glaring lack of adequate medical resources is becoming increasingly pronounced as developing nations try to prepare for a COVID-19 outbreak. In Africa, for example, there are fewer than 2,000 working ventilators in public hospitals across 41 African countries, the World Health Organization says, compared with more than 170,000 in the U.S., as The New York Times reported.Ten countries in Africa have none at all. Somalia's Health Ministry has none. The Central African Republic has three. South Sudan has four, which is one fewer than the number of vice presidents it has. Liberia has five. Nigeria, with a population of over 200 million, has fewer than 100, as The Washington Post reported.. The paltry number of ventilators across the continent means that patients who appear at hospitals with the most severe acute respiratory symptoms from the novel coronavirus have little chance of surviving. While the number of ventilators is expected to increase as donations trickle in, few doctors across the continent have had the extensive training necessary to use them. Also, the ventilators usually require an anesthesiologist to intubate patients, or at least supervise the process, but anesthesiologists are scarce in Africa, according to The Washington Post. The shortage of ventilators, training and specialists required to make them functional is only part of the massive shortage in resources that poorer countries face during the global pandemic. Health officials have also warned about a dire shortage of oxygen and masks. Even soap and water are in short supply. According to the United Nations, only 15 percent of sub-Saharan Africans had access to basic hand-washing facilities in 2015. In Liberia, UN numbers showed that in 2017, 97 percent of homes did not have access to soap and clean water, according to The New York Times. "The things that people need are simple things," said Kalipso Chalkidou, the director of global health policy at the Center for Global Development, a research group, as The New York Times reported. "Not high-tech things." As of Saturday, there were more than 21,000 confirmed coronavirus cases and 1,000 deaths across the continent. The World Health Organization said that the virus appears to be spreading away from Africa's capital cities. The UN Economic Commission for Africa warned that 300,000 could die and called for a $100 billion safety net for the continent, including halting external debt payments, as the BBC reported.
Poisonings linked to cleaning supplies spike in US during pandemic - Calls to US poison centers have risen 20 percent this year because of exposure to bleach and other disinfectants, health authorities said Monday, linking the surge to COVID-19 cleaning recommendations. From January to March 2020, poison centers received 45,550 calls about dangerous exposure to cleaning chemicals, the Centers for Disease Control and Prevention (CDC) said in a report, up from 37,822 the year before. The number of calls rose sharply in March -- around the time that most state lockdowns went into effect -- with exposures to children under the age of five years accounting for the biggest percentage. Exposure to bleaches, non-alcoholic disinfectants and hand sanitizers all saw sharp rises, with the main route being inhalation. The health agency recommended that to avoid such exposures, people using cleaning products should always read and follow instructions on labels, only use water at room temperature for dilution, and avoid mixing chemicals.
U.S. Air Quality Decreased in Recent Years, Study Finds -Nearly half of America's population lives in places where they are exposed to unhealthy air, an increase from numbers recorded over previous years, a new report finds.The American Lung Association's 21st annual State of the Air report uses air pollution data collected by federal, state and local governments and tribes from the years 2016-2018 – the three hottest years on record – to map air quality across the United States and update findings from previous years. The number of people exposed to ozone and/or particle pollution was 150 million, an increase from the 141.1 million and 133.9 million in the 2019 and 2018 reports, respectively."What we've seen is that hot weather is making it more difficult to achieve health-based [air quality] standards," Paul Billings, the senior vice president for public policy at the American Lung Association, told NPR. "Climate change makes the conditions for formation of smog or ozone easier, so we need to do more to reduce the underlying emissions." For a deeper dive: NPR, CNN, ABC
Nearly half of US breathing unhealthy air; record-breaking air pollution in nine cities -- This year marks the 50th anniversary of the Clean Air Act, which is responsible for dramatic improvements in air quality. Despite this, a new report from the American Lung Association finds nearly half of the nation's population - 150 million people - lived with and breathed polluted air, placing their health and lives at risk. The 21st annual "State of the Air" report finds that climate change continues to make air pollution worse, with many western communities again experiencing record-breaking spikes in particle pollution due to wildfires. Amid the COVID-19 pandemic, the impact of air pollution on lung health is of heightened concern.The 2020 "State of the Air" report analyzed data from 2016, 2017 and 2018, the three years with the most recent quality-assured air pollution data. Notably, those three years were among the five hottest recorded in global history. When it comes to air quality, changing climate patterns fuel wildfires and their dangerous smoke, and lead to worsened particle and ozone pollution. This degraded air quality threatens everyone, especially children, older adults and people living with a lung disease. "The report finds the air quality in some communities has improved, but the 'State of the Air' finds that far too many people are still breathing unhealthy air," said American Lung Association President and CEO Harold Wimmer. "This year's report shows that climate change continues to degrade air quality and increase the risk of air pollution harming health. To protect the advances in air quality we fought for 50 years ago through the Clean Air Act, we must again act today, implementing effective policies to protect our air quality and lung health against the threat of climate change." "Air pollution is linked to greater risk of lung infection," Wimmer added. "Protecting everyone from COVID-19 and other lung infections is an urgent reminder of the importance of clean air."
California’s widely polluted air may increase coronavirus death toll - California’s distinction as one of the nation’s most polluted states takes new significance this year as the coronavirus is proving deadlier for people living with dirty air. The American Lung Association’s “State of the Air” report, released Tuesday, indicates that the top metro areas for year-round particle pollution in the U.S. are all in California. They include the Central Valley hubs of Bakersfield, Fresno and Visalia, the Los Angeles region and the Bay Area. Statewide, most residents have recently been exposed to unhealthy levels of particulates, the report shows.
Air pollution may be 'key contributor' to Covid-19 deaths – study - High levels of air pollution may be “one of the most important contributors” to deaths from Covid-19, according to research. The analysis shows that of the coronavirus deaths across 66 administrative regions in Italy, Spain, France and Germany, 78% of them occurred in just five regions, and these were the most polluted. The research examined levels of nitrogen dioxide, a pollutant produced mostly by diesel vehicles, and weather conditions that can prevent dirty air from dispersing away from a city. Many studies have linked NO2 exposure to health damage, and particularly lung disease, which could make people more likely to die if they contract Covid-19. “The results indicate that long-term exposure to this pollutant may be one of the most important contributors to fatality caused by the Covid-19 virus in these regions and maybe across the whole world,” said Yaron Ogen, at Martin Luther University Halle-Wittenberg in Germany, who conducted the research. “Poisoning our environment means poisoning our own body, and when it experiences chronic respiratory stress its ability to defend itself from infections is limited.” The analysis is only able to show a strong correlation, not a causal link. “It is now necessary to examine whether the presence of an initial inflammatory condition is related to the response of the immune system to the coronavirus,” Ogen said. A separate study published on 7 April looked at fine particle pollution in the US and found that even small increases in levels in the years before the pandemic were associated with far higher Covid-19 death rates. Another recent paper noted that the high death rates seen in the north of Italy correlated with the highest levels of air pollution.
COVID-19 'Liberate' Groups Are the Same Ones Pushing Climate Denial – Steve Horn - The response among many American public officials and the public at large to the COVID-19 pandemic has, in many ways,paralleled the response to the climate crisis. First came a denial that it was a problem at all, then a denial of its depth and gravity. Later came an acceptance of the problem but the stance that responding is too economically costly. And as with the climate crisis, this is no accident. The well-funded machinery that sowed doubt about climate is now sowing seeds of doubt over the economic and public health response to COVID-19. DeSmog previously reported that many conservative groups and individuals who for years downplayed the gravity of the climate crisis did the same as the coronavirus outbreak worsened around the world and eventually made its way into the United States. Now, weeks into that public health crisis — and with more than three-quarters of a million cases and over 41,000 deaths in the U.S. — groups nationwide are clamoring for an early end to stay-at-home orders and a reopening of state economies. Many of those same groups, a DeSmog investigation shows, are also part of what sociologist Robert Brulle has called the climate change countermovement and what U.S. Sen. Sheldon Whitehouse (D-RI) has coined the “web of denial.” Like the eruption of Tea Party protests in 2009, many of the protests have the outward appearance of spontaneity, yet are tied through common funding streams and networks. In the case of what President Donald Trump has called the “liberate” movement, one major thread tying the groups together is the State Policy Network (SPN). SPN, a network of state-level conservative think tanks advancing pro-corporate agendas, has received money from the likes of the Koch family, the Devos family, the Mercer Family Foundation, and others. DeSmog traced SPN groups to three states in which protests against stay-at-home orders have ensued…
Great! If COVID-19 Doesn’t Get Me, Perhaps the Mercury Will: Trump EPA Rejects Justification for Pollution Rule - - Jerri-Lynn Scofield --During the midst of the COVID-19 pandemic, the Environmental Protection Agency decided that the wisest thing it can do is worsen air quality! I guess nothing should surprise me, as the Trump administration has consistently and relentlessly gutted environmental standards, taking especial delight in overturning actions of his predecessor – no matter how tepid they may be. As Ecowatch tells the story in Trump’s EPA Weakens Justification for Life-Saving Mercury Pollution Rule: As many Americans fight for their lives in the midst of a respiratory pandemic, the Trump administration Thursday axed the justification for a mercury pollution rule that saves more than 10,000 lives and prevents as many as 130,000 asthma attacks each year. The new rollback leaves mercury emission standards in place for now, but changes how their benefits are calculated so that the economic cost takes precedence over public health gains, The New York Times reported. The move provides a legal opening to challenge other pollution controls even as evidence suggests that exposure to air pollution might increase one’s chances of dying from the new coronavirus. “This final rule will increase the risk of more kids with asthma and brain damage, and more people with cancer. Undermining these vital safeguards now also directly threatens the people hardest hit by the COVID-19 pandemic, making it even harder to breathe and putting people with respiratory illnesses at even higher risk.” To understand what the EPA did, we must start with the previous policy. The Mercury and Air Toxics Standards (MATS), first passed in 2011 when McCarthy headed the EPA’s Office of Air and Radiation, were the first of their kind to limit toxic emissions like mercury and lead from coal-fired power plants. These metals are particularly harmful to pregnant women and the brains of children. Between 2006, when states first began controlling mercury, and 2016, when the MATS took full effect, mercury emissions declined 85 percent, The Washington Post pointed out. The Obama administration argued that, while the standards would cost the industry as much as $9.6 billion a year, the country as a whole would save between $37 billion and $90 billion in public health costs. However, these calculations considered co-benefits of the mercury rule such as a decline in soot and smog-causing pollution. The Trump EPA took issue with the cost benefit analysis previously done to justify enacting the mercury rule. With that analysis overturned, the EPA opens the door to future lawsuits challenengng these and other similar regulations. This move foreshadows a future shift in regulatory approach: we ain’t seen nothing yet!
Coronavirus underscores need to address environmental inequities, report says - The coronavirus pandemic and its outsize effect on low-income communities has created a new sense of urgency to address the climate crisis, advocates say.The New York City Environmental Justice Alliance is conveying in its annual climate justice agenda how the pandemic has laid bare the role environmental injustices play in making low-income communities of color particularly vulnerable to public health crises.“As the Covid crisis unfolded … what became clear to us was just how much relevance our report now has,” Eddie Bautista, executive director of the group, said in an interview with POLITICO. “The dimensions that have jumped out at us in the last couple of weeks — the folks with pre-existing conditions [and] heightened vulnerability — just how neatly that overlays with environmental justice communities.”Black and Hispanic residents have significantly higher death rates from the coronavirus than their white counterparts, often due to higher rates of pre-existing respiratory conditions. Those conditions trace their roots, in part, to living in highly polluted areas of the city.The policy agenda, first obtained by POLITICO, calls on lawmakers to reduce greenhouse gases and localized emissions, advance the transition to a regenerative economy and cultivate healthy and more resilient communities. It warns that the city must accelerate its efforts to both meet its own environmental goals and also prepare for the many ramifications of climate change, such as more frequent heat waves.Research on the pandemic is ongoing, but preliminary data has shown a link between counties with higher pollution levels to a greater number of coronavirus deaths. The study, conducted by the Harvard University T.H. Chan School of Public Health, showed that a person living decades in an area with high levels of particulate matter is 15 percent more likely to die from the coronavirus than someone in a region with one unit less of fine particulate pollution.That has raised alarms in environmental justice communities like the South Bronx — an area known as “Asthma Alley” because of its proximity to waste transfer stations and major highways. Preliminary data has shown that the Bronx — which has long had some of the highest rates of pre-existing conditions associated with COVID-19 complications — has seen a high number of deaths and confirmed cases compared to other parts of the city.
Insect Populations on Land Are Down 25%, Study Shows - If you haven't noticed as many bees, butterflies and fireflies as you used to, there's a good reason for that.It turns out that insects that live on land have seen their population decline 9 percent every decade, which means we have lost nearly one-fourth of them over the last 30 years and 50 percent of them over the last 75 years, according to a new analysis published in Science, as Newsweek reported."And because it's a mean, there are places where it is much worse than that," Dr. Roel van Klink, an ecologist at the German Center for Integrative Biodiversity Research, told the BBC."Insect declines happen in a quiet way and we don't take notice from one year to the next. It's like going back to the place where you grew up. It's only because you haven't been there for years that you suddenly realize how much has changed, and all too often not for the better," added van Klink from the Newsweek story.The losses were strongest in the West and Midwest in the U.S. and in Europe, especially in Germany, according to the BBC.The analysis looked at 166 long-term surveys from almost 1,700 sites between 1925 and 2018. It found that some insects were not following the trend. In fact, freshwater insects like mosquitoes and midges were increasing their numbers by about 11 percent per decade, which is likely due to conservation efforts to clean up polluted rivers and lakes. However, as The Guardian noted, these bugs make up only 10 percent of insect species and do not pollinate crops. The researchers said the study is by no means complete, and there is an urgent need to accelerate the study of insect populations to paint a clearer picture. The rapid decline of insects worldwide has concerned scientists. Insects are among the most abundant and diverse species on the planet. They serve vital functions in preserving ecosystems, from aerating the soil to pollination and recycling of nutrients, the BBC reported.The researchers would like to see data from understudied areas like South America, South Asia and Africa, where there is virtually none. They said that the rapid destruction of wild habitats in these places for farming and urbanization is likely to have drastically reduced insect populations, according to The Guardian.
Microplastics Found in Antarctic Sea Ice Samples for First Time, Scientists Say -For the first time, microscopic plastic pollution has been found in Antarctic sea ice samples collected more than a decade ago, suggesting that microplastic concentrations in Southern Sea ice may be higher than previously believed. A total of 96 microplastic particles from 14 different types of polymer were discovered in an ice core sample collected from Casey Station located in East Antarctica in 2009. As ice freezes in the region, scientists believe that small pieces of plastic may become trapped in ice, which acts as a reservoir for pollution until it is released again by ice melt."The remoteness of the Southern Ocean has not been enough to protect it from plastic pollution, which is now pervasive across the world's oceans," said lead study author Anna Kelly who published her findings in Marine Pollution Bulletin.Plastic particles measuring less than 5 millimeters have become common in remote marine habitats, from nearly every corner of the world to the bellies of the world's most remote organisms. Since researchers began tracing microplastics six years ago, they have found plastic pollution in Antarctic surface waters and sediments as well as in Arctic sea ice. Though these regions are remote, concentrations of microplastics have been found to rival those found in more urban settings. An average of nearly 12 particles of microplastic were found in every examined liter of coastal land-fast sea ice, which is sea ice "fastened" to the coastline, according to the Polar Science Center. This number is slightly lower than what previous studies in polar regions have detected, but the overall size of each was larger, which indicate that the pollution came from local sources as it had "less time to break down into smaller fibers than if transported long distances on ocean currents." "Local sources could include clothing and equipment used by tourists and researchers, while the fact that we also identified fibers of varnish and plastics commonly used in the fishing industry suggests a maritime source," Kelly said.
Arctic Likely to See Ice-Free Summers Despite Climate Action, Study Says - Moscow Times - The Arctic will likely lose its summertime ice cover by 2050 even if current levels of CO2 emissions are significantly cut, a new study published in the American Geophysical Union’s journal has warned. Climate change has reduced sea ice coverage in the Arctic Ocean in recent decades, with 2019 tying with 2012 for having the second-lowest ice cover in recorded history. Ice in Russia’s Arctic waters disappeared last summer, freeing up the shipping lane known as the Northern Sea Route which is coveted by the Russian government. “In most simulations, the Arctic Ocean becomes practically sea ice-free... in September for the first time before the year 2050,” said the authors of the latest study, which is based on 40 of the latest models. Previous research in 2013 forecast that the Arctic would become ice-free by 2050. “Ice-free” generally refers to perennial ice broken into fragments totaling an area less than 1 million square kilometers. “If we keep global warming below 2 [degrees Celsius], Arctic sea ice will nevertheless likely disappear occasionally in summer even before 2050,” The Guardian quoted Dirk Notz, the study’s lead author, as saying. “This really surprised us,” Notz was quoted as saying. Co-author Ed Blockley said another surprising finding was the emergence of ice-free winters in the Arctic if CO2 emissions remain high. “A winter ice-free event would be catastrophic, for some wildlife species [like polar bears] for example, that live and hunt around sea ice,” he was quoted as saying. Russia, whose economy heavily depends on oil and gas, has been slow to take steps to reduce its carbon emissions and is the world's fourth-largest greenhouse gas emitter. Earlier this year, the government published a plan of action that outlines 29 broad measures to both mitigate damage and take advantage of opportunities created by climate change.
Releasing Herds of Animals Into the Arctic Could Help Fight Climate Change, Study Finds - Herds of horses, bison and reindeer could play a significant part in saving the world from an acceleration in global heating. That is the conclusion of a recent study showing how grazing herbivores can slow down the pace of thawing permafrost in the Arctic. The study — a computerized simulation based on real-life, on-the ground data — finds that with enough animals, 80% of all permafrost soils around the globe could be preserved through 2100. The research was inspired by an experiment in the town of Chersky, Siberia featured on CBS News' "60 Minutes." The episode introduces viewers to an eccentric scientist named Sergey Zimov who resettled grazing animals to a piece of the Arctic tundra more than 20 years ago.Zimov is unconventional, to say the least, even urging geneticists to work on resurrecting a version of the now-extinct woolly mammoth to aid in his quest. But through the years he and his son Nikita have observed positive impacts from adding grazing animals to the permafrost area he named Pleistocene Park, in a nod to the last Ice Age.Permafrost is a thick layer of soil that remains frozen year-round. Because of the rapidly warming climate inArctic regions, much of the permafrost is not permanently frozen anymore. Thawing permafrost releases heat-trapping greenhouse gases that have been buried in the frozen soil for tens of thousands of years, back into the atmosphere.Scientists are concerned that this mechanism will act as a feedback loop, further warming the atmosphere, thawing more soil, releasing more greenhouse gases and warming the atmosphere even more, perpetuating a dangerous cycle.In winter the permafrost in Chersky, Siberia stays at about 14 degrees Fahrenheit. But the air can be much colder, dropping down to 40 below zero Fahrenheit. Typically there is a thick blanket of snowfall in winter which insulates the soil, shielding it from the frigid air above and keeping it milder. The idea behind Zimov's on-the-ground Pleistocene Park experiment was to bring grazing animals with their stamping hooves back to the land to disperse the snow, compress the ground and chill the soil.
Beer may lose its fizz as CO2 supplies go flat during pandemic - (Reuters) - Dwindling supplies of carbon dioxide from ethanol plants are sparking concern about shortages of beer, soda and seltzer water - essentials for many quarantined Americans. Brewers and soft-drink makers use carbon dioxide, or CO2, for carbonation, which gives beer and soda fizz. Ethanol producers are a key provider of CO2 to the food industry, as they capture that gas as a byproduct of ethanol production and sell it in large quantities. But ethanol, which is blended into the nation’s gasoline supply, has seen production fall sharply due to the drop in gasoline demand as a result of the COVID-19 pandemic. Gasoline demand is down by more than 30% in the United States. The lack of ethanol output is disrupting this highly specialized corner of the food industry, as 34 of the 45 U.S. ethanol plants that sell CO2 have idled or cut production, said Renewable Fuels Association Chief Executive Geoff Cooper. CO2 suppliers to beer brewers have increased prices by about 25% due to reduced supply, said Bob Pease, chief executive officer of the Brewers Association. The trade group represents small and independent U.S. craft brewers, who get about 45% of their CO2 from ethanol producers. “The problem is accelerating. Every day we’re hearing from more of our members about this,” said Pease, who expects some brewers to start cutting production in two to three weeks. In an April 7 letter to Vice President Mike Pence, the Compressed Gas Association (CGA) said production of CO2 had fallen about 20% and could be down by 50% by mid-April without relief, CGA CEO Rich Gottwald said in the letter. Meat producers are also feeling the pinch, as they use CO2 in processing, packaging, preservation and shipment. Orion Melehan, CEO of Santa Cruz, California-based LifeAID, a specialty beverage company, said two of his production partners are looking for alternative CO2 sources. “It does have us up at night figuring out what our options are,” “It highlights the laws of unintended consequences.”
Climate change: World mustn't forget 'deeper emergency' – BBC - Despite the impacts of the coronavirus pandemic, the world mustn't forget the "deeper environmental emergency" facing the planet. That's the view of the UN Secretary General Antonio Guterres, in remarks released to celebrate Earth Day. The toll taken by the virus is both "immediate and dreadful", Mr Guterres says. But the crisis is also a wake-up call, "to do things right for the future," said the Secretary General. Mr Guterres re-iterated his view that the coronavirus is the biggest challenge the world has faced since the Second World War. But as the world commemorates the 50th anniversary of Earth Day, the planet's "unfolding environmental crisis" is an "even deeper emergency", he says. "Biodiversity is in steep decline," Mr Guterres stated. "Climate disruption is approaching a point of no return. "We must act decisively to protect our planet from both the coronavirus and the existential threat of climate disruption." A long-term advocate of strong action to tackle global heating, Mr Guterres is now proposing six climate-related actions that should shape the recovery after the virus. The world has to deliver new jobs and businesses through a "clean, green transition". Taxpayers' money, when it is used, "needs to be tied to achieving green jobs and sustainable growth". Money must be used to make people and societies more resilient to climate change, he says. "Public funds should be used to invest in the future not the past." Fossil fuel subsidies from governments is a theme that Mr Guterres has highlighted many times. These must end he says, and polluters must pay for their pollution. The world will need to work together, says the Secretary General, and climate risks will need to be factored into the financial system and be at the heart of all public policy.
Earth Day: Demands for fresh look at environmental movement - As Earth Day marks its 50th birthday, the founders of the movement, which it is estimated draws in one billion people a year, can celebrate in their significant achievements. It’s inaugural demonstrations, on April 22, 1970, led to the founding of the Environmental Protection Agency, by Republican president Richard Nixon, and sparked a wave of legislation in the following years including the Clean Water and Air Acts and the Endangered Species Act. But half a century on, immense environmental challenges remain.There is less than a decade to achieve the Herculean task of limiting global warming to the 1.5C above pre-industrial levels set out in the Paris Climate Agreement. And pollution does not affect all equally. Communities of colour, indigenous peoples and low-income communities disproportionately suffer the adverse effects of pollution andclimate change. Currently, the Trump administration is rolling back dozens of environmental policies and cosying up to the fossil-fuel industry. Julian Brave Noisecat, Vice President of Policy & Strategy of Data for Progress, viewed the success of Earth Day as a “mixed bag”.He told The Independent: "The environmental movement has succeeded in its 50-year history of taking on big issues like the hole of the ozone layer quite effectively.“But the climate crisis has gotten a little bit out of our control. Even amid this pandemic, emissions reductions are not on track for what the UN says is necessary to keep warming below 1.5C." He added: “I would also say that the environmental movement in its history has, for the most part, been a movement led by and for middle-class, white people. “The communities that are harmed the most by the fossil-fuel economy, pollution and climate change are communities of colour. But the environmental movement has not done the best job in its history of allowing those communities and people to take leadership and to shape the movement in a way that would prioritise those on the hazardous edge of poverty and pollution.” In some respects, things have become worse.There has been widespread deforestation. Almost one-fifth of the "world's lungs" Amazon rainforest has been destroyed in the last 50 years, intensifying climate change along with decimating wildlife. The oceans are warming far more quickly than previously thought and in part due to this, sea levels are rising.
Drop in emissions due to pandemic won't fix climate, WMO says - (Reuters) - The COVID-19 pandemic is expected to cause the biggest fall in carbon dioxide emissions since World War Two but it will likely be short-lived and will not stop climate change, the World Meteorological Organization (WMO) said on Wednesday. The WMO expects a 6% drop in carbon emissions this year, an estimate on the high end of a range given by scientists, but the U.N. agency warned that it could be followed by even higher emissions growth than before the crisis. “This drop of emissions by 6%, that’s unfortunately short-term good news,” WMO’s Secretary-General Petteri Taalas said in response to a Reuters question at a virtual briefing in Geneva. “In the most likely case we will easily go back to normal next year and there might even be a boost in emissions because some industries have been stopped.” In fact, the drop is not even enough to get the world back on track to meet the target of the 2015 Paris Agreement, which aims for global temperature rise of no more than 1.5 degree above pre-industrial levels, Taalas said. That would require at least a 7% annual drop in emissions, he added. The WMO also published on Wednesday its Global Climate report, which confirmed a finding that 2015-2019 was the warmest five-year period on record, with the global average temperature up 1.1 degree Celsius above pre-industrial levels. So far this year, global temperatures on a monthly basis have been either the warmest or second warmest on record, a spokeswoman added. Carbon dioxide remains in the air for centuries so falls in emmissions do not immediately impact climate and would need to be sustained over a period to eventually do so. However, the WMO did note lower levels of the harmful greenhouse gas nitrous oxide as well as improvements in air quality in industrial hubs like China and northern Italy due to the pandemic.
DEP projects Pa. could cut carbon emissions dramatically as part of cap-and-trade effort | StateImpact Pennsylvania - Pennsylvania could reduce its carbon emissions by almost 10 times as much over the next decade if it joins a regional effort aimed at cutting greenhouse gases, according to new projections from the state’s Department of Environmental Protection. The models show Pennsylvania’s carbon emissions will go down over the next decade regardless of whether the commonwealth joins the Regional Greenhouse Gas Initiative (RGGI), a cap-and-trade agreement among 10 northeastern states. As the state’s energy portfolio shifts further away from coal toward cleaner-burning natural gas, emissions will still go down by 20 million tons between 2022 and 2030, or a 25 percent drop over those eight years. But Haley Book, DEP’s senior advisor on energy and climate, said participation in RGGI would create an immediate drop in emissions and prevent a total of 180 million tons of carbon emissions over the same time period. “How we are looking at this is it’s really less about the delta from where Pennsylvania ends up in 2030 and more about all the emissions savings that are occurring between now and then,” Book said. Scientists say carbon emissions must be cut dramatically to avoid the worst effects of climate change. Pennsylvania is the fourth largest greenhouse gas emitter in the country. RGGI sets a limit on carbon emissions from power plants, which must purchase a credit for each ton of carbon dioxide they emit. Book said projections show, under RGGI, Pennsylvania electricity generation would decline slightly while wholesale prices would rise by 3 percent. The state would still be a net exporter of electricity.
The coronavirus crisis means we may have already reached peak carbon - The coronavirus crisis will likely lead to the largest ever decline of global carbon emissions on record, according to research from Goldman Sachs, illuminating the potential for a long-term low carbon recovery. The Covid-19 outbreak has meant countries around the world have effectively had to shut down, with many governments imposing draconian restrictions on the daily lives of billions of people. To date, confinement measures have been implemented in 187 countries or territories in an effort to try to slow the spread of the pandemic. A side-effect of these measures, which vary in their application worldwide but broadly include school closures, bans on public gatherings and social distancing, has been a dramatic fall in the level of global carbon emissions. Analysts at Goldman Sachs said in a research note that they expect energy-related carbon emissions (which account for two-thirds of total greenhouse gas emissions) to fall by at least 5.4% this year alone. To be sure, that’s roughly five times that of previous crises, with the potential for “much larger” declines depending on the length of disruption to the transportation sector and industrial activity. ‘This time could be different’ “Energy-related emissions have always rebounded post crisis,” analysts at Goldman Sachs said, citing data which showed carbon intensity improvements in the year after every major crisis since the 1970s. “This time could be different as we have potentially already reached peak energy-related carbon,” they added.
Critical mass: Can low-carbon wood construction catch on in the U.S.? - Sustainable engineered wood products are starting to turn up in large-scale construction projects in New England, as architects, developers and institutions look for ways to reduce the building industry’s substantial carbon footprint.Cross-laminated timber, or CLT, and other so-called mass timber products are viewed as greener than concrete and steel, primarily because the carbon emissions from production of the wooden framing materials is so much lower.Since the University of Massachusetts incorporated CLT construction to stunning effect in its Design Building on the Amherst campus three years ago, the material has turned up in a number of other large projects, including a new residence hallat the Rhode Island School of Design, in Providence, and an office building under construction in Newington, New Hampshire.Now, two firms designing an affordable housing project implementing CLT in Boston hope it will become a prototype for sustainable architecture that can be replicated by other developers in housing throughout the city.“Boston has a very progressive design, engineering, construction and development community, and carbon is the new hot topic,” said John Klein, chief executive officer of Generate Architecture + Technologies, a startup focused on mass-timber building solutions based at the Massachusetts Institute of Technology. Cross-laminated timber is a very large, prefabricated wood panel. It is formed of several layers of lumber boards, stacked in alternating directions and glued to form one panel. Much stronger than traditional lumber, CLT is suitable for constructing walls, roofs and floors.
Wisconsin biogas gas producer sees potential in thermal renewable credits -- A Wisconsin company is the first to sign up for a new renewable natural gas tracking system that could help monetize the environmental benefits of methane captured from dairy farms, landfills, and other sources. U.S. Gain will verify its renewable gas production through Midwest Renewable Energy Tracking System (M-RETS), which will produce “thermal certificates” that can be sold to other customers as carbon offsets. The renewable thermal certificates work like renewable energy certificates, or RECs, used in electricity markets. A REC represents one megawatt-hour of electricity. The thermal renewable certificate measures renewable natural gas in dekatherms, a unit of volume used by the natural gas industry. M-RETS believes the thermal certificate could create a more robust market for renewable fuel, following in the footsteps of what RECs did for solar and wind. “I hope this will show people there’s a lot to be done on thermal decarbonization by building a market that can be quantified so we can see what the reductions are,” said Ben Gerber, M-RETS’ executive director. Without a third-party organization validating clean energy production, buyers would potentially have little idea of the origin of the electricity or renewable natural gas, Gerber said. For years M-RETS tracked RECs associated with electric power before developing the thermal certificate.
Nearly 30% of ethanol plants idled, including four in Minnesota - Four Minnesota ethanol plants are idled and many more have throttled back production as COVID-19 has sapped gasoline demand, crushing the biofuel industry. U.S. ethanol production has hit an all-time low. Nearly 30% of the nation’s 204 biofuel plants have been idled since March 1, while many others have slashed production. “The fuel market is just telling us to shut down and not operate,” said Randall Doyal, CEO of Al-Corn Clean Fuel in the southern Minnesota town of Claremont. “Economically, its abysmal.” Al-Corn has kept the doors open, running at 38% of capacity and doing some minor plant rejiggering to produce ethanol for hand-sanitizer makers. “We might have enough business on the hand-sanitizer side to at least defray some losses,” Doyal said. The ethanol industry’s woes also spell trouble for farmers in Minnesota and across the Midwest. Ethanol makers consumed 36% of Minnesota’s corn crop in 2019, according to the Minnesota Bio-Fuels Association. With so much biofuel demand erased, U.S. corn prices are near a 10-year low. Minnesota is the nation’s fourth-largest ethanol-producing state with 18 plants. By federal law, most fuel sold as gasoline is required to have 10% ethanol. But gasoline demand has fallen off a cliff because of COVID-19 social restrictions. The U.S. Energy Information Administration (EIA) said that as of the week ending April 10, the four-week moving average of U.S. gasoline consumption hit a low not seen in the 29 years that such data has been collected. Ethanol production for the week ending April 10 hit its lowest level since the EIA began reporting ethanol output in 2010, according to the Renewable Fuels Association, a trade group. Only 60 of the nation’s 204 ethanol plants were running full-tilt as of Monday, the association said. Another 71 were running below capacity, and 58 have been idled since March 1. (Another 15 plants had been idled before that date). The Denco II ethanol plant in Morris closed indefinitely on March 30; the next day Gevo temporarily closed its facility in Luverne, which makes ethanol and isobutanol for jet fuel. Denco and Gevo employed 35 and 30 people respectively, and both are smaller biofuels producers. Guardian Energy in the southern Minnesota town of Janesville is the state’s largest ethanol plant (with a capacity of 149 million gallons), and it closed April 2 through May.
Lordstown Motors still plans to debut Endurance EV pickup this summer - Lordstown Motors' ambitious timeframe to launch its first electric pickup truck is largely still on track, despite the coronavirus pandemic tossing a wrench in just about everything.In an update posted Tuesday to the startup's website, CEO Steve Burns said the firm's Endurance EV pickup will still debut this summer. Originally, the company told Roadshow the pickup would debut at the 2020 North American International Auto Show. The show, which takes place in Detroit, was canceled last month as the Federal Emergency Management Agency designated the expo center as a field hospital for those ill with COVID-19.The cancellation won't keep Lordstown Motors out of the spotlight and Burns said we'll likely see the pickup debut virtually at the company's headquarters inLordstown, Ohio. We should know more in the next month. The virus will push deliveries back, however, but just by a month. The startup wanted to deliver the first pickups by the end of this year. Now, the first customers will receive their Endurance pickups in January 2021.
After months of delay, Ohio solar projects gain siting board’s approval | Energy News Network - The Ohio Power Siting Board has approved three utility-scale solar projects following a delay demanded last fall by the board’s chair, Samuel Randazzo.The siting board on Thursday approved the 80-megawatt Nestlewood solar project that will be built on about 600 acres east of Cincinnati as proposed by Dallas-based developer Lendlease Energy Development, LLC.The close scrutiny of the project by Randazzo, a longtime critic of renewable energy, put the brakes on the project in October and had come as a surprise to developers and board staff. Randazzo said his concerns are now resolved. In a second vote, the board approved altering the location of some of the solar panel arrays in two solar farms previously approved for northwest Ohio’s Hardin County.The siting board in May 2019 approved the two adjacent solar projects with a combined output of more than 300 megawatts proposed by Chicago-based Invenergy. Rows of solar panels typically sit on metal racks atop steel I-beams driven into the ground. Subsequent test borings by the developer — as required by the siting board’s permit — indicated that portions of the land were unsuitable. Invenergy then asked to alter the footprints of the two adjacent projects.The siting board’s staff, the company, and the Ohio Farm Bureau — which had intervened in the case to represent farmers adjacent to the project as well as farmers who own the land leased for the project — had agreed on the layout changes and had submitted the modified site plans to the board for a vote of approval when Randazzo unexpectedly demanded further review of the entire project in October. He laid out his objections in great detail, including what he said was lack of specificity about the final design of project, including lighting and appropriate vegetative screening to hide the solar arrays from adjoining properties. He also said he was concerned about the impact the project would have on the Kirtland’s snake, a threatened species.
All of GM's Detroit operations to be solar-wind powered in three years --In three years, General Motors expects all its facilities in southeast Michigan to run on clean and renewable energy. The automaker has purchased 500,000 megawatt hours of solar energy from DTE Energy’s MIGreenPower program, GM said Monday. DTE said the investment will support nearly 1,500 clean energy jobs in Michigan during project construction. GM’s investment in MIGreenPower should deliver enough clean energy to run GM’s southeast Michigan facilities by 2023, GM said. That includes its global headquarters in the Renaissance Center in Detroit, the GM Global Technical Center in Warren, the Milford Proving Ground in Milford and two assembly plants, Orion and Detroit-Hamtramck. GM makes the Chevrolet Bolt electric car at Orion Assembly and the automaker is currently retooling Detroit-Hamtramck to build the GMC Hummer electric pickup, the self-driving Cruise Origin and other future EVs. GM said it will also supply energy to several smaller GM sites in metro Detroit. Clean energy is carbon-free energy that emits little to no greenhouse gas. Renewable energy is derived from sunlight, wind, water and geothermal heat. GM has said it is adding workplace charging stations, to be powered by wind and solar, at its facilities in southeast Michigan as well. “Not only should this agreement reduce emissions in the near term, it’s a glimpse into a world with electric vehicles, built by renewable energy, and in the case of our workplace chargers, charged by a green grid too," said GM’s Chief Sustainability Officer Dane Parker.
New wind, solar generation as coal fades - The power industry is continuing its shift toward renewable energy sources and away from coal-fired electricity generation.Electricity generators added nearly 23,000 megawatts of new generating capacity last year, the Department of Energy reported. About 9,100 megawatts came from new onshore wind generators, 8,300 megawatts from natural gas-fired power plants and 5,300 megawatts from solar energy. One megawatt powers about 200 homes during a hot summer day in Texas.The South, including Texas, represented nearly all of the new capacity additions, according to the Energy Department.At the same time, nearly 14,000 megawatts of coal-fired capacity was retired in 2019. Total U.S. electricity generation has remained relatively flat for more than a decade, but more renewable energy has come online to replace retiring coal-fired power plants. The shift reflects low natural gas prices, declining construction costs for solar and wind projects and more states increasing their renewable energy portfolio requirements.
Coronavirus outbreak at wind power plant in North Dakota shuts down production - An outbreak of Covid-19 at a wind power facility in North Dakota has forced it to temporarily close, the latest example of how the pandemic is impacting the renewable energy sector. Over the weekend, North Dakota’s Department of Health said there were 110 confirmed cases of coronavirus in people connected to the LM Wind Power plant in Grand Forks — a total that includes both employees and “their close contacts.” The site, which produces rotor blades for wind turbines and employs 900 people, closed last Wednesday after eight workers tested positive for coronavirus. In a statement, a spokesperson for GE — which owns LM Wind Power — said the Grand Forks facility would be temporarily closed for at least two weeks in order to “conduct an extensive disinfection process.” Employees would continue to be paid “as usual” during this time, they added. “We will continue to support our employees and monitor their condition as we determine when and how we can re-start the plant safely,” the spokesperson went on to state. On Saturday, North Dakota’s State Health Officer Mylynn Tufte issued a quarantine order for LM Wind Power employees. Among other things, they have been directed to quarantine for 14 days starting from April 16 and must remain at their home or place of residence “unless otherwise authorized” by the North Dakota Department of Health.
NextEra Energy Looks to Spend $1B on Energy Storage in 2021 -Companies across the global renewable energy industry are anxiously assessing the negative impact of the coronavirus outbreak on their bottom line. Every company, it seems, except NextEra Energy. NextEra, the leading U.S. renewables developer, reported its first-quarter financial results on Tuesday, saying that not only has its renewables development unit been unaffected by the COVID-19 pandemic, but it may actually benefit by being able to scoop up other projects that run into trouble. NextEra expects to build around 5 gigawatts of renewables capacity this year, and it added another 1.6 gigawatts of wind, solar and storage to its pipeline during the first quarter. None of its 2020 projects are expected to be delayed. The company also made a stunning, if not entirely surprising, prediction: It will spend $1 billion on battery projects next year. NextEra believes it will be the first company in the world to cross that threshold for energy storage investments in a single year. That investment will include the 409-megawatt Manatee Energy Storage Center in Florida that NextEra announced last year, which will be powered by solar panels and replaces a pair of aging natural-gas-fired plants. In addition to building renewables through its Energy Resources development arm, NextEra is adding wind, solar and batteries through its regulated utilities, Florida Power & Light and Gulf Power. FPL alone expects to add more than 10 gigawatts of solar capacity during the 2020s as Florida's solar market consolidates its position as one of the country's most important.
New report says R.I. will transition away from natural gas and oil heat - -- While the amount of electricity from solar, wind and other renewable energy sources coming into the Rhode Island power grid has steadily ramped up over the past decade, it’s been more difficult to switch heating systems in the state from fossil fuels because of the need for homes and business to invest in new equipment.But in a 91-page report released on Thursday state agencies say that Rhode Island’s heating sector could be able to transition away from its reliance on natural gas and oil within the next three decades while still keeping consumers’ bills close to what they are today.The report was written by The Brattle Group, a consulting firm based in Cambridge, Massachusetts, and was done on behalf of the state Office of Energy Resources and the Division of Public Utilities and Carriers.Governor Gina Raimondo, in an executive order last year, tasked the agencies with laying out a plan for decarbonizing the sector as part of the state’s larger effort to reduce greenhouse gas emissions in response to climate change. Heating accounts for 40 percent of total energy consumption in Rhode Island. The report was submitted to the governor on Wednesday, the 50th anniversary of Earth Day. In a letter to Raimondo that accompanied the report, the heads of the state agencies acknowledge that transforming Rhode Island’s heating sector presents a host of challenges, including technological uncertainties and upfront costs, that seem “daunting” at a time when the economy has been shut down by the coronavirus pandemic.
NYC Looks at Shaming Fossil Fuel Financiers - New York City lawmakers will introduce a resolution Monday to demand that the financial institutions and insurers the city does business with divest from fossil fuels, HuffPost reports.HuffPost obtained a draft of the resolution, and reports that while the draft resolution is largely symbolic in targeting JP Morgan Chase, BlackRock and Liberty Mutual, it will accelerate the movement to hold financial institutions accountable for climate change and preview how New York may institute radical changes in how the city handles its money."We are in the midst of a devastating short-term crisis … but the most devastating long-term risk to New York is the climate crisis," councilman Brad Lander, the lead author of the bill, told HuffPost. "If we're going to have any chance at actually bending the curve on CO2 emissions, we have to confront the capital that is driving it at its scale."For a deeper dive: HuffPost.
US weekly coal production down 41.5% YOY -- Total U.S. coal production for the week ended April 18 decreased 41.5% year over year to 8.6 million tons from 14.7 million tons, according to data from the U.S. Energy Information Administration. For the 52 weeks ended April 18, production was 658.7 million tons, representing a year-over-year decline of 11.9%, while year-to-date coal output slipped 19.6% year over year to 173.6 million tons. SNL Image The western region's coal production for the week reached 4.6 million tons, posting a 40.4% decrease from the prior year's 7.8 million tons. Data for the western region covers Powder River Basin mines. Coal production from Appalachian mines totaled 2.4 million tons, declining 43.6% from the year-ago week's 4.3 million tons. The interior region's production decreased 41.3% to 1.6 million tons, compared to 2.7 million tons a year ago. Interior region data covers mines in the Illinois Basin.
Coal Suffers as Coronavirus Saps Power Demand – WSJ - As Americans consume less electricity during the coronavirus pandemic, many utilities are cutting back on coal power first. That bodes poorly for the future of coal power in the U.S., which has already been in a steep decline. The slowdown is expected to accelerate closures of plants already challenged to compete with natural gas, wind and solar sources, all cheaper forms of power than coal. Prior to the pandemic, a number of companies were already planning to retire at least some of their coal plants to reduce generation costs and carbon emissions. Southern Co., which provides electricity and natural gas throughout much of the South and Midwest, said that the percentage of its total power generation coming from coal has fallen into the teens recently, as it relies more heavily on hydroelectric, natural gas and renewable power. It has been steadily retiring its coal assets over the past decade and last year relied on coal for about 22% of its power generation, down from 70% in 2007. “Coal is kind of what’s on the margin,” “You’d probably see an accelerated retirement of coal units if load levels don’t come back up.” Energy consulting firm Wood Mackenzie had expected U.S. coal generation to decline 3.5% this year but recently upped its forecast to 25%. Since 2015, U.S. coal generation, which accounts for most of the country’s coal usage, has declined between 2% and 16% annually. Analyst Greg Marmon said that the precipitous drop could serve as a final blow for coal plants on shaky financial footing, particularly ones that need upgrades. “This could force them to close earlier than previously expected,” he said. The coronavirus pandemic has changed the economics of U.S. power generation. Coal plants, now among the costliest generation sources, are typically used to supply the grid with large amounts of power when electricity demand increases. But with many factories, storefronts and office complexes offline due to coronavirus shutdowns, there is less of a need for that power.Already, utilities had been relying more heavily on gas-fired generation after a mild winter drove prices down. Natural-gas prices have plummeted alongside crude-oil prices, which have fallen as a result of a supply glut caused by a historic drop in demand.
Coronavirus accelerates decline of slumping coal industry - Coal demand has tanked over the past decade amid competition from cheap natural gas and expanded renewable energy sources. Coal companies have faced a reckoning as the world looks to combat climate change and move away from fossil fuels despite President Donald Trump’s effort to revive the industry. Now, the pandemic has made things worse. Lockdowns have shut off lights and computers in offices and schools, sapping demand for electricity provided by coal-fired power plants. Americans stuck at home binge-watching Netflix aren’t coming close to making up for that drop in demand, expected to be 3% for 2020. The safety of workers is another issue. In the most productive coal region in the U.S. — Wyoming and Montana’s Powder River Basin — companies are staggering shifts and running more buses to and from mining towns to create more space between workers. Companies have temporarily suspended operations at mines in Pennsylvania, Illinois and Virginia to stop the spread of the virus. Some miners are only working two or three days a week. “There is no consistency from mine to mine, even within the same company,” said Phil Smith, spokesman for the United Mine Workers of America, a union representing thousands of coal miners primarily in the eastern U.S. Even before the virus, companies were forced into bankruptcy and workers faced furloughs and layoffs. Six of the top seven U.S. coal companies have filed for Chapter 11 bankruptcy since 2015 and analysts expect more as the economy dives.
NIPSCO To Remove Toxic Coal Ash From Ponds At Michigan City Plant -- A northwest Indiana utility plans to remove toxic coal ash from five of its ponds at its Michigan City coal plant. NIPSCO plans to excavate the waste and put it in a lined landfill at its other coal plant, R.M. Schahfer Generating Station in Wheatfield. Coal ash contains toxic heavy metals like arsenic. Exposure to it can cause cancer, damage your nervous system, and cause other health issues. Though residents and environmentalists are glad NIPSCO is removing the coal ash, they’re skeptical about whether the utility will clean up the site thoroughly and safely. NIPSCO is responsible for polluting drinking water and soil with coal ash in the town of Pines, just west of Michigan City. “Damage in Pines has not yet been remedied — everyone is not on clean water. And when coal ash is allowed to escape into the environment, it’s hard to get back," says Lisa Evans, senior counsel for the group Earthjustice. Evans worries some coal ash could fly out of the trucks as it's being transported to Wheatfield, leading to more pollution. NIPSCO says it plans to control coal ash dust with tarps on the trucks and possibly tracking them through GPS. Officials with NIPSCO say, with few exceptions, all groundwater tested at the site met drinking water standards — though sediment was not tested.Christina Zacny now lives in Michigan City, but used to live in Wheatfield where she still has family. She says it's concerning that this is her first time hearing about NIPSCO's plans to ship the coal ash to the Wheatfield and wonders if residents there have been contacted.
Pandemic policies could make Indiana’s bad coal ash situation worse --EPA’s race to deregulate and “enforcement discretion” during the COVID-19 crisis leaves Hoosiers living near coal ash dump sites vulnerable. A flip of a switch brings light to darkness in most homes, but also sets into motion a chain of lasting pollution that could be made worse by environmental agency deregulation and inaction during the COVID-19 crisis. Environmental groups worry the U.S. Environmental Protection Agency’s race to deregulate in what could be President Donald Trump’s final year in office and the agency’s COVID-19 “enforcement discretion” policy will allow industrial polluters to legally endanger the health of Hoosiers and other Americans. The lack of continuing and complete state and federal oversight could have disastrous results in Indiana, which has the largest number of toxic coal ash disposal sites of any state. While most of the country is at a standstill, EPA employees are working to reshape the nation’s environmental regulations to become more industry-friendly while making available only small amounts of money to clean up environmental problems. “We’re open and continuing our regulatory work business as usual,” the EPA told multiple news outlets. In just the last 30 days, the EPA announced nearly $58 million in grants to help communities clean up environmental problems, mainly in reliably red states and politically useful swing states. But the agency has also been working to weaken the regulations aiming to prevent those problems in the first place.
‘I’ve already got infected lungs’: for sick coal miners Covid-19 is a death sentence - Seven years ago John Robinson of Coeburn, Virginia, was diagnosed with black lung. A coal miner for nearly 30 years, 54-year-old Robinson and many of his fellow workers already faced years of health issues. And then came Covid-19. Scarring of the lungs caused by years of coal dust inhalation, more formally known as coal workers’ pneumoconiosis, leaves miners at high risk of developing serious complications from coronavirus. Now the mining industry is trying to cut its payments to the fund that supports those affected. “It’s easier for us to get sick because of lung damage. We get colds easier. We pick up germs easier. It’s something we deal with all of the time. But the Covid-19 has it doubled up on us,” said Robinson. “It’s made it that much worse.” Robinson currently has an upper respiratory infection, which he develops a few times a year due to black lung. The last few years he spent in the mines before retiring, he regularly ate cough drops to try to alleviate his breathing issues. He tries to stay active, but finds himself increasingly short of breath and struggling to get air as his black lung progresses. It took several years for Robinson’s federal black lung benefits claim to be accepted, and he’s still going through court processes that will decide if he continues receiving his benefits for life, despite being diagnosed with the disease. While miners with black lung struggle during the pandemic, the coal industry is seeking to use the crisis to its advantage, cutting payouts to the federal black lung funds. Last month the National Mining Association asked Congress to decrease the excise tax that coal companies pay toward the fund by 55%. The federal black lung program, which pays out benefits to former coal miners diagnosed with the condition , has already faced financial problems in recent years in part due to coal companies filing for bankruptcy and shifting millions of dollars in liabilities onto taxpayers.
COAL: Senate Dems ask Trump to protect miners from virus ---- Eight Democratic senators from coal-producing states asked the Trump administration on Friday to issue an emergency safety standard to protect miners during the novel coronavirus pandemic.
These coal communities are protecting sick miners from COVID-19 and pushing Congress for more support - Weeks before Tennessee took action to limit the spread of COVID-19, Teresa Dabney was changing how she served high-risk patients at the clinic she runs in the Clearfork Valley. First, she split her medical staff into two teams who work every other week, so if an outbreak hit her facility, “not everyone would be taken out in one sweep.” Then, in mid-March, she cordoned off the clinic into two groups: coal miners and everyone else. Miners who opt for an in-person appointment enter and exit through a separate door, in a separate wing, with a separate waiting area. Patients can also use telehealth services, but Dabney said it’s less popular for miners her clinic sees, who are older and don’t always have internet access. “Most of our miners are medically fragile, specifically with breathing problems,” said Dabney, CEO of Community Health of East Tennessee’s black lung clinic in Lafollette. The clinic monitors and treats patients who suffer from the incurable and fatal respiratory disease caused by exposure to coal dust. While Dabney has fewer diagnosed cases of black lung since her department opened in 1980, rates are surging in central Appalachia. Dabney said she serves roughly 750 miners with black lung symptoms annually.The Clearfork Valley in Tennessee has 18 confirmed COVID-19 cases and one death as of April 23, which medical practitioners say is lower than expected. Daniel Yoder, a physician at nonprofit community health center Dayspring Health in Claiborne County, 25 miles north of Dabney’s clinic, said the low numbers could be because of a sparsely populated region, a lack of available tests, or that Tennessee’s stay-at-home orders are working. “It’s a pretty tight-knit community so I think for people here, it’s not too hard to stay put,” Yoder said. “It probably helps during something like this, just the geographic isolation.”
Coal-Ash Spill Cleanup Workers Reject Reputed $10M Exposure Settlement - Workers involved in cleanup of a massive coal-ash spill more than a decade ago from a Tennessee Valley Authority fossil-fuel power plant now must prove at trial that claimed exposure to toxic materials made them ill—after rejecting a settlement from project manager Jacobs Engineering made public on April 10. The company, now rebranded as Jacobs, would not confirm reports valuing the offer at $10 million—to be split by a group of 52 workers employed under the firm's $40-million remediation contract for part of the contaminated site. All parties are under a confidentiality rule set by the federal district court in Knoxville. The ash spilled from a containment cell at the Kingston, Tenn. plant in late 2008, sending about 5 million cu yd of coal ash across 300 acres and into the Emory River. TVA spent more than $1 billion cleaning up the site after the accident, which also resulted in new requirements for ash containment at the site and at other coal-burning U.S. power plants. The Kingston cleanup was completed in 2015. A federal jury in 2018 found Jacobs guilty of failing to protect the health of workers cleaning up the massive spill, which enabled them to seek damages from the company. Workers reported a variety of illnesses, including lung cancer, leukemia and others, that they claim is linked to contaminants in the ash. Press reports in 2018 said that more than 30 workers who cleaned the site under Jacobs' contract have died and more than 250 others were sick or dying. TVA was not a party to the lawsuit, and did not comment, except to say that the U.S. Environmental Protection Agency has deemed coal ash not to be regulated as a hazardous waste.
Abandoned coal mines may be with us forever — As yet another coal mining firm teetered on the edge of bankruptcy, West Virginia on March 26 asked a court for control of several abandoned mines, all owned by mining firm ERP Environmental Fund. It may be the first of many emergency measures states must take to prevent hundreds of defunct mines from littering the landscape with no money to restore them.Around the world, the Covid-19 pandemic is leading to plummeting energy demand, further destabilizing the battered coal industry. Last month, ERP, after accruing hundreds of citations from state regulators, appeared to run out of cash and fire its staff, who walked away from the mining sites. Now, the ERP mines pose an “imminent risk of harm to the environment and the public health and safety,”West Virginia contends in its lawsuit. It is asking a third party to manage ERP (the acronym stands for “Earth Restoration Project”) as it tries to recover cleanup funds from the mines’ owner.The West Virginia Department of Environmental Protection (WVDEP) says ERP has racked up 160 environmental law violations and repeatedly ignored orders to remedy threats to public health and the environment. ERP has been operating on a “shoe-string budget with under-experienced and under-manned staff,” WVDEP contends. “The [agency] had no option but to step in to seek the appointment of a receiver to take control of ERP’s operations to protect the public health and safety.”The legal maneuver is highly unusual, says Peter Morgan, an attorney at the Sierra Club. It means the state is trying to cut in line ahead of other creditors and keep ERP out of bankruptcy (for now). “What the state of West Virginia is desperate to avoid is all mines being abandoned and the state being responsible for cleaning them up,” said Morgan. This is not how mining is supposed to work in the US. The federal 1977 Surface Mining Act requires all coal companies to post bonds that cover the cost of cleanup in the event of abandonment. Removing hazards, replacing soil, removing toxic waste, replanting trees, and treating waste costs millions, and leaving open coal mines is hazardous. A 2008 study in the American Journal of Public Healthfound higher rates of cardiopulmonary disease, hypertension, lung disease, kidney disease, and other ailments for West Virginiansliving near mines. But enforcement by state agencies has been spotty, says Morgan. Their reliance on historical default rates to gauge how many companies might go under, and how much money future reclamation requires, has fallen woefully short.
Ramaco gets stimulus loan, to reopen West Virginia coal mine - Ramaco Resources says it plans to partially reopen its Elk Creek mine in West Virginia after receiving an $8.44M loan under the U.S. government's Paycheck Protection Program. The company says it will recall about a third of its furloughed workforce this week and recall all employees to fully open the mine by May 1; the employees were furloughed on March 31 as a precaution amid the spread of the coronavirus.
China fires up coal power plant construction - China approved nearly 10 gigawatts (GW) of new coal-fired power generation capacity in this year’s first quarter, roughly equal to the amount approved for all of last year, amid a broader scramble to jumpstart an economic hobbled by the Covid-19 epidemic. Investment in infrastructure like power generation has played an important part in China’s rapid economic rise, especially in times of economic distress like the global financial crisis of 2008 and 2009. Many expect such spending to play an important role as Beijing tries to restart the economy in the aftermath of the coronavirus outbreak that has brought activity a crawl, leading the economy to post its first quarterly contraction since modern record keeping began.
Plant Vogtle surpasses 100 positive COVID-19 cases-- Plant Vogtle officials now say 109 of their employees have tested positive for COVID-19.Cases at the Georgia Power nuclear plant continue to rise in the past several days.However, Georgia Power officials also say 42 workers are still awaiting results and 264 workers have tested negative.Ten workers who tested positive have recovered and received clearance by on-site medical professionals to return to work "We took immediate action to identify and notify workers who were located in close proximity to these individuals when we first learned there were pending tests and sent those team members home to await test results. These team members will remain home in self-isolation and monitor their health for symptoms," plant officials said in a statement.
New rules allow 12-hour work days at Seabrook nuke plant - Nuclear power plants can now implement longer shifts for workers and delay some inspections, raising concerns that as the coronavirus pandemic upends basic operations the industry may be bending the rules too far. The Nuclear Regulatory Commission is already allowing six U.S. power plants to extend workers' shifts, to as long as 12 hours a day for two weeks, and more may be coming. That's up significantly from current standards that require people to get two-to-three days off a week when pulling shifts that long. Employees can also work as many as 86 hours in a week now, up from 72 hours. To curb transmission of the virus, utilities also say they want to delay inspections that require people to work in close proximity. Environmental groups, though, warn the changes could have disastrous results, and worry they could lead to further deviations from safety rules. "This is a step backward," said Eric Epstein, chairman of Three Mile Island Alert, a Pennsylvania non-profit group. "It's not a good idea to stretch workers and marginalize safety standards." The new rules come as at least 42 construction workers have tested positive for the coronavirus at a nuclear plant in Georgia where Southern Co. is building two new reactors. Last week, the utility and its partners announced they would reduce the 9,000-person workforce by 20% to slow the spread of the virus. Exelon Corp., operator of the biggest U.S. nuclear fleet, says it "can no longer meet the work-hour controls" at four of its reactors, including the Braidwood plant in Illinois. NextEra Energy Inc. said the same thing about its Seabrook power plant in New Hampshire. The companies say that the extended work hours won't have an adverse impact on safety."The work-hour rule exemption is an important contingency that may be implemented to allow healthy workers to remain on site for more hours, reducing the need to bring in outside travelers and vendors," Exelon spokeswoman Linsey Wisniewski said by email.
A dirty battle for a nuclear bailout in Ohio - Bulletin of the Atomic Scientists - Last July, Ohio’s governor signed House Bill 6 (HB6) to provide FirstEnergy (now Energy Harbor), a large electric utility, with subsidies of nearly $150 million per year to keep its Perry and Davis-Besse nuclear power plants operating. Ohio is only the fifth US state to offer such subsidies; other states include New York, Illinois, New Jersey, and Connecticut. Although the subsidies are justified by some as necessary for climate mitigation, in the latter four states, electricity generation from natural gas, which results in greenhouse gas emissions, has increased since 2017, when these subsidy programs started kicking in. Moreover, in Ohio, subsidies are also being extended to coal power plants, providing the clearest illustration that what underlies the push for subsidies to nuclear plants is not a result of a real commitment to climate mitigation but a way to use climate concerns to bolster the profits of some energy corporations. The enormous lobbying effort that won the subsidies used dark money–backed organizations that spent millions of dollars to sway voters and politicians. But it didn’t stop with the bill being signed into law—the lobbying also thwarted the ability of citizens to put the proposal to a democratic vote through a referendum, including by funding television advertisements that falsely claimed that China was “intertwining themselves financially in our energy infrastructure” and threatening “national security,” implying that not going through with the nuclear bailout would somehow lead to Chinese control of Ohio’s power grid. As confronting climate change gets in the way of corporate profits, such dirty battles are sure to emerge more often.
Fate of Beaver Valley plant could hinge on federal fight over nuclear payments in power markets — In December, a powerful five-member federal board met in an office building just north of the U.S. Capitol to address what it viewed as a major problem for energy producers: Clean energy subsidies had distorted the electricity market.The Federal Energy Regulatory Commission ordered the nation’s largest power grid operator, which oversees the flow of electricity through Pennsylvania and surrounding states, to make changes that would protect natural gas and coal plants from falling revenue. Fossil fuel plants, the commission argued, faced competition from nuclear and renewable energy facilities, whose operations were aided, and in some cases bailed out, by state government subsidies.While new rules proposed last month by the grid operator, PJM Interconnection, allayed some concerns, a core question remains: How does nuclear fit into the nation’s power supply?“We expect this tension between market rules focused on price and state policies focused on carbon-free goals to grow over time,” said Matt Crozat, senior director of policy development at the Nuclear Energy Institute. “It’s now up to the states to decide how much control to relinquish to markets or whether to take more direct control of their own electricity technology mix.”In Pennsylvania, the federal fight over obscure electricity market rules could translate to life or death for the Beaver Valley nuclear plant in Shippingport. The Beaver Valley plant had been slated for closure in 2021 by its previous owner, FirstEnergy Solutions, as the Akron, Ohio-based energy company went through Chapter 11 bankruptcy proceedings. FirstEnergy had unsuccessfully lobbied Pennsylvania officials for state support for the plant, which employs about 1,000 people and has capacity to power more than 1 million homes.In a surprise move last month, the company — which emerged from bankruptcy under new ownership and a new name, Energy Harbor — revoked that closure plan. The company cited Pennsylvania Gov. Tom Wolf’s plan to enter the state into a regional carbon pricing initiative that would require coal, gas and oil-fired power plants to pay a fee for their carbon emissions. The carbon-pricing plan “will begin to help level the playing field for our carbon-free nuclear generators,”
Appalachian Storage Hub Development Sparks Concerns – The Oberlin Review - Appalachia has been a hub of fossil fuel extraction for over a century, and the Ohio Valley Environmental Coalition has been leading anti-pollution efforts in the region since Dianne Bady founded the organization in 1987. In 2017, months before her death, Bady was sifting through industry magazines and noticed several proposed projects related to plastic production. Slowly, she stitched together a picture of what was to come: a massive petrochemical complex, now known as the Appalachian Storage Hub, spanning Kentucky, Ohio, West Virginia, and Pennsylvania. This facility would store fracked natural gas fluids in underground caverns and process these petrochemicals into the building blocks of plastic.The coal industry has traditionally paid the bills for Appalachian families, but natural gas has been on the rise since the shale boom began in the early 2000s. Fracking projects swept across the region, along with pipelines to transport fracked natural gas — including the NEXUS pipeline that runs through Oberlin. For more on NEXUS, see “Eight Years In, NEXUS Fight Continues” on page 18. Still, the industry’s future is uncertain; it has expanded rapidly in part thanks to the low market price of natural gas. However, affordability is also one of the industry’s greatest challenges: it has prevented gas companies from generating the profits promised to investors. “There’s just a glut of natural gas, with nowhere to go,” says Dustin White, OVEC’s project coordinator focusing on the Appalachian Storage Hub. Companies are looking for ways to increase demand for their product, and it looks like they may have found one in ASH. “There are no exact numbers except for what is already in place,” White cautions. “Appalachia Development Group has suggested up to five large ethane crackers with the potential of other smaller crackers, several massive underground storage sites, a potential “six-pack” of “thirty-two” inch pipelines running the length of the Ohio River, several thousand miles of feeder pipelines, and hundreds of additional chemical refineries.”Every type of proposed infrastructure and each stage of the petrochemical process can create environmental hazards. White describes this as “cradle-to-grave” environmental damage. “From the moment the natural gas liquids are fracked to the plastic waste that is the end product, there’s no way that it does not harm human health in some way,” he said. “So it’s completely overarching.”
Pennsylvania bet its economic future on fracking, plastics. Was it all a giant scam?- When the global oil giant Royal Dutch Shell finalized its plan for a massive, $6 billion petrochemical plant on the banks of the Ohio River in far western Pennsylvania in the summer of 2016, an ecstatic Gov. Wolf called the scheme “a game-changer” for the state. In a series of interviews, the then-first-term Democrat said he was “elated" at what he called the largest private investment in the Keystone State since World War II and a reversal of fortune for the beleaguered blue-collar workforce in the greater Pittsburgh region. And America’s fifth-largest state was throwing its own weight behind the project, thanks in large part to a massive tax break for then highly profitable Big Oil icon that had been estimated by experts as worth $1.7 billion over 25 years and which had been approved under Wolf’s GOP predecessor Tom Corbett. The state also declared the site a Keystone Opportunity zone — another tax break — and invested in roads, site development and job training. Four years later, the Shell project — seeking to use ethane from fracking sites in Pennsylvania and nearby to make consumer plastics — is pushing forward, but other big petrochemical projects that threatened to make the Ohio Valley look, for better or worse, like Houston, appear to be on hold. The fracking industry is bracing for a wave of bankruptcies. Indeed, the whole fossil-fuel industry was looking bad even before the recent stunning collapse of global energy prices — for a few remarkable hours, the futures price of a barrel of West Texas crudewas less than zero — and that will likely have huge economic consequences for Pennsylvania. Instead of a “game-changer,” was everything the state experienced over the last decade-plus — including the thousands of ugly fracking rigs that dotted the rural landscape, and the The Graduate-like touting of “one word ... plastics” as our future — really just a shell game? (Pun intended.) And beyond the shaky economics that at its worst reeks of the subprime mortgage crisis, can there be any moral justification in a time of climate change, and when the world is increasingly littered with plastic gunk, for Pennsylvania’s relentless, short-sighted embrace of fossil fuels as its salvation?A report released earlier this month by the Center for International Environmental Law — warning the U.S. government that bailing out Big Oil, Gas and Plastics with coronavirus relief dollars would be “an unfillable sinkhole” — spells out why the pipe dream for state officials of plastics plants using fracked-in-Pa. natural gas lining the banks of the Ohio may be just that, a dream. The report argues that industry estimates of an ever-rising global demand for plastic products like those to be manufactured by the Shell ethane cracker and its competitors were bogus — even before the pandemic crashed the economy.“The whole push to build out this massive infrastructure for new plastic capacity has been driven not by any existing demand for plastics” — either in the U.S. or in international markets, Carroll Muffett, the president and CEO of CIEL, told me in a phone interview. “It’s driven by this flood of very cheap gas. The industry had this massive resource and they needed something to do with it.”
Construction of Southern Reliablity Link pipeline continues during pandemic - Construction on the controversial Southern Reliability Link pipeline is continuing during the ongoing coronavirus pandemic, much to the chagrin of environmental groups opposed to the natural gas infrastructure project. A collection of environmental leaders challenged the reasoning of Gov. Phil Murphy’s executive order suspending construction work but exempting utility projects like the natural gas pipeline during a news conference Tuesday where they blasted the exemption as a concession to the industry that endangers workers and puts the environment and others at risk. New Jersey Natural Gas is currently still finishing a portion of the 30-mile, high-pressure gas line in Monmouth County. Work is already completed in Ocean County and has yet to move into Burlington County, where the line is planned to connect to a new compressor station in Chesterfield. “I think it’s a cave to the fossil fuel industry and some of the labor unions. It makes no sense when you can’t do energy efficiency projects but you can do pipelines and power plants. We’re very concerned by it,” said Jeff Tittel, director of the New Jersey Sierra Club. Murphy indefinitely suspended nonessential construction on April 10, arguing that the restriction was needed to protect construction workers from becoming infected with coronavirus or spreading the disease. His order came weeks after he ordered restaurants and bars to close, along with other nonessential businesses. “No one should be working where social distancing isn’t practiced to its fullest extent,” Murphy said when he announced the construction ban. But his suspension order included several exemptions, among them construction of hospitals and schools, transportation projects and affordable housing projects. Utility projects were also exempted, including “those necessary for energy and electricity production and transmission.”
Keystone XL ruling could further delay Mountain Valley Pipeline permit - A long-suspended permit for the Mountain Valley Pipeline to cross streams and wetlands could remain on hold even longer as the result of a decision by a federal judge in Montana. Last week, U.S. District Judge Brian Morris vacated a so-called Nationwide Permit 12 issued by the U.S. Army Corps of Engineers for the Keystone XL pipeline. Opponents had said the Corps did not properly evaluate the harm to endangered species from the 1,210-mile pipeline that will transport crude oil from Canada to Nebraska. The ruling prevents other pipelines, including Mountain Valley, from obtaining a similar permit until systemic problems are addressed, according to an attorney involved in the case and others. “This is definitely a game-changer to some degree for the pipelines,” said Jared Margolis, a senior attorney with the Center for Biological Diversity, which joined the Northern Plains Resource Council and other groups in bringing the suit. “Right now, unless the ruling is modified, it does have a nationwide sweeping effect,” said Larry Liebesman, a senior adviser with Dawson & Associates, a Washington, D.C.-based water resources consulting firm. In October 2018, three similar permits for Mountain Valley to cross more than 1,000 streams and wetlands along its path through West Virginia and Virginia were set aside by a ruling from the 4th U.S. Circuit Court of Appeals. Although the appellate court cited different grounds — that the Corps bypassed a requirement that major river crossings in West Virginia be completed within 72 hours — Mountain Valley would still be barred from regaining its permit under the Montana case, Margolis said. Mountain Valley has applied for a new permit from the Corps in hopes of resuming construction later this spring on the often-delayed and increasingly expensive $5.5 billion natural gas pipeline. “We are evaluating any potential impact to the MVP project from this federal court decision and, in doing so, continue to target MVP’s late 2020 in-service date,” MVP spokeswoman Natalie Cox wrote in an email.
VIRGINIA: How a GOP-backed plan threatens the Atlantic Coast pipeline -- Friday, April 24, 2020 -- Virginia recently enacted a Republican-sponsored ratepayer protection measure that may spell trouble for the controversial Atlantic Coast natural gas pipeline.
Baker Says Locals Can Shut Down Weymouth Compressor Construction. But They're Not Sure That's True | Earthwhile -- Local officials can temporarily shut down construction of a natural gas compressor station in Weymouth if they have concerns about social distancing at the site, according to Gov. Charlie Baker. “We have a set of standards and rules with respect to distancing around construction, and those standards and rules are pretty clear," Baker said at a press conference on Wednesday. "And if locals have issues with those rules, they have the opportunity to either raise it with us or the opportunity to shut it down.” This week, Sens. Edward Markey and Elizabeth Warren called on Enbridge, the parent company responsible for the compressor station construction, to provide copies of its pandemic plan and detail the steps it is taking to protect the health and safety of workers and the surrounding communities. In their letter to Enbridge, the senators, who oppose the project, expressed concern that "ongoing construction could expose work crews and members of the surrounding community to coronavirus-related health and safety risks." A spokesperson for Enbridge said the company is following guidelines provided by government and public health authorities.
Enbridge moves forward with Line 5 tunnel despite coronavirus lockdown -The owners of the aging Line 5 oil and natural gas pipeline want Michigan regulators to declare that they don’t need state permission to construct a replacement pipeline deep beneath the Straits of Mackinac.The request to the Michigan Public Service Commision is part of a wave of applications that Enbridge, a Canadian conglomerate, has submitted to state and federal regulators in recent weeks to begin construction on the $500 million project next year. Enbridge spokesperson Ryan Duffy said the applications are “another step in moving forward” and consistent with a timeline laid out in a 2018 agreement with the state. But pipeline foes contend permitting should be delayed until Michigan’s coronavirus crisis ends to allow citizens to fully engage in the process.“Urgent matters relating to health, safety, financial, or security should receive the state’s full attention rather than unrelated new or pending actions requiring robust public engagement and input,” an opposition group, Oil & Water Don’t Mix, wrote on April 8 to Gov. Gretchen Whitmer. Enbridge argues the commission’s 1953 approval of the existing pipelines covers its plan to replace the section running under the straits with a 30-inch diameter pipeline running through a concrete-lined tunnel deep beneath the lakebed.In its application to the commision, the company’s lawyers argue the proposed pipeline “involves no more than maintaining and continuing to operate Line 5 by replacing and relocating one approximate four-mile segment of the over 600-mile line.”The company also filed separate permit applications this month with the U.S. Army Corps of Engineers and the Michigan Department of Environment, Great Lakes & Energy to begin constructing the tunnel that would house the pipeline, and with EGLE seeking permission to discharge wastewater during tunnel construction and operation. The 67-year-old Line 5 transports 540,000 barrels daily of crude oil and natural gas between Wisconsin and Ontario. Propane from Line 5 is an important energy source for many Upper Peninsula residents, but opponents contend the pipeline poses a catastrophic hazard to the Great Lakes.
Michigan commission seeks public comments on Line 5 tunnel project - Enbridge's application to build a tunnel under the Straits of Mackinac to house Line 5 — a 66-year-old oil and natural gas pipeline — has been put on hold by the Michigan Public Service Commission until it takes public comment. The Canadian energy company submitted an application to state and federal regulators earlier this month to secure a permit seeking to begin construction on a roughly 4-mile utility tunnel beneath the Straits of Mackinac. Approval of the permit would green light the Canadian oil pipeline giant to begin construction on the Great Lakes Tunnel Project next year with a target operational date in 2024. The commission is being asked by Enbridge for a "declaratory ruling that it already has the authority to construct the replacement segment based on the Commission’s original 1953 order granting authority for the Line 5 pipeline," according to a Public Service Commission news release. Written or electronic comments will be accepted no later than May 13, officials said. Electronic comments are to be e-mailed to mpscedockets@michigan.gov and should reference case number U-20763. Written comments may be addressed to: Executive Secretary, Michigan Public Service Commission, 7109 W. Saginaw Hwy., Lansing, MI 48917. The tunnel would house Enbridge’s new Line 5 oil pipeline and replace a 67-year-old dual span that transports up to 540,000 barrels a day of natural gas liquids and crude oil along the lake bed between the Upper and Lower peninsulas.
Demand For Oil Has Plummeted, But Industry Keeps Building New Infrastructure Anyway - Oil and gas companies are constructing pipelines and wells amid the pandemic, risking workers’ lives and depleting personal protective gear.In February, CNBC anchor Jim Cramer took aim at the heart of the debate over fossil fuels with a bold declaration on his investment advice show: “I’m done with fossil fuels. They’re done. ... We are in the death knell phase.” That was before the coronavirus pandemic and a price war sent oil prices into a tailspin. By March, analysts were predicting a “financial bloodbath” for the oil industry. By early April, usually sober economists at commodities trading firms were describing demand for oil like this to The Wall Street Journal: “Since humans started using oil, we have never seen anything like this. There is no guide we are following. This is uncharted.”On Monday, oil prices plunged below $0 as the world ran out of places to store what’s already been pumped. You’d be forgiven for wondering, then, whether the oil industry exists in a different reality. Instead of retreating, the American oil and gas sector has plowed ahead at full speed during one of the worst pandemics in a century, even as demand for its product tanked because of the COVID-19 economic downturn. The industry’s efforts continued in no small part because federal and state regulators deemed fossil fuel work “essential” during the pandemic. “Continuing construction of new fossil fuel infrastructure and expanding production during a massive oil supply glut is madness,” Collin Rees, a senior campaigner at the environmental group Oil Change USA, said in an email to HuffPost. “It’s the opposite of ‘essential,’ and it’s unbelievably dangerous to both workers and the communities they’re entering, many of which are already underserved by health services. This is just one more example of the Trump administration bailing out Big Oil and putting the interests of CEOs ahead of working people and communities on the frontlines.” The industry’s business-as-usual stance in the face of a historic public health catastrophe is only possible because of how politically entrenched the fossil fuel sector remains. It has capitalized on the crisis to further embed itself, risking the lives of workers and their families on projects that have depleted protective gear for little obvious public good.
PIPELINES: Groups launch new legal attack on FERC climate policy -- Wednesday, April 22, 2020 -- Environmental groups yesterday asked a federal appeals court to take a fresh look at energy regulators' duty to expand their consideration of climate change impacts from the projects they authorize.
Democrats call for new gas pipeline moratorium amid pandemic - A group of 29 House Democrats is asking the Federal Energy Regulatory Commission (FERC) to stop approving new natural gas pipeline projects and new liquefied natural gas export facilities amid the coronavirus outbreak.They argued in a Wednesday letter to FERC Chairman Neil Chatterjee that such a moratorium is necessary to make sure the public is included in the process and also to protect the safety of construction crews. “FERC must issue an immediate moratorium on the approval and construction of new shale-gas pipeline projects and Liquid Natural Gas export facilities to protect the public health, our environment, and the American people’s confidence in the integrity of governmental administrative and legal proceedings,” they wrote. The letter was led by Reps. Jamie Raskin (D-Md.), Jim McGovern (D-Mass.) and Ilhan Omar (D-Minn.). Chatterjee, however, expressed resistance to such a pause, arguing that the country’s infrastructure should try to be prepared for a return to normalcy. "It's imperative that the Commission continue to operate as close to normal as possible so that the industries we regulate are well-positioned to contribute to the nation's economic recovery when we all return to work,” he said in a statement to The Hill. “We at FERC will do everything in our power to make sure our energy systems continue to operate and are there when we call upon them once our economy reopens. To shut our door to working on the nation's critical energy infrastructure would be as irresponsible as it is shortsighted," the chairman added. FERC regulates interstate transmission of natural gas, oil a nd electricity as well as natural gas and hydropower projects.Wednesday’s letter follows a decision by FERC earlier this month to relax certain obligations on the companies it regulates due to the virus.
Oil Price Rout to Hit U.S. Regional Economies – WSJ - Tumbling oil prices will have broad regional impacts on the U.S. economy, hitting states far afield from Texas, which was the engine of a national energy boom during the past decade. Wyoming, Alaska, Oklahoma, North Dakota and West Virginia all depend more on mining and energy extraction than the Lone Star state, according to Wall Street Journal calculations of state economic output data. Ohio and Pennsylvania increased their exposures to energy in the past decade, albeit from low levels, as they jumped on the fracking revolution that tapped previously unused shale reserves, primarily for natural gas. The nation already faces historic declines in economic output and employment because of the social-distancing measures and business closures adopted to stem the spread of the novel coronavirus. Like Texas, other energy-driven states now face an added blow from plunging oil prices, one that might outlast the pandemic shock. “It will also remain a headwind going into 2021 as broader economic conditions start to improve,” said Karl Kuykendall, a regional economist with IHS Markit, an economic research firm. The most actively traded U.S. contracts for crude oil—the West Texas Intermediate futures for delivery of petroleum in June—dropped 43% to $11.57 a barrel Tuesday, a day after some contracts for the U.S. crude benchmark dropped below zero for the first time in history. Oil owners were effectively paying others to take it off their hands and store it. Pain in the oil industry will likely ripple through other parts of those state economies. People who lose jobs in energy will spend less, with spillovers on housing markets, service industries and state coffers.
‘We Pulled the Plug’: As Oil Prices Plunge, Drillers in the Gulf of Mexico Shut Off Wells – WSJ - Offshore oil drillers have begun shutting off wells in the U.S. Gulf of Mexico following a collapse in crude prices due to the coronavirus pandemic, and some executives worry that the region’s production may take years to fully recover. A historic decline in energy demand that has led refiners to make less fuel and caused storage tanks to fill up with crude is pushing Gulf Coast producers to shut down high-cost wells in both shallow and deep federal waters. The offshore oil sector last year accounted for about 15% of U.S. production, or nearly two million barrels a day, a record level. Offshore shut-ins and other cost reductions are among the factors pressuring companies such as Schlumberger Ltd., SLB 7.95% Halliburton Co. HAL 6.87% and Baker Hughes Co. BKR 4.00% to lay off the oil-field-service workers that they provide to producers on a contract basis. The Gulf Coast drillers’ response to the crisis is expected to have a longer-lasting regional impact than the pullback in onshore plays like the Permian Basin of West Texas and New Mexico. While offshore companies are accustomed to turning off wells temporarily during hurricanes and other extreme weather, shale oil production is known for shorter cycles from drilling to initial extraction. Older offshore platforms are at risk of being removed, leaving oil and gas underground—and those fields are unlikely to attract investors willing to pay for costly restarts when prices recover. “In offshore, we don’t shut in fields, we shutter them. You begin the process of leaving them forever,” said Tim Duncan, chief executive of offshore producer Talos Energy Inc. TALO 8.60% Offshore producers pay comparatively high costs to produce and transport crude oil to onshore refineries and storage facilities. They typically offset those costs by collecting premium prices for barrels delivered into Gulf Coast trading hubs in Texas and Louisiana, supported by high demand from U.S. refiners. Richard Kirkland, chief executive of shallow-water producer Cantium LLC, ordered his company at around 1 p.m. Monday to shut in all production as U.S. prices fell to a level where producers were effectively paying buyers to take crude off their hands. By 6 a.m. Tuesday, almost all of it was shut. “We pulled the plug,” Mr. Kirkland said. Cantium’s fields, which were producing 20,000 barrels a day, will be shut for at least two months, possibly four. Gulf Coast refiners told Mr. Kirkland they would substitute Gulf crudes with Saudi barrels from two tankers sitting offshore. “This could very well be the peak for years,” Mr. Kirkland said. “We’ve got to survive with our hedge money and cash in the bank. We’re not getting much help from anybody.”
A Decade Later, Gulf Residents Suffer From BP’s Toxic Legacy - Rick DuFour has worked the most dangerous oil cleanup jobs in the Gulf of Mexico. He was there when the Deepwater Horizon oil rig exploded 40 miles off southeastern Louisiana 10 years ago, killing 11 men and spewing more than 200 million gallons of Louisiana crude out of its well a mile below the sea. Much of it poured onto the shores of four states; DuFour was one of the first in line to clean it up. Over three years, DuFour estimates he worked for 18 different companies, cleaning up a toxic mix of oil and chemical dispersants stuck like peanut butter to the bottoms and bows of ships, picking up oily tar balls on beaches and scraping tar mats as long as football fields from areas they sank just offshore. There wasn’t a cleanup job he didn’t sign up for, working for weeks on end in the blistering 100-degree heat and humidity, sucking in the noxious fumes that permeated the salt air. He saw hundreds of dolphins wash up dead on the barrier islands where he worked, many of them just babies. Sometimes the men had to limit their work to just five minutes out of every hour to avoid heat exhaustion and chemical exposure as the sweat poured off them in buckets. One day, a company chemist approached the workers with a new compound called Chemical 7248, a special degreaser the Coast Guard now warns should be disposed of as hazardous waste. Soon after spraying the chemical, DuFour says one of the workers started screaming and had to be taken to the hospital. DuFour says the skin on his legs blistered with a “thousand ant bites ... it looked like cherry-colored lipstick went around my eyes and went around my nose and it just burned so bad.” DuFour says he soldiered on, determined to finish the job even as people fell sick around him. But oil and chemicals finally took a toxic toll. After three years of working oil cleanup jobs across four states, exposed to countless cleaning compounds, oil dispersants and fumes, DuFour collapsed at home one morning in April 2013. He was rushed to the hospital in Ocean Springs, where he remained in recovery for nearly a year. He was initially diagnosed with a condition similar to Guillain-Barré syndrome, a rare neurological disorder, and he lay mostly paralyzed in a hospital setting during his recovery. He describes the pain coursing through his body like “snakes were crawling up” his legs, torturing him as he was unable to move. DuFour eventually made it back to his trailer, but the pain never went away. He still can’t move well, and he can barely eat or grasp drinks with partially paralyzed hands. His eyes still burn, too, “like there’s tabasco” in them. A decade after the spill, DuFour is broke, nearly paralyzed and mostly homebound.
Oil prices tumble below $0; Louisiana trade group warns of potential halt to operations - A price collapse that sunk May oil prices well below the $0 mark on Monday was a rude awakening to a glut that's straining storage capacity and has the potential to halt much of Louisiana's oil production. Benchmark U.S. crude oil fell $55.90, or more than 300%, to settle at negative $37.63 a barrel Monday. The drop into negative territory was chalked up to technical reasons — the May delivery contract is close to expiring so it was seeing less trading volume, which can exacerbate swings. "For the last few barrels in the May contract, they literally had to pay somebody to take the oil but it didn't impact a huge volume of oil," said Eric Smith, associate director of the Tulane Energy Institute. U.S. crude oil for June delivery shows a more ”normal” price, he said. The June price fell 14.8% to $21.32 per barrel, as factories and automobiles around the world remain idled. Demand for oil has collapsed so much due to the coronavirus pandemic that facilities for storing crude are nearly full. “Many of our members are being told they cannot deliver crude in May due to storage constraints, and as a result have begun planning to shut in 100% of their Louisiana production,” said Gifford Briggs, president of the Louisiana Oil and Gas Association. “It’s an absolute worst-case scenario." The breakeven price for producers is about $37 per barrel, he said. A negative price for May contract oil hit on Monday is unprecedented, and the price has not dropped to single digits since 1973. Big oil producers have announced cutbacks in production in hopes of better balancing supplies with demand, but many analysts say it’s not enough and wells are going to get shut down.
Louisiana faces major budget shortfall as oil markets crash - Thousands of oil and gas jobs in Louisiana are potentially on the chopping block as the price of crude oil continues to tank. The market was already down, with crude oil hovering around $30 to $40 per barrel at the start of 2020, a far cry from the $50 to $60 per barrel at which is was supposed to be priced. But no one predicted the market would depress to historic lows.“We’re down about 30 million barrels per day or more because the global shutdown of the economy,” said Gifford Briggs, president of the Louisiana Oil & Gas Association.The market has been saturated with oil in part because of the lack of demand as Americans are largely under stay-at-home orders.“We need to get our state economy moving again, we need to get our country’s economy moving again, we need the global economy moving again if we’re going to minimize the impacts to the oil and gas industry and ultimately the state,” Briggs said. More so than the potential for job cuts, the crumbling market presents problems for the state. Oil and gas makes up about 10% of Louisiana’s budget. For every dollar oil goes down, Louisiana loses roughly $12 million annually. Loren Scott, a Baton Rouge economist, estimates already, that shapes up to a loss of $20 million per month to the state’s budget.
Coronavirus: Edwards delays severance tax payments to help oil and gas industry - The state is delaying collection of severance taxes, Gov. John Bel Edwards announced Wednesday, a move that will offer relief for Louisiana's oil and gas industry reeling from plummeting prices. The governor's announcement came after the Louisiana Oil and Gas Association and U.S. Rep. Clay Higgins asked Edwards to suspend the tax, which is imposed on all natural resources produced in the state. Louisiana Department of Revenue Secretary Kim Robinson said the governor's new directive will delay collecting the tax for two months until June 25. Legislative action would be required to suspend or forgive the tax permanently. "We are looking at what we can do here in Louisiana," Edwards said Wednesday, noting that a special task force studying business issues in the wake of the coronavirus is considering help for the energy sector. Edwards said more permanent steps to help the industry, like cutting taxes, requires legislative approval “and we’ll discuss that going forward.” Robinson said the state collects about $40 million a month in severance taxes, which includes production of oil, natural gas and timber. All severance tax collections are delayed by the governor's order. “We are grateful that Governor Edwards has recognized the severe crisis that is facing the industry and has heard our calls for severance tax relief,” said Louisiana Oil and Gas Association President Gifford Briggs. “The decision to delay severance tax payments and provide temporary relief to the industry is a welcome first step. "We look forward to continuing to work with the administration and the Louisiana Legislature on additional measures to help small and independent producers, service companies and the thousands of hard working men and women that make up the industry. We need bold, decisive action in order to survive" Robinson said the governor hasn't made a decision on whether he will delay collection of severance taxes beyond June 25. Briggs called on the state to do more.
Forced to Store Fuel at Sea, Oil Refiners at Breaking Point - Oil refiners are hunting for vessels to store jet-fuel and gasoline that nobody is buying, sending freight rates sharply higher, an indication that the global refining system is fast approaching a breaking point. Until now refiners had mostly been storing unwanted product on site, but the latest indication from the tanker market suggests they are now being forced to place their output into ships. With local demand sharply down, if they can’t find storage, they’ll be forced to trim output, or even shut down completely. “The shipping market is now the main bottleneck,” said Torbjorn Tornqvist, head of commodity trading giant Gunvor Group Ltd. “We are fast approaching the crunch point whereby it will be hard to find any ships, and shipping rates are currently stratospheric,” he added in an interview. If the refiners are forced to reduce their processing rates, it would mean even less demand for crude, creating a ricochet effect through the oil market. The sign of a global hunt for tankers to store products is clear in the eye-watering prices traders are paying for the vessels. It now costs more than $8.6 million to haul an 80,000-ton cargo of naphtha, a material used to make gasoline and plastics, to Asia from Europe. Just a few years ago, the same route was paying little more than $1 million. Rates are soaring on all routes and ship sizes, according to the Baltic Exchange in London.
The oil industry has never been in a crisis quite like this and many producers will not survive - The oil industry is in its worst crisis since at least the Great Depression, according to analysts. There’s too much oil, and nobody wants to buy any more. Planes aren’t flying, shipping has slowed, and U.S. consumers, who use 10% of the world’s oil output in their cars, are now staying at home. The action Monday in the most closely watched energy market in the world was devastating, as the value of the May oil futures contract plummeted 300 percent, flipping into negative territory to end at minus $37.63 per barrel. The price action was unprecedented, and hard to explain but it was also a wake up call for an industry that is likely to see much more pain ahead. 20200420 Oil futures crash One reason the CME’s May contract for West Texas Intermediate plunged was well understood. There is simply a basic lack of storage capacity in the world for crude. As the contract expires, nobody wants to take delivery of the physical product. But that’s not a satisfying explanation for such a bizarre price reaction, and there was speculation it was the result of hedging gone wrong or even some exchange traded funds behind the sell off. The end result is that the industry now has had a warning that it needs to seriously curb drilling and unwinding the supply glut could be more difficult than expected. The May contract, which expires Tuesday, was the only one to trade in such erratic fashion, but the June contract was down 15% and was trading around $21.40 per barrel Monday afternoon. Brent futures, the international benchmark, were trading at about $25.90 per barrel. But in the spot market, North American regional prices reflected the problems producers were having unloading landlocked crude in a market with no buyers. Louisiana light sweet crude was selling for a little over $5 a barrel but crude in the Bakken region in North Dakota was selling for negative $38.63 a barrel.
Hard times ahead for Houston as oil falls to its lowest price in history — Oil has fallen to its lowest price in history. Coronavirus has killed the demand for crude oil, which was already suffering amid an international oversupply. Experts can agree on at least one point: Houston is sure to face some tough days ahead. “We’ve never seen anything like this before, where you see an upswing in production at the same time a decline in demand,” says journalist Evan Mintz. The Texas Monthly writer described the double-hit Texas was about to take earlier this month in a report for the magazine called, "Houston, Meet Cleveland." The title is a reference to other American cities, like Cleveland, that were once one-industry towns. “You can look at Cleveland, you can look at Pittsburgh,” Mintz explains. “These are cities that have had to re-invent themselves. But no one will say they’re the best they’ve ever been. That was in the past, and they have to find a new story for themselves in the future.” Although many describe Houston as having a diversified economy, Mintz disagrees. “We like to think Houston has this big diverse economy,” Mintz said. “But the fact of the matter is we are still an oil and gas city, and we aren’t as diverse as people think we are.” The writer says Houston’s economy is still dependent on oil and gas. When nobody is buying, it’s really bad. “About a third of Houston’s GDP is based on oil and gas,” Mintz said. “If people can’t make money selling oil, that’s really bad. It means we’re going to lose money, we’re going to lose jobs it means we’re losing a major economic engine.” Oil and gas attorney Cliff Vrielink spent Monday on the phone with clients, many of whom own small-scale oil and gas businesses, helping them navigate their next steps. “Right now there’s a lot of crisis management as you could imagine,” Vrielink said. The lawyer is giving advice to clients who are forced to make tough decisions like letting go of workers and trying to survive without any revenue. He is helping one of them close their business. “Trying to sell their assets for whatever they can, talking to the bank,” Vrielink said. “And in their case, they’re just going to have to wrap up the business and close the doors unfortunately.”
Former Dallas Fed President Fisher says Texas has been 'hit hard' by the oil slump - Texas has been slammed by the collapse in oil prices and the recovery ahead for the area and the national economy as a whole will be slow, former Dallas Federal Reserve President Richard Fisher said Tuesday. West Texas Intermediate crude prices plunged into negative territory Monday, the first time that has happened, as slumping demand and oversupply distorted energy market dynamics. Fisher said his state is looking to restart slowly an economy that has been bruised by the oil slump. “We are all, particularly in the Houston area and West Texas, being hit hard by what happens in the energy patch,” Fisher told CNBC’s Rick Santelli during a “Squawk on the Street” interview. Fisher added that he anticipates a slow road ahead as the economy recovers from a coronavirus-induced shutdown. “Texans get things done. The order of difficulty is great,” he said. “We’re in for a long, U-shaped recovery in the United States as a whole. It’s going to take time to patch things back together, to get them up and running, to get the financing for working capital for small- and medium-sized businesses to lift up the economy, bring people back to work and start growing again. It’s going to take quite a while.” Fisher pointed out that it’s not only oil getting hit but also other goods across the commodity spectrum including copper, wheat, soybeans and corn. That all has happened as the dollar has strengthened but government bond yields have remained low. Whereas the benchmark 10-year low normally would average about 4% over time, he added, it’s now closer to 0.5%, which he said sends the message to members of Congress that “you can spend eight times as much” but still have the same financing costs. The U.S. national debt has ballooned to nearly $24.5 trillion and the budget deficit this year is expected to eclipse $3 trillion. Fisher said low rates are making those costs affordable, but also have a downside. “It’s kind of a good thing, but it’s also a dangerous trap,” he said.
Negative Prices For Crude And Natural Gas Slam Permian Markets --Underlying Monday’s financially driven oil price rout are physical markets that are in extreme turmoil as they contend with severely reduced demand resulting from the COVID lockdowns and rapidly filling storage tanks. In the Permian Basin, the epicenter of U.S. shale oil, the crude benchmark price — WTI at Midland — on Monday crashed to a historical low of negative $13.13/bbl before rebounding to a positive $13.01/bbl Tuesday. The same day, prices at the Permian natural gas benchmark Waha revisited negative territory for the third time this month, with a settle of minus $4.74/MMBtu for Tuesday’s gas day. Negative supply prices aren’t new to Permian producers, at least for gas — Waha settled as low as minus-$5.75/MMBtu in early April 2019. But up until a couple months ago, oil prices were supportive enough to keep producers drilling regardless. Now, that’s all over, at least for a while. What can we expect now that negative oil prices have arrived in the Permian? Today, we’ll dissect the latest bizarre pricing event to rattle the Permian natural gas and oil markets. We said this yesterday in One Way Out, but it bears repeating: the crude oil market entered the twilight zone Monday when WTI at Cushing not only collapsed below zero but went as negative as minus-$40.32/bbl and settled the day at minus-$37.63/bbl. The extent of Monday’s trouncing was shocking and, as we explained yesterday, worsened by a few financial players who got caught having to unwind long positions for May delivery just a day before the May contract was expiring, because they had no way to take physical delivery. To get out of their predicament, they ended up having to pay “buyers” to take them out of their positions. That was Monday. On Tuesday, with the financial trading crisis resolved, the May contract recovered to positive territory to expire at $10.01/bbl, up almost $48/bbl from the previous day. The June contract, which had remained relatively supported Monday near $20/bbl — fell to converge with the expiring May contract, down nearly $9/bbl to $11.57/bbl Tuesday
Oil Producers Will Pay You $54/Barrel To Take South Texas Sour Off Their Hands - All day long we have been told, "ignore the price collapse in the May WTI futures contract," look over here instead at how well stocks have rebounded... Excuses vary from "it's purely technical" to "a fund or twelve probably blew up, it's not fundamental" to "ahh, it's just the roll" but as it becomes clearer and clearer that the world is coming to terms with what Goldman called "The Largest Economic Shock Of Our Lifetimes", and the record surge in excess oil output amounting to a mindblowing 20 million barrels daily or roughly 20% of global demand. Besides that simple supply/demand imbalance, we explained here in great detail exactly what drove today's move:...all the storage in Cushing is booked, and there is no price they can pay to store it, or they are totally inexperienced in this game and are caught holding a contract they did not understand the full physical aspect of as the time clock expires. Or, put another way, today's negative prices are the reflection of dire market conditions for producers, and as the following price sheet from Plains Marketing LP notes, producers are paying up massively for you to take crude off their hands...As Elisabeth Murphy, an analyst at consultant ESAI Energy previously noted, "these are landlocked crude with just no buyers. In areas where storage is filling up quickly, prices could go negative. Shut-ins are likely to happen by then."And it's not about to get better anytime soon as oil demand has been so battered by global government lockdowns to stop the spread of the coronavirus (that are being reinstated amid secondary waves of infection or delayed for fear of such) that any conceivable oil production cut is a drop in the ocean.Yes, the crude futures curve offers hope but that contango is supported by the ETF as much as anything else and given spot deliverable prices above, rolling down that curve of pain, just as May contract longs did today, to converge with spot will come very soon for June... and as Kyle Bass explained this afternoon, there is little expectation that the Saudis and Russians will take their foot off the throat of US shale anytime soon...
Drowning in crude, U.S. drillers say Trump strategic reserve plan is no lifeline - (Reuters) - President Donald Trump’s plan to fill the U.S. emergency crude oil stockpile has become the centerpiece of his administration’s strategy to shield drillers from a meltdown in energy demand - but company officials and industry groups say the program has been too slow and won’t be enough to save them. Trump announced his intention to fill the U.S. Strategic Petroleum Reserve “to the top” on March 13 as global oil prices went into freefall amid the coronavirus outbreak as governments issued stay-at-home orders that have obliterated fuel demand. But by the time crude oil prices CLc1 hit negative territory for the first time in history this week because of a lack of commercial storage space, the SPR’s sprawling salt caverns had yet to take delivery of a single barrel due to logistical constraints and a lack of funding. Drillers, meanwhile, say they are balking at the government’s offer to take their oil because it is hard for them to move it from inland fields to the SPR delivery sites on the Gulf Coast, and because they worry placing it in the reserve could compromise the oil’s quality. Global oil demand generally averages about 100 million barrels per day, but the pandemic is estimated to have cut that by around 30%. While major oil-producing nations led by Saudi Arabia have cut output and companies are closing wells, the oversupply is projected to linger for months or years leading to waves of bankruptcies in the U.S. energy industry. “I don’t see (the SPR program) providing a significant benefit to the masses in Texas,” Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association. The administration’s initial idea for the SPR was to purchase 77 million barrels of oil – the amount required to fill all available space in the reserve - directly from small U.S. producers most at risk from the market slump. But after Democratic lawmakers blocked funding for the program in last month’s stimulus package, the administration shifted strategies by offering the initial 30 million barrels of space for lease instead. The Department of Energy said this week it has awarded contracts to store a total of 23 of the 30 million barrels initially offered in the reserve, with deliveries to start as early as this month. A DOE official said it was “not surprising” that some of the offered space was not taken, because the leasing offer required different crude types to be delivered to specific locations on a deadline.
A hunt for any storage space turns urgent as oil glut grows (Reuters) - The telephone lines have been ringing at Adler Tank Rentals in Texas as oil companies found a new use for steel tanks that had been left idle when shale producers stopped drilling - they want to use the tanks to store some of an oil glut that has overwhelmed the market and flipped U.S. crude prices negative for the first time. Hundreds of millions of barrels of crude have gushed into storage worldwide in the past two months as the coronavirus-related lockdowns wiped out around a third of global oil demand. With oil depots that normally store crude oil onshore filling to the brim and supertankers mostly taken, energy companies are desperate for more space. The alternative is to pay buyers to take their U.S. crude after futures plummeted to a negative $37 a barrel on Monday. A topsy-turvy market that has oil prices for October delivery at $31 a barrel has oil firms anxious to sock away millions of barrels now to sell at a profit later. In Cushing, Oklahoma, home to dozens of large tank farms with combined space for about 76 million barrels, operators are fully booked, said traders. Storage there jumped by 5.7 million barrels the week before last, according to the latest U.S. Energy Information Administration (EIA). While the government estimated there is available space, traders said Monday’s market drop indicated any unfilled tanks are under lease, and not available to new renters. “The industry is really scrambling to source viable storage options,” said Stuart Porter, a manager at Adler Tank Rentals (MGRC.O) in Texas, which has shale companies lining up to potentially lease dozens of its 500-barrel steel frac tanks. The tanks can be lined up like dominos and filled at the well site by producers without a home for their oil.Converge Midstream LLC with millions of barrels of storage available in underground salt caverns outside Houston has gone from few takers to requiring one- to two-year contracts. “Quite honestly we were struggling for business. Now that the market has changed, everyone is our friend,” said Dana Grams, chief executive of Converge Midstream. The hunt for storage points to the magnitude of the collapse in demand for U.S. shale and the huge volume of unsold oil to refiners who are cutting purchases. Last month, the Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia threw in the towel on four years of self-imposed output curbs that gave U.S. shale a price umbrella. The result was a drop in U.S. oil prices to about $20 a barrel as Saudi Arabia and Russia pledged to pump full bore. For a time, it looked like prices would stabilize after the pair and other nations this month agreed to deepen cuts. But crude stocks in the United States rose by 19 million barrels overall the week before last, the EIA said, the biggest one-week increase in history, setting the stage for Monday’s historic decline. In addition to the onshore glut, there are about 160 million barrels of oil sitting on tankers waiting for buyers. And at least six crude tankers carrying 2 million barrels apiece are en route to the United States from Saudi Arabia, adding to the alarm at the U.S. Gulf Coast. It is not just crude looking for a place to go. State lockdowns have decimated demand for motor fuel. U.S. gasoline demand fell 32% earlier this month compared with the same time a year ago, the EIA said.
US energy firms mull building new crude storage, conversions, more as stocks rise | S&P Global Platts — The North American energy sector is weighing options from building new tanks farms to more extreme alternatives such as temporarily storing crude in rail cars as US commercial crude storage threatens to fill to capacity as soon as May. Oil producers, midstream firms, traders and others are considering all types of storage possibilities to capture contango profits with NYMEX WTI at about $16/b on Thursday after falling into negative territory for the first time ever on Monday. But energy analysts warn the negative-pricing potential threatens to return in the days and weeks ahead as the Cushing storage hub quickly fills to capacity, followed by other regions throughout North America. Some of the options include converting tanks and storage wells into crude storage, utilizing all offshore floating storage, and more. The larger midstream players are deciding whether to build new storage that may not hold long-term value, while other export and refining hubs, such as Corpus Christi, Texas, are better positioned at least in the near term because they already had a wave of storage construction underway. With working US commercial storage more than 60% full and the prominent Cushing hub rising above 76%, energy traders and analysts said all practical options must be on the table. If storage gets too tight, NYMEX WTI and more regional hubs will again see negative crude pricing as markets have seen at times with natural gas in the Permian Basin, he warned. "If there's an opportunity to make money, people are going to do it," said Ernie Barsamian, CEO of midstream logistical firm The Tank Tiger. "Most of the big-chunk stuff got taken up by the big boys, but there's still lots of smaller stuff. And the contango continues to roll from front month to front month [through 2021 and beyond]." The Tank Tiger lists smaller and modest-sized storage opportunities, including caverns in the Permian, rail cars in the Bakken, floating barges off of New Orleans, and more traditional tank storage from Cushing to Brownsville, Texas. There also are options to sign on for tank storage that's currently out of service or eventually rolling off of contracts. After going through the permitting process, it only takes about three months to build new tanks in Cushing, he said, noting that a lot of conversations are ongoing as firms prepare to move quickly. Most of the midstream companies are holding their cards tight as they consider their options and are declining comment for now. But they are expected to reveal more as midstream earnings season picks up next week, analysts said.
One Pipeline Giant Is Looking to Stash the Oil Glut in Its Lines - Energy Transfer LP, the pipeline operator run by billionaire Kelcy Warren, is looking at ways to free up space on its conduits to store more crude as the coronavirus lockdown leaves the world swimming in oil. The company has identified two pipelines in Texas that would provide about 2 million barrels of additional storage, according to a spokeswoman. Energy Transfer is in the process of asking the Texas Railroad Commission for permission to change the method of operation on these lines. Argus Media first reported the plans. “After that it will be a matter of adding pumps, which we can easily achieve,” the spokeswoman said in an email. “We estimate we can be ready by mid-May.” It was just last month that Plains All American Pipeline LP asked oil producers to scale back production as storage started to fill. Now, prices have plunged so low that drillers are being forced to shut in output. Still, the global oil market faces a massive supply glut and rapidly filling tanks. The Texas Railroad Commission is now weighing mandatory oil curtailments, though the oil regulator recently delayed a vote on the matter. Instead, the agency launched a task force led by trade groups meant to come up with ways the state can bolster the industry.
‘I’m Just Living a Nightmare’: Oil Industry Braces for Devastation - NYTimes --Workers at Marathon Petroleum’s refinery in Gallup, N.M., are turning off the valves. Oil companies in West Texas are paying early termination fees to contract employees rather than drill new wells. And in Montana, producers are shutting down wells and slashing salaries and benefits. Just a few months ago, the American oil industry was triumphant in its quest for energy independence, having turned the United States into the world’s biggest petroleum producer for the first time in decades. But that exhilaration has given way to despair as the coronavirus has kneecapped the economy, destroying demand for gasoline, diesel and jet fuel as cars sit parked in driveways and planes are consigned to remote fields and runways. The oil industry has lived through many booms and busts, but never before have prices collapsed as they have this week. On Monday, one closely watched price fell below zero, meaning some traders had to pay others to take crude oil off their hands. That price — for May delivery — recovered on Tuesday, but not nearly to levels where oil companies can make a profit. At the same time, the price of oil for June delivery fell by about half to roughly $10 a barrel. “I’m just living a nightmare,” said Ben Sheppard, president of the Permian Basin Petroleum Association, which represents companies in the area of Texas and New Mexico that became the world’s most productive oil field last year. In Midland, Texas, the epicenter of the oil shale boom over the last decade, parking lots at companies like Chevron, Diamondback and Apache are empty aside from a scattering of pumping trucks. Executives are working from home, huddling with their colleagues and board members to decide how quickly to shut down production and lay off workers. Oil giants like Exxon Mobil have slashed their 2020 exploration and production budgets by nearly a third, and that was before the total oil price collapse at the start of this week. Many smaller oil companies are expected to seek bankruptcy protection in the coming months after having spent years borrowing billions of dollars to extract and move crude. Production companies have $86 billion in debt coming due between 2020 and 2024, and pipeline companies have an additional $123 billion they have to repay or refinance over the same period, according to Moody’s Investors Service.
Would They Actually Pay Refineries To Take Their Oil? - Something happened yesterday that has never happened before and does not even sound like it is based in reality. The contract for a barrel of West Texas Intermediate crude oil scheduled for delivery in May closed at a negative $37.63 per barrel.Yes, you read that correctly I did not make a mistake. A barrel of oil closed at a negative $37.63 meaning that producers of oil would actually pay traders to take their full barrels off their hands.What is West Texas Intermediate (WTI) crude, according to Investopedea: West Texas Intermediate (WTI) crude oil is a specific grade of crude oil and one of the main three benchmarks in oil pricing, along with Brent and Dubai Crude. WTI is known as a light sweet oil because it contains 0.24% sulfur, making it "sweet," and has a low density, making it "light." It is the underlying commodity of the New York Mercantile Exchange's (NYMEX) oil futures contract and is considered a high-quality oil that is easily refined. How can a barrel of oil get to a price in which the producer will actually pay you to take the barrel off their hands? Because no refiner has the ability to even store the oil that has already been extracted from the earth. Thus the oil is worthless to the refineries. This is what the shutdown of our economies has done to our world. Eventually, many more people will be harmed by this complete economic shutdown rather than a controlled regional shutdown as compared to COVID-19.
2,500 oil and gas workers in Texas lose their jobs in 10-day span - The oil and natural gas industry shed another 2,500 jobs over the past 10 days, new figures from the Texas Workforce Commission show. Blaming record low oil prices and the coronavirus pandemic hurting demand for their products and services, 13 companies laid off 2,525 people. The service sector, which includes drilling rig operators, hydraulic fracturing crews and manufacturing, took the hardest hit. Houston-based NexTier Oilfield Services reported the highest number of layoffs. It cut 1,041 employees working at its headquarters, another Houston office and field offices in the Permian Basin and Eagle Ford Shale.Midland oil-field service company ProPetro Service announced more job cuts in the Permian Basin where losses now total 584 layoffs. Houston oil-field service company Baker Hughes cut 184 jobs after merging operations at two locations in Houston.Oil Bust: Drilling rig operator braces for 60 percent drop in activityFrac sand companies with operations in the Permian Basin took the next biggest hit, with U.S. Silica laying off 105 people in Midland. Fort Worth-based Black Mountain Sand decided to mothball a plant in Kermit where 87 people were laid off. Ohio-based Covia laid off 82 people at a frac sand mine and plan in Kermit.The offshore industry also took a hit with Diamond Offshore cutting 102 jobs at its Houston headquarters and Enterprise Offshore Drilling eliminating 75 jobs after on its customers halted operations in Gulf of Mexico.
Bankruptcy looms over U.S. energy industry, from oil fields to pipelines - (Reuters) - U.S. shale producers, refiners and pipeline companies are scrambling for cash and face likely restructuring as they struggle under heavy debt loads while engulfed in the worst crisis the oil industry has faced. Fuel demand has tumbled roughly 30% worldwide as the coronavirus pandemic destroys demand for transport, provoking a massive glut of oil that has hammered global prices and left energy companies with no choice but to pump hundreds of millions of barrels into storage. Just as demand plummeted, Saudi Arabia and Russia started an oil price war, and Riyadh flooded the market with even more crude. That left the oil industry facing the prospect of a long period with prices below their production costs. Shale producers came into the crisis with already high debt levels, namely from big investments to increase production across the United States in a bet on higher prices. But in turning the United States into the world’s largest oil producer, the companies became the victims of their own success when the quick rise in supply meant returns were thin. Investors lost patience, tightened credit and pushed shale producers to stop expanding and pay them back. Enter coronavirus. Oil prices have crashed 75% this year, and on Monday, closed at about minus-$38 per barrel. Most U.S. producers have announced one, if not two, rounds of spending and output cuts. But the crash sent prices to levels well below what companies and advisors had modeled in worst-case scenarios, according to energy lawyers. About half of the top 60 independent U.S. oil producers are in danger of restructuring and will need to find ways to boost their cash pile, according to energy lawyers at Haynes and Boone.“The reverberations from this price collapse will be felt throughout the industry and by everyone who provides services to the industry,”
US Fracking Set for Biggest Ever Monthly Drop - The Covid-19 pandemic, coupled with low oil prices, is likely to cause the largest monthly drop in fracking activity ever recorded in the United States, according to a new Rystad Energy analysis. Rystad estimates that the total number of started frac operations will end up below 300 wells in April, comprising close to 200 in the Permian and less than 50 wells each in Bakken and Eagle Ford. This translates into a 60 percent decline in started frac operations between the peak level seen in January-February and April 2020, Rystad outlined. The company said it observed a 30 percent monthly decline in the number of started frac jobs in the Permian, Bakken and Eagle Ford basins in March and added that nationwide fracking activity, on a completed jobs basis, might have already declined by around 20 percent last month. “With such a rapid decline in fracking already visible, very little activity will be happening in the oil basins during the remainder of the second quarter of 2020,” Rystad Energy Head of Shale Research Artem Abramov said in a company statement. “The natural base production decline, which we have seen as an absolute floor for production, therefore becomes an increasingly relevant production scenario,” he added. According to Rystad, if no new horizontal wells are put on production from April onwards, total light tight oil production will decline by 1 million barrels per day (MMbpd) by May, 2MMbpd by July and 3MMbpd by October to November.
As The US Rig Count Collapses Most Since 2014, Will Trump Bail Out Oil Companies? - After a chaotic week in the energy complex and a record plunge in the price of WTI, today's data from Baker Hughes suggests American oil companies are finally starting to draw the line as rig counts collapse to their lowest since July 2016, having plunged at the fastest rate since 2014's crash... The lagged response on production may be imminent: And pressure is building on the Trump administration to "do something" - even if doing something is the worst thing for a market that needs the pressure of low prices to force restructurings. As Bloomberg reports, a plan being weighed by Treasury Secretary Steven Mnuchin to steer financial aid to beleaguered oil drillers could set up a clash with Democrats who have warned against any bailout for the industry. As OilPrice.com's Irina Slav notes, the Department of Treasury may set up a lending fund for oil companies, Secretary Steven Mnuchin told Bloomberg this week, adding that there was nothing final yet.“One of the components we’re looking at is providing a lending facility for the industry,” Mnuchin said.“We’re looking at a lot of different options, and we have not made any conclusions.”Besides direct loans - which the Federal Reserve would implement - the federal government may also buy stakes in some oil companies in addition to providing loans. It could also ask these companies to reduce production.The larger oil companies that hold an investment-grade rating would either have to fend for themselves on the debt market or take advantage of the loan program that the Fed has set up for small businesses, even if they are not exactly small businesses. The actual small businesses, in the meantime, are asking the Fed to adjust the rules of the loan program to allow them to use the funds to pay off existing debt. Investment-grade companies have options. In addition to the main street business loan program, they can take part in the Fed’s bond-buying program. Those with lower ratings, however, would need other options that the Treasury is considering in discussions with banks, Mnuchin told Bloomberg. He added that the Fed lending to such higher-risk companies was not an option.
The Democrats Who Want to Bail Out the Oil Industry – With prices of oil futures contracts dropping deep into negative territory on Monday, environmental advocates are calling for the industry to be wound down to facilitate a transition away from fossil fuels. But some Democrats in Congress had a very different response. “Tomorrow, I will file bipartisan, bicameral legislation to appropriate funds to make a Strategic Petroleum Reserve oil purchase, and I urge my colleagues to take it up immediately,” Rep. Lizzie Fletcher (D-Texas) announced on Monday. Fletcher’s bill is not yet public, but she has previously said she would back legislation authorizing the federal government to purchase $3 billion worth of oil for the strategic reserve. Earlier this month, Fletcher signed onto a letter calling for the oil purchasing funds to be included in the next coronavirus relief package. In March, she was the only Democrat to sign a letter from Rep. Dan Crenshaw (R-Texas) calling on the Interior Department to provide temporary royalty relief for oil and gas companies. Fletcher, a first-term representative, has influence as the chair of the Science Subcommittee on Energy, a position she was elected to in January, and her support for financing oil purchases makes the measure bipartisan, giving it an important boost during the current session of Congress which is divided between Democratic and Republican control. Having prominent Democratic support for these measures could cost Demoratic leadership important leverage in negotiations with Republicans.So far in the 2019-20 election cycle, Fletcher has received $126,917 from the oil and gas industry, the second highest amount among all House Democrats, according to the Center for Responsive Politics. During her 2018 race, Fletcher took $80,381 from the industry. One of her top donors so far this cycle, with $13,649 contributed, is Plains All American Pipeline, a large oil and gas pipeline company that she defended as an attorney prior to joining Congress. The law firm where Fletcher was a partner, Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing, lists multiple clients in the oil and gas industry on its website, including Total, Halliburton, Cheron, and Andarko.
A Big Oil Bailout Would Be the Opposite of the Green New Deal We Need --- Alexis Goldstein - It’s been a wild couple of weeks in the oil markets. Following a price war between major petrostates, the price of oil has tanked. Ever since, Donald Trump and congressional Republicans have been desperately trying to save a deeply indebted oil industry. We can all but expect a Trump-led bailout for Big Oil. Instead, our law and policy makers should let the oil producers fail, and devote resources to stave off the next crisis — the climate crisis — before it gets even worse.The ongoing economic fallout of the coronavirus pandemic has caused oil demand to plunge worldwide. On March 6, Russia withdrew from its pact with the Organization of the Petroleum Exporting Countries (OPEC), and began producing more oil, driving the price of oil down even further. Russia may have been motivated, at least in part, by a desire to hurt U.S. shale oil producers. And while some, like Mexico, took steps to protect themselves against just such a price collapse, U.S. oil producers were loaded up with debt and totally vulnerable to a sudden drop in oil prices. By April 1, Whiting Petroleum Corp. became the firstmajor U.S. fracking company to file for bankruptcy since the pandemic began, with many analysts predicting more bankruptcies to come.Trump’s never been shy about his love of oil and gas companies. After all, they were major funders of his inauguration, and continue to be major donors to his campaign. When the oil price war broke out in early March, Trump and congressional Republicans began to talk tough to try and secure the higher oil prices that teetering U.S. oil companies need to survive. GOP Sen. Bill Cassidy introduced a bill to withdraw U.S. troops from Saudi Arabia if the country doesn’t cut oil production, and 48 House Republicans sent a letter threatening to end the U.S.’s economic and military cooperation with Saudi Arabia if the country didn’t cut production. When OPEC+ came to a deal to cut production, Trump openly thanked Saudi Prince Mohammed bin Salman and Russian President Vladimir Putin for their work to “save hundreds of thousands of energy jobs in the U.S.” But while the OPEC+ deal may have bought the over-leveraged U.S. oil producers some time, many analysts are predicting it won’t be enough. There’s been so much overproduction of oil there’s no space to store it — leading to creative and inefficient storage methods, like loading up boats with barrels of oil. It seems that without enormous help, more U.S. shale oil producers will go bankrupt. Perhaps that’s why Trump has been increasingly vocal on Twitter about oil production, sending two market-moving tweets in less than a one-week period. First, it was his misleading tweet promising cuts well before they were negotiated, which pumped oil prices up by nearly 50 percent at the intraday peak. Then, when the OPEC+ deal didn’t seem to move oil prices much higher, Trump tweeted right before the market opened on Monday, April 13, that he thinks OPEC+ is actually going to cut production by 20 million barrels of oil a day, not the 10 million that was reported.Trump is eager to bail out his donors, and protect the interests of vulnerable GOP senators in oil-producing states like Texas. The White House recently hosted nine oil and gas executives for a meeting with Trump administration officials. Which is why, should the OPEC+ deal in fact not be enough, we should expect Trump to come to Congress and ask for a Big Oil bailout.
Oil, Gas, Petrochemical Financial Woes Predate Pandemic — And Will Continue After, Despite Bailouts, Report Finds - The oil, gas, and petrochemical industries have taken a massive financial blow from the COVID-19 pandemic, a new report from the Center for International Environmental Law (CIEL) concludes, but its financial troubles preexisted the emergence of the novel coronavirus and are likely to extend far into the future, past the end to measures aimed at curbing the spread of the disease.“Oil and gas are among the industries hardest hit by the current economic crisis, with leading companies losing an average of 45 percent of their value since the start of 2020,” the report finds.“These declines touch on nearly every facet of the oil and gas sector’s business, including the petrochemical sector that has been touted in recent years as the primary driver of the industry’s future growth.” That’s to some degree because of the abrupt plunge in demand for oil resulting from shelter-in-place and quarantine measures that, as of early April, applied to over 3 billion of the world’s 7.8 billion people — including 90 percent of the United States. And the United States uses an outsize amount of gasoline — in 2017, the US consumed one fifth of the gasoline used globally, the report notes. Nearly 70 percent of petroleum products are consumed for transportation, the report adds — meaning that the impact on demand resulting from quarantines is enormous.But, before the pandemic, oil, gas, and petrochemical firms “showed clear signs of systemic weakness,” CIEL’s report says, listing factors like the industries’ poor stock market performance, high levels of debt, competition from cheaper renewable energy, slowing growth in demand for plastics, and growing awareness among investors of the impacts that action to slow climate change will have on the sector. CIEL also noted that pension plan managers and other institutional investors have legal duties that may force them to keep an especially close eye on any oil, gas, or petrochemical projects in their portfolios.“Because many investors, including pension funds, which are the largest category of equity investors globally, have fiduciary duties to their beneficiaries, they have legal obligations on top of the financial incentives to maximize profits: they must also reduce risk,” the report says. “As the risks of investing in the oil and gas sector become ever more apparent, more and more investors subject to fiduciary duties will likely choose to steer clear of these companies.”
U.S. oil consumption stabilises but stockpiles continue to swell: Kemp - Chartbook: https://tmsnrt.rs/2VuEGqf (Reuters) - U.S. petroleum consumption has fallen by a third since the economy went into lockdown in March but showed signs of stabilising last week, according to the latest weekly figures from the U.S. Energy Information Administration. Lockdown has caused the biggest economic interruption since the depression of the 1930s and the largest interruption in oil consumption since the birth of the modern petroleum industry in the 1860s. The challenge now is for domestic oil producers, importers and refiners to adjust to a prolonged period of lower consumption and bring the increase in inventories under control before storage space runs out. The total volume of petroleum products supplied to the domestic market averaged 14.1 million barrels per day (bpd) in the week ending on April 17 (“Weekly petroleum status report”, EIA, April 22). The total volume was essentially the same as a week earlier (13.8 million bpd) but down by around a third compared with five weeks ago before the lockdown began (21.5 million bpd). In response to lower demand, U.S. refiners cut crude processing to 12.5 million bpd last week, down from 15.8 million bpd five weeks ago and 16.5 million bpd at the same point a year ago. U.S. crude imports slowed to just 4.9 million bpd last week from 6.5 million bpd five weeks earlier, one of the fastest declines in the last decade, and were running at the slowest rate since 1992. But the refining system is still struggling to digest the enormous volume of unprocessed crude that has accumulated since the economy went into freefall and to limit the build up of unsold fuels. Total stocks of unrefined crude and products, excluding the strategic petroleum reserve, increased by a further 25.5 million barrels last week and have risen by a total of 109 million barrels in the last five weeks. Last week’s inventory increase was the third-largest since records began in 1990. Four of the six largest weekly stock builds on record have occurred in the last five weeks. In crude alone, stocks rose 15 million barrels last week and are now up 65 million barrels since March 13, rapidly filling storage capacity, albeit from an initially low level. Nationwide, crude storage capacity is now 60% full, up from 50% five weeks ago and 52% at the same point a year ago (https://tmsnrt.rs/2VuEGqf). There is still capacity to store another 262 million barrels, with most of the unused space on the Gulf Coast where there is still room for 156 million barrels. Crude storage space is scarcer around Cushing, Oklahoma, the delivery location for the NYMEX light sweet crude oil contract. Crude stocks at Cushing have risen by 21.3 million barrels over the last five weeks and there is now just over 18 million barrels of unused tank space available in the area.
Super-Polluting Methane Emissions Twice Federal Estimates in Permian Basin, Study Finds - Methane emissions from the Permian basin of West Texas and southeastern New Mexico, one of the largest oil-producing regions in the world, are more than two times higher than federal estimates, a new study suggests. The findings, published Wednesday in the journal Science Advances, reaffirm the results of a recently released assessment and further call into question the climate benefits of natural gas. Using hydraulic fracturing, energy companies have increased oil production to unprecedented levels in the Permian basin in recent years. Methane, or natural gas, has historically been viewed as an unwanted byproduct to be flared, a practice in which methane is burned instead of emitted into the atmosphere, or vented by oil producers in the region. While new natural gas pipelines are being built to bring the gas to market, pipeline capacity and the low price of natural gas has created little incentive to reduce methane emissions. Daniel Jacob, a professor of atmospheric chemistry and environmental engineering at Harvard University and a co-author of the study, said methane emissions in the Permian are "the largest source ever observed in an oil and gas field." He added, "There has been a big ramp up in oil production in that region and when you don't care too much about recovering the natural gas, it makes for a large emission." As a global oil glut threatens to curtail oil production in the region, it remains unclear if methane emissions from the Permian will diminish, or if emissions will continue to climb, as operators scale back monitoring and maintenance operations during the coronavirus pandemic. "There is going to be a lot less wells being drilled, probably less gas being flared, even wells [that] will [probably] be shut in," said David Lyon, a scientist with the Environmental Defense Fund and a co-author of the study. "If that is done properly, then I think you will have less emissions. At the same time, I wouldn't be surprised if a lot of operators cut back on their environmental staff and they do less leak inspections and other activities that would reduce emissions. They may have less ability to respond to malfunctions and things that cause emissions."
Satellite data show ‘highest emissions ever measured’ from U.S. oil and gas operations - Findings published today in the journal Science Advancesshow that oil and gas operations in America's sprawling Permian Basin are releasing methane at twice the average rate found in previous studies of 11 other major U.S. oil and gas regions. The new study was authored by scientists from Environmental Defense Fund, Harvard University, Georgia Tech and the SRON Netherlands Institute for Space Research."These are the highest emissions ever measured from a major U.S. oil and gas basin. There's so much methane escaping from Permian oil and gas operations that it nearly triples the 20-year climate impact of burning the gas they're producing," said co-author Dr. Steven Hamburg, chief scientist at EDF. "These findings demonstrate the rapidly growing ability of satellite technology to track emissions like these and to provide the data needed by both companies and regulators to know where emissions reductions are needed."Based on 11 months of satellite data encompassing 200,000 individual readings taken across the 160,000 square-kilometer basin by the European Space Agency'sTROPOMI instrument from May 2018 to March 2019, Permian oil and gas operations are losing methane at a rate equal to 3.7% of their gas production. The wasted methane—which is the main component in natural gas—is enough to supply 2 million U.S. households. Methane is a potent greenhouse gas, anthropogenic emissions of which cause over a quarter of today's warming. Reducing methane from oil and gas operations is the fastest, most cost-effective way to slow the rate of warming, even as the necessary transition to a net-zero carbon economy continues.
Digging blind: Wisconsin allows drillers to flout state law — sometimes with deadly results - Jim and Calvin Jensen surveyed an intersection for a job installing fiber optic cable in Sun Prairie during the summer of 2018. They did not like what they saw. The dense suburb east of Madison featured older building stock, and paint markings atop the pavement suggested a web of pipelines lurked beneath their feet, Calvin would later tell detectives. The Jensens, a father-son duo at Jet Underground drilling company, decided they needed a new, more careful plan to drill. But that would add time and dollars to the project. Calvin, a 15-year veteran of the industry, relayed those conclusions to Bear Communications, the Kansas-based company that hired Jet for the Sun Prairie job. On the morning of July 10, 2018, a Bear employee sent him a text: A competing driller had been hired. The work would be done faster. In a Kwik Trip parking lot that morning, a Bear field supervisor handed the original drilling plans to Valentin Cociuba, owner of Michigan-based VC Tech. The goal: Complete the job within four days. Cociuba and his wife, Christen, a fellow VC Tech employee, told Bear they would need to locate utilities beneath the intersection, a requirement of state law that would have added at least three days to the project. “Don’t worry about locates,” a Bear employee responded in an email, believing that task was already complete. “They’re good to go.” The underground utilities had not been located, investigators would later determine. Valentin Cociuba would later acknowledge to the Wisconsin Public Service Commission, which regulates public utilities in energy, gas, telecommunications and water, that he knowingly violated state law by digging without a proper ticket. The decision would prove deadly. Just after 6 p.m. on July 10, a VC Tech directional driller struck an unmarked natural gas lateral, releasing vapors that police described as blurry “like heat waves coming off of asphalt on a hot day.” The gas spewed out of storm sewers in front of a senior living facility, and it flowed into The Barr House, a popular tavern owned by Capt. Cory Barr, a Sun Prairie volunteer firefighter of 15 years, and his wife, Abby. Less than an hour later, the gas ignited near the tavern, leveling the downtown intersection, critically injuring firefighter Ryan Welch and killing Barr, who had also responded to the gas leak although he was off duty. The Pipeline and Hazardous Materials Safety Administration (PHMSA) pegged the economic damage at nearly $21 million.
Bill McKibben, Winona LaDuke: The Fight Against the Line 3 Pipeline - Rolling Stone - In mid-March, as major cities began locking down, environmentalist and Rolling Stone contributor Bill McKibben called activist Winona LaDuke, both in “different corners of rural America with low bandwidth,” to talk aboutclimate change, JPMorgan Chase, and LaDuke’s seven-year effort to stop the construction of an oil pipeline called Line 3. LaDuke lives on the White Earth reservation, part of the Ojibwe nation in northwestern Minnesota. She’s been a booming voice in Native American land rights for three decades, and in recent years that has intersected directly with campaigns against fossil fuels. She was at the Standing Rock protest against the Dakota Access Pipeline — which she calls the “Selma moment” for a lot of Native activists — and she’s now taken that energy to a lower-profile but equally important fight: stopping the reconstruction of the Enbridge Line 3 pipeline in Minnesota. “We don’t have any oil in Minnesota,” LaDuke points out, but because the nearest port is in Superior, Wisconsin, the state has become a thruway for Canadian oil. “We have six Enbridge pipelines already, and two Koch brothers pipelines,” she says. Enbridge is hoping to reroute Line 3, which was built in 1968 and has started to decay, rather than digging it up and repairing it. But the new route would go directly through land that sustains the Ojibwe nation — it’s the only place in the world where wild rice grows naturally, and it’s a core part of their economy, their culture, and their diet. McKibben’s most recent writing and organizing efforts have been with a coalition called Stop the Money Pipeline, which focuses on cutting off oil development at the source, by targeting the big banks that fund it. In Rolling Stone’s April climate issue, he detailed how JPMorgan Chase has become the fossil-fuel industry’s biggest lender — $196 billion when it went to press, and that number keeps climbing. And for efforts that help expand the breadth of the industry, like new pipelines, Arctic drilling, and deep-sea exploration, JPMorgan Chase has given 63 percent more than any other bank on Earth. One of those projects is Line 3. The portions of the pipeline that pass through Canada, Wisconsin, and North Dakota have already been approved, but LaDuke has been effectively stalling the Minnesota section. “For seven years we’ve been fighting them in the courts, in the regulatory process, and in the communities,” LaDuke says. In a massive community-organizing effort, nearly 70,000 individual comments were submitted to the Minnesota Public Utilities Commission, and 94 percent were opposed to the pipeline. But in 2018, after massive spending from Enbridge, the permits were still granted. “Someone needs to explain to us why 94 percent isn’t enough,”
Fire at North Dakota saltwater disposal well spills brine (AP) — A fire at a saltwater disposal well in McKenzie County caused brine to spill, according to the North Dakota Oil and Gas Division. The fire was reported Wednesday at the J.W. Fisketjon 1 saltwater disposal well about four miles northwest of Watford City. BNN North Dakota, LLC reported that an estimated 23,100 gallons of brine were released because of the fire. The cause of the fire has not been determined. The brine was contained on site. A state inspector has been to the location and will monitor response and cleanup. Brine is a byproduct of oil production.
North Dakota searches for oil production salve amid outbreak (AP) — North Dakota’s top oil regulator said Tuesday that nearly a third of the state’s wells have been idled and crude production has slid by more than 20% in recent days amid the COVID-19 outbreak.State Mineral Resources Director Lynn Helms told the North Dakota Industrial Commission some 5,000 wells have been shut down in recent weeks, accounting for about 300,000 barrels of lost oil daily. Helms estimated the state has lost up to 60,000 barrels of oil production in “the last 24 hours” as oil prices crashed and in what Gov. Doug Burgum has called a potential “economic Armageddon for North Dakota.” North Dakota’s coffers had been fatter than projected due strong prices and near-record drilling in its oil patch. The state had forecast about $48 a barrel to craft its current two-year budget. Based on the state’s forecasted price and the loss of barrels in the past day, the state would lose about $288,000 in oil tax revenue in a single day, Tax Commissioner Ryan Rauschenberger said.Burgum called an emergency meeting Tuesday to discuss ways to aid the state’s oil producers that are wracked by falling oil prices due to meager demand amid the coronavirus outbreak.The three-member, all-Republican North Dakota Industrial Commission headed by Burgum took no action but discussed incentives to bring wells back online, including the potential of using federal stimulus money or tax breaks, should oil prices rebound.“We know operators are going to have limited capital,” Burgum said.Helms said a well could cost $50,000 or more to bring it back online and producing.
Friday gas plant hearing to be conducted remotely - A public hearing on a proposed natural gas processing plant in Williams County will be conducted remotely rather than in Williston.The 9 a.m. Friday hearing is on an application by OE2 North LLC to build a plant to process up to 250 million cubic feet of gas per day. The $150 million facility would be about 15 miles west of Williston, on 39 acres of a 143-acre parcel. Processed gas and natural gas liquids would be sold to nearby transmission pipelines. North Dakota's Public Service Commission had planned to hold a hearing in Williston. The hearing now will be conducted remotely to conform with state and federal guidance urging limited public gatherings amid the coronavirus pandemic.
OIL AND GAS: 'A big deal': Keystone XL ruling could threaten other pipelines -- Wednesday, April 22, 2020 -- A sweeping court ruling last week that halted construction of the Keystone XL pipeline through waterways set off alarm bells for some energy industry analysts.
US delays oil pipeline approvals after environmental ruling (AP) — The U.S. Army Corps of Engineers has suspended a nationwide program used to approve oil and gas pipelines, power lines and other utility work, spurred by a court ruling that industry representatives warn could slow or halt numerous infrastructure projects over environmental concerns The directive from Army Corps headquarters, detailed in emails obtained by The Associated Press, comes after a federal court last week threw out a blanket permit that companies and public utilities have used for decades to build projects across streams and wetlands. The Trump administration is expected to challenge the ruling in coming days. For now, officials have put on hold about 360 pending notifications to entities approving their use of the permit, Army Corps spokesman Doug Garman said Thursday. The agency did not provide further details on types of projects or their locations. Pipeline and electric utility industry representatives said the effects could be widespread if the suspension lasts, affecting both construction and maintenance on potentially thousands of projects. That includes major pipelines like TC Energy’s Keystone XL crude oil line from Canada to the U.S. Midwest, the Mountain Valley natural gas pipeline in Virginia and power lines from wind turbines and generating stations in many parts of the U.S. “The economic consequences to individual projects are hard to overstate,” said Ben Cowan, a Houston-based attorney with Locke Lord LLP who represents pipeline and wind energy companies. “It could be fatal to a number of projects under construction if they are forced to stop work for an extended period in order to obtain individual permits.”
Saudi oil official refutes claim that crude exports to the US skyrocketed in the last month - A Saudi Arabian oil official on Saturday refuted the conclusion of an analytics firm that the country’s oil exports to the U.S. dramatically increased in the last month. TankerTrackers.com said on Thursday that Saudi Arabian oil exports to the U.S. more than doubled from February to March as oil prices crashed. The firm said its data indicates that the April export figure is on track to surpass March’s number. An unnamed Saudi oil official who is familiar with the matter denied both conclusions. The official told CNBC that Saudi Arabia’s April allocation for the United States is targeted at around 600,000 barrels per day, a figure which the official said is not a significant increase over the first-quarter monthly average. TankerTrackers, which uses satellite tracking of VLCCs — the vessels that transport crude — says that Saudi crude shipments to American ports went from an average of 366,000 barrels per day (bpd) in February to 829,540 bpd in March — a multiple of 2.27. TankerTrackers said that satellite tracking indicates 1.46 million barrels per day of Saudi oil shipped to the U.S. in the first two weeks of April — a figure that would mark four times February’s daily volume and the highest figure since 2014. According to Saudi state oil producer Aramco’s website, the company was loading 15 tankers for its international customers on April 1 — the day a previous OPEC production cut agreement with its oil-producing allies, OPEC+, expired — supplying the tankers with a record 18.8 million barrels in a single day.
Saudi Arabia may re-route tankers if U.S. imposes crude import ban, sources say - (Reuters) - Saudi Arabia is exploring re-routing millions of barrels of oil onboard tankers sailing to the United States if President Donald Trump decides to block imports of crude from the kingdom, shipping and trade sources say. Some 40 million barrels of Saudi oil are on their way to the United States and due to arrive in the coming weeks, piling more pressure on markets already struggling to absorb a glut of stocks, according to shipping data and sources. U.S. officials have said in recent days that Washington is considering blocking Saudi shipments of crude oil, or putting tariffs on those shipments, adding to difficulties for the cargoes now on the water. Shipping sources said the kingdom tried to seek storage options for the cargoes from tanker owners when the ships were chartered last month, but many pushed back given booming rates and not wanting tied-up vessels. Two sources said Saudi Arabia was looking into whether it could re-route the cargoes elsewhere if the United States halted imports. Saudi Arabia’s state oil company, Saudi Aramco (2222.SE), said it is committed to its long-term contracts with customers with deliveries of crude shipments for April, May and June. Aramco also “offers its larger customers with refineries in multiple regions of the world optionality to take their crude purchases from Aramco into the region,” the company said in a statement to Reuters. “Changes in ship destinations are routine in the course of our business, particularly in a company of our scale,” it said. Oil traders active in European and Asian markets said there was expectation that the Saudis would look to divert the cargoes to other markets if a ban was imposed, which would then put huge pressure on storage tanks in those two regions. “Europe looks full, but surely if the Saudis offer it at really cheap levels, buyers would take it,” a source with an international trading firm said. “Some still have storage spaces or may agree to float it for some time.”
Negative Oil: Trump Can't Save Prices By Banning Saudi Crude - Banning imports of crude oil from Saudi Arabia is just the sort of gesture that might appeal to President Donald Trump, who has vowed to protect jobs in the U.S. shale patch. But such a move wouldn’t do much to reverse the decline in prices that has seen the May contract for West Texas oil fall below zero. As we speak, there is a small armada of ships full of Saudi crude heading to the U.S. Most of it is scheduled to arrive next month, when storage space is expected to be near full and refiners are highly unlikely to be ramping up processing rates. Bloomberg has identified 20 very large crude carriers, known in the industry as VLCCs, that loaded since the beginning of March, each hauling about 2 million barrels of the kingdom’s crude toward American ports on the Gulf and West coasts. They are due to arrive by the end of May. Several more that aren’t showing a destination could be heading the same way.It's not immediately clear who now owns most of the Saudi crude on those tankers. Traditionally the kingdom sells its oil at its export terminals, meaning that any ban would hit the American refiners who've purchased the cargoes, rather than the Saudis. However, four of the ships that loaded in March are owned by the National Shipping Company of Saudi Arabia, known as Bahri, while eight out of the 10 vessels that have sailed so far in April were chartered by the same company. That suggests that at least some of the crude may not have been sold before it left Saudi Arabia, making it a prime target for import tariffs or an outright ban. It just won’t make much of a difference whether that oil is sold on American shores when it finally arrives, or whether it’s forced to go someplace else, where it will complete with U.S. exports. That’s because the gushing oil glut and dramatic evaporation of demand in a world under lockdown is happening right here and now. And oil prices are responding Yes, Saudi Arabia and other OPEC+ countries are coming under pressure to bring forward their recent, much-lauded output cuts. But for now they aren't due to come into effect until the start of May. And they are starting to look less impressive every day that passes. The deal reached on April 12 after a four-day standoff called for a reduction of a combined 9.7 million barrels a day from baselines mostly reflecting October 2018 production levels. The reference point is crucial because a lot has changed in the 18 months since then, and particularly in the last month since the previous OPEC+ output deal collapsed. In that time, Saudi Arabia and its closest neighbors embarked on a production surge. The kingdom has boosted output by more than 2.5 million barrels a day since February to 12.3 million barrels a day, according to its state-owned oil company Saudi Aramco. The United Arab Emirates is pumping 4.1 million barrels a day, up by around one-third from February, according to the country’s energy minister, Suhail Al-Mazrouei. Kuwait has raised its production by a more modest 500,000 barrels a day, according to the International Energy Agency.
$0 Oil Forces Canada To Shut Down Crude Production -- Canadian oil companies have begun shutting down steam-driven oil sands production projects as prices continue to fall, Reuters reports, noting the move could have dire long-term consequences for the production facilities.Steam-driven oil sands production, also called steam-assisted gravity drainage, involves injecting steam into an oil sands deposit to melt the bitumen and make it flow up the well. To ensure long-term production, the temperature and pressure at such sites must be maintained at a certain level. Disruption, Reuters explains, could result in permanent damage, which would translate into a permanent loss of production.Yet Western Canadian Select, the heavy oil benchmark of Canada, has been trading below $10 for about ten days now, with a temporary spike to $10.13 a barrel last Thursday. At the time of writing, WSC was trading at $-0.01 a barrel. As a result, producers are being forced to cut. Husky Energy cut its oil sands output by 15,000 bpd. Cenovus reduced its production by 45,000 bpd and said it could raise this further to 100,000 bpd, nothing a cut of this size wouldn’t damage the bitumen reservoirs. ConocoPhillips last week said it would cut its oil sands output by as much as 100,000 bpd.Earlier this month, ahead of a meeting between Alberta government officials and OPEC, the chief executive of Enbridge said oil producers in Western Canada could shut down as much as 20-25 percent of production in response to the price slide, brought about by the coronavirus outbreak that exacerbated the situation with the supply overhang. A cut of 20-25 percent translates into 1.1-1.7 million bpd. According to TD Securities, 135,000 bpd of this has already been cut, all in the oil sands, as of April 7. Now, the consultancy says that total production cuts in the oil sands amount to 300,000 bpd and could rise further to 1.5 million bpd.
Oily water spill into Port of Valdez continues days after discovery - Response crews on Saturday have pinpointed the primary entry point of an oily water spill that for several days has seeped into Port Valdez. The source of the leak — a drain area about a quarter-mile uphill from the water — was halted on Monday. It was discovered on April 12. But the oily mix has continued to travel beneath snow and into the water at the Valdez Marine Terminal, where tankers are filled with oil. The cause of the leak remained under investigation on Saturday by the Alaska Department of Environmental Conservation and others. Operations at the terminal have not been affected. More than 230 people locally and around the state are involved in the response, and around 5 miles of oil-containing boom have been deployed on the water, an incident management team said in a prepared statement Saturday evening. The exact amount of oil spilled is unknown. About 720 barrels of oily water mix, or 30,240 gallons, had been collected as of 6 a.m. Saturday. The spill response team on Saturday estimated that about eight barrels of oil, or 315 gallons, have been recovered so far. The oily water’s primary entry point into the port was described as “a rocky area new the low tide line, which indicates a flow path below ground,” the incident management team said. Crews were digging through earth uphill from that point “to create a potential collection point and prevent more oily water from entering the water.” Similar work was being done in other areas, including around the spill’s source.
Hundreds of barrels of oil, water mixture recovered from Valdez spill - Eight days after oil was found in Prince William Sound in Valdez, a citizen oversight group says the initial response to the spill has been positive. "Any amount of oil hitting the water is a big deal. You can never clean up all of the oil once it's been spilled, so we won't know the full impacts of this until it's over with and we can fully determine how much was spilled, how the process went confining and cleaning up, and do more long term monitoring for any lingering oil or impacts," said Brooke Taylor, director of communications for Prince William Sound Regional Citizens Advisory Council. "To date, what we've seen is unified command, and specifically Alyeska as a responsible party, being very prompt and proactive with their response to this. We've seen they put together a great team to really respond to this. We've been very pleased with how well their containment and clean up so far has seemed to go." PWSRCAC was created in the wake up of the Exxon Valdez oil spill to provide a voice for communities impacted by the Alyeska terminal and associated tankers. In addition to long-term environmental monitoring and spill prevention planning, the group monitors spill response training, including training that prepares captains operating fishing vessels to act as first responders to a spill. "They have called out a number of fishing vessels in this response to help setup boom, to help with containment, sensitive area protections," Taylor said. "It’s one of the reasons that this contracted model is something that we’re big advocates for, because it means these people have been trained ahead of time, they know how to use the gear, they are ready to act. And in particular in light of whats happening with COVID-19 right now, it also means that there’s that much less direct interaction that Alyeska staff have to have with these operators because they’ve already been trained." As of Monday afternoon, the unified command for the incident says 798 barrels of water and oil mixture have been recovered. Further analysis shows that the amount of oil recovered from the water so far is approximately 12 barrels, or 511 gallons. An additional 30 gallons has been recovered from land. The area has been boomed since April 12 and the boom has contained the spill.
Oily water cleanup continues at Valdez Marine Terminal - Alyeska Pipeline Service Company and state officials are continuing their investigation of an oil spill sheen near the Valdez Marine Terminal’s small boat harbor first reported on April 12. Early indicators suggested that the crude/water mixture was leaking from a sump that overflowed. As of Tuesday, April 21, additional tests had been performed to verify the integrity of other piping in the area and all tests passed indicating the 58-SU-3 sump was the only source of the incident. The product spilled was primarily a mixture of Alaska North Slope crude with water, DEC officials said. The amount released was unknown and will be estimated based on recovery numbers, the agency said. More than 240 personnel from the pipeline company, U.S. Coast Guard and Alaska Department of Environmental Conservation were engaged in the response effort. Fifteen fishing vessels working to support on-water containment and recovery operations are among the responders, according to ADEC. Boom has been deployed to protect the Solomon Gulch Hatchery, the Valdez Duck Flats, Saw Island and Seal Island. Oil skimming efforts continue, with 35,784 gallons of oil water mixture collected through April 21, and 511 gallons of oil recovered. Officials said the primary containment boom has been adjusted to contain the spill closer to the spill outflow area. The bigger boom still maintained the outer perimeter of the boomed areas, being monitored to ensure adequacy of containment. Response crews were continuing oil skimming operations and use of sorbents for passive recovery. ADEC officials said additional plans were being prepared to address the spill outflow location. The shoreline cleanup plan is already approved for the next stage of nearshore cleanup operations, they said. DEC officials said the oil traveled under the snow-covered surface and came out near the head of Berth 4 into Port Valdez. A tanker was loading at Berth 5 at the time of the spill, but was not affected. Most of the sheen was contained behind the Berth 4 area with sorbent boom and sweeps and two layers of hard yellow boom, according to DEC. Wildlife have been observed near the spill area, including one oiled Kittiwake, one deceased gull and three deceased Kittiwakes.
Tribes Sue to Halt Trump Plan for Channeling Emergency Funds to Alaska Native Corporations Tribal leaders from across the country are calling for the U.S. Departments of Interior and Treasury to halt a proposed plan that could give as much as half of $8 billion in emergency relief funds earmarked for the nation's tribal governments to private Alaska Native Corporations (ANCs). The corporations collectively generate more than $10 billion in revenue from a diverse array of industries, including significant oil and gas developments. Six tribes, including three from Alaska, filed suit against Treasury Secretary Steven Mnuchin on Friday in U.S. District Court in Washington, D.C. to halt the transfer of funds. The suit noted that Alaska's more than 200 regional and village corporations are private, for-profit businesses. The state's 12 regional ANCs own "scores" of corporate subsidiaries operating in all 50 states, as well as foreign countries, and are not tribal governments, according to the suit. The complaint noted that their business holdings include construction, pipeline maintenance, government and military contracting, financial management and aerospace engineering firms. Sign up for InsideClimate News Weekly Our stories. Your inbox. Every weekend. EMAIL SIGN UP I agree to InsideClimate News' Terms of Service and Privacy Policy The Arctic Slope Regional Corporation, the largest ANC, earns nearly half of its $3.4 billion in annual revenue from the oil and gas sector, including company-owned refineries and royalties from North Slope oil and gas leases. The proposed plan for distributing money under the Coronavirus Aid, Relief, and Economic Security Act would keep funding from tribal groups, "who are in dire need of the funds to support the necessary and increased expenditures caused by the Covid-19 pandemic," the tribes said. They include Alaska's Akiak Native Community, the Asa'carsarmiut Tribe and the Aleut Community of St. Paul Island. At a time when trillions of federal dollars are being spent to staunch the economic impacts of Covid-19, tribes worry they could be losing sorely needed aid to privately-held corporations with ties to the oil industry. Leaders of the Cheyenne River Sioux Tribe of South Dakota say they also plan to file suit against the Treasury and Interior Departments if the distribution of funds to the ANCs goes forward. While the exact funding formula hasn't been released, the Interior Department has requested that tribes and ANCs provide data on the size of their land holdings, and the number of their members or shareholders. The 45 million acres held by the 12 regional Alaska Native Corporations nearly equals that of the country's 574 federally recognized tribes. Cheyenne River Sioux Tribe officials say disbursements based on land holdings could result in $3 to $4 billion going to the corporations.
Arctic LNG 2 Contracts Go to CCC - Turbomachinery specialist Compressor Controls Corp. (CCC) reported Wednesday that it has won multiple contracts from Novatek for the Arctic LNG 2 project, located on the Gydan Peninsula in Russia’s Yamal-Nenets Autonomous Region. CCC will oversee the turbomachinery controls and optimization of the centrifugal compressors and expanders of Arctic LNG 2’s three liquefaction trains, the contract recipient noted in a written statement emailed to Rigzone. Each train will boast a capacity of 6.6 million tons per annum (mtpa), and CCC pointed out that it will oversee anti-surge, performance, quench and other advanced controls. It added that it will use specialized local and global teams and collaborate with the field’s leading original equipment manufacturers to execute and deliver control algorithms. According to CCC, the new contracts mark its latest collaboration with Novatek. The firm explained that it had previously provided turbomachinery expertise for the Yamal LNG project. Novatek owns a 60-percent interest in Artic LNG 2, which will monetize resources from the Utrenneye field. Its partners in the development, each of which holds a 10-percent stake, include Total, CNPC, CNOOC Limited and Japan Arctic LNG consortium members Mitsui & Co. and JOGMEC.
Chevron barred from drilling, transporting oil in Venezuela: U.S official - (Reuters) - Chevron Corp (CVX.N) has been banned from drilling or transporting oil in Venezuela and its assets there are “mothballed” as the Trump administration cracks down on money going to the government of socialist President Nicolas Maduro, a senior U.S. official said on Wednesday. The restriction is expected to further reduce Venezuela’s crude output, which has fallen by 20% so far this year due to a collapse in oil prices and intensifying U.S. sanctions. Chevron had already halted many of the activities Washington has now prohibited. Seeking to increase pressure on Maduro, the U.S. Treasury Department late on Tuesday imposed tight new restrictions on Chevron’s joint ventures with Venezuelan state-run oil company PDVSA, which could pave the way for the California-based company’s departure, after operating in Venezuela for about 100 years. The license prohibits Chevron or any American company from drilling, bartering or selling oil or petroleum products with the Maduro government as of Tuesday night, the U.S. official told reporters on a call. Chevron’s assets “are mothballed and essentially it’s ... a de facto wind-down, which allows them to just ensure that their assets remain viable and that the Venezuelan people that work for them are able to continue getting paid during these dire times,” the official added. The license gives Chevron until Dec. 1 to “wind down” operations in Venezuela, an OPEC member, but the license could be renewed at a later date, allowing the company to stay there longer. A second senior U.S. official said the Chevron action, part of U.S. President Donald Trump’s “maximum pressure” strategy aimed at stifling trade in Venezuelan crude, “will further deprive access to financial lifelines” the Venezuelan leader depends on to keep his hold on power.
Oil Giant Slashes Dividend to Weather Crash -- Equinor ASA became the first major oil company to cut its dividend amid an historic market rout. The move by Norway’s biggest crude producer may be a signal of what’s to come from others in the industry, including Royal Dutch Shell Plc and Chevron Corp. They’ve already slashed investments and buybacks, but have so far steered clear of the dividends that shareholders are counting on. Equinor’s decision reflects “unprecedented market conditions and uncertainties,” it said in a statement on Thursday. The stock dropped as much as 2.4% in early Oslo trading, lagging a 1.5% increase in the European Stoxx 600 Oil & Gas index. Since Big Oil announced some initial measures to cope with a market slump driven by the coronavirus pandemic, the situation has worsened. Oil in the U.S. traded at negative prices for the first time ever amid massive oversupply. North Sea’s Brent benchmark dropped to more than 20-year lows. Equinor cut its dividend for the first quarter to 9 cents from 27 cents for the previous three months, marking the first reduction since the company started quarterly payments in 2014 (aside from a so-called scrip program that paid investors in new shares during the previous market slump). Making a straight cut without offering a scrip option “was a bit surprising, but very reasonable,” SpareBank 1 Markets analyst Teodor Sveen Nilsen said in a note to clients. He reduced his estimate for Equinor’s dividend for the rest of the year. The company has already suspended its share-buyback program and launched a $3 billion plan to cut investments and costs, including exploration. It also sold bonds for $5 billion this month.
Efforts To Stem Oil Spill From British WW2 Tanker Wrecked In Seyðisfjörður - The Icelandic government has approved measures to tackle a spillage from a British oil tanker wrecked in Seyðisfjörður in 1944. The project is estimated to cost 38 million ISK.El Grillo, a British oil tanker was attacked by German fighter planes in February 1944 during the Second World War. There were no casualties in the attack, but the ship sustained considerable damage and the captain made the decision to sink the tanker to stop it being a target for German air attacks. An Allied naval base was situated in Seyðisfjörður during the war, whilst Iceland was occupied by Britain and then the U.S., but the nation remained neutral during the conflict. The wrecked ship lies on the bottom of Seyðisfjörður in East Iceland and has been sporadically leaking oil into the fjord from its ruined hull for over 75 years.The Icelandic Parliament approved the Minister for Evironment, Guðmundur Ingi Guðbrandsson’s request for 38 million ISK (€242,737) in order to stem the oil spill on April 17th. A statement on the government website states that the hull will be sealed with concrete to prevent further leakage. A valve will also be fitted so that oil can be extracted in the future. The works are planned to begin in a couple of weeks and the project will be overseen by the Coast Guard. Research shows that higher sea temperatures cause greater amounts of oil to leak so it is imperative that work begins before the summer.Efforts to contain the oil spill have had limited success in the past. In 1952 and again in 2001 engineers attempted to pump oil out of the tanker, but just 60 tonnes of oil were removed and an estimated 10-15 tonnes remain in the tanker. The issue came to the public’s attention once again last October when a routine dive by the Icelandic Coast Guard revealed that El Grillo’s hull had corroded, causing considerable oil leakage into the ocean. The ship is only expected to become more damaged with time so swift action is required to protect the fjord. The Ministry for Environment states that urgent action is required to mitigate the oil leakage’s effect on the environment. The oil is harming birds in the fjord and is damaging local beaches. In an interview with RÚV in August 2019, Rúnar Gunnarsson, chief port security officer explained that the oil was particularly harmful for young birds, including eider ducklings and that many have died.
Qatar Petroleum China LNG Ship Deal Value Could Top $3 Billion - Qatar Petroleum (QP) reported Wednesday that it has entered into an agreement to reserve liquified natural gas (LNG) ship construction capacity in China. QP, which made the deal with Hudong-Zhonghua Shipbuilding Group Co., Ltd., noted that it reserved the shipbuilding capacity for its future LNG carrier fleet requirements – including those tied to its ongoing North Field expansion projects. The agreement covers “a significant portion” of Hudong’s LNG ship construction capacity for QP through 2027, the Qatari state-owned firm added. Hudong, which forged the deal with QP in a virtual signing ceremony, is a wholly owned subsidiary of China State Shipbuilding Corp. Ltd. (CSSC). “Today, we have taken yet another concrete step to reinforce Qatar’s commitment to its global reputation as a safe and reliable LNG producer at all times and under all circumstances,” Sherida Al-Kaabi, Qatar’s minister of state for energy affairs and QP’s president and CEO, remarked in a written statement. “By entering into this agreement to reserve a major portion of Hudong’s LNG ship construction capacity through the year 2027, we are confident that we are on the right track to ensuring that our future LNG fleet requirements will be met in due time to support our increasing LNG production capacity.” QP stated that its North Field expansion projects will raise Qatar’s LNG production capacity from 77 million tons per annum (mtpa) to 126 mtpa. The firm added that its LNG carrier fleet program – the largest such program in the LNG industry’s history – represents a major role in meeting the shipping requirements for QP’s local and international projects and will replace some of Qatar’s existing LNG fleet.
In Rare Development, Oil Majors Are Forced To Cut Output Under OPEC Deal --A British Petroleum-led project in Azerbaijan will have to cut production in May for the first time as Azerbaijan will need to take drastic measures to meet its new quota under the OPEC production cut deal, three sources told Reuters on Thursday. This is rare for Big Oil, who is typically exempt from such production restrictions because countries need these big oil players in their backyards to develop oil resources. Big Oil has never seen a mandatory production cut in Azerbaijan. But these are unprecedented times, and we are seeing a lot of firsts, including this week the first time that WTI oil futures went deep into negative territory. The most recent production cuts that are set to go into effect on May 1 call for some significant cuts—and Azerbaijan can’t cut enough without enlisting the help of BP and its partners in the project, which include Equinor, Chevron, and ExxonMobil, too. Azerbaijan’s state-run oil company, SOCAR, is also a partner in the project. The project in question is the Azeri-Chirag-Gunashli (ACG) project, which is a $38 billion project that lies 120km off the coast of Azerbaijan. It is thought to hold 5.4 billion barrels of recoverable oil, and was put into production in 1997. It is the largest oilfield in the Azerbaijan part of the Caspian Basin, according to BP’s website. In 2019, the block in question produced an average of 542,000 bpd, according to BP. Under the deal forged with OPEC+ to cut project, Azerbaijan is required to cut its total production by 164,000 bpd—about 75,000 to 80,000 of which would need to come from the ACG project. Azerbaijan’s current average production is 718,000 bpd, according to Reuters.
Russia’s Oil Producers Told by Ministry to Cut Output by Fifth - Russia’s oil producers have been told by the Energy Ministry to cut their production by about a fifth to comply with the new OPEC+ deal starting May 1, said two people with knowledge of the matter. After days of consultations on how to divide the supply curbs, companies were instructed to split Russia’s 2.5 million barrel-a-day cut proportionally, the people said, asking not to be named because the information wasn’t public. Under those terms, Rosneft PJSC would implement about 40% of the country’s total reduction. During the negotiations Rosneft disagreed with the principle of pro-rata cuts, according to two people familiar with company’s position. The company didn’t respond to a Bloomberg request for comment. Russia agreed a collective 9.7 million barrel-a-day output cut earlier this month with the Organization of Petroleum Exporting Countries and its allies, ending a brief price war with Saudi Arabia. In the next two months Moscow and Riyadh will each cut their crude output by 23%, or 2.5 million barrels a day, from a baseline level of about 11 million barrels a day. In the fourth quarter, Rosneft pumped around 4.67 million barrels of crude oil and condensate a day, or nearly 42% of nation’s daily output, making it the country’s biggest producer. If Russia applies the pro-rata principle under the OPEC+ agreement, the company will need to cut its daily production in May and June by roughly 1 millions barrels a day. Russia’s second biggest oil producer Lukoil PJSC will reduce its output by more than 40,000 tons a day, Interfax reported on Monday, citing Chief Executive Officer Vagit Alekperov. That equates to more than 293,200 barrels a day, according to Bloomberg calculations based on 7.33 barrels-per-ton conversion ration, and accounts for about 12% of Russia’s quota.
Coronavirus harms the oil market more than OPEC friction, oil commodities expert says - The coronavirus pandemic is weighing more on the oil market than the price dispute between OPEC and its allies, RBN Energy CEO Rusty Braziel told CNBC’s Jim Cramer Monday. RBN Energy is a privately held energy commodities analytics company based in Houston that plays a role between physical markets and financial markets. “I would say that, just off the top of my head, 15% of this is Saudi Arabia and Russia and 85% of it is Covid,” he said in a “Mad Money” interview referring to Covid-19, the disease caused by the novel virus that has put the global economy on ice. The comments came after oil futures turned negative for the first time in history. The May futures contract, which expires Tuesday, shred all of its value after the West Texas Intermediate tumbled to negative $37.63 per barrel on Monday. The price of barrels was above $60 at the start of 2020. Crude has taken a hit from both an oil price war and the downturn caused by government efforts to stop the spread of coronavirus, which has become a global pandemic. A disagreement between OPEC and its allies, led by Saudi Arabia and Russia, on oil production levels in March caused a major sell-off in crude. Furthermore, travel restrictions and stay-at-home orders have depleted demand for oil. OPEC and OPEC+ agreed to an historic production of tens of millions of barrels per day earlier this month, but the health crisis still persists. “The entire world is long on crude oil and the entire world is short on storage capacity,” Braziel said. Braziel explained that the phenomenon in the oil market reflects a “paper-market” problem, rather than an issue with physical barrels. Futures contracts trade by the month, and the June WTI contract, which expires about one month from now, remains above $20 per barrel. “It was a squeeze in the futures market,” he said, adding that any company that bought a contract is “obligated to receive physical barrels” on Tuesday “unless they get out of it before the market closes.” “That’s what they call convergence. The future market and the cash market converge on the final day of contract.” If current conditions persist, however, the challenges in the “paper market” can bleed into the physical barrel market, Braziel said.
Whether OPEC+ formally agrees, deeper oil cuts now look inevitable - (Reuters) - Whether or not OPEC+ oil producers formally agree to extra oil output curbs, rapidly filling storage capacity and plummeting demand due to the coronavirus crisis may force them to cut more. With crude consumption collapsing, the Organization of the Petroleum Exporting Countries, Russia and other producers, a group known as OPEC+, is due to implement a deal to cut supply by a record 9.7 million barrels per day (bpd) from May 1. But that unprecedented deal to withdraw about 10% of global supply already looks inadequate when demand has plunged by as much as 30% and the world is possibly just weeks away from running out of storage space for the surplus. Vopak, the world’s biggest independent storage company, said on Tuesday its tanks were almost full. Tanks at Cushing, the delivery point for the U.S. crude futures contract, might not yet be full but any available space was already booked, analysts and traders said. “We have to cut down, ... with or without OPEC output cut deal,” Mele Kyari, the head of Nigeria’s state-owned oil firm NNPC Group, told the African nation’s Premium Times newspaper. He said Nigeria would have to cut production because it was hard to find anywhere to put the oil. An OPEC source told Reuters it was “logical” to expect the market to force more cuts on OPEC+ producers. As much as 17 million bpd of supply could be taken out of the market this spring, estimated Jim Burkhard at IHS Markit, a research firm, due to production cuts and other shutdowns.
Oil plunges to just one cent a barrel - U.S. crude prices plunged to their lowest level in history as traders continue to fret over a slump in demand due to the coronavirus pandemic. West Texas Intermediate crude for May delivery sank to just one cent per barrel, its lowest level on record. The front part of the oil futures ‘curve,’ which is the May contract that expires on Tuesday, was hit the hardest since it applies to fuel that’s set to be delivered while most of the country remains on lockdown thanks to the coronavirus. There’s little demand for gasoline from refineries, and storage tanks in the U.S. are nearing their limits. The spread between the May and June contracts — known as the front month and second month — is now the widest in history, according to KKM Financial’s Jeff Kilburg. Earlier this month, analysts at Goldman Sachs warned that the coronavirus shock was “extremely negative for oil prices and is sending landlocked crude prices into negative territory.” “The U.S. situation is quite dire,” The coronavirus pandemic has dealt a severe blow to economic activity around the globe and sapped demand for oil. While OPEC and its oil-producing allies finalized a historic agreement earlier this month to cut production by 9.7 million barrels per day beginning May 1, many argue that it still won’t be enough to counter the fall-off in demand. The International Energy Agency, for instance, warned in its closely watched monthly report, that demand in April could be 29 million barrels per day lower than a year ago, hitting a level last seen in 1995. The COVID-19 outbreak has meant countries have effectively had to shut down, with many governments imposing restrictive measures on the daily lives of billions of people. It has created an unprecedented demand shock in energy markets, with storage space — both onshore and offshore — quickly filling up. With demand at near-paralysis, oil and fuel tanks around the world are close to brimming. “Going forward, we are going to have to see a lot of declines in production in the U.S. in order to push this thing a little bit higher,” Samir Madani, founder of TankerTrackers.com, told CNBC on Monday. “U.S. energy is very important for global energy security … because if it wasn’t for U.S. energy then prices would be a whole lot higher,” Madani said.
Oil prices dip below zero as producers forced to pay to dispose of excess - US oil prices turned negative for the first time on record on Monday as North America’s oil producers run out of space to store an unprecedented oversupply of crude left by the coronavirus crisis.The price of US crude oil collapsed from $18 a barrel to -$38 in a matter of hours, forcing oil producers to pay buyers to take the glut of crude which they cannot store, as rising stockpiles of crude threaten to overwhelm oil storage facilities. “The problem of the global supply-demand imbalance has started to really manifest itself in prices,” said Bjornar Tonhaugen, head of oil at research firm Rystad Energy. “As production continues relatively unscathed, storages are filling up by the day. The world is using less and less oil and producers now feel how this translates.” The Guardian reported over the weekend that a record 160m barrels of oil was being stored in “supergiant” oil tankers outside the world’s largest shipping ports, including the US Gulf, following the deepest fall in oil demand in 25 years because of the coronavirus pandemic. The last time floating storage reached levels close to this was in the depths of the financial crisis in 2009, when traders stored more than 100m barrels at sea before offloading stocks when the economy began to recover. The price collapse in US oil market - known in the industry as the West Texas Intermediate price - accelerated because it is the last day oil producers can trade barrels that are scheduled for delivery next month, when oil storage is expected to reach capacity. The US price for oil delivered in June, which will become the default oil price from tomorrow, is also falling due to the economic gloom caused by the coronavirus, but has managed to remain above $20 a barrel. On Monday the price for brent crude, the most widely used benchmark, fell 8% to $25.79. Global oil prices are expected to begin recovering over the second half of the year as tight restrictions on travel to help curb the spread of the virus are lifted, raising demand for fuels and oil. The world’s largest oil-producing nations have agreed a deal to hold back between 10m to 20m barrels of oil a day from the global market from May, and many oil companies are likely to shut their wells as financial pressures mount. Despite the historic production cuts, most analysts believe that oil prices will fail to reach the same price levels recorded at the beginning of the year before the outbreak. The global oil price, under the brent crude measure, reached highs of almost $69 a barrel in January before plummeting to less than $23 a barrel at the end of March.
An oil futures contract expiring Tuesday went negative in bizarre move showing a demand collapse - A futures contract for U.S. crude prices dropped more than 100% and turned negative for the first time in history on Monday, showing just how much demand has collapsed due to the coronavirus pandemic. But traders cautioned that this collapse into negative territory was not reflective of the true reality in the beaten-up oil market.. The price of the nearest oil futures contract, which expires Tuesday, detached from later month futures contracts, which continued to trade above $20 per barrel. West Texas Intermediate crude for May delivery fell more than 100% to settle at negative $37.63 per barrel, meaning producers would pay traders to take the oil off their hands. This negative price has never happened before for an oil futures contract. Futures contracts trade by the month. The June WTI contract, which expires on May 19, fell about 18% to settle at $20.43 per barrel. This contract, which was more actively traded, is a better reflection of the reality in the oil market. The July contract was roughly 11% lower at $26.18 per barrel. The international benchmark, Brent crude, which has already rolled to the June contract, settled 8.9% lower at $25.57 per barrel. 20200420 Oil futures crash The front part of the oil futures ‘curve,’ which is the May contract that expires on Tuesday, was hit the hardest since it applies to fuel that’s set to be delivered while most of the country remains on lockdown thanks to the coronavirus. The only buyers of oil futures for that contract are entities that want to physically take the delivery like a refinery or an airline. But demand has dropped and storage tanks are filled, so they don’t need it. “There is still a lot of crude on the water right now that is going to refineries that do not need it,” Helima Croft, global head of commodities strategy at RBC Capital, said Monday on CNBC’s “Squawk Box”. “Right now we don’t see any near-term relief for this oil market … we remain really concerned for the outlook on oil near-term,” she added.
Anyone who thinks oil has hit a floor is 'playing with fire' — yes, prices can go lower - An oil futures contract in the U.S. made a historic plunge, with West Texas Intermediate crude for May delivery falling below zero for the first time to settle at negative $37.63 per barrel. Monday’s crash shows a stark picture of how demand has been obliterated by the coronavirus pandemic while storage tanks in the U.S. have run out of space — companies are actually paying traders to take the oil off their hands. Eyes are now on the more actively traded June contract for U.S. crude as market players question whether there is a buying opportunity in the coming weeks or whether the commodity has even further to fall. “As the smoke clears, that’s the number one question of the markets today — anyone who thinks that the technicals are behind the pricing yesterday is going to completely miss the point,” Dave Ernsberger, global head of commodities pricing for S&P Global Platts, told CNBC’s “Squawk Box Europe” on Tuesday. “That storage is just as full for June, if not fuller, than it was for May. Already Cushing is 70% or 80% full, and that technically means it’s closed for business. So we could easily see this play into the June contract pretty soon.” Cushing, Oklahoma, is a critical oil storage hub and delivery point for American oil traded on futures markets. WTI is already down a staggering 102% year to date, and Brent is down 65%. The U.S. energy sector is more than 50% below its 52-week closing high. The June contract for WTI was trading at $14.40 by Tuesday afternoon London time, already down 30% from the previous day and fluctuating continuously. The negative May contract — which later turned positive to surpass $2 but fell back to less than negative $3 during London’s morning trading hours — was hit harder as it expires on Tuesday, meaning it’s seeing less trading activity as it’s set for delivery while economies around the world remain in full lockdown mode. The spread between May and June contracts was the largest in history. Still, trying to make money buying into oil businesses on the hopes of improved prices in June is a complete gamble, Ernsberger warned. “There’s an eight-week danger zone here between today and sometime in June — where between now and then, anybody who thinks oil has found a floor is playing with fire and trying to catch the famous falling knife, because it’s almost impossible to call,” he said.
Oil price contracts take historic plunge into negative territory - In a day of chaos in the international oil market yesterday, futures contracts expiring today on US-produced West Texas Intermediate crude dropped to as low as -$40.32 per barrel, meaning that producers were paying buyers to take them off their hands. The price at the close of trading was -$37.63 compared with $18.36 a barrel on Friday. It is the first time in history that oil prices have gone into negative territory. The reason for the collapse is the lack of storage capacity in the US because of the collapse in demand due to the impact of the COVID-19 pandemic and the associated lockdown measures. The main US storage facility is at Cushing, Oklahoma, a town of 10,000 people. The storage hub was at 70 percent capacity last week with traders saying it would be filled within two weeks. This prompted the futures selloff because the holder has to deliver 1000 barrels for every contract they hold to Cushing. Traders in the futures market described the chaos. Phil Flynn, senior market analyst at Price Futures Group, told the New York Times: “We saw a total collapse in the market. There was everybody selling it into the hole with no buyers. They’re going to have to drive down to a price where someone wants to buy it, and no one wants to buy it.” The director of energy futures at Mizuho in New York told the Times: “I’m 55 years old, and I worked on the trading floor in college. I’ve been through the first Gulf War, second Gulf War, World Trade Center, dot-com crisis, and nothing came close to this. It could get worse. This situation we are in is that bad.” Some futures traders are still betting on a revival and so contracts for June remain positive. But an even bigger crash could be in the making when they become due.
Holy WTF Moly: WTI May Contract Collapses to Negative -$37 - Wolf Richter - It’s not often that we’re served up a WTF moment like this. Just about a couple of hours ago, I published my article about US crude-oil benchmark grade West Texas Intermediate (WTI) and how the May futures contract for it collapsed by 45% to $10 a barrel — US Crude Oil Gets Annihilated Under Targeted Saudi Attack — and I pointed at some of the dynamics. But WTI kept plunging.This is the near-month May futures contract, which expires tomorrow. It should normally trade close to the spot market price, but has now divorced from it. It has continued to collapse in a breath-taking pace to $8 a barrel, then $4, then $2, then $0, then below zero, then at -$10 and then… and now settled at negative -$37.63 a barrel:This is obviously completely nuts. Futures contracts that expire the next day should be close to the spot market cash price.But the WTI spot cash price “only” collapsed by 35% today to $11.70 at the moment. And in terms of prices further out, the June futures contract has plunged by 17% to $20.75. So this is a WTI massacre all around, but those prices are still well into positive territory.So the disconnect between the May contract (-$37.63), and the cash spot price ($11.80), and the June contract ($21.77) point at some serious forced selling and a complete blowup in the May contracts.It seems some oil trading firms and hedge funds were caught on the wrong side of heavily leveraged bets, and couldn’t roll over their contracts due to a liquidity crunch and horrible market conditions in that space. But if they can’t sell the contracts by tomorrow, they’ll have to take delivery of the physical oil at the delivery point for NYMEX futures, namely in Cushing, Oklahoma.The delivery time is in May. But storage in Cushing for May seems to have been spoken for, and now these traders see that they have no place to go with this oil that they might have to take delivery of in May.But the market for the May contract today essentially collapsed, as potential buyers faced the same problem. And so in their desperate efforts to get rid of the contracts so they wouldn’t end up with the oil that they couldn’t physically handle, these speculators paid a heavy price. Over the next couple of days, we’ll probably learn who some of those exploded-imploded players might have been. Meanwhile this is a moment for historic reflection and head-shaking.
Oil traders have never seen 'insane' market like this before, fear more declines to negative prices - The oil market is facing uncharted territory as the drop-off in demand, caused by the coronavirus pandemic, combined with rapidly filling storage, sent prices plunging into negative territory for the first time in history. And with only guesswork as to when stay-at-home orders might be lifted and when crude demand might pick up, traders warn that oil could continue to trade at extremely depressed levels. “If we have not recovered from Covid in July so that enough driving has come back and storage is full, then the price of crude oil is going to be zero,” RBN Energy’s Rusty Braziel told CNBC. He called Monday’s trading activity “insane,” and said that in his more than 40 years of trading he had “never seen anything like this.” West Texas Intermediate crude for May delivery fell Monday more than 100% to settle at negative $37.63 per barrel, meaning sellers would effectively pay to have the oil taken off their hands. The contract expires on Tuesday, fueling the wild swing to the downside as traders scrambled to get out of their positions. Longer-term contracts settled above $20 per barrel on Monday, but losses accelerated in overnight trading, suggesting that traders are increasingly concerned about a lack storage will continue in coming months. The contract for June delivery — the most actively traded WTI contract — fell 18.7% to trade at $16.61 per barrel on Tuesday. The July contract was about 10% lower at $23.66 per barrel. Bernadette Johnson, Enverus’ vice president of strategic analytics, noted that the June contract will likely face pressure until demand comes back, and she believes it will “start coming down over the next month.” Some of this view is already reflected with bets in the options market. Scott Nations, president and chief investment officer at NationsShares, noted that June 0.50 puts are currently trading for more than 50 cents, meaning that traders would only turn a profit if the June WTI contract expires in negative territory when accounting for the option premium. In the meantime, Johnson said a lack of storage will force oil companies to halt production. “What we’re into now is shut-in economics,” she told CNBC in an email. “Product demand is off and when product demand is off, you don’t buy crude. If you don’t buy crude, you can’t produce the crude if there’s not a place to store it, and so that’s the problem.”
'Uncharted territory.' Oil prices go negative for 1st time -- Tuesday, April 21, 2020 -- Oil prices took a spectacular tumble yesterday with the benchmark U.S. grade falling into negative territory for the first time on fears the world will run out of storage during the novel coronavirus pandemic. West Texas Intermediate crude, which sold for more than $60 a barrel at the beginning of the year, started the day at just under $18 a barrel and fell 300% to a low of around negative $37 per barrel. The plunge came amid an unprecedented drop in worldwide oil consumption due to widespread travel restrictions and business shutdowns aimed at curbing the spread of COVID-19. The negative price — which roiled markets a week after the Trump administration and the world's crude-producing countries negotiated a highly publicized deal to stabilize them — was likely a quirk of the oil market structure and will be short-lived, analysts said. But it shows that the pandemic's economic effects will continue to hammer oil prices for months, if not longer. "We ought to be a little bit humbled because we're living in completely uncharted territory here," said Mark Finley, a fellow in energy and global oil at Rice University's Baker Institute. The free-falling price is another historic event, coming on the heels of the record-setting drop in oil demand that the virus caused and the international deal by oil-producing countries to slash production, Finley said. Oil typically trades on one-month contracts, and the negative prices only affect oil scheduled for delivery in May. The price for West Texas Intermediate delivered in June is still about $22 a barrel. The sharp drop shows the larger problem with the oil market, according to the data firm Rystad Energy. Demand for crude has fallen by more than one-fourth since the outbreak started, yet production has continued at a breakneck pace because of a price war among Saudi Arabia, Russia and other oil-pumping nations. It was only a matter of time before the supply of oil outstripped the demand from refineries and the capacity of storage facilities to hold it. "And what does that mean? That pricey shut-ins or even bankruptcies could now be cheaper for some operators," the firm's oil market analyst, Louise Dickson, said in a research note.
Why U.S. oil prices fell below zero. - In the latest sign that the world economy is collapsing into a black hole, the price of oil dropped below zero for the first time ever Monday, with futures for U.S. crude delivered in May wrapping up at negative $37.63 per barrel. In practical terms, this means that anybody who is supposed to receive a shipment of American crude but doesn’t want it will have to pay somebody else to take it. How come? Because we are literally running out of places to put all of the extra oil we’re not using, because people have stopped driving, flying, or living any semblance of normal life while the country descends into a state of coronavirus-induced catatonia. As the Wall Street Journal puts it: “The historic low price reflects uncertainty about what buyers would even do with a barrel of crude in the near term. Refineries, storage facilities, pipelines and even ocean tankers have filled up rapidly since billions of people around the world began sheltering in place to slow the spread of the deadly coronavirus.” This is happening despite the deal Donald Trump helped broker between Russia and Saudi Arabia to cut production and stabilize prices. Good try, good effort, I guess. Buyers are still willing to pay positive sums of money for crude delivered later in the year. Contracts for June closed the day above $20 a barrel, which suggests that traders expect the current glut to ease up a bit, either due to further production cuts or because they think the economy will have recovered ever so slightly by then. They just really don’t want to be responsible for dealing with a bunch of hydrocarbons right now. This state of affairs—when a commodity’s price is higher in the future than the present—is known as contango, by the way, and while that little bit of vocab is in no way essential to understanding what’s going on, it is possibly my favorite bit of financial marketese. It’s like a tango, but contagious. The storage problem also appears to be worst in the United States. CNN notes that investors are especially worried that storage is reaching capacity in Cushing, Oklahoma, the domestic industry’s key transit hub. Brent crude, the international benchmark variety that mostly gets shipped out on tankers, is still trading at $25.70, presumably because it has a wider market and there are just more places to stow the stuff.
'This is a great time to buy oil,' Trump says as prices plunge into negative territory -- After a tumultuous day that saw oil futures falling into negative territory, President Donald Trump suggested the U.S. could either purchase roughly 75 million barrels of oil to add to the country’s Strategic Petroleum Reserve, or rent that spare capacity to oil companies squeezed for storage space due to the glut in the market. “This is a great time to buy oil. We'd get it for the right price," Trump said at a coronavirus task force news briefing on Monday night. "Nobody's ever heard of negative oil before." Lawmakers have discussed providing support to the struggling energy sector, but a plan for the Department of Energy to spend $3 billion purchasing oil for the Strategic Petroleum Reserve was suspended when the money was not included in the stimulus package passed earlier this month.The price for West Texas Intermediate crude contracted for May delivery plunged Monday to negative $37.63 a barrel for contracts expiring Tuesday. In an ordinary market, buyers with such a short horizon would typically be businesses such as airlines or refineries taking delivery of oil right away. But as the COVID-19 pandemic has ravaged economies around the world, would-be buyers literally have no place to warehouse oil, which is amassing in storage facilities, on board tankers and in pipelines around the world. Although the coalition of oil-producing countries referred to colloquially as OPEC+ agreed to shave nearly 10 million barrels a day off their collective output, this cut pales in comparison to the speed with which our collective appetite for oil is evaporating. In today’s moribund market, global demand for oil has plummeted by 25 to 30 million barrels a day, said Tom Kloza, global head of energy analysis for Oil Price Information Service, an IHS Markit company. “Right now we’re at peak demand destruction.” Oil is piling up faster than refiners, airlines, shipping companies and drivers can use it, since no one in the world needs it immediately — an unlikely and unprecedented confluence of circumstances that has distorted the market to such extremes that a seller would, in theory, have to pay a buyer to take oil off their hands.
As crude oil drops to historic lows, chart analyst sees 90-year record for energy stocks - West Texas Intermediate crude for May delivery, a contract expiring Tuesday, fell more than 300% to negative $37.63. It was the first time that crude oil had fallen below zero. Oil has been crushed by Covid-19 disruptions and a price war between Saudi Arabia and Russia. Energy stocks were also hit hard on Monday with the XLE energy ETF falling by 3%. Ari Wald, head of technical analysis at Oppenheimer, says while the drop wasn’t as steep for energy stocks, the group did reach its own historic low. “The sector overall [is] really far from bullish. In fact, the energy sector [is] coming off its lowest level since 1931 versus the S&P. That’s a 90-year relative low. So while some stabilization will be both reasonable and welcome, we see more attractive opportunities for funds elsewhere and stay away,” Wald said on CNBC’s “Trading Nation” on Monday. Wald says it makes sense to either avoid the energy sector or sell on any strength. One group of investors could see opportunity here, though, says Boris Schlossberg, managing director of FX strategy at BK Asset Management. “If you’re a value investor, this is actually the kind of scenario you actually want. Energy was 70% of the S&P at the height when oil was around $100 a barrel. Now it’s only 3% of the S&P. It’s a perfect mean reversion trade,” Schlossberg said during the same segment. Value investors face stocks that trade at a “cheap” valuation relative to the market — this is commonly measured by their price-to-earnings ratios. “Overall, on a long-term basis, I think the easiest play is to simply buy the biggest players in the space — perhaps Exxon and Royal Dutch Shell — because they have the strongest balance sheet, because ultimately what’s going to happen is you’re going to have massive consolidation, they’re going to be able to buy assets incredibly cheap,” said Schlossberg. Exxon Mobil and Royal Dutch Shell are down 41% and 43% year to date, respectively. The XLE ETF is down 45% year to date.
US Oil Fund, popular ETF trading under ticker ‘USO,’ plunges 38%, halted for trading repeatedly - The United States Oil Fund, a popular exchange-traded security known for its ‘USO’ ticker which is supposed to track the price of oil and is popular with retail investors, plunged nearly 40%. The fund said Tuesday afternoon that it would be changing its structure yet again. This time the fund is requesting to invest in varying oil futures contracts and said it had already moved money into the August crude oil contract. The fund was halted, down 36% to $2.40. IT was repeatedly halted for volatility on Tuesday after USCF, the manager of the fund, said that it was temporarily suspending the issuance of so-called creation baskets. Creation baskets are how an ETF creates new shares to meet demand. The baskets hold the underlying securities which in this case are plummeting oil futures. With the halting of these creation baskets, the ETF will essentially now trade with a fixed number of shares like a closed-end mutual fund. On Friday, USCF changed the structure of the USO fund so that it can hold longer-dated contracts. Per a regulatory filing, around 80% of the fund will be in the front-month contract, with 20% in the second-month contract. That changed again with a new filing Tuesday afternoon. The filing stated: “Commencing on April 22, 2020, USO in response to ongoing extraordinary market conditions in the crude oil markets, including super contango, may invest in the above described crude oil futures contracts on the NYMEX and ICE Futures in any month available or in varying percentages or invest in any other of the permitted investments described below and in its prospectus, without further disclosure. USO intends to attempt to continue tracking USO’s benchmark as closely as possible, however significant tracking deviations may occur above and beyond the differences described herein.”
What plunging crude prices mean for the market's largest oil ETF - It’s been a wild week for the oil market. Oil prices began an unprecedented drop on Monday that saw the West Texas Intermediate May futures contract, which expires on Tuesday, slide into negative territory for the first time ever. The May and June contracts remained under serious pressure Tuesday as the more actively traded June contract fell nearly 25%. In the days leading up to the historic plunge, the United States Oil Fund (USO) — the market’s largest crude oil ETF by assets — saw notably higher trading volumes as short- and long-term buyers sought to express their views on crude, ETF analysts told CNBC on Monday. Some market watchers criticized USO for playing a role in the implosion in oil prices given its sizable, roughly 25% position in the May futures contracts. But Mike Akins, founding partner of ETF Action, told CNBC’s “ETF Edge” on Monday that likely wasn’t the case. “It’s important to note that USO is no longer in the May contract. USO’s methodology is to roll out of their contracts two weeks prior to expiration, so, actually, they rolled out of May into June the week of April 7,” Akins said. “So, with respect to what’s going on currently with ... that huge disconnect between the price of May contracts and June contracts, it is not directly related to USO even though USO ... does own a significant percentage of contracts of the month they’re currently holding.” Akins was more concerned about how buyers might interpret the spike in USO’s trading volumes. The increase was evidenced by higher share creation in the fund, which is when an ETF issues new blocks of shares to sell on the open market. “I think it’s important to point out to the audience that, historically ... the price of USO has been an inverse relationship to the shares outstanding. That meaning that as price goes down, shares outstanding have historically gone up and vice versa. And the rationale for that is because [of] the demand,” Akins said. “As volatility increases in the price of oil, the demand for this product goes up,” he said. “But it’s very important not to use that as a way to assume that people are getting long the price of oil, because these strategies, these are trading tools. They’re not allocation tools alone. And as a result, as you mentioned, flows don’t dictate the position of the actual traders.”
What an Oil ETF Has to Do With Plunging Oil Prices -- The oil market is in disarray, a result of a coronavirus-led collapse in demand, surplus supply following a price war and a shortage of storage. Yet there have been plenty of people willing to bet on a rebound in basement-level crude prices, and for many retail investors the vehicle of choice has been an exchange-traded fund. However, those wagers via the biggest American ETF -– the U.S. Oil Fund, or USO -– have contributed to market mayhem and helped push crude prices below zero. It grew so huge so quickly that it became a sizable player in the market for West Texas Intermediate, the U.S. benchmark for crude. Investors piled in during March and April, convinced that oil prices that had been falling -- pushed down by a price war between Saudi Arabia and Russia that boosted production just as demand was slashed by pandemic-driven lockdowns -- would eventually recover once economies reopened. At different stages, the fund held about a quarter of all May and June contracts for WTI. Unlike shares that can be held as long as an investor chooses, oil futures have finite terms and are agreements to buy or sell a physical product. The May futures contract, for example, expired on April 21. Any holder who had not sold by then would need to take delivery of the oil -- 1,000 U.S. barrels, or 42,000 gallons, for each contract. As a favored investment vehicle for many bullish speculators, the number of shares in the fund ballooned from 145 million at the end of February to more than 1.4 billion by mid-April. Its outsized portion of the WTI market -– on paper -- came at a time when demand for physical oil was cratering and storage space was becoming harder and more expensive to find. For years, USO was mandated to invest in the most-active WTI contract and to roll it over to the following contract. (Rolling over means selling it and, often simultaneously, buying the following month’s contract.) The flood of money into May contracts earlier had pushed oil prices up; as USO sold its May futures as part of the rollover and bought June and July contracts, prices fell for May and rose for the following months, opening an unusually wide spread. Only a handful of traders remained in the May contract on Monday, when prices plunged well below zero. With USO holding a significant level of June contracts, there are concerns that prices will go negative again and that the whole process might repeat -- or might be worse, if the April 20th debacle scares off more investors. To try to mitigate the prospect, USO, which lost 37% of its value in the first three weeks of April, has moved to allocate some holdings to contracts expiring later in the year, since those prices tend to be less volatile. But the fund is adding to pressure on oil prices in other ways.
Retail investors who believed they were investing in crude oil get a rude awakening - “Know what you own” is an old adage when investing, but it is especially important when owning investments that hold futures contracts. Just look at the largest oil ETF, the United States Oil Fund (USO). Many retail investors mistakenly believe this is a proxy for investing in the “spot” (cash) price for oil. But it isn’t, and never has been. The purpose of the fund was to track as closely as possible the front-month oil futures contract, not the spot price. True, the prices for spot oil and USO have been reasonably close — until the oil market imploded. In theory, USO works in a very simple manner. Every month, about two weeks before that “front month” contract expired, USO and similar funds began buying the next futures contract. Sounds like a good way to bet on oil, right? Except it isn’t — because it owns futures contracts, not the spot price of oil. Most futures markets are in “contango” — the price of contracts farther out in time are more expensive than the earlier or “front-month” contracts due to the cost of storing the commodity. That is certainly true of oil. So every month USO and other similarly structured ETFs have to close out their futures positions by buying the next month’s contract, and since it is almost always a higher price an investor over time — many months — will lose money. As the short-term demand for oil has collapsed, the front-month contracts have collapsed, and the “spread” between the front-month contracts and those farther out have gotten huge: the June contract is at $13, the July is at $23. That means that investors — like USO — that will eventually roll over from the June to the July contract are having to pay a huge premium. Investors, in these circumstances, are guaranteed to lose money. A lot of it, especially if it is repeated for several months. What’s the bottom line? These kinds of vehicles are primarily meant to be used by active traders to hedge or short positions. They are not meant as long-term buy and hold vehicles.
Mom and Pop Piled Into Biggest U.S. Oil ETF During Historic Rout -- The historic rout in oil this week has done little to deter mom and pop investors who are convinced they can see a bottom for the beleaguered commodity. The number of investors at retail trading platform Robinhood piling into the biggest oil ETF, the United States Oil Fund LP (USO), spiked to 152,073 at the end of Tuesday, according to Robintrack, a website unaffiliated with the site that uses its data to show trends in positioning. That figure was up more than 50,000 from Monday and 90,000 from the end of last week, making it the most-added security across the trading venue. The demand for the oil ETF came as the price of crude tumbled to historic levels, with retail investors speculating in some instances that oil at $1 a barrel had nowhere to go but higher. But USO isn’t a direct bet on oil prices, and incurs costs from rolling its futures positions that hamper performance when longer-dated contracts cost more than the current one. “There’s a huge cost of carry in the front of the curve and the average Robinhood USO buyer and USO call buyer doesn’t know that, doesn’t understand that, or doesn’t care, and thinks they’re just buying oil at a low price,” said Benn Eifert, chief investment officer at QVR Advisors. relates to Mom and Pop Piled Into Biggest U.S. Oil ETF During Historic Rout USO fell 10% to $2.52 as of 12:54 p.m. in New York, headed for a ninth straight day of losses. It’s down 37% so far in April. With the price so low, the fund announced a one-for-eight reverse share split on Wednesday, a move it said is designed to ensure the shares trade above levels exchanges require for continued listings. It also said the move is “expected to increase the marketability and liquidity” of the shares. Some ETF experts believe the split may be designed to attract more interest from retail investors. “That’s what these things do, as they don’t want it trading less than $1,” Christian Fromhertz, chief executive officer of Tribeca Trade Group in New York. “It’s just making it a higher stock price to suck in more retail.” An email to a Robinhood spokesman was not immediately answered. Todd Rosenbluth, director of ETF and mutual fund research at CFRA Research, said the split, which will increase the price eight-fold, aims to make the ETF more palatable. “Reverse splits are designed to make potential investors believe the security has greater value than before as it is harder to consider buying a low single digit priced fund,” he said. Most of the recent USO buyers now own a product that’s much different than it was a week ago. The ETF used to maintain a position in only the front-month West Texas Intermediate contract, but announced on April 16 a shift to having 20% of its exposures in the second-month. Since then, the fund said it could hold West Texas Intermediate futures at any point in the curve, and now holds 40% in the front month contract, 55% in the second month, and 5% in the third. These tweaks help guard against the possibility that the cumulative value of its holdings could turn negative.
Bank of China sold oil’s May contract into a historic implosion in crude — and retail investors may have gotten crushed - Chinese banks hawked wealth-management products tracking U.S. oil futures, marketed with flashy labels like “crude oil treasure” to ordinary Chinese. Buyers are now crying foul over the losses as some investors report they now owed money to banks when crude briefly fell below $0 on Monday. Local news reports say these oil-related funds were slammed by the strained liquidity in energy trading this week as banks offering these products needed to sell their soon-to-expire futures for the most recent contract and buy the following month’s futures to maintain exposure to oil markets. But the combination of an oil surplus and winnowing demand saw prices for U.S. benchmark crude futures trade in subzero territory for the first time in history as traders and other speculative investors attempted to avoid taking delivery of physical oil shipments. See: Why oil prices just crashed into negative territory — 4 things investors need to know Bank of China 3988, -0.34% was rolling over West Texas Intermediate U.S. futures for May delivery on Monday, only a day before they were set to expire, unlike other Chinese banks who rolled over their oil futures at earlier dates, reported Caixin, citing traders familiar with the matter. It’s unclear how many May contracts they needed to sell on Monday. The date of the rollover had been pre-arranged, said Caixin, citing sources at the Bank of China. Faced with a glut of oil swirling around the world, Bank of China sold the May contract into a maelstrom of selling, with the now-defunct contract eventually settling at negative-$37.63 a barrel on Monday. Trading was suspended for these Chinese oil funds the following day, the bank said.
Oil for Less Than Nothing? Here’s How That Happened -- April 20, 2020 will go down in oil-market history as the day when the U.S. benchmark price for crude dropped below zero for the first time -- and then kept falling. In a massive and unprecedented swing, the future contracts for May delivery of West Texas Intermediate tumbled to minus $37.63 a barrel. The jaw-dropping development was in no small measure down to an extreme glitch in the way oil futures operate. But it also revealed a fundamental truth about the oil market in the age of coronavirus and the aftermath of a price war: The world’s most important commodity is quickly losing all value as chronic oversupply overwhelms the world’s crude tanks, pipelines and supertankers. Why would anyone pay to sell their oil? For some producers, it may be cheaper in the long run than closing down production or finding a place to store the supply bubbling out of the ground. Many worry that shutting their wells might damage them permanently, rendering them uneconomical in the future. Then there are the traders who buy oil futures contracts as a way of betting on price movements who have no intention of taking delivery of barrels. They can get caught by sharp price drops and face the choice of finding storage or selling at a loss. And the escalating glut of oil has made storage space scarce, and increasingly expensive. Either the pandemic or the price war alone would have rocked energy markets. Together, they have turned them upside down. As the virus started to spread around the globe, it began eating away at oil demand. But just as countries like Italy showed what kind of damage a national lockdown could do economically, Saudi Arabia and Russia, the world’s biggest oil producers, escalated the price war. A pact that had restrained production collapsed and both countries opened their taps to the fullest, releasing record volumes of crude into the market. Wasn’t there a deal on that? Yes, one worked out by OPEC, Russia, the U.S. and the Group of 20 countries. But its call for an overall production cut of roughly 10% proved to be too little, too late. Prices initially turned negative just in obscure corners of the U.S. market such as Wyoming, where storage options are few. Then major hubs began to register negative prices for small streams of selected crudes. And on April 20, prices fell sharply below zero on the NYMEX exchange, which is owned by CME, the world’s largest energy market. The lowest prices came in trades in futures -- contracts in which a buyer locks in a purchase at a stated price at a stated time. Futures are a tool for users of oil to hedge against price swings, but also a means of speculation. The contracts run for a set period, and traders who don’t want to unwind their position or take delivery generally roll over their monthly contracts shortly before expiration to a month further in the future. Contracts for May delivery were due to expire on April 21, putting maximum pressure the day before on traders whose contracts were coming due. For them, selling at a steeply negative price was better than taking delivery of actual oil because nobody needs it and there are fewer and fewer places to put it.
Negative oil prices - James Hamilton - First negative interest rates, and now negative oil prices. Is the world coming to an end? The price of the May crude-oil futures contract closed yesterday at negative $37.63 a barrel. The buyer of that contract is entitled to receive 1000 barrels of oil in Cushing, Oklahoma in May and in addition the buyer is entitled to receive $37,630. Sound like a pretty good deal? A month ago there were around a half million such contracts outstanding, promising delivery of half a billion barrels of oil to Cushing in May. That’s far more than could ever be physically delivered, and it’s perfectly normal. In the vast majority of those contracts, the buyer had no intention of receiving oil and the seller had no intention of delivering oil. The plan of the buyer was to sell the contract to somebody else before time for delivery, and enjoy the gain if they sell for more than they bought. The seller likewise planned later to buy a contract; in effect, their original offer was a short sale, which they later cover by buying. You can think of the second contract that closes each individual’s initial position as between the same two parties as the original contract, so that the two trades exactly cancel. For most of the original contracts, no oil actually changes hands in May. The anchor for the system is the fact that the buyer has the right to receive physical delivery if they choose to hold the contract to expiry, and could plan to put the oil into storage or ship it immediately into another pipeline. If I can store the oil in Cushing for a cost of a few dollars a barrel, that’s a valid option. But the higher the cost of storage, the bigger problem I’ll have on my hands if I actually take physical delivery. The May contract expires today, so if you haven’t sold your position now, you better plan on receiving your 1000 barrels of oil. But you can still buy oil for delivery in June, or for delivery in July, or other future months. There is a basic arbitrage that connects the futures prices in any consecutive months. By buying the July contract you could lock in an option to receive delivery in July at a cost of $26.28 per barrel. You could plan on storing the oil that month and selling in August at a guaranteed price of $28.51. If you expect the cost of storing oil in July to be $2.23 per barrel (28.51 – 26.28 = 2.23), you’ll just break even by buying the July contract and selling the August contract. If you think the price you’d have to pay to store the oil in July would be less than $2.23, you should buy July oil and sell August oil. Arbitrageurs following that trade will drive the July price up and August price down. In equilibrium we’d expect the price differential between months to represent the cost of storage. Applying that interpretation to the above numbers, the cost of storing a barrel right now is imputed to be around $60 a barrel (nobody would do the deal with you yesterday at any reasonable price). The imputed storage cost is about $6 in June. There’s a horrific storage bottleneck in Cushing right now, but traders are betting that it’s going to be more manageable by summer.
Here Is The Full Explanation Behind Today's Unprecedented Negative Oil Price - How did you end up with negative oil prices today? This happens when a physical futures contract find no buyers close to or at expiry. Let me explain what that means: A physical contract such as the NYMEX WTI has a delivery point at Cushing, OK, & date, in this occurrence May. So people who hold the contract at the end of the trading window have to take physical delivery of the oil they bought on the futures market. This is very rare. It means that in the last few days of the futures trading cycle, (which is tomorrow for this one) speculative or paper futures positions start rolling over to the next contract. This is normally a pretty undramatic affair. What is happening today is trades or speculators who had bought the contract are finding themselves unable to resell it, and have no storage booked to get delivered the crude in Cushing, OK, where the delivery is specified in the contract. This means that all the storage in Cushing is booked, and there is no price they can pay to store it, or they are totally inexperienced in this game and are caught holding a contract they did not understand the full physical aspect of as the time clock expires. The contract roll and liquidity crunch that made the extreme sell-off today possible but it DOESN’T necessarily represent futures market conditions: NYMEX June settled today at $21.13. The June contract is not out of the woods either: today’s action indicate that physical oil markets at Cushing are not in good shape and that storage is getting very full. A decline of over 15% in the June contract price points to real worries that the physical stress will continue to reverberate, and will force a lot more production shutdowns during May than the ones announced so far. So today negative prices are the reflection of dire market conditions for producers, with the hope that demand restart before the middle of May and that the June contract does not face the same fate.
Analyst Who First Predicted Negative Oil Prices Sees Oil Hitting Minus $100 -- Back on March 17, as oil was plunging to levels not seen since the presidency of George W. Bush, we published a shocking forecast by Mizuho’s Paul Sankey who stunned oil traders with what at the time was an insane prediction: "crude prices could go negative - yes, as in you would be paid to take delivery." According to Sankey, much of the US 4MM bpd in crude exports will be curtailed as prices fall and tanker rates soar. And with US storage roughly 50% full, and able to take another 135MM bbl more, assuming a build rate of 2MM b/d, the US can add 14MM bbl/week for 10 weeks until full.As a result, there is a now race between filling storage and negative pricing "unless U.S. decline rates can outpace inventory builds, which we very much doubt."We concluded our own assessment by saying that "despite its low price, oil may still have at least 100% (or more) to drop."This was proven correct. What also proven correct, just one month later, was Sankey's apocryphal forecast when the May WTI contract crashed to negative $40 when it "suddenly" emerged that there is no place to store the hundreds of thousands of barrels of deliverable oil (held mostly by the USO ETF), something we had cautioned about... repeatedly.Having been proven correct, was Sankey content and does he now think that Monday's insane price action ws the bottom?Oh no, not even close, because while sooner or later oil will soar - just as soon as the oil market shifts to a demand imbalance after millions of bpd in production has been indefinitely shut down and the global economy start to recover - in the meantime there is much more pain to come. "We have clearly gone to a full-scale, day-to-day market management crisis,” said Paul Sankey taking a modest victory lap, and then, talking to Bloomberg, he went a step further on Tuesday, saying: “Will we hit negative $100 a barrel next month? Quite possibly."The reason: the (lack of) oil storage situation is going from bad to worse - something Reuters details so vividly in "Ships, trains, caves: Oil traders chase storage space in world awash with fuel" - as can be seen in the chart below...
Saudi Arabia is the winner from oil's historic price plunge, analysts say - Saudi Arabia will be best positioned to weather the impact of an unprecedented collapse in U.S. oil prices, energy analysts told CNBC on Tuesday.It comes at a time when the market is awash with crude, storage tanks are being filled and the coronavirus crisis continues to ravage global demand.On Monday, the May contract for U.S. West Texas Intermediate futures tumbled into negative territory for the first time ever.The contract, which expires on Tuesday, traded at negative $4 a barrel during afternoon deals. Remarkably, this means traders would effectively have to pay to get the oil taken off their hands. The May contract of WTI had settled at a discount of $37.63 on Monday.The historic collapse in the market for crude oil futures was thought to have been exaggerated by the contract’s imminent expiration. The June contract for WTI, which is much more actively traded and tends to be more indicative of how Wall Street views the price of oil, stood at $15.75 a barrel on Tuesday, around 22% lower.International benchmark Brent crude traded at $20.64 a barrel Tuesday morning, over 19% lower.“Saudi Arabia and Russia have both won here, but it’s a very pyrrhic victory,” Dave Ernsberger, global head of commodities pricing at S&P Global Platts, told CNBC’s “Squawk Box Europe” on Tuesday. Riyadh and Moscow have long had U.S. shale output “in their sights,” Ernsberger continued, but “they need to look over their shoulder because Brent is not far behind, other crude benchmarks are not far behind, and the world is running out of storage.”
Here's The Next Problem: Where Do 100 Million Oil Barrels Get Delivered... And What Happens Next Month? - The entire financial world is watching in stunned amazement as the May WTI contract crashed as low as -$40, an unprecedented - until today - event, and one which is sparking frenzied speculation who will be oil's "Amaranth", the nat-gas trader which remains the best example of how futures-spread positions can go wrong. But sooner or later, investors will ask themselves the next question: where will roughly 100 million barrels of oil be delivered. That is roughly the equivalent of the outstanding May WTI open interest of some 109 thousand contracts. As Bloomberg's Mike McGlone writes, "the greater-than-normal level of open interest in May futures has no place to go but is likely to mark an extreme, if history is a guide." As of April 17, there were over 100,000 open positions in the May contract, well above the five-year average of about 60,000. What is more striking is that while the May position stops trading at 230pm tomorrow, April 21, only about 2,000 contracts are usually delivered. This time we are looking at 100,000 contracts, or about 100 million barrels of oil. The question, of course, is where does all this oil get delivered in a world where commercial storage is expected to run out as soon as next month? And let's say the May contract somehow finds enough space - this brings up the June contract, which is trading at around $21.51 because somehow traders believe that some magical solution will present itself in the next 4 weeks (spoiler alert: it won't). The open interest for June is 538K contract, or the equivalent of over half a billion barrels of. While much of this will be rolled up the contago-ing curve, this still means that the world is looking at hundreds of thousands of oil barrels to be delivered next month, and the question again: where will all this oil be delivered, and what happens to the price of WTI next month? And what about July... and August... And September? As prominent squawker Yogi Chan put it best, "Back of the fag box: Take all WTI contracts from May 2020 through to Dec 2021 (covers 93% of all OI). Average price weighted by open interest? $43.48/bbl" (editor's note: in the UK "fag" means cigarette)
June oil futures contract loses half its value as crude continues unprecedented sell-off - West Texas Intermediate crude futures for May delivery pared losses to trade in positive territory on Tuesday, one day after plunging below zero for the first time in history. The contract expires today, which means that thin trading volume has contributed to the wild price action. The massive selling gripping the oil market is now spreading to more futures contracts, worrying investors about the deep economic damage being done by the coronavirus shutdowns. The contract for June delivery, which is the more actively traded contract and therefore a better indication of how Wall Street views the price of oil, slipped 50% to $10.12 per barrel. Earlier it fell more than 60% to trade under $7 per barrel. The contract for July delivery fell roughly 27% to $19.04. The May contract stood at $10.21 per barrel after previously trading in negative territory, which means sellers would effectively pay buyers to take the oil off their hands. On Monday it fell below zero for the first time in history. However, as contracts approach expiration, trading volume is typically thin. The front part of the oil futures ‘curve,’ which is the May contract that expires today, was hit the hardest since it applies to fuel that’s set to be delivered while most of the country remains on lockdown thanks to the coronavirus. The only buyers of oil futures for that contract are entities that want to physically take the delivery like a refinery or an airline. But demand has dropped and storage tanks are filled, so they don’t need it. Futures contracts trade by month with expiration dates. Toward the end of their expiration, speculators usually trade out of the contract and then buyers who will accept physical delivery of the commodity remain. Meanwhile, in another bearish sign, international benchmark Brent crude traded 28% lower at $18.29 per barrel. Earlier in the session Brent fell to $18.10, its lowest level since Dec. 2001, before paring some of those losses.
Can Brent Crude Oil Follow WTI Into Negative Territory? You Bet - Monday’s plunge in U.S. crude futures into negative territory has raised an obvious question in the oil market: can the global Brent marker do the same? The answer is yes. ICE Futures Europe Ltd. confirmed on Tuesday night that it’s preparing various Brent prices for just that possibility if there’s demand to do so -- even if there’s still a long way to go before that happens, since June contracts are trading at about $20 a barrel. Beyond the mechanistic side of negative pricing there’s also market reality: the world’s storage sites are filling with crude fast -- the precise concern that caused West Texas Intermediate to turn negative. “In the North Sea, the ships operate as a pipeline, so are there enough vessels to enable the flow of oil?” said Jorge Montepeque, president of General Index and the man who helped shape the way oil prices are assessed globally when he was a boss at S&P Global Platts. “If there isn’t, you will need to pay ever increasing prices for the ships, which results in a lower and lower price of the oil.” That pressure on the tanker fleet is building right now. Well over 100 million barrels of oil is now being held in floating storage -- by another estimate more than twice that. According to Belgian vessel owner Euronav NV, one of the world’s largest, the dynamic is driving freight rates ever higher -- a trend the firm doesn’t see reversing any time soon. Places to keep supplies are diminishing globally. With on-land sites either completely booked up or filling fast, there’s still pressure on Brent, even if it’s more dispersed than for WTI. Barrels may keep flowing for longer than they should, too, because stopping and starting wells is no easy task. “If there is a technical reason why you cannot shut in the well, then the oil production that you have to sell will have to clear in the market, which can be a negative price,” Montepeque said. There’s another important difference between the two contracts. While the Brent futures contract is cash settled against the value of the Brent index price, the WTI contract is physically settled, meaning a trader must take delivery of barrels of oil at Cushing in Oklahoma, hundreds of miles from the coast. While this means that WTI can become pressured if there’s perceived strain on storage at the U.S. hub, there’s also a fast-building glut in the rest of the world. So Brent can, in theory at least, go negative. The real question is whether production will be scaled back sufficiently before that possibility becomes a probability.
Goldman Sees Global Oil Storage Full In 3-4 Weeks; Expects Another Oil Price Crash - While it may be tempting to argue that the worst is behind us for oil price given the historic collapse in WTI which crashed to negative $40 on Monday as holders of May WTI futures panicked to sell their holdings at any price - even paying the "buyer" for taking possession of the deliverable barrels - Goldman's chief commodity strategist Jeffrey Currie reminds us that it is important to remember that unlike bonds and stocks, "commodities are spot assets, not anticipatory assets and must clear current supply and demand, which still remain extremely out of balance in all markets." And since oil supply remains vastly greater than demand, we are merely in the eye of the hurricane at least until the June WTI maturity in one month, with Goldman expecting the market to test global storage capacity in the next 3-4 weeks - unlike WTI which was merely a Cushing event - which will likely create substantial volatility with more spikes to the downside until supply finally equals demand, as with nowhere to store the oil, supply has no other option but to be shut-in down in-line with the expected demand losses. Alternatively, we could see another "Monday massacre" with producers of oil willing to pay buyers to take physical possession right around the time all global capacity is full, unless of course US shale producers drastically cut output in the coming days, not weeks. That's the bad news: the good news is that slowly the market is rebalancing, and once production is well and truly shuttered, there is a potential for a violent price reversal - but remember, one can't just "price it in" as commodities have to reprice through the spot, not forward channel. As Currie notes, "we have now entered the inflection phase where the rebalancing has started, but this period could take 4-8 weeks to resolve before we can comfortably argue a bottom has been carved out." This timeline assumes that peak demand loss was likely last week with nascent restarts in Europe now underway, but as Goldman concedes substantial uncertainty still remains. In conclusion, "while acknowledging that a balanced market is in eyesight, more forward-looking assets like equities can look past the next several weeks and begin to price a recovery; however, commodities simply do not have that luxury."
Can Oil Prices Get Back To $100? Three weeks ago, on April 1, CNBC published a report titled “Oil prices could soon turn negative as the world runs out of places to store crude, analysts warn,“ which predicted exactly what is happening now. “Global oil storage could reach maximum capacity within weeks, energy analysts have told CNBC, as the coronavirus crisis dramatically reduces consumption and some of the world’s most powerful crude producers start to ramp up their output.” While the situation is totally unprecedented it’s impossible to say what will happen next for oil markets, some experts think that oil is poised for a major comeback. Even though oil prices are lower than they have ever been, “one energy fund thinks $100 a barrel is achievable,” reported the Midland Reporter-Telegram earlier this week. At the time of the report, oil was only at an 18-year low rather than an all-time low. The article intro continued: “But first, prices need to fall even further.” Well, they got their wish. As oil prices have tanked over the past two months, “Westbeck Capital Management’s Energy Opportunity Fund climbed 20.2 percent in March after declines in the first two months of the year, according to an investor letter. That puts the commodities-focused fund up 3.7 percent in the first quarter after U.S. oil futures cratered 66 percent -- their worst quarter ever,” reports the Midland Reporter Telegram. “The fund, which gained 40 percent last year shorting U.S. shale companies, has turned its attention to oil tanks filling up at various points around the world, particularly at the biggest U.S. hub in Cushing, Oklahoma. With too much oil and not enough places to put it, Cushing may reach storage limits by mid-May, a market dislocation that could portend the next leg of a price rout.” This all points to a huge comeback for oil prices. As the world rushes to scale back oil production, they are setting up a bull market for the future.
The Worst Is Yet To Come for Oil Prices - Dashing hopes for some oil producers who may have thought negative prices were a weird quirk, the June WTI contract fell sharply on Tuesday. During intraday trading June contracts collapsed by more than 45 percent, falling close to $11 per barrel. The selloff demonstrated that the ruinous supply glut is not going away, and that the meltdown for the May contract was not just a bizarre anomaly, but representative of an acute state of oversupply in North America.In fact, there could be a rerun of negative prices in a month’s time, according to several analysts. “We believe prices are likely to remain at basement levels in the short-term with further shut-ins forthcoming – expect late-May to bring similar price movements as the June contract rolls over,” Raymond James wrote in a note on Tuesday.The malaise bled over into Brent prices, which collapsed below $20 per barrel by midday Tuesday, down more than 25 percent.While forecasts have suggested that U.S. oil production could fall by 1 or 2 or 3 million barrels per day (mb/d) by the end of 2021, depending on who you ask, the lack of storage and collapsing prices means that shut ins could begin to mount very quickly. “[T]he physical reality of a still massively oversupplied oil market will likely exert downward pressure on the June WTI contract,” Goldman Sachs analysts wrote on Tuesday. “But with ultimately a finite amount of storage left to fill, production will soon need to fall sizeably to bring the market into balance, finally setting the stage for higher prices once demand gradually recovers.”“This inflection will play out in a matter of weeks, not months, with the market likely forced to balance before June,” Goldman analysts warned. In other words, the U.S. oil industry could lose several million barrels per day in the next few weeks in what Goldman analysts called a “violent rebalancing.” The crisis for the industry has entered a new phase, which will surely provoke more twists and turns. The Trump administration, flailing about, is trying to come up with ways to bailout the industry. On Monday, President Trump suggested that he would consider halting imports of oil from Saudi Arabia (“We’ll look at it”), while also reiterating his plan to fill up the strategic petroleum reserve with 75 million barrels of oil.Also on Tuesday, the Texas Railroad Commission punted on the idea of mandating production cuts. Two of the three commissioners were uneasy with the idea of voting on the proposal. Ryan Sitton, the one commissioner in favor of requiring a 20 percent cut in the state’s production, argued that not voting was itself a decision, allowing the market to mete out production cuts in a disorderly fashion. “I don’t believe that inaction on our part is acceptable,” Sitton said. Meanwhile, there are other ideas for government intervention. The oil and gas industry is lobbying the Federal Reserve to loosen its $600 billion lending facility to allow drillers to use funds to repay debt, according to Reuters.
"A Recipe For Disaster" - WTI Holds Huge Gains Despite Inventory Surge - More crude chaos overnight (with AsiaPac oil ETFs trading at "crazy premiums" and Asian oil futures tumbling) has been over-ruled this morning as long-squeezes have morphed into a short-squeeze after Trump ordered the US Navy to "shoot down and destroy any and all Iranian gunboats if they harass our ships at sea", sending June WTI soaring 40% to $16 before fading modestly into the official inventory data from DOE. “There’s no way you can predict [it] right now,” Michael Cuggino, portfolio manager at Pacific Heights Asset Management LLC, said on Bloomberg TV.“It’s virtually impossible until we have more visibility with respect to how to world comes out of the coronavirus on the other side.” Still, we suspect inventories will be a catalyst for the next leg in these chaotic paper oil markets... DOE
- Crude +15.022mm (+13.8mm exp)
- Cushing +4.776mm (+14mm exp)
- Gasoline +1.017mm (+4.4mm exp)
- Distillates +7.8765mm (+3.9mm exp)
This is the 13th weekly rise in crude inventories... Source: Bloomberg Crude stocks soared to their highest since May 2017 (this is the highest level of crude inventory for this time of year ever aside from 2017)... Source: Bloomberg Bloomberg Intelligence energy analyst Fernando Valle warns that the roll of WTI contracts showed that all remaining storage at Cushing is booked, even if not yet full... but demand has collapsed... Source: Bloomberg Refineries slowed to 67% of utilization last in the previous week, the lowest since 2008. As Bloomberg Intelligence senior energy analyst Vince Piazza notes, "U.S. crude storage capacity has about three months to go before it’s filled, as demand falls faster than production is declining." Following a collapse in US oil rig counts, US oil production is fading back to its lowest since June 2019...
OPEC daily basket price drops to 12.22 USD per barrel (Xinhua) -- The Organization of the Petroleum Exporting Countries (OPEC) daily basket price dropped to 12.22 U.S. dollars a barrel on Wednesday, compared with 14.63 dollars on Tuesday, according to OPEC Secretariat calculations released on Thursday. Also known as the OPEC reference basket of crude oil, the OPEC basket, a weighted average of oil prices from different OPEC members around the world, is used as an important benchmark for crude oil prices. It currently averages the oil prices of 13 countries, namely Algeria, Angola, the Republic of the Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates and Venezuela. Enditem
Oil Edges Higher on Slower Production in Wake of Sluggish Demand - Oil advanced as traders eye a production slowdown that has resulted from the coronavirus-led weaker demand environment. Futures in New York rose as much as 33% on Thursday. With crude trading below $20-a-barrel, U.S. production has declined rapidly, now at the lowest since last July. Operators in the U.S. have also started to shut in old wells and halt new drilling, actions that could reduce output by 20%. Plus, the number of new wells being brought online is forecast to plunge almost 90% by the end of the year, according to IHS Markit Ltd. “Cash market prices have recovered. There is a sense that the market is starting to clear itself,” said John Kilduff, a partner at hedge fund Again Capital LLC. The decline in production and rig count in the U.S. is “obviously supportive.” OPEC and its allies have also reacted to the low-price environment. The coalition agreed earlier this month to slash daily production by about 10 million barrels a day starting in May. Kuwait said it has already started cutting output, the first major producer in the Persian Gulf, the world’s most prolific oil-producing region, to announce that it’s pumping less oil ahead of schedule. Algeria also told OPEC its cuts would begin immediately. West Texas Intermediate crude for June delivery advanced $3.86 to $17.64 a barrel at 12:32 p.m. on the New York Mercantile Exchange. WTI’s June-July spread rose $1.88 to -$5.03 a barrel. Brent crude for June settlement climbed $1.93 to $22.30 a barrel on the ICE Futures Europe exchange. Still, the U.S. benchmark crude has plummeted about 70% so far this year as the coronavirus pandemic shutters economies and keeps drivers off the road. The World Bank says global commodities markets will face lasting disruption because of the outbreak. Oil markets are also having to grapple with a wave of volatility spurred by exchange-traded funds. The United States Oil Fund may roll more of its WTI contracts forward due to extraordinary market conditions, while at least two brokerages, including INTL FCStone Financial Inc., are limiting the ability of some clients to enter into new trades in the most active oil benchmarks. Even with production slowing, crude stockpiles in the U.S. are still at the highest level since May 2017, according to the Energy Information Administration. Inventories at the nation’s key storage hub in Cushing, Oklahoma, increased each week since early March and are inching closer to a maximum capacity of around 76 million barrels.
Oil Gains on Slower Production in Wake of Demand Drop -- Oil advanced as traders eye a production slowdown that has resulted from the coronavirus-led weaker demand environment.Futures gained 20% in New York on Thursday. With crude trading below $20-a-barrel, U.S. production has declined rapidly, now at the lowest since last July. Operators in the U.S. have also started to shut in old wells and halt new drilling, actions that could reduce output by 20%. Plus, the number of new wells being brought online is forecast to plunge almost 90% by the end of the year, according to IHS Markit Ltd.“Cash market prices have recovered. There is a sense that the market is starting to clear itself,” said John Kilduff, a partner at hedge fund Again Capital LLC. The decline in production and rig count in the U.S. is “obviously supportive.”OPEC and its allies have also reacted to the low-price environment. The coalition agreed earlier this month to slash daily production by about 10 million barrels a day starting in May. Iraq’s Oil Minister Thamir Ghadhban said oil prices will improve once the deal kicks off.Kuwait said it has already started cutting output, the first major producer in the Persian Gulf, the world’s most prolific oil-producing region, to announce that it’s pumping less oil ahead of schedule. Algeria also told OPEC its cuts would begin immediately. Prices:
- West Texas Intermediate crude for June delivery advanced $2.72 to settle at $16.50 a barrel on the New York Mercantile Exchange.
- WTI’s June-July spread rose $1.97 to settle at -$4.94 a barrel.
- Brent crude for June settlement climbed 96 cents to end the session at $21.33 a barrel on the ICE Futures Europe exchange.
Still, the U.S. benchmark crude has plummeted more than 70% so far this year as the coronavirus pandemic shutters economies and keeps drivers off the road. The World Bank says global commodities markets will face lasting disruption because of the outbreak. Oil markets are also having to grapple with a wave of volatility spurred by exchange-traded funds. The United States Oil Fund may roll more of its WTI contracts forward due to extraordinary market conditions, while at least two brokerages, including INTL FCStone Financial Inc., are limiting the ability of some clients to enter into new trades in the most active oil benchmarks.
Oil bounces after Trump uses the 'oldest Middle East oil trick in the book' to kickstart prices - Oil prices recovered on Thursday, after a bellicose Wednesday tweet from US President Donald Trump sparked fears about oil supply in the Middle East.US crude-oil prices rose 20% to $16.65 a barrel in early US morning time. Brentcrude oil, the global benchmark equivalent, advanced 8.6% to $22.16 a barrel.Earlier in the week, Brent crude dropped to a two-decade low and US oil fell intonegative territory for the first time in history.The rebound in oil prices followed a fresh prospect of US-Iran tension as President Trump said on Wednesday he instructed the US Navy to "shoot down and destroy" Iranian gunboats that "harass our ships at sea." Trump's tweet said: "I have instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea." "It is perhaps the oldest Middle East oil trick in the book: you want higher oil prices, threaten to start breaking things," analysts at Rabobank said in a morning note. Tensions in the Middle East can lead to crude oil price increases as that would indicate a potential disruption to oil shipments around the world and cause possible supply shortages.
Oil rises, but ends wild week lower as coronavirus slashes fuel demand - (Reuters) - Oil prices rose on Friday, bringing an end to another week of losses that featured the U.S. contract plunging to minus $40 a barrel, as global production cuts could not keep pace with the collapse in demand caused by the coronavirus pandemic. Oil trading was extremely volatile all week, in an extension of the selling that has dominated trading since early March as demand collapsed 30% due to the pandemic. While certain fundamental factors, such as a sharp fall in active drilling rigs in the United States, were nominally bullish for oil prices, the positive effects of those moves are months down the road. Brent futures LCOc1 rose 11 cents, or 0.5%, to settle at $21.44 a barrel, while U.S. West Texas Intermediate crude CLc1 rose 44 cents, or 2.7%, to close at $16.94. Oil futures marked their third straight week of losses, with Brent ending down 24% and WTI off around 7%. Traders expect demand to fall short of supply for months due to the economic disruption caused by the pandemic. Producers may not be slashing output quickly or deeply enough to buoy prices, especially when global economic output is expected to contract by 2% this year, worse than the financial crisis. “The efforts to curtail supply just struggle to even come close to matching coronavirus demand destruction,” John Kilduff, partner at hedge fund Again Capital LLC in New York, said. After trading near unchanged for most of the day, the benchmarks rebounded in the afternoon after energy services firm Baker Hughes Co (BKR.N) said producers in April cut the number of active U.S. oil rigs by the most in a month since 2015. In Canada, drillers slashed the number of oil and natural gas rigs to a record low. “The rig count was another stunner. These are meaningful cuts and they have come at a rapid pace,” Kilduff said. Storage is quickly filling worldwide, which could necessitate more production cuts, even after the Organization of the Petroleum Exporting Countries and allies including Russia agreed this month to cut output by 9.7 million barrels per day. “Despite the measures taken by OPEC, oil producers in various countries should be aware that they may be called to take more drastic measures,” Diamantino Azevedo, Angola’s resources and petroleum minister, told state news agency ANGOP on Friday. Angola is a member of OPEC. Russia plans to halve oil exports from its Baltic and Black Sea ports in May, according to the first loading schedule for crude shipments since it agreed to cut output. Still, onshore oil storage is currently filled to nearly 85% capacity, according to energy research firm Kpler.
Oil futures mark a third straight gain, but post a record 32% weekly drop - Oil futures on Friday finished higher for a third straight session, but U.S. prices posted a record weekly loss of more than 32%, as commodity investors attempted to take stock of a historic collapse in prices that cast a spotlight on problems of oversupply and dwindling storage in the energy complex. After the now-expired May Nymex contract on Monday fell into negative territory for the first time ever, meaning that sellers had to pay buyers to take crude off their hands, market participants have been struggling to manage the unprecedented volatility. ReadSinking oil demand, drop in oil prices put U.S. fracking activity on track for a record monthly decline: report “Any meaningful recovery in oil prices is unlikely to last after the utter chaos witnessed earlier this week,” said Lukman Otunuga, senior research analyst at FXTM. “Oil weakness is set to remain a major theme in Q2 given the overwhelming drop in demand, fears around slowing global growth and lack of storage space.” “At this point, anything and everything is on the cards for both WTI & Brent, and this sentiment will most likely be reflected in price action moving forward,” he told MarketWatch. June West Texas Intermediate crude CLM20, +1.41%, the U.S. benchmark grade, gained 44 cents, or 2.7%, to settle at $16.94 a barrel, but the contract traded as low as $15.64 in the overnight session. On Thursday, WTI surged nearly 20%. Gains on Friday marked a third straight advance for the international and U.S. grade oils—the longest such streak of gains since a similar stretch ended March 25. Despite those outsize gains, WTI still saw a 32.3% decline for the week, based on the June contract. That was the biggest weekly percentage loss on record, according to Dow Jones Market Data.
COLUMN-Is the WTI crude fiasco relevant to Asia? Not yet, but risks loom: Russell - (Reuters) - The unprecedented collapse in U.S. oil futures into negative territory is an event that has little direct relevance for the industry in Asia, but still holds vast significance for the world’s biggest crude-importing region. The immediate fallout from the dramatic plunge into negative pricing for the front-month West Texas Intermediate (WTI) futures was largely a result of the design of the contract, which requires physical delivery to the storage hub at Cushing, Oklahoma, that is already near full. The contract dropped to as low as minus $40.32 a barrel on April 20, the day prior to expiry, as investors unable to secure physical storage had to exit positions at any cost. The dramatic swings in U.S. oil prices in recent days has been viewed by Asia’s trading community as fascinating, but not really relevant given that the vast majority of crude traded in the region is priced off Brent futures, or a combination of the Dubai Mercantile Exchange’s Oman contract and Middle East assessments by price reporting agencies. While these benchmarks have dropped sharply, they are still fulfilling their price discovery functions, and it would be hard to argue that the market for crude in Asia is currently dysfunctional, even if prices are extremely low, and in the case of the DME contract, near the weakest since its 2007 launch. The DME contract is physically settled, but delivery is at a port and is therefore unlikely to suffer from the same constraints as the landlocked delivery point for WTI. But what the fiasco in WTI futures does show is that the crude market is capable of becoming disorderly and unruly under exceptional circumstances, and Asia’s traders would be wise to be cautious. For example, the deal to cut output by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, by 9.7 million barrels per day (bpd) has largely passed by Asia, with exporting countries still appearing to compete hard on winning or keeping market share. In the wake of the deal being agreed on April 12, Saudi Arabia’s state-controlled oil company released its official selling prices for May, which raised prices for the United States, kept them flat for Europe, but cut them for Asia. Saudi Aramco’s benchmark Arab Light grade was set at discount of $7.30 to the Oman/Dubai average for Asian refiners for May loading cargoes, a steeper discount than the $4.20 for April.
Video shows Russian fighter's 'unsafe' intercept of US Navy aircraft - For the second time in four days, a Russian fighter jet conducted an "unsafe" intercept of a US aircraft over the Mediterranean Sea, the US Navy said on Sunday. The Navy said in a press release that over roughly an hour and a half on Sunday, a Russian Su-35 fighter twice intercepted a US Navy P-8A Poseidon maritime patrol and reconnaissance aircraft operating in international airspace over the Mediterranean. While the first intercept was acceptable, the Navy considered the second "unsafe and unprofessional." During the risky intercept, the Russian fighter executed a "high-speed, high-powered maneuver that decreased aircraft separation to within 25 feet, directly in front of the P-8A, exposing the US aircraft to wake turbulence and jet exhaust," the Navy said. The P-8A descended to create space between it and the Russian fighter jet.The Navy accused the Russian pilot of "seriously jeopardizing the safety of flight of both aircraft."The service captured the incident on video. Sunday's intercept followed a similar incident on Wednesday, when a Russian Su-35 intercepted a P-8A over the Mediterranean, conducting "a high-speed, inverted maneuver, 25 ft. directly in front of the mission aircraft," the Navy said in a statement at the time.The Navy said the Russian aircraft's actions were "irresponsible" and accused Russia of putting "our pilots and crew at risk." The US is battling a serious coronavirus outbreak, but US adversaries continue to cause headaches for the military. On Wednesday, 11 Iranian vessels "conducted dangerous and harassing approaches" against US Navy and Coast Guard vessels operating in the Persian Gulf, repeatedly crossing the bows and sterns of the US ships and at one point coming within 10 yards of a US vessel, the Navy said.
Donald Trump Threatens to 'Shoot Down and Destroy' Iran Ships Amid Tensions in Persian Gulf -- President Donald Trump has instructed the U.S. military to use force against armed Iranian vessels that have recently engaged in tensions with the Navy's Fifth Fleet in the Persian Gulf. "I have instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea," Trump tweeted Wednesday. The tweet came one week after as many as 11 fast-attack craft of Iran's Revolutionary Guard appeared to approach and circle a group of U.S. warships including the USS Lewis B. Puller expeditionary mobile base vessel and Island-class USCGS patrol boat Maui as they transited the Persian Gulf. The Fifth Fleet accused the Revolutionary Guard of conducting "unsafe and unprofessional actions," while the elite Iranian force argued it was the U.S. Navy that was responsible for "illegal, unprofessional, dangerous and even adventurist behavior" both during the April 15 and in allegedly blocking its Shahid Siyavoshi ship in separate encounters a week before. Trump's tweet sparked anger among Iranian officials, especially as both Washington and Tehran battled the novel coronavirus disease known as COVID-19. "In the midst of a global coronavirus pandemic when all attentions worldwide is to combat this menace, the question is what the US military is doing in Persian Gulf waters, 7000 miles from home," Iranian mission to the United Nations spokesperson Alireza Miryousefi told Newsweek. "Iran has proven that it will not succumb to intimidation and threats, nor will it hesitate to defend its territory, in accordance with international law, from any and all aggressions."
Iran-US tensions rise on Trump threat, Iran satellite launch - (AP) — Tensions between Washington and Tehran flared anew Wednesday as Iran’s Revolutionary Guard conducted a space launch that could advance the country’s long-range missile program and President Donald Trump threatened to “shoot down and destroy” any Iranian gunboats that harass Navy ships. The launch was a first for the Guard, revealing what experts described as a secret military space program that could accelerate Iran’s ballistic missile development. American officials said it was too early to know whether an operational Iranian satellite was successfully placed into orbit. Trump’s top diplomat accused Iran of violating U.N. resolutions. After Iran’s announcement, Trump wrote on Twitter, without citing any specific incident, “I have instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea.” Last Wednesday, the U.S. Navy reported that 11 Guard naval gunboats had carried out “dangerous and harassing approaches” to American Navy and Coast Guard vessels in the Persian Gulf. The Americans used a variety of nonlethal means to warn off the Iranian boats, and they eventually left. Such encounters were relatively common several years ago, but have been rare recently. “We don’t want their gunboats surrounding our boats, and traveling around our boats and having a good time,” Trump told reporters Wednesday evening at the White House. “We’re not going to stand for it. ... They’ll shoot them out of the water.” Iran said the U.S. was to blame for last week’s incident. Conflict between Iran and the U.S. escalated after the Trump administration withdrew from the international nuclear deal between Tehran and world powers in 2018 and reimposed crippling sanctions. Last May, the U.S. sent thousands more troops, including long-range bombers and an aircraft carrier, to the Middle East in response to what it called a growing threat of Iranian attacks on U.S. interests in the region. The tensions spiked when U.S. forces killed Iran’s most powerful general, Qassem Soleimani, in January. Iran responded with a ballistic missile attack on a base in western Iraq where U.S. troops were present. No Americans were killed but more than 100 suffered mild traumatic brain injuries from the blasts.
Iran Vows to Destroy Any Threatening U.S. Forces in the Persian Gulf Following Trump Threat - The commander of Iran's Islamic Revolutionary Guards Corps (IRGC) has warned that his forces will respond to any perceived threat in the Persian Gulf, after President Donald Trump ordered U.S. forces to sink Iranian vessels harassing American ships. Hossein Salami, the IRGC commander-in-chief, said Thursday he had ordered his forces in the Gulf to destroy any vessel or combat unit that threatened the safety of Iranian ships, according to the Iranian Young Journalists Club news agency. Salami specifically referred to "any American terrorist force" posing a threat. The COVID-19 coronavirus pandemic has overshadowed continued tensions between the U.S. and Iran in recent months, but the animosity between Washington and Tehran has resurfaced in recent days. Last week, as many as 11 fast-attack IRGC ships encircled a group of U.S. warships in the Gulf. The U.S. Fifth Fleet said the move was "unsafe and unprofessional," while the IRGC said the American ships were engaged in "illegal, unprofessional, dangerous and even adventurist behavior" in the area. Then on Wednesday, Iran successfully launched a military satellite into orbit for the first time. The successful launch could have implications for the country's intercontinental ballistic missile program, which is one of the grievances that prompted Trump to withdraw from the Joint Comprehensive Plan of Action in 2018. Iran has denied that the satellite launch is connected to its ICBM program. Hours after the launch, Trump said he had ordered military units in the Gulf region to respond aggressively to any perceived Iranian threat. "I have instructed the United States Navy to if they harass our ships at sea," Trump tweeted.
ISIS Has Nothing Over Saudi Arabia - Kingdom Reaches 800 Beheadings Under Salman - Another grim milestone was reached this week, but not on the COVID-19 front. Human rights monitors have recorded that Saudi Arabia has carried out its 800th execution since King Salman bin Abdulaziz (and by extension MbS) began his rule five years ago — most being in the form of the kingdom's 'favored' beheadings. The British nonprofit Reprieve said the kingdom's rate of execution in Saudi Arabia has doubled since 2015 when King Salman took over following the death of his half-brother, King Abdullah. Of course, as Salman's health was reportedly increasingly fragile from the start of his rule, it's widely believed crown prince Mohammed bin Salman (MbS) has remained the true power and day-to-day decision maker. MbS was widely hailed as a 'reformer' - among other things promising to greatly reduce the number of annual executions, which include the ghastly methods of beheading and crucifixion. But this is nowhere near the reality. So much for empty talk of 'reform', 'modernization' and 'progress' - as Middle East Eye reports of Reprieve's findings: By comparison, Saudi authorities executed 423 people between 2009 and 2014.Currently, there are at least 13 juvenile defendants on death row - including Ali al-Nimr, Dawood al-Marhoon and Abdullah al-Zaher - who are “at imminent risk of execution”, Reprieve and the European Saudi Organisation for Human Rights said.Saudi Arabia executed six young men last year who were children at the time of their alleged offences, in a mass execution of 37 people. Riyadh's concerns no doubt now lie far elsewhere regarding the prior MbS rhetoric of reform, given the kingdom is now scrambling to bring oil prices back up after the historic global price crash this week. Reform vs. Reality — public beheadings as a form of political suppression: Apparently 'Chop Chop Square' was busy as usual even amid the more pressing crisis of the accelerating oil glut. As of only last week, Amnesty International recorded 789 executions under the king, which only days later grew to 800.
Middle East Not Even Worth Invading Now Oil Is Worthless - US MILITARY generals and private contractors were said to be inconsolable at the news that international and as well as home produced oil is now worth as little as minus $36 a barrel, scuppering any motivation for haphazardly pointing at a random Middle Eastern nation on a map and saying ‘invasion time’.Crude oil, once the most sought after commodity in the world is now, by the barrel load, worth less than non-brand toilet roll, a price drop which has left many war fans devastated.“Aw man, I hate this pandemic,” remarked a sulking Republican politician who had his heart set on a decades long war in Iran or some such oil plenty country that could create the sort of needless casualty numbers that inspired him to become a war mongering politician in the first place.With the price collapse rendering oil less than worthless, many are contemplating if Middle Eastern countries and their citizens are even worth destroying.“I’m just sad for all the locals won’t get jobs rebuilding the schools we arbitrarily drone bombed into oblivion,” confirmed one private contractor, who feared proxy wars would actually have to take place on home soil. “What do you expect me to do now, go to the Middle East as a civilian tourist and experience the differing cultures, languages and history, and leave with just a fridge magnet having not committed a massacre? Are you fucking nuts?” confirmed one military man with an itchy trigger finger.
US Ramps Up War in Somalia, Killing More Civilians --While much of the world tries to fight a global pandemic that has already killed thousands, the U.S. military has been secretly stepping up its war in Somalia, killing civilians in the process.Soon after President Donald Trump took office in 2017, U.S. Africa Command (AFRICOM) began ramping up its air war. Since then, it’s only increased its tempo. In the first few months of 2020, the U.S. has already conducted at least 39 airstrikes in Somalia. To put that in perspective, AFRICOM carried out 63 air strikes during the entirety of 2019.The U.S. says these airstrikes are to assist the government of Somalia in its war against the non-state armed group al-Shabaab and “increase the security of the Somali people as these terrorists indiscriminately attack and extort innocent civilians.” Yet the increase in strike activity has not fulfilled its purpose on the ground. Al-Shabaab was driven out of the Somali capital, Mogadishu, by a multinational force led by the African Union Mission to Somalia, or AMISOM, in 2011, but still controls vast swaths of the Somali countryside. Even if al-Shabaab was pushed out of this territory, the government of Somalia appears to be incapable of securing and governing those parts of the country. On top of that, al-Shabaab’s lethal attacks on civilians in Somalia have only increased even as the U.S. ramps up its bombing.In the meantime, the U.S. continues to kill a growing number of civilians with these airstrikes, without acknowledgement or accountability. A year ago, Amnesty International — where I work — reported the deaths of 14 civilians in just five air strikes that it was able to investigate. The U.S., at that point, had acknowledged 131 lethal air strikes in Somalia since early 2017, but claimed that all of those killed were “terrorists.” AFRICOM says it investigates claims of civilian casualties, but it does not contact witnesses, family or community members to determine who the victims were. In the past year, the U.S. has acknowledged civilian deaths occurred in two cases, but even then, it never contacted the family or offered them assistance.
North Korean leader Kim Jong Un recently had surgery, could be incapacitated, US officials say - U.S. intelligence indicates that North Korean dictator Kim Jong Un recently had cardiovascular surgery, NBC News reported Tuesday, citing American officials. The intelligence also suggests that Kim could be incapacitated, NBC added, citing some of those officials. The update came after the South Korean currency, the won, took a hit following an unconfirmed report that Kim was seriously ill. Kim has been out of public view for several days, according to officials cited by NBC. The new report also seemed to contradict what South Korea’s presidential office had told NBC News. “We confirm that Chairman Kim Jong Un is currently touring provincial areas with his close aides and we do not detect evidences to support speculation about his ill health,” South Korea’s presidential office told NBC News in a statement. “Even North Korea’s Worker’s Party, military or cabinet aren’t showing any special movements such as emergency decree. We believe that Chairman Kim is active as normal as he has been,” the office said. Robert O’Brien, President Donald Trump’s national security advisor, said in a Fox News interview on Tuesday that the United States is monitoring Kim’s status. The White House and the Pentagon did not immediately respond to CNBC’s request for comment.
Kim Jong Un in ‘vegetative state,’ Japanese media report says - North Korean dictator Kim Jong Un is in a “vegetative state” after he underwent heart surgery earlier this month, a Japanese magazine says. The weekly Shukan Gendai reported Friday that a Chinese medic sent to North Korea as part of a team to treat Kim believed a delay in a simple procedure left the leader severely ill, Reuters reported. North Korean media hasn’t mentioned Kim’s health or whereabouts, even though reports by other media have sparked international speculation about his well-being. The Chinese expert told the magazine that Kim clutched his chest and fell to the ground on a visit to the countryside earlier this month. A doctor accompanying Kim performed CPR and took him to a nearby hospital. Kim, believed to be 36, needed a stent procedure, which calls for placing a tube into a congested blood vessel to allow blood to keep flowing to the heart, according to Shukan Gendai. The hashtag #KimJongUndead was trending on Twitter but without any proof of the leader’s death.
UN: Acute Food Shortages Worldwide May Double Due to COVID-19 -A stark new assessment from the UN's World Food Program (WFP) found that the economic implications from the economic downturns due to the coronavirus crisis might raise the number of people facing acute foodshortages to 265 million, according to Reuters. That's nearly twice as many as were already suffering from acute hunger.The WFP experts warned that swift action is required to provide food and humanitarian relief to the most at-risk areas of the planet before more than a quarter of a billion people are at risk of starving, as The Guardianreported."COVID-19 is potentially catastrophic for millions who are already hanging by a thread," said Dr. Arif Husain, chief economist at the World Food Program, as The Guardian reported."It is a hammer blow for millions more who can only eat if they earn a wage. Lockdowns and global economic recession have already decimated their nest eggs. It only takes one more shock – like COVID-19 – to push them over the edge. We must collectively act now to mitigate the impact of this global catastrophe."The surge in food shortages is due to precipitous drops in tourism, as well as less money being sent to poorer regions, and travel and other restrictions that are driving economic engines to a halt, as Reuters reported."We all need to come together to deal with this because if we don't the cost will be too high — the global cost will be too high: many lost lives and many, many more lost livelihoods," Husain told reporters at a virtual briefing in Geneva, Switzerland, according to Reuters.The report warned that, in some of the poorest countries around the globe, attempts to save people from COVID-19 may be in vain if it means watching people die from hunger, according to the Global Report on Food Crises published on Tuesday by the UN Food and Agriculture Organization, the World Food Program and 14 other organizations.
Bank of Japan to Debate Unlimited Bond Buys, Nikkei Reports - The Bank of Japan will discuss abandoning its annual 80 trillion yen ($742 billion) annual purchase target for Japanese government bonds at its monetary policy meeting Monday and replacing it with the ability to buy an unlimited amount of bonds, the Nikkei reported.
- Nikkei report doesn’t cite anyone
- BOJ is set to double its purchase targets for CP and corporate bonds, and is likely to keep the 10-year JGB yield target at around 0% and maintain the negative rate at -0.1%
- The central bank is set to hold its next meeting on April 27 from 9 a.m. local time, having switched to a one-day format due to the spread of the coronavirus
- NOTE: The bank has kept its reference to the 80 trillion yen purchase target, pledging to “conduct purchases in a flexible manner so that their amount outstanding will increase at an annual pace of about 80 trillion yen,” even though actual purchases have fallen substantially below that target in recent years
When $8 Trillion in Global Fiscal Stimulus Still Isn’t Enough - As governments dedicate more than $8 trillion to fight the coronavirus pandemic, a further widening in the gap between rich and poor countries threatens to exacerbate the global economy’s pain. Wealthy nations have delved deep to cushion the blow. For instance, Germany and Italy have each allocated more than 30% of gross domestic product to direct spending, bank guarantees, and loan and equity injections, for a combined $1.84 trillion in aid, figures from the International Monetary Fund show. Yet the countries IMF analysts say they’re most concerned about have only been able to trickle out support: Many African and Latin American economies have failed to reach even a few billion dollars in fiscal aid, according to IMF data and reporting from more than 60 countries collated by Bloomberg News. “Governments worldwide are unleashing fiscal support measures, but not all fiscal packages are the same,” said Chua Hak Bin, a senior economist at Maybank Kim Eng Research Pte. in Singapore. While “fiscal bazookas are the norm in the more advanced economies,” emerging-market governments “don’t have that kind of ammunition and fiscal space. Their fiscal packages are more water pistols than bazookas.” IMF Chief Economist Gita Gopinath has repeatedly voiced concern that developing nations have less policy space and less sophisticated infrastructure to manage the virus outbreaks taking hold in their countries. Much of the global fiscal tally of more than $8 trillion consists of bank guarantees in developed nations -- France and Spain have allocated more than $300 billion and $100 billion respectively for this kind of support, for example. Total virus-relief spending in the U.S. stands in excess of $2.3 trillion. South Africa, the continent’s only member of the Group of 20, has managed to boost its support to about $26 billion, yet many of its neighbors are far more strapped. Tracking fiscal support across the world isn’t a straightforward exercise, making global comparisons difficult. Some countries like Russia haven’t yet published official figures for aid, while others like Mexico provide too few details to estimate a support package. For Bloomberg’s collection of data, no central bank funding was considered. Fiscal support generally fell into three categories: direct aid for medical response to the virus; consumer support, including cash handouts; and funds for businesses, including tax breaks, loan support, bank guarantees, and wage subsidies. In many cases, governments have reallocated spending that was already budgeted, while also adding new measures.
European Central Bank to Accept Some Junk-Rated Bonds as Loan Collateral - The European Central Bank said it would accept some junk-rated bonds as collateral for its loans in its latest move to ensure eurozone banks can access central bank cash during the coronavirus pandemic. The decision, announced Wednesday, means banks could continue to use government bonds of Italy or Spain as collateral for ECB loans, even if those countries’ credit ratings were to be downgraded. To qualify as collateral, the bonds must have been rated as investment grade on April 7, the ECB said. The bank will also demand “appropriate haircuts,” and the changes will remain in place until September 2021. The ECB said earlier in April that it would start accepting a broader range of collateral at its loan operations including Greek government debt, and would allow banks to borrow more money against the same amount of collateral.
Euro zone business activity ground to a halt in April: PMI - (Reuters) - Economic activity in the euro zone all but ground to a halt this month as the new coronavirus sweeping across the world forced governments to impose lockdowns and firms to down tools and shut their businesses, a survey showed on Thursday. The coronavirus has infected more than 2.57 million people globally and killed over 178,000, and with citizens told to stay at home economic activity has plummeted. IHS Markit’s Flash Composite Purchasing Managers’ Index (PMI), seen as a good gauge of economic health, sank to 13.5, by far its lowest reading since the survey began in mid-1998 and considerably below all forecasts in a Reuters poll. Even the most pessimistic contributor to the poll had predicted a reading of 18.0. As countries began to shut down last month the index staged its biggest one-month fall on record in March, hurtling below the 50 mark that separates growth from contraction to 29.7. “April saw unprecedented damage to the euro zone economy amid virus lockdown measures coupled with slumping global demand and shortages of both staff and inputs,” said Chris Williamson, chief business economist at IHS Markit. “The ferocity of the slump has also surpassed that thought imaginable by most economists.” Williamson said the PMI was consistent with the economy contracting 7.5% this quarter. A Reuters poll published on Wednesday had a 9.6% contraction pencilled in. Demand all but dried up this month, headcount was reduced at a record pace and firms cut prices at one of the steepest rates since the survey began. Unsurprisingly therefore, optimism was also at a survey low. The future output sub-index, which almost halved last month, was 34.5. With restaurants, bars and other leisure activities shuttered, holidays cancelled and travel restricted the situation in the bloc’s dominant services industry was dire. The flash services PMI sank to a new record low of 11.7 from 26.4.
Ryanair Announces It Won't Fly Again If “Idiotic” Rules Eliminating Middle Seats Are Enforced -Ryanair CEO Michael O’Leary, said the planes of the discount Irish carrier won’t return to the skies if the airline is forced to leave the middle seat empty to comply with “idiotic” in-flight social distancing rules. The boss of the no-frills carrier, which has thrived by packing its flights as full as possible with cattle passengers lured by low prices, has previously said that blocking out the space in between seats is "nonsense" that would have no beneficial effect, according to the Guardian.O'Leary doubled down on the comments on Wednesday, saying that if governments insisted on social distancing measures, then Ryanair’s business model would be in tatters and the carrier would not fly. The CEO said that Ryanair had told the Irish government that if it imposes the restriction, then “either the government pays for the middle seat or we won’t fly”.The Dublin-based carrier’s business model relies on flying as frequently as possible, carrying as many people as possible, and stripping out costs and running an extremely high “load factor”, a polite way of saying with planes full of passengers. “We can’t make money on 66% load factors,” he said. “Even if you do that, the middle seat doesn’t deliver any social distancing, so it’s kind of an idiotic idea that doesn’t achieve anything anyway,” he added, in an interview with the Financial Times. Commenting on this, Rabo's Michael Every correctly notes that proper, 2-meter social distancing logic would require not the middle seat being empty, but 3-4 people per row, and two rows empty between each occupied one. The problem with this is that an economy class ticket would "surely be closer to business class fares – in which case the potential number of people willing and able to fly is going to be even lower than projected (an exponential/fat tail effect where less means less, just as more can mean more)."
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