Get ready for even bigger rate hikes from the Fed - The jobs market is still healthy and paychecks are growing at a solid rate — although not fast enough to make up for surging prices on just about everything. That means that the Federal Reserve is increasingly certain to raise interest rates in May by a half-point to halt inflation in its tracks.Traders are pricing in a more than 75% chance that the Fed will lift its key short-term rate from its current range of 0.25% to 0.5% up to 0.75% to 1% when the central bank wraps up its next meeting on May 4. A half-point rate hike is highly unusual. Although the Fed has often cut rates by that amount to stimulate the economy, it is exceedingly rare for the Fed to raise rates so aggressively. The Fed usually prefers gradual quarter-point hikes so it can slow inflation without raising the risk of a slump in growth or a recession.In fact, the last time the Fed raised rates by a half-pointwas May 2000, right as the dot-com/tech bubble was peaking. Prior to that, the Fed hadn't raised rates that drastically since February 1995.Friday's solid jobs report will spur Fed officials to act more urgently at their May meeting, said Joseph Brusuelas, chief economist with RSM US, in a report Friday.Others argue that the Fed must continue its aggressive stance even beyond May.Economists at Nomura said in a report Friday that they expect paychecks to continue to grow strongly and an unemployment rate of 3.3% by the end of 2022. For those reasons, the Nomura team is predicting half-point hikes in May, June and July.Some experts wonder if that many big rate hikes would be overkill. After all, higher interest rates won't solve the problem of spiking oil prices due to geopolitical concerns or the lingering effects of the pandemic, which are leading to supply constraints and higher prices."The Fed can't do anything about Russia invading Ukraine or China's Covid policy," said Megan Greene, chief economist with the Kroll Institute. "I'm concerned the Fed will send the economy into recession."Greene added that the market needs to recognize that there are multiple factors weighing on the market and the US economy. Any current forecasts for rate hikes could change multiple times over the next few months.She also dismissed mounting worries about how theyield curve has inverted, a condition where short-term rates rise above the level of long-term rates. The yield curve for 2-year and 10-year Treasury notes inverted several times this week, but rates for 3-month Treasury notes are still well above 10-year yields.Greene said people would be better off looking at the unemployment rate. Until that starts to steadily climb, the Fed may be better off not raising rates too sharply. Higher rates could actually push the unemployment rate higher."It's hard to believe that the Fed can hike rates six more times this year and that will not have an impact on employment," she said. "I don't think the Fed will be able to raise rates as aggressively as people expect. The Fed may have to back off. There is so much uncertainty."
Fed nominee Cook clears Senate hurdle, setting stage for confirmation -— Lisa Cook’s nomination for Federal Reserve Board governor cleared a key procedural hurdle in the Senate on Tuesday, resolving a deadlocked committee vote earlier in March.Cook, a professor of economics at Michigan State University, will advance to a Senate floor vote alongside Federal Reserve Chair Pro Tempore Jerome Powell, current Fed Gov. Lael Brainard and Philip Jefferson, a dean and economics professor at Davidson College. Three of the White House’s Fed nominees — Powell, Brainard and Jefferson — advanced through the Senate Banking Committee on March 16, while Cook received unanimous Republican opposition, leaving her one vote shy of advancement. Under current Senate rules, nominees deadlocked in committee votes must be discharged by the broader Senate before receiving a floor vote.
US Dollar’s Status as Global Reserve Currency drops to 26-Year Low: Slowly but Surely? - By Wolf Richter -- With inflation raging in the US following the Fed’s $5-trillion money-printing orgy and interest-rate repression, the question constantly arises: When will the rest of the world throw in the towel on the dollar as the dominant global reserve currency? If this were to happen all of a sudden, it would spell chaos. But it is happening little by little. The global share of US-dollar-denominated foreign exchange reserves fell by 40 basis points from Q3 to 58.8% in Q4, setting a new 26-year low, edging out the low in Q4 2020, according to the IMF’s COFER data released at the end of March. Dollar-denominated foreign exchange reserves consist of Treasury securities, US corporate bonds, US mortgage-backed securities, and other USD-denominated assets that are held by foreign central banks and other foreign official institutions. Over the past 20 years, since 2001 – just before the official arrival of euro banknotes and coins – the dollar’s share has dropped by 12.7 percentage points, from 71.5% then to 58.8% now. Global foreign exchange reserves do not include the assets held by a central bank in its own currency, such as the Fed’s own holdings of Treasury securities and MBS, the ECB’s holdings of euro-denominated assets, or the Bank of Japan’s holdings of Japanese Government Bonds and other yen-denominated assets. Back in 1977, the prior period when inflation was raging, the dollar’s share was still 85%. But on fears that the Fed would let inflation rage out of control, dollar assets got dumped by central banks, the dollar’s share of global reserve currencies collapsed, hitting bottom a decade after Fed chairman Volcker had started the successful inflation crackdown. These relationships are slow moving. It took years of inflation before the dollar assets got dumped, and then it took years after inflation was essentially being brought back under control, before dollar-denominated assets were being picked up again. When the dollar’s share of global reserve currencies drops, the share of other currencies increases, and the dollar becomes less dominant, as other central banks are gradually diversifying away from US dollar holdings (year-end data): The values of foreign exchange reserves denominated in currencies other than dollars are translated into dollar figures. For example, the value of Japan’s holdings of euro-denominated assets is expressed in dollars at the current EUR-USD exchange rate to make them comparable to other holdings. But the exchange rate between the USD and other currencies impacts the magnitude of the non-USD assets. In other words, the magnitude of euro-denominated assets held by the Bank of Japan moves with both: a change in euro-assets that the BoJ holds, and the exchange rate of the euro to the dollar. But the exchange rates of the major currency pairs, while volatile from month to month, have been stable over the past 23 years, very well managed, as shown by the Dollar Index (DXY), which tracks the dollar against the euro, yen, British pound, Canadian dollar, Swedish krona, and Swiss franc.
Yield curve briefly inverted for first time since 2019 --The market’s most closely watched part of the yield curve inverted very briefly on Tuesday. At 1:33 p.m. ET on Tuesday afternoon, Bloomberg data showed the yield on the 10-year U.S. Treasury note briefly dipping below the yield on the 2-year U.S. Treasury. The inversion lasted only a few seconds, and by 3:00 p.m. ET (the settlement time for U.S. government bond futures) the curve remained un-inverted with about 0.05% separating the two securities' yields. Over the last half-century the yield curve inversion has been a recession indicator. But others say the Federal Reserve’s unprecedented firefight with high inflation would make a yield curve inversion different from those of decades’ past. This phenomenon has a strong track record of predicting a recession; each of the last eight recessions (dating back to 1969) were preceded by the yield on the 10-year falling below the 2-year. The “yield curve” maps out U.S. Treasuries of various durations, and usually shows longer-dated Treasuries (like those with 10-year or 30-year maturities) having higher yields than shorter-dated Treasuries (i.e. 3-month or 2-year maturities). The curve “inverts” when yields on shorter-dated Treasuries rise above those of longer-dated ones. Points of the curve have already inverted in recent weeks (the 3-year and the 5-year on March 18, the 5-year and the 30-year on March 28). But the 2-year and 10-year points are often looked to because they are among the most commonly traded durations. An inversion in these particular points has correctly predicted a recession with a lead time of between eight months and two years in each of the last eight recessions.
Bond market is flashing a warning sign that a recession may be coming --The bond market is flashing a warning sign for the U.S. economy. That harbinger is called an "inverted yield curve." These inversions in the bond market have been reliable predictors of past recessions. Part of the yield curve inverted on Monday. An economic downturn isn't assured, though. Some economists think the warning is a false alarm. When the bond market is healthy, yields are higher for bonds with a longer time to maturity. For example, a 10-year Treasury bond would carry a higher yield (or, interest rate) than a one-year Treasury. In other words, short-term yields are lower than long-term yields. Investors expect a bigger reward for lending their money for a longer time, giving the "yield curve" an upward sloping shape. When the curve inverts, short-term bonds pay a higher yield than long-term ones. It's a distortion in the market. "Generally, it should be the opposite," said Stephanie Roth, a senior markets economist for global wealth management at J.P. Morgan. Why is it a warning sign? An inversion in the yield curve doesn't trigger a recession. Instead, it suggests bond investors are worried about the economy's long-term prospects, Roth said. Investors pay most attention to the spread between the two-year U.S. Treasury and the 10-year U.S. Treasury. That curve isn't yet flashing a warning sign. However, the five-year and 30-year U.S. Treasury yields inverted on Monday, the first time since 2006, before the Great Recession. "It doesn't mean a recession is coming," Roth said of the inversions. "It just reflects concerns about the future economy." The two- and 10-year Treasury yield curves inverted before the last seven recessions since 1970, according to Roth. However, data suggest a recession is unlikely to be imminent if one materializes. It took 17 months after the bond-market inversion for a downturn to start, on average. (Roth's analysis treats the double-dip recession in the 1980s as one downturn.) There was one false alarm, in 1998, she said. There was also an inversion right before the Covid-19 pandemic, but Roth said it can arguably also be considered a false alarm, since bond investors couldn't have predicted that health crisis. "It doesn't work all of the time, but it has a high success rate for portending a future recession,"
Q4 GDP Growth Revised down to 6.9% Annual Rate - From the BEA: Gross Domestic Product (Third Estimate), Corporate Profits, and GDP by Industry, Fourth Quarter and Year 2021 Real gross domestic product (GDP) increased at an annual rate of 6.9 percent in the fourth quarter of 2021, according to the "third" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.3 percent. The "third" estimate of GDP released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 7.0 percent. The downward revision primarily reflected downward revisions to personal consumption expenditures (PCE) and exports that were partly offset by an upward revision to private inventory investment. Here is a Comparison of Third and Second Estimates. PCE growth was revised down from 3.1% to 2.5%. Residential investment was revised up from 1.0% to 2.2%.
Q4 GDP Third Estimate: Real GDP at 6.89% --The Third Estimate for Q4 GDP, to one decimal, came in at 6.9% (6.89% to two decimal places), an increase from 2.3% (2.30% to two decimal places) for the Q3 Third Estimate. Investing.com had a consensus of 7.1%. Here is the slightly abbreviated opening text from the Bureau of Economic Analysis news release: Real gross domestic product (GDP) increased at an annual rate of 6.9 percent in the fourth quarter of 2021 (table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.3 percent. The "third" estimate of GDP released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 7.0 percent. The downward revision primarily reflected downward revisions to personal consumption expenditures (PCE) and exports that were partly offset by an upward revision to private inventory investment (refer to "Updates to GDP"). [Full Release] Here is a look at Quarterly GDP since Q2 1947. Prior to 1947, GDP was an annual calculation. To be more precise, the chart shows is the annualized percentage change from the preceding quarter in Real (inflation-adjusted) Gross Domestic Product. We've also included recessions, which are determined by the National Bureau of Economic Research (NBER). Also illustrated are the 3.20% average (arithmetic mean) and the 10-year moving average, currently at 2.43%.
An Inside Look at the GDP Q4 Third Estimate - The chart below is a way to visualize real GDP change since 2007 and uses a stacked column chart to segment the four major components of GDP with a dashed line overlay to show the sum of the four, which is real GDP itself. Here is the latest overview from the Bureau of Labor Statistics: Real gross domestic product (GDP) increased at an annual rate of 6.9 percent in the fourth quarter of 2021 (table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.3 percent. The "third" estimate of GDP released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the increase in real GDP was 7.0 percent. The downward revision primarily reflected downward revisions to personal consumption expenditures (PCE) and exports that were partly offset by an upward revision to private inventory investment (refer to "Updates to GDP"). Let's take a closer look at the contributions of GDP of the four major subcomponents. The data source for this chart is the Excel file accompanying the BEA's latest GDP news release. Specifically, it uses Table 2: Contributions to Percent Change in Real Gross Domestic Product. Note: The conventional practice is to round GDP to one decimal place, the latest at 6.9%. Here is a chart of the latest estimates. Over the time frame of this chart, the Personal Consumption Expenditures (PCE) component has shown the most consistent correlation with real GDP itself. When PCE has been positive, GDP has usually been positive, and vice versa. In the latest GDP data, the contribution of PCE came in at 1.8 of the 6.9 real GDP, an increase from the previous quarter. Net Exports were negative in Q4. Government Consumption Expenditures came in as a negative contributor. As for the role of Personal Consumption Expenditures (PCE) in GDP and how it has increased over time, here is a snapshot of the PCE-to-GDP ratio since the inception of quarterly GDP in 1947. To one decimal place, the latest ratio of 69.8% is below its record high. Let's close with a look at the inverse behavior of three of the GPDI components during recessions. PCE and especially GC generally increase as a percent of GDP whereas GPDI declines. Note the three with different vertical axes (Personal Consumption Expenditures on the left, Gross Private Domestic Investment and Government Consumption on the right) to highlight the frequent inverse correlations.
Six High Frequency Indicators for the Economy - These indicators are mostly for travel and entertainment. It is interesting to watch these sectors recover as the pandemic subsides. The TSA is providing daily travel numbers. This data is as of March 27th.This data shows the 7-day average of daily total traveler throughput from the TSA for 2019 (Light Blue), 2020 (Black), 2021 (Blue) and 2022 (Red).. The 7-day average is down 10.6% from the same day in 2019 (89.4% of 2019). (Dashed line) Air travel was picking up over the last month. The second graph shows the 7-day average of the year-over-year change in diners as tabulated by OpenTable for the US and several selected cities. This data is updated through March 26, 2022. This data is "a sample of restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins." Dining was mostly moving sideways but declined during the winter wave of COVID and is now increasing. The 7-day average for the US is down 4% compared to 2019. This data shows domestic box office for each week and the median for the years 2016 through 2019 (dashed light blue). Black is 2020, Blue is 2021 and Red is 2022. The data is from BoxOfficeMojo through March 24th. Movie ticket sales were at $102 million last week, down about 46% from the median for the week. This graph shows the seasonal pattern for the hotel occupancy rate using the four-week average. The red line is for 2022, black is 2020, blue is the median, and dashed light blue is for 2021. This data is through March 19th. The occupancy rate was down 3.7% compared to the same week in 2019. The 4-week average of the occupancy rate is close to the median rate for the previous 20 years (Blue). This graph is from Apple mobility: "This data is generated by counting the number of requests made to Apple Maps for directions in select countries/regions, sub-regions, and cities." This data is through March 26th for the United States and several selected cities. According to the Apple data directions requests, public transit in the 7-day average for the US is at 126% of the January 2020 level. Here is some interesting data on New York subway usage. This graph shows how much MTA traffic has recovered in each borough. Manhattan is at about 38% of normal. This data is through Friday, March 25th.
“Dollar Hegemony Ended Last Wednesday”: Michael Hudson Interviewed by Margaret Flowers on Clearing the Fog – Hudson: Dollar hegemony seems to be the position that has just ended as of this week very abruptly. Dollar hegemony was when America’s war in Vietnam and the military spending of the 1960s and 70s drove the United States off gold. The entire US balance of payments deficit was military spending, and it began to run down the gold supply. So, in 1971, President Nixon took the dollar off gold. Well, everybody thought America has been controlling the world economy since World War I by having most of the gold and by being the creditor to the world. And they thought what is going to happen now that the United States is running a deficit, instead of being a creditor.Well, what happened was that, as I’ve described in Super Imperialism, when the United States went off gold, foreign central banks didn’t have anything to buy with their dollars that were flowing into their countries – again, mainly from the US military deficit but also from the investment takeovers. And they found that these dollars came in, the only thing they could do would be to recycle them to the United States. And what do central banks hold? They don’t buy property, usually, back then they didn’t. They buy Treasury bonds. And so, the United States would be spending dollars abroad and foreign central banks didn’t really have anything to do but send it right back to buy treasury bonds to finance not only the balance of payments deficit, but also the budget deficit that was largely military in character. So, dollar hegemony was the system where foreign central banks keep their monetary and international savings reserves in dollars and the dollars are used to finance the military bases around the world, almost eight hundred military bases surrounding them. So, basically central banks have to keep their savings by weaponizing them, by militarizing them, by lending them to the United States, to keep spending abroad.This gave America a free ride. Imagine if you went to the grocery store and you just paid by giving them an IOU. And then the next week you want to buy more groceries and you give them another IOU. And they say, wait a minute, you have an IOU before and you say, well just use the IOU to pay the milk company that delivers, or the farmers that deliver. You can use this as your money and just you’ll as a customer, keep writing IOU’s and you never have to pay anything because your IOU is other people’s money. Well, that’s what dollar hegemony was, and it was a free ride. And it all ended last Wednesday when the United States grabbed Russia’s reserves having grabbed Afghanistan’s foreign reserves and Venezuela’s foreign reserves and those of other countries.And all of a sudden, this means that other countries can no longer safely hold their reserves by sending their money back, depositing them in US banks or buying US Treasury Securities, or having other US investments because they could simply be grabbed as happened to Russia. So, all of a sudden this last week, you’re seeing the world economy fracture into two parts, a dollarized part and other countries that do not follow the neoliberal policies that the United States insists that its allies follow. We’re seeing the birth of a new dual World economy.
White House 2023 budget makes big pivot to deficit reduction - President Biden unveiled a $5.8 trillion budget plan on Monday that reflects a major administration pivot to rein in future borrowing, introducing a proposal that would reduce the national deficit by roughly $1 trillion over 10 years. The new White House budget — which reflects an opening offer in broader negotiations with Congress — calls for substantial funding increases for the military and police, more money for a slew of domestic programs and a “Bipartisan Unity Agenda” focused on cancer prevention, mental health care and veterans services. The deficit reduction would be achieved almost entirely through changes in the tax code, which could include a new minimum tax on ultrawealthy households. While the debt would continue to grow even if all of the administration’s proposals are enacted, the White House document reflects a new focus on fiscal prudence. Last year, the White House budget would have increased the nation’s deficits over 10 years by almost $1.4 trillion. By contrast, the White House’s budget this year would reduce the annual deficit every year after its enactment. “We’re making real headway cleaning up the fiscal mess I inherited,” Biden said when introducing the budget on Monday. “We’re returning our fiscal house to order.” The administration’s newfound emphasis on deficit reduction comes amid a potential revival of negotiations over its economic agenda with Sen. Joe Manchin III (D-W.Va.), who has repeatedly emphasized his interest in a budget deal that would reduce the nation’s fiscal imbalance. Inflation has also emerged as a key worry of voters coming out of the coronavirus pandemic, and reducing government borrowing in the long term may help allay those concerns ahead of the 2022 midterm elections. Sometimes, lawmakers scrap big parts of the annual White House budget proposal, as they did last year with the Biden administration’s call for new tax increases. Other times, lawmakers will engage the White House on a budget proposal and reach a deal, as they did with the White House’s push last year for an infrastructure package. The documents can also become fodder for both parties during midterm elections, as Biden’s push on deficits could pose a political challenge to the Republican Party, which has traditionally modeled itself as more fiscally responsible than the Democratic Party. Both of the past two Republican presidents, George W. Bush and Donald Trump, oversaw enormous increases in the federal debt during their administrations. And the Republican Party has resisted releasing its own economic blueprint for America, with Senate Minority Leader Mitch McConnell (R-Ky.) rebuffing members of his own party for attempting to craft a policy vision for the 2022 midterms. New tax plan from leading GOP senator would require all Americans to pay federal income taxes But the deficit argument has uncertain implications for Democrats as well. Biden spearheaded a $1.9 trillion economic relief plan last year that many voters believe contributed to the worst spike in prices in four decades. Biden’s initial plans for transforming the domestic economy, the Build Back Better agenda, fell apart amid criticism from centrist Democrats that it would do too much to fuel runaway federal spending. Republicans were quick to argue Monday that the budget increased spending too dramatically while simultaneously hurting economic growth through tax increases.
Biden unveils 2023 budget with massive spending on the military and police - President Joe Biden revealed his administration’s 2023 budget proposal Monday afternoon, featuring the largest ever US military spending and a substantial increase for domestic police repression. While Biden gave lip service to increasing spending on domestic social programs and taxing billionaires, this was for show, given the narrow margin of Democratic Party control in both the House and Senate. More significant was his declaration that “fiscal responsibility” would be the priority of his administration. In his brief address as he stood alongside budget director Shalanda Young, Biden outlined his priorities as “First, fiscal responsibility. Second, safety and security. And thirdly, investments needed to build a better America.” He then reiterated, “The first value is fiscal responsibility. The previous administration as you all know, ran record budget deficits. In fact, it went up every year under my predecessor. My administration is turning that around. Last year, we cut the deficit by more than $350 billion. This year, we’re on track to cut the deficit by more than $1,300,000,000,000. That would be the largest one-year reduction in the deficit in US history.” This means that when the proposed tax increase on the billionaires and other revenue-raising measures are blocked by Republicans and the right wing of his own Democratic Party, Biden will insist that there can be no cuts in the military, given the ongoing confrontation with Russia and the supposed threat of China. Social spending will inevitably bear the brunt. Pandemic spending “will be dramatically less than last year,” even though the actual number of people infected and in need of care has increased. Biden said that a new tax on billionaires would raise $360 billion over the next ten years. This is the latest iteration of a long-time Democratic Party con game, claiming that it supports higher taxes on the wealthy, and enacting changes in the tax code that the multi-millionaires then easily evade. The Democrats never propose any measures that would actually redistribute wealth away from the super-rich, because, as Biden said Monday, “I’m a capitalist.” He also proposed an increase in the corporate income tax rate from 21 percent to 28 percent. A similar plan went nowhere last year because of opposition by two right-wing Democrats, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona. Neither has changed their position, so that proposal is purely to support a bit of populist demagogy in the 2022 election campaign. The Democratic president went through a litany of promises on social spending, including child care, universal preschool, health care, expanding research into fighting cancer and climate change, and alleviating poverty and homelessness. Biden is well aware that none of these proposals will pass Congress unless watered down to virtually nothing. The heart of his domestic program was law and order. “The answer is not to defund our police departments,” he declared, “It’s to fund our police and give them all the tools they need… The budget puts more police on the streets for community policing so they get to know the community they are policing.” There would be more funding for federal police agencies as well, including the FBI and the Bureau of Alcohol Tobacco and Firearms (ATF). The various domestic items pale by comparison with the massive outlays for the military, which will receive a record $813 billion, more than $2 billion a day. The bulk of this spending is for the acquisition of more and more weaponry—planes, ships, tanks, armored cars, advanced artillery, as well as $40 billion for the Department of Energy to build new and more destructive nuclear weapons.
A breakdown of Biden's $5.8 trillion budget proposal - President Joe Biden’s budget request reflects an administration grappling with multiple obstacles: It can’t yet move past the pandemic, didn’t get to enact its huge social spending package and has added Russia’s invasion of Ukraine to its national security plate. The multitrillion-dollar proposal released Monday also seeks to build on the achievements of Biden’s first year, including the passage of the new infrastructure law, while chipping away at long-term priorities such as climate change and competition with China. The reality? Congress will, as always, enact its own spending priorities. And not only will that likely look pretty different from Biden’s request, but lawmakers also won’t necessarily get it done before the next fiscal year dawns in October. The White House asked Congress for $813 billion for national defense on Monday — including $773 billion for the Pentagon, or $30 billion more than approved by Congress for this year. The administration is focusing on China as the “pacing challenge” for the Pentagon, its budget documents released in the morning say. The impact of Russia’s invasion on Ukraine last month, however, will loom large over how the new request is received in Congress. Despite the high top-line request, considering inflation, it is only a 1.5 percent real increase from the fiscal 2022 budget — a fact that will draw the ire of many in Congress who have pushed for a 5 to 7 percent increase, citing Russian aggression and continued Chinese military modernization efforts. The national defense budget enacted for this year was $782 billion. The budget will make new investments in the nation’s nuclear triad, and in building a new long-range stealth bomber and new nuclear-powered submarines. It will also increase investments in hypersonic weapons development and building up the defense industrial base, in particular, funding upgrades to the Navy’s public and private shipyards. Overseas, the request includes $6.9 billion for the European Deterrence Initiative — up from a $3.6 billion request in 2022 — and $1.8 billion for expanding U.S. military presence in the Indo-Pacific region. There is an additional $682 million for Ukraine, “to counter Russian malign influence and to meet emerging needs related to security, energy, cybersecurity issues, disinformation, macroeconomic stabilization, and civil society resilience,” according to a budget documentBiden’s plan would require the top 0.1 percent of earners, those worth more than $100 million, to pay at least 20 percent in taxes on a combination of their income and their unrealized gains in assets like their stock portfolios. Those gains are not currently taxed. The administration estimates the plan would raise $360 billion over the next decade. This would be a dramatic change in the way the wealthy are taxed. Democrats are philosophically united in their desire to see the wealthy pay higher taxes, but they part ways over the details. In particular, some Democrats have balked at wealth taxes like the one Biden is proposing. Implementing such a plan would be complex and also raises arcane constitutional issues. He asked for a total of more than $200 million extra for the federal government’s two antitrust agencies, which are coping with a crush of corporate mergers while waging legal battles against the nation’s wealthiest tech giants. Biden’s proposed budget includes $287 million for the Justice Department’s Antitrust Division, a 49 percent increase from what Congress has enacted for the fiscal current year, and $491 million for the Federal Trade Commission, up 30 percent. The White House described both as “historic increases.”.
Biden Budget Tax Plan Raises Tax Rates to Highest in Developed World – Tax Foundation - President Biden’s budget came out this week with a very sensible message about the need for stronger economic growth and sound fiscal policy:“Critically, my Budget would also keep our Nation on a sound fiscal course. It fights inflation and helps families deal with rising costs by growing our economy, making more goods in America, and lowering the costs families face. Its bold ideas are fully paid for, with tax reforms that more than offset the cost of new investments.”The actual policies laid out in the budget, however, would reduce economic growth and create unsound fiscal policy, with no real evidence provided to support claims to the contrary.The Biden budget assumes the Build Back Better Act (BBBA) becomes law and is somehow made deficit neutral. Our analysis, like that of the Congressional Budget Office, indicates BBBA as passed by the House is not deficit neutral, but rather would increase deficits by more than $800 billion over the next decade. Furthermore, because the bill proposes several tax increases that raise marginal tax rates on individual and corporate income, we find it would reduce the size of the economy over the long run by 0.5 percent and eliminate 125,000 jobs.The FY 2023 budget proposes several new tax increases on high-income individuals and businesses, which in combination with the BBBA would give the U.S. the highest top tax rates on individual and corporate income in the developed world. The largest proposed tax hike is an increase in the corporate tax rate from 21 percent to 28 percent, which the administration estimates would raise $1.3 trillion over 10 years. We estimated such a tax increase, which was proposed in last year’s budget, would raise $954 billion over 10 years and would shrink the economy by 0.7 percent and eliminate 145,000 jobs. Another proposal reprised from last year’s budget, taxing unrealized capital gains at death and raising the top tax rate on capital gains and dividends from 20 percent to 39.6 percent, would shrink the economy by about 0.3 percent and eliminate 27,000 jobs.The administration also proposes a novel and complex tax increase on the unrealized capital gains of high-net worth individuals, hitting entrepreneurial founders of many of our greatest and most creative companies, even though under current law these companies pay corporate tax and shareholders pay dividend taxes on what remains. At the very least, this sends the signal that creating and growing successful companies in America is no longer welcome.The administration proposes a cluster of novel and complex tax increases on U.S. multinational companies attempting to do business abroad, providing more reasons to avoid America as a place to start and grow a business, and giving other countries an advantage in attracting highly mobile corporate investment. The administration is pointing to the OECD’s global minimum tax agreement as a backstop to this global tax competition, but several questions remain about the deal’s prospects, implementation, and effectiveness.
5 things to know about Biden's more centered '23 budget plans President Biden on Monday unveiled sweeping plans for military and domestic spending as part of his annual budget proposal that also includes tax hikes on the wealthy.The $5.8 trillion budget request released early Monday morning calls for investments in policing, historic spending boosts for education and tax reform targeting billionaires and wealthy corporations. Here are five things to know.
- The budget does not include line items from Biden’s signature “Build Back Better” proposal, a decision administration officials said was made to give room to talks with Congress. At the same time, officials made clear that Biden wants to see lawmakers pass a bill that addresses elements of Build Back Better that would lower health care, child care and other costs for families.The fate of Biden’s domestic policy agenda was thrown into doubt late last year when Sen. Joe Manchin (D-W.Va.) said he could not support the House-passed version.Administration officials have been tight-lipped about the status of negotiations, wary of disagreements spilling into the public as they did last year.
- Biden’s second budget blueprint puts plenty of focus on deficit reduction but largely relies on tax hikes to do so.Biden proposed a minimum tax on multibillionaires and billionaires that the White House’s budget office said in a fact sheet on Monday would “apply only to the wealthiest 0.01 percent of households.” OMB estimated the change would ensure the households pay at least a fifth of their total income in federal income taxes.The proposal calls for the top individual tax rate to be raised from 37 percent to 39.6 percent. And the request also renews a push by top Democrats to raise the corporate tax rate to 28 percent, after it was previously shaved down to 21 percent under the Trump administration in 2017. That idea faces challenges in the Senate, where Democrats hold a slim majority.
- Biden proposed $30 billion in new mandatory funding for state and local law enforcement, crime prevention and community violence intervention programs and $1.7 billion for a Justice Department gun trafficking strike force convened last year.The funding request is consistent with Biden’s rhetoric supporting police over the past year.“The answer is not to defund our police departments, it’s to fund our police and give them all the tools they need,” Biden said in remarks on Monday.The White House has pushed back against Republican arguments that Biden and Democrats are soft on crime, while breaking with more progressive views about scaling back police funding. Asked by a reporter Monday if the proposal was a response to GOP pressure, Biden answered “no.” Amid Russia’s war in Ukraine, the budget also seeks additional funding to assist Ukraine, combat Russian aggression and bolster NATO. It proposes $773 billion in funding for the Pentagon, an increase over the previous fiscal year.
- The budget request aims to advance racial equity in areas spanning education, health care and public assistance.The Biden administration said the request calls for historic investments for K-12 schools, doubling the funding for Title I grants for schools as part of a larger effort by the president to address “long-standing funding disparities between under-resourced schools — which disproportionately serve students of color — and their wealthier counterparts.” Biden also seeks to double the maximum award amount for Pell Grant recipients by 2029. The move comes after the maximum amount saw an increase in the $1.5 trillion omnibus spending package that passed Congress earlier this month. According to the Education Data Initiative, Black students were most likely to receive the grant, which is awarded based on financial need, between 2015 and 2016, and Asian and Pacific Islander students were most likely to receive the highest award amount during the same period.
- Some viewed the budget, and particularly the focus on deficit reduction and combating crime, as an effort by the White House to play to the middle. Biden has long described himself as a centrist, but his sweeping policy proposals last year contained many progressive priorities.Biden’s second budget release comes in a midterm election year, at a time when he is facing growing angst among the public about high inflation and a difficult road to passing his remaining domestic priorities. “I do think this does recognize that after 12 months of a rather extensive, progressive agenda, this does recognize you have to be a little more middle of the road and maybe a little more bipartisan,” Hoagland said.Speaking to reporters Monday, House Budget Committee Chairman John Yarmuth (D-Ky.) said it was “fair” to argue the White House sought to placate concerns of Manchin with the recent request’s focus on deficit reduction.“I think the emphasis on deficit reduction was something that was designed to mollify Sen. Manchin,” Yarmuth said.
Biden budget would boost funding for SBA loans, fighting financial crime - — The Biden administration has proposed more funding for government agencies tasked with combating illicit finance, Small Business Administration programs that back private-sector lending, affordable housing financed by community development financial institutions, as well as efforts to combat climate change and the risk it poses to the financial system.The White House’s overall $5.8 trillion budget proposal for fiscal year 2023, published Monday, reflects many of the core priorities from the administration’s previous year’s budget proposal. The task of approving the funds ultimately falls to Congress.In a statement, Treasury Secretary Janet Yellen said the U.S.’s “rapid” economic recovery from the COVID-19 pandemic over the previous year “allows us to look beyond the pandemic-induced crisis and provide a road map to address future challenges: creating a tax system that is fair to working families, expanding access to capital in disadvantaged communities, and safeguarding the financial system.”
Biden touts budget plan's clean energy, climate spending - President Biden this afternoon said his $5.8 trillion fiscal 2023 budget plan reflects major priorities, including lowering energy costs for families and funding clean energy research and development.“The budget I’m releasing today sends a clear message to the American people of what we value,” Biden told reporters at the White House. “First, fiscal responsibility. Second, safety and security. Third, investments needed to build a better America.”The request is the second of his presidency and reflects a continued push for major climate and environment spending spikes. That comes despite Congress’ only approving modest increases this year (Greenwire, March 28).“My budget invests in building more homes to keep up with skyrocketing cost of housing for the middle class and the poor. My budget lowers family energy costs and gives them credit for making their home more efficient,” he said.The budget plan, released this morning, boasts $44.9 billion across several federal agencies to fight climate change. EPA would get a roughly 25 percent increase, the Department of Energy a 7 percent rise and the Interior Department roughly 24 percent more than current levels.The president said the proposed budget would make “real headway cleaning up the fiscal mess I inherited,” arguing that the country hasn’t seen current levels of economic growth in decades. Improving conditions, he said, have increased government revenues and “dramatically improved our financial situation.”Earlier in the day, Office of Management and Budget Director Shalanda Young, who joined the president for his remarks, attributed the economic growth to the administration and Congress’ stimulus sending. Republicans have blamed that spending for record inflation.Biden also mentioned a proposal to implement a new tax on billionaires. The plan would require households worth over $100 million to pay taxes on at least 20 percent of their income.
How Biden's budget would change the energy sector - The White House released a budget proposal yesterday for fiscal 2023 that would deploy billions of dollars toward carrying out President Biden’s climate and clean energy priorities at the Department of Energy and related agencies. While a final budget will be refashioned and bartered by lawmakers on Capitol Hill, the blueprint underscores how Biden officials like Interior Secretary Deb Haaland and Energy Secretary Jennifer Granholm are trying to shift agency muscle toward administration priorities like grid modernization, renewables, energy security, research into new technologies, cleanup programs and growing the capacity for clean energy on public lands. “After a year of unprecedented economic growth that resulted in over $500 billion in deficit reduction, the President’s Budget reflects his commitment to protecting our national security, cleaning up legacy pollution from historic nuclear activities, and transitioning the U.S. to clean energy,” Granholm said in a statement. She said: “As we facilitate the transition to clean energy, the investments reflected in this latest budget will cut costs for Americans and secure our energy independence on our path towards a net-zero future.” The president’s $5.8 trillion proposal would spend $3.3 billion on clean energy growth alone, including $90 million for a grid deployment office to modernize the nation’s electrical grid and $502 million to weatherize and retrofit low-income homes, the White House said yesterday. “My budget lowers family energy costs with tax credits to help people make their homes more efficient, research and development to broaden the reach of solar and build a clean energy future,” Biden told reporters yesterday. Other bundles of federal dollars would go toward boosting offshore wind energy projects and directing funding toward thwarting Russian cyberthreats. But the spending proposal would also maintain the status quo in many areas, such as keeping oil and natural gas flowing on public lands. Lesley Jantarasami, managing director of the energy project at the Bipartisan Policy Center, said the budget reveals the ideal funding direction for agencies to carry out Biden’s agenda, from climate resiliency to climate research. The proposal touches on all the hallmarks that Biden made clear via executive actions and legislation like the “Build Back Better Act,” a spending approach that fell apart over partisan lines last year, and the Bipartisan Infrastructure Law, she said.Taken together with the infrastructure bill passed by Congress last year, the proposal released yesterday would compound the dollar amount going to programs on the White House’s radar. But without the kind of funding laid out in the proposal, some of the programs built up in the infrastructure package would wane, ultimately undermining the White House’s priorities, some experts noted. “We do worry about the fiscal cliff coming when the infrastructure funding runs on in four years’ time,” said David Hart, director of the Center for Clean Energy Innovation at the Information Technology and Innovation Foundation, in an email. “We’d like to see appropriations ramp up to carry the momentum forward.” Hart said overall the proposal “tells us that the administration maintains its strong commitment to investing in clean energy innovation.” Here’s how the $5.8 trillion plan would affect spending on energy issues at key federal agencies, from solar panel manufacturing to offshore wind farms.
Manchin shoots down Biden's new billionaire tax plan Centrist Sen. Joe Manchin (D-W.Va.) on Tuesday shot down President Biden’s new plan to raise $360 billion in revenue by imposing a 20 percent minimum tax on billionaires, a proposal the president formally unveiled Monday in his budget request to Congress. Manchin says he doesn’t support the president’s plan to tax the unrealized gains of billionaires, which would set a new precedent by taxing the value an asset accrues in theory before it is actually sold and converted into cash. “You can’t tax something that’s not earned. Earned income is what we’re based on,” he told The Hill. “There’s other ways to do it. Everybody has to pay their fair share.” “Everybody has to pay their fair share, that’s for sure. But unrealized gains is not the way to do it, as far as I’m concerned,” he added. Manchin’s opposition means Biden’s proposal is likely dead only a day after the White House unveiled it. It could be significantly restructured to avoid taxing unrealized gains, which would pose the big challenge of trying to make up the lost revenues. The problem with taxing just the regular income of billionaires is that many of the nation’s richest individuals, such as Jeff Bezos and Elon Musk, have been able to pay little or nothing in income tax by not declaring income. Instead, the ultra-rich often can take out loans secured by the value of their assets to finance their lavish lifestyles. “Here’s what they do. They go to their accountant. They tell their accountant, ‘Make sure I don’t make any income, any salary.’ And then they say, ‘Make sure I can buy, borrow and die.’ And nobody knew anything about that years ago, and now people are pretty up on it,” said Senate Finance Committee Chairman Ron Wyden (D-Ore.), who has announced his own proposal to tax the unrealized gains of billionaires. Wyden says that imposing a minimum 20 percent tax on billionaires is about making sure they pay a similar percentage of their wealth in taxes as middle-class Americans. He called Biden’s proposal “solid.” Structuring a tax on unrealized capital gains is complicated because the value of assets can fluctuate. “The problem with that particular tax is that it’s a tax on unrealized gains,” said Senate Republican Whip John Thune (S.D.), a member of the Finance Committee. “It’s essentially taxing people before they actually get the income, and that seems like a really dangerous precedent in tax law because if you have a gain one year and then a huge loss the next year, how’s the government going to pay people back for their losses?” he said.
Joe Manchin Hires Natural Gas Lobbyist to Energy Panel As He Blocks Climate Action -Sen. Joe Manchin has hired a natural gas industry lobbyist to work for the Senate's Energy and Natural Resources Committee as he continues to spar with the Biden administration over its energy and climate policies.C.J. Osman spent nearly six years at the Interstate Natural Gas Association of America, most recently as its top lobbyist, before joining Manchin's committee as a professional staff member in March. The hiring was first reported by Legistorm, which compiles data about the congressional workforce.Osman was registered as a lobbyist representing the INGAA from 2019 to 2021, and represented the organization's interests in both the House of Representatives and the Senate, federal records show. It's so common for congressional staffers to jump ship to lobbying firms, and for lawmakers to snap up lobbyists for their policy teams, that the system is often referred to as a "revolving door." While supporters of the practice say it allows them to hire staffers with nuanced expertise, good government groups have for years raised alarms that the revolving door leads to undue lobbying influence on Congress. Manchin, a Democrat from West Virginia, represents a coal-producing state and has taken a more conservative stance on climate issues than his other Democratic colleagues — though he has supported clean energy solutions, such as wind farms. With an evenly divided Senate, Manchin's refusal to get on board with some of President Joe Biden's major legislative initiatives have doomed them in Congress, including the Build Back Better bill, which was the president's most ambitious plan to tackle climate change. As chairman of the Senate Energy and Natural Resources Committee, Manchin has the power to steer energy and climate-related legislation and to grill Biden's agency leads about their policies. The committee practices oversight of the government's policies for energy sources like wind, solar, natural gas, electricity, and fossil fuels. At a March 3 hearing, Manchin grilled all five members of the Federal Energy Regulatory Commission on their updated guidelines for approving natural gas projects, which require more environmental considerations to be taken into account. The changes are intended to stave off ecological harm from such projects but may delay some permits being granted, to the frustration of lawmakers like Manchin as energy prices continue to rise during the Ukraine-Russia conflict.\
Biden eyes using wartime powers for minerals needed in clean energy push - The White House is weighing using wartime executive powers to boost U.S. battery production to help secure supplies for the growing market for electric vehicles and power storage on the electric grid, according to two people familiar with the Biden administration’s thinking. President Joe Biden would use the Defense Production Act to help secure U.S. sources of critical minerals that are deemed key components of clean energy technology. While the U.S. possesses many of those minerals, industry and some lawmakers of both parties contend regulations have deterred development and forced the U.S. to rely on supplies from nations like China, Russia, South Africa and Australia. “As we break our dependence on foreign sources of oil and natural gas, we must ensure that we secure the materials necessary for the clean energy economy in a way that holds to our strong environmental, labor, Tribal engagement standards and does not leave us reliant on unreliable and unsustainable foreign supply chains,” one of the people said. The move to use an emergency national defense law dating to the Cold War comes as the prices of battery minerals like nickel, lithium and cobalt, have surged during Russia’s war in Ukraine. Russia is a leading producer of nickel, copper and other minerals. Prices were already rising before Russia’s invasion because of forecasts that global supply won’t keep up with surging demand expected from electrifying economies. Influential lawmakers led by Democratic Sen. Joe Manchin (D-W. Va.), chair of the Energy Committee, and Sen. Lisa Murkowski (R-Alaska) called last month for the Biden administration to invoke the Defense Production Act to boost the production and processing of critical minerals, citing the ongoing supply chain crisis and the vulnerability of depending on Russian mineral supplies. “It’s a nice start. If you are going to go whole hog on electric and you don’t have the minerals, you ought to do something,” Sen. Bill Cassidy (R-La.), who signed a letter with Manchin and Murkowski prodding the Biden administration to take the action, said in an interview. Several Democratic senators wrote to Biden two weeks later expressing concern over supply chain issues related to the Ukraine crisis, too. Rich Nolan, CEO of the National Mining Association, said the Biden administration is sending a “strong signal” to the marketplace by taking action.
Biden's boost for mineral mining splits Hill climate hawks - Climate hawks in Congress had mixed reactions yesterday to the Biden administration’s expected effort to expand domestic production of critical minerals by invoking the Defense Production Act. Some were cautiously optimistic. Others downright apprehensive. Still others were looking for more action on other priorities. Taken together, those responses highlight the unavoidable tension that will be inherent in any party-led effort to boost U.S. energy independence amid the ongoing conflict between Russia and Ukraine. On the one hand, Democrats can’t argue with the intent of President Biden’s executive order, which he could sign as soon as today: It would encourage more mining for lithium, nickel, graphite, cobalt and manganese for the express purpose of manufacturing batteries for electric vehicles. The Defense Production Act allows the president to use loans, direct purchases and other government-backed business investments to incentivize production of goods and materials. Biden has used the law in the past to boost medical equipment manufacturing to aid hospitals during the Covid-19 pandemic (Greenwire, March 30). Experts have said such an action could help the U.S. combat the grip foreign adversaries have on the nation’s mineral supplies over the long term. On the Hill yesterday, some lawmakers said that the expected surge in mining was welcome. “We want the critical minerals, obviously, to have a special place, because we can’t manufacture without those critical minerals,” said Sen. Ed Markey (D-Mass.), sounding a positive note on the development. Sen. Sheldon Whitehouse (D-R.I.), another vocal advocate for climate action, said he supported expanding domestic mining “as a general concept,” adding that while “I don’t know the details of it … obviously it’s important to support the clean energy transition.” At the same time, mining for such materials would take place on federal lands, and environmental advocates fear there will be few guardrails on the industry, which operates under the last comprehensive mining law, which was passed in 1872. Some Democrats said yesterday they were worried that such excesses needed to be kept in check. “We have seen abuses, and we have seen many sites that have been abandoned,” said Sen. Ben Ray Luján (D-N.M.). “The United States government takes responsibility and then it takes a lifetime to be able to go to reclaim, but what’s never talked about are the people in the community that live in that community, how harmed they are.” Luján said his understanding is that the White House’s actions would “not include safeguards. I think that’s the wrong path to go.”
U.S. weighs largest ever draw from emergency oil reserve -The Biden administration is considering releasing up to 180 million barrels of oil over several months from the Strategic Petroleum Reserve (SPR), four U.S. sources said on March 30, as the White House tries to lower fuel prices.The latest amount of U.S. oil release being considered, which is equivalent to about two days of global demand, would mark the third time the United States has tapped its strategic reserves in the past six months, and would be the largest release in the near 50-year history of the SPR. The International Energy Agency (IEA) member countries are also set to meet on April 1 at 1200 GMT to decide on a collective oil release, a spokesperson for New Zealand energy minister said in an email, aimed at calming global crude prices that scaled 14-year highs this month amid the Russia-Ukraine conflict. Oil prices have surged since Russia invaded Ukraine in late February and theUnited States and allies responded with hefty sanctions on Russia, the second-largest exporter of crude worldwide. Brent crude, the world benchmark, soared to about $139 earlier this month, highest since 2008, and was near $110 a barrel in Asian trading on Thursday. Russia is one of the world's top producers of oil, contributing about 10% to the global market. But sanctions and buyer reluctance to buy Russian oil could remove about 3 million barrels per day (bpd) of Russian oil from the market starting in April, the International Energy Agency (IEA) has said. Russia exports 4 to 5 million bpd.The news comes just before the Organization of the Petroleum Exporting Countries and its allies, an oil producer group known as OPEC+ that includes Saudi Arabia and Russia, meets to discuss reducing supply curbs. The United States, Britain and others have previously urged OPEC+ to quickly boost output.However, OPEC+ is not expected to veer from its plan to keep boosting output gradually when it meets Thursday.The U.S. SPR currently holds 568.3 million barrels, its lowest since May 2002, according to the U.S. Energy Department.The United States is considered a net petroleum exporter by the IEA. But that status could change to net importer this year and then return to exporter again as output has been slow to recover from the COVID-19 pandemic.
Democrats eye action on leasing reforms, gas rebates - Congressional Democrats are showing interest in moving legislation that would reflect, and even go beyond, the latest White House proposals for bringing down soaring gas prices. Speaker Nancy Pelosi (D-Calif.) endorsed President Biden’s plans yesterday for releasing more crude from the strategic reserve and using a national security law to shore up critical mineral supplies for electrical vehicles. She also signaled an openness to White House calls for Congress to pass federal energy leasing reforms. Democrats have also floated gas rebates for consumers, but the administration has yet to embrace that idea. “Right now, of course, we have the Putin price hike at the pump, and it’s something that has to be addressed,” she told reporters in her weekly press conference, referring to Russian President Vladimir Putin, whose invasion of Ukraine in February scrambled energy markets. “There are a number of options on the table.” Pelosi twice mentioned that Democrats are eager to find ways to increase domestic energy production on federal land by noting there are more than 9,000 unused leases. She suggested options could include a “use it or lose it” policy for leaseholders or charging them for failing to pursue active energy exploration. Cracking down on used energy leases on federal land also has the crucial support of Senate Energy and Natural Resources Chair Joe Manchin (D-W.Va.). He said energy companies should not be able to hold on to federal leases indefinitely that can otherwise quickly be permitted for production. “The fees are too low. You can hold a lease fee for almost nothing from the federal government; you can’t do that in the private sector,” Manchin told reporters yesterday. “It’s not a penalty [to increase federal leasing fees], just make them comparable in the marketplace.” Asked specifically about a “use it or lose it” policy, Manchin said he would first need to look at the specific proposal, but he has in the past been skeptical of that approach. Pelosi seemed to dismiss the idea of delivering a gasoline rebate by temporarily lifting the 18-cent-per-gallon federal gasoline tax. She said there is no way to write a bill implementing a gas tax holiday that would guarantee consumers, not oil companies, benefit from eliminating the fee. That’s one reason Transportation and Infrastructure Chair Peter DeFazio (D-Ore.) has rejected calls in the Senate for a federal gasoline tax moratorium. Some states have moved forward with their own suspensions. Exactly how and when Congress could move gas price legislation remains to be seen. Democrats are especially eager to take action to drive down energy costs as polls show high inflation is hurting their midterm election prospects.Pelosi said she expects the proposals to be written by the Energy and Commerce Committee, although not until after it has hearings. Those begin next week with six oil executives due to testify before a panel subcommittee on charges of price gouging (E&E Daily, March 30).
Biden's 'careless remark' on Putin incenses GOP - Republicans are pointing to President Biden’s ad-libbed remark that Russian President Vladimir Putin “cannot remain in power” as the most serious example of reasons to doubt his competency. “It’s extremely concerning that our commander in chief can’t clearly communicate the policy of the United States abroad,” said Rep. Greg Steube (R-Fla.), adding that Biden “left our allies a bigger mess” after a trip that was “supposed to reassure support for our NATO allies.” Biden’s remark came as U.S.-Russia relations reach a breaking point over the Kremlin’s invasion of Ukraine, now in its second month. The administration has been delicately navigating the conflict without risking escalation by the nuclear power, but some Republicans said Biden’s off-the-cuff remark may have done just that. The White House on Saturday immediately attempted to clean up Biden’s comment about Putin not remaining in power, saying that the president meant to convey that Putin “cannot be allowed to exercise power over his neighbors or the region.” But that sparked even more confusion, leading Biden himself to answer questions Sunday and Monday about what exactly he meant after reporting emerged that indicated he had ad-libbed the end of his pivotal speech. “President Biden’s careless remark is fuel for Vladimir Putin’s propaganda machine and breaks unity with our NATO allies. It only ratchets up tensions,”
Top GOP Intel lawmaker says Biden's Putin comment complicates ending Ukraine conflict --The top Republican on the House Intelligence Committee said President’s Biden comments over the weekend, in which he said Russian President Vladimir Putin “cannot remain in power,” will put a further strain on U.S.-Russia relations. Rep. Mike Turner (R-Ohio) said Biden’s declaration “makes it more complex to end the conflict in Ukraine.” “How does he, in the future, sit with Vladimir Putin?” Turner added. Biden on Monday left the door open to meeting with Putin but said it would depend on what the Russian president wanted to talk about. Russia’s invasion of Ukraine entered its second month amid Biden’s visit to Brussels and Warsaw late last week in which he declared in a speech on Saturday that Putin “cannot remain in power,” which sparked mass confusion about whether the president had just changed official U.S. policy to favoring regime change in Russia. After the White House attempted to quickly walk back his comments on Saturday, saying what Biden meant was that Putin should not exercise power outside of Russia, the president on Monday said his words reflected a personal “moral outrage” and not a stated policy change. Turner said Biden’s pivotal speech in Warsaw should have served as a critical assertion against Russian aggression. Instead, Turner said, Biden’s remarks shifted the focus away from countering Russia’s attacks on Ukraine and onto confusion about regime change. “That’s not President Biden’s decision, and it’s not ours either,” Turner said before adding that he believed Biden was mishandling the U.S. response. The White House has warned for weeks that Russia has the potential to use chemical weapons in Ukraine.
Biden: Putin comments were an expression of 'moral outrage,' not policy change - President Biden on Monday said his assertion days earlier that Russian President Vladimir Putin "cannot remain in power" was an expression of moral outrage and not intended as a formal policy call for regime change. "I’m not walking anything back," Biden said Monday in his most extensive comments to date since his speech in Warsaw, Poland, on Saturday. "The fact of the matter is I was expressing the moral outrage I felt toward the way Putin is dealing and the actions of this man," Biden continued, noting he had just met with Ukrainian refugees before giving his speech in Poland. "But I want to make it clear: I wasn’t then nor am I now articulating a policy change," Biden said. "I was expressing moral outrage that I feel, and I make no apologies for it." Biden said he does not believe his comments complicate relations with Russia, nor does he think they risk further escalating Russian attacks on Ukraine. Biden on Saturday delivered remarks in Warsaw to cap off a two-day visit to Europe to shore up NATO and European allies. In his speech, Biden spoke of the importance of democracies standing together and condemned the attacks on Ukraine over the past month. At the end, in an apparently unscripted moment, Biden said, "For God’s sake, this man cannot remain in power." White House officials quickly clarified Biden was not calling for regime change in Russia. But some lawmakers criticized the remark as undisciplined and potentially giving fodder to Putin as he wages war on Ukraine. The Kremlin on Monday called Biden's comments "alarming." Biden on Monday said he does not believe Putin will use his remarks for propaganda, and he expressed some irritation with repeated questions about the potential consequences of his comments.
Biden muddies line with Vladimir Putin --President Biden’s declaration that Russian President Vladimir Putin “cannot remain in power” has overshadowed an otherwise successful trip to rally allies against Russian aggression and muddied the line between his personal feelings and official policy. Biden on Monday attempted to personally correct his remarks, following up on efforts by the White House. He said he was not announcing a policy change but was giving an emotional and moral statement after vising Ukrainian refugees in Warsaw who had fled their home country as Russia invades and indiscriminately attacks civilians. “I want to make it clear: I wasn’t then, nor am I now articulating a policy change. I was expressing moral outrage that I feel, and I make no apologies for it,” Biden said Monday when asked about the comments, while insisting he was not “walking anything back.” The unscripted remarks didn't sit well with some lawmakers, and former government officials say it will be difficult for the White House to un-ring the bell on Biden’s comments at a precarious time for U.S.-Russia relations. Biden, however, downplayed the risk of upending diplomatic relations with Russia or giving Putin fodder to escalate his attacks, growing visibly irritated when several reporters pressed him on the fallout as he delivered remarks on his budget proposal at the White House. “This is a guy who goes to the beat of his own drummer,” Biden said. “And the idea that he is going to do something outrageous because I called him for what he was and what he’s doing is just not rational.” It could be difficult for Biden and his team to undo potentially lasting damage from the remark on Saturday, which has dominated headlines. Biden declared that “for God’s sake, this man cannot remain in power” at the end of a 30-minute address in Warsaw, referring to Putin. Within minutes of the conclusion of his speech, a White House official said that comment was referring to Putin exercising power outside of Russia.
Macron criticizes Biden’s call for regime change in Russia -Macron was speaking a day after US President Joe Biden denounced Russian President Vladimir Putin as a “butcher.” Insisting that Putin could not stay in power and that America had to prepare itself for “decades” of war, Biden made clear that NATO is waging war for regime change in Russia. This clearly has made the French ruling class nervous, and France3 interviewer Francis Letellier asked Macron, “Are you concerned that these are remarks that could poison the situation?” Macron distanced himself from Biden’s remarks, stating, “I think we must first of all speak factually and then, indeed, do everything in our power for the situation not to get out of control. I would not use such language because I am continuing to discuss with President Putin. What do we want to accomplish collectively? We want to stop the war Russia has launched in Ukraine, without waging war and without escalation.” Macron made clear that Biden’s remarks cut across French policy. He defined France’s goals as “a cease-fire and the total withdrawal of Russian troops. If we want that, we cannot have escalation, either in words or in deeds.” Macron argued that the European powers have a greater stake in Russia than America does, and that they cannot accept US policy on Russia as their own. “The United States of America are our allies in the context of NATO, we work with them and that is a good thing,” Macron continued. “We share many common values. But those who live next to Russia are the Europeans. That is why for five years you have heard me say that we Europeans must have a defense policy and define this security architecture, not delegate it.” Macron concluded by explaining that European powers must pursue a different policy towards Russia than Biden. “We, Europeans, we cannot give in to any form of escalation,” he said. “We must not, we, Europeans, forget our geography or our history. We are not at war with the Russian people.”
Biden at the Improv: Ukraine and the Dangers of Foreign Policy by Open Mic – WSJ -- At what point does Joe Biden’s verbal incontinence start to become a mortal threat to Americans? Until now we’ve mostly had the luxury of observing the president’s many rhetorical infelicities with a mixture of mild puzzlement and gentle concern, as one might watch an aging relative struggle to remember the name of one’s children. But some words have larger consequences than others—especially when you’re the president of the United States. It’s one thing to misidentify your vice president as the first lady, quite another to call for the ouster of an autocratic and bellicose leader of a nation with nuclear weapons. That is the kind of thing that can trigger wars that could result in the annihilation of much of humanity. It’s a sign of the rising alarm the presidential blunders must be causing in diplomatic circles that the White House communications shop has stopped attempting to correct the gaffes that come flying like grapeshot from a cannon. Instead they take the Humpty Dumpty approach. Instead of issuing corrections or clarifications of Mr. Biden’s words, they simply invoke Humpty’s philosophy on the president’s behalf: “Whenever I use a word . . . it means just what I choose it to mean—neither more nor less.” This exercise in through-the-looking-glass semantics was on display last week throughout the president’s trip to Europe, where he sought to rally allies in support of Ukraine and against Russian aggression. At North Atlantic Treaty Organization headquarters in Brussels on Thursday, Mr. Biden was asked what the U.S. would do if Vladimir Putin used chemical weapons in Ukraine. He said the West would respond “in kind.” You might think, deploying commonly understood definitions, that he meant to convey the somewhat shocking threat that NATO would retaliate against use of a weapon of mass destruction with a like attack. But you’d be wrong. Later, Jake Sullivan, the president’s national security adviser, said that while Russia would pay a heavy price if it used such weapons, the U.S. had “no intention of using chemical weapons, period, under any circumstances.” The next day in Poland, the president casually remarked to American troops stationed there that some of them had already been in Ukraine and others would be going soon. Soon another administration Humpty was on the line to reporters, insisting that Mr. Biden’s words were in no way inconsistent with the fact that the U.S. had no forces in Ukraine and no plans to send any. On Saturday we had the most arresting breach between presidential words and improvised official definitions. At the end of an impassioned speech that denounced Vladimir Putin’s aggression and framed the struggle as a battle between democracy and tyranny, Mr. Biden threw down a gauntlet: “For God’s sake, this man cannot remain in power.” This apparent call for regime change in Moscow, was, we were instantly told, nothing of the sort. “The president’s point was that Putin cannot be allowed to exercise power over his neighbors or the region,” according to an unnamed White House official. “He was not discussing Putin’s power in Russia, or regime change.” … We can’t go on like this. Credibility is essential to the effective and safe conduct of national security. No amount of hasty cleanup will erase the words that come from the lips of a commander in chief. And no, it is not a defense of the president to note—accurately—that his immediate predecessor was as notorious for his verbal indiscipline as Mr. Biden is. For now, we have an immediate and escalating problem with this presidency. We can certainly hope that Russians understand as well as we do that, at 79, Mr. Biden is prone to saying things he doesn’t mean. But we can’t be sure. What we can be sure of is that Mr. Putin, who has already whipped up his compatriots into a frenzy of paranoia about the “real” intentions of the U.S. in arming Ukraine—to wit, an attempt to weaken and destroy Russia itself—will seize on every piece of evidence he can find to bolster his case.
Biden's Blundering Has Become a Mortal Threat to America - Much has been made of Joe Biden’s instantly reversed call for regime change in Moscow. Speaking in Warsaw, the president said of Vladimir Putin, “For God’s sake, this man cannot remain in power.” The words sent his staffers scrambling to cleanup on Aisle Three and prompted European leaders to firmly distance themselves from Washington. It was bad, awful, terrible—a reminder why the campaigner who told the Corn Pop story to a group of befuddled black youngsters may not have been quite ready for a global crisis.Yet as hair-raising as Biden’s Warsaw declaration was, it could be charitably—okay, extra-charitably—interpreted as a mere gaffe. Indeed, the administration’s line is that Biden was referring to Putin exercising power over Russia’s neighbors, not Russia itself. Or something. Like I said, it’s a stretch, but the White House is trying.Far worse and more irreparably damaging was the statement Biden tweeted on Saturday that read: “We are engaged anew in a great battle for freedom. A battle between democracy and autocracy. Between liberty and repression. This battle will not be won in days or months, either. We need to steel ourselves for the long fight ahead.”This was no typical big-mouth Biden whoopsie-daisy. This was a deliberate, apparently considered expression of what might be called the Bush-Biden Doctrine: one that harks back to the worst of the George W. Bush years, when America was in the business of dividing the whole planet into two camps—light and dark, good and evil, free and unfree, Autobots and Decepticons. As foolish as such a Manichaean foreign policy was after 9/11, it is even more so today, because much as Biden is a feebler man than Bush at the height of his powers, so is the America of 2022 feebler than the country that set out to remake Iraq and Afghanistan. Such posturing forces the United States to either wage war against the dozens and dozens of nations it considers undemocratic or unfree or evil or whatever—or stand exposed as the world’s hypocrite-in-chief. Blessedly, no one seriously thinks all “autocracies” are about to face Washington’s wrath in some epochal war between “liberty and repression.” Which leaves us with the hypocrite-in-chief option, and that is stupid and embarrassing enough. Consider: Ukraine, the nation that has inspired all this moralistic exertion, regularly ranks as less free and less transparent than nearby Hungary, a nation routinely reproached by global liberaldom for its alleged unfree-ness. If Biden really wants to draw a sharp “battle” line between democracies and autocracies, liberty and repression, then he ought to denigrate Kiev and embrace Budapest (in relative terms).
How the Democratic Party prepared the war in Ukraine: Part one - The mounting confrontation between US-NATO forces and Russia is portrayed by the Biden administration and the American corporate media as entirely the product of Russia’s invasion of Ukraine. This in turn is attributed to the demonic intentions of one man: Russian President Vladimir Putin. This rips the Russia-Ukraine war out of its historical context. Most importantly, it conceals the role of American imperialism in preparing and deliberately instigating the conflict. The reactionary war has been seized on to generate a veneer of popular support to the long-prepared US-NATO campaign to overthrow the Putin regime, break up Russia, and reduce it to a semi-colonial status. The Democratic Party has played the central role in an anti-Russia campaign that goes back more than a decade. This article will review the role of the Democrats particularly since the Obama-Biden administration took office in 2009. This account is not an after-the-fact assessment. It relies heavily on the contemporaneous analysis provided by the World Socialist Web Site as the process was unfolding, documenting both the role of the Democrats in carrying out the policy of the US ruling class and its national security strategists, and the effective takeover of the party by direct agents of the military-intelligence apparatus.
How the Democratic Party prepared the war in Ukraine: Part two - Soon after the Republican convention nominated Trump, and on the eve of the Democratic convention that would do the same for Clinton, the Democrats began a carefully prepared attack on Trump for his alleged ties to Russia. The signal came from the New York Times, which questioned Trump on the NATO pledge to go to war if any member state, including the small Baltic republics Estonia, Latvia and Lithuania, came into military conflict with Russia. Trump gave an ambiguous response, and a media barrage began immediately.A column by Paul Krugman in the Times branded Trump “The Siberian candidate,” (a takeoff on the Cold War thriller, “The Manchurian Candidate”), suggesting he was a Russian agent. Similar columns, with less lurid headlines but equally inflammatory arguments, appeared in The Atlantic magazine, the Los Angeles Times, and elsewhere. Clinton took up this theme and made it central to her general election campaign. The WSWS wrote that the anti-Russia media campaign was “a measure of how central the military buildup and war preparations against Russia are to US imperialist policy around the globe.” The commentary continued: It also provides a window into the real character of the Democratic Party and the Clinton campaign. At its heart, it consists of a fusion of identity politics—the relentless promotion of race, gender and sexual orientation as the motive forces of US society—and a viciously pro-war imperialist policy. The objective of this poisonous mix is to sow divisions in the working class while fashioning a new constituency for imperialist war from among privileged layers of the upper-middle class and the pseudo-left satellites of the Democratic Party.
Partnering With Neo-Nazis in Ukraine: An Inconvenient History - Antiwar.com Original - Volodymyr Zelensky defeated Petro Poroshenko in the 2019 election on a platform that included making peace with Russia and signing the Minsk Agreements. The Minsk Agreements would have granted a degree of autonomy to the Donetsk and Lugansk regions of the Donbas that had voted for independence from Ukraine after the 2014 US backed coup put a government in power that was handpicked by the US and that was pro-West and anti-Russian. It was intense pressure from the far right wing ultranationalists that bent Zelensky from a Minsk backer into the shape of a Minsk rejecter. Under that pressure from neo-Nazi parties that have large power that is disproportionate to their small support, Zelensky abandoned his campaign peace promise and refused to talk to the leaders of the Donbas and implement the Minsk Agreements.Those ultranationalist organizations, including Svoboda Party and the Right Sector, during the 2014 coup, again cast a shadow much larger and darker than their popular support. They commandeered and reshaped the peaceful protest. They rejected the peaceful settlement that would have called for a ceasefire and early elections. Several lines of evidence now strongly suggest that the snipers in the February 20, 2014 massacre that sent the protests spinning toward civil war were not government forces but members of the ultranationalist insurgency. And it was they who occupied the government building and forced the elected president to flee Ukraine.After the coup, those neo-Nazi forces would brutally spearhead the fight against separatist forces in the Donbas. They were in a position to lead the fight because the most famous of them, the Azov Battalion, had been officially incorporated into the Ukrainian National Guard. These ultranationalists had become, not only, as Richard Sakwa says in Frontline Ukraine, "a legitimate part of the Maiden [protest]" and "the new normal of Ukrainian state development," they had become an official part of the Ukraine military.They would become an official part of Ukraine government too. Sakwa says that several core ministerial positions in the Ukrainian coup government were taken by the Right Sector and Svoboda, both openly neo-Nazi parties, including top national security, defense and legal posts. The deputy prime minister and the minister of justice were both members of Svoboda. Andriy Parabiy, one of the founders of Svoboda with what Sakwa calls “a long history of ultra-nationalist activism” became secretary of the National Security Defense Council. Sakwa calls Parabiy’s appointment “astonishing.” Stephen Cohen, who was Professor Emeritus of Russian studies and politics at Princeton, in an article on Ukraine called “America’s Collusion With Neo-Nazis,” says that the coup government in Ukraine has systematically rehabilitated and memorialized Ukrainian Nazi Germany collaborators.Among the Nazi collaborators memorialized by the government of Ukraine is Stepan Bandera who allied with the Nazis and committed atrocities against Jews, Poles and Russians. Sakwa reports that “a giant portrait of Bandera was . . . on the stage during the Maidan protests.”
Bennet, Portman introduce bill to use seized Russian assets for Ukrainian relief -- Sens. Michael Bennet (D-Colo.) and Rob Portman (R-Ohio) on Tuesday unveiled a bill to require the Department of Justice to direct any funds resulting from the sale of seized Russian assets to support Ukrainian refugees and reconstruction. The Repurposing Elite Luxuries Into Emergency Funds for Ukraine Act, or Relief for Ukraine Act, would require the Justice Department to direct funds from the liquidation of seized Russian assets to a new Ukraine Relief Fund, which will be administered by the State Department and the U.S. Agency for International Development. “Putin and his inner circle bear direct responsibility for the war in Ukraine and the shameful death, destruction, and dislocation it has unleashed,” said Bennet in a statement. “Our bill makes Putin and Russian oligarchs pay the price by ensuring that funds from their seized assets go directly to the Ukrainian people to support them through many difficult years ahead of resettlement, reconstruction, and recovery.” Attorney General Merrick Garland on March 2 announced a special task force named KleptoCapture to enforce sanctions, export restrictions and economic countermeasures against Russian President Vladimir Putin and his circle of allies and supporters. The task force could use civil and criminal asset forfeiture authority to seize the luxury properties, yachts and private jets of Russian oligarchs close to Putin. Portman said Ukraine is suffering from the worst refugee crisis since World War II and needs help to resettle its displaced population and rebuild cities turned to rubble by Russian artillery. The relief fund would be used to protect the health and wellbeing of Ukrainian refugees and provide for reconstruction efforts in parts of Ukraine that aren’t controlled by Russian forces, according to a summary of the bill provided by the senators’ offices.
Pentagon announces $300M in aerial systems, military weapons for Ukraine - The Department of Defense announced on Friday the U.S. will provide Ukraine with $300 million of additional security assistance to Ukraine. In a press release, the department said that it had notified Congress of “additional assistance activities under authority provided by the Ukraine Security Assistance Initiative (USAI).” The money is aimed to bolster Ukraine’s defenses against Russia’s invasion that has been going on for more than a month. This package includes tactical secure communications systems, a counter-unmanned aerial system, non-standard machine guns and other defense systems. “This decision underscores the United States’ unwavering commitment to Ukraine’s sovereignty and territorial integrity in support of its heroic efforts to repel Russia’s war of choice,” the Department of Defense stated. Since the war began, the U.S. has given Ukraine more than $2.3 billion in defense assistance. The money came the same day a U.S. official told The New York Times the U.S. will be assisting allies in giving Ukraine Soviet-made tanks in response to an appeal from Ukrainian President Volodymyr Zelensky. The official, who spoke to the outlet on the condition of anonymity, did not give a specific timeline when the tanks would be transferred, but said that it would be happening soon. Thus far the U.S. has provided military and humanitarian resources to Ukraine and issued crushing economic sanctions on Russian institutions and officials with close ties to the Kremlin. In addition Congress passed a massive bill in early March to fund the government which included $13.6 billion in aid to Ukraine. However, the Biden administration and other western leaders have stopped short of granting Zelensky’s request from a no-fly zone to protect the country’s airspace. President Biden himself said that the U.S. would not declare a no-fly zone in order to keep the country out of direct conflict with Russia, a nuclear power. Countries in NATO have been careful not to get directly involved in the war, but have committed engaging, should Russia attack any member of the alliance.
US-Mexico Relations Hit New Low Over Russia-Ukraine Conflict --The U.S. Ambassador to Mexico caused a stir at the tail end of last week when he told Mexican lawmakers that Mexico cannot ever be close to Russia. That is quite literally what Ambassador Ken Salazar’s said in his address to select members of Mexico’s lower house of Congress on Thursday (translated by yours truly):“I have here (he said while indicating lapels on his jacket breast) the flags of Mexico, the United States and Ukraine. We have to be in solidarity with Ukraine and against Russia.The Russian ambassador was here yesterday making a lot of noise about how Mexico and Russia are so close. This, sorry, can never happen. It can never happen…I remember very well that during the Second World War there was no distance between Mexico and the United States, both were united against what Hitler was doing…When a family is attacked, the family comes together…Between Mexico and the United States there can be no difference, we have to be the same.”Salazar’s comments are controversial for a whole slew of reasons. First, Mexico is a sovereign nation and as such should be able to choose which countries it wants to forge close ties with, even if they are the target of U.S. sanctions.Second, the hypocrisy stinks. U.S. and its European allies have consistently argued that Russia has absolutely no right to try to determine what happens within the borders of its sovereign neighbor Ukraine, even as tons of weapons poured into the country from NATO Member States such as Poland and the Czech Republic. Yet the US Government, through its ambassador to Mexico, is now trying to literally dictate the terms of Mexico’s relationship with Russia.What the U.S. essentially seems to be saying is that neutrality is not an option in the escalating conflict between Russia and the West — at least not for Mexico.Which brings us to the third point: Mexico has a long, albeit interrupted, history of neutrality dating all the way back to the early 1930s. In 1939, a neutrality clause was even added to its constitution by the government of then-President Lazaro Cardenas, which also nationalized Mexico’s oil and gas a year earlier. Since then Mexico has enjoyed close relations with many countries that have been targeted by international sanctions, including Cuba, Nicaragua and Venezuela. Mexico’s long-held position of neutrality has also made it a haven for people seeking political asylum, including republicans fleeing Spain at the end of the Spanish Civil War and the emigres of the Southern Cone dictatorships of the 1960s and ’70s. Lastly, even Salazar’s elicitation of Mexico’s unwavering alliance with the U.S. against Hitler in the Second World War is not entirely fact-based. Mexico did not join the war until 1942 and that was only after a German submarine torpedoed the Mexican oil tanker “Potrero del Llano” in international waters, leading to the loss of 14 lives.
Biden skeptical of Russian claims it will reduce military assault in Ukraine --President Biden expressed skepticism Tuesday about Russia’s claim that it will reduce its military campaign on the Ukrainian cities of Kyiv and Chernihiv. “We’ll see,” Biden said when asked about the recent developments following a joint statement with Singaporean Prime Minister Lee Hsien Loong. “I don’t read anything into it until I see what their actions are.” “We’ll see if they follow through on what they are suggesting,” Biden added. The president acknowledged that negotiations between Russia and Ukraine picked up this week in Turkey and noted that the subject came up during a call with the leaders of France, Germany, Italy and the United Kingdom earlier Tuesday morning. “There seems to be consensus that let’s just see what they have to offer. We’ll find out what they do,” Biden said. Russian state media reported earlier Tuesday that Moscow would “drastically reduce military activity” near the capital Kyiv and Chernihiv near the Belarus border. The developments fueled some tepid optimism that Russia’s nearly five-week assault on Ukraine could be winding down in some places. Yet other U.S. officials have also expressed skepticism. “There is what Russia says, and there is what Russia does," Secretary of State Antony Blinken told reporters earlier Tuesday. "We're focused on the latter. And what Russia is doing is the continued brutalization of Ukraine and its people. And that continues as we speak.” And speaking later from the Pentagon, press secretary John Kirby said officials have seen some movement by Russian units away from Kyiv but said forces were likely being repositioned to conduct offenses elsewhere. “We believe this is a repositioning, not a real withdrawal,” Kirby said.
Blinken moves to bring Middle East allies behind US/NATO war on Russia - US Secretary of State Antony Blinken flew to the Middle East at the weekend to hold an extraordinary meeting with Middle East leaders. His ostensible purpose was to discuss the region’s relations with Iran, but his overarching mission was to secure full backing for the US/NATO war drive against Russia. The hastily arranged meeting, attended by leaders from the United Arab Emirates (UAE), Bahrain, Morocco, all of whom signed the Abraham Accords with Israel in 2020, and Egypt, was hosted by Israel’s Prime Minister Naftali Bennett. It was held in Sde Boker, a town in Israel’s Negev desert. Jerusalem would have been too contentious a location for Israel’s newfound allies, still supposedly committed to a “two-state solution” to the decades-long Israel/Palestine conflict. The Negev summit comes amid US concern that its longstanding Middle East allies are not firmly on board the Biden administration’s war drive against Russia in a bid to assert US hegemony. On Tuesday, Blinken met Morocco’s King Mohammed VI and the UAE’s Crown Prince Mohammed bin Zayed in Rabat. The UAE hosts numerous Russian oligarchs, has bought weapons from Russia, initially refused to denounce Russia’s invasion of Ukraine, abstaining from a resolution at the United Nations Security Council, and declined calls from US President Joe Biden. Its welcoming of Syria’s President Bashar al-Assad, who survived US imperialism’s covert war for regime change with Russian help, for a state visit to Abu Dhabi has infuriated Washington. Tel Aviv has desperately sought to balance between the US and Russia, despite having acted for years as the custodian of US imperialism’s interests. Israel is home to many immigrants from both Russia and Ukraine on whom it is reliant as a source of cheap labour for its high-tech industries. It has formally supported the US/NATO war drive in Ukraine, but has been very reticent in public, with Bennett ordering his cabinet to remain silent on the issue and refusing to publicly mention “Russia” or “Putin” or criticize Russia’s invasion of Ukraine. Senior US politicians and officials have criticised Israel for “sitting on the fence.” Victoria Nuland, Under Secretary of State for Political Affairs, called on Bennett to come out of his “comfort zone” and provide Ukraine with military aid while joining the sanctions against Putin, adding that the US did not want Israel “to become the last haven for dirty money that’s fuelling Putin's wars.” While Israel has sent humanitarian aid to Ukraine, it has refused Kiev’s requests to send arms, including US-made anti-aircraft Stinger missiles or drones, or supply it with Israeli arms company NSO’s Pegasus spyware. Bennett has sought to avoid antagonising Russia, even paying a flying visit to Moscow as the first Western leader to meet Putin after the invasion of Ukraine. He has refused to impose sanctions on Russia or Russian oligarchs, despite Nuland’s insistence that joining the financial sanctions was more important than Israel providing military aid to Ukraine.
US Indo-Pacific military chief warns of conflict with China over Taiwan - In an interview with the Financial Times last Friday, Admiral John Aquilino, head of the US Indo-Pacific Command, again hit out at China over Taiwan, declaring that the Russian invasion of Ukraine signaled that “hey, this could really happen” in this region. The lesson, he declared, was “don’t be complacent… We have to be prepared at all times.” During his congressional confirmation hearing last year, Aquilino warned that war with China over Taiwan was “much closer than most think.” His predecessor Admiral Phil Davidson only days earlier told the Senate Armed Services Committee that the US could face conflict with China within six years. Aquilino, who heads the largest US command comprising some 380,000 military personnel armed to the teeth with warplanes, warships, submarines and the latest weaponry, was in Australia to further integrate its military into US war plans. His focus on the “threat” posed by China is simply the justification for a massive US military build-up in the Indo-Pacific and the forging of closer alliances, strategic partnerships and basing arrangements across the region. Aquilino told the Financial Times that China had displayed a “boldness” over the past year, citing its “increased maritime and air operations” near Taiwan, the “very steep increase” in China’s nuclear arsenal, which the Pentagon projects will surpass 1,000 warheads this decade, and the test firing of a new hypersonic weapon last July. China’s military expansion, however, is dwarfed by that of US imperialism, whose military budget is greater than that of the world’s next nine largest combined, including China. The Pentagon already has thousands of nuclear warheads and is spending hundreds of billions of dollars to upgrade its nuclear weapons and delivery systems. It pulled out of the Intermediate Range Nuclear Forces Treaty with Russia in 2019 and is planning to station such weapons in the Pacific within range of the Chinese mainland. Over the past year, the Biden administration has deliberately escalated tension with China over Taiwan by conducting high-level US visits with Taipei’s civilian and military officials—actions that call into question the One China policy that is the basis of US-Chinese diplomatic relations. While flights by Chinese aircraft have increased into the Taiwanese Air Defence Identification Zone (ADIZ)—a designation that has no standing in international law—the Pentagon has boosted the passage of its warships through the Taiwan Strait as well as the size and number of war games in waters close to China. In a particularly provocative move before arriving in Australia, Aquilino flew aboard a US navy reconnaissance aircraft close to Chinese-controlled islets in the South China Sea in a direct challenge to Chinese authorities. While flying in a military plane thousands of kilometres from the nearest American territory, the Indo-Pacific commander accused China of establishing an “offensive” military capacity in the South China Sea.
Prices of Iron and Steel, and Trade Policy by Menzie Chinn -I’m covering the impact of tariffs and quotas (general, antidumping, countervailing subsidy, section 232) and updated some graphs on steel employment, production, and prices. Here’s one particularly interesting one: Figure 1: PPI for iron and steel (blue), and import price for iron and steel (brown), both in logs 2018M03=0. NBER defined recession dates shaded gray. Orange denotes imposition of Section 232 tariffs. Source: BLS via FRED, NBER, and author’s calculations.Obviously, the weights and definitions differ between the two indices, so the the two series are not strictly comparable. However, to the extent that the import price indices do not include tariffs, the evolution of the gap between the two series indicates the impact of tariffs. This is suggestive that eliminating the Section 232 tariffs would provide a one-off reduction in inflationary pressures.AAF estimates the consumer cost of the Section 301 and Section 232 tariffs at about $51 billion (loss of consumer surplus is different from net welfare loss).Removal of the steel and aluminum tariffs would likely result in a one-time drop of a 1 percentage point in the PPI, while removal of the China tariffs would result in a one time drop in the CPI of about a quarter percentage point, according to Russ/PIIE.
Alberta’s ‘Energy War Room’ Now Wants to ‘Influence’ US, New Documents Show - An organization that spreads propaganda on behalf of the Alberta government has registered as a “foreign agent” in the U.S. so that it can “influence American public opinion” amid the Ukraine crisis in favor of importing more Canadian oil, according to documents viewed by VICE News.The documents were filed earlier this month with the U.S. Department of Justice on behalf of the Canadian Energy Centre, also known as the “energy war room,” which is funded by the Alberta government and has a board of directors composed of three provincial cabinet ministers.The Canadian Energy Centre says in the documents, required under the Foreign Agents Registration Act, that it is working with public relations company DDB Canada on “political activity” in the U.S. The goal of this activity is to “influence American public opinion with respect to the Canadian oil and gas industry.” It says that advertising “materials will be disseminated to the general public” to achieve this goal. The irony is that the Alberta government has spent years trying to delegitimize its environmental critics as belonging to“foreign-funded misinformation campaigns” that hide their true interests from the public. “They have so heavily criticized any form of foreign engagement or influence,” Tzeporah Berman, international program director at the environmental groupStand.earth, told VICE News. “This push in the U.S. shows how hypocritical they are.” Alberta is home to the third-biggest proven oil reserves on the planet, making Canada the largest foreign supplier of oil to the U.S. But Alberta’s oil sands industry has been criticized by President Joe Biden and other U.S. Democratic policymakers including Ilhan Omar and Rashida Tlaib for itsheavy environmental impacts.
Elon Musk says the Russian rocket engines Boeing and Lockheed Martin use are 'great,' amid the country's decision to stop supplying the US - Elon Musk recently addressed the quality of Russian engines, amid Russia's decision to halt sales of rocket engines to the US.In an interview with Mathias Döpfner, the CEO of Insider's parent company, Axel Springer, which took place at Tesla's factory in Fremont, California, Musk called the Russian-made RD-180 engine "a great engine."He also acknowledged that US aerospace companies, including Boeing and Lockheed Martin, used Russian engines.ULA, a joint venture between Boeing and Lockheed Martin, relies on the RD-180 engine to power its Atlas V rocket, per The Verge. The plan is for the engine of ULA's new Vulcan rocket to be produced by Blue Origin, though delays are said to have caused frustration.Musk's comments came after Russia stopped supplying rocket engines to the US in retaliation for sweeping sanctions over the country's invasion of Ukraine.Dmitry Rogozin, the head of the Russian space agency, said previously: "In a situation like this, we can't supply the United States with our world's best rocket engines. Let them fly on something else, their broomsticks, I don't know what."Döpfner asked Musk whether the situation was dangerous for the US. In response, Musk said: "Boeing and Lockheed have strongly relied on the Russian RD-180 Engine. Which I should say, to be fair, is a great engine."He added: "They are hoping to move away from that in the future with engines from Blue Origin. There is also the Antares, which uses the RD-181, I believe. They will not be able to fly as a result."
Russia brought back a US astronaut from the ISS despite the two countries cutting most ties over the invasion of Ukraine -US astronaut Mark Vande Hei set off Wednesday to return to Earth on a Russian space capsule. Vande Hei spent 355 days in the International Space Station (ISS) — the longest continuous trip in low-Earth orbit.Vande Hei boarded the Russia Soyuz MS-19 spacecraft on Wednesday with Russian cosmonauts Anton Shkaplerov and Pyotr Dubrov.The trip is an example of increasing rare US-Russian cooperation after the Russian invasion of Ukraine and Western retaliatory sanctions severed many of the ties between the two. The spacecraft landed in Kazakhstan at 7:28 a.m. ET on Wednesday.Vande Hei's record-breaking achievement was marred by raised tensions between Russia and the US.In recent weeks, Russia's space agency chief Dimitry Rogozin hascriticized the US sanctions in aggresive social-media posts,including a public spat on Twitter with former US astronaut Mark Kelly.A heavily edited video aired by the State-Owned RIA Novosti andshared by NASA Watch on March 5 hinted at the possibility that Russia could refuse to return Vande Hei to Earth, stranding him in orbit.It showed Russian cosmonauts seemingly waving goodbye at Vande Hei before boarding a shuttle departing from the ISS.
Administration now requiring coronavirus vaccines for some undocumented migrants -The Department of Homeland Security (DHS) will be expanding its vaccination policy at the southwestern U.S.-Mexico border, requiring some migrants who are taken into custody to get immunized against COVID-19. "The effort to vaccinate those in our care and custody, which is a public health best practice, has been ongoing for many months," a spokesperson for the department told The Hill in a statement. "DHS has been providing the COVID-19 vaccines to noncitizens in ICE custody since summer 2021," they added. "In order to further safeguard public health and ensure the safety of border communities, the workforce, and migrants, DHS is now expanding these efforts and requiring that noncitizens taken into CBP custody for further immigration processing at the Southwest land border be given age-appropriate COVID-19 vaccines." This new policy was first reported by The New York Times. According to the sources who spoke to the newspaper, migrants who lack proof of vaccination and are not expelled under the public health order will be required to get vaccinated in seven areas, including San Diego, El Paso and the Rio Grande Valley. The Times reported that those who refuse to get vaccinated will be placed into deportation proceedings. Migrants who request asylum and refuse to get immunized will be released with a monitoring device and "stringent conditions.” This new policy could indicate a shift in the U.S. border policy as both federal, state and local authorities seek to move on from pandemic-era guidelines. Since the beginning of the pandemic, many migrants seeking to enter the U.S. have been turned away under the health provision Title 42. It was invoked by the Trump administration after the Centers for Disease Control and Prevention said it was necessary, and the Biden administration has continued to uphold it. However, modification have been made to the policy, with the Biden administration adding exemptions for unaccompanied children in 2021.
CDC lowers COVID travel warning for India -The Centers for Disease Control and Prevention (CDC) has changed India's COVID-19 notice to "Level 1," indicating that the risk of contracting the virus is low.The CDC had previously designated India a "Level 3: High" travel warning for Americans wishing to travel to the South Asian country. The CDC also lowered Chad, Guinea and Namibia to Level 1.Despite easing the travel warning, the CDC recommends that travelers be up to date on their COVID-19 vaccines before traveling to India. The CDC classifies someone as "up to date" if they have completed their primary series and received their booster dose.The travel notice warns that "even if you are up to date with your COVID-19 vaccines, you may still be at risk for getting and spreading COVID-19."It further recommends that anyone 2 years or older should properly wear a well-fitting mask in indoor public spaces.The State Department has also lowered its travel advisory for India to "Level 2: Exercise Increased Caution."The update from the CDC and the State Department comes a day after all international flights to and from India were resumed. The Indian government announced a significant relaxation in COVID-19 travel restrictions earlier this month. A ccording to the Indian Embassy in Washington, D.C., tourists traveling to India will be able to enter the country on either paper or e-tourist visas for the first time since March 2020.
CDC remains silent on unexplained 25 percent cut in child COVID-19 deaths - On March 16, 72,277 deaths, including 416 pediatric deaths, disappeared from the age demographics section of the COVID Data Tracker website run by the US Centers for Disease Control and Prevention (CDC). This resulted in the CDC’s official COVID-19 pediatric death count dropping by nearly 25 percent. No substantive explanation has been given by the agency for this drastic reduction of age-demographic data. The CDC gave an evasive reply to an initial inquiry by the World Socialist Web Site (WSWS), which was reported last week. The WSWS explained that this incident comes at a time when there is a concerted effort at the federal, state and local levels to reduce COVID-19 surveillance and data reporting and to hide the impact of the disease by differentiating between deaths and hospitalizations “with COVID-19” versus “from COVID-19.” In a brief reply to the WSWS, CDC Public Affairs Specialist Jasmine Reed stated, “An adjustment was made to COVID Data Tracker’s mortality data on March 14 involving the removal of 72,277—including 416 pediatric deaths—deaths previously reported across 26 states because CDC’s algorithm was accidentally counting deaths that were not COVID-19 related.” The WSWS has sent three subsequent inquiries to the CDC over the past week and a half and has not received a reply. The CDC has not addressed the following pertinent questions asked by this reporter:
- How was the algorithm accidentally counting deaths that were not COVID-19 related?
- Why did this affect only 26 states, and which states were involved?
- Did the 72,277 deaths occur during a specific range of dates or across the duration of the pandemic?
- Were these deaths among patients who were diagnosed with COVID-19? In other words, were their deaths re-classified despite a COVID-19 diagnosis?
- Why weren’t the 72,277 deaths that were removed from the age demographics section also removed from the “Deaths Total” tally at the top of the Data Tracker webpage?
In the midst of the worst public health crisis in over 100 years, the public has a right to accurate, timely and uniform data. The CDC must answer the questions raised by the WSWS and thoroughly explain what happened.
21 states file lawsuit against federal mask mandate on transportation -More than 20 states filed a lawsuit on Tuesday against the federal mask mandate on transportation, which has been extended until April 18, saying it violated the Constitution and violated the Administrative Procedure Act (APA). The 21 states claim that the Centers for Disease Control and Prevention (CDC) had not allowed for public comment for more than a year since the federal transportation mask mandate was first issued. They also claimed that they were negatively impacted by the mask mandate because it required states to “expend resources to enforce the mandate” and harmed states’ “sovereign interests” because many states “have laws or policies prohibiting or discouraging mask requirements in contexts where the mask mandate applies,” according to court filings.. While speaking during a press conference on Tuesday, Florida Gov. Ron DeSantis (R), whose state is leading the multi-state lawsuit, said the federal requirement was not “grounded in any science.” “And it's not something that's grounded in any science because if you have somebody sitting in the window seat, and they're nibbling on peanuts for two and a half hours, they can have their masks down. You have the person in the middle seat that is not eating — if they just wanted to read a magazine without the mask, then somehow that would be a big problem, and it's turned the airlines into having to police this,” DeSantis said. “It's created a lot of unruly passenger situations because it's so frustrating for people.” West Virginia Attorney General Patrick Morrisey (R) alleged in a statement that the mask mandate was depriving residents of their freedoms. “I oppose such broad overreaching mandates on airplanes and in other public transportation,” Morrisey said. “We must fight back against efforts to deprive citizens of their freedoms.” The states involved in the lawsuit are: Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, Utah, Virginia and West Virginia. The CDC told The Hill they did not comment on ongoing litigation. The Transportation Security Administration also said they would not comment on pending litigation. The development comes as U.S. airlines made a similar push earlier this month to get rid of the federal mask mandate on transportation such as trains and airlines, which they said has required their employees to become enforcers of the mandate.
Hillary Clinton tests positive for Covid-19 - NBC --Former Secretary of State Hillary Clinton announced Tuesday that she had tested positive for Covid-19, and was "feeling fine" despite some mild symptoms."I’m more grateful than ever for the protection vaccines can provide against serious illness. Please get vaccinated and boosted if you haven’t already!" Clinton, 74, said in a pair of tweets.She said her husband, former President Bill Clinton, 75, tested negative "and is feeling fine. He’s quarantining until our household is fully in the clear. Movie recommendations appreciated!"Clinton’s positive test result came the same day White House press secretary Jen Psaki announced she wouldn’t be accompanying President Joe Biden on his upcoming trip to Europe because she tested positive for the virus earlier in the day.Sen. Bob Casey, D-Pa., also announced Tuesday that he’d tested positive for the virus, adding that he was asymptomatic.
Musk reports testing positive for COVID-19: 'I supposedly have it again' - Tesla CEO Elon Musk said in a Monday tweet that he "supposedly" has tested positive for COVID-19, adding that he has "no symptoms" yet."I supposedly have it again (sigh), but almost no symptoms," Musk said in a tweet while referring to COVID-19 as the "virus of Theseus.""How many gene changes before it's not Covid-19 anymore?" he added.Musk visited Tesla's Gruenhide plant in Germany last week, according to the newswire.Musk previously had COVID-19 in November 2020. He then questioned the accuracy of COVID-19 tests after alleging that results showed he tested positive twice and then negative twice all on the same day,Reuters reported. However, in March 2021, he stirred up a bit of controversy after saying there was "some debate" about the safety of the second shot of the two-dose vaccines. Public health officials continue to maintain COVID-19 vaccines have proven to be safe and effective in providing protection against the disease.
House poised to pass bill legalizing marijuana The House is poised to pass legislation this week that would legalize marijuana, just the latest example of the swiftly changing attitudes on drug laws that marks a near reversal from the Reagan-era war on drugs that also reverberated through the 1990s. The bill legalizing marijuana has near-uniform support among Democrats and a top ally in Senate Majority Leader Charles Schumer (N.Y.), who has been aiming to introduce a similar measure this spring. And it’s just one of several pieces of legislation that underlines the shift in Congress’s attitude — a change that has come about in part because of the way past drug laws have disproportionately hit minority communities. “This Congress represents a sea change,” said Rep. Earl Blumenauer (D-Ore.), a co-chair of the Congressional Cannabis Caucus. “What we have seen is that the majority of people now realize that the war on drugs failed,” Blumenauer told The Hill. “Drugs are more accessible and cheaper and more potent and dangerous. Nobody won this war, except people who were involved with the drug dealers themselves.” The House has voted twice in the past year, most recently as part of legislation to bolster U.S. competitiveness, to enable legally operating cannabis businesses to use banking services and credit cards instead of having to function as cash-only. On Thursday, the Senate unanimously passed a bill to expand scientific and medical research on marijuana and its compounds, including cannabidiol. The flurry of action in Congress isn’t limited to marijuana legalization. The House passed a bipartisan bill last fall — by a margin of 361-66 — to eliminate the federal disparity in prison sentences for crack and powder cocaine offenses. All of the votes in opposition were from Republicans, but a majority of the House GOP overall joined all Democrats in support. The issue was also raised in the Supreme Court confirmation hearings this week by Sen. John Kennedy (R-La.), who asked nominee Ketanji Brown Jackson if she agreed there should be no such disparity in sentencing.
Trump says he's uninterested in being Speaker if GOP retakes House --Trump says he's uninterested in being Speaker if GOP retakes House © Associated Press/Ben Gray Former President Trump said he was not interested in becoming the Speaker if Republicans retake the House in the 2022 midterm elections. “No, I think that it's not something I wanted. A lot of people bring it up. It’s brought up all the time. No, it's not something I want to do. I want to look at what's happening, and then we're going to be doing something else. No, it's not something I would be interested in,” Trump said during an interview with John Solomon and Amanda Head of Just the News on Tuesday. Solomon is a former employee of The Hill. Trump’s remarks came after Rep. Matt Gaetz (R-Fla.) said during a Trump rally in Commerce, Ga., on Saturday that he would nominate the former president to be Speaker of the House if Republicans win back the lower chamber. “Give us the ability to fire Nancy Pelosi, take back the majority, impeach Joe Biden, and I’m going to nominate Donald Trump for Speaker of the United States House of Representatives,” the Florida Republican said, leading to a round of applause. “Thank you very much. Thank you, everybody,” Trump said, taking to the lectern. “Well, that was interesting.” Trump has been pitched on running for the Speakership before. The Constitution lacks a requirement for the House Speakership to be held by a House member, so the former president could theoretically be elected to the position.
No. 2 GOP senator to oppose Supreme Court nominee - Sen. John Thune (S.D.), the No. 2 Senate Republican, said on Tuesday that he will oppose Ketanji Brown Jackson’s Supreme Court nomination. Thune’s opposition, while expected, is the latest indication that Republicans are hardening their stance on Jackson’s nomination. “I enjoyed meeting with Judge Jackson and respect her achievements, but I cannot in good conscience vote for a Supreme Court justice whose record indicates that she will allow her personal political opinions to shape her judicial decisions,” Thune said. Thune pointed to multiple issues, including her sentencing rulings, declining to take a stance on expanding the Supreme Court and questions about her judicial philosophy. The White House and Democratic senators have defended Jackson by noting her sentencing decisions are in the mainstream and that previous nominees haven’t taken a position on expanding the Supreme Court. Thune’s official announcement comes after he indicated to reporters on Monday that he would oppose her and Senate Minority Leader Mitch McConnell (R-Ky.) said last week that he would vote against Jackson. Susan Collins to make Supreme Court decision 'relatively soon' GOP shoots down Thomas recusal as scrutiny grows Democrats don't need GOP support to confirm Jackson as long as all 50 of their members support her and are present to vote, and Vice President Harris can break a tie. But Democrats are hoping to peel off at least one GOP senator. Republican Sens. Lindsey Graham (S.C.), Lisa Murkowski (Alaska) and Susan Collins (Maine) voted for her confirmation to the circuit court last year.
GOP Sen. Susan Collins says she'll vote to confirm Biden's Supreme Court nominee Ketanji Brown Jackson --GOP Sen. Susan Collins said she'll vote to confirm Judge Ketanji Brown Jackson to the Supreme Court, becoming the first Republican senator to support President Joe Biden's nominee."I have decided to support the confirmation of Judge Jackson to be a member of the Supreme Court," Collins told The New York Timesafter meeting with Jackson a second time on Tuesday. Collins' move ensures that Jackson will get bipartisan support for her confirmation to the Supreme Court. The Maine Republican, a critical swing vote on Supreme Court confirmations in recent years, praised Jackson's "sterling academic and professional qualifications" in a statement, and said she was confident that Jackson would not be "bending the law to meet a personal preference." Biden nominated Jackson, a federal judge on the US Court of Appeals for the District of Columbia Circuit, to replace retiring Justice Stephen Breyer. If confirmed, Jackson will be the first Black woman in US history to serve on the Supreme Court.
Judiciary chair calls on Justice Thomas to recuse himself from Jan. 6 cases - Sen. Dick Durbin (Ill.), the No. 2 Senate Democrat and chairman of the Judiciary Committee, said on Monday that Supreme Court Justice Clarence Thomas should recuse himself from cases related to the Jan. 6, 2021, Capitol attack. Durbin's comments come in the wake of reports from late last week that Ginni Thomas, Clarence Thomas's wife, urged then-White House chief of staff Mark Meadows to move aggressively to overturn the 2020 election. Ginni Thomas also disclosed in a recent interview that she took part in the "Stop the Steal" rally that preceded the riot. Durbin said Ginni Thomas's involvement "really creates an obvious conflict" for her husband on Jan. 6-related cases. "For the good of the court I think he should recuse himself from those cases," Durbin added. The reporting on Ginni Thomas's contact with Meadows has raised fresh scrutiny of how Clarence Thomas has handled cases tied to Jan. 6 and the 2020 election. In January, the Supreme Court blocked former President Trump's bid to keep administration records from being handed to the Jan. 6 House committee. The decision was 8-1, with Thomas as the lone dissent. It's unclear if Ginni Thomas's messages would have been in the White House records being disputed in court. Thomas also dissented in a February 2021 decision by the Supreme Court to turn away a challenge to Pennsylvania's election results. Thomas wrote that the decision was "baffling" and "befuddling." Durbin is one of several Democrats who have called for Thomas to recuse himself from any cases related to Jan. 6. Other Democrats have also said that he should recuse himself from cases involving the 2024 election if Trump runs again.
GOP shoots down Thomas recusal as scrutiny grows - Republicans are defending Justice Clarence Thomas as he faces intense ethics scrutiny over his wife’s support for overturning the 2020 election. Thomas has been at the center of a days-long political storm in the wake of reports that his wife, Ginni Thomas, urged then-White House chief of staff Mark Meadows to aggressively try to overturn the results of the 2020 election. The messages, which are part of the 2,320 texts Meadows handed over to the House Jan. 6 committee, have sparked calls from Democrats for Clarence Thomas to recuse himself and questions about why he didn’t step back from cases tied to the 2020 election. But Republicans are backing up the conservative justice, underscoring the uphill battle facing those pushing to investigate Clarence Thomas or reform ethics rules on Capitol Hill. “There were a lot of people who had bought some of those arguments. But I think in terms of how that bears on the justice’s work, I’m fully confident in his ability to do his job in an impartial way. He always has,” said Sen. John Thune (R-S.D.). Sen. John Cornyn (R-Texas) said it was up to Thomas if he wanted to recuse himself, but lamented the focus on Ginni Thomas. “I just think this is a bad development where now public officials’ families are now the target of all this press,” Cornyn said, adding that public officials “don’t volunteer to have our families dragged through the mud.” The GOP defense of Thomas comes after reports from The Washington Post and CBS News about communication between Ginni Thomas and Meadows set off a political firestorm. Ginni Thomas also revealed in a recent interview that she had participated in the pro-Trump “Stop the Steal” rally that preceded the Jan. 6 riot at the Capitol. Critics have been raising concerns that Ginni Thomas’s political activity poses an ethically troubling overlap with her husband’s judicial position. But the new reporting on her outreach to Meadows has raised fresh ethics questions about Justice Clarence Thomas’s handling of election-related cases. In January, the Supreme Court blocked Trump’s bid to keep administration records from being handed to the Jan. 6 committee. The decision was 8-1, with Clarence Thomas as the lone dissenter. It’s unclear if Ginni Thomas’s messages would have been in the White House records being disputed in court. Clarence Thomas also dissented in a February 2021 decision by the Supreme Court to turn away a challenge to Pennsylvania’s election results. He wrote that the decision was “baffling” and “befuddling.” Several Democratic senators have pushed for Clarence Thomas to recuse himself from Jan. 6-related cases, as well as 2024 election cases if former President Trump runs again. Senate Judiciary Committee Chairman Dick Durbin (Ill.), the No. 2 Senate Democrat, said on Monday that Ginni Thomas’s outreach on trying to overturn the 2020 election creates an “obvious conflict” for Justice Thomas on Jan. 6-related cases. “For the good of the court, I think he should recuse himself from those cases,” Durbin added. But Republicans, so far, are sticking by the justice.
Ginni Thomas texts leave GOP lawmakers scrambling -Ginni Thomas's text messages to former White House chief of staff Mark Meadows leading up to the Jan. 6, 2021, riot at the Capitol have sparked questions over the extent of her activism within the GOP. It’s also left Republican lawmakers grappling with how to respond to Thomas and her husband, Supreme Court Justice Clarence Thomas. Thomas sent a total of 21 text messages to Meadows urging him to find a way to keep former President Trump in office. Her efforts may have gone beyond her messages to Meadows. NBC News reported that Thomas also reached out to an aide with the Republican Study Committee, the largest conservative caucus in the House, asking for its members to go “out in the streets.” A Republican Study Committee aide disputed that characterization, but in doing so acknowledged the existence of an exchange with Thomas: “It's a misleading description of a single departed staffer’s recounting of an email exchange from 15 months ago,” the aide said. Thomas has been a regular presence in conservative activism circles for years. But her activities were not widely questioned until recently, when a New Yorker profile and the subsequent release of the text messages highlighted her involvement with “Stop the Steal” groups and suggestions of avenues to try to overturn the election. Her contact with Republicans in support of Trump is also placing scrutiny on her husband, who is facing growing calls from Democrats to recuse himself from cases related to the Capitol riot. Many Republicans see the Supreme Court as their best chance for blocking the House investigation into the attack, underlining his importance. It also seems increasingly possible that Ginni Thomas could be called to testify before the House committee investigating the Jan. 6 attack on the Capitol. “Based on the evidence we have in our possession, I feel very confident with inviting her to the committee, and if she refuses, issuing a subpoena,” Rep. Bennie Thompson (D-Miss.), the chairman of the select committee, told CBS this week. Thomas’s texts included shoutouts to Reps. Louie Gohmert (Texas) and Paul Gosar (Ariz.), two of the conservative Republicans identified by Stop the Steal organizer Ali Alexander as being central to the effort, as well as mentions of well-known conservative Reps. Jim Jordan (Ohio) and Chip Roy (Texas). In one text message to Meadows on Nov. 6, 2020, Thomas expressed frustration that members of Congress were not doing more to support Trump: “House and Senate guys are pathetic too... only 4 GOP House members seen out in street rallies with grassroots... Gohmert, Jordan, Gosar, and Roy.” Many Republican members of Congress are familiar with Thomas, but they did not elaborate on whether she sent them the same kinds of messages about overturning the election that she did to Meadows in the period between the 2020 election and Jan. 6 insurrection.
The Money Trail to the Ginni Thomas Emails to Overturn Biden’s Election Leads to Charles Koch - By Pam and Russ Martens - The Washington Post’s Bob Woodward and Bob Costa of CBS News have unleashed a fury of renewed interest in the work of the House Select Committee investigating the January 6 attack on the Capitol. Last Thursday, Woodward and Costa set off a political firestorm when they released the contents of emails that Ginni Thomas, wife of the sitting Supreme Court Justice, Clarence Thomas, had sent to President Donald Trump’s Chief of Staff, Mark Meadows, in 2020, urging him to overturn the Biden election win and attempting to steer his efforts in that regard. A total of 29 emails were obtained by Woodward and Costa, with the bulk of the emails occurring in just the month of November 2020, raising questions as to how many more emails are still out there from Thomas to the White House from December 1, 2020 through January 20, 2021 when Biden was sworn in. Much of the current news debate around the emails is focusing on whether Clarence Thomas should recuse himself from cases involving groups with which his wife is involved and whether the Select Committee should subpoena Ginni Thomas to testify. While those are certainly important issues, what has thus far been ignored is the smoking gun trail that leads directly to the doorstep of billionaire and right-wing Republican political mastermind, Charles Koch, the Chairman, CEO (and majority owner with the heirs of his deceased brother David) of the fossil fuels conglomerate Koch Industries.Wall Street On Parade has previously documented that at least three of the front groups that fomented the Big Lie that the 2020 presidential election had been stolen from Trump and that actively solicited thousands of people to turn out for the January 6 event at the Capitol, were funded by Koch Industries or its front groups. The smoking gun in the Ginni Thomas email thread occurs in an email dated November 10, 2020 when she tells Meadows to “Listen to Rush. Mark Steyn, Bongino, Cleta.” Thomas is clearly referring to conservative commentators Rush Limbaugh, Mark Steyn and Dan Bongino, and lawyer, Cleta Mitchell.Cleta Mitchell is best known in the Trump election saga as the lawyer who was on the January 2, 2021 call with Donald Trump when he phoned the Secretary of State of Georgia, Brad Raffensperger, and told him this: “I only need 11,000 votes. Fellas, I need 11,000 votes. Give me a break.” That call took place two months after the presidential election. (Mitchell stepped down from her long-term employment at law firm Foley & Lardner after her presence on that call made the news cycle.)But Cleta Mitchell’s relationship with Ginni Thomas dates back at least a decade earlier – and not in a good way.Cleta Mitchell had filed an amicus brief in the Citizens United case before the Supreme Court that was decided on January 21, 2010. That case would be the tipping point to allow unlimited sums from corporations – like Koch Industries — in U.S. elections.Just eight days after Justice Thomas voted in favor of that decision to open the floodgates to corporate money in campaigns, Cleta Mitchell made a move that looked very much like a quid pro quo to Ginni Thomas. Mitchell, then still a partner at Foley & Lardner, filed an application with the Internal Revenue Service to set up a nonprofit called Liberty Central, Inc. on behalf of Ginni Thomas. According to IRS tax filings, Liberty Central received a combined $1.478 million from dark money donors in 2009 and 2010.On the IRS tax filings for Liberty Central for 2009 and 2010, Ginni (Virginia) Thomas is listed as President and CEO. The 2010 tax filing shows that Ginni Thomas received $120,511 in compensation from Liberty Central that year. She eventually stepped down from an official post at the nonprofit, stating she would serve as a consultant.Liberty Central had the fingerprints of Charles Koch all over it. Acting as General Counsel in 2010 for Liberty Central was a former lawyer for the Charles G. Koch Foundation, Sarah Field. A former Koch lobbyist, Matt Schlapp, served on the Board of Liberty Central at inception.
The Wall Street Journal’s Editorial Page Is Back to Propping Up Bad Actors: This Time It’s the Wife of Clarence Thomas - By Pam and Russ Martens -While the vast majority of news outlets around the country are calling for Supreme Court Justice Clarence Thomas to recuse himself from cases involving the January 6 attack on the Capitol, the Wall Street Journal’s Editorial Board has penned this headline today over yet one more of its radical-right editorials: “Justice Thomas Shouldn’t Recuse.” (We’d link to the article but there’s a paywall.)To support its position, the Wall Street Journal Editorial Board writes this about the wife of Clarence Thomas, Ginni (Virginia) Thomas, whose recently released emails to Trump-era White House Chief of Staff Mark Meadows have exposed her as attempting to steer the White House in how to overturn the election of Biden:“The right answer is that Ginni Thomas is no threat to the Court, no matter how bizarre her views about the 2020 election. She doesn’t sit on the Court, and there is no reason to believe her personal political views influence the judicial impartiality of Justice Thomas.”It’s not the “views” of Ginni Thomas that need to stand trial. It’s her decades of money-grubbing behind a dark curtain – money that has benefitted her husband as well – as he sat on the highest court in the land for the past three decades.If you’ve been listening to TV news lately, you’ve heard that Ginni Thomas had received $680,000 from the right-wing Heritage Foundation and her husband had failed to report it on his financial disclosure forms at the Supreme Court. Wall Street On Parade got our hands on the public tax filings of the Heritage Foundation from 1999 through 2007 and the amount paid by the Foundation to Ginni Thomas was actually $1,051,214. Clarence Thomas was forced to amend years of his financial disclosure reports in 2011, which note in bold that falsification of the information on the report “may be subject to civil and criminal sanctions.”The Heritage Foundation has been heavily funded over the years by the billionaire Koch brothers, Charles and David. (David Koch died in 2019.) Charles Koch and David’s heirs are the majority owners of the fossil fuels conglomerate, Koch Industries. Greenpeace calls the Heritage Foundation “Koch Industries’ Climate Denial Front Group” and reports that it has received $6,130,201 from Koch foundations from 1997 through 2017. That funding is just the tip of the iceberg, however. Tens of millions more have come from the Koch network, a group of super wealthy corporate heirs who meet semi-annually to strategize on how to put their sycophants in Congress and the White House.Fourteen days after the attack on the Capitol, Wall Street On Parade documented that at least three of the front groups that fomented the Big Lie that the 2020 presidential election had been stolen from Trump and that actively solicited thousands of people to turn out for the January 6 event at the Capitol, were funded by Koch Industries or its front groups. Ginni Thomas was present on the grounds of the Capitol on January 6.In the emails that Ginni Thomas sent to Trump’s Chief of Staff, Mark Meadows, one of the people that she told Meadows to listen to was attorney Cleta Mitchell – a woman who has both a longstanding association with Ginni Thomas as well as with Koch front groups. Trump’s phone log for January 6 shows that Cleta Mitchell was one of the people that Trump spoke with at 7 :53 p.m. on the evening of the attack on the Capitol.
Ocasio-Cortez to Clarence Thomas: Resign or face impeachment - Rep. Alexandria Ocasio-Cortez (D-N.Y.) on Tuesday called on Justice Clarence Thomas to resign or face impeachment for what she depicted as a pattern of ethical breaches. “Clarence Thomas should resign,” she wrote on Twitter. “If not, his failure to disclose income from right-wing organizations, recuse himself from matters involving his wife, and his vote to block the Jan 6th commission from key information must be investigated and could serve as grounds for impeachment.” Ocasio-Cortez is just the latest in a series of Democratic lawmakers and legal experts to intensify ethical scrutiny of Thomas in the wake of explosive reports last week that exposed his wife’s aggressive efforts to help overturn former President Trump’s electoral defeat. Those revelations raised fresh questions about the justice’s refusal to step aside from related cases before the Supreme Court, including at least 10 rulings concerning the 2020 presidential election, without any indication of him recusing. The ruling that has drawn the sharpest criticism came in January, when Thomas was the only justice who dissented in an 8-1 ruling that cleared the way for House investigators probing the Jan. 6, 2021, insurrection to obtain Trump-era White House records.
Ocasio-Cortez: Lack of Latino representation 'really disgraceful' -- Alexandria Ocasio-Cortez (D-N.Y.) criticized the lack of Latino representation in leadership in an interview published Tuesday. "I think it’s really disgraceful, frankly, the lack of Latino representation," Ocasio-Cortez said to New York Magazine's Intelligencer. "And the thing is that this isn’t just about identity representation, it’s also about issue representation. "Frankly, even with the mayor, some of his Latino appointments have been homophobic and have been unrepresentative of the interests of our broader community. Even on the state level, there is an enormous dearth of real representation of people fighting for Latinos," she added. "I have endorsed and invested in, I believe, 19 city council candidates that won their races this past cycle. So a lot of the work that I’m investing in is building our bench and also organizing our voters and our communities around the issues that are important to us," she also said. The progressive lawmaker's comments come after a recent poll indicated more Hispanic Democrats are considering leaving their political party than Hispanic Republicans. In July, Latina lawmakers gathered to discuss efforts about increasing representation in both the federal government and the private sector. “When I was first entered into politics, it was dominated by white males in my party,” Rep. Nicole Malliotakis (R-N.Y.), who was the first Hispanic Republican in New York City to hold elected office, said at the time. “Because I was sort of an outsider, you could say I always had to work harder and take on the harder seats.” In the 117th Congress, there are a record-breaking 54 Latino lawmakers, including 14 women. /p>
Trump Organization ordered to comply with New York attorney general's subpoena in next month - The New York Supreme Court on Monday ordered the Trump Organization to comply with a subpoena issued by the New York attorney general's office within the next month. New York Supreme Court Justice Arthur Engoron gave the Trump Organization until April 20 to provide a report detailing "potentially responsive information." "The Trump Organization Report must specify, as much as reasonably possible, the quantities of documents collected, reviewed, and produced, and the quantities of documents reviewed from each device or likely location or responsive records," Engoran wrote. The Hill has reached out to the Trump Organization for comment. This subpoena was issued more than two years ago by New York Attorney General Letitia James (D) in connection with an investigation into whether the Trump Organization artificially inflated its value to increase its perceived net worth. The judge also ordered that computer forensics company HaystackID, hired to audit the company's compliance with the subpoena issued by the New York attorney general's office, submit a weekly report detailing its findings, starting one week from the order issued on Monday.
Trump urges Putin to release dirt on Hunter Biden -Former President Trump called on Russian President Vladimir Putin to release dirt on President Biden’s son Hunter Biden during an interview published Tuesday. “One thing, while I'm on your show, as long as Putin now is not exactly a fan of our country, let him explain, where did — because Chris Wallace wouldn't let me ask the question — why did the mayor of Moscow’s wife give the Bidens, both of them, $3.5 million dollars? That's a lot of money,” Trump told John Solomon and Amanda Head on the "Just the News" show on Real America’s Voice network. Trump added that, "I would think Putin would know the answer to that. I think he should release it.” Solomon, a former opinion writer at The Hill, faced scrutiny for his columns during Trump’s first impeachment relating to Ukraine. A review of his columns was subsequently undertaken by The Hill, and they were later annotated with more context after it was established that Solomon had not identified important details regarding his sources. The former president in the new interview was referencing a controversial 2020 Senate GOP report on President Biden and Hunter Biden, which resulted in little proof of wrongdoing. Trump has repeatedly alleged that Hunter Biden received money from the wife of Moscow's late mayor Yury Luzhkov.
Inside Hunter Biden’s multimillion-dollar deals with a Chinese energy company - The deal was years in the making, the culmination of forging contacts, hosting dinners, of flights to and from China. But on Aug. 2, 2017, signatures were quickly affixed, one from Hunter Biden, the other from a Chinese executive named Gongwen Dong. While many aspects of Hunter Biden’s financial arrangement with CEFC China Energy have been previously reported and were included in a Republican-led Senate report from 2020, a Washington Post review confirmed many of the key details and found additional documents showing Biden family interactions with Chinese executives. Over the course of 14 months, the Chinese energy conglomerate and its executives paid $4.8 million to entities controlled by Hunter Biden and his uncle, according to government records, court documents and newly disclosed bank statements, as well as emails contained on a copy of a laptop hard drive that purportedly once belonged to Hunter Biden. The Post did not find evidence that Joe Biden personally benefited from or knew details about the transactions with CEFC, which took place after he had left the vice presidency and before he announced his intentions to run for the White House in 2020. But the new documents — which include a signed copy of a $1 million legal retainer, emails related to the wire transfers, and $3.8 million in consulting fees that are confirmed in new bank records and agreements signed by Hunter Biden — illustrate the ways in which his family profited from relationships built over Joe Biden’s decades in public service. Hunter Biden’s overseas work has been the subject of heightened scrutiny. He has been under federal investigation as part of an inquiry into his taxes, with witnesses called before a grand jury as recently as last month. Federal prosecutors had been attempting to determine if he failed to account for income from China-related deals, The Post has previously reported, although it is unclear whether that is still a focus. Republicans, meanwhile, have pointed to the Biden family’s business deals in China, along with Hunter Biden’s past membership on the board of the Ukrainian energy firm Burisma, as potential conflicts of interest. The CEFC deal became one of the most lucrative, if short-lived, foreign ventures Hunter Biden is known to have pursued. The Post review draws in part on an analysis of a copy said to be of the hard drive of a laptop computer that Hunter Biden purportedly dropped off at a Delaware repair shop and never came to collect. The laptop was turned over to the FBI in December 2019, according to documents reviewed by The Post, and a copy of the drive was obtained by Rudy Giuliani and other advisers to then-President Donald Trump a few months before the 2020 election. After the New York Post began publishing reports on the contents of the laptop in October 2020, The Washington Post repeatedly asked Giuliani and Republican strategist Stephen K. Bannon for a copy of the data to review before the election, but the requests were rebuffed or ignored. In June 2021, a copy was provided to The Post by Jack Maxey, an activist who received a copy from Giuliani in 2020, at a time when Maxey was working with Bannon and his “War Room” podcast. The Post has explored the chain of custody, as well as the findings of forensic analyses of the data, in a separate story..
Federal judge upholds Maxwell’s conviction following retrial bid - Federal Judge Alison Nathan upheld a guilty verdict against Ghislaine Maxwell after the validity of the conviction was questioned due to a juror’s mistake made on a questionnaire. Attorneys for Maxwell, a British socialite and former girlfriend of disgraced financier Jeffrey Epstein, filed for a retrial after it was discovered a man, called Juror 50, said that he was never sexually abused on a questionnaire that was meant to screen for bias in the jury selection process. It was discovered the man told his story of abuse during deliberations in the case, causing Maxwell’s lawyers to call for a retrial. Nathan ruled on Friday that she does not believe the juror purposely lied about his abuse to get on the jury. The judge further stated the juror did not display bias and the lawyers did not reach the level of evidence needed for a retrial. Nathan’s decision upholds Maxwell’s guilty verdict after she was convicted in December of five out of the six charges against her. The charges included enticing minors to travel to engage in sex acts, transporting minors with the intent of having them engage in criminal sexual activity and perjury. She was found not guilty on one count of enticing a minor to travel to engage illegal sex acts. The Friday decision came almost a month after the juror testified to the judge regarding the mistake on the questionnaire. “This was one of the biggest mistakes I have ever made in my life,” the man told Nathan in March. “I didn’t lie in order to get on this jury.” The man told Reuters he only shared his experience because jurors during the deliberations questioned why victims who testified in Maxwell’s trial had faulty memories of their experiences.
Biden proposes funding boost for federal antitrust enforcers - President Biden is proposing funding increases for the Federal Trade Commission (FTC) and the Department of Justice's (DOJ) antitrust division as part of his $5.8 trillion proposal released Monday. Biden's 2023 budget would increase the DOJ's antitrust division funding by $88 million and the FTC funding by $139 million. The White House called it a “historic” increase in a fact sheet, saying it “reflects the Administration’s commitment to vigorous marketplace competition through robust enforcement of antitrust law.” The requests to increase the funding come as the DOJ and FTC push forward with antitrust cases against tech giants, including Google and Facebook parent company Meta. The agencies and tech advocacy groups have long pushed for increased funding to help regulators as they make decisions about which cases they can pursue and to what degree. Biden’s budget proposal also aims to strengthen the nation’s supply chains, with $372 million for the National Institute of Standards and Technology’s manufacturing programs to launch two additional manufacturing innovation institutes in 2023 and to continue to support the two institutes funded in 2022. The proposal also would provide $13 million for “cutting edge advanced communications research and engineering” at the National Telecommunications and Information Administration.
Six years of Chris Hedges’ On Contact program erased by YouTube - On March 27, YouTube removed the entire archive of six years of Chris Hedges’ On Contact from its platform without any notice or explanation. Even though very few of Hedges’ shows referenced Russia or Vladimir Putin directly, his association with RT America as well as his opposition to NATO warmongering was all that was required for YouTube to delete hundreds of hours of interviews on a range of political subjects that were critical of both the Democrats and Republicans.As reported previously by the World Socialist Web Site, the Russian state-funded cable news network RT America was shut down in the US on March 3 and all 120 of its employees were laid off at offices located in New York City, Washington D.C., Los Angeles and Miami.Although the management of the news channel said the network had experienced “unforeseen business-interruption events,” the abrupt shutdown of RT America was no doubt part of the anti-Russian offensive mounted by corporate media outlets and governments aligned with the US and NATO in the proxy war being fought in Ukraine against the regime in Moscow.Among the RT America programs terminated were several popular left-wing and anti-war TV shows including Redacted Tonight with Lee Camp andOn Contact with Chris Hedges. These programs were specifically targeted for censorship because they adopted an anti-war standpoint that was opposed to the narrative developed by the ruling political establishment in the US and Europe.This campaign to silence voices critical of the role of imperialism in provoking the war in Ukraine has been extended to the removal of video content from YouTube, podcasts from Spotify and other censorship measures by the social media platforms Facebook and Twitter.
Taibbi: Meet The Censored - Chris Hedges by Matt Taibbi - This past weekend, celebrated journalist and author Chris Hedges woke up to find six years of episodes of his Russia Today show On Contact vanished from the show’s account on YouTube. Though almost none of the shows referenced Russia or Vladimir Putin directly, and the few that did tended to be unflattering, his association with Russian state media was enough to erase hundreds of interviews about topics ranging from Julian Assange’s imprisonment to censorship to police brutality to American war crimes in the Middle East.Now on Substack, Hedges has a long and uncomfortably colorful history of being muffled. The former New York Times correspondent covered wars from the Balkans to the Middle East to the Falkland Islands, and authored books like War is a Force That Gives Us Meaning, American Fascists, and The Death of the Liberal Class, and through 2002, when he won the Pulitzer Prize as part of a team for Exploratory Reporting, he defined mainstream respectability and excellence in journalism. He might have had it easy, spending the latter part of his career on the Thomas Friedman/David Brooks Memorial Gravy Train of overpaid lectures, University trusteeships, and fellowships at obscure think-tanks, if he’d just kept his mouth shut.He didn’t. One of the few frontline American reporters who spoke Arabic, Hedges knew instantly the Iraq war would be a disaster and said so at every opportunity. He was booed offstage at a commencement address at Rockford College in 2003 by a crowd chanting “U-S-A! U-S-A!,” and hustled off campus so fast that the school wouldn’t let him grab his jacket on the way out. For those who haven’t seen it, the video of that scene is a remarkable museum piece of Bush-era war mania:Episodes like this accelerated his departure from the New York Times and into the wilds of independent media, where paying options for dissident voices had been shrinking. As he points out below, someone like him in the past would have parachuted out of a big commercial enterprise like the Times into a life at NPR — broadcasting shows “at like one in the morning, or something,” he chuckles — but NPR, too, had by then been begun its purging of unorthodox and especially antiwar voices.By the 2010s, one of the last places where media figures pushed off the traditional career track could pick up a paycheck was Russia Today. In an arrangement Hedges plainly describes as a cynical marriage of convenience, the Russian state was happy to give voice to figures covering structural problems in American society, and those quasi-banned voices were glad for the opportunity to broadcast what they felt is the truth, even understanding the editorial motivation. Hedges ended up working at RTfor six years hosting On Contact, where he interviewed authors and thinkers resting outside the cultural mainstream, from Nathaniel Philbrick to Cornel West to Nils Melzer to Noam Chomsky to many others (disclosure: I’ve also been a guest).As Hedges points out in the wide-ranging, unnerving interview below, the speech-control one-two he’s just experienced — first herded out of the mainstream for ideological offenses into a shrinking space of “allowable” dissent, then forced to watch as that space is demonized out of existence — is part of an effective pattern. “It’s how this works,” he sighs. He points to the Intelligence Community Assessment of January 6th, 2017, ostensibly intended to make a case for Russian interference in the 2016 presidential election, which actually spent much of its time complaining about RT, especially its coverage of real but unflattering domestic issues.
Musk giving 'serious thought' to building Twitter rival - Tesla Inc. CEO Elon Musk in a response to another user on Twitter said he is giving "serious thought" to starting a rival social media to Twitter. Asked whether he'd consider building a platform with an "open source algorithm" where "free speech and adhering to free speech is given top priority" and "where propaganda is very minimal," Musk tweeted that he is giving it "serious thought." A day earlier, Must posted a Twitter poll that asked users if they believe that Twitter addresses freedom of speech issues. Seventy percent said it did not. “Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy,” Musk wrote in a tweet. “What should be done?” “Is a new platform needed?” Musk added. Musk’s remarks come as the Securities and Exchange Commission (SEC) urged a federal judge last week to not let Musk and his company leave an agreement that requires his Twitter account to remain monitored.
House Subcommittee Drops a Bombshell: It Will Hold a Hearing Next Tuesday on U.S. Banks’ Role in Financing “the Horrors of Slavery” By Pam Martens and Russ Martens: The hearing set for next Tuesday at 2 p.m. by the House Financial Services’ Subcommittee on Oversight and Investigations is certain to have brought all of the public relations flacks into a huddle at JPMorgan Chase – home to an unprecedented five felony counts and the Teflon guy, Jamie Dimon, who still manages to get good press despite overseeing a financial crime spree for 16 years while becoming a billionaire in the process. The hearing is titled: “An Enduring Legacy: The Role of Financial Institutions in the Horrors of Slavery and the Need for Atonement.” It is certain to look at the notorious, previously disclosed role of JPMorgan Chase’s predecessor banks.In 2005, JPMorgan Chase was forced to acknowledge that two of its subsidiaries, Citizens’ Bank and Canal Bank in Louisiana, had accepted slaves as collateral for loans and when the holders of the loans defaulted, it actually took ownership of the slaves. The two subsidiary banks had served plantation owners from the 1830s to approximately 1865 when the civil war ended. JPMorgan Chase estimated that the two subsidiaries had accepted an estimated 13,000 slaves as collateral and had ended up owning about 1,250 slaves as a result of defaulted loans.The revelations from JPMorgan Chase came about as a result of an ordinance passed in Chicago in 2003 that required companies doing business with the city to research their history to determine any past ties to slavery.Wall Street banks were also involved in selling securities to finance the expansion of slave-run plantations in the southern United States.Alan Singer reported in 2017 at the Huffington Post that the predecessor bank to today’s Citigroup’s Citibank “was headed by a banker and sugar trader named Moses Taylor who was deeply involved in financing the illegal 19th century trans-Atlantic slave trade smuggling Africans into Cuba.”While there is still much sunshine that needs to shine on Wall Street’s role in perpetuating slavery in the United States, New York City’s dismal role received more attention on June 27, 2015. On that date then New York City Mayor Bill de Blasio dedicated a memorial plaque at a site just two blocks from the New York Stock Exchange where thousands of enslaved men, women and children had been bought and sold at a Wall Street slave market that operated from 1711 to 1762.The plaque states in part: “Slavery was introduced to Manhattan in 1626. By the mid-18th century approximately one in five people living in New York City was enslaved and almost half of Manhattan households included at least one slave.”According to an article published in 2015 by the New York Public Library, “the slave market on Wall Street closed in 1762 but men, women, and children continued to be bought and sold throughout the city.” The article also reveals this shocking history about New York City:“By 1730, 42 percent of the population owned slaves, a higher percentage than in any other city in the country except Charleston, South Carolina. The enslaved population—which ranged between 15 and 20 percent of the total — literally built the city and was the engine that made its economy run.”Wall Street banks are still the last plantation in America. They run their own private justice system that locks claims out of the nation’s courts. (See Wall Street’s Kangaroo Courts Perpetuate a Business Model of Fraud.) Discrimination against minorities is still rampant on Wall Street. Stroll through any one of the major Wall Street brokerage offices – such as Merrill Lynch or Morgan Stanley – and you will observe a sea of white males sitting in the glass-paneled offices with women mostly relegated to clerical desks outside those offices. Black brokers, male or female, are still a rarity at Wall Street brokerage firms.
Treasury, Congress in talks on stablecoin proposals, official says - Biden administration officials and lawmakers have been holding talks in recent weeks about possible legislation to regulate stablecoins and other digital assets, the Treasury Department's Nellie Liang said Tuesday. But she was vague about how much progress has been made.“There’s sort of a general agreement that stablecoins are growing and there should be actions to reduce emerging systemic risk,” Liang, the under secretary for domestic finance, said during a panel discussion at the National Association for Business Economics policy conference in Washington. “So I’m confident that we’ll reach some consensus around some of these proposals somewhere.”
Crypto hackers steal over $615 million from network that runs popular game Axie Infinity - The popular blockchain game Axie Infinity, which lets users earn money as they play, is connected to what could be the largest decentralized finance, or DeFi, hack in history.Axie Infinity's Ronin Network said in a blog post on Tuesday that it lost around $615 million in USDC (a U.S. dollar pegged stablecoin) and ethereum, surpassing the $611 million hack of the DeFi protocol Poly Network in August 2021.The security breach was confirmed by Axie Infinity's official Discord and Twitter accounts, and by Ronin Network, which underpins the game. DeFi networks aim to recreate traditional financial systems like banks, but with cryptocurrency. They mostly run on the ethereum blockchain.The incident was discovered Tuesday after a user was unable to withdraw 5,000 ether. But the attack took place on Mar. 23, when exploiters used hacked private keys to forge fake withdrawals, the blog post said, adding that other key validator nodes were compromised.Ronin said the breach resulted in 173,600 ethereum and 25.5 million USDC being drained from the Ronin bridge in two transactions, which can be viewedon Etherscan. The project lost around $615 million at current prices.Crypto holders often do not operate exclusively within one blockchain ecosystem, so developers have built cross-chain bridges to let users send cryptocurrency from one chain to another. In this case, the Ronin bridge connects Axie Infinity to other blockchains such as ethereum.Using the bridge, players could deposit ethereum or USDC to Ronin and use that to purchase non-fungible tokens (NFTs) or in-game currency. They could then sell their in-game assets and withdraw the money. Analysts at Blockchain Intelligence Group said the stolen money is on the move. Thus far, close to $17 million in ethereum has already been transferred to exchanges, including FTX and Huobi, the firm said.
‘Their Inflation Strategy Is Working’: Corporate Profits Soared to Record High in 2021 - Federal data released Wednesday shows that U.S. corporate profits jumped 25% to record highs in 2021 even as the coronavirus pandemic wreaked havoc on the nation’s economy, disrupting supply chains, hammering low-wage workers, and helping to push inflation to levels not seen in decades.According to the Commerce Department’s Bureau of Economic Analysis (BEA), domestic corporate profits adjusted for inventory valuation and capital consumption reached $2.8 trillion last year, up from $2.2 trillion in 2020—the largest increase since 1976.Employee compensation also increased in 2021, just not at the pace of corporate profits. Citing the new BEA data, Bloomberg reported that “employee compensation rose 11%, but the so-called labor share of national income—essentially, the portion that’s paid out as wages and salaries—fell back to pre-pandemic levels.”“That tends to undermine the argument that soaring labor costs are what’s driving the current surge in inflation, a case the Federal Reserve is starting to make as it accelerates interest-rate increases,” Bloomberg noted.Lindsay Owens, executive director at the Groundwork Collaborative, argued in a statement that the new profit figures show that corporate America is successfully weathering inflationary pressures across the economy by pushing higher costs onto consumers—a tactic some CEOs have openly touted during recent calls with investors.“CEOs can’t stop bragging on corporate earnings calls about jacking up prices on consumers to keep their profits soaring—and today’s annual profit data shows just how well their inflation strategy is working,” Owens said. “These megacorporations are cashing in and getting richer—and consumers are paying the price.”The American Economic Liberties Project expressed a similar view on Twitter:A number of major U.S. corporations, from Amazon to Starbucks to the Dollar Tree, have announced in recent months that they’re moving to hike prices on consumers, often blaming the broader “inflationary environment.” Outgoing Starbucks CEO Kevin Johnson—who saw his compensation soar by 39% to $20.4 million in 2021—said during his company’s fourth-quarter earnings call that impending price increases are aimed at mitigating “cost pressures including inflation.”But recent survey data indicates that Americans aren’t buying the companies’ justifications for higher costs. A Data for Progress poll released last month found that a majority of U.S. voters believe that “large corporations are taking advantage of the pandemic to raise prices unfairly on consumers and increase profits,” a position also taken by progressive members of Congress.
Large regional banks are at risk of becoming the next too big to fail firms, Hsu says - Large regional banks could become the country’s next too big to fail firms, acting Comptroller Michael Hsu said, and the agency it looking at ways of incorporating resolvability into its bank merger review process. Bank merger policy has become a hot-button financial regulation issue after it sparked the power struggle on the board of the Federal Deposit Insurance Corp. late last year. While Hsu has supported moving forward on bank merger issues in his capacity on the FDIC board, he’s been more quiet than fellow Democrats Martin Gruenberg, who now leads the FDIC, and Rohit Chopra, director of the Consumer Financial Protection Bureau. The OCC plays a critical role in overseeing mergers among larger banks.Hsu’s remarks, given at the Wharton Financial Regulation Conference on Friday, outline his concerns on bank mergers largely in the context of what he says could be a threat to financial stability. His comments signal a tougher time for banks going through the merger review process, said Bao Nguyen, a partner at Skadden's Financial Institutions Regulation and Enforcement Group.
FDIC advances bank merger proposal -The agency submitted its request for information — which asks whether banks should bear the burden of proof in merger applications and how much input the CFPB should have in approving deals — to the Federal Register. The Federal Deposit Insurance Corp. has set the wheels in motion to publish its request for information on bank merger policy, putting the policy fight that led to the resignation of former Chair Jelena McWilliams back on the front-burner and eliciting a new round of industry reaction.On Friday the agency said it has sent its proposal to the Federal Register for publication and will allow 60 days for public comment. The FDIC board had approved the request for information in December, but it’s not official until published.Since the board’s 3-0 vote in December, the agency conducted a final technical review before formalizing the request, according to FDIC staff. The vote occurred amid a power struggle between McWilliams — a Republican appointee — and Democrats on the board, including now acting Chair Martin Gruenberg and Consumer Financial Protection Bureau Director Rohit Chopra. McWilliams stepped down from the agency in February.
Why bank M&A is slowing despite a healthy appetite for dealmaking - Rising interest rates and higher regulatory hurdles chilled bank merger and acquisition activity in the first quarter, quelling expectations for continued momentum into this year after a robust 2021. Through the third week of March, banks had announced only 35 acquisitions in total and just eight with deal values north of $50 million, according to a Piper Sandler analysis. That puts the industry behind the pace set last year, when there were 211 deals announced for the full year (averaging at about 50 per quarter) and 79 valued at more than $50 million. Bankers and analysts say the increased regulatory scrutiny of M&A under orders from the Biden administration delayed several deals in 2021. This, in turn, has made buyers this year more discriminating — they're focusing on targets that are least likely to raise even minor red flags with regulators.
Lawmakers spar over government intervention in overdraft — Lawmakers clashed Wednesday over the government's role in the future of overdraft programs — specifically, whether reining them in will protect account holders from being gouged or have unintended negative consequences for consumers and small banks.Democrats, who contend overdraft fees have disparate impact on poor consumers of color, praised efforts from banks and regulators to curb or eliminate them. Yet Republicans said overdraft fees are a valuable and affordable source of short-term credit for consumers who may have few options otherwise. “The current scale and growth of overdraft and nonsufficient fund fees has caught the attention of consumer groups, this committee and the regulators,” said subcommittee Chair Ed Perlmutter, D-Colo. “In an average year, consumers in the United States pay around $10 [billion] to $12 billion in overdraft fees and nonsufficient fund fees, and just 9% of consumers take up 80% of those overdraft fees.”
FDIC issues climate risk guidance for larger banks -The Federal Deposit Insurance Corp. has outlined steps large banks should take to gauge their climate-related financial risks.The agency, which is moving quickly on the Biden administration’s priorities for financial regulation now that it’s led by Democrat Martin Gruenberg, also said more guidance is in the works. The FDIC’s 17-page outline resembles guidance that the Office of the Comptroller of the Currency sent out in December. Both apply to banks with more than $100 billion of assets and touch on governance, strategic planning, risk management and scenario analysis.
Big Oil Is No Longer “Unbankable” - It’s an open secret within energy circles that the eventual death of oil and thermal coal won’t come from environmentalists or even directly from renewable energy, but rather when big banks decide to stop financing it, rendering it ‘unbankable’. And the U.S. oil and gas sector came dangerously close to meeting that fate after Wall Street banks started disavowing oil and gas lending at the height of the ESG (environmental, social, and governance) craze. In 2019, Goldman Sachs became the first big U.S. bank to rule out financing new oil exploration, drilling in the Arctic, as well as new thermal coal mines anywhere in the world. The bank’s environmental policy declared climate change as one of the “most significant environmental challenges of the 21st century” and pledged to help its clients manage climate impacts more effectively, including through the sale of weather-related catastrophe bonds. The giant bank also committed to investing $750 billion over the next decade into areas that focus on climate transition. Wall Street banks tend to move in lockstep, and Wells Fargo, JPMorgan Chase,Bank of America, Citigroup, and Morgan Stanley quickly followed suit by marking their enormous oil and gas loan businesses for extinction. According to BankTrack, 14 international banks have now ended the direct financing of new coal plants worldwide. But the lure of those juicy oil and gas dollars amid an energy boom has been proving hard for Wall Street banks to resist, leading to many throwing their ESG pledges out of the window. One year after Wells Fargo & Co. became one of the last big U.S. banks to make a net-zero promise, the bank has become the biggest fossil fuel lender: Wells Fargo’s 2021 tally in the sector topped $28 billion, racking up $188 billion in oil and gas loans since late 2015. Last year alone, banks organized ~$555 billion of bonds and loans for the oil, gas, and coal sectors. Wells Fargo’s fossil fuel lending has stayed at the top of the industry. Wells, America’s fourth-largest bank, earned itself the dubious distinction as one of the most scandalous financial institutions in the land after it emerged that it had systematically opened millions of fake accounts for its clients. Few bankers like to be in a line of work practically marked for elimination. But Bloomberg reports that companies like Wells just won’t stop making hydrocarbon loans when the rest of us are consuming so much of it. Indeed, Wall Street banks are now playing the long game with oil and gas businesses because their climate milestones are decades away.
OCC overhauls community, midsize bank supervision -The Office of the Comptroller of the Currency will overhaul its supervision of community and midsize banks, including designating one deputy comptroller responsible for overseeing “novel banks and technology service providers,” according to a memo obtained by American Banker. The changes will put a bigger emphasis on supervising fintech and cryptocurrency, as well as creating flexibility the agency might need to account for consolidation of small banks. The reorganization will take effect Oct. 1. “This is a significant restructuring of the midsize and community bank department,” said Daniel Stipano, a partner at Davis Polk and a 30-year veteran of the OCC. “It’s recognizing the changes that have taken place in the industry, particularly those due to technology and consolidation.”
CFPB’s questions to banks suggest new frontiers in fair-lending scrutiny -Banks have recently gotten hints about specific types of fair-lending cases the Consumer Financial Protection Bureau may be interested in pursuing, according to industry executives and attorneys. Issues raised in questionnaires the CFPB has sent to banks in recent months include: how public assistance is counted in the loan origination and loan servicing processes; how loans are written to women on maternity leave; and whether any loans are securitized by property on tribal lands. Other questions have dealt with how customers who have limited English proficiency are treated, and whether, when seeking a loan, same-sex couples and opposite-sex couples are asked different questions regarding their income.
Bank/BNPL lender divide dominates comments to CFPB -One theme emerging in the Consumer Financial Protection Bureau’s request for public comments about buy now/pay later loans is that consumers need clarity over what they're getting into. The CFPB recently sought public input about the BNPL industry from all quarters, following a probe it opened late last year of five prominent BNPL providers: Affirm, Afterpay, Klarna, PayPal and Zip. Responses fell into two general camps. Groups representing banks, credit unions and consumer advocacy groups argued that BNPL loans may drive consumers deeper into debt and that BNPL fees and return policies are inconsistent and not clearly understood.
CFPB’s Chopra promises crackdown on repeat offenders - The Consumer Financial Protection Bureau plans to crack down on repeat industry offenders by potentially banning business practices, forcing the divestiture of business lines and working with state agencies to revoke licenses. In a speech Monday, CFPB Director Rohit Chopra laid out a robust enforcement regime and a bigger arsenal of tools against large banks and other financial firms that he described as corporate recidivists, breaking the law again and again with few additional sanctions. Chopra has previously talked about going beyond fines and restitution to consumers by targeting individual executives. In his speech Monday, he also discussed revoking privileges provided by the government, such as by terminating deposit insurance from the Federal Deposit Insurance Corp.
Top Republican knocks CFPB, credit bureaus on exclusion of medical debt -The federal government inappropriately pressured major credit bureaus to remove most medical debt from consumer credit reports, a move that ultimately will curtail — not expand — the availability of loans, a top Republican argued Tuesday.Speaking during a Senate Banking Committee hearing on medical debt, Sen. Pat Toomey, R-Pa., blamed the Consumer Financial Protection Bureau for a recent decision by the three major credit bureaus — Equifax, Experian and Transunion — to no longer include nearly 70% of medical debt on consumer credit reports. Toomey, the committee's ranking Republican, argued that any action that limits lenders' access to consumer information could be harmful to the financial system.“Pricing risk accurately is critical to the safety and soundness of financial institutions, and to consumers’ ability to access affordable credit,” Toomey said during opening remarks. “Lenders who cannot access information that they consider predictive of risk are likely to restrict their lending to the borrowers with the thickest credit files, seek out relevant proxies for the credit information they aren’t able to obtain, or increase the price of loans to all borrowers in order to capture the uncertainty and risk."
Surging inflation will allow card issuers to hike late fees: CFPB - Under rules that allow for inflation adjustments, credit card companies are expected to raise the cost of late fees, despite recent efforts by the Consumer Financial Protection Bureau to crack down on the charges. Of the 20 largest card issuers, 18 of them charge late fees at or near the maximum level allowed by the Credit Card Accountability Responsibility and Disclosure Act of 2009, known as the Card Act, according to a CFPB report released Tuesday. “Many credit card issuers have made late fee penalties a core part of their profit model,” CFPB Director Rohit Chopra said in a press release. “Given their current practices, we expect that credit card issuers will hike fees, based on inflation, as limits continue to rise.”
Wells Fargo ducks pre-2008 mortgage discrimination suit, for now -- Wells Fargo won an early round in a lawsuit accusing the bank of running a predatory mortgage lending scheme in the Atlanta area before the 2008 financial crisis and continuing to discriminate against minorities for more than a decade afterward. A federal judge said a complaint filed by three Georgia counties in 2021 had to be dismissed because the Fair Housing Act only reaches back two years and the suit didn’t include enough specifics about alleged misconduct by the bank during that time period. But the judge gave officials with Fulton, DeKalb and Cobb counties 30 days to revise and refile the case to provide more information, including names of borrowers and addresses of their properties.
Rising rates, remote work put commercial real estate on Fed official's radar - Esther George, president of the Federal Reserve Bank of Kansas City, has commercial real estate on her radar for financial risks as the central bank tightens monetary policy. Speaking with economist Peter Blair Henry during a webinar hosted by the Economic Club of New York on Wednesday, George said the combination of higher interest rates — raising the cost of CRE financing — and the pandemic-era shift toward remote work could hurt property owners and their lenders. George noted that community banks have especially large exposure to CRE, which, at roughly $21 trillion, is the fourth-largest asset market in the U.S. behind equities, residential real estate and treasury securities, according to the Fed.
Thompson says FHFA is preparing GSEs for end of conservatorship - The Federal Housing Finance Agency is preparing the government-sponsored enterprises for life after conservatorship, acting director Sandra Thompson said Thursday. During an interview with Dennis Shea, head of the Bipartisan Policy Center’s Terwilliger Center for Housing Policy, Thompson said the agency is conducting the first pricing review for Fannie Mae and Freddie Mac products since 2015 to make sure they are generating viable returns while still supporting affordability in the mortgage market. The pricing review is part of a multi-step process to unwind the GSEs from government control, she explained. “We're preparing the enterprises to adjust to supervision in a way that they would be regulated outside of conservatorship,” Thompson said. “The safety and soundness of the enterprises, making sure their operations are really in tip-top condition — which they are — making sure their financial condition is as expected and that they never have to rely on the federal government again, [are] really important.
Mortgage-related fraud indicators rose by over 65% in 2021 - Suspicious activity reports filed by the government-sponsored enterprises, along with loan and finance companies, rose sharply in the past year, according to the Treasury Department’s Financial Crimes Enforcement Network. The GSEs filed 5,476 reports last year, an increase of 65% from 3,954 submitted in 2020. The number filed by loan and finance companies jumped by over 79% to 41,743 from 25,275. While the number of reports coming from lenders and the housing GSEs are lower than for depository institutions, the increases within them are more pronounced, the FINCEN data shows.
FHA exposed to $4.5 billion risk from flood insurance gaps: audit - The Department of Housing and Urban Development’s inspector general claims the Federal Housing Administration’s insurance fund was exposed to at least $4.5 billion in loans that didn’t maintain proper flood coverage in 2020, blaming oversight faults. The amount is estimated to have been spread across 31,500 loans, HUD’s Office of Inspector General said in an audit released this week. The agency recommends the department update regulations and develop a control to track flood insurance compliance. “FHA did not have adequate controls to detect loans that did not maintain the required flood insurance, and its handbooks did not clearly guide servicers on the flood insurance requirements,” the audit said.
Many distressed loans that never got forbearance predate 2009 -- The share of mortgages 90-plus days past due and never in forbearance is high, but many of them had troubles predating the pandemic, the Federal Reserve Bank of Philadelphia’s latest report shows. Sixty-three percent of the 487,976 seriously delinquent mortgages not in loss mitigation never entered forbearance, but 60% of those loans were pre-2009 originations, according to the analysis of Black Knight data by the Philadelphia Federal Reserve’s Risk Assessment, Data Analysis, and Research group. The finding suggests that the high share of seriously delinquent borrowers without forbearance or other hardship accommodations may have more to do with the Great Recession than the pandemic.
MBA: Mortgage Applications Decrease in Latest Weekly Survey - From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey: Mortgage applications decreased 6.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 25, 2022. ... The Refinance Index decreased 15 percent from the previous week and was 60 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 10 percent lower than the same week one year ago. “Mortgage rates jumped to their highest level in more than three years last week, as investors continue to price in the impact of a more restrictive monetary policy from the Federal Reserve. Not surprisingly, refinance application volume declined further, as fewer borrowers have an incentive to apply at rates that are significantly higher than a year ago. Refinance application volume is now 60 percent below last year’s levels, in line with MBA’s forecast for 2022,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “Even with the ongoing climb in rates, purchase application volumes were little changed last week. This is particularly auspicious, as we are now in the beginning of the spring homebuying season, and those shopping for homes are struggling with not only higher and more volatile mortgage rates, but also an ongoing shortage of homes on the market. Given these hurdles, it appears to be promising news that purchase application volume has not declined, as many potential buyers are likely feeling the squeeze in their purchasing power from the jump in rates.” ... The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 4.80 percent from 4.50 percent, with points decreasing to 0.56 from 0.59 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The first graph shows the refinance index since 1990.
Mortgage Rates Ease Slightly -From Matthew Graham at MortgageNewsDaily: Here We Go Again: Mortgage Rates Making Another Recovery AttemptNow today, we have another improvement in the bond market that looks quite similar to the one seen last week. This one arose due to hopes for some sort of de-escalation in Ukraine. The thought process is that de-escalation helps oil prices drop, thus easing upward pressure on inflation and allowing the Fed to be slightly less aggressive in making policy changes that are unfriendly to rates.If recent instances of hope and the subsequent crushing of those hopes are any guide, this could certainly be another head fake. There's no way to tell how likely that is. What we can say is that it would take several more days with bigger improvements to alter the broader rising rate trend.The average lender was closest to 5.0% on Friday and Monday for top tier conventional 30yr fixed scenarios. Today's number is closer to 4.875% for the same scenarios.This is a graph from Mortgage News Daily (MND) showing 30-year fixed rates from three sources (MND, MBA, Freddie Mac) since 2010. The 30-year fixed rate for top tier scenarios was 4.88% today, down from 4.95% on Monday.Go to MND and you can adjust the graph for different time periods.
FHFA House Price Index: Up 1.6% in January - The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for January. Here is the opening of the press release: House prices rose nationwide in January, up 1.6 percent from the previous month, according to the latest Federal Housing Finance Agency House Price Index (FHFA HPI®). House prices rose 18.2 percent from January 2021 to January 2022. The previously reported 1.2 percent price change for December 2021 was revised upward to a 1.3 percent price change. “House price trends notched up slightly in January,” said Will Doerner, Ph.D., Supervisory Economist in FHFA’s Division of Research and Statistics. “Rising mortgage rates in January certainly reflect a major change from the past several years, but lending costs remain relatively low. The mortgage rate shift has not dampened upward price pressure from intense borrower demand and limited supply.” The chart below illustrates the monthly HPI series, which is not adjusted for inflation, along with a real (inflation-adjusted) series using the Consumer Price Index: All Items Less Shelter.
Case-Shiller: National House Price Index increased 19.2% year-over-year in January - S&P/Case-Shiller released the monthly Home Price Indices for January ("January" is a 3-month average of November, December and January prices). This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index. From S&P: S&P Corelogic Case-Shiller Index Reports 19.2% Annual Home Price Gain to Start 2022 The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 19.2% annual gain in January, up from 18.9% in the previous month. The 10-City Composite annual increase came in at 17.5%, up from 17.1% in the previous month. The 20-City Composite posted a 19.1% year-over-year gain, up from 18.6% in the previous month. Phoenix, Tampa, and Miami reported the highest year-over-year gains among the 20 cities in January. Phoenix led the way with a 32.6% year-over-year price increase, followed by Tampa with a 30.8% increase and Miami with a 28.1% increase. Sixteen of the 20 cities reported higher price increases in the year ending January 2022 versus the year ending December 2021....Before seasonal adjustment, the U.S. National Index posted an 1.1% month-over-month increase in January, while the 10-City and 20-City Composites both posted increases of 1.4%.After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.6%, and the 10-City and 20-City Composites both posted increases of 1.8%.In January, all 20 cities reported increases before and after seasonal adjustments.The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000)..The National index is 54% above the bubble peak (SA), and up 1.1% (SA) in January. The National index is up 108% from the post-bubble low set in February 2012 (SA).
Housing Inventory Has Bottomed – McBride - Today, in the Calculated Risk Real Estate Newsletter: Housing Inventory Has Bottomed: A brief excerpt: Altos Research reports inventory up 2.4% last week ...As of March 25th, inventory was at 253 thousand (7-day average), compared to 248 thousand the prior week. Inventory was UP 2.4% from the previous week.Last year inventory bottomed seasonally in April 2021 - very late in the year. This year, by this measure, inventory bottomed seasonally at the beginning of March.Inventory is still very low. Compared to the same week in 2021, inventory is down 19.0%, and compared to the same week in 2020, and inventory is down 66.1% from 747 thousand. One of the keys will be to watch the year-over-year change each week to see if the declines are decreasing. Here is a table of the year-over-year change by week since the beginning of the year. […] Now we need to watch if the YoY change continues to decrease. Based on the current trend, it is possible inventory will be up YoY sometime in the second half of 2022.Altos Research CEO Mike Simonsen discusses this data regularly on Youtube.
Construction Spending Increased 0.5% in February -From the Census Bureau reported that overall construction spending increased 1.3%:Construction spending during February 2022 was estimated at a seasonally adjusted annual rate of $1,704.4 billion, 0.5 percent above the revised January estimate of $1,695.5 billion. The February figure is 11.2 percent above the February 2021 estimate of $1,533.3 billion.Private spending increased and public spending decreased:Spending on private construction was at a seasonally adjusted annual rate of $1,353.7 billion, 0.8 percent above the revised January estimate of $1,343.4 billion. ... In February, the estimated seasonally adjusted annual rate of public construction spending was $350.7 billion, 0.4 percent below the revised January estimate of $352.2 billion.This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted.Residential (red) spending is 25% above the bubble peak (in nominal terms - not adjusted for inflation).Non-residential (blue) spending is 21% above the bubble era peak in January 2008 (nominal dollars). Public construction spending is 8% above the peak in March 2009.The second graph shows the year-over-year change in construction spending.On a year-over-year basis, private residential construction spending is up 16.6%. Non-residential spending is up 9.7% year-over-year. Public spending is up 1.4% year-over-year. This was below consensus expectations of a 0.9% increase in spending; however, construction spending for the previous two months was revised up.
Hotels: Occupancy Rate Down 5.5% Compared to Same Week in 2019 - From CoStar: STR: US Hotel Rates Stay High in Latest Weekly Performance Data- With lower Spring Break travel volume, U.S. hotel performance dipped slightly from the previous week, according to STR‘s latest data through March 26.
March 20-26, 2022 (percentage change from comparable week in 2019*):
• Occupancy: 65.5% (-5.5%)
• Average daily rate (ADR): $149.38 (+13.5%)
• Revenue per available room (RevPAR): $97.92 (+7.3%)
*Due to the pandemic impact, STR is measuring recovery against comparable time periods from 2019.
The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average. The red line is for 2022, black is 2020, blue is the median, and dashed light blue is for 2021. The 4-week average of the occupancy rate is just below the median rate for the previous 20 years (Blue).The 4-week average of the occupancy rate will now mostly move sideways seasonally until the summer.
Las Vegas February 2022: Visitor Traffic Down 18% Compared to 2019 - From the Las Vegas Visitor Authority: February 2022 Las Vegas Visitor Statistics - Despite continued waning effects of the Omicron variant during the month, Las Vegas visitation exceeded 2.6M in February, 70% ahead of a year ago but down ‐18% vs. February 2019.Overall hotel occupancy reached 69.3%, roughly 10 pts ahead of January, up 27.3 pts YoY and down 17.7 pts vs. February 2019. Weekend occupancy came in relatively strong at 87.5%, 24.7 pts ahead of the weekend levels of last February and only 4.4 pts below February 2019. Midweek occupancy still reflected a convention segment in recovery but reached 60.7%, well over the 32.1% level of last February (+28.6 pts) but down 23.9 pts vs. February 2019.February 2022 ADR approached $150, surpassing both February 2021 (+52.5%) and February 2019 (+15.0%) while RevPAR reached $103.62 for the month, dramatically ahead of February 2021 (+151.7%) and down only 8.4% vs. February 2019. The first graph shows visitor traffic for 2019 (dark blue), 2020 (light blue), 2021 (yellow) and 2022 (red)Visitor traffic was down 18.0% compared to the same month in 2019. Visitor was up 70% compared to last January.The second graph shows convention traffic.Convention traffic was down 41.4% compared to January 2019.Note: There was almost no convention traffic from April 2020 through May 2021.
Personal Income increased 0.5% in February; Spending increased 0.2% - The BEA released the Personal Income and Outlays, February 2022:Personal income increased $101.5 billion (0.5 percent) in February, according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $76.1 billion (0.4 percent) and personal consumption expenditures (PCE) increased $34.9 billion (0.2 percent). Real DPI decreased 0.2 percent in February and Real PCE decreased 0.4 percent; goods decreased 2.1 percent and services increased 0.6 percent. The PCE price index increased 0.6 percent. Excluding food and energy, the PCE price index increased 0.4 percent. The February PCE price index increased 6.4 percent year-over-year and the November PCE price index, excluding food and energy, increased 5.4 percent year-over-year.The following graph shows real Personal Consumption Expenditures (PCE)through February 2022 (2012 dollars). The dashed red lines are the quarterly levels for real PCE.Personal income was at expectations, and the increase in PCE was below expectations.Using the two-month method to estimate Q1 PCE growth, PCE was increasing at a 1.9% annual rate in Q1 2022. (Using the mid-month method, PCE was increasing at 1.3%).
Consumer spending continues OK, while income continues its seemingly relentless decline - Nominally personal income rose 0.5%, and spending rose 0.2% in February. That’s the good news. The bad news is the personal consumption deflator, i.e., the relevant measure of inflation, rose 0.6%, so real income declined -01%, and real personal spending declined -0.4%. While both real income and spending are well above their pre-pandemic levels, I have stopped comparing them with that, but instead with their level after last winter’s round of stimulus. Accordingly, the below graph is normed to 100 as of May 2021: Since then spending is up 2.3%, while income has declined -1.4%. Comparing real personal consumption expenditures with real retail sales for February (essentially, both sides of the consumption coin) reveals small declines in each: Meanwhile, the personal saving rate increased 0.2% to 6.3% in February. The below graph of the last 30 years subtracts 6.3% from all months, so that the current reading is shown as 0 (before then all values were higher than 6.3%): Note that the savings rate has tended to decrease as expansions grow longer, leaving consumers more vulnerable to shocks (e.g., vehicle and gas prices). The current value is the lowest since 2013 (when a different stimulus program ended). In other words, so far consumes are making up shortfalls by digging into savings or tapping a source of credit. One of my recession models - the “consumer nowcast” - is based on such a shock that is unable to be made up from increased real income, or an increased source of wealth to be cashed in. Income has clearly faltered, and stocks have not made a new high in almost three months. That leaves housing equity. Whenever the housing price spiral ends, unless something reverses, consumers are in trouble.
Real Disposable Income Per Capita Down Again in February - With the release of this morning's report on February's Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal 0.40% month-over-month change in disposable income is cut to -0.18% when we adjust for inflation. This is an increase from last month's 0.11% nominal and -0.43% real changes. The year-over-year metrics are 4.39% nominal and -1.86% real.Post-Great recession, the trend was one of steady growth, but generally flattened out in late 2015 with increases in 2012 and 2013. As a result of COVID pandemic stimulus measures, major spikes can be seen in April 2020, January 2021 (a December 2020 payment), and March 2021. The first chart shows both the nominal per capita disposable income and the real (inflation-adjusted) equivalent since 2000. This indicator was significantly disrupted by the bizarre but predictable oscillation caused by 2012 year-end tax strategies in expectation of tax hikes in 2013 and more recently, by COVID stimulus.The BEA uses the average dollar value in 2012 for inflation adjustment. But the 2012 peg is arbitrary and unintuitive. For a more natural comparison, let's compare the nominal and real growth in per-capita disposable income since 2000. Nominal disposable income is up 116% since then. But the real purchasing power of those dollars is up 39%.
After Huge Spike in Prior Month, “Real” Spending Dips to Second Highest Ever. But Consumer Income Got Walloped by Inflation What happened is that income growth has been getting eaten up by inflation for months, but inflation-adjusted spending jumped by a huge and upwardly revised amount in January from December (+2.1%), and then dipped a little in February from that record (-0.4%), but was still the second highest ever, and up by a huge 6.9%, adjusted for inflation, from a year ago. Inflation is a massive problem and is eating up the substantial growth in income. But for now, consumers are still making heroic efforts to out-spend inflation, with many of them spending money they’d extracted from their homes through cash-out refis, brokerage accounts, and from other assets they could leverage, and from running up their credit card balances. Spending shifting back from durable goods to services, gradually. The long-awaited shift from pandemic-crazed spending on durable goods to services is now taking place. Services include lodging, air fares, rental cars, insurance, healthcare, repairs, haircuts, sports and entertainment venues, rents, etc. During the pandemic, spending on services collapsed. Adjusted for inflation, spending on services in February rose by 0.6% from January and by 7.4% from a year ago, according to the Bureau of Economic Analysis today. But it still remains way below the long-term trend (green line) and was down by 0.3% from February 2020, and still accounted for only 61.2% of total consumer spending, down from 64.3% pre-Covid. Spending on durable goods continues to be handicapped by large-scale supply issues, particularly with new vehicles, where global production continues to get hit by semiconductor shortages. Spending on motor vehicles is by far the largest category of durable goods spending. But demand exceeds supply by a wide margin as dealers have been desperately low on inventories since early 2021. Consumers, frustrated by nearly empty lots, have switched to ordering new vehicles, and then are waiting patiently. New vehicle supply at dealers should be about 60 days. In 2019, it was 90 days, which was a sign of too much inventory. Last year, supply collapsed below the 30-day line, and in February was still only at 34 days. Consumers cannot spend money on stuff they cannot get: Durable goods inflation, given the blistering overstimulated demand that triggered the shortages, has been gigantic. The durable goods CPI spiked by 18.7% in February, by far the highest in the monthly CPI data going back to the 1950s. Adjusted for inflation, “real” spending on durable goods fell by 2.5% in February from January, but was still up by 5.2% from a year ago, and up by a blistering 23.0% from two years ago. Americans are still spending a gigantic amount on durable goods, and this spending remains way above trend (green line), and shortages keep them from spending even more: “Real” spending on nondurable goods – mostly food, beverages, household supplies, and energy – had spiked during the pandemic in part because spending shifted from the office (paid for by companies and not part of consumer spending) to the home, as more people were working from home. “Real” spending on nondurable goods fell 1.9% in February from January, but was still up 6.4% from a year ago and by 11.8% from two years ago, and remains way above trend. All this is adjusted for inflation, and inflation has been huge in nondurable goods, with the nondurable goods CPI reaching 10.7% in February.. Incomes fail to keep up with inflation. “Real” personal income without transfer payments – income from wages, salaries, rents, farms, businesses, etc., but not from government transfer payments, such as stimulus, unemployment, welfare, Social Security, etc. – edged up by just 0.1% in February from January, and was up just 1.0% from February two years ago. It peaked in October and November last year and has since declined by 2.3% and remains substantially below trend, as inflation is starting to eat everyone’s lunch: Per-capita “real” disposable income gives a broader picture. This is income from all sources combined, including income from wages, salaries, rents, farms, businesses, and transfer payments, minus income-based taxes, and then adjusted for inflation, and then figured on a per-capita basis. This per-capita “real” disposable income declined by 0.2% in February from January, the seventh month in a row of month-to-month declines, down 1.9% from a year ago, and at the lowest level since March 2020, and heading further below pre-pandemic trend:
March Vehicles Sales decreased to 13.33 million SAAR --Wards Auto released their estimate of light vehicle sales for March. Wards Auto estimates sales of 13.33 million SAAR in March 2022 (Seasonally Adjusted Annual Rate), down 5.3% from the February sales rate, and down 24.4% from March 2021. This graph shows light vehicle sales since 2006 from the BEA (blue) and Wards Auto's estimate for March (red).The impact of COVID-19 was significant, and April 2020 was the worst month. After April 2020, sales increased, and were close to sales in 2019 (the year before the pandemic). However, sales decreased late last year due to supply issues. It appears the "supply chain bottom" was in September 2021, however sales in February were below the consensus forecast of 14.1 million SAAR - and not far above the supply chain bottom last year. Another weak month for vehicle sales.
Chicago to offer prepaid gas cards to residents amid skyrocketing gas prices – Gas prices have skyrocketed across the U.S., jumping above $4 a gallon in most states. Now, local leaders are trying to find ways to help their residents cope with the price hikes, with Chicago announcing it had established a $12.5 million program to provide transportation relief for low-income residents. On Thursday, Mayor Lori Lightfoot announced that in order to combat increasing gas prices she would be launching the Chicago Moves program, which will provide 50,000 prepaid gas gift cards worth $150 each along with 100,000 prepaid cards for public transit worth $50 each.Lightfoot said the $12.5 million program will open for eligible low-income residents to apply beginning April 27. In Chicago, the average price of a gallon of gas is $4.87, well over a dollar more than this time last year. “By subsidizing the cost of gas and transit, we’re helping residents get to work, school, the grocery store, the medical office or wherever they need to get to. Enabling physical mobility directly ties into economic mobility,” said Lightfoot during a press conference.
Democrats blast oil execs for skipping hearing on gas prices -House Natural Resources Committee Chair Raúl Grijalva (D.-Ariz.) slammed the CEOs of three major oil companies for refusing to testify at a Natural Resources Committee hearing scheduled for April 5. The hearing would have examined the fossil fuel industry’s failure to help stabilize gas prices during the ongoing crisis in Ukraine, Grijalva said in a statement. The companies that refused to testify are EOG Resources, Devon Energy Corporation, and Occidental Petroleum, which are among the largest oil and gas companies that operate on public land and waters, per the committee statement.The three companies hold over 4,000 leases covering nearly 1.5 million acres of public land and over 2,800 approved and unused drilling permits, per the NRC. Those same companies experienced record profits over the past year, totaling nearly $9 billion, per the statement. : "Their silence tells us all we need to know — that cries for more drilling and looser regulations are nothing more than another age-old attempt to line their own pockets,” Grijalva said in the statement. While Devon Energy Corporation won't participate in the April 5th hearing, a spokesperson told Axios the company's president and CEO Rick Muncrief is confirmed to speak to the House of Energy and Commerce Committee on April 6. A spokesperson for EOG Resources confirmed to Axios they will not be participating in the hearing. Occidental Petroleum did not immediately respond to Axios' request for comment.
Everyone is worried about gas prices, but diesel is driving inflation more than you think - Even before Russia invaded Ukraine, the fuel that runs the global economy was in short supply. Now some analysts say there could be spot shortages of diesel fuel and prices may stay elevated, even if oil and gasoline decline. Those higher diesel fuel prices are also stoking inflation. "I've started to use the term diesel 'crisis.' It clearly is a crisis that's happening before our eyes. I wouldn't rule out lines, shortages or $6 [price] in places beyond California," said Tom Kloza, head of global energy research at OPIS. "I wouldn't say it's a shortage yet. Europe, I think they're headed for a shortage." A drop in demand if prices become too high could temper that outcome. The low supply of diesel fuel is the result of a loss of refining capacity worldwide, after Covid wreaked havoc on the oil industry. Kloza said it is the middle of the barrel — diesel — that has been hit the hardest. Since Russia invaded Ukraine in late February, the price of oil has traded much higher, with volatile swings. West Texas Intermediate crude futures were at about $107 per barrel Wednesday, after trading as high as $130.50 on worries about shortages due to sanctions on Russia. "When you're seeing crude rallying, you've seen diesel outpacing it just because of supply concerns. We're already at eight-year lows for distillate inventories," said Matt Smith, lead oil analyst Americas at Kpler. "So what you're really seeing is while everyone is focused on the crude side of things, prices have really been pushing on because Europe is short diesel and it has to import a lot of diesel, whereas it exports gasoline," he added. "While there's obviously concerns about the crude side of the picture, ultimately diesel is what the end-user needs." While gasoline prices at the pump have held steady over the past week, the price of diesel continued to rise, gaining about 8 cents per gallon to a national average of $5.12 per gallon, according to AAA. The national average for unleaded gasoline is $4.23 per gallon, up from $2.86 a year ago. The price of diesel, however, was $2.03 per gallon cheaper at this time last year. For a truck that fuels up with 125 gallons or more, that several hundred dollars extra at every filling can result in higher costs for anyone who buys anything that gets shipped, from food to home goods to automobiles. "The spread between diesel and motor fuel is the widest it's ever been in the data," said Mark Zandi, chief economist at Moody's Analytics. "It's $1 a gallon ... the average over the last few decades has been 30 to 40 cents. That gives you a sense of how out of balance it is. ... By my calculation, one-tenth of the acceleration in [consumer price] inflation [over the past year] is due to the surge in diesel prices." That contribution to inflation includes related impacts. "The farmer ploughing the field, getting the food to the store shelf: It's the cost to FedEx and UPS getting the product we're buying to the front porch — all of those ancillary knock-on effects," Zandi said. But for goods price inflation, for everything from production to shipping, the contribution of diesel prices to inflation is even greater. Zandi calculates that 17% of the acceleration of goods price inflation is due to the higher diesel costs. "Diesel is used in farming. It's used in a lot of industrial processes. All the machinery runs on diesel. A lot of construction runs on diesel," said Francisco Blanch, global head of commodities and derivatives research at Bank of America. "I think it's very problematic. Trucks run on diesel, trains run on diesel, and planes run on jet fuel which is also diesel."
Ford, GM to halt production at two Michigan plants due to parts shortage (Reuters) - Ford Motor Co and General Motors will each halt production next week at a Michigan plant due to parts shortages, the two companies said separately on Thursday.No. 2 U.S. automaker Ford said it would suspend production at its Flat Rock Assembly Plant next week, where it builds the Mustang, due to the global semiconductor shortage.GM said that because of a temporary part shortage it would cancel production next week at Lansing Grand River assembly, where it builds the Cadillac CT4, Cadillac CT5 and Chevrolet Camaro. GM said the production halt was not related to chips but provided no other specifics.The auto industry is grappling with a global chip shortage triggered by the COVID-19 pandemic, forcing companies to cut production, although high car prices have partially offset the financial impact.Ford warned last month that the chip shortage would lead to a decline in vehicle volumes in the current quarter. Last month, Ford halted production at its Kansas city assembly plant that makes F-150 pickup vehicles for a week due to the chip shortage.Dearborn, Michigan-based Ford said that production at its other North American plants will continue as normal. GM last week said it would halt production for two weeks at an assembly plant in Fort Wayne, Indiana, that builds the Chevrolet Silverado 1500 and GMC Sierra 1500 pickup trucks, beginning April 4, over the semiconductor chip shortage.
March Dallas Fed Manufacturing: Expansion Continues- The Dallas Fed has released its Texas Manufacturing Outlook Survey for March. The latest general business activity index came in at 8.7, down 5.3 from last month. All figures are seasonally adjusted.Here is an excerpt from the latest report:Texas factory activity continued to increase at solid pace in March, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, held mostly steady at 13.2, indicative of slightly above-average output growth.Expectations regarding future manufacturing activity generally eased but remained positive. The future production index ticked down from 42.1 to 40.1, and the future general business activity index retreated 12 points to 8.2. Other measures of future manufacturing activity such as capital expenditures and employment showed mixed movements but remained solidly in positive territory. Monthly data for this indicator only dates back to 2004, so it is difficult to see the full potential of this indicator without several business cycles of data. Nevertheless, it is an interesting and important regional manufacturing indicator.
March Regional Fed Manufacturing Overview - Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia.Regional manufacturing surveys are a measure of local economic health and are used as a representative for the larger national manufacturing health. They have been used as a signal for business uncertainty and economic activity as a whole. Manufacturing makes up 12% of the country's GDP. The other 6 Federal Reserve Districts do not publish manufacturing data. For these, the Federal Reserve’s Beige Book offers a short summary of each districts’ manufacturing health. The Chicago Fed published their Midwest Manufacturing Index from July 1996 through December of 2013. Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. The latest average of the five for March is 14.9, up from the previous month.
Weekly Initial Unemployment Claims Increase to 202,000 --The DOL reported:In the week ending March 26, the advance figure for seasonally adjusted initial claims was 202,000, an increase of 14,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 187,000 to 188,000. The 4-week moving average was 208,500, a decr ease of 3,500 from the previous week's revised average. The previous week's average was revised up by 250 from 211,750 to 212,000.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 decreased to 208,500.The previous week was revised up.Weekly claims were slightly above the consensus forecast.
BLS: Job Openings "little changed" at 11.3 million in February - From the BLS: Job Openings and Labor Turnover Summary - The number of job openings was little changed at 11.3 million on the last business day of February, the U.S. Bureau of Labor Statistics reported today. Hires edged up to 6.7 million while total separations were little changed at 6.1 million. Within separations, the quits rate was little changed at 2.9 percent and the layoffs and discharges rate was unchanged at 0.9 percent. The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS. This series started in December 2000. Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for February, the employment report this Friday will be for March. Note that hires (dark blue) and total separations (red and light blue columns stacked) are usually pretty close each month. This is a measure of labor market turnover. When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs. The huge spike in layoffs and discharges in March 2020 are labeled, but off the chart to better show the usual data. Jobs openings decreased slightly in February to 11.266 million from 11.283 million in January. The number of job openings (yellow) were up 43% year-over-year. Quits were up 27% year-over-year. These are voluntary separations. (See light blue columns at bottom of graph for trend for "quits").
ADP: Private Employment Increased 455,000 in March - From ADP: Private sector employment increased by 455,000 jobs from February to March according to the March ADP® National Employment ReportTM. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by the ADP Research Institute® in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual data of those who are on a company’s payroll, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis “Job growth was broad-based across sectors in March, contributing to the nearly 1.5 million jobs added for the first quarter in 2022,” said Nela Richardson, chief economist, ADP. “Businesses are hiring, specifically among the service providers which had the most ground to make up due to early pandemic losses. However, a tight labor supply remains an obstacle for continued growth in consumer-facing industries This was slightly above the consensus forecast of 438,000 for this report. The BLS report will be released Friday, and the consensus is for 475 thousand non-farm payroll jobs added in March. The ADP report has not been very useful in predicting the BLS report, but this suggests a solid March BLS report.
March Employment Report: 431 thousand Jobs, 3.6% Unemployment Rate - From the BLS:Total nonfarm payroll employment rose by 431,000 in March, and the unemployment rate declined to 3.6 percent, the U.S. Bureau of Labor Statistics reported today. Notable job gains continued in leisure and hospitality, professional and business services, retail trade, and manufacturing. The change in total nonfarm payroll employment for January was revised up by 23,000, from +481,000 to +504,000, and the change for February was revised up by 72,000, from +678,000 to +750,000. With these revisions, employment in January and February combined is 95,000 higher than previously reported. The first graph shows the job losses from the start of the employment recession, in percentage terms. The current employment recession was by far the worst recession since WWII in percentage terms. However, 25 months after the onset of the current employment recession, almost all of the jobs have returned. The second graph shows the year-over-year change in total non-farm employment since 1968. In March, the year-over-year change was 6.5 million jobs. This was up significantly year-over-year. Total payrolls increased by 431 thousand in March. Private payrolls increased by 426 thousand, and public payrolls increased 5 thousand. Payrolls for January and February were revised up 95 thousand, combined. The third graph shows the employment population ratio and the participation rate. The Labor Force Participation Rate increased to 62.4% in March, from 62.3% in February. This is the percentage of the working age population in the labor force. The Employment-Population ratio increased to 60.1% from 59.9% (blue line). I'll post the 25 to 54 age group employment-population ratio graph later. The fourth graph shows the unemployment rate. The unemployment rate decreased in March to 3.6% from 3.8% in February. This was slightly below consensus expectations; however, January and February payrolls were revised up by 95,000 combined.
March jobs report: Payrolls rise by 431,000 as unemployment rate falls to 3.6% -The U.S. economy notched another sizable payroll gain in March as the labor market extended a strong and speedy recovery to bring employment closer to pre-pandemic levels. The Labor Department released its March jobs report Friday at 8:30 a.m. ET. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg.
- Non-farm payrolls: +431,000 vs. +490,000 expected and an upwardly revised +750,000 in February
- Unemployment rate: 3.6%, vs. 3.7 expected, 3.8% in February
- Average hourly earnings, month-over-month: 0.4% vs. 0.4% expected and an upwardly revised 0.1% in February
- Average hourly earnings, year-over-year: 5.6% vs. 5.5% expected and an upwardly revised 5.6% in February
March's closely-watched jobs report saw payrolls come in lower than expected but still marked a fifteenth consecutive month of expansion for the U.S. workforce. Economists surveyed by Bloomberg had anticipated payrolls to rise by 490,000, according to consensus data. At 678,000, last month's employment report reflected a stunning upside surprise to investors, with payrolls rising 255,000 more than consensus estimates projected at the time. Moreover, job gains from the last report were also upwardly revised even further to show 750,000 jobs added or created. The unemployment rate dropped a more-than-expected two-tenths of 1%, edging closer to the historic low of 3.5% seen in February 2020, Bankrate senior economic analyst Mark Hamrick noted, though pointing out that the labor force participation rate remains 1 percentage point below its pre-pandemic level. The labor force participation ticked up slightly to 62.4% after an unexpected jump to 62.3% in last month's data signaled more individuals were returning to look for work or be placed in jobs after being sidelined by COVID-19. Still, FWDBONDS chief economist Christopher Rupkey points out that payroll employment remains 1.6 million or 1.0% below its February 2020 level. "Many of those jobs will take years to come back and even if restaurants and bars and amusement parks wanted to increase staff, they wouldn’t be able to because of the millions of labor force dropouts from baby boomers retiring at the age of 65," he said. "The economy will run into a wall if it can’t get any more workers, and economic growth is already slowing down to a crawl this quarter." Although the recovery has room to continue before pre-pandemic employment levels are restored, the past several months of data have reflected continued momentum in the labor market recovery, even as an Omicron surge in cases of COVID-19 put a dent in demand for workers earlier this year. March figures showed broad gains in employment across industries, particularly in the high-contact services sector, that were hit hard by the pandemic as virus cases retreated further in recent weeks. Leisure and hospitality employers added back 112,000 jobs to build on a jump of 179,000 from February, with more job growth seen in food services and drinking venues at 61,000, and accommodation at 25,000. Notably, retail trade employment rose by 49,000 to reach 278,000 above its level in February 2020. The manufacturing industry saw 38,000 new jobs added or created during the period.
America added 431,000 jobs in March, bringing the unemployment rate to a new pandemic low – CNN -America's labor market is roaring back, adding another 431,000 jobs in March and bringing the unemployment rate to a new pandemic-era low of 3.6%, the Bureau of Labor Statistics reported Friday. Prior to the pandemic, the jobless rate was at 3.5%, matching the near 50-year low first set in 2019. Even though the job gains were lower than economists had expected, they still rounded up a strong first quarter for the US labor market with an average monthly gain of more than half a million jobs. March was the 15th straight month of robust job gains. The economy is now just 1.6 million jobs -- or 1% -- short of where it was in February 2020, before the pandemic hit, according to the BLS. That means the country is on pace to bounce back from the pandemic recession almost eight years faster than it took to recover from the Great Recession. Several labor market measures are already close to their pre-Covid levels, the BLS said Friday. That includes the total number of unemployed people, which fell to 6 million in March, as well as the number of permanent job losers, which declined to 1.4 million. The labor force participation rate, which was a sore point for economists for much of the recovery, also ticked up slightly to 62.4%. While that's still a whole percentage point below the February 2020 level as some workers remain on the sidelines, it has increased consistently over the past months. In March, women made up the majority of new employees. The number of unemployed women, as well as those not in the labor force, declined. As things are normalizing and workers return to their offices, the number of people working remotely because of the pandemic also declined, falling to 10% in March from 13% in February. Wages rise further, boosting inflation Wages increased again in March -- good news for workers across the nation who have to deal with higher prices everywhere from the grocery story to the gas pump. "Despite concerns about inflation and the Russia-Ukraine war, American businesses are still hiring at full throttle, while more people are returning to the labor force (including retirees), likely drawn by higher wages," said Sal Guatieri, senior economist at BMO, in a note to clients. "That's great news for the economy." US businesses are having to increase pay in order to attract staff as job openings remain near record highs. Average hourly earnings increased by 13 cents to $31.73 in March. That puts the average increase over the past 12 months at 5.6%. While that would be phenomenal wage growth in normal times, the high pandemic-era inflation makes it pale in comparison. In February, the Personal Consumption Expenditure price index rose by 6.4% from the same period a year earlier, for the fastest increase since January 1982. Between the ongoing worker shortage and rising prices for goods and services, wages are unlikely to come down any time soon, "fanning the inflation flames," Guatieri said. That means the Federal Reserve, whose job includes keeping prices stable, will need to continue its series of monetary-tightening moves. In March, the central bank raised interest rates by a quarter-percentage point for the first time since 2018 in order to rein in high prices. Market expectations for a bigger interest rate hike in May rose following Friday's employment data.
March jobs report: yet another strong showing for jobs and unemployment; while strong wage growth nevertheless likely lags inflation -Here’s my in depth synopsis of the report:
- 431,000 jobs added. Private sector jobs increased 426,000. Government jobs increased by 5,000 jobs. The alternate, and more volatile measure in the household report indicated a gain of 736,000 jobs, which factors into the unemployment and underemployment rates below.
- U3 unemployment rate declined -0.2% to 3.6%, just 0.1% above the January 2020 low of 3.5%.
- U6 underemployment rate declined -0.3% to 6.9%, equaling the January 2020 low of 6.9%.
- Those not in the labor force at all, but who want a job now, rose 382,000 to 5.737 million, compared with 4.996 million in February 2020.
- Those on temporary layoff declined -101,000 to 787,000.
- Permanent job losers declined -191,000 to 1,392,000.
- January was revised upward by 23,000. February was also revised upward by 72,000, for a net gain of 95,000 jobs compared with previous reports.
- the average manufacturing workweek, one of the 10 components of the Index of Leading Indicators, rose +0.1 hours to 41.7 hours.
- Manufacturing jobs increased 38,000. Since the beginning of the pandemic, manufacturing has still lost -128,000 jobs, or -1.0% of the total.
- Construction jobs increased 19,000. All of the jobs lost during the pandemic, plus another 4,000, have now been made up.
- Residential construction jobs, which are even more leading, fell by 2,600. Since the beginning of the pandemic over 50,000 jobs have been gained in this sector.
- temporary jobs rose by 4,900. Since the beginning of the pandemic, almost 250,000 jobs have been gained.
- the number of people unemployed for 5 weeks or less increased by 158,000 to 2,289,000, which is 164,000 higher than just before the pandemic hit.
- Professional and business employment increased by 102,000, which is about 700,000 above its pre-pandemic peak.
- Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $0.11 to $27.06, which is a 6.7% YoY gain. :
- the index of aggregate hours worked for non-managerial workers rose by 0.1%, which is a loss of -0.7% since just before the pandemic.
- the index of aggregate payrolls for non-managerial workers rose by 0.5%, which is a gain of 11.7% (before inflation) since just before the pandemic.
- Leisure and hospitality jobs, which were the most hard-hit during the pandemic, rose 112,000, but are still -1,474,000, or -8.7% below their pre-pandemic peak.
- Within the leisure and hospitality sector, food and drink establishments added 61,300 jobs, and is still -819,900, or -6.6% below their pre-pandemic peak.
- Full time jobs increased 912,000 in the household report.
- Part time jobs increased 101,000 in the household report.
- The number of job holders who were part time for economic reasons increased by 35,000 to 4,170,000, which is still below their level before the pandemic began.
SUMMARY: This was another very good jobs report. There is no sign of any significant slowdown in hiring at this point. Leading sectors like manufacturing, construction, and temporary help continued to improve. Also, wage gains among non-supervisory workers continued to rise sharply. Aside from 3 months in 2019 and 2020, the unemployment rate was the lowest (or equal to it) in over 50 years. Similarly, the underemployment rate was the lowest for its entire 28 year history except for two months.There were a few blemishes, most notably the decrease in residential construction jobs (more evidence of a housing slowdown) and the likely real, inflation-adjusted decline in aggregate payrolls, which means that probably real aggregate payrolls for the American working class have only risen by 1% or less in the last year in total. Two months ago I wrote that “Because real sales and income have not improved in over half a year, I expect the pace of job gains to slow considerably in the coming months.” For the second month in a row, I have been wrong - and happily so! But I continue to think job gains will slow (but not reverse) shortly.
Comments on March Employment Report - McBride - This was another solid report. The headline jobs number in the March employment report was slightly below expectations, however employment for the previous two months was revised up by 95,000. The participation rate and the employment-population ratio both increased, and the unemployment rate decreased to 3.6%. Leisure and hospitality gained 112 thousand jobs in March. At the beginning of the pandemic, in March and April of 2020, leisure and hospitality lost 8.20 million jobs, and are now down 1.47 million jobs since February 2020. So, leisure and hospitality has now added back about 82% all of the jobs lost in March and April 2020. Construction employment increased 19 thousand and is now 4 thousand above the pre-pandemic level. Manufacturing added 38 thousand jobs and is still 118 thousand below the pre-pandemic level. In March, the year-over-year employment change was 6.5 million jobs. This graph shows permanent job losers as a percent of the pre-recession peak in employment through the report today. This data is only available back to 1994, so there is only data for three recessions. In March, the number of permanent job losers decreased to 1.392 million from 1.583 million in the previous month. These jobs will likely be the hardest to recover, so it is a positive that the number of permanent job losers is almost back to pre-recession levels. Since the overall participation rate has declined due to cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old. The 25 to 54 participation rate increased in March to 82.5% from 82.2% in February, and the 25 to 54 employment population ratio increased to 80.0% from 79.5% the previous month. Both are slightly below the pre-pandemic levels and indicate almost all of the prime age workers have returned to the labor force. "The number of persons employed part time for economic reasons was about unchanged at 4.2 million in March and is little different from its February 2020 level. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs." The number of persons working part time for economic reasons increased in March to 4.170 million from 4.135 million in February. This is at pre-recession levels. These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 6.9% from 7.2% in the previous month. This is down from the record high in April 22.9% for this measure since 1994. This measure is below the 7.0% in February 2020 (pre-pandemic). This graph shows the number of workers unemployed for 27 weeks or more. According to the BLS, there are 1.702 million workers who have been unemployed for more than 26 weeks and still want a job, up from 1.691 million the previous month. This does not include all the people that left the labor force. Summary: The headline monthly jobs number was slightly below expectations; however, the previous two months were revised up by 95,000 combined. The headline unemployment rate decreased to 3.6%. The household survey indicated a strong gain in employment of 736 thousand, pushing up the participation rate and employment-population ratio, and pushing down the unemployment rate to 3.6%, and U-6 to below pre-recession levels. Both the prime age participation rate and employment-population ratio increased, and are now close to pre-pandemic levels, indicating almost all of the prime age workers have returned to the labor force. There are still 1.6 million fewer jobs than prior to the recession. Overall, this was another solid report.
Positive Drug Tests Among U.S. Workers Hit Two-Decade High – WSJ --The percentage of working Americans testing positive for drugs hit a two-decade high last year, driven by an increase in positive marijuana tests, as businesses might have loosened screening policies amid nationwide labor shortages.Of the more than six million general workforce urine tests that Quest Diagnostics Inc., one of the country’s largest drug-testing laboratories, screened for marijuana last year, 3.9% came back positive, an increase of more than 8% from 2020, according to Quest’s annual drug-testing index.That figure is up 50% since 2017. Since then, the number of states that legalized marijuana for recreational use grew to 18 from eight, plus the District of Columbia.Despite the increase in positivity last year, fewer companies tested their employees for THC, the substance in marijuana primarily responsible for its effects, than in recent years, said Barry Sample, Quest’s senior science consultant.The shifting legal backdrop and changing cultural attitudes have prompted some employers to stop testing for marijuana while companies in some states are barred from factoring the test results into hiring decisions, according to Dr. Sample. And those trends accelerated last year amid the recent shortage of workers, especially in states where recreational marijuana is legal, Dr. Sample added. “We’ve been seeing year-over-year declines in those recreational-use states, but by far the largest drop we’ve ever seen was in 2021,” he said about the number of drug tests that screened for THC.
What does getting covid cost, for international travelers? -The requirement that travelers to the US test negative for Covid-19 only one day before flying has implications for additional costs, when the test is positive. This is what a family member told me after visiting Costa Rica recently:Despite being fully vaccinated and boosted, I contracted Covid-19, but was actively sick only 36 hours. Unable to return to the US as originally scheduled, I needed to rebook and remain in Costa Rica for an additional 10 days. Fortunately, I could quarantine with family, so did not need to find and book a hotel. However, the costs of covid testing ($140), local transportation and domestic air fares ($359), hotel the night before flying ($188) and the increased cost of the rebooked international air fare ($360) drove the out-of-pocket costs for contracting covid to over $1000. Staying at a hotel for 10 days could add more than $1000 to that. Just something to think about, when considering international travel.
Last American state drops indoor mask mandates as Omicron BA.2 threatens to surge across United States - The state of Hawaii has dropped its indoor mask mandate as of Saturday, March 26, a move announced by the state’s Department of Health March 9. In addition, travelers to the islands will no longer be required to submit a proof of vaccination or recent negative coronavirus test for the first time since the state locked down in March 2020. Mask mandates began dropping nationwide after the US Centers for Disease Control and Prevention (CDC) changed its criteria for determining low, moderate and high risk from a measure of daily case counts to a measure of hospitalizations and bed occupancy. Counties and states that were deemed high-risk became low-risk overnight, and Democratic-controlled states such as California and New York used this as an excuse to drop mask mandates and the pretense of mitigation measures to slow the spread of the pandemic. Even as those mandates were being dropped, however, warnings from leading epidemiologists were being issued warning of a new surge of the highly contagious Omicron BA.2 subvariant. Even before the initial wave of Omicron had subsided, BA.2 began spreading internationally, particularly in Europe. In Germany, for example, the number of daily new cases currently stands at a record 225,000, well above the peak of 193,000 on February 10, as a result of the spread of BA.2. Similarly in France, cases have risen sharply from 52,000 a day to 123,000 a day in less than three weeks. Coronavirus-related deaths are also on the rise in Austria, Belgium, Ireland, Italy and Switzerland. Similar trends are in their initial stages in the United States. The number of total cases in New York City currently stands at 1,076 a day, a more than 40 percent increase over the past four weeks. New cases in New York state as a whole are about 60 percent higher than they were two weeks ago. In the southwestern United States, Arizona, California, and Nevada, as well as Hawaii, BA.2 currently makes up 41 percent of all coronavirus samples, up from 28 percent a week ago. Data from Europe indicates that these preliminary indications predict a full surge sometime in the next few weeks. Nearly 35 percent of all coronavirus cases across the US are of the BA.2 subvariant, double the figure from two weeks ago. In Europe, case counts again began to trend upward after BA.2 became at least 50 percent of coronavirus cases. While it is not clear how deadly the next wave will be, early studies of the subvariant in February from the University of Tokyo indicate that the subvariant may prove to be as deadly as the Delta variant, which was largely responsible for coronavirus waves last summer and fall, producing a combined official death toll of about 2.5 million people worldwide. It is also worth noting that as the next wave of the pandemic is coming, even the most basic aspects of monitoring COVID-19 are being dismantled. Testing centers across the country are being shut down and states have begun reporting cases and deaths weekly, or sometimes only twice a month. Moreover, testing for the uninsured will no longer be paid for by the Health Resources and Services Administration due to a lack of funding. In other words, if any of the 31 million people in the US who lack health insurance suspect they have gotten COVID-19, they will not be able to get confirmation and possibly treatment without spending hundreds or possibly thousands of dollars out of pocket.
Nebraska lawmaker apologizes for debunked litter box claim (AP) — A Nebraska state lawmaker apologized on Monday after he publicly cited a persistent but debunked rumor alleging that schools are placing litter boxes in school bathrooms to accommodate children who self-identify as cats.Sen. Bruce Bostelman, a conservative Republican, repeated the false claim during a public, televised debate on a bill intended to help school children who have behavioral problems. His comments quickly went viral, with one Twitter video garnering more than 300,000 views as of Monday afternoon, and drew an onslaught of online criticism and ridicule.Bostelman initially said he was “shocked” when he heard stories that children were dressing as cats and dogs while at school, with claims that schools were accommodating them with litter boxes. “They meow and they bark and they interact with their teachers in this fashion,” Bostelman said during legislative debate. “And now schools are wanting to put litter boxes in the schools for these children to use. How is this sanitary?”The rumor has persisted in a private Facebook group, “Protect Nebraska Children,” and also surfaced last month in an Iowa school district, forcing the superintendent to write to parents that it was “simply and emphatically not true.” Bostelman had said that he planned to discuss the issue with the CEO of the Nebraska Department of Health and Human Services. He also alleged that schools were not allowing kids to wear flags, but didn’t give specific examples. .The false claim that children who identify as cats are using litter boxes in school bathrooms has spread across the internet since at least December, when a member of the public brought it up at a school board meeting for Midland Public Schools (MPS) northwest of Detroit.The claim was debunked by the district’s superintendent, who issued a statement that said there had “never been litter boxes within MPS schools.” Still, the baseless rumor has spread across the country, and become fuel for political candidates, amid the culture wars and legislative action involving gender identification in schools.
White privilege card causing controversy at area high school (KFOR) – Edmond resident Kitty Deering said she was shocked and saddened to learn about a so-called white privilege card making its way through the halls at Deer Creek High School around Valentine’s Day. She said while a card was given to her daughter, a student at the school, they were actually being sold for $10.“I guess [the person that handed them out] wanted to just let it be known that these were being purchased for,” she added, gesturing to the card. “They literally would just sell them, like a box of candy.”With its glossy white background and black writing, the card could easily be mistaken for a credit or debit card; however, a closer look indicates something much different, with the following language printed on the back: “This card grants its bearers happiness because it’s the color of your skin and not the choices that you make that determines your ability to be successful.” “This hurts because I have a multicultural family and we have Caucasian and African-Americans in our household,” she said of the impact the card had on her daughter, and her family. “And when you come to school and the Caucasians are judging you based on skin color, it doesn’t reflect love of whoever you are, no matter what race or nationality.” KFOR reached out to the creator of the card Wednesday, who said the card was meant to be viewed as a parody, not something meant to be taken seriously.“We created this card as a joke,” said Joel Patrick, who is Black and sells the card onOfficalJoelPatrick.com. “If they’re saying this in seriousness, that’s a personal problem with them. You don’t go around telling someone you’re better than them.” Patrick said the card, which also bears a reference to former President Donald Trump, has sold 200,000 units.
Pennsylvania lawmakers advance ban on transgender athletes in women's sports -Pennsylvania lawmakers took a step toward advancing legislation that would would bar transgender girls and women athletes from competing on teams that correspond with their gender identity. The state’s House Education Committee moved the legislation forward on Tuesday in a 15-9 vote. The legislation says that “athletic teams or sports designated for females, women or girls ... may not be open to students of the male sex,” according the bill’s text. According to the bill, “sex” refers to the “biological distinction between male and female based on reproductive biology and genetic make-up.” The legislation would affect community colleges, state universities and public schools, among others. Pennsylvania’s LGBTQ+ Equality Caucus slammed the advancement of the bill in a statement. “In yet another attempt to inflict harm on one of PA’s most vulnerable communities, House Republicans are moving a bill to ban transgender women from playing women’s school sports in Pennsylvania," state Rep. Brian Sims (D), co-chair of the LGBTQ+ Caucus, said in a statement. - "This is a solution in search of a problem, and with the number of trans women and girls who play sports actually being extremely small, we must recognize this for what it is -- an inflammatory move meant to spark a culture war, not a meaningful policy solution for an issue impacting working Pennsylvanians," he added. The bill’s advancement comes as at least a dozen other states have passed similar legislation, according to the Pittsburgh Post-Gazette.
Tennessee House advances bill adding penalties to transgender athlete ban - Tennessee lawmakers on Thursday passed legislation aiming to pull funding from state schools allowing transgender youth to play on sports teams consistent with their gender identity. The bill, which now heads to the state Senate for consideration, attaches additional penalties to a law passed last year prohibiting trans students from competing on teams aligning with their gender identity.Under the new bill, the state commissioner of education would be required to “withhold a portion of the state education finance funds” from local school districts which fail or refuse to determine a student’s gender for participation in school athletics.Passed last March, the law requires students beyond the fourth grade provide legal documentation demonstrating their sex assigned at birth to participate in school sports. Students may only play on gender-segregated teams consistent with the gender listed on their “original” birth certificate.“I signed the bill to preserve women’s athletics and ensure fair competition,” Tennessee Gov. Bill Leetweeted last year shortly after approving the law, echoing an argument often made by conservative lawmakers and anti-trans activists that transgender girls have an unfair advantage over cisgender girls.In a statement on Thursday, Cathryn Oakley, state legislative director and senior counsel at the Human Rights Campaign, accused Tennessee legislators of targeting trans students to “curry favor” with radical supporters.“Last session’s prohibition of transgender students playing school sports was itself an unnecessary and discriminatory piece of legislation, which created many issues and solved none,” Oakley said. “Study after study has shown that denying transgender kids the social benefits that come from school sports and the ostracization caused by these legislative attacks, deeply impact their well-being and ability to succeed in school – and decades of experience show us that allowing transgender students to play alongside their friends causes no harm,” Oakley added. “This bill is only an attempt to continue the conversation to publicly ostracize, demonize, and harm transgender children who only want to play.”
MIT reinstating standardized testing requirements -The Massachusetts Institute of Technology (MIT) has announced the reinstatement of its standardized testing requirements amid concerns over the spread of COVID-19. In a statement on Monday, MIT said it made its decision due to the availability of the COVID-19 vaccine and an increase in students taking tests in schools. “After careful consideration, we have decided to reinstate our SAT/ACT requirement for future admissions cycles. Our research shows standardized tests help us better assess the academic preparedness of all applicants, and also help us identify socioeconomically disadvantaged students who lack access to advanced coursework or other enrichment opportunities that would otherwise demonstrate their readiness for MIT,” MIT said in its statement. “We believe a requirement is more equitable and transparent than a test-optional policy,” it added. MIT noted that the math portion of standardized tests is important when evaluating students' performance through the system. House poised to pass bill legalizing marijuana Chernobyl workers say unprotected Russians kicked up radioactive dust... “In other words, there is no path through MIT that does not rest on a rigorous foundation in mathematics, and we need to be sure our students are ready for that as soon as they arrive,” the institute said. There has been a move away from standardized tests, which have come under increased criticism. California's university system just last week said it would not use the SAT or ACT as a requirement for admission. MIT initially suspended its testing requirements due to concerns about the ongoing pandemic, the statement noted.
Jill Biden's community college receives bomb threat - Authorities said a bomb threat was made at Northern Virginia Community College (NVCC), where first lady Dr. Jill Biden is a professor. The school announced in a tweet on Tuesday that its Alexandria, Va. campus will remain closed throughout the day due to the threat, adding that students and faculty have evacuated the area. Alexandria Campus is closed today due to a bomb threat and the college has evacuated the area,” the school said. “Follow instructions of authorities and avoid area.” First lady spokesperson Michael LaRosa told The Hill that Biden was informed about the bomb threat at the school, adding that she is currently not in danger. The first lady had been scheduled to depart from the White House to teach a morning class. “The First Lady was informed about a bomb threat at Northern Virginia Community College prior to departing the White House for class this morning,” LaRosa said. “At no point was she in any danger.”
Census: Record 37.9% of adult population in the United States has a bachelor’s degree or higher - This was released last month by the Census Bureau: Census Bureau Releases New Educational Attainment Data
In 2021, the highest level of education of the population age 25 and older in the United States was distributed as follows:
• 8.9% had less than a high school diploma or equivalent.
• 27.9% had high school graduate as their highest level of school completed.
• 14.9% had completed some college but not a degree.
• 10.5% had an associate degree as their highest level of school completed.
• 23.5% had a bachelor’s degree as their highest degree.
• 14.4% had completed an advanced degree such as a master’s degree, professional degree or doctoral degree.
This graph shows the number of adults, 25 years and older, with less than high school education, high school or some college, and a bachelor's degree or higher since 1940. The trend towards more education has been ongoing, and there are now only 20 million adults without a high school education. There are about 120 million with a high school education or some college. And a record 85 million with bachelor's degree or higher. The second graph shows the same data as a percent of the population. In 1940, about 76% of the adult population (over 25) had less than a high school education. That has declined to less than 9% now. And in 1940, only 4.6% of the population had a bachelor's degree or higher. Now that is at a record 37.9%.
Student Loan Forgiveness Not Included in Biden’s Budget — Will Payment Pause Be Extended by May 1? - President Joe Biden’s $5.8 trillion budget proposal has a little something for everyone — except federal student loan borrowers hoping the budget would include provisions to forgive all or part of their debt.The proposal does not include any direct student loan relief such as payment forgiveness or interest relief, Forbes reported. There also is no extension of the student loan payment pause that went into effect two years ago during the early days of the COVID-19 pandemic.As it stands, the pause is still set to end on May 1, 2022, meaning federal student loan borrowers will have to resume their payments on that date.In terms of higher education, the proposal includes funds that would double the maximum allowable Pell Grant by 2029. These grants provide federal aid for low-income students and don’t need to be repaid. The proposal also earmarks $752 million in funding for HBCUs and $800 million to streamline and improve student loan servicing.As Forbes noted, Congress must first approve the budget for it to pass, and there’s a chance Biden’s proposal could be changed in Congress to include additional student loan relief. If that doesn’t happen, Biden could always use an executive action to provide relief to federal student loan borrowers — something many Democrats and advocates have urged him to do. Biden could also use his executive powers to extend the payment pause, which is another action supported by certain lawmakers and advocates. As GOBankingRates previously reported, Sen. Patty Murray (D-WA) recently unveiled a four-point plan that would extend the pause to 2023 and cancel student loans for some borrower. Murray, chairwoman of the Senate Health, Education, Labor and Pensions Committee, urged Biden to consider her proposal.
CDC data suggests mRNA booster for J&J vaccine recipients - People who received the single-shot Johnson & Johnson (J&J) COVID-19 vaccine are at higher risk of serious illness and hospitalization than those who received an mRNA vaccine, so they should seriously consider getting a booster dose of either Pfizer's or Moderna's shot, according to new Centers for Disease Control and Prevention (CDC) data released Tuesday. Health officials first allowed people to mix and match booster shots last fall, but there's been very little data on the real-world effectiveness of different strategies. The CDC study of 10 states during the height of the omicron wave found that people who received a single J&J dose combined with an mRNA booster shot had better protection against severe outcomes than those with just the J&J dose. A single J&J dose provided only 31 percent protection against hospitalization. A booster dose of the J&J vaccine was better than a single dose, but people with three doses of mRNA vaccines had the best protection, with 90 percent effectiveness.
What’s going on with the Johnson & Johnson vaccine – The Johnson & Johnson coronavirus vaccine, also known as the Janssen vaccine, is administered as a single shot, but a booster dose is recommended two months later, according to the Centers for Disease Control and Prevention (CDC). Overall, the vaccine efficacy for the Janssen vaccine seems to be lower than for the mRNA vaccines from Pfizer/BioNTech and Moderna. Recent studies have added to the understanding of the vaccine’s durability and recommended booster shots. Several studies on efficacy against severe COVID-19, hospitalizations and deaths find that one Janssen dose is less effective than two doses of either mRNA vaccine. This has been noted and suspected by health officials since last year. However, these studies only include one Janssen dose, and not the booster dose two months later. They were also conducted prior to the emergence of the omicron variant. Newer studies on durability of vaccine efficacy and booster shot combinations are adding to what we know. A study uploaded to a preprint server in January suggests that there is waning protection against hospitalization in the Pfizer/BioNTech and Moderna vaccines at the five month mark post-vaccination, but no evidence of waning protection from the Janssen vaccine. Protection against infections started waning in month two for people who received either the Pfizer/BioNTech or Moderna vaccines. For the Janssen vaccine, protection against infection started to dip after month four. Protection against hospitalizations started dropping for the Pfizer/BioNTech v accine in the second month, and for Moderna in the third month. The research also suggests protection against intensive care unit admissions stays the same for all three vaccines.
COVID vaccination of children age 5-11 cut Omicron hospitalizations by 68% - Although the Pfizer–BioNTech COVID-19 vaccine became available in October for children age 5-11, many parents have been hesitant to have them vaccinated. As of March 16, only 27 percent had received two vaccine doses, according to CDC data. A national study published March 30 by The New England Journal of Medicine now reports that vaccination of 5- to 11-year-olds reduced hospitalizations with COVID-19 by more than two thirds during the omicron surge and protected against severe illness.The study, co-led by Adrienne Randolph, MD, MSc, at Boston Children’s Hospital and the Centers for Disease Control and Prevention, also confirms that vaccination reduced COVID-19 hospitalization in adolescents age 12-18 and protected strongly against severe illness, in line with a study earlier this year.“The reason for a child to get a COVID-19 vaccine is to prevent severe complications of SARS-CoV-2 infection, including hospitalization,” says Randolph. “This evidence shows that vaccination reduces this risk substantially in 5- to 11-year-olds..”The study tapped data from the national Overcoming COVID-19 Network, which Randolph launched in 2020. It included 1,185 children with COVID-19 at 31 pediatric hospitals across the U.S.: 918 adolescents aged 12 to 18 and 267 children aged 5 to 11. The team also enrolled patients of similar age who were hospitalized for other reasons and served as controls.The study spanned July 2021 through February 17, 2022, during the delta and omicron surges. In children 5 to 11, vaccine benefits could only be assessed during omicron, as the vaccine was not approved for them until October 2021. Study findings and conclusions:
- Overall, 88 percent of patients hospitalized with COVID-19 were unvaccinated, and 25 percent had critical illness requiring life-supporting interventions.
- Of children ages 5-11 hospitalized with COVID-19, 92 percent were unvaccinated. Sixteen percent were critically ill, needing life support measures such as intubation. Of these, 90 percent were unvaccinated.
- Of adolescents ages 12-18 hospitalized with COVID-19, 87 percent were unvaccinated. Twenty-seven percent had critical illness, and of these, 93 percent were unvaccinated. Two children died.
A Round-Up of Anti-Covid Nasal Spray Vaccine and Treatment Research By Lambert Strether - As readers know, I’m a big fan of anti-covid nasal sprays. The first time I did a round-up, in July of 2021, there were a few vaccines under development, but the focus was mainly on prophylaxis and treatment. As of this writing, there are many more solid nasal vaccine projects, worldwide, and one treatment on the market. So I’m encouraged! I won’t go very deeply into the science behind the new generation of nasal vaccines (the previous post includes a diagram of the “human oral squamous epithelium” and how SARS-CoV-2 affects it). Rather, I will look at the advantages of nasal vaccines, ask how many nasal vaccines are under development (not so easy to answer), and look at a few of the projects in more detail. I’ll conclude with some brief caustic remarks on the Biden Administration’s miserably inadequate handling of this technology. Nasal vaccines have two significant advantages over current intramuscular (syringe-injected) vaccines. First, the means of administration means broader take-up. Nasal vaccines don’t trigger fears of needles: Around 20% of adults in the world share this fear, with 1 in 6 adults avoiding the flu vaccine due to this phobia.Nasal vaccines are easier to administer:Administration does not require a trained professional, sterile environment, and syringe and needle; making self-administration possible and thus offering much broader possibilities of distribution and a greater uptake in vaccination. Self-administration is really attractive to me, since I avoid interacting with the health care establishment as much as I possibly can. Some nasal vaccines can be easier to produce and store: Because the vaccine is grown in chicken eggs — the same technology used for many flu vaccines all over the world — the cost of development is also cheaper. “It is much, much cheaper to produce this vaccine as compared to the mRNA vaccines by Pfizer and Moderna,” Palese told DW Second, the mechanism of action promises sterilizing immunity. From the American Chemical Society:SARS-CoV-2 often enters through our noses [because Covid is airborne], where it encounters a protein called ACE2, which is found in abundance in our nasal passages. ACE2 is the virus’s doorway into our cells. In fact, the mucosal membranes that line our airways, digestive systems, and reproductive tracts are often the first parts of our bodies to face an invading pathogen. A network of immune cells resides underneath our mucous membranes, or mucosae, and forms a front line of defense against invaders, and they prevent most infections from taking root. This is the mucosal immune system, and some immunologists think we have been seriously underestimating it. Our mucosal immune cells make a special class of antibodies that are constantly secreted from the mucous membranes to protect the nose, gut, and other vulnerable sites from pathogens we’ve seen in the past. “But if you don’t stimulate the immune system in the mucosae, you don’t obtain mucosal immune responses,” Yet most research on SARS-CoV-2 and our immune systems has overlooked mucosal immunity in favor of the easier-to-study systemic immunity. “When the pandemic hit last year and I started to see papers coming out about immunity, it really quite staggered me to see an absence of attention to the mucosal immune response,” Russell says. Stopping infections where they start could mean sterilizing immunity. From the Lancet:[Intranasal] vaccines have the potential to induce sterilizing immunity against mucosal pathogens. Antigens are exposed at the initial site of viral attack to induce potent immune responses at local or distant mucosa.In a word, the [intranasal] immunization route can induce sterilizing mucosal and systemic immunity, further preventing virus infection and transmission. Application of [intranasal] vaccines will hopefully help deal with the persistent COVID-19 pandemic and potential viral contagious diseases in the future.Time concludes:[R]esearchers hope that nasal vaccines may one day do what even the highly effective mRNA vaccines made by Pfizer-BioNTech and Moderna have not: slow transmission enough to bring the pandemic to an end.
How I’ll decide when it’s time to ditch my mask - For weeks, I have been watching coronavirus cases drop across the United States. At the same time, cases were heading skyward in many places in Europe, Asia and Oceania. Much of the rise in cases has been attributed to the omicron variant’s more transmissible sibling BA.2 clawing its way to prominence. But many public health officials have pointed out that the surges coincide with relaxing of COVID-19 mitigation measures. People around the world are shedding their masks and gathering in public. Immunity from vaccines and prior infections have helped limit deaths in wealthier countries, but the omicron siblings are very good at evading immune defenses, leading to breakthrough infections and reinfections. Even so, at the end of February, the U.S. Centers for Disease Control and Prevention posted new guidelines for masking, more than doubling the number of cases needed per 100,000 people before officials recommended a return to the face coverings (SN: 3/3/22). Not everyone has ditched their masks. I have observed some regional trends. The majority of people I see at my grocery store and other places in my community in Maryland are still wearing masks. But on road trips to the Midwest and back, even during the height of the omicron surge, most of the faces I saw in public were bare. Meanwhile, I was wearing my N95 mask even when I was the only person doing so. I reasoned that I was protecting myself from infection as best I could. I was also protecting my loved ones and other people around me from me should I have unwittingly contracted the virus. I don’t really like wearing masks. They can be hot and uncomfortable. They leave lines on my face. And sometimes masks make it hard to breathe. At the same time, I know that wearing a good quality, well-fitting mask greatly reduces the chance of testing positive for the coronavirus (SN: 2/12/21). In one study, N95 or KN95 masks reduced the chance of testing positive by 83 percent, researchers reported in the February 11 Morbidity and Mortality Weekly Report. And school districts with mask mandates had about a quarter of the number of in-school infections as districts where masks weren’t required (SN: 3/15/22).With those data in mind, I am not ready to go barefaced. And I’m not alone. Nearly 36 percent of the 1,916 respondents to a Science News Twitter poll said that they still wear masks everywhere in public. Another 28 percent said they mask in indoor crowds, and 23 percent said they mask only where it’s mandatory. Only about 12 percent have ditched masks entirely. Before the pandemic, I caught several colds a year and had to deal with seasonal allergies. Since I started wearing a mask, I haven’t had a single respiratory illness, though allergies still irritate my eyes and make my nose run. I’ve also got some health conditions that raise my risk of severe illness. I’m fully vaccinated and boosted, so I probably won’t die if I catch the virus that causes COVID-19, but I don’t want to test it (SN: 11/8/21). Right now, I just feel safer wearing a mask when I’m indoors in public places.
Coronavirus dashboard for March 28: I’ll take the “under” for the severity of any BA.2 wave - Very few US States reported over the weekend. The decline in new cases has stalled at roughly 30,000 per day. Deaths are still declining, and are currently just below 800 per day. Since the BA.2 variant continues to generate new headlines, with just about everybody warning of a new wave in the US, let’s take a look at what actually happened in Europe (and remember: there was no new BA.2 wave in South Africa, the Philippines, India, and a number of EU countries where BA.2 took over from BA.1 early). BA.2 started a new wave in Europe beginning in the last week of February through the first week of March: A week or two ago, the poster children for Europe’s big outbreak included countries like the UK, Germany, Belgium, Austria, the Netherlands, and Greece. Here’s what they (plus the other major countries of Italy and Spain, plus Portugal), look like now: Declines everywhere. Italy just peaked earlier during last week, and the UK probably did as well (there was a data dump last Monday which will go out of the average tomorrow). Here is where BA.2 is still increasing in Europe: In short, four weeks after Europe’s BA.2 wave started, cases are already declining everywhere except France, Ireland, Luxembourg, Cyprus, and Malta. The last 4 countries have a combined population of 6.5 million. There may be a few small countries I’ve missed, but they wouldn’t materially affect the result. Last Tuesday, the CDC reported that the BA.2 variant was a majority of new cases in the Northeastern Census region, 40% along the West coast and the upper Midwest, and 30% or below everywhere else. Here’s what cases in the US Census regions look like as of now: Remember that the appropriate comparison with the CDC report is cases one week ago. Since then, the percentage of BA.2 infections has probably risen by about 15% (but we won’t know until at least tomorrow). One week ago cases were flat to declining everywhere except for the Northeast, where they were up 10%. Cases are still declining in the West, flat in the Midwest, and rising in the South and Northeast now. For the EU as a whole, cases rose 50% from their bottom since then, and appear to have peaked in the last week. In the US, that would translate to 45,000 cases per day in about 2.5-3 weeks. The worst case countries saw their cases roughly double, which in the US would be 60,000. I’m more inclined to go with the former estimate than the latter. And since, as of now, there is no new variant on the horizon, I expect a fast decline from peak just as we are seeing in the European countries now.
The Covid Data Is Making Me Queasy, and CDC Changes and Reform Proposals Aren’t Helping Me Any --by Lambert Strether -As readers know, I’m a humble Covid tape watcher. I don’t believe any of the numbers are as accurate as (say) an income statement [snort], but I have had confidence that I could discount the bullshit and at least form sufficiently useful narratives to answer questions like: Are we rising, peaking, or declining? Is my area safe? Is an area I want to travel to safe? If I get sick, what are the odds I won’t survive? For example, if Los Angeles County is a rapid riser county, it probably doesn’t make sense to fly there. And so forth. My motive is reader service (with myself as a reader). Now, however, I’m not so sure I can discount the bullshit properly, and that makes me queasy. And I’m not the only one:In the wake of a flurry of warnings from officials over a potential COVID-19 resurgence in the United States, there are growing concerns among health experts that dwindling access to public data, the shuttering of COVID-19 testing sites and with an increasing number of people using at-home tests instead, it could leave the nation vulnerable to unforeseen upticks.“Comprehensive case data is critical to an effective response. As we have seen throughout the pandemic, lack of data leads to poor decision making and ultimately costs lives,” Dr. John Brownstein, an epidemiologist at Boston Children’s Hospital and an ABC News contributor, said.Worse, the CDC reform proposals seem geared to handing more power to an agency that has shown itself to be completely dysfunctional. Maybe clean house before starting a renovation?First, I’ll quickly go through the metrics I’ve been using. (Readers are welcome to suggest new metrics, and new sources. However, I think continuity is also important. Plus, I’m aware of the new CDC dashboards, but I’m not sure their value-add goes beyond presentation, and in some cases the presentation is not that good.) Contra CDC and many Covid minimizers, I think case cases are the most important metric, more important than hospitalization. That’s because you can suffer vascular and neurological damage, or get Long Covid, without necessarily going to the hospital. In addition, case counts are much close to a leading indicator than hospitalization, and since Covid cases can multiply exponentially, getting as much lead time on a case explosion as possible is important. Here are the case counts for the last four weeks from the source I regularly use, 91-DIVOC: This looks mightily and flatly reassuring (as long as you’re willing to accept that the new normal of average daily cases is equal to a record high in the first peak, in April 2020. But are these numbers right, and are the case count curves really flat? Probably not: [Researchers] found the use of the [at-home] tests more than tripled when the omicron variant was spreading rapidly, increasing from an average of 5.7 percent to more than 20 percent among people with symptoms. While test use surged, the tests weren’t used consistently across the U.S. population — it varied by race, age, income or education. For example, the researchers found that white people were approximately twice as likely to report at-home test use, compared with those who identified as Black. In addition, adults in their 30s were more likely to report at-home test use than people in their teens and 20s and those ages 75 and older. At home tests aren’t likely to be counted:
As pandemic funding dries up, BA.2 has become dominant COVID-19 variant in the US - Daily confirmed COVID-19 infections in the US have stopped declining and plateaued as the BA.2 subvariant of the Omicron variant has come to dominate. The Centers for Disease Control and Prevention (CDC) reported that BA.2 represented nearly 55 percent of all sequenced cases in the US last week. Globally, the BA.2 accounts for close to 90 percent of all recently sequenced SARS-CoV-2 viruses. Sixteen states have reported a rise in the 14-day average of new infections, of which nine are in the Northeast, where BA.2 makes up 70 percent of sequences and daily infections are up by 50 percent. These findings are corroborated by wastewater surveillance. Other regions of the country also see signs of an upturn in cases. These include the Southeast, specifically South Carolina, Alabama, Florida, the Southwest, Great Plains states, and, finally, the Northwest and Alaska. Overall, the average number of new cases is just above 29,000 infections per day. The numbers dying each day from COVID continue their decline and currently stand at an average of 750 per day. There have been almost 81.7 million COVID cases and just over one million reported COVID deaths in the US, based on the Worldometer COVID dashboard. Despite the lull in cases, the US is in a precarious place as it has essentially dismantled all its meager mitigation measures and tracking dashboards and flying blind once more. Real-time data is speculative and reliant on whatever reporting systems remain in place. It is crucial to remember that when BA.2 became dominant just two to three weeks ago in European countries like the UK, France, and Germany, COVID cases there turned rapidly upwards. Accompanying these changes has been a rise in hospitalizations and deaths. Additionally, these countries have substantially higher rates of vaccination and boosters than the US. Given the projections that the US will experience a similar if not more extensive community spread than seen in Europe, then cases could quickly rise by more than tenfold if BA.1 to BA.2 peak comparisons hold. This implies that daily infections could reach above 300,000 per day at their peak by mid to late April. The situations in the US and across many high-income countries are similar. Regardless of the political party in charge, governments have entirely disregarded the continued dangers posed by the pandemic. With each wave of infection, they have systematically, step by step, undermined their public health measures to protect the well-being and life of their populations.
Five things to know about omicron subvariant BA.2 - Recent surges of COVID-19 cases around the world have brought on questions and concerns about one particular subvariant of the virus — BA.2 BA.2, along with its sister variants BA.1 and BA.3, are all different versions of the omicron strain. BA.1, the most common of the three variants after omicron, was first discovered in November and was effectively the sole cause of the large spike in coronavirus cases around the world in December and January. Although BA.1 dominated new infections at the end of last year, BA.2 has continued to become more prevalent as 2022 has progressed. The Centers for Disease Control and Prevention (CDC) named the BA.2 subvariant the dominant strain in the U.S. on Tuesday. The agency said the new strain accounts for 54.9 percent of new coronavirus cases for the week ending March 26, a jump from 27 percent two weeks earlier. The subvariant may cause a spike in cases after weeks of consistent declines in numbers in the U.S., but it is unclear how noticeable the increase may be. Eric Topol, director of the Scripps Research Translational Institute in La Jolla, Calif., told Reuters it was "a little too early" to say whether the U.S. would see a large wave of infections brought on by BA.2 CDC Director Rochelle Walensky said last week that the agency was monitoring the effects of BA.2, especially in the Northeast, where most cases of the subvariant have been located so far. The BA.2 subvariant is thought to be about 30 percent more transmissible than the original BA.1 strain of omicron, which itself was already more contagious than earlier forms of the virus.Scientists believe that part of BA.2's high level of transmissibility is caused by its unique mutations. BA.2 has eight mutations not found in BA.1, according to the New England Journal of Medicine. Just as with the other omicron variants, vaccines are less effective against BA.2 than they are against the original strain of the coronavirus, and protection wanes over time. However, a booster shot restores protection against the virus, especially when it comes to preventing severe cases that lead to hospitalization and death, according to datafrom the United Kingdom Health Security Agency. Despite the subvariant's high level of transmissibility, evidence so far shows that BA.2 does not cause severe disease, Walensky said at a White House COVID-19 response team briefing last week. Experts also claim there is no evidence that BA.2 penetrates protection from the COVID-19 vaccines to a significant degree. This is noticeably different from the original omicron variant, whose ability to penetrate vaccine protection led to "breakthrough" infections becoming a more common occurrence. Another reason scientists believe BA.2 is not causing severe cases of COVID-19 is that people who were infected with BA.1 developed antibodies that seem to be giving them immunity to the new subvariant. The World Health Organization (WHO) said last month that infection from BA.1 provides a significant level of protection against BA.2.The transmissible subvariant has accounted for surges in COVID-19 cases across the globe, with the WHO saying last week that BA.2 is the predominant variant around the world. The organization also said that BA.2 made up about 85.9 percent of cases globally in the last month. The trend is particularly prevalent in Southeast Asia, followed by the Eastern Mediterranean, African, Western Pacific and European regions, the WHO said. The rise in cases in Europe due to BA.2 — which has hit Germany and the United Kingdom particularly hard — has also been driven by the loosening of coronavirus safety measures across the continent.
NIH experts discuss controlling COVID-19 in commentary on herd immunity - Achieving classical herd immunity against SARS-CoV-2, the virus that causes COVID-19, may not be attainable, according to a new perspective published in The Journal of Infectious Diseases. However, widespread use of currently available public health interventions to prevent and control COVID-19 will enable resumption of most activities of daily life with minimal disruption, the authors note. Anthony S. Fauci, M.D., director of the National Institute of Allergy and Infectious Diseases (NIAID), part of NIH, David M. Morens, M.D., senior scientific advisor to the NIAID director, and Gregory K. Folkers, chief of staff to the NIAID director, authored the perspective. The general concept of herd immunity implies that transmission of an infectious agent can be blunted, except for sporadic outbreaks, because a certain proportion of the population is already protected through vaccination or prior infection. The authors explain how the scientific understanding of herd immunity and its applications to various diseases have evolved over time. High levels of herd immunity have enabled the United States to largely control polio and measles—two diseases caused by viruses that have not undergone significant evolution. However, the authors note, the benefits of achieving herd immunity thresholds have been less successful with respiratory viruses such as influenza, which continually mutate. Dr. Fauci and his colleagues write that achieving classical herd immunity against SARS-CoV-2 is unlikely, due to a combination of factors that include features of the virus as well as current societal dynamics. These include the virus’ ability to continually mutate to new variants; asymptomatic virus transmission, which complicates public health control strategies; the inability of prior infection or vaccination to provide durable protection against reinfection; suboptimal vaccination coverage; and adherence to non-pharmacologic interventions. However, the authors note, controlling COVID-19 without major disruptions to society is now achievable because of widespread background immunity via prior infection or vaccination, booster shots, antiviral drugs, monoclonal antibody therapies and widely available diagnostic tests. Research to develop pan-coronavirus vaccines, which could protect against multiple coronaviruses or at least multiple SARS-CoV-2 variants, remains crucial. “Living with COVID is best considered not as reaching a numerical threshold of immunity, but as optimizing population protection without prohibitive restrictions on our daily lives,” the authors conclude.
Covid deaths 15 times more, finds Lancet study - The actual number of deaths caused by Covid-19 between 2021 and 2020 in Bangladesh was almost 15 times higher than the officially reported figure, says a study published in the UK-based peer-reviewed medical journal The Lancet. According to the report published on March 10, the cumulative excess Covid mortality number in Bangladesh was 4,13,000 while the official fatality figure was 28,100. All Covid deaths in any of the 191 countries studied in the report could not be accounted for, the study said, estimating that the global cumulative number of excess Covid deaths would be 18.2 million, three times the official figure. The health ministry of Bangladesh, however, refused to accept the findings of the study. ‘The study lacks credibility for its lack of solid data to back its claim,’ said Kazi Zebunnessa Begum, additional secretary, health ministry, adding, ‘The official death figure is the actual account. There is no chance of underestimation.’ At the regional level, the number of excess Covid deaths was the largest in the regions of South Asia, North Africa, the Middle East and eastern Europe, the report said. The April–August 2021 Covid surge in South Asia brought cumulative excess pandemic mortality rates across that region up to or above the levels that were observed in some high-income countries, said the report. At the country level, the highest number of cumulative excess Covid deaths were estimated in India to be 4.07 million, followed by the USA with 1.13 million, Russia with 1.07 million, Mexico with 7,98,000, Brazil with 7,92,000, Indonesia with 7,36,000 and Pakistan with 6,64,000. Among these countries, the excess mortality rate was the highest in Russia with 374.6 deaths per 1,00,000, followed by Mexico with 325.1 per 1,00,000 and similar in Brazil with 186.9 per 1,00,000 and the USA with 179.3 per 1,00000, the report said. The highest estimated excess Covid mortality rate was 734.9 deaths per 1,00,000 of the population in Bolivia compared with the global rate of 120.3, whereas negative excess mortality rates were estimated in Iceland, Australia, Singapore, New Zealand and Taiwan. The excess mortality rate exceeded 300 deaths per 1,00,000 in 21 countries. The Lancet study pointed out several reasons for the underestimation of Covid deaths. The first reason was the requirement to produce a Covid positive test certificate. This condition led to under-reporting among older victims of the disease in high-income countries, particularly in long-term care facilities, the report said. The other reasons that lead to the Covid mortality underestimation were lack of quality and comprehensiveness in the information management systems of the countries concerned, disagreement in the global medical community as to when a Covid death should be reported. Political considerations appear to have prevented accurate reporting of Covid deaths in some locations, the report said.
Avian flu now confirmed in 5 Minnesota counties — Minnesota state agricultural officials say cases of highly contagious bird flu have now been linked to poultry operations in five counties. According to the Minnesota Board of Animal Health (MBAH), H5N1 Highly Pathogenic Avian Influenza is now present at commercial poultry operations in Kandiyohi and Lac Qui Parle Counties. The avian influenza was earlier confirmed in poultry flocks in Meeker, Mower and Stearns Counties. All the cases have been tested and confirmed by the U.S. Department of Agriculture’s National Veterinary Services Laboratories in Iowa. Two infections were confirmed last Friday, one involving a commercial turkey flock with 289,000 birds in Meeker County. The other is a backyard flock in Mower County that consisted of chickens, ducks and geese, officials say. Then on Sunday came word that the state confirmed more cases of HPAI in a commercial turkey flock of 24,000 in Stearns County. So far, according to the Board of Animal Health, more than 310,000 birds are impacted. The Kandiyohi commercial turkey operation involves 40,000 birds on premises, while the one in Lac Qui Parle has 23,000. MBAH says in total, more than 376,000 birds are housed in the operations where positive cases have been confirmed. Animal health experts emphasize that the influenza poses a low risk to humans but causes respiratory problems, a reduction in egg production and increased mortality in turkeys, chickens and other forms of poultry. “These are the first cases of HPAI in the state of Minnesota since 2015,” Dr. Dale Lauer, Poultry Program Director for the Board, said in a news release. “Poultry producers and backyard flock owners need to be on alert and contact their veterinarian immediately if they see any changes in their flocks. Everyone in poultry facilities needs to follow the site’s biosecurity protocols every time to prevent the spread of disease.” Minnesota is currently ranked #1 in turkey production in the nation, boasting more than 660 turkey farms that raise about 40 million birds annually. State agricultural and economic officials say turkey production generates $774 million in cash receipts annually, and in 2020 Minnesota exported about 15% of its production, worth approximately $114 million.
5 counties, 376K birds now affected by H5N1 - The bird flu that was first detected in Minnesota on Friday has now been found in five counties. The Minnesota Board of Animal Health’s data Tuesday showed birds in Kandiyohi, Lac Qui Parle, Meeker, Mower and Stearns counties are affected by the highly pathogenic avian influenza (HPAI) H5N1. More than 376,000 birds were affected by the influenza, as of Tuesday, with all but the 17 birds in Mower County being on commercial turkey premises. H5N1 was first confirmed in a commercial turkey flock in Dubois County, Indiana on Feb. 8. It was first found in Minnesota on March 25. The virus hasn’t caused any human illness, officials say, and the public is at a low risk. A federal emergency response team from the United States Department of Agriculture is expected to arrive in Minnesota on Wednesday to help state officials contain the virus.
Mass. town warns residents about avian flu detection in state - — Officials in the Massachusetts town of Dighton are warning residents who own domestic poultry to be aware that avian flu has been detected in the state. In an announcement on Tuesday, Dighton Animal Control Officer Stacy Ferry offered important safety tips to prevent the spread of the virus. The Massachusetts Department of Agricultural Resources has confirmed that Highly Pathogenic Avian Influenza (HPAI) has been detected in wild birds in multiple locations in the state and appears to be prevalent in at least some species of the region's wild bird population. According to the MDAR, this means all domestic poultry in Massachusetts may be at risk of exposure to the virus, which can be fatal for birds like chickens and turkeys. Avian flu, also known as bird flu, is a common influenza strain that can spread from birds to humans through saliva, naval secretion and feces. The avian flu is not common among humans, but is very contagious among birds. Earlier this month, the owners of Pumpkin Wall Farm in Derry, New Hampshire, said about 80 of their birds were euthanized by state workers after five turkeys at the animal sanctuary suddenly died of the avian flu. Wild ducks carrying the virus landed in their pond and infected the flock, which meant the rest of the farm's chickens, ducks, geese and turkeys then had to be put down.
More than 32,000 turkeys in Johnston County euthanized after positive sample of Avian flu -— A poultry farm in Johnston County had to preventively euthanize about 32,000 turkeys after a positive sample within the flock. The United States Department of Agriculture has confirmed flu outbreaks in several groups of animals throughout the country. The turkeys tested positive for High Path Avian Influenza, first at a diagnostic lab in Raleigh and later in a National Veterinary Services Lab in Ames, Iowa. A spokesperson for the USDA said the turkeys were depopulated to prevent any spread. The positive sample was the first case of HPAI in domestic poultry in North Carolina. “With HPAI in the wild bird population and other cases around the country, commercial operators and backyard flock owners have been on heightened watch for any signs of the virus in their flocks,” said State Veterinarian Mike Martin. “The industry responded quickly to the positive result, depopulating the affected flock of 32,100 and starting the composting process of the birds onsite to guard against additional spread. Under HPAI protocols, we will be actively testing other flocks within the 10 kilometer zone or about 6.2 miles in collaboration with our federal and industry partners.”
Bird flu: Iowa to kill 1.5M more hens, turkeys due to recent outbreaks - Two more outbreaks of the highly pathogenic avian influenza – otherwise known as bird flu – have been detected in Iowa, according to state agriculture officials. The Iowa Department of Agriculture and Land Stewardship and the United States Department of Agriculture (USDA) Animal and Plant Health Inspection Service (APHIS) confirmed cases at a commercial turkey flock in Hamilton County and a commercial layer flock in Guthrie County. Cage-free chickens walk in a fenced pasture at an organic farm near Waukon, Iowa. (AP Photo/Charlie Neibergall, File / Getty Images) As a result, 1.5 million chickens and 28,000 turkeys will be killed in order to prevent the virus from spreading to other flocks. The virus spreads easily among chickens through nasal and eye secretions, as well as manure. Seventeen states have already had outbreaks in commercial or private outdoor flocks this year, according to the Department of Agriculture. Over 15.6 million chickens and 1.3 million turkeys were killed since January because of those outbreaks. In Iowa alone, there have already been nine outbreaks, affecting seven commercial flocks and two backyard flocks. Iowa’s agriculture secretary, Mike Naig, warned that this situation could worsen since the spring migration is likely to continue for a few more months. Much depends on the weather and improved biosecurity on farms, Naig said. Still, health officials say they don’t know of any people who have caught the bird flu in the U.S. and that the disease doesn’t present an immediate public health concern. The virus can spread from infected birds to people, but such infections are rare and haven’t led to sustained outbreaks among humans.
High-path avian flu hits poultry in 5 more states -Federal officials today announced that avian flu has struck flocks in five more states—Massachusetts, North Carolina, North Dakota, Ohio, and Wyoming—expanding outbreak activity westward and to nearly half of US states. Four of the outbreaks involved backyard flocks, while North Carolina's outbreak involved commercial poultry. In a related development, Iowa reported two more outbreaks at commercial farms, including a large layer farm. The announcement from the US Department of Agriculture (USDA) Animal and Plant Health Inspection Service (APHIS) today lifts the number of affected states to 23. Events have include both backyard flocks and commercial operations, mainly in the Midwest and East. In North Carolina, where the virus had already been found in waterfowl surveillance, an outbreak struck a commercial farm in Johnston County, about 40 miles southeast of Raleigh. Meanwhile, in the four states reporting their first outbreaks in backyard flocks, Massachusetts' detection occurred in Berkshire County, in the far west of the state. Ohio's outbreak occurred in backyard chickens in Franklin County, the home of Columbus.
Bird flu losses: 3% of U.S. egg-laying flock - Nearly 11.8 million egg-laying hens — three of every 100 in the U.S. flock — have died in outbreaks of highly pathogenic avian influenza (HPAI) in less than a month, USDA data released on Tuesday show. The latest losses were 1.46 million hens in Guthrie County in central Iowa. Laying hens account for most of the 17 million chickens, turkeys, and other domestic poultry lost to HPAI in the first U.S. outbreak of the viral disease in two years. More than 50 million birds, mostly chickens and turkeys in Iowa and Minnesota, died in an HPAI epidemic in 2014-15. Iowa is No. 1 in eggs and Minnesota is the top turkey-producing state. The 2014-15 epidemic created egg shortages in grocery stores. USDA economists are monitoring this year’s outbreaks for possible effects on food inflation. “An ongoing outbreak of highly pathogenic avian influenza could contribute to poultry and egg price increases through reduced supply or decreased prices through lowered international demand for U.S. poultry products or eggs,” they said last week. Poultry prices were forecast to surge by 6.5% this year, nearly triple the usual rate. While the HPAI outbreaks began in early February, the first among laying hens was confirmed on March 4 at an egg farm with 496,272 hens in Cecil County, Maryland, said the USDA. Since then, “high path” bird flu was identified at six other farms in Iowa, Maryland, South Dakota, and Wisconsin. All were large operations with hundreds of thousands or even millions of hens. There were 390 million laying hens in the United States before HPAI reached egg farms, so the loss of 11.77 hens equals 3% of the national total. Iowa has lost 7.7 million hens, Wisconsin 1.76 million hens, Maryland 1.16 million hens, and South Dakota 124,000 hens in the outbreaks, as of Tuesday. Some 1.3 turkeys have died in 28 HPAI outbreaks this year. Half of the outbreaks occurred in South Dakota. The most recent hit 28,000 turkeys on a farm in Hamilton County in central Iowa, about 60 miles north of Des Moines. Guthrie County, the site of the outbreak on an egg farm, is about 50 miles west of Des Moines.
First case of avian influenza detected in Oklahoma – State officials say they are investigating the first case of avian influenza in Oklahoma’s wild bird population. Officials with the Oklahoma Department of Agriculture, Food and Forestry say a wild duck in Payne County is the first wild bird in Oklahoma to be confirmed to be infected with Eurasian H5 type of highly pathogenic avian influenza.“While Oklahoma has not seen HPAI in a backyard or commercial poultry flock this year, the finding of this single duck adds Oklahoma to a long list of states with confirmed cases of HPAI,” said Dr. Rod Hall, State Veterinarian for Oklahoma. “I encourage poultry owners of all kinds to continue to remain vigilant, practice good biosecurity and report sick or dying birds immediately.” Experts stress that the virus can also cause sudden death in birds, even if they are not showing symptoms.Officials say HPAI can survive for weeks in contaminated environments.At this point, the virus is considered low-risk to people. However, it can be detrimental to poultry species.
800,000+ birds euthanized because of avian flu in S.D. — Avian flu has been confirmed at 21 locations in South Dakota, according to the U.S. Department of Agriculture (USDA).Eighteen of those locations are in commercial turkey productions. At least 800,000 turkeys have been impacted as of March 30.About 124,000 chickens were impacted at an egg laying production site. The flu was also confirmed at a commercial mixed-species site with 47,330 birds in the flock. The flu was also confirmed in a backyard flock of 150 birds.“As for South Dakota we are well beyond the (number of sites) in 2015,” said state assistant veterinarian Dr. Mendel Miller. “I would imagine we over the number of birds too.” Ten sites were impacted in 2015. Nine were in commercial turkey sites and one was in a commercial egg laying site, according to the USDA.
Bird flu that causes ‘terrible death’ found at 2 more Johnston County turkey farms -The strain of avian flu that has now been detected in three Johnston County turkey flocks is “terrible” for birds and could be devastating to North Carolina’s economy, according to an N.C. State University professor.“It kills the majority of the birds in a flock, and in some cases all of them, in just a few days. It attacks all the systems of the body,” Matthew Koci, a virologist and immunologist in the school’s Department of Poultry Science, wrote in an email to The News & Observer.The N.C. Department of Agriculture reported Wednesday that a Johnston County turkey operation had become the first to record a positive test for the “highly pathogenic” avian flu. On Friday, the department announced that the virus had been found at two additional turkey operations.Protocols for a positive test require all poultry operations within a 6.2-mile radius to be tested for avian flu. It was in the course of testing at least 40 farms around the initial Johnston County turkey operation that the two additional positives were found, according to the Department of Agriculture.The samples that came back positive were tested at N.C. Department of Agriculture and Consumer Services Veterinary Diagnostic lab in Raleigh and as of Friday afternoon had been sent to the U.S. Department of Agriculture’s National Veterinary Services Lab in Ames, Iowa, for confirmation.In an interview Thursday, Martin said it would not be surprising if there were additional cases in the state.“Hope for the best, plan for the worst,” Martin said about the state’s approach to the virus. “We have planned for continued operations in the event there are more outbreaks. We are preparing for other flocks (testing) positive.”Martin announced that a 6.2-mile radius will be set up around each of the operations where the virus has been newly detected. Those areas largely cover an area similar to the one set up around the first operation where the virus was detected. That area included parts of Johnston, Sampson and Wayne counties. According to the USDA, the counties produced a total of 70.61 million chickens and turkeys in 2020.
Iowa egg, turkey farms to lose 5 million birds to bird flu - Bird flu has infected two more farms in Iowa, forcing the killing of 5.3 million hens and 88,000 turkeys, officials said Friday.The new cases mean that across the nation, farmers have had to kill about 22 million egg-laying chickens, 1.8 million broiler chickens, 1.9 million pullet and other commercial chickens, and 1.9 million turkeys. Iowa accounts for many of those cases, with operations having to kill more than 18 million chickens and 305,000 turkeys since the outbreaks began a month ago.Iowa is the nation's leading egg producer and had 46 million chickens on farms in February, according to U.S. Department of Agriculture data. Iowa raises about 11.7 million turkeys annually.The latest cases were at an egg farm in Osceola County and a turkey farm in Cherokee County, both in northwest Iowa. Earlier this week, state officials also confirmed the virus on a turkey farm with 35,500 birds in Buena Vista County.Because the virus is so infectious and deadly for commercial poultry, entire flocks are destroyed and composted on the farms when they are infected.USDA data shows 23 states have confirmed cases in commercial or backyard flocks.Spread of the disease is largely blamed on the droppings or nasal discharge of infected wild birds, such as ducks and geese, which can contaminate dust and soil. Infectedwild birds have been found in at least 26 states, and the virus has been circulating in migrating waterfowl in Europe and Asia for nearly a year.The Centers for Disease Control and Prevention said the cases in birds do not present an immediate public health concern. No human cases of the avian influenza virus have been detected in the United States.
Do We Produce Too Much If We Are Making Corn Into Plastic Bottles? --Outside of agriculture there is a feeling of vast quantities, that farmers produce too much corn, soybeans, cotton, and other monocrops in a habitat destroying, bee killing, rural, backward, government sponsored enterprise that is slowly adding to climate change and environmental destruction. Agriculture is largely reactionary and heavily influenced by capitalism. If the need is there, and the price is right, the crop will be produced. Corn, the silage, feed stock, multi-use plastics and sugar crop that has come to dominate the American Midwest. We grow too much, or do we not grow enough? Biofuels are no better for the climate, so we have to cast that aside, so why corn for fuel? The ethanol derived is often much cheaper than gasoline and can be substituted or blended as most gas is in order to drop the price at the pump for the average American. Current spot price indicates that at $2.50 a gallon, when blended with gas, would make fuel more affordable. Now, corn crop is highly dependent upon yield. One thing I can say is that the ethanol plants are highly efficient with their process, corn goes in, fuel goes out and the waste is blended into cattle feed. We can also infer that plastics made from corn will also be cheaper due to the price per barrel of oil derived plastics are higher. Corn derived plastics are called Polylactic Acid, or PLAs for short, and this table sums up the cost per gram of each poly resin currently on the market.Corn plastics, at $0.03 per gram are about comparable with oil derived plastics such as poly ethylene and nylon. Now, PLA has some different qualities than oil derived plastics, so the uses are limited to plastics bottles which are abhorrent, and other low pressure, low heat applications. Bring back glass bottles for all.Corn also is a principal ingredient in silage, and a vast majority of the corn we grow goes into sustaining the herds of beef, pork, and poultry that we keep to feed protein to the population. The vast majority of silage is fed to bovine ruminants to produce milk and meat, principally during winter when forage is at its lowest.Corn sugar is also a huge industry. Corn sugar as a monosaccharide is easier for yeast to ferment, hence moonshine, Budweiser beer, etc. Corn also has a larger growing range than sugar cane. Cane sugar is a tropical plant that grows mostly further south than corn. Texas and Florida can successfully pull off a sugar cane crop, however, a corn crop realizes a better yield, and the fructose is sweeter than cane sugar (sucrose). Relative sweetness in products allows them to put less in to achieve the desired flavor profile.
'This plan is a lie': Biogas on hog farms could do more harm than good - Sherri White-Williamson lives about three miles from a pork processing plant in Clinton, N.C. On a good day, the air smells fresh, tainted by a minor whiff of rotten egg and sewage. On a bad day, the odor from the plant is so strong, she has to keep her windows closed. The smell wafts into a local elementary school, nearby restaurants, churches, and the county history museum. Those who live and work in the area say they have to keep fans, candles, and air fresheners running at all hours to make the air tolerable. The problem is even worse for people living down the road in rural Sampson County, near large hog farms, where they must endure more potent odors and pollution coming from the lagoons filled with waste, and the systems that spray waste onto fields as fertilizer. North Carolina is the second largest producer of pork in the country, and Sampson, Duplin, and Bladen counties house more than 40% of the state’s hog farms. According to census data, between a quarter to a third of the population in all three of these counties are Black; around a quarter of Duplin and Sampson residents are Latinx. About 42% of residents in neighboring Robeson County—the fourth largest hog producing county—are Native American. At farms using this system, hog waste— feces, urine, blood, and pus—drips through slats in the floors and into open pit lagoons, where it is mixed with water. The wastewater often sits uncovered, emitting noxious odors and gasses including methane, or is pumped out and sprayed as fertilizer on crop fields. There are approximately 4,000 lagoons in North Carolina, and the sludge—unusable waste left after the liquid has been sprayed—has almost filled many of these lagoons to capacity, experts say. These are often in “communities that are low-income and minority,” White-Williamson said. The pollution from concentrated animal feeding operations disproportionately impacts rural Black, Latinx, and Indigenous communities in North Carolina, including the Haliwa Saponi, Coharie, and Lumbee tribal nations. Studies have shown they’re more likely to live within three miles of large swine operations. A 2021 report also found that in Duplin County, 89 premature deaths per year can be attributed to emissions from hog operations.
California Grapples With Regulation of Known Carcinogen Ethylene Oxide - Southeast Los Angeles residents recalled the vast legacy of soil contamination due to air emissions from the now-shuttered Exide lead battery recycling facility, and shared their fears of letting their children and grandchildren play in lead-contaminated dirt. They described the rumbling noise and noxious smells from the near-constant heavy truck traffic in the industry-rich area. Maybe most frightening, they said, was the brown or gray water that can flow from their kitchen and bathroom faucets and which they suspect comes from contaminated sources.Such is life in Los Angeles neighborhoods bounded by freeways, truck routes, industrial and waste sites. Now, when everyone thought they knew of every imaginable health threat, residents were warned of another potential hazard. In the office of local community organizer Felipe Aguirre, the group was informed of a chemical used at two nearby plants that disinfect medical items like wound dressings and stents.Ethylene oxide — often shortened to just EtO — is highly toxic and can be emitted in the air from such facilities. The Environmental Protection Agency determined that EtO iscarcinogenic, with links to lymphoma, leukemia, stomach and breast cancers. Short of cancer, EtO irritates the eyes, nose, throat and lungs, and it has been linked to damage to the brain, nervous and reproductive systems. At the Maywood meeting, Elda Peralta, who has lived in the city since 1993, said that after decades of organizing against toxic emissions in her community, she and other residents thought they knew of all the local threats. After hearing of the medical sterilizers in her city, she said, “We’re disillusioned.” The chemical is used to sterilize 50% of medical devices in the country, and EtO is an important ingredient in all sorts of other industrial processes, like the manufacture of antifreeze, plastics, pesticides and pharmaceuticals. For the last few years, ethylene oxide has been at the heart of a torrid national battle between government and industry. In 2016, the EPA issued a revised hazard assessment for the chemical updating its cancer-causing risks. During the Trump administration, however, the agency attempted to weaken that assessment at the behest of the powerful chemical industry, using an alternative analysis by the Texas Commission on Environmental Quality (TCEQ) that significantly underestimated those risks. That effort ultimately failed. In January, the EPA formally rejected the TCEQ’s alternate analysis, instead using its original 2016 assessment to underpin new stricter rules governing certain chemical plants. The EPA has also moved in other ways to better regulate ethylene oxide. At the end of last year, for example, the agency required 29 additional medical sterilization facilities — five of them in California — to begin reporting their emissions to a national toxic emissions inventory, writing, “This will help inform EPA’s future actions and empower communities to act at the local level.”
Researchers thought they knew how PFAS get into the Great Lakes. Then they made a discovery -PFAS pollutants ride rivers across the Midwest and Canada to get to the Great Lakes. But not in the way a pair of University of Wisconsin-Madison researchers studying the forever chemicals expected, and that could impact how environmental officials regulate the chemicals. Christy Remucal, a professor of civil and environmental engineering, and Sarah Balgooyen, a postdoctoral researcher, expected to find the most PFAS in waterways that run through heavily polluted places, like small streams that travel through Marinette where PFAS used at Tyco's Fire Technology Center contaminated groundwater, ponds and ditches. The streams flowing through well-known polluted sites did carry PFAS, but Remucal and Balgooyen were surprised to find a concerning amount of PFAS in the samples they took from big rivers: specifically the Fox, Peshtigo and Menominee. While those rivers carry less PFAS pollution per gallon of water, they also dump a lot of water into the bay. "When we did the math on the loadings, combining the concentrations and the flow rates, we found out 'hey, these big rivers contribute two-thirds of the tributary loading to Green Bay.' That was a really surprising finding," Remucal said. "You look at the concentrations and they're not that bad, but they actually really, really matter." To find PFAS, Balgooyen and Remucal spent five days in 2020 driving around the Bay of Green Bay, the narrow, 120-mile-long bay on Lake Michigan's Wisconsin side, collecting samples of water and sediment from 41 tributaries to the bay. They took the samples to a lab to analyze them and measure how much, if any, of 10 specific PFAS chemicals each one contained. They published their research in the journal ACS ES&T Water in February. The big takeaway: Big rivers are a significant source of PFAS pollution into the Great Lakes, but not one that would be noticed by regulators who focus on cleaning sites with high concentrations of the pollution. " "But if we want to think about protecting the Great Lakes, we have to think about these large rivers that have modest PFAS concentrations because they're a really important source."
Biden pitches record Everglades funding, but GOP wants more - President Biden’s historic request yesterday for more than $407 million to restore the Everglades was cheered by Democrats and appeared to soothe one prominent Florida Republican, but did not fully allay his fears.The president’s proposed fiscal 2023 budget includes the largest-ever ask for Everglades funding from an administration.Army Corps of Engineers officials at a press conference yesterday confirmed that the bulk of the money — more than $300 million — would go toward the Everglades Agricultural Reservoir (EAA) reservoir, if the budget is approved by Congress.The reservoir, part of a larger suite of restoration projects, has emerged as a lightning rod among Republicans who earlier this year accused the White House of withholding infrastructure dollars and forcing the project’s funding to maneuver through a tricky appropriations process (E&E News PM, March 28).The reservoir, located south of Lake Okeechobee, is being constructed to catch and filter nutrient-supercharged water before it flows south into the Everglades and beyond. The project is a collaboration between the federal government and Florida.Republican Rep. Brian Mast of Florida had blasted the White House at a press conference earlier this year for “sending a middle finger over to Florida” after the Army Corps of Engineers didn’t include the reservoir when doling out $2 billion under the Bipartisan Infrastructure Law (Greenwire, Feb. 2).The corps responded by pushing back and urging patience, reassuring lawmakers and advocates that the funding could appear in future spending bills.While Mast welcomed the budget request, the congressman in a statement yesterday also made clear the White House hadn’t fully met his demands, pointing to a bipartisan letter Florida’s delegation sent last week, urging President Biden to budget $725 million for the project.“The president’s budget request is trending in the right direction, but it is still a far cry from the full $725 million per year that is needed and that we requested with bipartisan support,” Mast said. “I’ll continue to push the Administration for full funding and fight to ensure that it’s spent where it’s most needed. The EAA Reservoir needs to be the top priority.” Notably, the fiscal 2022 spending package that moved through Congress in recent weeks includes $350 million for restoration efforts in South Florida, including work in the Everglades. Mast backed an earmark to help secure the money (E&E Daily, March 10).;
Salmon disappearing into North Pacific 'black box' - North Pacific salmon, which account for most of the world’s wild-caught salmon, are disappearing deep into the high seas, leaving scientists uncertain when they will return, The Washington Post reported. These fish typically spend several years in deep waters before returning to coastal areas to spawn. But many are now dying as marine heat waves — driven by climate change — wreak havoc on their ecosystems, according to the Post. Once they leave the coastal region, salmon now enter what fisheries biologist Laurie Weitkamp described as a “black box.” “Salmon will go out, in what we think is a really good ocean, and then it collapses,” Weitkamp, who is based in Oregon for the National Oceanographic and Atmospheric Administration, told the Post. “They don’t come back.” The biggest-ever salmon research expedition is now taking place in the North Pacific — where scientists hope to illuminate what has become a lifecycle mystery for this global economic and food staple, the Post reported.
Right whale food source migrating out of Gulf of Maine - — Government agencies and environmental groups in the U.S. and Canada have been pushing for increasingly tough measures to ensure the survival of the endangered North Atlantic right whale. But those steps, aimed primarily at fishing and shipping, may be missing the more serious threat to the whales. Researchers at the Bigelow Laboratory for Ocean Sciences in East Boothbay have said that may be exactly what's happening, and the changing climate may be a factor. There are believed to be fewer than 400 North Atlantic right whales left on Earth, which is a population drop of 20 percent in the past 10 years, according to data from the New England Aquarium.And while the latest whale protection rules from the National Oceanic and Atmospheric Association include significant new restrictions on Maine and New England's lobster fishing industry, Bigelow scientists have said the whales face a more fundamental threat in the Gulf of Maine because their food supply is shrinking.All the indicators that we've seen suggest they are looking for prey elsewhere," Nick Record, a senior research scientist at Bigelow, said. Right whales' primary food source in the Gulf of Maine are tiny, energy-rich creates called copepods, Record said. He described the copepods as the size of a grain of rice and has said one right whale will devour hundreds of pounds per day. However, Record said their research has shown that copepod populations are in decline because the water in the Gulf has been warming and has been doing so at a surprisingly fast rate. Temperatures at the bottom of the Gulf of Maine are as much as 7 degrees Fahrenheit warmer than the used to be because of increasing influence of the ocean current known as the Gulf Stream, Record said. That shift has raised average temperatures of the Gulf of Maine, which in turn has cut into the right whales' food supply.
Forecasters predict another active hurricane season – AccuWeather forecasters are predicting another active Atlantic hurricane season this year. Similar to last year, forecasters expect between 16 and 20 tropical storms to form this hurricane season which begins in June and ends at the end of November. Out of those tropical storms, six to eight will most likely turn into full-fledged hurricanes with at least three to five of those hurricanes projected to make landfall, AccuWeather Senior Meteorologist Dan Kottlowski told Changing America. In addition, Kottlowski predicts those three to five storms will reach at least Category 3 strength with winds greater than 111 miles per hour. Having an average of three and half hurricanes make landfall during a given season is typical, Kottlowski said, but this season meteorologists believe an above average number of storms will make landfall in keeping with a years-long trend. “Last year we had eight landfalls on the U.S. coastal area, way above normal, and that was very similar to what we had the year before,” Kottlowski said. The last two hurricane seasons have been highly active. Last year, 21 hurricanes were named, making 2021 the third most active hurricane year in history, according to the National Hurricane Center.Climate experts have warned that warming waters and rising sea levels stemming from climate change are playing a role in the increasing number of hurricanes each year and in their increasingly destructive nature. Hurricanes are one of the costliest natural disasters and the price of the damage caused by the storm has steadily gone up over the years, according to the Yale Climate Connections. In total, damages from weather and climate disasters occurring from 1980 to 2020 in the United States have cost about $1.87 trillion, according to the National Oceanic and Atmospheric Administration.The last few seasons have also been deadly, with 2020’s Hurricane Laura resulting in the deaths of at least 77 people and last year’s Hurricane Ida killed at least 91 people across nine states many of died when their basement homes flooded.
Heavy rains trigger deadly landslide, leave more than 250 000 without drinking water in Cuenca, Ecuador - Heavy rainfall affecting southern Ecuador, particularly the province of Azuay, over the past 48 hours caused numerous landslides resulting in casualties and damage. On March 28, the Servicio Nacional de Gestión de Riesgos reported 4 fatalities, 4 injured people, around 15 damaged houses and damaged roads due to a landslide in Cuenca City during the afternoon hours (LT) of March 27.1 Cuenca Mayor Pedro Palacios said Monday, March 28 they are still searching through collapsed structures and debris for bodies but hope most of the missing have found safety.2 "The official death toll remains four," Palacios said. "We have evacuated about 400 people from Marianza and the hills just above Sayausi due to instability of the ground," he said. "Our big concern today is that we receive more rain which could trigger more ground movement." In addition, landslides on the west side of the city contaminated the drinking water, affecting more than 250 000 people in the city. According to the public utility ETAPA, three water processing facilities in the Cajas Mountains watershed - El Cebollar, San Pedro and Culebrillas - were affected by Sunday’s landslides and flooding. "The flooding has generated turbidity in our treatment ponds and we must allow settlement before we can reopen the valves," ETAPA officials said, adding that there was no indication of bacterial contamination in the water flowing into homes, even if it discolored. "All water coming into residences has been treated." An estimated 40 000 tons of rock and mud ended up on the Cajas highway, blocking all traffic. Work crews and heavy machinery are on stand-by as officials are still waiting for slide activity to subside before ordering them to move in.
'Flash droughts' coming on faster, global study shows -Just like flash floods, flash droughts come on fast—drying out soil in a matter of days to weeks. These events can wipe out crops and cause huge economic losses. And according to scientists, the speed at which they dry out the landscape has increased. Researchers found that although the number of flash droughts has remained stable during the past two decades, more of them are coming on faster. Globally, the flash droughts that come on the fastest—sending areas into drought conditions within just five days—have increased by about 3%-19%. And in places that are especially prone to flash droughts—such as South Asia, Southeast Asia and central North America—that increase is about 22%-59%. Rising global temperatures are probably behind the faster onset, said co-author and UT Jackson School Professor Zong-Liang Yang, who added that the study's results underscore the importance of understanding flash droughts and preparing for their effects. "Every year, we are seeing record-breaking warming episodes, and that is a good precursor to these flash droughts," he said. "The hope and purpose [of this research] is to minimize the detrimental effects." The research was published in Nature Communications. The study was led by doctoral student Yamin Qing and Professor Shuo Wang, both of The Hong Kong Polytechnic University. Flash droughts are relatively new to science, with the advancement of remote sensing technology during the past couple of decades helping reveal instances of soil rapidly drying out. This serves as the telltale sign of the onset of a flash drought and can make drought conditions appear seemingly out of the blue. As the name suggests, flash droughts are short lived, usually lasting only a few weeks or months. But when they occur during critical growing periods, they can cause disasters. For example, in the summer of 2012, a flash drought in the central United States caused the corn crop to wither, leading to an estimated $35.7 billion in losses. The data showed that about 34%-46% of flash droughts came on in about five days. The rest emerge within a month, with more than 70% developing in half a month or less. When they examined the droughts over time, they noticed the flash droughts happening more quickly. The study also revealed the importance of humidity and variable weather patterns, with flash droughts becoming more likely when there's a shift from humid to arid conditions. That makes regions that undergo seasonal swings in humidity—such as Southeast Asia, the Amazon Basin, and the East Coast and Gulf Coast of the United States—flash drought hot spots. .
Boulder's NCAR fire prompts evacuation of more than 19,000 people - Firefighters in the air and on the ground battled a 122-acre wildfire Saturday that broke out near the National Center for Atmospheric Research in Boulder, threatening neighborhoods on the southwestern edge of the city and forcing thousands of people to evacuate. The wind-driven wildfire, which came less than three months after the deadly Marshall fire destroyed more than 1,000 homes in Boulder County, had not burned any structures or led to any injuries by Saturday night, authorities said. Firefighters had not achieved any containment of what has been named the NCAR fire, but by nightfall expressed optimism that a shift in the weather would bring favorable conditions. Officials scaled back evacuations after 11 p.m., allowing residents in parts of south Boulder and unincorporated Boulder County back into their homes. Boulder Fire-Rescue spokeswoman Marya Washburn told the Daily Camera that about 1,600 to 1,900 homes remained in the evacuation area, down from 8,000 homes. At its peak in size, the NCAR fire evacuation zone included about 19,400 people and covered both the area where December’s devastating Marshall fire originated and the King Soopers grocery store on Table Mesa Drive where a gunman killed 10 people a year ago. Late Saturday night, the Devil’s Thumb neighborhood in south Boulder — immediately east of the burn zone — and the Eldorado Springs area remained evacuated, with hard closures at the intersections of Cragmoor Road and Lehigh Street; Bear Mountain Drive and Wildwood Road; and at Colorado 93 and Eldorado Springs Drive. The full evacuation map for what has been named the NCAR fire can be seen here.
New eruption at underwater Funka Asane vent near Kita-Ioto volcano, Japan - A new eruption has started at the underwater Funka Asane vent near Kita-Ioto volcano, Japan on Sunday, March 27, 2022. The last confirmed eruption at this volcano lasted from 1930 to 1945 (VEI 2).The eruption started at around 09:00 UTC on March 27, with ash rising up to 7 km (23 000 feet) above sea level by 14:30 UTC. The emissions continued into March 28 and dissipated on satellite imagery by 05:20 UTC.1As a result, the Japan Meteorological Agency has raised the alert level to 3 (of 5).Ash rising from underwater Funka Asane volcano (Kita-Ioto), Japan at 14:30 UTC on March 27, 2022. Credit: JMA/Himawari-8, EUMETSAT, RAMMB/CIRA, TW Aircraft and ships were warned to avoid the area due to the risk of ash and gasses, pumice and other debris.2
'Potentially hazardous asteroid' will make its closest-ever approach to Earth on April Fools' Day (yes, really) - Astronomers have confirmed that a "potentially hazardous" asteroid is set to make its closest-ever approach to Earth this Friday (April 1). However, there is no need to panic; astronomers say the massive space rock will miss us by around 4.6 million miles (7.4 million kilometers).The asteroid, known as 2007 FF1, is between 360 feet and 656 feet (110 and 260 meters) in diameter, according to SpaceReference.com, a database that compiles information from NASA's Jet Propulsion Laboratory in California and the International Astronomical Union. The rock 2007 FF1 is known as an Apollo-class asteroid, of which there are around 15,000, meaning that its orbit around the sun (which takes 684 days) crosses with Earth's orbit. The asteroid is classified as potentially hazardous because of its size and relatively close orbit to Earth.A blurry photo of the space rock hurtling in our direction was captured by theVirtual Telescope Project on March 24, when the asteroid was around 7.2 million miles (11.6 million km) from Earth. This is the first evidence that confirms the asteroid will make its flyby of Earth as predicted by past models. The asteroid will make its closest approach to Earth at 4:35 p.m. ET, when it will be around 4.6million miles away. For reference, the average distance between Earth and the moon is around 238,855 miles (384,400 km), according to NASA, which will make the asteroid around 30 times farther away than the moon is from Earth when it arrives.The upcoming flyby is the closest approach to Earth that 2007 FF1 has made since it was discovered in March 2007. In August 2020, the asteroid reached a minimum distance to Earth of around 10.8 million miles (17.3 million km) and was traveling at around 29,800 mph (47,950 km/h), according to SpaceReference.org. The next closest approach is estimated to take place on April 2, 2037, when it will reach a minimum distance to Earth of around 4.9 million miles (7.9 million km).
Moderately strong M4.0 solar flare erupts from geoeffective Region 2975 (video, graphics) A moderately-strong solar flare measuring M4.0 erupted from geoeffective Active Region 2975 at 11:29 UTC on March 28, 2022. The event started at 10:58 UTC and ended at 11:45.The event was associated with a Type II Radio Emission at 11:23 UTC, with an estimated velocity of 1 259 km/s. Type II emissions occur in association with eruptions on the Sun and typically indicate a coronal mass ejection is associated with a flare event.Additionally, a Type IV Radio Emission was registered at 11:37 UTC. Type IV emissions occur in association with major eruptions on the Sun and are typically associated with strong coronal mass ejections and solar radiation storms."EUV darkening was observed at 11:24 UTC in SUVI 195 imagery with the M4 flare suggesting a likely CME," SWPC forecasters said at 12:30 UTC. "Analysis will be conducted as coronagraph imagery becomes available." The responsible region 2975 is located at the center of the solar disk, suggesting the CME generated by the flare is Earth-directed. The estimated time of arrival is March 30/31.
Two CMEs heading toward Earth, G3 - Strong geomagnetic storm watch in effect - Active Region 2975 produced multiple C- and M-class solar flares since M4.0 at 11:29 UTC on March 28, 2022, as well as 2 coronal mass ejections (CMEs) - both toward Earth. As a result, a G3 - Strong geomagnetic storm watch is in effect for March 31.Solar activity reached high levels in 24 hours to 12:30 UTC on March 29, with a total of 6 M1 or greater flares over the period. The strongest was M4.0 flare at 11:29 UTC produced by geoeffective Region 2975 (N13W18, Dsc/beta-gamma-delta).1A type II Radio Emission was associated with the M4 flare with an estimated speed of 1 259 km/s and a subsequent partial halo/asymmetric full CME was observed in coronagraph imagery. The greater than 2 MeV electron flux was at moderate levels during the period.Shortly after the M4 event, the 10 and 100 MeV proton flux began to rise. The 10 MeV flux reached a peak of 18.7 pfu at 14:50 UTC on March 28 UTC and the 100 MeV flux peaked at 1.27 pfu at 13:25 UTC on March 28. Both radiation events ended shortly after and flux traces continue recovery toward the ambient background.A second halo CME was observed in LASCO and STEREO data following a M1 flare at 19:23 UTC. A Type II Radio Emission was associated with this event too, with speeds estimated between 1 605 - 1 848 km/s.This second CME also came from Region 2975 and appears as an asymmetric full halo in NASA SOHO LASCO C2/C3 and NASA STEREO B COR2.Initial analysis and modeling indicated Earth-directed transients from both events with speeds of 667 km/s and 841 km/s respectively.The second and faster CME is expected to catch up and combine with the first transient from the M4 event.The combined arrival of both events at the magnetosphere protecting Earth is expected early March 31. Additional analysis and tweaking of the forecast is expected to continue throughout today, SWPC forecasters said."Forecast confidence of an Earth-directed component is moderate, while there is less confidence in timing and intensity. When the CME approaches Earth, NOAA’s DSCOVR satellite will detect the real-time solar wind changes and SWPC forecasters will issue any appropriate warnings. Impacts to technology from a G2 storm are generally small, but it can drive the aurora equatorward of its polar home. Aurora may be visible over the northern portions of the northern tier states if the conditions are favorable." "The blast from M4.0 flare propelled a 'solar tsunami' through the Sun's atmosphere," Dr. Tony Phillips of SpaceWeather.com said. "This tsunami was 'radio-active.' Its rippling leading-edge beamed radio waves toward Earth."2 "I received a fantastic solar radio burst at 56 MHz," said Rob Stammes who recorded the outburst at his space weather observatory in Lofoton, Norway. At about the same time, the US Air Force said they recorded both Type II and Type IV solar radio bursts. "Energetic protons accelerated by the flare+tsunami peppered the Earth's magnetosphere, causing an S1 - Minor radiation storm," Phillips said, adding that our planet's magnetic field funneled some of these particles toward the poles where the second type of radio blackout was underway - a Polar Cap Absorption Event. "Airplanes flying over these regions may find that their shortwave radios won't work during the transit." WATCH: Geomagnetic Storm Category G3 Predicted. Highest Storm Level Predicted by Day: Mar 30: G1 (Minor) Mar 31: G3 (Strong) Apr 01: G2 (Moderate). Potential Impacts: Area of impact primarily poleward of 50 degrees Geomagnetic Latitude.
Induced Currents - Power system voltage irregularities possible, false alarms may be triggered on some protection devices.
Spacecraft - Systems may experience surface charging; increased drag on low Earth-orbit satellites and orientation problems may occur.
Navigation - Intermittent satellite navigation (GPS) problems, including loss-of-lock and increased range error may occur.
Radio - HF (high frequency) radio may be intermittent.
Aurora - Aurora may be seen as low as Pennsylvania to Iowa to Oregon.
Major X1.3 solar flare erupts from Active Region 2975 - A major solar flare measuring X1.3 erupted from Active Region 2975 at 17:37 UTC on March 30, 2022. The event started at 17:21 UTC and ended at 17:46. The region is located in an area that favors Earth-directed coronal mass ejections (CMEs). A Type II Radio Emission was registered at 17:32 UTC, with an estimated velocity of 1 424 km/s. Type II emissions occur in association with eruptions on the Sun and typically indicate a coronal mass ejection is associated with a flare event. In addition, a 10 cm radio burst (540 sfu) and a Type IV Radio Emission were registered. Type IV emissions occur in association with major eruptions on the Sun and are typically associated with strong coronal mass ejections and solar radiation storms. An R3 - Strong radio blackout was registered over North and South America Active Region 2975 has a beta-gama-delta magnetic configuration and is capable of producing more strong to major eruptions on the Sun. The chances for Earth-directed CMEs are diminishing as it rotates away from geoeffective position.
Solid aerosols found in Arctic atmosphere could impact cloud formation and climate - The Arctic is rapidly losing sea ice, and less ice means more open water, and more open water means more gas and aerosol emissions from the ocean into the air, warming the atmosphere and making it cloudier. So when researchers from the lab of University of Michigan aerosol scientist Kerri Pratt collected aerosols from the Arctic atmosphere during summer 2015, Rachel Kirpes, then a doctoral student, discovered a curious thing: Aerosolized ammonium sulfate particles didn't look like typical liquid aerosols. Working with fellow aerosol scientist Andrew Ault, Kirpes discovered that ammonium sulfate particles, which should have been liquid, were actually solid. The team's results are published in the Proceedings of the National Academy of Sciences. Solid aerosols can change how clouds form in the Arctic. And, as the Arctic loses ice, researchers expect to see more of these unique particles formed from oceanic emissions combined with ammonia from birds, which will impact cloud formation and climate. "The Arctic is warming faster than anywhere else in the world. As we have more emissions from open water in the atmosphere, these types of particles could become more important," "These particles didn't look like anything we had ever seen in the literature, in the Arctic, or anywhere else in the world." The aerosols observed in the study were up to 400 nanometers, or about 300 times smaller than the diameter of a human hair. Ault, associate professor of chemistry, says that aerosols in the Arctic are typically assumed to be liquid. Once the relative humidity of the atmosphere reaches 80%—about the level of a humid day—the particle becomes liquid. When you dry the aerosol back out, it doesn't turn into a solid until the relative humidity is about 35%-40%. Because the air over the Arctic Ocean—or any ocean—is humid, researchers expect to see liquid aerosols. "But what we saw is a pretty new phenomenon where a small particle collides with our droplets when it's below 80% humidity, but above 40% humidity. Essentially, this provides a surface for the aerosol to solidify and become a solid at a higher relative humidity than you would have expected," Ault said. "These particles were much more like a marble than a droplet. That's really important, particularly in a region where there haven't been a lot of measurements because those particles can eventually end up acting as the seeds of clouds or having reactions happen on them."
Arctic Greening Won’t Save the Climate – Here’s Why - Satellite images show the Arctic has been getting greener as temperatures in the far northern region rise three times faster than the global average.Some theories suggest that this “Arctic greening” will help counteract climate change. The idea is that since plants take up carbon dioxide as they grow, rising temperatures will mean Arctic vegetation will absorb more carbon dioxide from the atmosphere, ultimately reducing the greenhouse gases that are warming the planet. But is that really happening?I am a biologist who focuses on the response of ecosystems to climate change including tundra ecosystems. For the past five years, my colleagues, students and I have tracked vegetation changes at remote locations across the Arctic to find out.For our study, scientists braved bear territory and cold summer nights to collect extensive carbon dioxide measurements near plants and soil in 11 Arctic tundra ecosystems, including in Alaska, Canada, Siberia and Greenland. We focused on the most understudied Arctic areas, located over continuous permafrost.Arctic plants currently have only about three months in which they can grow and reproduce before the temperatures gets too cold.When we looked closer and compared the changes from week to week, we discovered the earlier snowmelt was stimulating plants’ productivity in June, that productivity began to taper off in July – normally their peak season for photosynthesis. By August, productivity was well below normal.The Arctic’s dominant shrubs, sedges and other wetland plants were no longer sequestering more carbon late in the season. It was like waking up earlier in the morning and being ready to go to sleep earlier in the evening.If tundra ecosystems are not able to continue taking up carbon dioxide later in the season, the expected increase in plants sequestering carbon may not materialize.And there’s another problem. Normally, plants on t he tundra store more carbon through photosynthesis than the tundra releases, making it a vast carbon sink. The long, cold winters slow plants’ decomposition and lock them in the frozen ground. However, when permafrost holding this and other organic matter thaws, it releases more greenhouse gases into the atmosphere.
Warmer summers and meltwater lakes are threatening the fringes of the world's largest ice sheet - A first-of-its-kind study looking at surface meltwater lakes around the East Antarctic Ice Sheet across a seven-year period has found that the area and volume of these lakes is highly variable year-to-year, and offers new insights into the potential impact of recent climatic change on the 'Frozen Continent'. The research, led by Durham University (UK), used over 2000 satellite images from around the edge of the East Antarctic Ice Sheet to determine the size and volume of lakes on the ice surface, also known as supraglacial lakes, across seven consecutive years between 2014 and 2020. The study showed that lake volume varied year-to-year by as much as 200% on individual ice shelves (floating extensions of the main Antarctic ice sheet), and by around 72% overall. Lakes were also found to be deeper and larger in warmer melt seasons and formed on some potentially vulnerable ice shelves. This research, published today in Nature Communications, is the first time that meltwater lakes have been studied over consecutive melt seasons across the whole ice sheet, enabling the controls on their development to be explored. The study therefore provides vital insight into why and where lakes grow, and will help experts understand which ice shelves may be most at risk of breaking up as a consequence of surface melting. "We knew that supraglacial lakes were more extensive than previously thought around the East Antarctic Ice Sheet, but until now only had snapshots of these in some years. "Our study reveals these lakes change in scale far more than we originally suspected. We were surprised at how much lakes can change year-to-year between ice shelves. "We explored the potential reasons for this and found that warmer summer air temperatures in Antarctica correlated with more extensive lakes. "Due to climate change, air temperatures in Antarctica will continue to rise and our study suggests that this will lead to an increase in the number and volume of supraglacial lakes, which will in turn put some East Antarctic ice shelves at risk of meltwater-driven collapse." Warmer summers and meltwater lakes are threatening the fringes of the world's largest ice sheet. The East Antarctic Ice Sheet is the world's largest ice mass and holds enough ice to raise global sea levels by around 52 meters. The loss of ice shelves fringing an ice sheet allows ice further inland to flow faster into the ocean, contributing to global sea-level rise.
Solar energy explains fast yearly retreat of Antarctica's sea ice -In the Southern Hemisphere, the ice cover around Antarctica gradually expands from March to October each year. During this time the total ice area increases by 6 times to become larger than Russia. The sea ice then retreats at a faster pace, most dramatically around December, when Antarctica experiences constant daylight. New research led by the University of Washington explains why the ice retreats so quickly: Unlike other aspects of its behavior, Antarctic sea ice is just following simple rules of physics. The study was published March 28 in Nature Geoscience. "In spite of the puzzling longer-term trends and the large year-to-year variations in Antarctic sea ice, the seasonal cycle is really consistent, always showing this fast retreat relative to slow growth," said lead author Lettie Roach, who conducted the study as a postdoctoral researcher at the UW and is now research scientist at NASA and Columbia University. "Given how complex our climate system is, I was surprised that the rapid seasonal retreat of Antarctic sea ice could be explained with such a simple mechanism." Previous studies explored whether wind patterns or warm ocean waters might be responsible for the asymmetry in Antarctica's seasonal sea ice cycle. But the new study shows that, just like a hot summer day reaches its maximum sizzling conditions in late afternoon, an Antarctic summer hits peak melting power in midsummer, accelerating warming and sea ice loss, with slower changes in temperature and sea ice when solar input is low during the rest of the year. The researchers investigated global climate models and found they reproduced the quicker retreat of Antarctic sea ice. They then built a simple physics-based model to show that the reason is the seasonal pattern of incoming solar radiation. At the North Pole, Arctic ice cover has gradually decreased since the 1970s with global warming. Antarctic ice cover, however, has seesawed over recent decades. Researchers are still working to understand sea ice around the South Pole and better represent it in climate models. "I think because we usually expect Antarctic sea ice to be puzzling, previous studies assumed that the rapid seasonal retreat of Antarctic sea ice was also unexpected—in contrast to the Arctic, where the seasons of ice advance and retreat are more similar," Roach said. "Our results show that the seasonal cycle in Antarctic sea ice can be explained using very simple physics. In terms of the seasonal cycle, Antarctic sea ice is behaving as we should expect, and it is the Arctic seasonal cycle that is more mysterious."
Under the Sea, a Hidden Climate Variable: Thawing Permafrost -Around 20,000 years ago, the world was so frigid that massive glaciers sucked up enough water to lower sea levels by 400 feet. As the sea pulled back, newly exposed land froze to form permafrost, a mixture of earth and ice that today sprawls across the far north. But as the world warmed into the climate we enjoy today (for the time being), sea levels rose again, submerging the coastal edges of that permafrost, which remain frozen below the water.It’s a huge, hidden climate variable that scientists are racing to understand. They know full well that the destruction of terrestrialpermafrost is a significant source of carbon entering the atmosphere. As it thaws, microbes munch on the organic matter it contains, releasing carbon dioxide (if the material is fairly dry) and methane (if the melted ice forms a pond). This can form a feedback loop, in which more permafrost thaw produces more emissions, which heat the planet to thaw even more permafrost. That’s an extra-big problem because the Arctic is now warming four times as fast as the rest of the planet.Yet submarine permafrost is largely unstudied, owing to its inaccessibility — renting out time on a research vessel is not cheap anywhere, much less in the Arctic, and it’s much harder to reach for drilling samples. Now, in an alarming paper published last week in the Proceedings of the National Academy of Sciences, an international team of scientists give us a rare look at what’s going on down there. The team used oceanic robots, which look like torpedoes, off the coast of northern Canada and mapped the seafloor with sonar. The scientists repeated this several times over the course of nine years to get a sense of how the topology of the seafloor might be changing and found that it’s undergoing massive upheaval. The result is the worrisome image shown below — a massive sinkhole indicating that the subsea permafrost has thawed and collapsed. This sinkhole is a giant among dozens of pockmarks the researchers found on the seafloor. Scientists have already documented this violent phenomenon,called thermokarst, on land. Because permafrost is made of soil suspended in a matrix of frozen water, when it thaws the land shrinks, gouging massive holes across the Arctic landscape. And as these images of the seafloor show, it’s also happening underwater.
Biden budget proposal includes nearly $2 billion increase for EPA --The White House’s proposed budget for fiscal 2023 would increase funding for the Environmental Protection Agency (EPA), the Energy Department and the Interior Department, according to materials shared with The Hill. The budget proposes $11 billion for the EPA in fiscal 2023, an increase of about $1.5 billion from the $9.56 billion Congress authorized last year. The White House unsuccessfully sought similar increases in its proposed fiscal 2022 budget, with Congress eventually increasing the agency’s budget by about $323 compared to the previous year. “The President’s budget request for EPA reflects this Administration’s unwavering commitment to protect people from pollution, especially those living in overburdened and underserved communities across America. It funds a broad suite of transformational programs enacted by the Bipartisan Infrastructure Law, and it will enable us to implement the President’s historic Justice40 commitment, among other key priorities,” EPA Administrator Michael Regan said in a statement. Regan noted that $5.7 billion of the proposed budget includes efforts to support environmental justice and cleanup efforts with tribes, states and localities. The budget proposal also includes $3.3 billion for renewable energy, one of the White House’s major priorities at a time when the price of gas has soared amid the crisis in Ukraine. The White House has already released oil from the Strategic Petroleum Reserve and called for both domestic oil companies and nations such as Saudi Arabia to increase production, but renewables advocates have said the crisis illustrates the need to move beyond fossil fuels entirely. The administration’s proposal also includes more than $18 billion for federal climate resilience programs, including federal firefighting funds and funding to improve the resilience of federal housing. Another $11 billion would go toward international climate finance, which President Biden has pledged to increase fourfold. The budget is almost certainly doomed in the 50-50 Senate, but it comes months after Sen. Joe Manchin (D-W.Va.) announced he would not back the Build Back Better package, which contains many of the administration’s most sweeping climate goals. Manchin has indicated he could be persuaded to back a significantly smaller package including many of the same climate provisions.
Biden seeks major spending jump for global climate efforts - President Biden’s proposed budget would give a big boost to the global climate fight by injecting more than $11 billion into efforts to help other countries address global warming.The money would go toward a range of programs, budget documents show — from one initiative designed to help developing nations transition away from coal, to another that provides grants to help countries handle climate change and biodiversity loss.Biden’s proposal — the White House’s opening bid in its negotiations with Congress over next year’s budget — sends what analysts called a strong statement to advocates of global climate action.“It’s good to see the administration being a lot more ambitious this year in their request,” said Joe Thwaites, an international climate finance expert at the World Resources Institute.Biden’s $11 billion ask is significantly more than the $2.5 billion he requested last year for international climate efforts. It also includes $1.6 billion for the Green Climate Fund, a multilateral initiative that seeks to help developing countries finance their clean energy transitions and respond to the impacts of rising temperatures.The request would help Biden to make good on a pledge to quadruple investment in climate action outside the United States more than a year earlier than promised, according to the White House.It also would help accelerate U.S. efforts to cut greenhouse gas emissions and provide support to developing countries to respond to the impacts of climate change “while increasing energy independence,” the budget request said.The proposed spending boost for international climate efforts is notable given the trouble Biden has faced in getting his climate initiatives and budget requests through Congress (Climatewire, March 14). “Last year the problem was that their initial request was not terribly ambitious and then the final amount fell even lower,” Thwaites said. “So I think they’ve understood that and the priority of reaching and delivering on the president’s commitment to provide $11.4 billion a year by 2024 means that they’ve got to go big.”
Environmental organizations unveil 'Green New Deal pledge' for 2022 candidates - A coalition of progressive and environmental organizations on Monday introduced a pledge for candidates indicating plans to co-sponsor a handful of bills associated with Green New Deal policies. Signers of the pledge commit to rejecting any donations of more than $200 from fossil fuel lobbyists, companies or executives and commit to co-sponsoring 10 pieces of Green New Deal-related legislation within six months of taking office. These include the original Green New Deal resolution, Rep. Cori Bush’s (D-Mo.) Green New Deal for Cities, the Civilian Climate Corps for Jobs and Justice Act, and the Keep it in the Ground Act, which would ban new fossil fuel projects on federal lands and waters. Candidates who have taken the pledge include Jessica Cisneros, who will face Rep. Henry Cuellar (D-Texas) in a July runoff for the state’s 10th Congressional District in May, along with three candidates the environmental organization Sunrise Movement endorsed last week: Nida Allam, who is running in North Carolina’s 4th District, Erica Smith of North Carolina’s 1st District and Summer Lee of Pennsylvania’s 12th District. A number of sitting members of Congress also meet the standards of the pledge, many of them associated with the progressive wing of the Democratic Party. They include Sens. Bernie Sanders (I-Vt.), Ed Markey (D-Mass.) and Elizabeth Warren (D-Mass.) and Reps. Alexandria Ocasio-Cortez (D-N.Y.), Ro Khanna (D-Calif.), Ayanna Pressley (D-Mass.), Rashida Tlaib (D-Mich.), Ilhan Omar (D-Minn.) and Pramila Jayapal (D-Wash.). “Since I introduced the Green New Deal with Congresswoman Ocasio-Cortez, the climate crisis has only become more severe,” Markey said in a statement. “We have to act now to deliver justice for communities on the frontlines of this crisis and create millions of green-collar jobs to save our economy and save our planet. I’m proud to stand with my colleagues in the House and Senate, and with an entire generation committed to climate justice, in the fight for a Green New Deal.”
Climate activist Greta Thunberg releasing ‘The Climate Book’ –Teenage climate activist Greta Thunberg is releasing a book that aims to help readers understand how threats to climate, environment, sustainability and Indigenous populations are all interconnected, titled “The Climate Book.” \Thunberg announced her new book on Twitter, writing that she had invited more than 100 leading voices from around the world, including scientists, experts, activists and authors, to create a book that holistically covered the climate crisis. “The Climate Book” will be released in October. “All the facts and stories in this book are unnerving enough individually. But they too, are closely joined together- just like all of us. And once you start to connect them, understanding them as a part of a web of interlinked events, they quickly gain another, far more alarming meaning,” said Thunberg in a video posted to her Twitter account. In an interview with The Guardian, Thunberg explained that she hoped her new book could be a “go-to source” for understanding the interconnected crises born out of climate change. “The Climate Book” will also share the 19-year-old’s perspective on greenwashing, a phenomenon where corporations, businesses and brands advertise eco-friendly products and services to create the illusion of being eco-friendly. Global Citizen describes greenwashing as, “it falls into the space between labelling something as good for the environment, and it actually being good for the environment.” Thunberg told The Guardian that she believes greenwashing is one of the biggest problems facing climate change as it keeps people in the dark about the real issues at stake. “Right now, we are in desperate need of hope. But hope is not about pretending that everything will be fine,” said Thunberg to The Guardian. “The Climate Book” will become Thunberg’s third published book with publishing house Penguin Random House. The teenager has a reputation for highlighting the harsh realities of climate change, most recentlycriticizing world leaders outside of the COP26 Climate Summit in Glasgow, Scotland, last November. Thunberg tweeted that taking “small steps in the right direction, making some progress or winning slowly, equals loosing.” That came after she joined a large protest outside the COP26 conference and called on world leaders to make real changes to curb greenhouse gas emissions and cut out fossil fuels. She also called on banks to stop funding climate “destruction.”
'Pouring gasoline on the fire': JPMorgan, Citi and other U.S. banks lead rise in lending to oil and gas: report - Financing of the oil and gas industry that is helping drive global temperatures to a dangerous point has snapped back strongly, a new report says. In fact, current spending tops the capital flowing in 2016, the year just after arguably the most significate climate pledge to date was struck in Paris. The 60 banks profiled in the report funneled $185.5 billion just last year into the 100 companies doing the most to expand the oil and gas sector, says a group of environmental nonprofits, which reports such findings in their 13th annual Banking on Climate Chaos release. The release documents that in the six years since the adoption of the Paris Agreement — setting a no more than 2 degrees Celsius and, ideally, 1.5 degrees, warming limit — the world’s 60 largest banks financed fossil fuels with $4.6 trillion in loans and other capital. That includes $742 billion in 2021 alone as the world recovered from the worst of COVID-19. The report shows that overall fossil-fuel financing remains dominated by four U.S. banks, with JPMorgan Chase, Citigroup, Wells Fargo, and Bank of America together accounting for one quarter of all fossil fuel financing identified over the last six years. The group calling for bank reform also leveraged their findings with reference to the Russian invasion of Ukraine and the broader risk that geopolitical instability brings to energy markets. “The war on Ukraine is another stark reminder that oil and gas are at the root of both war and climate change. It’s high time banks close the policy gaps and turn off the taps,” said Lucie Pinson, director at Reclaim Finance, a backer of the banking-sector review. Opinion: Ukraine war is a wake-up call to ditch oil and gas forever JPMorgan Chase Chief Executive Jamie Dimon earlier this month urged the U.S. government to create a “Marshall Plan” of sorts to improve domestic energy production, particularly natural gas. Natural gas NG00, +0.03% has been a largely cost-effective replacement for dirtier coal to power the electricity grid, although detractors say even it is not clean enough. And some trade groups and lawmakers say the key to a transition to renewable energy, without a shock to the economy, is a varied energy portfolio. Dimon, according to Axios, called for more liquid natural gas facilities to be built in Europe, less reliance on Russian energy imports and investing in new energy technology, such as hydrogen. As global oil and gas markets are rocked by Russia’s invasion of Ukraine, the data showed JPMorgan Chase to be the biggest banker covered in this report for Russian state energy giant Gazprom, both in terms of 2016-2021 totals and when looking only at last year. JPMorgan Chase provided Gazprom with $1.1 billion in fossil fuel financing in 2021. It’s also true that many major financial institutions have jumped on board a popular pledge for net-zero emissions by 2050, and what their critics argue is largely business-as-usual financing to the fossil fuel industry.
As Gas Prices Soar, Biden’s Climate Ambitions Sputter - — A year after he entered the White House with a vow that fighting global warming would be a driving priority for his administration, President Biden finds his climate agenda is mired in delay and faces legal, legislative and political headwinds that could diminish or dismantle it entirely. His two main avenues for significant climate action are legislation and regulation. But even Mr. Biden’s top aides and closest allies now concede that the legislative centerpiece of his climate plan is unlikely to become law in the face of steadfast Republican opposition. And regulations that are now under development — strict limits on the pollution from cars and power plants that is dangerously heating the planet — could be curtailed or blocked by the conservative majority on the Supreme Court. With gasoline prices surging after the Russian invasion of Ukraine and images receding of last summer’s climate disasters — wildfires that raged through seven states, heat waves and floods — Republicans and oil companies are newly emboldened in calling for more drilling and less emphasis on climate change. “The U.S. oil companies are like a prisoner that was condemned to death, and suddenly the warden of the prison lets them out and wants them to produce as much oil as quickly as possible,” said Robert McNally, a consultant who was a senior energy and economic adviser to President George W. Bush. “Now, the president is saying to them, help me out of a jam. It’s a panicked response to high oil prices.” On Thursday, President Biden said he would release one million barrels of oil a day from the Strategic Petroleum Reserve for as long as 180 days to help bring down global oil prices. The scale and duration of such a release would be historic. The United States also plans to increase exports of natural gas to help Europe wean itself from Russian supplies. Environmentalists are concerned that both of those moves will lead to more domestic drilling at a moment when scientists say nations must sharply and quickly cut fossil fuel use. The president used the announcement about the petroleum reserve to make a plea for his stymied climate legislation, saying that he was boosting gas and oil supplies to deal with an immediate crisis but that the country’s long term energy independence should be rooted in wind, solar and other renewable sources that are insulated from global market fluctuations. “Ultimately, we and the whole world need to reduce our dependence on fossil fuels altogether,” Mr. Biden said. “We need to choose long-term security over energy and climate vulnerability. We need to double down on our commitment to clean energy and tackling the climate crisis with our partners and allies around the world. And we can do that by passing my plan that’s literally before the Senate right now, the United States Congress right now.”
Biden announces new funding to make homes more energy efficient - The Biden administration on Wednesday announced new plans to spend $3.16 billion to retrofit hundreds of thousands of homes in low incomes areas, with the goal of making them more energy-efficient while also lowering utility bills for Americans.The investment comes from President Biden's $1.2 trillion bipartisan infrastructure bill that was signed into law last year. It will bolster the federal government's Weatherization Assistance Program, which is designed to upgrade homes by installing insulation, updating heating and cooling systems and switching to new electrical appliances, among other things.White House officials, during a press briefing on Wednesday, said the new funding will allow the program to retrofit about 450,000 homes, a major increase from the roughly 38,000 homes it currently serves each year."Home energy retrofits and upgrades – like electrification, heat pumps, LED lighting, insulation, and sealing up leaks – can slash monthly energy bills for families and improve the air we breathe," Secretary of Energy Jennifer Granholm said in a statement."We will be able to help households in disadvantaged communities, reduce carbon emissions, and generate good-paying local jobs in every corner of America," Granholm said.Electricity production from businesses and homes represents about 13% of the country's climate-changing greenhouse gas emissions, according to estimates from the Environmental Protection Agency.The funding will move forward Biden's pledge to slash emissions in half by 2030 and reach net-zero emissions by mid-century. The program also implements the administration's Justice40 commitment, which requires federal agencies to deliver at least 40% of benefits from specific funding to disadvantaged communities. The weatherization program began in the 1970s as an effort to slash utility bills and has delivered an average of $372 in annual energy savings for families, according to the Energy Department.
A Queens Coastal Community, Vulnerable to Climate Change, Fights a Plan for ‘High Rise Rentals’ - A city proposal to rezone swaths of the Rockaways vulnerable to flooding related to climate change is moving forward in the face of fierce neighborhood opposition over rental apartments that could be built there.The Department of Housing Preservation and Development is seeking to revive coastal and inland sections of Edgemere, Queens, a majority Black neighborhood on the peninsula still recovering from the damage inflicted by Superstorm Sandy in 2012 and earlier abandonment.The rezoning, which is set for review by the City Planning Commission on Wednesday, is the latest step in the sweeping Resilient Edgemere Community Plan, formulated under the de Blasio administration.Released in 2017 after two years of groundwork, it aims to transform vacant lots “into affordable housing, retail and amenities, and open spaces, while mitigating flood risk and growing the coastal ecology,” as described on the HPD website.In a pre-hearing session on Monday, members of the commission got an overview of the rezoning by the Department of City Planning’s Hallah Saleh, who noted the “significant flood risk and coastal hazards” facing the Edgemere community.“High-tide projections for the 2050s show the area will experience twice daily flooding in the next 30 years,” Saleh said during the virtual meeting. To prevent flooding, the multi-agency plan calls for fortifying the Jamaica Bay shoreline with a 30-inch-high berm, protecting the coast from rising sea levels.The proposed rezoning, stretching from Beach 35th to Beach 50th Street, would downsize some blocks while promoting relatively large-scale development on others.
Largest American Wind Farm ever Built all-at-Once Opens in Oklahoma, Saves Customers $1 Billion over Fossil fuels - This week, American Electric Power (AEP), which operates in several states, inaugurated what it called the largest wind farm in the US ever built all at once. That is, there are larger wind facilities, but they were actually a congeries of several projects built over many years.The nearly 1 gigawatt Traverse Wind Energy Center, in Blaine and Custer counties in western Oklahoma, generates power not only for that state but also for Arkansas an Louisiana.Mark Williams at the Columbus Dispatch writes, “Traverse has 356 turbines that are nearly 300 feet tall. Most of the blades go up to nearly 400 feet in height.”He adds, “AEP says it is on track to have half of its generating capacity from renewable sources by 2030 and that it is on track to reduce emissions of carbon dioxide by 80% from 2000 levels by 2050.”AEP will get there in part by closing its sole remaining coal-fired plant in 2026. So we can see the realities on the ground, and the future does not belong to coal barons like Joe Manchin.Wind farms accounted for 35 percent of Oklahoma’s electricity production before Traverse came online. The state has about 4 million residents and about a million and a half households. The $2 billion Traverse wind farm and two smaller facilities will power 440,000 households, around 30 percent of all households in the state.
Southern Co. Gas' path to net-zero rests on renewable gas, next-gen heating tech - Southern Co. Gas would rely heavily on renewable gas and high-efficiency natural gas heating equipment to maintain its natural gas distribution system and achieve net-zero greenhouse gas emissions, according to a report. Conventional methods for reducing planet-warming methane emissions would only get the Southern Co. subsidiary part of the way to its goal. To achieve net-zero emissions from both its operations and its customers' gas consumption, the utility would need to scale up today's trickle of low-carbon gas flows and deploy a new generation of gas heating equipment that is not now in widespread use, according to the report by consulting firm ICF. "The identified natural gas-focused pathways include a balanced approach addressing how our utility operations and gas supply practices can be leveraged to achieve important climate goals, and that natural gas solutions provide a practical and realistic pathway that is affordable for our customers," Southern Co. Gas Chair, President and CEO Kim Greene said in a March 25 news release. The report's conclusions reflect a strategy common among gas utilities: reimagining vast pipeline networks as carriers of renewable natural gas, or RNG, an alternative fuel processed chiefly from methane waste at farms, landfills and other sites. The report also sees a role for methanated gas made from low-carbon hydrogen and waste carbon. Importantly, RNG trades at a stiff premium to conventional gas, and regulatory frameworks for passing on its cost to ratepayers are developing but remain limited. The report identified several policy and regulatory changes needed to support the pathways. The ICF study projected that Southern Co. Gas — which operates in Illinois, Georgia, Virginia and Tennessee — could reduce its methane emissions by up to 33% from 2019 levels by 2030 by deploying readily available and cost-effective options. Those include replacing old leak-prone pipe, expanding meter leak detection and repair programs, and reducing emissions during accidents and planned maintenance. The report further concluded that the company could reduce overall greenhouse gas emissions by 28% by 2050. In addition to reducing its methane emissions, Southern Co. Gas would need to tackle its vehicle fleet emissions and run its compressors on RNG or electric power.From there, low-carbon fuels would have to do the heavy lifting.
Brenham officials discuss cryptocurrency and their ability to sustain energy demands that come with it (KBTX) - The City of Brenham Planning and Zoning Committee approved a change of terminology in their home occupations ordinance due to cryptocurrency. According to the city planner, they have been approached by residents and companies looking to get into mining cryptocurrency in the area, including Garrett Casada. He got approved for the mining from his home in fall 2021. Casada has a full-time job as a homebuilder and uses cryptocurrency mining as a hobby with his son.In a meeting Monday night, the committee said they would not approve more mining set ups for now. This is due to the electricity required for large scale and commercial-like set ups. Officials said the city’s current power grid cannot sustain cryptocurrency mining.“You get three or four (mining machines) in a neighborhood, all of a sudden you’re going to need a substation and more infrastructure, and we just don’t have the infrastructure to do that,” City Planner Shauna Laauwe said.Casada said these machines do require a lot of electricity, but they are very profitable and could help Brenham shift with current technology demands for electricity.“These run 24 hours a day, seven days a week. Our 800-amp system here in Brenham runs 40 crypto miners and probably once a month it’ll pull a bitcoin out of 800 amps,” he said. “What’s going to happen when everybody has a Tesla in their driveway? What’s going to happen when everybody’s charging their vehicles 24/7?”If others look to set up a cryptocurrency mining operation, the city said they may have to be in commercial space or pay higher deposits for electricity. Casada will be grandfathered into any decision that’s made by the city because he was already approved. If Casada wants to grow or move his operation, he will have to follow the new rules once they are decided.
Climate groups say a change in coding can reduce bitcoin energy consumption by 99% -Bitcoin mining already uses as much energy as Sweden, according to some reports, and its booming popularity is revitalizing failing fossil fuel enterprises in the US. But all that could change with a simple switch in the way it is coded, according to a campaign launched on Tuesday.The campaign, called Change the Code Not the Climate and coordinated by Environmental Working Group, Greenpeace USA and several groups battling bitcoin mining facilities in their communities, is calling on bitcoin to change the way bitcoins are mined in order to tackle its outsized carbon footprint.The software code that bitcoin uses – known as “proof of work” – requires the use of massive computer arrays to validate and secure transactions. Proof of work is a way of checking that a miner has solved the extremely complex cryptographic puzzles needed to add to the bitcoin ledger.Rival cryptocurrency ethereum is shifting to another system – “proof of stake”– that it believes will reduce its energy use by 99%. In the proof of stake model, miners pledge their coins to verify transactions; adding inaccurate information leads to penalties.With the value and use of cryptocurrencies rising, the campaign’s organizers argue bitcoin must follow suit or find another, less energy intensive, method. “This is a big problem. In part because of where the industry stands now but also because of our concerns about its growth,” said Michael Brune, campaign director and former executive director of Sierra Club. The US now leads the world in cryptocurrency mining after China launched acrackdown on mining and trading last May.“Coal plants which were dormant or slated to be closed are now being revived and solely dedicated to bitcoin mining. Gas plants, which in many cases were increasingly economically uncompetitive, are also now being dedicated to bitcoin mining. We are seeing this all across the country,” said Brune.
White House officials open crypto climate inquiry -The White House science office is seeking input about climate harm from expanding use of cryptocurrencies — and ways to tackle the problem. Digital "mining" to verify and record transactions often involves the use of very powerful, energy-intensive computing equipment.That's creating concerns about carbon emissions, especially when mining occurs in regions with fossil-heavy power grids. The Office of Science and Technology Policy (OSTP) on Friday issued a formal "request for information" that solicits feedback by May 9.OSTP wants info on "protocols, hardware, resources, economics, and other factors that shape the energy use and climate impacts of all types of digital assets.""Some researchers estimate that cryptocurrencies use more electricity each year than many individual countries in the world, including some industrialized nations," it states.OSTP is also interested in ways crypto can help battle global warming, such as how digital assets can provide new opportunities in natural asset and carbon accounting, and greater trust in carbon measurement.: It stems from President Biden's wider order this month on developing U.S. crypto policy and better understanding the risks and rewards of digital currencies. The order requires an OSTP report specifically on the climate and energy dimensions.
Fuel economy penalties soar under new rule - President Biden is cracking down on automakers who fail to meet fuel economy standards by charging them more for violations. In a final rule released late last week, the National Highway Traffic Safety Administration bumped its corporate average fuel economy, or CAFE, penalty from $5.50 per tenth of a mile per gallon to $14 — a significant increase.The move restores the Obama-era rate, whose implementation was delayed by former President Trump, and could cost manufacturers hundreds of millions of dollars in new fines. “This means if a company deliberately wants to violate the CAFE standards, they’ll have to finally pay,” said Dan Becker, director of Safe Climate Transport Campaign at the Center for Biological Diversity. President Obama passed a law in 2015 requiring agencies to adjust their penalties to account for inflation. That led to the first CAFE fine increase since 1997, which was slated to take effect for model year 2019 vehicles. Trump attempted to reverse the increase, but the courts ruled the move unlawful. Still, the former president managed to issue a rule delaying the rate increase until model year 2022. The new rule applies to model year 2019, meaning companies whose last few vehicle models are not in compliance, will be required to pay. The fine is multiplied by the number of vehicles in a manufacturer’s fleet, making CAFE penalties some of the largest the government levies. John Bozzella, president and CEO of the Alliance for Automotive Innovation, expressed frustration with the rule, which he said establishes a retroactive penalty to vehicles already produced. “It would be a better outcome for the environment, manufacturers, workers, and consumers if these financial resources were invested in electric vehicles, batteries and charging infrastructure instead of disappearing into the general fund of the Treasury,”
Midwestern lawmakers want to replace Russian oil with ethanol - As gas prices continue to soar following a ban on Russian oil imports, a bipartisan group of Midwestern lawmakers hopes the U.S. can replace the flow with something else: ethanol. But landowners report agents of pipeline interest are calling them more than a dozen times a day, repeatedly showing up at their homes and workplaces to pressure them into granting easements for pipelines across their property, Mazour said. The amendment to House File 2565 “doesn't remove the threat of eminent domain, and the landowners are going to make it loud and clear tomorrow that they still feel that eminent domain is being threatened,” she said Monday. Landowners want to tell legislators “we're glad you finally started to listen, but this doesn't do anything.”Last week, representatives from Minnesota, Iowa, and Illinois introduced the Home Front Energy Independence Act to encourage production of the mainly corn-based fuel, which is mixed with gasoline and sold alongside conventional gas at pumps across the country. The bill would make E15, a blend that contains 15 percent ethanol, available year-round. (The Environmental Protection Agency currently restricts retailers from selling during the summer to allay concerns about its contributions to smog.) It would also establish an E15 tax credit of at least five cents per gallon for blenders and retailers, extend other soon-to-expire tax credits for biofuels, and provide funding for biofuel infrastructure such as fuel tanks and pumps, which need upgrades to handle E15. The bill mirrors legislation introduced in the Senate in early March, led by Senators Joni Ernst, an Iowa Republican, and Amy Klobuchar, a Minnesota Democrat. Both pieces of legislation have sought to complement a ban on Russian, oil, gas, and coalthat President Joe Biden announced on March 8. “With the cost of this war hitting Americans at the gas pump, it’s time to bolster our fuel supply with home-grown biofuels,” Representative Cheri Bustos, an Illinois Democrat, said in a press release. “Not only would this cut gas prices for consumers, but it would also reduce emissions and support our family farmers.” The White House has signaled that it’s open to expanded E15 sales, and the bill’s sponsors have argued that the U.S. already has enough excess ethanol capacity to make up for Russian oil imports. But some energy experts contend the country would actually have to expand ethanol production significantly to meet the shortfall, meaning the promised price relief could be elusive. Doubts about the environmental benefits of switching to ethanol are substantial, too: Growing, processing, and burning corn to produce ethanol may exacerbate climate change even more than the fossil fuels it could replace.
Opponents of Iowa CO2 pipeline plan hearing on eminent domain --Concerned with a lack of action, opponents of the use of eminent domain for the construction of carbon capture pipelines across Iowa will host their own public hearing at the Capitol on Tuesday. Landowners report threats and harassment from interests promoting the construction of three proposed pipelines to carry carbon dioxide from Iowa ethanol plants to underground sequestration sites in neighboring states, according to Jessica Mazour of the Sierra Club. The Sierra Club and partners will be hosting the hearing from 3:30 to 6 p.m. Tuesday in the Capitol rotunda. Gov. Kim Reynolds and legislators have been invited to hear from landowners directly affected by the Summit, Navigator and ADM pipelines, Mazour said Monday. Reynolds so far has refused to meet with those opposing the use of eminent domain, Mazour said. The governor’s office has not responded to a request for comment. The Iowa House approved an amendment to a budget bill that would prevent the Iowa Utilities Board from scheduling hearings on the use of eminent domain until Feb. 1, 2023. The amendment was approved on a voice vote. So there is no record of which legislators supported it or did not.
Switching to zero-emission cars and trucks could save more than 100,000 lives over the next three decades - More than 100,000 lives could be saved over the next 30 years if the United States switches to zero-emission vehicles powered by a zero-emission grid, according to a new report by the American Lung Association. Not just lives would be saved. The report also estimates that more than $1.2 trillion in public health costs could be avoided with the shift. While many recent studies have looked at the costs of air pollution and the particular burden placed on communities of color, this report takes a different approach, and instead looks at what we would gain by meeting specific transition benchmarks. For its analysis, the American Lung Association envisioned a future where all new passenger vehicles are zero-emission by 2035, all new heavy-duty vehicles, like trucks and buses, are zero-emission by 2040, and the electrical grid is powered by clean, renewable energy by 2035. “These are ambitious but achievable targets,” said Will Barrett, director of clean air advocacy for the American Lung Association and lead author of the report. As of right now, 15 states have adopted zero-emission mandates for passenger vehicles and six have followed suit for trucks. President Biden has pledged to clean up the country’s electricity grid by 2035, but opposition from Republicans and key Democratic senators means that has been easier said than done. Using the latest models available from the Environmental Protection Agency, or EPA, and the Department of Energy, Barrett and his colleagues calculated the benefits of reducing tailpipe emissions and reducing the demand for fossil fuels. The fossil fuel industry emits pollutants that harm public health and warm the climate at every step of the supply chain — from extraction, to transportation, to refining, to use. If the U.S. were to meet the targets outlined in the report, by 2050 the on-road transportation sector would see a 92 percent decrease in smog-forming nitrogen oxide pollution, a 61 percent decrease in fine particle pollution, and a 93 percent decrease in greenhouse gas pollution. On the ground, that would mean preventing over 100,000 premature deaths, 2.8 million asthma attacks, and a variety of other health problems over the next 30 years. Barrett called these findings “stunning new information on the transition to zero-emission electricity and transportation.”
Russia’s War in Ukraine Reveals a Risk for the EV Future: Price Shocks in Precious Metals - Russia’s war on Ukraine has roiled global commodities markets—including those for nickel and other metals used in EV batteries—and laid bare how vulnerable the world is to price shocks in the metals essential to the EV future. That volatility comes on top of the pandemic-triggered supply chain woes that have dogged the auto industry for months. President Joe Biden’s pledge to catalyze the electric vehicle transition has been only partly fulfilled, with consumer EV tax credits, much of the money for charging stations and other assistance stalled with the rest of his Build Back Better package in Congress. Sen. Joe Manchin (D-W.Va.), the linchpin for any effort to revive the legislation, this month said he is particularly reluctant to invest in an EV future because of U.S. dependence on imported metals for electric transportation. “I don’t want to have to be standing in line waiting for a battery for my vehicle, because we’re now dependent on a foreign supply chain,” Manchin said at the annual CERAWeek energy conference in Houston. But last week, automakers, the Biden administration and U.S. trading partners and allies were doubling down on their commitment to vehicle electrification—not only to address climate change but because of concerns about energy insecurity in a world reliant on oil for transportation. Skyrocketing prices at gasoline pumps have made clear that U.S. drivers are not insulated from spikes in the global oil market, even though the United States is producing more oil domestically than ever.Automakers are embarking on an array of strategies to secure supply of the critical minerals they will need for electric vehicles, including alternative battery chemistries, investment in new processing plants and deals with suppliers. Meanwhile, the United States and the 30 other member nations of the International Energy Agency last week launched a critical minerals security program. That could eventually include steps such as the stockpiling of metals needed for EVs and other renewable energy applications, just as IEA nations have committed since the 1970s to hold strategic stockpiles of oil. The IEA meeting participants also discussed a greater focus on systematic recycling of metals.“We don’t want supply-chain bottlenecks to prevent us from being able to electrify the transportation sector,” said U.S. Energy Secretary Jennifer Granholm, after the IEA’s annual ministerial meeting in Paris on Thursday. “Making sure that we’ve got sources for those critical minerals that are sustainably extracted and processed is a big part of what the going-forward work will be of the countries here. The Russia-Ukraine conflict has brought to light the risk for the EV future in the upheaval in global metal markets. On March 8, the price of nickel, which averaged about $18,000 per metric ton in 2021, shot up an unprecedented 250 percent in a little more than 24 hours to more than $100,000. Chaos broke out on the London Metal Exchange, the main commodities market for globally traded industrial metals, and the exchange halted trading for a week and took the highly unusual step of canceling billions of dollars worth of trades.Since then, trading in nickel has resumed, with the price easing somewhat, but still volatile and about 50 percent above 2021 levels. The financial newspaper Barron’s reportedthat the price it tracks of a basket of EV battery metals is up 64 percent so far in 2022, theoretically raising the sticker price of an EV by as much as $2,000. The world’s biggest EV maker, Tesla, applied price increases to all versions of its vehicles in the United States, and CEO Elon Musk noted on Twitter that the company was seeing significant inflationin raw materials costs.
Lawmakers warn US could lose EV, AV race - As Congress prepares to consider a multibillion-dollar semiconductor investment package meant to develop American independence from China, Rep. Bob Latta (R-Ohio) and Sen. Gary Peters (D-Mich.) maintain that the domestic production of electric and autonomous vehicles should be treated as another essential element of global competition. “Every day we don’t get something done and delay, we’re falling behind someplace else and the rest of the world,” Latta said Tuesday during The Hill’s “Driving Tomorrow EVs and AVs” event.The latest version of Latta’s Self Drive Act would establish federal safety and cybersecurity standards for automated vehicles. His original bill failed to gain traction after passing the House in 2017.The Ohio Republican has since touted his bill as an investment in the domestic supply of emerging technologies for the automotive industry, piggybacking off the momentum of the Biden-backed semiconductor package, which Senate Majority Leader Charles Schumer (D-N.Y) introduced with a similar objective.Among other investments in research and development, Schumer’s bill would funnel $52 billion into the domestic development of computer chips, needed to produce cars and cellphones, amid a global chip shortage.House Majority Leader Steny Hoyer (D-Md.) told reporters the House could vote this week to begin formal negotiations on the semiconductor bill.Reliance on international computer chip manufacturers led several American automakers to shut down their production lines as the COVID-19 pandemic exacerbated supply chain backlogs. Latta said he anticipates that American dependence on China and other nations to mine lithium, cobalt, nickel, graphite and manganese – minerals needed to produce the batteries used in electric vehicles – could lead to similar shutdowns. China refines two-thirds of the world’s lithium and is the largest investor in lithium mines across the globe, according to the 2022 U.S. Geological Survey.“This is a homeland security issue,” said Peters, who chairs the Senate Homeland Security Committee. “This is a national security issue. We have to have supply chains that are not just efficient but are resilient.” Latta has promoted his bill’s potential to improve highway safety and accessibility for seniors and people with disabilities. Some opponents have argued it could take jobs away from truckers, while others have noted that the U.S. lacks the mining infrastructure needed to mass-produce electric and autonomous vehicles.
U.S. may weigh up exemptions to ban on financing fossil fuel projects abroad-official (Reuters) - The Biden administration may soon consider calls for exemptions to a ban on financing of new carbon-intensive fossil fuel projects overseas, a senior U.S. official said, as energy markets tighten on Russia's invasion of Ukraine. President Joe Biden in December ordered U.S. agencies to immediately stop financing coal, gas and other projects and prioritize global collaborations to deploy clean energy technology. The order provided exemptions if a country faced severe consequences if it was unable to build a plant burning fossil fuels, such as natural gas or coal. A senior U.S. official told reporters on condition of anonymity he suspected that over the coming months there will be situations where some officials will want to invoke the provision. The official, who did not want to be directly quoted, said there would be an interagency process on the merits of any exceptions. Any exemptions to the order could underscore how Russia's invasion has forced the Biden administration to balance priorities on tackling climate change with energy security, including by imploring domestic oil producers to boost production and to open up the Strategic Petroleum Reserve. The invasion of Ukraine by Russia, which typically provides about 40% of the European Union's natural gas and about 27% of its oil, has intensified the global energy crunch. The EU is seeking to wean itself off the imports, and traders worry Russia could use energy as a weapon by restricting shipments to global markets.
Will Biden use the Defense Production Act to boost mining? - On Capitol Hill, pressure has grown in recent weeks for Biden to invoke a 1950 law — the Defense Production Act — in order to address rising energy prices and inflation. Progressives asked for Biden to use the DPA to mandate more renewable energy projects, while Sen. Joe Manchin (D-W.Va.) has asked whether the law could be used to spur more oil and gas production.But environmental advocates are particularly focused on recent evidence that the Biden administration is weighing a separate request by Manchin and some GOP lawmakers this month to invoke the 1950 program to bolster domestic mineral production and help move U.S. supply chains away from Chinese markets.Invoking the Defense Production Act allows the president to use a wide range of authorities to prioritize the production of goods considered in the national interest. Under the Trump administration, the Defense Department began purchasing minerals key to industrial defense purchases citing the law, and Biden has used it to expedite production of medical equipment during the Covid-19 pandemic.In this case, the argument is that domestic mining must be increased to feed a low-carbon economy due to resource constraints getting worse due to Russia’s war on Ukraine. But environmentalists want the president to remember that there will be consequences from using the law to boost mining.A growing mining industry would likely affect front-line communities, including lands sacred to Indigenous people. Most mining takes place out West, and according to one estimate by finance company MSCI, the majority of U.S. reserves of cobalt, copper, lithium and nickel are located within 35 miles of Native American reservations.“The conservation community is actually very concerned about what this might turn out to be,” said Kelly Fuller, energy and mining campaign director for the Western Watersheds Project.On March 11, Manchin and Republican Sens. Lisa Murkowski of Alaska, Jim Risch of Idaho and Bill Cassidy of Louisianawrote to Biden asking that he invoke the Defense Production Act to “accelerate domestic production” of metals key to making electric vehicle batteries: graphite, manganese, cobalt, nickel and lithium. Allowing the nation to depend on other countries for its minerals “is a growing threat to U.S. national security,” the senators wrote, “and we need to take every step to address it.”
‘Ready to fight’: how a Russian uranium ban would threaten Native American tribes -Sacred Native American sites such as the Grand Canyon and Bears Ears may seem a long way from the devastation unfolding in Ukraine. But as the US mulls a ban on Russian uranium, part of economic levers to stop Putin’s war, Indigenous communities living near US mines could pay the price.John Barrasso, a senator from Wyoming, recently introduced a bill that calls for a ban on all forms of uranium imported from Russia. Uranium fuels America’s nuclear power plants, and about 20% of that comes from Russia, while close to another 30% is imported from the Russian allies of Kazakhstan and Uzbekistan.Such a ban would shift American uranium production into overdrive. In an editorial in the Casper Star Tribune, Barrasso pointed out that the US has “vast uranium resources”, including in Wyoming, but 90% of the uranium used in nuclear power plants is imported. “Rather than letting our uranium sit in the ground, we ought to use it,” he wrote. A longtime advocate of the uranium industry, Barrasso also wrote that continuing to buy Russian uranium was funding “Putin’s killing machine”.Mining companies now stand at the ready, with the possibility to ramp up production at sites near the Grand Canyon, Bears Ears national monument in Utah and at multiple locations in Barrasso’s home state of Wyoming. Many of the operations pose environmental and spiritual threats to Indigenous communities who live near the mines and have fought their existence for decades.Amber Reimondo, the energy director of the not-for-profit Grand Canyon Trust, says the Senate’s proposal risks “perpetuating environmental injustices on our own soil”.“If this ban is aimed at saving lives, the answer can’t just be to ramp up US uranium production,” Reimondo says. “The answer has to involve truly respecting and listening to communities on the frontlines of uranium production, especially Indigenous communities … Otherwise, this is not about protecting human life. It is about protecting profits.”
California is Falling Behind Its Climate Goals. Big Oil Wants to Help. --California isn’t just at the forefront of climate policy; it’s also leading the way when it comes to contending with climate change, as rising temperatures and increasing aridity threaten water reservoirs while carbon emissions from wildfires exceed those of the entire industrial sector or electrical grid.Yet, just as the climate crisis worsens in the state and around the globe, California is falling behind its own climate goals and ceding its role as the trendsetter in sustainability initiatives. That slowdown is due in part to the powerful influence of the oil and gas industry, which has been able to kill legislation aimed at accelerating the state’s efforts to reduce emissions and to pressure the state to continue production of fossil fuels. In addition, climate advocates point to the challenges inherent in scaling renewable technologies and to inadequate investment in everything from zero emissions vehicles to sustainable land management.“We buy the level of emissions reductions that we want, or we’re willing to pay for,” according to Benjamin Preston, one of the authors of a recent International Panel on Climate Change report that laid out in stark detail the urgency of the climate crisis and a senior policy researcher at the RAND Corporation based in Santa Monica.Paradoxically, the fossil fuel industry is stepping in to fill the gap, pushing its own technologies to help reduce emissions so that the industry can profit off the transition to a greener future. Some of its solutions, like renewable natural gas, biodiesel, and carbon capture technology, are expected to require massive investments to scale unproven technologies and still pose substantial risks to the climate and public health.
US using Ukraine as cover to lock us into fossil fuels for years to come -Last year, 90 percent of all the new electricity generating capacity built around the world was renewable energy. And that’s in spite of the fossil fuel industry receiving 70 percent of global energy subsidies.To put it another way, despite all the advantages of the entrenched, monolithic fossil fuel industry, energy markets are choosing to build clean energy over dirty energy nine times out of 10.“Solar and wind are now the cheapest bulk power sources in 91 [percent] of the world…The energy revolution has happened. Sorry if you missed it,” Amory Lovins, regarded as the “Einstein of Energy Efficiency,” told The Guardian.Given this state of affairs, the following will make you scratch your head: The Biden administration recently announced a new partnershipwith the European Union to help them end their reliance on Russian natural gas — by supplanting it with American natural gas.Rather than a Marshall-plan type effort to help Europe accelerate the clean energy transition and limit the impacts of the unfolding climate crisis, the Biden administration opted instead to use the Russian invasion of Ukraine to try and justify building new natural gas infrastructure that will lock us into fossil fuel use for years to come. The White House announcement about the partnership talks a great game on clean energy and energy efficiency. But at the heart of it, the plan ramps up liquid natural gas (LNG) production, streamlines the approval processes for new natural gas infrastructure, and requires that EU nations keep their natural gas storage capacity 90 percent full.The partnership announcement is very clear about what the gas production and consumption goals of the initiative are. It stipulates the U.S., with international partners, will ensure LNG volumes of “at least 15 [billion cubic meters] in 2022” and the EU will ensure “stable demand for additional U.S. LNG until at least 2030 of approximately 50 [billion cubic meters annually].”No such clear metrics or timetables were spelled out on the clean energy side. The renewables and energy efficiency goals in the agreement sound more like a child’s vague promise to be nicer to their sibling in the future.“Developing a strategy to accelerate workforce development to support the rapidly [sic] deployment of clean energy technologies, including an expansion of solar and wind,” the announcement states. The White House didn’t even take the time to correct this grammatical error, which may be an indicator of how much of an afterthought this statement was.
How Joe Manchin Aided Coal, and Earned Millions - The New York Times- At every step of his political career, Joe Manchin helped a West Virginia power plant that is the sole customer of his private coal business. Along the way, he blocked ambitious climate action.The Grant Town power plant, a fortresslike structure with a single smokestack, the only viable business in a dying Appalachian town, is also the link between the coal industry and the personal finances of Joe Manchin III, the Democrat who rose through state politics to reach the United States Senate, where, through the vagaries of electoral politics, he is now the single most important figure shaping the nation’s energy and climate policy.Mr. Manchin’s ties to the Grant Town plant date to 1987, when he had just been elected to the West Virginia Senate, a part-time job with base pay of $6,500. His family’s carpet business was struggling.Opportunity arrived in the form of two developers who wanted to build a power plant in Grant Town, just outside Mr. Manchin’s district. Mr. Manchin, whose grandfather went to work in the mines at age 9 and whose uncle died in a mining accident, helped the developers clear bureaucratic hurdles. Then he did something beyond routine constituent services. He went into business with the Grant Town power plant. Mr. Manchin supplied a type of low-grade coal mixed with rock and clay known as “gob” that is typically cast aside as junk by mining companies but can be burned to produce electricity. In addition, he arranged to receive a slice of the revenue from electricity generated by the plant — electric bills paid by his constituents.The deal inked decades ago has made Mr. Manchin, now 74, a rich man.While the fact that Mr. Manchin owns a coal business is well-known, an examination by The New York Times offers a more detailed portrait of the degree to which Mr. Manchin’s business has been interwoven with his official actions. He created his business while a state lawmaker in anticipation of the Grant Town plant, which has been the sole customer for his gob for the past 20 years, according to federal data. At key moments over the years, Mr. Manchin used his political influence to benefit the plant. He urged a state official to approve its air pollution permit, pushed fellow lawmakers to support a tax credit that helped the plant, and worked behind the scenes to facilitate a rate increase that drove up revenue for the plant — and electricity costs for West Virginians.Records show that several energy companies have held ownership stakes in the power plant, major corporations with interests far beyond West Virginia. At various points, those corporations have sought to influence the Senate, including legislation before committees on which Mr. Manchin sat, creating what ethics experts describe as a conflict of interest.As the pivotal vote in an evenly split Senate, Mr. Manchin has blocked legislation that would speed the country’s transition to wind, solar and other clean energy and away from coal, oil and gas, the burning of which is dangerously heating the planet. With the war in Ukraine and resulting calls to boycott Russian gas, Mr. Manchin has joined Republicans to press for more American gas and oil production to fill the gap on the world market.But as the Grant Town plant continues to burn coal and pay dividends to Mr. Manchin, it has harmed West Virginians economically, costing them hundreds of millions of dollars in excess electricity fees. That’s because gob is a less efficient power source than regular coal.
Chapel Hill hopes to build low-income housing on top of toxic coal ash. Will they be able to safely? — A large mound of toxic coal ash sits on the same land as the Chapel Hill Police Department, looming over residents who walk along the Bolin Creek Greenway.But the hill filled with black dust and overgrown brush is more than just an eyesore. Coal ash, a product of power plants, is made up of metals like arsenic, lead and mercury — all of which have been proven to cause serious health issues.Long-term exposure to the ash can lead to an increased risk of chronic respiratory issues, behavioral issues and cancers, research shows.The pollution has been on Martin Luther King Jr. Boulevard for 50 years or longer,according to town officials. Much of the 10-acre piece of land was used as a trash pit where residents and the University of North Carolina at Chapel Hill dumped waste.Even though the town acquired the land in the 80s, officials only recently discovered how much radioactive material was in their possession. The land is filled with more than 60,000 cubic yards of coal ash — enough to fill roughly 18 Olympic swimming pools — according to a 2017 estimate by a town contractor.As the price of land increases, the slice of prime property in the town's possession has become increasingly more valuable.“We are in desperate need of housing in our community," said Chapel Hill Mayor Pam Hemminger. "It’s a great location for residential if that’s the path we vote to take.”This month, the town council approved a memorandum of understanding and will soon begin the process of developing on top of the land filled with toxic waste. The document outlines the town's preference for adding low-income housing and building a new municipal office on the property.Adam Searing, the lone council member opposed to the development, is concerned about the possible impact that the coal ash will have on future residents, particularly children. Research published by the Environmental Protection Agency shows that children are affected by the toxins even when exposed to low levels of them in the air. "We don’t want to go ahead and build housing, especially family housing, on something we know is not good for the environment and not good for people who live near it," Searing said. "It’s just makes no sense whatsoever.”
Powerful Clouds of Methane Spotted in Alabama Coal Country-- Powerful clouds of the greenhouse gas methane have been observed by satellite near a coal-mining basin in Alabama, highlighting an often overlooked climate impact from the dirtiest fossil fuel. Since mid-February at least three plumes were observed by the European Space Agency’s Sentinel-5P satellite that originated near the Black Warrior Basin, according to an analysis of the data from Kayrros SAS. The plumes could have been generated by multiple sources, the geoanalytics firm said. The estimated locations for each of the releases were within 12.4 miles (20 kilometers) of five mines or mine clusters owned or operated by Warrior Met Coal Inc., RJR Mining Co. and Southland Resources, according to location and ownership data in Global Energy Monitor’s coal mine database. Another mine owned by Peabody Energy Corp. was within about 12 miles of two of the plumes. Methane, the primary component of natural gas, can be released from the ground during mining when rock strata or coal seams are fractured. The greenhouse gas traps 84 times more heat than carbon dioxide during its first two decades in the atmosphere, and halting its intentional release during the production and transport of fossil fuels is viewed by scientists as some of the lowest hanging fruit in the fight against a warming planet. Northern Alabama has active coal, gas and oil production. Satellite observations over the region since January 2019 show dozens of releases of the super-potent gas. The state’s Department of Environmental Management said it did not appear there were any pipeline leaks in the areas on the dates of the observations and there were no reported issues from mines that would have resulted in the releases. Warrior Met Coal said it publicly discloses mandatory greenhouse gas emissions reporting and said it wasn’t aware of any activities that would have caused abnormal emissions from its mines. No one answered a phone number listed online for RJR Mining, and Southland Resources didn’t respond to an email seeking comment. Peabody said it hasn't encountered any methane pockets that would cause a release.At least one of the recent plumes was identified within about 10 miles of a pipeline owned by Southern Natural Gas, although the wind direction at the time wasn’t consistent with a release coming from the line, according to Kayrros. A spokeswoman for Southern Natural Gas’s parent company, Kinder Morgan Inc., said its operations didn’t cause the release.
Illinois environmental justice bill would help residents prevent pollution -Illinois activists who led fights to close coal plants and ban petroleum coke storage are now leading the charge for a bill that would provide new powers and funding to environmental justice communities.The legislation (HB4093/ SB2906) would create a more robust community participation and oversight process for new industry in environmental justice areas. It would also expand the definition of environmental justice communities and direct funds from violations directly to those communities, among other provisions. “Enough is enough. Communities must have a way to be involved in a permitting process that is really broken,” said Gina Ramirez, a representative of the Natural Resources Defense Council and activist on Chicago’s Southeast Side, where residents after a years-long fight achieved a ban on the storage of petcoke in Chicago. The bill, which passed in the state House in March and is now in the state Senate, is sponsored by state Sen. Celina Villanueva. Villanueva’s 11th district includes Little Village, where a coal plant that ultimately closed in 2012 became an international symbol of the environmental justice impacts of coal. “Ensuring equity among Illinois residents requires confrontation of the disparities and environmental impacts on low-income areas, in communities of color, and in neighborhoods that lack economic and health care opportunities,” said Villanueva, who also lives in Little Village, during a March 30 press conference. The bill would mandate new responsibilities for the Illinois Environmental Protection Agency and companies when a new industry proposes to open or an existing industry seeks permission to increase emissions in an environmental justice community. The bill would force the Illinois EPA to consider the cumulative impact of air pollution when deciding whether to issue new facility permits. It would require an examination of the compliance history of companies seeking permits. It would require more community participation, including a public meeting before permits are issued, and ensure that translation services are available. A study would need to be conducted by an independent third party exploring the environmental and health impacts of the proposal. The bill would also give residents the power to challenge permits that have been issued.
Chernobyl workers say unprotected Russians kicked up radioactive dust in toxic zone --Workers at the Chernobyl nuclear site said that Russian soldiers kicked up clouds of radioactive dust while driving through the toxic “Red Forest” zone without radiation protection. Russian tanks entered Chernobyl, which is located about 65 miles north of Ukrainian capital Kyiv, on Feb. 24, the first day of the Russian invasion of Ukraine, but new details of the seizure of Chernobyl's nuclear plant are just emerging, according to Reuters. Soldiers drove armored vehicles through the Red Forest, causing an increase in radiation levels due to the resulting disturbance of radioactive soil around the site of the 1986 Chernobyl disaster. The Russian convoy did not use any anti-radiation gear while taking Chernobyl, which was “suicidal,” according to Chernobyl employees. One employee said that the radioactive dust inhaled by Russian soldiers is likely to result in internal radiation in their bodies. Despite the Russian invasion, Chernobyl staff members are still working to safely manage spent nuclear fuel at the site and monitoring the remains of the reactor that blew up more than 35 years ago. The Russian government has insisted that radiation remains within normal levels after its capture of Chernobyl. The Russian military claims that its seizure of Chernobyl prevented “nuclear provocations” that may have been planned by Ukrainian nationalists.
Ohio Power Retailer Volunteer Files for Bankruptcy to Offload Customers – WSJ - Volunteer Energy Services Inc., a retail energy company providing natural gas and electricity to homeowners and businesses in Ohio, Michigan, Kentucky and Pennsylvania, has filed for bankruptcy and intends to wind down its business. Family-owned Volunteer Energy filed for chapter 11 protection on Friday in the U.S. Bankruptcy Court in Columbus, Ohio, after defaulting on about $12.6 million in payments due to wholesale energy providers that the company works with. Based in Pickerington, Ohio, Volunteer Energy said it defaulted after spending months marketing its assets to prospective buyers, a process that was ultimately unsuccessful.
Utica Shale gas drillers Ascent, Gulfport said to be in talks for $8B merger - S&P Global -A rumored merger between Utica Shale oil and gas drillers Gulfport Energy Corp. and privately held Ascent Resources would continue the roll-up of Appalachian shale gas producers and would be welcomed by the market, investment analysts said. The deal is said to be valued at about $8 billion. "Our conversations with investors and industry contacts suggest an all-equity reverse merger near proved-developed-producing pricing would be well-received by the market, creating a larger-scale, lower-cost entity that would appeal to investors," Truist Securities Inc. oil and gas analyst Neal Dingmann told clients March 30. "We believe scale continues to become more important, especially in areas such as Appalachia." The transaction would give Gulfport, which was fresh out of bankruptcy proceedings in 2021, more scale by combining its Ohio operations with neighbor Ascent, said Charles Johnston, senior high yield oil and gas analyst with credit research firm CreditSights. At the same time, it would allow Ascent to have publicly traded stock without an IPO, Johnston said. The bulk of Gulfport's Utica operations are in the dry gas counties along the Ohio River on the eastern edge of the state, while Ascent's wells are focused on the "wetter" counties to the west where natural gas liquids and oil are mixed into the production stream. Gulfport produces 1 Bcfe/d, 90% gas, with 77% of those volumes coming from the Utica, according to Matthew Keillor, an analyst with energy data and software company Enverus. Ascent produces nearly 2 Bcfe/d, 91% gas, all from the Utica. Truist said Ascent, backed by private equity firm First Reserve Corp. and the Energy and Minerals Group's EMG Fund II Management LP, could reasonably offer $114 per share for Gulfport, a nearly 32% premium to Gulfport's trading value at March 29 market close. Public companies have been snapping up privately held neighbors in Pennsylvania's larger Marcellus Shale over the past year. Most recently, Chesapeake Energy Corp. announced a $2.6 billion deal in January to buy northeast Pennsylvania neighbor Chief Oil & Gas LLC. EQT Corp., the largest U.S. gas producer, bought out Alta Resources LLC, another Chesapeake neighbor in Lycoming County, for $2.9 billion in July 2021. Both deals brought immediate gains in production volumes and revenues.
U.S. natural gas producer Ascent Resources said to prepare for IPO - Ascent Resources is said to prepare for an IPO could that could value the U.S. natural gas producer at about $6B.Ascent, which is owned by private equity firms Energy & Minerals Group and First Reserve Group, is working with Citi and Barclays on an IPO, according to a Reuters report. Ascent may confidentially register its IPO with the SEC as soon as next month for a potential listing in the second half of the year. The report comes after Bloomberg on Friday reported that Gulfport Energy (NYSE:GPOR) had discussed merging with Ascent Resources. A merger with Ascent Resources would value the combined company at ~$8 billion. Gulfport and Ascent are both active in the gas-rich Utica Shale of Ohio. Reuters reported that while Gulfport (GPOR) and Ascent had held talks "sporadically" since the end of last year, the discussions have broken down over valuation expectations. Gulfport Energy recently reported in-line Q4 results while guiding FY 2022 production lower.
Artera Services Acquires Ohio-based 1127 Construction Inc. - Artera Services has acquired the operating assets of Akron, Ohio-based 1127 Construction Inc. The deal expands Artera’s core gas distribution services in Northeast Ohio. A family-owned company founded in 2005 by brothers Jeff, Nick and Joe Smith, 1127 provides natural gas distribution and related infrastructure services. The company has a workforce of 75 highly-trained construction professionals.. “We look forward to welcoming Jeff, Nick and the entire 1127 team to Artera,” said CEO Brian Palmer in an April 1 company statement. “Joining our current gas distribution operations in the area with 1127 is a great way for us to expand our footprint and service capabilities in the region.” The acquisition will expand existing operations in the Ohio Region of Miller Pipeline, an Artera gas distribution business unit, and build on the core service offering of maintenance, replacement and upgrade (MRU) services. Jeff and Nick Smith will continue to lead business operations and will be overseen by Jim Wilson, Miller Pipeline vice president of construction over the Ohio Region. Headquartered in Atlanta, Artera is one of the United States’ industry-leading providers of essential infrastructure services to the natural gas and electric industries, with $2.5 billion in revenue.
Ohio GOP Senate contender Dolan vows to oppose Biden's 'war on energy' - One of the main Republican candidates in Ohio’s open Senate seat race is spotlighting inflation and taking aim at President Biden’s "energy agenda" in a new ad blitz. Ohio Senate contender Matt Dolan vows in a new campaign commercial that was shared first with Fox News Digital on Thursday that he’ll "fight Joe Biden’s energy agenda because this war on energy is really an attack your wallet." Dolan, a state senator from Cleveland and a former county chief assistant prosecutor and state assistant attorney general, is seen in his spot standing outside an oil refinery in East Toledo, Ohio, which he argues is "ground zero in the Democrats’ war on energy.""On Day One, Joe Biden canceled pipelines and banned oil exploration. Energy prices skyrocketed, causing the worst inflation in 40 years on everything from gas to groceries," Dolan emphasizes in his commercial. And pointing to his rivals in Ohio’s Senate race, he claims that "my opponents aren’t able to confront today’s crisis; I am."Dolan’s campaign told Fox News Digital they’re spending $1.5 million to run the new spot statewide. The candidate, whose family owns Major League Baseball’s Cleveland Guardians, has pledged to spend $8 million in ad spending through Ohio’s May 3 primary. In a campaign release accompanying the new commercial, Dolan points to Line 5,a nearly 70-year-old pipeline that moves oil through Wisconsin and Michigan to refineries in Ontario, Canada and Midwestern states such as Ohio, including the refinery in East Toledo. Republicans have heavily criticized the Biden administration and Democratic Gov. Gretchen Whitmer of neighboring Michigan for considering shutting down the pipeline due to environmental concerns.The dispute over the pipeline has grabbed national attention in recent months amid the spike in energy prices and the overall steep rise in inflation.Dolan warned in a statement that if Line 5 is shut down, "thousands of Ohio jobs could be lost, prices on everyday consumer goods would skyrocket, and billions of dollars in economic activity will be in jeopardy." Dolan is one of eight GOP candidates running in the race to succeed retiring Republican Sen. Rob Portman.
Conn. regulators move to end gas subsidies -Connecticut regulators want to halt a program that incentivizes homeowners and businesses to convert to natural gas as soon as the end of April. The program, which began in 2014, is authorized through the end of 2023. But in adraft decision issued Wednesday, the state Public Utility Regulatory Authority, known as PURA, called for “an immediate winding down” of the program and said it is “no longer in the best interest of ratepayers.” PURA has been reviewing the utility-run gas expansion program, which is subsidized by ratepayers, for more than a year. Established under former Gov. Dannel Malloy at a time when natural gas was considerably cheaper than oil, it called for the state’s three natural gas distribution companies to convert 280,000 customers over 10 years. After eight years of using marketing and incentives to persuade new customers to sign on, the companies have only reached about 32% of their goal. At the same time, average costs per new service and new customer have tripled for Eversource, and doubled for Connecticut Natural Gas and Southern Connecticut Natural Gas, according to PURA.In their draft decision, regulators cited the companies’ failure to meet their conversion goals and the rising costs as key reasons for ending the program. In addition, they noted, the price differential between oil and gas has lessened considerably since the program’s start. And finally, regulators concluded that the program no longer furthers the state’s climate goals. They cited Gov. Ned Lamont’s recent executive order on climate, which recognizes that the greenhouse gas emissions from the state’s building sector have increased in recent years, and calls for a cleaner energy strategy that reconsiders the continued expansion of the natural gas network.
NJ Supreme Court to consider if pipeline company can be part of construction permit appeal - The fate of a controversial project to build a natural gas compressor station along a pipeline in North Jersey could lie with the New Jersey Supreme Court. The court justices are due to hear arguments regarding the circumstances of an ongoing challenge to the Tennessee Gas Pipeline project's Highlands Act exemption from environmental advocacy groups. The federally regulated pipeline project would install an electric powered 19,000-horsepower compressor turbine near the Monksville Reservoir. Combined with two other compressor station upgrades, including one in Sussex County, the project would expand capacity on the Tennessee Gas system enough to allow Consolidated Edison to end its moratorium on natural gas connections in Westchester County, New York, records show. On Monday, the Supreme Court is expected to consider the ability of Tennessee Gas to intervene in a 2021 legal challenge to the project from nonprofits Food & Water Watch and the New Jersey Highlands Coalition. The groups have challenged the project's Highlands Applicability Determination and Water Quality Management Plan Consistency Determination, which essentially granted the company a permit to build the station and affiliated facilities in spite of Highlands Water Protection and Planning Act restrictions on development. The challenge from the nonprofits seeks to intervene and nullify the permit. It is, however, being held up. Tennessee Gas Pipeline officials argue that they should have been included in the appeal process, as an interested party. The state's Appellate Division denied the company's requests to intervene, records show. Michael Gross, a Red Bank attorney, said the court should not have denied the company its due process rights. Gross is arguing on behalf of a collection of interested parties, including the New Jersey State Chamber of Commerce and the New Jersey Business and Industry Association, who are alarmed by the appeals court’s denial of the pipeline company's desire to be involved in the appeal and seeking to intervene to prevent a precedent, he said. The appeal would have “a profound effect on the business and development community if the Supreme Court denies the right of a property owner to participate in an appeal involving its property," Gross said. Representatives from Food & Water Watch and the New Jersey Highlands Coalition declined to comment on the permit challenge or the pipeline company's appeal.
Environmental law group sues TVA over gas pipeline documents (AP) — The Southern Environmental Law Center has sued the nation’s largest public utility for failing to disclose full contracts related to proposed natural gas pipelines.The Tennessee Valley Authority plans to shutter its remaining coal-fired power plants and get power from another fossil fuel — natural gas. The SELC requested copies of TVA contracts with two gas companies under the federal Freedom of Information Act. TVA supplied the contracts, but they were heavily redacted, according to the lawsuit last week.In explaining the redactions, TVA said that the contracts contain confidential business information that is exempt from disclosure.SELC attorney George Nolan said it appears that TVA has committed to purchasing gas before complying with its National Environmental Policy Act obligations to study alternative energy sources. TVA said in an email it has not made any final decisions.SELC is seeking unredacted copies of the contracts and a declaration that TVA violated the Freedom of Information Act.
Biden's most effective climate warrior faces potential doom in the Senate - President Joe Biden’s efforts to deliver on his ambitious climate agenda are getting a big boost from the leader of one often overlooked agency who has used his position to home in on the energy industry’s greenhouse gas impact.Now that official, Federal Energy Regulatory Commission Chair Richard Glick, may see his efforts to put climate change at the forefront of federal energy policy cost him his job.Glick, who was appointed to FERC in 2017 and elevated to the chair role last year by Biden, has pushed policies that angered prominent lawmakers, including many Republicans — and, most crucially, Senate Energy and Natural Resources Chair Joe Manchin (D-W.Va.), who as the upper chamber’s swing vote has weakened much of Biden’s climate agenda. That’s put Glick’s future at risk after his current term on the commission ends in June.Former FERC staff say Glick has launched perhaps the most far-reaching agenda of any leader ever at the commission, which regulates U.S. power markets and approves the siting of gas pipeline infrastructure. His efforts to reshape the agency’s mission include conducting closer examinations of the climate impacts of new energy infrastructure, as well as the effects of existing natural gas pipelines and fossil fuel facilities on low-income areas and minority communities where they are often located.FERC will play a key role in fostering the transition to a low-carbon economy, said Rep. Sean Casten (D-Ill.), who has sought to raise the agency’s profile. “If we are going to get carbon emissions down as quickly as we need to, we are going to have to substantially electrify huge parts of our economy, which means building a lot of generation, building a lot of transmission, doing things that are uniquely within the purview of an agency that most Americans don’t know anything about,” Casten said in a statement.New rules spearheaded by Glick could also require companies seeking to build new pipelines prove that the projects are needed to strengthen regional reliability and save customers money. That change would counter criticism that the agency has greenlit projects that sometimes weren’t justified by consumer demand but would boost utility company revenues.Red states and other opponents of FERC’s new approach flooded the commission with formal challenges to those policies earlier this month, accusing the agency of going far beyond its statutory authority. They also argue that the policies will harm the reliability of energy supplies and raise consumers’ costs, by making pipelines more expensive to site and chilling investment.
US will require valves on new pipelines to prevent disasters - (AP) — U.S. officials on Monday adopted a long delayed rule aimed at reducing deaths and environmental damage from oil and gas pipeline ruptures in response to fatal explosions and massive spills that happened in California, Michigan and other states. But safety advocates said the U.S. Transportation Department move would not have averted the accidents that prompted the rule because it applies only to new pipelines — and not the hundreds of thousands of miles of lines that already crisscross the country. The rule requires companies to install valves that can quickly shut off the flow of oil, natural gas or other hazardous fuels when pipelines rupture. It came in response to a massive gas explosion in San Bruno, California, that killed eight people in 2010, and to large oil spills into Michigan’s Kalamazoo River and Montana's Yellowstone River and other spills. The National Transportation Safety Board since the 1990s has recommended the use of automatic or remote controlled valves on large pipelines — whether they are existing or new — to reduce the severity of accidents. But pipeline companies resisted new valve requirements because of the expense of installing them and concerns they could close accidentally and shut off fuel supplies. Transportation Secretary Pete Buttigieg said the more stringent regulations for the industry were needed because too many people have been harmed by pipeline failures. He said installation of the valves would also protect against large releases of methane, a highly potent greenhouse gas blamed for helping drive climate change. "Today we are taking an important step to protect communities against hazardous pipeline leaks — helping to save the lives, property, and jobs of people in every part of the country while preventing super-polluting methane leaks.” Buttigieg said.
Oil spill concerns emerge as ship remains stuck in Chesapeake Bay -As a 1,095-foot cargo ship remained stranded in the Chesapeake Bay Friday, environmental experts raised concerns about a potential oil spill as crews worked to free the ship from the mud that it’s stuck in.“It’s so far aground that about 20 feet of the ship is buried in mud,” said Doug Myers, a scientist with the Chesapeake Bay Foundation, an advocacy group focused on improving the Bay.“That has a tendency to put stress on the hull, and even though it’s not carrying oil, a ship that big would have large amounts of fuel,” Myers added. “Until the ship is freed, we’re concerned that the stress could rupture the hull and cause a fuel leak.”The Ever Forward was headed from the Port of Baltimore to Norfolk, Virginia, on March 13 when it ran aground north of the Chesapeake Bay Bridge, the U.S. Coast Guard said.The ship, operated by Taiwan-based Evergreen Marine, became stranded outside the shipping channel. Officials have said there were no reports of injuries, damage or pollution. Myers said he is worried that not enough is being done to plan for the containment of a potential spill. “My hope is that there’s no damage or stress to the hull that might cause an oil spill, but that’s all a big unknown at this point,” Myers said. “The one thing they’re doing that did give me some comfort is that every four hours, the ship’s crew is doing routine inspections of the fuel tanks to make sure they don’t see any leaking oil.”An oil spill there could affect nearby oyster reefs and recreational fishing areas.“Any fuel that spilled would travel some distance from that as well,” Myers said.
A 'Bit of a New Market' Emerging for Natural Gas, Says ConocoPhillips Analyst - Slower-than-usual rig count growth, fewer uncompleted wells and a shrinking coal generation fleet are contributing to an atypical natural gas market recovery, according to analysts with ConocoPhillips. At the LDC Gas Forum Southeast in Savannah, GA, earlier this month, ConocoPhillips’ Matt Henderson, a senior market analyst, said the industry had entered “a bit of a new market.” To illustrate, he pointed out that exploration and production (E&P) companies added rigs at a slower rate during the 2020-2021 price recovery than in the previous rebound in 2016-2017. Rig additions for the most recent period totaled only 246 units, compared to 497 units in 2016-2017, he noted, acknowledging that fleetwide rig efficiency improvements could contribute to the slower pace. “And this is despite the fact that the run up in prices that we saw this time around has been a lot stronger for both gas and crude,” Henderson said. As of March 18, Baker Hughes Co. (BKR) counted 524 oil-directed and 137 gas-directed rigs across the United States. During the 2016-2019 “growth phase,” E&Ps “were focused on growth at all costs,” said Henderson. “And anytime we saw gas prices get above about $3.00, it seemed like we saw a pretty much instantaneous response from producers. And I just don’t think you can assume that’s going to happen anymore.” Besides highlighting the change in pace at which rig additions follow price action, Henderson said that E&Ps would likely continue to increase natural gas volumes – particularly dry gas from the Haynesville Shale and associated gas from the Permian Basin – even while publicly traded operators maintain a disciplined focus that emphasizes returning cash to shareholders. To be sure, he said that 2022 guidance from operators projects roughly 20% growth in capital spending. However, he added that production growth would likely be “pretty healthy” but “moderate” and “nowhere near where we were” during the previous recovery. Henderson also cited cost inflation on the order of “about 10-15%” as a key reason for the “moderate” growth. In addition to having their extra capex “eaten up by additional inflation,” producers “are actually having to drill wells,” he said. Henderson cited the declining inventories of drilled but uncompleted (DUC) wells. Recent Energy Information Administration (EIA) figures showed a 156-DUC well drawdown from January to February. In February, drilling permits year/year were up in the Permian and down in the Haynesville. Henderson pointed out that the EIA’s recent DUC well count does not consider an important factor: the age of the well. Citing 2017-2021 data from Enverus, he pointed out that a relatively small number of DUCs remained in inventory two years after spudding was completed. “When you’re looking at DUC numbers, you’ve got to remember that if a well is older than two years old, it’s very likely that it’s never going to be completed, ever,” the ConocoPhillips executive said.
What to expect in Louisiana following Biden’s move to boost LNG exports - As the Biden administration attempts to ramp up the United States’ liquefied natural gas exports to Europe amid Russia’s war with Ukraine, Louisiana oil and gas authorities on Friday repeated a familiar refrain: Don’t expect the state’s export totals to shoot through the roof anytime soon. Lengthy construction timelines, maxed-out capacities, regulatory pressures and opposition from environmental advocates could all prevent a short-term gain for Louisiana. President Joe Biden and European Commission President Ursula von der Leyen on Friday announced a joint effort to reduce Europe’s dependency on Russian fossil fuels. The moves are designed to weaken Russia’s economy as punishment for bombarding Ukraine. After being reluctant to sanction Russian oil and natural gas due to rising gas prices and limited oil supply, Biden has gradually targeted them recent weeks. Earlier this month, Biden announced the U.S. would no longer import oil from Russia. The White House said Friday the U.S. will “work with international partners” to boost LNG supply for the European market by at least 15 billion cubic meters in 2022 with an eye toward 50 billion cubic meters by 2030. The U.S. and Europe also intend to reduce the greenhouse gas intensity of any new LNG infrastructure by reducing methane leakage, enhancing Europe’s ability to safely handle the imports, and finding clean energy sources to both power LNG facilities and reduce global use of natural gas. U.S. Rep. Garret Graves, R-Baton Rouge, called Biden’s LNG move — along with the Department of Energy’s decision to approve increased capacity at a pair of LNG facilities, including Sabine Pass in Cameron Parish — “another step in the right direction.” However, he said the Department of Energy needs to do more. “Until they clear the backlogged export terminal permits and allow new LNG facility construction, our ability to replace dirtier Russian gas is constrained,” Graves said in a statement. “It’s good to see that the pressure put on the Biden Administration is working, but the only real, long-term solution moving forward is to permit new LNG terminal construction and utilize domestic energy production so we can provide our allies with reliable and secure energy.” The totals proposed by the White House and the European Commission aren’t nearly enough to make a dent in the global LNG stockpile, said David Dismukes, executive director of LSU’s Center for Energy Studies. He noted a standard tanker can transport 3 billion cubic meters of LNG in a day. Dismukes added that most European purchasers of natural gas would rather sign long-term contracts — a norm in the LNG industry — than make spot purchases here and there. “While this may sound great, there’s this backdrop of all these anchors around the neck of industry that have to be taken off as well to get more drill bits in the ground,” Dismukes said. Of the United States’ six LNG export terminals, Sabine Pass in Cameron Parish easily had the greatest export output in 2021 at more than 1.24 trillion cubic feet, or more than one-third of all exports, according to U.S. Energy Information Administration data. Cameron LNG, located in Hackberry, was fourth at more than 602 billion cubic feet. Mike Moncla, president of the Louisiana Oil and Gas Association, said Louisiana’s LNG terminals are at “100% maximum capacity” at the moment. Any efforts to steer more of the existing LNG to Europe would take away supply from Asian markets, Moncla said. About 70% of U.S. LNG goes to Europe, 20% to Asia and 10% to other nations. Moncla said the key is to get federal approval on permits for the new terminals waiting in the wings.
U.S. natgas slides with drop in crude prices, milder weather coming (Reuters) - U.S. natural gas futures slid on Monday from an eight-week high in the prior session on a drop in crude prices and a small decline in demand next week that should allow utilities to inject gas into storage. That price decline came despite forecasts for colder weather and higher heating demand this week than previously expected that will likely force utilities to pull gas from storage after injecting it during last week's milder weather. The U.S. price decline also came despite rising global demand for gas to replace Russian fuel as Russia's invasion of Ukraine keeps U.S. liquefied natural gas (LNG) exports near record highs and European gas prices about six times over U.S. futures. On its second to last day as the front-month, gas futures for April delivery on the New York Mercantile Exchange (NYMEX) fell 6.3 cents, or 1.1%, to settle at $5.508 per million British thermal units (mmBtu). On Friday, the contract closed at its highest since Jan. 27. Futures for May were down about 1% to around $5.55 per mmBtu. U.S. crude futures dropped over 6% on concerns about Chinese demand, while European gas prices gained about 10% to trade around $35 per mmBtu on forecasts for colder weather. Data provider Refinitiv said average gas output in the U.S. lower 48 states was up 93.3 bcfd so far in March from 92.5 bcfd in February as more oil and gas wells return to service after freezing over the winter. That compares with a monthly record of 96.2 bcfd in December. Refinitiv projected average U.S. gas demand, including exports, would drop from 106.0 bcfd this week to 98.4 bcfd next week as the weather turns seasonally milder. The forecast for this week was higher and the forecast for next week was lower than Refinitiv's outlook on Friday.
April Natural Gas Futures Finish Front-Month Run with Second Straight Loss -- Natural gas futures floundered on Tuesday as the domestic weather outlook shifted increasingly bearish, production ticked up and energy commodities broadly dipped lower amid pandemic flare-ups and the potential for a cease-fire in Ukraine. On its final day as the prompt month, the April Nymex gas futures contract lost 17.2 cents day/day and settled at $5.336/MMBtu before rolling off the board. May fell 20.8 cents to $5.330. Futures faltered for a second straight day – after rallying throughout the prior week. NGI’s Spot Gas National Avg. shed 55.0 cents to $4.970, led lower by drops across Appalachia and the East. U.S. production reached 95.5 Bcf on Tuesday, up more than a 1 Bcf from the prior week. This put output near 2022 highs of around 96 Bcf, Bloomberg data showed. At the same time, the latest weather data Tuesday extended warmer trends as both the American and European models advertised mostly mild temperatures for the northern United States this weekend and through next week, according to NatGasWeather. For the April 5-12 time frame, the latest data showed a pattern that could lead to widespread comfortable conditions for the Lower 48, according to the forecaster.
U.S. natgas rises 5% to near 9-week high on soaring global prices (Reuters) - U.S. natural gas futures rose about 5% to a near-nine week high on Wednesday as worries about Russia's plan to price energy exports in roubles caused global energy prices to spike, keeping demand for U.S. liquefied natural gas (LNG) exports near record highs. That U.S. gas price gain came despite forecasts for milder weather and lower demand than previously expected, which should allow utilities to inject gas into storage next week. Germany on Wednesday triggered an emergency plan to manage gas supplies in Europe's largest economy in an unprecedented move that could see the government ration power if there is a disruption or halt in gas supplies from Russia. That caused gas prices at the Title Transfer Facility (TTF) in the Netherlands, the European benchmark, to jump about 18% to around $41 per million British thermal units (mmBtu) earlier in the session. European prices, however, pared gains - trading around $39 per mmBtu Wednesday afternoon - after Russia said it will not immediately demand buyers pay for its gas exports in roubles, promising a gradual shift. On their first day as the front month, gas futures for May delivery rose 27.5 cents, or 5.2%, to settle at $5.605 per mmBtu, their highest close since Jan. 27. The United States, the world's top gas producer, has agreed to divert some of its LNG exports to Europe to help allies break their dependence on Russian gas after Russia invaded Ukraine on Feb. 24. Russia, the world's second-biggest gas producer, provided about 30-40% of Europe's gas, which totaled about 18.3 billion cubic feet per day (bcfd) in 2021.The United States is already producing LNG near full capacity. So it will not be able to export much more of the supercooled fuel regardless of how high global gas prices rise. The amount of gas flowing to U.S. LNG export plants rose to 12.81 bcfd so far in March, up from 12.43 bcfd in February and a monthly record of 12.44 bcfd in January. The United States can turn about 13.1 bcfd of gas into LNG. Traders said U.S. LNG exports would remain near record levels provided that global gas prices remain well above U.S. futures as utilities around the world scramble for cargoes to meet surging demand in Asia and replenish low inventories in Europe, especially with the threat of Russia possibly cutting European supplies.
US natural gas storage posts first injection of season, rises 26 Bcf to 1.4 Tcf | S&P Global Commodity Insights - US natural gas storage fields posted the first build of the season, which was one week earlier than normal, as the remaining Henry Hub summer strip continued to climb during trading on March 31. Storage fields injected 26 Bcf for the week ended March 25, according to data released by the US Energy Information Administration on March 31. The injection matched the 26 Bcf build expected by a survey of analysts from S&P Global Commodity Insights. However, it was a flip from the five-year average draw of 23 Bcf. Working gas inventories increased to 1.415 Tcf for the week ended March 25, EIA data showed. US storage volumes stood 347 Bcf, or 20%, less than the year-ago level of 1.762 Tcf and 244 Bcf, or 15%, less than the five-year average of 1.659 Tcf. The NYMEX Henry Hub May contract climbed 4 cents to $5.65/MMBtu following the EIA's storage report release March 31. The remaining summer strip, May through October, followed suit, tacked on 6 cents to $5.72/MMBtu. The 2022-23 winter strip, November through March, added 4 cents to $5.76/MMBtu. Despite the early flip to injections, a forecast by S&P Global expects a 15 Bcf draw for the week ending April 1. Weather forecast models are showing more unseasonably cold temperatures for western and eastern regions of the US over the course of the next two weeks as the calendar presses into the month of April. Total US demand dipped below 96 Bcf/d for the first time since March 25, settling at 95.8 Bcf/d for March 31, according to S&P Global data. The decline was driven by average US temperatures rising to 55 degrees Fahrenheit, the highest since March 19. Demand is forecast to rise slightly over the weekend to 98 Bcf/d. But for the week beginning April 4, total demand is forecast to continue to decline, nearing 90 Bcf/d by the end of the week. After dropping below 94 Bcf/d for the first time since March 18, total US production continued to rebound on March 31, reaching 94.9 Bcf/d. Total March production has averaged 93.8 Bcf/d, 1.5 Bcf/d above February. At the same time, production continued to grow in the prolific Permian. S&P Global sample data suggested that New Mexico Delaware has been a focal point of Permian growth, with the play's production sample 23% larger on average in March than it was one year ago, while the total Permian sample is 12% larger. This summer, it is likely that Double E Pipeline will be increasingly utilized, as price premiums in the Southeast continue to draw more of the 1.6 Bcf/d of Permian production growth forecast throughout summer 2022.
May Natural Gas Futures Rally a Second Day as Global Supply News Permeates Markets -Natural gas prices seesawed, but always in positive territory, and advanced on Thursday for a second consecutive session. The first storage injection of the year failed to freeze bulls, who have fixated on robust demand for U.S. exports to help address festering global supply challenges. The May Nymex gas futures contract gained 3.7 cents day/day and settled at $5.642/MMBtu. June rose 4.3 cents to $5.701.NGI’s Spot Gas National Avg. advanced 30.5 cents to $5.290.The U.S. Energy Information Administration (EIA) on Thursday reported an injection of 26 Bcf natural gas into storage for the week ended March 25. It marked the first inventory increase of the year, led by a 22 Bcf build in the South Central region.Wind generation was elevated and temperatures in the South were generally mild, participants on The Desk’s online energy platform Enelyst noted.The season’s initial injection arrived early by historical standards — the five-year average for the week was a withdrawal of 23 Bcf — but the print was essentially in line with market expectations for an increase in the 20s Bcf. The injection boosted inventories to 1,415 Bcf. However, stocks remained below the year-earlier level of 1,762 Bcf and the five-year average of 1,659 Bcf, according to EIA. The depleted stocks reflected steady demand through the U.S. winter, modest production to date this year and record calls for American shipments of liquefied natural gas (LNG).Those factors have fueled multiple rallies this year and lifted the May contract over the past two days by more than 30.0 cents – its initial run as the front month. News of Europe’s energy woes continued Thursday, following word from the German government that the country was preparing for the possibility of a sudden plunge in natural gas supplies from Russia. Germany, like much of the European Union, is working in haste to distance itself from Russian energy in protest of the war. It remains dependent, though, on Russian gas in the near term.At issue is a demand from Russian President Vladimir Putin that Germany and others pay for Kremlin-backed gas with rubles, rather than euros, a change that Germany may not be able to – or want to — accommodate. While Putin was short on specifics and Russian gas continued to flow to Europe this week, Germany sounded an early alarm. In doing so, it punctuated the severity of the war’s impacts on European gas supplies.Europe was already low on natural gas heading into the past winter, given waning domestic production and robust demand during the peaks of the past summer and previous winter. Europe was helping to drive record calls for U.S. LNG before the war. It now is creating expectations for a new years-long era of demand that could keep American exports running at capacity.Rystad Energy said the war-induced uncertainty is likely to continue to impact gas prices. “The gas market remains highly volatile and news driven,” This week, in particular, “the market remains anxious for clarity on rules governing ruble payments for Russian gas supplies.”
Late-Season Cold Drives Big Premiums for Weekly Natural Gas Cash Prices; War Supports Futures With winter overstaying its welcome in the Lower 48, weekly spot natural gas prices charged higher as gas demand increased during the two-day trading period from March 31-April 1, which covered gas deliveries through April 4. Price gains were stout across the country, driving NGI’s Weekly Spot Gas National Avg. up 57.5 cents to $5.285. Nymex natural gas futures also continued to strengthen amid the ongoing war in Ukraine following Russia’s invasion in late February. The continued call on U.S. supplies – along with weather-driven demand and lagging production growth – sent the May Nymex contract to $5.720 by Friday, up 18.2 cents from Monday’s close. With last week’s dramatic warm-up likely leading storage operators to flip their facilities to injection mode, the cash market was hot this week as chilly weather returned to the northern United States and buyers had to turn to the spot market for gas purchases. Overnight lows dipped below freezing across key demand regions, and NatGasWeather said Old Man Winter may still have some life in him. Although warmer weather is expected in the coming days, another cold snap was seen arriving by the April 9-10 weekend. Lows could plunge back into the 20s and 30s. At the Chicago Citygate, cash averaged 70.0 cents higher week/week at $5.415, and OGT picked up 60.5 cents to average $5.055. With balmy conditions taking hold in the southern United States, Henry Hub climbed a comparatively small 33.5 cents to $5.475, and Waha tacked on 46.0 cents to $4.745. In the Northeast, Transco Zone 6 NY picked up 86.0 cents on the week to average $5.275 amid back-to-back blasts of Arctic air that could bring snow squalls. Still, the air from early this week originated from the Arctic, while the air coming in from Friday to Saturday will originate from southern Canada and the Pacific Ocean and will not be as cold, nor as harsh as a result,” according to AccuWeather meteorologist Paul Pastelok.
Biden signals third year of offshore oil-leasing delay in gulf — The Biden administration doesn’t anticipate selling offshore drilling rights in the Gulf of Mexico through at least October 2023, effectively stretching a delay in that activity to a third year, according to economic projections included in its newly released budget proposal. The numbers show expected revenues from offshore oil auction bids and annual rental payments on existing leases are set to plummet in fiscal 2023 by about $370.4 million to just $25 million. That reflects the government’s typical haul from two auctions of oil and gas leases in the Gulf of Mexico. The anticipated offshore leasing pause comes despite the war in Ukraine and high costs for oil, gas and gasoline that have prompted administration officials to implore energy companies to pump more crude. The Gulf of Mexico generates about 15% of the nation’s crude production. Based on the revenue projections in the Biden budget, there could be at least a three-year gap in the sale of new offshore oil and gas leases, said Erik Milito, the head of the National Ocean Industries Association. “It’s pretty clear that there are no new lease sales on the horizon in their mind from a budgeting standpoint until fiscal year 2024” at least, Milito said. In practical terms, the delay could mean forfeiting hundreds of millions of dollars in federal revenue annually and eventually shrink oil production in the Gulf of Mexico. Though new leases sold today can take years to yield crude, the delay means companies will not be able to replenish existing holdings and search for more oil as existing wells are retired.
Shell starts deepwater production at PowerNap in the Gulf of Mexico -Shell Offshore Inc., a subsidiary of Shell plc, announced the start of production at PowerNap, a subsea development in the U.S. Gulf of Mexico with an estimated peak production of 20,000 barrels of oil equivalent per day (boed). PowerNap is a tie-back to the Shell-operated Olympus production hub in the prolific Mars Corridor. “Shell has been producing in the Mars Corridor for more than 25 years, and we continue to find ways to unlock even more value there,” said Zoe Yujnovich, Shell Upstream Director. “PowerNap strengthens a core Upstream position that is critical to achieving our Powering Progress strategy and ensuring we can supply the stable, secure energy resources the world needs today and in the future.” Shell is the leading deep-water operator in the U.S. Gulf of Mexico, where the production is among the lowest greenhouse gas (GHG) intensity in the world for producing oil. Shell’s global deepwater portfolio represents two core positions in its Upstream business with prolific basins in the US and Brazil, along with a frontier exploration portfolio in Mexico, Suriname, Argentina and West Africa. Shell designs and operates its deep-water projects to be competitive and economically resilient, and since 2015, has reduced unit development costs by 50% and unit operating costs by 40%.
Texas Upstream Natural Gas, Oil Workforce Growth Continued in February - Texas’ upstream oil and gas employment rose to 181,900, representing increases of 5,100 jobs month/month and 20,700 positions year/year, the Texas Independent Producers and Royalty Owners Association (TIPRO) reported last week. “Rising global energy demand and strains on oil and natural gas supply exacerbated by geopolitical conflicts necessitate…increased domestic production,” said President Ed Longanecker. February’s month/month upstream job growth is more than four times that of the 1,200 jobs Texas added from December to January. The Texas Oil and Gas Association (TXOGA) called the monthly gain “the highest spike in over a decade and the second highest jump in at least 32 years,” trailing only the 5,600-job gain in June 2011. “News of this historic job growth in Texas’ upstream sector is encouraging for all Americans, because Texas continues to lead the way in meeting our energy needs, fortifying our national security, and assuring continued environmental progress,” said TXOGA’s Todd Staples, president. TIPRO, which reviews upstream jobs data from the U.S. Bureau of Labor Statistics Current Employment Statistics report, said Texas’ oil and gas services workforce expanded by 18,800 jobs year/year. The state’s oil and gas extraction headcount grew by 1,900 during the period, the trade group added. TIPRO observed 9,985 active unique job postings across Texas’ natural gas and oil industry in February, a 20% increase from January. Based on its classification of Texas’ oil and gas industry across 14 specific sectors, TIPRO said support activities ranked highest in February with 2,712 unique job postings. Crude petroleum extraction, with 1,239 listings, and petroleum refineries, with 905, claimed the second and third spots, respectively. With 3,319 postings, Houston ranked highest among Texas cities for unique oil and gas job listings in February. Next in line were the Permian Basin hubs Midland (1,048) and neighboring Odessa (541). For February, TIPRO noted that Baker Hughes Co., with 524 listings, was the top company based on oil and gas job postings in Texas. National Oilwell Varco, Inc. (450) and Halliburton Co. (422) were second and third, respectively. With 413 listings, heavy tractor-trailer truck drivers took first place among Texas’ posted occupations in February, TIPRO said. The second most common occupational group was maintenance and repair workers (284), followed by software developers and software quality assurance analysts and testers (262).
‘You can’t just turn on the taps’: bottlenecks hit hopes of US oil output surge - Shortages of staff and supplies are weighing on the recovery of US oilfields, derailing hopes that Texas drillers could unleash gushers of crude to help bring soaring global prices under control. The Biden administration has pleaded with oil producers to raise output to ease the burden on American motorists, who are paying high prices at the pump following Russia’s invasion of Ukraine. But the service groups responsible for providing materials, drilling equipment and labour warn that extensive bottlenecks mean this cannot be done overnight. “You can’t just immediately turn on the taps,” said Ryan Hassler, senior analyst at consultancy Rystad Energy. “It will take some time to reactivate the equipment and staff the crews and bring on the additional sand capacity.” The US’s shale patch has over the past decade come to be seen as a sort of release valve for global oil supply, capable of rapidly ratcheting output up or down as needed in a relatively short period of time. In previous years this could be done in anywhere from three to six months, say analysts. But today that timeframe is likely to be double — meaning any significant growth is up to a year away. The reason is a chronic shortage of essential labor and equipment: from drilling rigs and frac sand — used to prop open shale rocks so that oil and gas can flow through — to crews and drivers. The countdown will not start until investors, who have put the clamps on spending, clear operators to return to growth mode. The bottlenecks will dampen the hopes of the Biden administration that a drilling push by US producers will temper prices. The price of Brent crude, the international oil marker, sat at around $120 a barrel on Friday, up 25 percent since Russia’s troops invaded Ukraine last month. National average petrol prices hovered just shy of record levels struck in recent weeks, at $4.24. The lack of frac sand is a key problem. In the Covid-induced downturn of 2020, when oil prices crashed below zero, many sand suppliers went bankrupt and mines were taken offline. Their recovery has been slow and supply is lagging behind demand.
Calls for increased domestic oil production met with hurdles (KBTX) - The Texas Tribune published an article with the headline “In Texas, calls to boost U.S. oil production after Russian invasion runs into hard realities.” The story details the challenges and the hurdles that Texas oil and gas companies face when looking at ramping up production. Mitchell Ferman, the author of the piece, joined First News at Four to explain why increasing domestic production is easier said than done.The beginning of the pandemic saw a mass number of people losing their jobs. Now as the future of Russian oil and gas on the global market remains uncertain in the long term, Texas energy companies are still struggling with lingering issues from the pandemic and even before.While increased domestic production seems like a good idea, putting it into practice is harder than anticipated. Ferman found that challenges facing Texas oil and gas companies include labor shortages, supply chain issues, hesitant financial bankers, and a strained relationship with the Biden administration.Labor shortages are not unusual in a number of industries across the United States. To help understand why there was a labor shortage in this particular industry, Ferman talked to former employees of the oil and gas industry. He recounted meeting Juan Cano a mechanic at an auto shop in Midland who previously worked in the oil and gas industry.“He originally entered the industry to make more money because the price of oil was rising,” but Ferman says “[Cano] has no interest in leaving his job as a mechanic to go work in the oil field because he said that everyone needs to get their car worked on and that is a steady paycheck.”Cano, like many other potential employees, sees the price of oil as too volatile.Another challenge mentioned to Ferman by people in west Texas is a “frosty” relationship with the Biden administration. Many people noted that on day one of his presidency Biden suspended further construction on the Keystone Pipeline. The Texans interviewed said this was one of the many signals from the Biden administration that they are not interested in working with the fossil fuel industry in Texas. This in turn led to Wall Street backers becoming hesitant to lend their support.“If Wall Street and other investors don’t see a long-term profitable future then they may be a little hesitant to put their money behind it,” explained Ferman.
I Can't Go For That (No Can Do), Part 2 – E&P Capex And Production Guidance, And Why They Aren't Doing More --There’s a lot of confusion out there — both in the media and the general public — about how producers in the U.S. oil and gas industry plan their operations for the months ahead and the degree to which they could ratchet up their production to help alleviate the current global supply shortfall and help bring down high prices. It’s not as simple or immediate as some might imagine. There are many reasons why E&Ps are either reluctant or unable to quickly increase their crude oil and natural gas production. Capital budgets are up in 2022 by an average of 23% over 2021. That increase seems substantial, but about two-thirds (15%) results from oilfield service inflation. And there are other headwinds as well. In today’s RBN blog, we drill down into the numbers with a look at producers’ capex and production guidance for 2022, the sharp decline in drilled-but-uncompleted wells, the impact of inflation and other factors that weigh on E&Ps today. The oil-patch is notorious for its boom-and-bust cycles. For decades, exploration and production (E&P) companies followed an investment strategy that prioritized aggressive growth, including stepping up drilling-and-completion activity when crude oil prices climbed. With oil prices exceeding $100/barrel in 2014, the 43 oil and gas producers we closely monitor invested a whopping $130 billion in drilling and completion to ramp up output. And investors went along for the ride: The S&P E&P index hit a record 12,400 at the midpoint of that year. But the bloom went off the rose when oil prices plunged through the second half of 2014 and most of 2015. Investors left in droves, stock prices cascaded and E&Ps, laden with debt, teetered financially. When COVID hit in the first few months of 2020, demand destruction of epic proportions caused prices and production to plummet, leaving the oil and gas industry virtually abandoned by investors and the S&P E&P index at 1,200 — only one-tenth its high point six years earlier. On top of that, the industry faced significant risk, not only from the pandemic, but also from the looming potential of an OPEC+ production increase and questions about the long-term prospects for producers as public perception shifted sharply against all things hydrocarbons, institutional investors divested from the sector for ideological reasons, and political opposition became a major hurdle (See Part 1 of this series for more.). […] In late 2021 and earlier this year, the 43 major public E&Ps that we track guided to 2022 capital investment of $48.6 billion (tri-colored bar to far right in Figure 1 and left axis), a 23% increase over 2021 — a headline number that appeared to indicate a return to a more aggressive strategy. But as we said at the outset about two-thirds (15%) results from oilfield service inflation and the increased spending is only forecast to generate 8% production growth, far lower than the magnitude of the spending increase though four times the 2% increase in production from 2020 to 2021. Still, closer analysis reveals that both these headline numbers are misleading — 2022 guidance shows that most publicly traded producers are continuing only maintenance-level investment. Let’s take a look at why these numbers don’t reflect a strategic change.
US oil, gas rig count drops one to 780 on week; Eagle Ford growth strongest: Enverus - The US oil and gas rig count shed one rig in the week ended March 23, leaving 780, energy analytics and software company Enverus said March 24, with the Eagle Ford Shale now at its highest level since March 2020. The week ended March 23 was also the first time the total domestic rig count recorded a loss since the end of 2021. So far in 2022, the rig count is up 73 rigs. Still, oil rigs gained three rigs to 609, while rigs chasing gas dropped by four to 171. Most basins moved little in either direction, while three basins did not change at all. The Eagle Ford, located in South Texas moved up the most, as the former gained two rigs to 68. The SCOOP-STACK in Oklahoma and the Permian Basin of West Texas/New Mexico dropped the most at two each. That left the Permian with 328 and the SCOOP-STACK with 42. Otherwise, the Williston Basin mostly in North Dakota/Montana, and the Marcellus Shale, mostly in Pennsylvania and West Virginia, moved by one each but in different directions. The Williston was up one rig to 35, while the Marcellus lost a rig for a total of 40. Three basins — the Haynesville Shale of East Texas/Northwest Louisiana, the DJ Basin mostly in Colorado and the Utica Shale largely in Ohio — stood still rig-wise. That left the Haynesville at 71, the DJ at 18 and the Utica at 14.
Permian E&Ps Not Fooling Around as US Drilling Activity Continues to Rise - Amid continued expansion in the Permian Basin, the U.S. rig count climbed three units overall to reach 673 for the week ended Friday (April 1), according to the latest numbers from Baker Hughes Co. (BKR). Two oil-directed rigs and one natural gas-directed rig were added in the United States for the period, putting the combined domestic tally nearly 250 units ahead of its year-earlier total of 430, according to the BKR numbers, which are partly based on data from Enverus. Land drilling by exploration and production (E&P) companies increased by four units for the period, offsetting a one-rig decline in inland waters drilling. The Gulf of Mexico count held steady at 14. Three horizontal rigs were added overall, with directional and vertical drilling totals unchanged week/week. The Canadian rig count fell 16 units to 124, versus 69 rigs in the year-earlier period. Changes there included declines of 12 oil-directed rigs and four natural gas-directed units. Broken down by major play, the Permian continued to lead the way in U.S. onshore activity, with E&Ps adding four rigs to raise the total to 323, up from 224 in the year-ago period. Elsewhere among plays, the Cana Woodford and Marcellus Shale each added one rig, while the Haynesville Shale and Williston Basin each posted one-rig declines for the period. In the state-by-state count, Texas led with an increase of five rigs for the period, while Utah and West Virginia each added one rig week/week. Louisiana posted a net decline of three rigs for the period, while North Dakota dropped one rig from its total, the BKR data show. The Biden administration, in a historic move, agreed Thursday to release 1 million b/d of oil from U.S. reserves over six months in a measure that paralleled a decision by OPEC to temper boosting crude output. The White House said the release from the Strategic Petroleum Reserve came after consulting “with allies and partners.” The “largest release of oil reserves in history would put 1 million b/d of additional supply on the market every day for the next six months,” officials said. The release will provide a “historic amount of supply to serve as a bridge until the end of the year when domestic production ramps up,” they added. Meanwhile, U.S. crude producers nudged output higher during the week-earlier period, the Energy Information Administration (EIA) revealed Wednesday. Production for the week ended March 25 ticked up to 11.7 million b/d after holding at 11.6 million b/d through all of February and most of March, EIA’s latest Weekly Petroleum Status Report showed. American producers have been under pressure to increase crude supplies amid mounting global demand and waning Russian oil exports during the Kremlin’s war in Ukraine.
Oil producers push Democrats to preserve key drilling deduction -Oil producers are ramping up their lobbying efforts to ensure that Democrats don’t repeal a lucrative tax deduction in the $3.5 billion reconciliation bill. The U.S. tax code allows companies to recover the cost of drilling for oil and gas and preparing oil wells for production, a provision that helps boost U.S. oil production but has drawn criticism from environmental groups and Democratic lawmakers.Senate Finance Committee Chairman Ron Wyden (D-Ore.), who wields significant influence over tax changes in the reconciliation package, is considering removing the intangible drilling costs deduction in the final bill, according to a committee spokesperson.Wyden previously proposed repealing the deduction in his bill to overhaul energy tax incentives to boost clean energy development. President Biden also proposed eliminating the tax provision in his budget plan and the American Jobs Plan. That’s alarmed oil and gas lobbyists, who are rounding up support from moderate Democrats from fracking-heavy states such as Texas, Pennsylvania and Ohio to ensure the deduction survives. “Democrats, particularly those with oil and gas operations in their districts, understand the importance of this industry, that it provides high-paying jobs and the benefits that come with domestic production,” said Anne Bradbury, president of the American Exploration and Production Council (AXPC), which represents independent oil and gas producers.The AXPC said that removing the deduction would reduce the number of wells drilled by 25 percent. That would raise gas prices and increase U.S. dependence on oil from Russia and the Middle East, the lobbying group stressed in meetings with lawmakers.Only a handful of defections among House Democrats — or one defection in the 50-50 Senate — could doom the party-line reconciliation package, which will not receive Republican support. Lobbyists are eyeing Sen. Joe Manchin (D-W.Va.), an industry ally, and moderate House Democrats who have expressed reservations about the reconciliation package. Oil and gas groups and business associations sent a flurry of letters to lawmakers this month urging them to keep the deduction intact.
Natural Resources chair says three oil execs refusing to testify --Three oil company CEOs have refused a request by the House Natural Resources Committee to testify on disparities between oil and gas prices, Chairman Raúl Grijalva (D-Ariz.) said Tuesday morning. Grijalva said in a statement that executives from EOG Resources, Devon Energy Corporation and Occidental Petroleum had declined to appear at the hearing, set for next Tuesday. The hearing will be canceled as a result of the executives’ refusal, Grijalva said. “As rising gas prices started hurting Americans, fossil fuel industry trade groups and their allies in Congress wasted no time placing blame on the Biden administration and pushing for a drilling free-for-all. But when you look at oil companies’ record profits, these claims don’t add up,” Grijalva asserted. “I invited these companies to come before the Committee and make their case, but apparently they don’t think it’s worth defending. Their silence tells us all we need to know—that cries for more drilling and looser regulations are nothing more than another age-old attempt to line their own pockets.” President Biden and Democrats in Congress have sought to blame oil companies for continued consumer pain at the pump, even after a more recent dip in oil prices. Industry experts, however, have said the lag between price drops is common and not the result of any deliberate action. House Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.) has called a similar hearing set for April 6. The broader list of companies asked to send a representative to that hearing — BP, Chevron, ExxonMobil, Pioneer Natural Resources and Royal Dutch Shell, along with Devon Energy — told The Hill earlier this month that they were reviewing the request.
Bankruptcy Fears Turn Into Merger Mania In U.S. Oil Patch -- How quickly fortunes can change in the oil and gas business. Last year, U.S. oil and gas companies were still filing for bankruptcy at record levels right in the midst of an oil price recovery. Smaller producers were the main victims; eight North American oil and gas producers with an aggregate debt of $1.8B filed for bankruptcy protection in Q1 2021. But it’s now official: the tidal wave triggered by the price correction that began in late 2014 is finally over.According to the final report by energy and restructuring law firm Haynes and Boone, since the beginning of 2015, a total of 274 oil and gas producers as well as 330 oilfield services and midstream companies have filed for bankruptcy involving over $321 billion in secured and unsecured debt.The U.S. Oil Patch entered rough seas facing stiff headwinds after OPEC declared its intention to take back market share from the prolific U.S. shale sector over Thanksgiving weekend in 2014. Oil prices began dropping precipitously in 2015, and it was only a matter of time before a wave of bankruptcies descended on a sector famed for epic boom and bust cycles. Aggregate debt in the oil and gas sector peaked in 2016, with the latest bust cycle of 2019/2020 failing to attain those heights thanks to a wave of Covid-19 vaccines that helped the world emerge from lockdowns and travel restrictions faster than anticipated.There was “only” $2.1 billion in total debt reported in 2021, marking the lowest amount since 2015--evidence that the tide has finally turned. The previous low was $8.5 billion reported in 2017. Only 20 oil and gas producers filed in 2021, about half of the more than 39 cases filed each year.Even more encouraging, dozens of companies have been successfully emerging from Chapter 11 bankruptcy protection, with M&A their preferred modus operandi. Here we look at several oil and gas companies that have successfully emerged from bankruptcy in recent times.
U.S. weighs largest ever draw from emergency oil reserve -The Biden administration is considering releasing up to 180 million barrels of oil over several months from the Strategic Petroleum Reserve (SPR), four U.S. sources said on March 30, as the White House tries to lower fuel prices.The latest amount of U.S. oil release being considered, which is equivalent to about two days of global demand, would mark the third time the United States has tapped its strategic reserves in the past six months, and would be the largest release in the near 50-year history of the SPR. The International Energy Agency (IEA) member countries are also set to meet on April 1 at 1200 GMT to decide on a collective oil release, a spokesperson for New Zealand energy minister said in an email, aimed at calming global crude prices that scaled 14-year highs this month amid the Russia-Ukraine conflict. Oil prices have surged since Russia invaded Ukraine in late February and theUnited States and allies responded with hefty sanctions on Russia, the second-largest exporter of crude worldwide. Brent crude, the world benchmark, soared to about $139 earlier this month, highest since 2008, and was near $110 a barrel in Asian trading on Thursday. Russia is one of the world's top producers of oil, contributing about 10% to the global market. But sanctions and buyer reluctance to buy Russian oil could remove about 3 million barrels per day (bpd) of Russian oil from the market starting in April, the International Energy Agency (IEA) has said. Russia exports 4 to 5 million bpd.The news comes just before the Organization of the Petroleum Exporting Countries and its allies, an oil producer group known as OPEC+ that includes Saudi Arabia and Russia, meets to discuss reducing supply curbs. The United States, Britain and others have previously urged OPEC+ to quickly boost output.However, OPEC+ is not expected to veer from its plan to keep boosting output gradually when it meets Thursday.The U.S. SPR currently holds 568.3 million barrels, its lowest since May 2002, according to the U.S. Energy Department.The United States is considered a net petroleum exporter by the IEA. But that status could change to net importer this year and then return to exporter again as output has been slow to recover from the COVID-19 pandemic.
The Biden Surge -- Why Now? March 30, 2022 - What prompted the Biden administration to release of one million bopd for an extended period of time and rebates for drivers to cushion the cost of gasoline at the pump? So far, this is just a rumor, but it "feels real." If the Biden administration does announce the Biden Surge, the first question is what prompted that now? Obviously, the short answer is the mid-term elections.Earlier, the administrations said the rise in the price of gasoline a) would be short-lived; b) would not cause all that much pain; c) if it did cause too much pain, folks could buy a Tesla.My hunch is that the administration can now see that the rising price of gasoline a) will not be short-lived; b) that it will cause a lot of pain for those who plan to vote in November; and, c) the Tesla option is not an option at all. So, what changed? Everyone will argue if there will be buyers for Russian oil. Of course, there will be. But sanctions on Russia are going to get worse, and for the most part have not yet begun to be felt. The fact is that Russian oil production is very much dependent on western technology and western resources. We won't see that impact for several months. But if you thought a shortage of toilet paper was a problem for Americans during the early days of the pandemic, the shortages that Russia begins to experience will make those toilet paper shortages pale in comparison. No matter how much one sugar coats it, Russian production is going to fall significantly. And Russia is not like Kashagan or Libya when it comes to temporary losses in production.
OPEC says the U.S. must trust its oil production strategy — Saudi Arabia and the United Arab Emirates said the U.S. must trust OPEC+’s strategy, as Washington and other major importers call on the group to hike oil production following Russia’s invasion of Ukraine. Crude prices surged to almost $140 a barrel soon after Moscow’s attack last month, though they’ve eased to around $110 this week amid a rise in coronavirus cases and tighter lockdowns in China. They’re still up by 40% this year. OPEC+, led by Saudi Arabia and Russia, meets on Thursday to decide on output levels for May. Members have far signaled they see no need to divert from their policy of small increases each month. “We’re experts in our field and we’ve been doing it for a very long time,” UAE Energy Minister Suhail al Mazrouei said at a conference in Dubai on Tuesday, sitting alongside his Saudi counterpart. “We’re trying to balance the market and it’s not an easy job. We’re not the only producers in the world and when we say this is the right way to do it, we know it from experience. So, trust us.” The Organization of Petroleum Exporting Countries and its partners say prices have spiked because of geopolitical tension and that there’s little evidence yet of the market being significantly under-supplied. Russian oil flows have probably fallen by 1.5 million barrels a day since the invasion, according to the International Energy Forum, a multilateral organization based in Riyadh. Still, it will take around two weeks until there’s firm evidence and OPEC+ will want to assess that data, IEF Secretary-General Joe McMonigle told Bloomberg Television. OPEC+ slashed supply by 10 million barrels a day at the start of the pandemic, which crushed oil demand, and is still unwinding those cuts. The U.S., Japan and Europe have tried to persuade the 23-nation group to accelerate its increases of around 400,000 barrels a day each month.
U.S. to release 1 million barrels of oil per day from reserves to help cut gas prices - The U.S. will release 1 million barrels of oil per day from its strategic reserves to help cut gas prices and fight inflation across the country, the White House announced Thursday. President Joe Biden plans to tap the nation's Strategic Petroleum Reserve for the next six months as domestic producers ramp up production, according to a fact sheet released by the Biden administration. "The scale of this release is unprecedented: the world has never had a release of oil reserves at this 1 million per day rate for this length of time," the White House said in a release. "This record release will provide a historic amount of supply to serve as bridge until the end of the year when domestic production ramps up." A senior administration official told reporters Thursday morning that, in combination with similar actions in other countries, the average daily amount released from global strategic reserves should exceed 1 million barrels. Oil prices dropped Thursday after reports surfaced Wednesday evening suggesting such a move was imminent. International benchmark Brent crude futures for May fell 4% to trade at $108.89 per barrel. U.S. crude futures slid 4.7% to $102.84. Earlier in the session the contract traded as low as $100.16. The announcement comes as the White House looks for ways to combat a spike in energy prices caused by Russia's invasion of Ukraine. While oil prices are well off highs seen earlier this year, the geopolitical chaos has continued to elevate petroleum costs and stir fears about oil and natural gas availability.Biden later remarked on the administration's efforts to cool oil prices and blamed Russian President Vladimir Putin for the most recent spike in energy costs."Many people are no longer buying Russian oil around the world. I banned Russian-imported oil here in America, Republicans and Democrats in Congress called for it and support it. It was the right thing to do," Biden said."But as I said at the time, it's going to come with a cost," the president added. "As Russian oil comes off the global market, supply of oil drops, and prices are rising. Now Putin's price hike is hitting Americans at the pump." The recent rise in crude prices has led to a jump in domestic gasoline prices, with the national average price of a gallon of gas at $4.23, up from $2.87 a year ago. That jump has contributed to a broader rise in the prices consumers pay for all goods and services, and a 7.9% increase in year-over-year inflation.
Biden to tap oil reserves, press oil sector to hike production - President Joe Biden will order the release of 1 million barrels of oil per day from the nation’s strategic reserves and urge Congress to press the oil industry to increase drilling on federal lands in bid to tame high gasoline prices. The move is the latest attempt by the White House and Democrats to temper the volatile oil markets that drove gasoline prices to all-time highs in the weeks since Russia invaded Ukraine. Those skyrocketing prices and the inflation they have fanned sparked criticism from voters ahead of the mid-term elections in November. While U.S. oil production has climbed since Biden entered the White House, the rate of growth has not been as quick as energy experts typically project when crude prices top $100 a barrel. “We think these companies need to be stepping up,” a senior administration official said in a background call with reporters. “There is nothing standing in their way.” The news: The U.S. will once again tap the Strategic Petroleum Reserve as it did twice before, with limited effectiveness. But this new effort will be a sustained released for six months, putting as much as 180 million barrels onto the market. The addition of 1 million barrels per day represents and increase in U.S. supply of 8.5 percent. The White House also said Biden will use the Defense Production Act to develop domestic supply chains for key minerals used in batteries for the power grid and electric vehicles as it seeks to jump-start clean energy manufacturing, in turn reducing reliance on foreign supply chains and volatile energy markets. Context: The White House said it coordinated with allies in its decision to open the reserves, noting gasoline prices have eclipsed $4.20 per gallon after averaging $3.30 to start the year. Those rising costs are a result of supply chain bottlenecks in the oil and gas sector and the U.S. move to ditch Russian imports in response to its invasion of Ukraine. Biden has had to balance his campaign promises to combat climate change — which is largely caused by burning fossil fuels — with energy market fluctuations hitting Americans’ pockets. As such, the White House’s war against gas prices and the political problems that they bring has put Biden in the position of hectoring oil companies to increase production at least in the short term. The White House is asking Congress to impose fees on oil companies for any federal acres they have leased but are not using to produce oil — citing the fact that companies are sitting on 9,000 unused permits for drilling on federal land. The White House stuck to Biden’s message that rising fuel costs underscored the need to quickly shift away from fossil fuels. But many of the resources used in clean energy are also under foreign control. China and Russia are major producers of key clean energy production minerals. The White House said Biden would use the Defense Production Act to foster a domestic supply of critical minerals such as manganese, lithium, cobalt, graphite and nickel, which are used to make large capacity batteries for the power grid and electric vehicles. The White House said the effort would not circumvent environmental reviews and permitting.
House GOP readies bills to unleash energy on federal land - House Republicans plan to introduce a package of bills today calling on the Biden administration to restart lease sales on public lands for fossil fuel production.The six bills, all from members of the Natural Resources Committee, come after months of attacks from Republicans who blame the Biden administration for rising energy prices amid the Russian attack on Ukraine.The latest attacks came yesterday in a hearing on the Biden administration's fiscal 2023 budget request, where Republicans charged that the president's energy policies were harming the country.“The president’s budget surrenders America’s energy independence and attacks American energy companies so that we are more reliant on foreign nations for our energy needs,” said Rep. Jason Smith (R-Mo.), ranking member on the House Budget Committee, at a hearing yesterday. A Republican one-pager for the new package of bills reinforced that message. “The U.S. has vast energy resources critically needed at home and abroad. Congress must take immediate action to remove barriers to domestic oil and gas development to support ourselves and our allies,” it said.
Gas flaring connected to early U.S. deaths — report --The oil industry’s practice of burning off excess gas may have contributed to as many as 53 premature deaths in the United States in 2019, according to a study from the Clean Air Task Force and Rice University.Companies often flare gas when they lack the infrastructure or the capacity to capture it. The practice releases both carbon dioxide and black carbon, a component of soot. According to EPA, black carbon is associated with a variety of health problems, from respiratory and cardiovascular disease to cancer and birth defects.The study, published recently in Atmosphere, an international journal of science related to Earth's atmosphere, was the first to use NOAA satellite data on total gas flared in the United States to model the human toll of the practice in terms of premature deaths.“The health impacts we’re seeing here are significant,” Lesley Fleischman, a senior analyst at the Clean Air Task Force and one of the study’s authors, told E&E News. “But they’re also unnecessary.”
A new report reveals how the Dakota Access Pipeline is breaking the law - The federal government and the Dakota Access Pipeline’s parent company, Energy Transfer, misled the public, used substandard science, utilized poor technology, and broke the law by not cooperating with impacted Indigenous Nations. That’s according to a new report that also criticizes the Army Corp of Engineers and the Environmental Protection Agency for not completing a realistic analysis of the environmental damage the pipeline could cause.The report, written by NDN Collective, an Indigenous nonprofit, provides the first comprehensive timeline of the controversial pipeline’s legal and environmental violations. Working with a team of engineers, the report’s authors included new information about oil quality, spills, leakage, and faulty infrastructure that NDN Collective says could be pivotal in the ongoing battle to stop the pipeline. The report comes as tribes await the Army Corps of Engineers to complete a new, court-mandated Environmental Impact Statement (EIS) on a section of pipeline under Lake Oahe, a reservoir on the Missouri River to which tribes have treaty rights. The EIS is expected to be released in September, after which a public comment period will open. NDN Collective, tribes, and other environmental groups are also calling on the Biden administration to shut down the pipeline. Meanwhile, the pipeline remains operational, carrying 750,000 barrels of oil a day. “This report shows how the Army Corps of Engineers violated their own processes, and continues to violate our human rights for the benefit of a destructive, violent, and extractive energy company,” said Nick Tilsen, Oglala Lakota and CEO of NDN Collective. “We cannot sit on the sidelines with this information. It’s time for accountability and it’s time to shut down the Dakota Access Pipeline, once and for all.”
South Gate refinery to pay $112K for violating oil spill prevention rules --A South Gate refinery and storage facility will pay $112,673 to resolve alleged violations of the Clean Water Act related to oil spill prevention, the U.S. Environmental Protection Agency announced Wednesday.World Oil is located near the Rio Hondo Channel and the Los Angeles River, which flow to the Long Beach Harbor and the Pacific Ocean, as well as the Golden Shore Marine Reserve, an environmentally sensitive site that is of the “highest concern for protection,” according to the EPA.The agency says the company violated the Clean Water Act’s Oil Pollution Prevention Regulations. They say inspections at the facility last year found that World Oil failed to implement tank and facility inspections, inspect and conduct integrity tests on tanks in accordance with industry standards, promptly correct visible discharges which result in a loss of oil from containers, and develop an adequate response plan for spills.“This enforcement action reflects EPA’s continued commitment to ensuring facilities like World Oil refinery comply with federal clean water laws and prevent unnecessary oil spills,” EPA Pacific Southwest Regional Administrator Martha Guzman said. “Actions like this are key to protecting our waterways and surrounding communities.”As a result of the agreement, World Oil developed and began implementation of an updated tank testing and inspection schedule, implemented a revised oil spill prevention training program, and updated its facility response plan, according to the EPA.
Biden's top economic advisor says restarting the Keystone XL pipeline now won't lower oil prices - President Joe Biden's top economic advisor suggested Friday the White House is not rethinking its decision to cancel the controversial Keystone XL oil pipeline in response to elevated crude and gasoline prices. National Economic Council Director Brian Deese told CNBC the Biden administration is instead concentrating on policies and strategies that can deliver lower fuel prices as soon as possible. He pointed to Biden's decision Thursday to begin releasing 1 million barrels of oil per day from the Strategic Petroleum Reserve over the next six months. "Any action on Keystone wouldn't actually increase supply, and it would transmit oil years in the future," Deese said in a "Squawk on the Street" interview. "What we're focused on right now is what we can do right now, and ... there are wells that are shut in and that can be brought back online over the course of the next couple months. What we need right now is to address the immediate supply disruption," he added. The Russia-Ukraine war delivered a supply shock to global oil markets, which had already been tight as demand recovered from Covid-pandemic related declines. As crude prices hit record highs recently so has prices at the gasoline pumps. Russia, a major energy exporter, has been hit with a wave of sanctions after it invaded neighboring Ukraine. The U.S. banned Russian oil imports, in an attempt to punish Moscow, and the U.K. also is phasing them out. Oil prices have retreated from their early March peaks, when they traded at their highest levels since 2008, However, they are still are up considerably for the year, adding to inflationary pressures in the economy. West Texas Intermediate crude, the U.S. oil benchmark, traded around $100 per barrel Friday, up 35% so far in 2022. Brent crude, the international benchmark, hovered around $104 per barrel.
As Biden looks to increase natural gas, Alaska is poised to step forward - Alaska’s plans for a $38 billion liquefied natural gas project have gained new momentum with President Biden’s pledge last week to increase European exports to replace Russian fossil fuels. “Global developments have created a sense of urgency for new projects like Alaska LNG,” “Europe has depended on Russia for 40% of its natural gas, and Russia’s invasion of Ukraine created a sudden global energy crisis, as our allies seek energy from the U.S. and other non-adversarial nations,” America is the world’s largest exporter of liquefied natural gas (LNG), but existing U.S. production is inadequate to meet new demands by Europe. Alaska’s LNG could help to change that. Alaska’s LNG project would provide cleaner-burning natural gas from the North Slope for domestic use and a rapidly expanding global market, supporters say. Alaskans also would benefit from in-state use. The state-owned Alaska Gasline Development Corp. projects that North Slope fields can deliver an average of 3.5 billion cubic feet of gas daily, with much of the supply for an international market.” Lower development costs for the LNG project may lower the cost of fuel from previous estimates. "Alaska LNG is expected to deliver LNG for approximately $6.70 per MMBtu (one million British thermal units), below the expected price from Gulf Coast projects targeting the same Asian markets," Fitzpatrick said in an email to the News-Miner. For gas customers in the Interior and Southcentral, Fitzpatrick estimated Alaska LNG could be delivered for less than $5 per per MMBtu. Driving the price down are projected lower construction costs for the project and a new finance structure, among other factors, he said. Supporters say that Alaska LNG can play a role in replacing coal and oil in Asia and Europe as the United States and other nations transition to more use of renewable energy and clean technologies. It also can have a role in moving Europe away from Russian fossil fuels. “Bringing Alaska LNG online will enable the U.S. to effectively serve allies in both Asia and Europe.” The Sierra Club and Northern Alaska Environmental Center in Fairbanks questioned the U.S. Energy Department’s approval of an environmental impact statement that did not fully examine carbon dioxide emissions. A supplemental life cycle review was ordered to estimate the project’s impact starting from North Slope extraction and production to consumption by export customers. That work is expected to be done by December. An initial study by the Alaska Gasline Development Corp. concluded that an Alaska LNG project would have significantly fewer emissions for gas exports than Gulf Coast LNG projects, which have longer shipping routes. Natural gas on the North Slope would be drawn from existing wells in the Prudhoe Bay and Point Thompson fields, which is less intensive and produces fewer emissions than drilling shale gas wells in the Lower 48. “Alaska’s LNG supply is the equivalent of about 30% of Japan’s LNG imports or 45% of South Korea’s imports,” Fitzpatrick said. “Meeting growing Asian LNG demand with Alaska’s natural gas will enable U.S. Gulf Coast LNG suppliers to focus on serving our European allies.”
Diesel spill cleanup efforts continue near Sitka -The Alaska Department of Environmental Conservation reported that the ongoing diesel fuel cleanup efforts in Neva Strait have collected 15 cubic yards over the last four days, and no major impacts to wildlife have been reported.The tugboat Western Mariner ran aground, spilling diesel fuel into Neva Strait near Sitka on March 21 The tug was towing the Chichagof Provider container ship south through Neva Strait when it lost steering capabilities, causing the Chichagof Provider to collide with the Western Mariner, which was pushed ashore and began leaking from the port forward fuel tank.According to the fourth situation report from the unified command of the U.S. Coast Guard, the Alaska Department of Environmental Conservation, and Western Towboat Company who owns the tug boat, no fuel has exited the Western Mariner since Thursday, and all remaining fuel tanks were emptied on Saturday. An additional 500 feet of containment boom were added on Friday, and two layers of containment boom remain around the Western Mariner.“There is no longer enough fuel within the secondary containment to support skimming operations,” the report said. “Any remnant sheen within the boom configuration continues to be addressed with absorbent materials. A total of 1,750 gallons of oily water was skimmed from within the containment boom.”Hanson Maritime and Global Diving and Salvage Inc. continue to work on repairs on the Western Mariner, to prepare the vessel for salvage operations. In the situation report, Global Diving and Salvage estimates that the boat carried 43,500 gallons of fuel at the time it hit the shore — 32,080 gallons of which were clean fuel and 11,625 gallons of which were mixed oil and water that were recovered from within the tug boat.Additionally, the report states that “15 cubic yards of saturated absorbents have been generated.”The report said that a flight over the spill area on March 26 saw a silver sheen that remained isolated in Neva Strait. No visible sheen was observed outside of Neva Strait on March 26.The report states that the Alaska Department of Fish and Game opened the Sitka Sound herring sac roe fishery from 11 a.m. to 12:15 p.m. on Saturday. The Alaska Department of Health and Social Services and the Department of Environmental Conservation issued multiple seafood safety recommendations for herring egg and other subsistence harvests in the area. Fish and Game’s Division of Commercial Fisheries issued a herring fishery update for Sitka Sound yesterday.
China Sells U.S. LNG to Europe at a Hefty Profit -China resold several U.S. liquefied natural gas shipments to Europe, a rare move by the world’s top buyer that highlights how sky-high prices are rerouting trade flows. Unipec, the trading arm of China’s state-owned Sinopec, sold at least three LNG cargoes for delivery through June to ports in Europe via a tender that closed late last week, according to traders with knowledge of the matter. The shipments will load from Venture Global LNG Inc.’s Calcasieu Pass export facility in Louisiana, where Sinopec has a deal to purchase LNG, they said, requesting anonymity to discuss private details. European natural gas rates surged to a record high last week on fears that the war in Ukraine will curb flows from top supplier Russia. The rally prompted Unipec’s traders to turn away from the lower-priced Chinese market, even as Beijing demand its importers secure more fuel amid concerns over wartime disruptions. European gas usually trades at a discount to LNG in North Asia, home to the top importers. But Europe’s plan to ditch Russian gas means that it will need to significantly boost LNG imports, with the continent’s prices primed to stay higher than Asian rates as it seeks to attract every last drop of fuel from the spot market.
- Sakhalin Energy, which operates the Sakhalin II project in Russia’s Far East, plans to release a tender this week offering an LNG cargo for loading around April 25
- South Korea’s LNG imports plunged 33% in February from a year earlier to 3.5 million tons as prices soared
- Eni declares force majeure on Nigeria shipments of Brass crude after a blast on a pipeline in Bayelsa state, while Nigeria LNG is also affected
Replacing Russian LNG from Sakhalin-2 would cost Japan $15bn - --Price tag for imports to jump 35% if Mitsui, Mitsubishi pull out of energy project -- Japan could pay one-third more per year for imported liquefied natural gas if it exits the Sakhalin-2 LNG project in Russia, a potentially fateful decision for the energy-poor Asian nation.
Oil sands to play biggest role in Canada’s export boost pledge— Canada’s oil sands would play the biggest role in the government’s pledge to boost crude and natural gas exports by 300,000 barrels a day this year to compensate for Russian supplies, according to the lead trade organization for the industry. Oil sands companies are able to increase crude output by about 130,000 barrels a day, conventional drillers can add another 60,000 and a platform off Newfoundland could raise production by 10,000 barrels, Ben Brunnen, vice-president of oil sands, fiscal and economic policy at the Canadian Association of Petroleum Producers, said in an interview. “Will companies bring that production on-stream? It depends,” he said. “Industry is encouraged and would like to support the government but to do so they need some signals” that regulatory burdens will be relaxed and pipelines built more easily. “If we want to see production increases from Canada, we need support from the federal government.” Canada, the world’s fourth-largest oil producer, faces constraints in rapidly raising output. It currently produces more than 5 million barrels a day of liquid hydrocarbons, but the country’s pipeline network for exports is limited. The increases in conventional oil output, as well as the equivalent of 100,000 barrels a day of gas, would come from advancing drilling programs that were planned for next year, Brunnen. The crude production increases were already largely expected before the Ukraine crises. The Canada Energy Regulator in December forecast a little more than 200,000 barrels a day of increased crude production this year, exactly the extra export volume the government promised. “The incremental production is based on industry’s assessment of what can be reasonably brought online this year,” “It is mostly because of bringing forward production increases that were already anticipated for 2023 and 2024.” The seasonality of the business in Canada means the increases from conventional drillers wouldn’t happen before the second half of the year.
Exxon drills dry hole in setback to Brazilian oil exploration— Exxon Mobil Corp. drilled a so-called dry hole off the Brazilian coast, a rare setback in the oil titan’s effort to expand its South American crude reserves. The Cutthroat exploratory well failed to find significant quantities of oil or natural gas, according to Enauta Participacoes SA, an investor in the project. Exxon didn’t immediately respond to a request for comment. Exxon, which leads the project and owns a 50% stake, began drilling Cutthroat in late February in an ultra-deepwater region known as the Sergipe-Alagoas Basin off the northeast coast of Brazil. Enauta owns a 30% interest and and Murphy Oil Corp. holds the remaining 20%. The Brazilian company dropped as much as 13%, while Murphy and Exxon declined as much as 12% and 3.7%, respectively. Murphy didn’t respond to a request for comment. Brazil is one of Exxon’s top exploration targets after years of heavy investment in the country’s offshore prospects. Farther afield, the company has made massive discoveries in Guyanese waters and has plans to drill off the coast of Colombia later this year.
Exxon Again Finds No Oil In Brazil. Cutthroat Not On Target. - Oil and gas supermajor ExxonMobil has completed drilling operations on the Cutthroat prospect but failed to find any oil offshore Brazil one more time. The well, which was drilled using the Seadrill-owned ultra-deepwater drillship West Saturn, is in the Sergipe-Alagoas Basin. ExxonMobil is the operator and holds 50 percent interest there. Its partners are Enauta with 30 percent and Murphy Oil with 20 percent. The Cutthroat prospect well in Block SEAL-M-428 was spud in late February. The start of drilling followed a five-year license granted to ExxonMobil last week by the Brazilian Institute of the Environment for a drilling campaign with up to 11 exploratory wells in blocks SEAL-M-351, SEAL-M-428, SEAL-M-430, SEALM-501, SEAL-M-503, SEAL-M-573. Enauta said that, although the occurrence of hydrocarbons in this well was not verified, the consortium will conduct complementary studies, incorporating sampled data into its regional geologic interpretation, and update its vision as to the exploratory potential of the blocks located in the Sergipe-Alagoas Basin ultradeep waters. The other partner in the well – Murphy Oil – said last week that the Cutthroat well could potentially hold as much as 1 billion barrels of oil and gas. For now, no oil has been found. Although Exxon has invested a massive amount of money in Brazilian exploration it does not have a good record of drilling there. Exxon's entered Brazil offshore in the early 2000s. Namely, there was a time nearly 20 years ago when Exxon was the only international oil major that held licenses in the pre-salt area. Exxon searched for promising spots and spent over $300 million on drilling. Exxon found nothing as a dry hole was drilled in 2009 followed by two more in 2011. Cutthroat was not what Exxon expected or the start of a prolific drilling campaign in Brazil, a country which was for the company the opposite of, for example, Guyana where it made over 20 discoveries and discovered some 10 billion barrels of oil.
War turns Argentina's shale boom dream into gas-buying nightmare— Argentina, home to some of the world’s vastest gas reserves, is bracing for the unthinkable: rationing one of its chief natural resources. Despite having shale-gas deposits to rival those in Appalachia, which made the U.S. a major exporter, Argentina's domestic gas production sector has suffered from years of underinvestment that has left it unable to meet domestic demand, never mind the needs of the export market. As a result, Argentina is competing for shipments of liquefied natural gas, or LNG, along with industrial powerhouses like the U.K. and Japan. Its timing could scarcely be worse, as prices have skyrocketed. The fallout from Vladimir Putin's invasion of Ukraine has plunged energy and commodity markets into chaos, worsening the shortages, supply-chain bottlenecks and wild price swings that have roiled the world economy since the pandemic emerged. Furthermore, Argentina is only just starting to ask traders for cargoes for May and June, when winter in the southern hemisphere sets in. With the spike in prices over the last few weeks, the country — which has perennial shortages of hard currency used to pay for imports — may not be able to afford all the LNG it needs. “Argentina was planning to import 60 to 65 LNG shiploads, but these prices force it to adjust that original strategy,” Marcos Bulgheroni, chief executive officer of Pan American Energy, one of the country’s biggest gas drillers, said at an oil conference last week in Buenos Aires. To many observers, including people in the government and the gas-processing industry who asked not to be named because the matter is politically sensitive, the specter of fewer-than-needed LNG cargoes puts the country on the cusp of having to limit energy supplies to industrial consumers. "It's going to be a tough winter ahead for fuel supplies with the way access to hard currency is in Argentina,"
Declining North Sea output means UK could soon import 80% of its gas and oil, warns OEUK report - The UK will have to import almost all its gas and most of its oil from overseas suppliers unless billions of pounds are invested in new North Sea exploration and production facilities, a report from Offshore Energies UK has warned. Without new investment, by 2030 around 80% of UK gas supplies and more than 70% of oil will have to be sourced abroad, according the 2022 Business Outlook report from OEUK, whose 400 members embrace established industries like oil, gas and offshore wind, plus emerging technologies like hydrogen production and CO2 capture. It finds that, although there are enough oil and gas reserves to support the UK for at least 15 years, there has been too little investment in the platforms, pipelines and other infrastructure needed to access it. Offshore wind, whose expansion has been a major success for the industry, is still too small to be able to replace the declines in oil and gas output from the North Sea – although this is expected to change over decades. “Production of oil and gas will fall by up to 15% a year unless there is rapid investment in new infrastructure,” the report will say. “This decline is much faster than the predicted reduction in UK energy demand so, if there is no such investment then, by 2030, we will be reliant on other countries for around 80% of our gas and 70% of our oil.”
EA investigates oil spill in Richmond river --Dog walkers have been urged to keep their dogs on leads following an oil spill near Richmond Park. Thames Water say the spill, which is believed to have entered the water in Pyl brook, Morden, before flowing into Beverley Brook, was created by a “third party.” Thames Water engineers have been creating makeshift dams and are using pads to try and wipe the oil off the surface of the water. Pyl Brook is a small stream with two sources, a 5.3km main brook in Sutton Common that joins Beverley Brook in New Malden and a 3.9km East Pyl Brook that eventually joins the main Pyl east in Raynes Park. Wimbledon and Putney Commons Ranger’s office said the Environment Agency has been informed of the spillage and they, and Thames Water, are trying to identify the cause of the spillage. “Thames Water have been on site to inspect the Brook but as of yet, we have no sense of what the damage may be but we will keep you advised,” said the ranger’s office. “In the meantime, please keep out of the water and advise the Ranger’s Office if you see any wildlife in distress.” A Thames Water spokeswoman added: “Our teams are currently tracing and establishing the source of the pollution, which we believe was caused by a third party, and we have deployed booms and pads to help prevent the oil further spreading in the watercourse.
USA-Europe LNG Deal Reaction - Several U.S. oil and gas groups have responded favorably to a recent U.S.-EU LNG deal, which was announced in a White House statement on March 25. Under the deal, the U.S. will strive to ensure additional LNG volumes for the EU market of at least 15 billion cubic meters in 2022 with expected increases going forward, the White House statement outlined. According to the statement, the European Commission will also work with EU member states toward ensuring stable demand for additional U.S. LNG, until at least 2030, of approximately 50 billion cubic meters per year. “We welcome the president’s focus on expanding U.S. LNG exports to our European allies during this crisis, and we applaud the administration’s continued leadership in ensuring a unified international response to maximize pressure on Russia through additional sanctions,” American Petroleum Institute (API) President and CEO Mike Sommers said in an API statement. “Over the past few months, American producers have significantly expanded LNG shipments to our allies, establishing Europe as the top U.S. LNG export destination. With effective policies on both sides of the Atlantic, we could do even more to support Europe’s long-term energy security and reduce their reliance on Russian energy,” Sommers added in the statement. “We stand ready to work with the administration to follow this announcement with meaningful policy actions to support global energy security, including further addressing the backlog of LNG permits, reforming the permitting process, and advancing more natural gas pipeline infrastructure,” Sommers went on to say. Energy Workforce & Technology Council CEO Leslie Beyer said, “we welcome the call for more exports of LNG to Europe and for increased domestic production”. “Our industry is ready to help fill the gap as the world continues to shun Russian oil and gas. U.S. production is on the rise and can continue to ramp up, but the administration must pullback excessive regulatory hurdles, and support and encourage long-term investment in domestic oil and gas production and infrastructure,” Beyer added. According to a BofA Global Research report, the recently announced U.S.-EU LNG deal has few specifics and fails to address fundamental challenges to increasing supplies. “Specifically export capacity constraints in the U.S., import capacity constraints in Europe and limited new practical LNG capacity additions globally until 2025,” the BofA Global Research report stated. “We see no quick fix to meet REPowerEU's targets to pivot towards incremental LNG - other than bidding cargoes from other markets (as is already happening today), with inevitable price competition or to displace existing gas demand with other readily available sources of energy - which would almost certainly mean fossil fuels that directly contradicts EU’s Taxonomy and Green deal,” the Bofa Global Research report added.
U.S.-EU gas deal won’t be enough to replace Russian supply, says former U.S. energy secretary -- The gas deal between the U.S. and EU is important, but won't be able to make up the shortfall from Russia, former U.S. energy secretary Dan Brouillette said on Monday.The U.S. said it will work with international partners to provide at least 15 billion cubic meters more liquefied natural gas (LNG) to Europe this year. In 2021, the European Union imported 155 billion cubic meters of natural gas from Russia, according to the International Energy Agency."Frankly, I'm not quite sure that everyone can make up that shortfall. That's an enormous amount of gas," he said.However, the gas deal is "very important," and private industry and governments will have to fill the gap if Europe is to reduce its reliance on Russian gas, said Brouillette. He added that Germany should also build regas facilities to convert LNG from liquid into gas to support the shift away from Russian energy in the short run. In the longer term, Europe has to tap various energy sources as it tries to reach its carbon emissions goals, said Brouillette."When you look at the history of energy, it's always been in transition, but it's always been a transition of less to more," he said. That's in contrast to substituting one form of energy generation, such as burning fossil fuels, for another form of energy, like wind or solar power."To maintain the economic growth that all of these countries want, that the United States wants, it will take more energy, not less," he said. "That's the transition that we should focus on."
Prepare to switch to rubles for natural gas exports by March 31, Vladimir Putin tells Gazprom and Russia's central bank -Russian President Vladimir Putin has ordered the country's biggest gas company and central bank to prepare to start taking rubles for natural gas payments from "unfriendly" countries, saying they should outline their plans by March 31.Putin blindsided traders in the natural gas market last week by announcing Russia would make countries deemed hostile pay for the product in rubles. Russia accounts for around 45% of EU gas imports, with pipeline exports to Europe normally paid for in euros."At face value this appears to be an attempt to prop up the ruble by compelling gas buyers to buy the previously free-falling currency in order to pay," Rystad Energy senior analyst Vinicius Romano said last week. "What is clear however, is that this has added another element of uncertainty to the already chaotic European gas market by complicating gas purchases that many countries have been reluctant to cut." The President appeared keen to push ahead with the plan on Monday. He ordered Gazprom, the central bank and the government to prepare reports outlining how it will make the switch by Thursday, March 31, according to state news agency Tass. It was not immediately clear whether the switch itself would take place Thursday.Analysts have said Putin is trying to shore up the Russian currency and to make life more complicated for Western countries that have sanctioned Moscow over its war against Ukraine.The head of the European Commission, Ursula von der Leyen, accused Russia of blackmail last week and said the move would be a clear breach of contract. The boss of Italian energy company Eni, Claudio Descalzi, said at a panel in Dubai on Monday that the company would not be paying for gas in rubles.
Putin should think about the consequences of asking for energy payments in rubles, Germany says -Germany has some advice for Russian President Vladimir Putin: think about the consequences of asking for energy payments in rubles. Russia's Putin said last week that "unfriendly" nations would be asked to pay for their natural gas in rubles — causing a spike in European gas prices. By asking for payments in the Russian currency — rather than in dollars or euros, as is contracted — Putin is seeking to prop up the value of rubles, which sank in the wake of Russia's invasion of Ukraine. The U.S. dollar is up almost 13% against the Russian ruble since Feb. 24, when Russia began its invasion of Ukraine, after spiking around 85% in early March. However, Germany's Finance Minister Christian Lindner said he would not be strong-armed by Russian demands. "We are completely against any kind of blackmailing. These treaties are based on euro and [U.S.] dollar and so we suggest that private sector companies to pay [Russia] in euro or dollar," Lindner told CNBC's Annette Weisbach Monday. "If Putin is not willing to accept this, it's open to him to think about consequences," he added. Germany's Chancellor Olaf Scholz said last week that paying for oil in rubles would be a breach of contract, and Italian officials also said they would not be paying in rubles as doing so would help Russia avoid Western sanctions over its invasion of Ukraine. Nonetheless, tensions over future payments could disrupt the ongoing flow of natural gas from Russia to Europe. The region receives about 40% of its gas imports from Russia and this figure is even higher for some European nations, notably Hungary which got 95% of its gas imports in 2020 from Russia. The region's dependency on Russian energy has prevented the bloc from imposing an oil embargo on Moscow as part of its sanctions regime — in contrast the White House, which has banned Russian oil and gas imports. The European Union has said it will overhaul its approach to Russian energy and reduce its long-standing dependency. A plan put forward earlier this month suggested to cut Russian gas imports by two-thirds before the end of the year. "We will find solutions. We are working on less dependency on Russian imports and if [Putin] decides to cut his supplies, we would have to be even faster to be independent from Russia," Lindner said. The region is now scrambling to source its energy from elsewhere.
Ukraine Updates and More Discussion of the Russia “Gas for Roubles” Countersanction - by Yves Smith - Given that the war in Ukraine is the focus of a massive propaganda operation in the West, it’s telling that it’s fading a bit from attention, either by design or a need to regroup. While the business press still gives the war top billing due to the fact that energy supplies and pricing around the globe are very much in play, the level of discussion on Twitter in the last couple of days has dropped dramatically. Similarly, I don’t check into Daily Mail religiously, but not all that long ago, Russia’s campaign crowded out celebrity coverage. By contrast, the last two days, the first conflict-related story, this on a TV host in Russia calling for regime change in the US, was well below the fold. Not that there aren’t new developments, mind you. Russia and Ukraine concluded two days of talks in Istanbul. Progress was made and the two sides will meet again. As I understand it (and readers are welcome to correct me) Ukraine presented a proposal. It appears Russia didn’t, due to some combination of having already set forth its red lines and not wanting to negotiate against itself. The two sides appear to have closed the gap on some issues. Russia said it will provide more in the way of a response in the next round. So press reports that Russia is saying there was no breakthrough and a lot of work remains to be done should come as no surprise. Specifically, Ukraine says it will not join NATO. How Zelensky can commit to that when it’s been put in the Ukraine constitution is beyond me. Russia agreed that Ukraine can join the EU. The latter sounds like a non-concession. Most of the EU has cooled considerably on further expansion to the East now that Poland has turned out to be a monster headache. On top of that, having Ukraine join would have all of those supposedly temporary refugees from Ukraine have the right to live and work in their new home countries. Bloomberg reports tonight that 4 million have fled. Another Russian non-concession was offering that Russia would considerably reduce the size of its forces near Kiev. Interestingly the Western press and officials did not depict this as an admission of Russian weakness or reduction of aims, but instead first tried to portray Russia as dishonest and doing no such thing. The reality is more along the lines that reducing troop levels in Ukrainewould be a big deal, but in the Kiev environs serves mainly to give civilians some sense of relief.For instance, an early evening take from the Financial Times:Russia has decided to “dramatically” scale back its military activities in the Kyiv area, a top Moscow defence ministry official said following a fresh round of peace talks with Ukrainian counterparts in Istanbul.Alexander Fomin, Russia’s deputy defence minister, said the move was intended to “increase mutual trust” as he announced it in Turkey after face-to-face talks concluded on Tuesday.But western officials cautioned against taking Moscow’s pledge at face value. “Nothing we have seen so far suggests that Putin and his colleagues are particularly serious about the talks. They are likely just playing for time,” said one.Recall the US wouldn’t deign to negotiate with Russia before the war, refusing repeated entreaties from Russia to provide written responses to its proposals, and then accused Russia of not being willing to negotiate! So the US is hardly one to judge what good faith amounts to in this arena.
Russia Supply Interruption Risk Has Increased Gas flows will continue from Russia to the EU27, but the risk of supply interruptions has increased. That’s what Fitch Solutions Country Risk & Industry Research analysts stated in a new report sent to Rigzone on Thursday, which highlighted that Russian President Vladimir Putin demanded last week that payments for natural gas from ‘unfriendly’ countries be paid in Roubles. “The most recent escalation by Russia has increased the risk of some partial cut off due to disputes over payment for gas, but a total shut down of gas flows remains extremely unlikely, with elevated gas prices for the foreseeable future the most likely consequence,” the analysts stated in the report. “Looking to the short-term, we are not expecting European buyers to pay in Roubles, so what occurs next depends on whether Russia shuts off gas supplies in response. We do not expect Russia to shut off gas supplies, as it would be a major escalation from its previous position that this would be a response to an oil embargo,” the analysts added in the report. “If Russia were to shut off gas supplies, it would mark a serious step-change from Russia’s deference to long-term contracts as the model for gas supply agreements. Putin and other government officials have continuously stressed their preferred form of gas trade as long-term contracts with Gazprom and that existing contracts would be respected, to maintain its reputation as a reliable gas supplier,” the analysts continued. In the report, the analysts noted that they expect Russia to continue to accept Euros as payment for gas supplies covered by long-term contracts, but perhaps demand Roubles for purchases of any additional volumes. “This poses an easy route for de-escalation whilst saving face by Putin and is more aligned with the deference shown for long-term contracts historically by Russia,” the analysts stated. In a separate market note sent to Rigzone on Wednesday, Senior Rystad Energy analyst Vinicius Romano noted that the Kremlin confirmed Wednesday that Russia does not expect gas payments in Roubles immediately but added that it is expected that an initial proposal regarding payments from Russia to European importers will come by Thursday. “Germany and the wider G7 have signaled that gas supply agreements cannot be unilaterally modified,” Romano said in the note. “Should renegotiations start at the insistence of Russia, it is likely that importers will be offered value elsewhere in their deals with Russia in return for the change to Rouble payments,” he added. “The challenge to put this in practice is that each buyer may have different conditions, while some may not even be willing to alter contractual terms. This suggests that negotiations might take some time, which means there is still no abrupt deadline for the payment to switch to Roubles,” Roman went on to say.
Putin-Scholz Phone Call on “Gas for Roubles” Mechanism Conforms to Our Assessment; Disputes Over Russia Force Reduction Around Kiev; West Pressure on China, India Continues by Yves Smith - The Western press is widely describing Putin clarifying to German Chancellor Scholz how Germany could pay for gas in roubles as a climbdown. Since the Russian mechanism, of foreign gas buyers making their usual payments in the contracted currency, to an unsanctioned Russian bank, is the one we described as most likely and most consistent with Putin’s original announcement, it’s hard to see it as a retreat. And as we’ll describe, Russia accomplished several things with its move, starting with rattling Scholz enough to force him to speak to Putin.By contrast, as we’ll explain soon, in the “No polite but largely empty gesture goes unpunished” category, a Russian free non-concession about making a substantial cut in military activity around Kiev is being spun as a Russian falsehood, despite the Guardian reporting that multiple sources, both US and UK, did note some reduction in Russian action. As we’ll explain, it’s not clear if Russia was being too clever by half, or whether this is yet another example of the US and Ukraine winning the PR war irrespective of facts on the ground, or both. Back to the gas for roubles gambit. Let’s again see what Putin said” (Putin Al Arabia video) And as we stated in our post on this story when it broke:As we’ll explain, this counter-sanction does not amount to forcing (much) more demand for roubles (unless Russia sets an above-market rouble price for these gas buys). Russia has already imposed currency controls, including requiring major exporters to sell 80% of their foreign currency receipts and buy roubles. And contrary to popular mis-perceptions, the rouble is not collapsing…. So EU buyer pays Euros, to say Gazprom via one of Gazprom’s banks. Either that bank is one of the non-sanctioned Russian banks, or Gazprom transfers the funds from a Eurobank to a non-sanctioned Russian bank to convert enough of the Euros to roubles to satisfy Russian requirements. Note that there are not enough roubles circulating outside Russia for it to be very likely that a garden-variety European bank could acquire enough roubles to pay Gazprom.2 Now has anything changed from that picture? Contrast that with the report in DW, Germany says Putin agreed to keep payments for gas in euros:Olaf Scholz’s office said Russian President Vladimir Putin told the German Chancellor that European companies could continue paying in euros or dollars.In a phone call with Scholz, Putin said the money would be paid into Gazprom Bank and then transferred in rubles to Russia, a German statement said. The bank is not currently subject to sanctions.“Scholz did not agree to this procedure in the conversation, but asked for written information to better understand the procedure,” the statement added.Putin said last week that Moscow would only accept rubles as payment for gas deliveries to “unfriendly” countries, including European Union nations. Unfortunately, I had no luck in finding the readout on the German government website or the Chancellor’s subsite. This is the Russian readout: Vladimir Putin had a telephone conversation with Federal Chancellor of the Federal Republic of Germany Olaf Scholz. Vladimir Putin informed the Federal Chancellor about the substance of the decision to switch to Russian rubles in gas transactions, for Germany in particular. The change in transaction currency is being introduced due to the fact that, in violation of international law, the foreign exchange reserves of the Bank of Russia were frozen by the EU member states. It was noted that the decision should not lead to a deterioration of contractual obligations for the European companies importing Russian gas. It was agreed that the experts of the two countries would discuss this issue further. Vladimir Putin and Olaf Scholz exchanged views on the latest round of talks between Russian and Ukrainian representatives in Istanbul held the day before. Ensuring the safe evacuation of civilians from combat zones, primarily from Mariupol, was also considered.
Germany and Austria plan for gas rationing over payment stand-off with Russia - Germany and Austria have taken the first formal steps towards gas rationing as officials rushed to avoid a potential halt in deliveries from Russia because of a dispute over payments.If supplies fall short and attempts to lower consumption do not work, the German government would cut off parts of industry from its gas network and give preferential treatment to households.Russia has insisted that all “unfriendly” buyers of its natural gas pay in roublesrather than in currencies such as euros or dollars.But in a call with Germany’s chancellor Olaf Scholz on Wednesday evening, Vladimir Putin hinted at a potential compromise, saying that payments by European gas customers could continue to be made in euros — as long as they were made to Gazprombank, which has not been sanctioned by the EU, according to a readout of the call given by German officials.Germany and the G7 nations which have sanctioned Russia since it invaded Ukraine have refused to use roubles to buy gas, saying they will continue to pay in currencies specified in supply contracts.As talks to resolve the stand-off continued between Russia and EU officials, future contracts tied to TTF, the European gas price benchmark, rose 9 per cent to €118 per megawatt hour on fears of supply disruptions.Even though the UK only sources 4 per cent of its gas from Russia, supply shocks in Europe would have global ramifications. Prices in the UK gained 6 per cent to trade at 280p per therm.EU officials and their Russian counterparts have discussed using a euro-rouble swap mechanism, which would be likely to avoid forcing corporate customers to buy roubles from the central bank. Instead, payments would be routed through Gazprombank.“Neither side is ready to pull the plug, so there’s going to be a framework that’s acceptable to both sides,” said one person briefed on the matter.The German government said Scholz had not agreed to any proposals in the call with Putin but had requested more information on how it would work.Earlier in the day Robert Habeck, Germany’s economy minister, activated the “early-warning phase” of a gas emergency law put in place to deal with acute energy shortages.During that phase — the first of three stages in its emergency response — a team from the Berlin economics ministry, the regulator and the private sector will monitor imports and storage.Austria said it would implement the first part of its own three-stage emergency national contingency plan, citing a “concrete and reliable” expectation that gas supplies will drop dramatically in the coming weeks.Russia supplies 80 per cent of Austria’s domestic gas needs and the country is one of Europe’s biggest hubs for Russian gas imports.“We will do everything we can to secure the gas supply for Austria’s households and businesses,” Karl Nehammer, the country’s chancellor, said at a press conference in Vienna.Volker Wieland, a professor of economics at Frankfurt University and a member of the German council of economic advisers, said a halt in Russian energy supplies would create a “substantial” risk of a recession and bring Europe’s largest economy “close to double-digit rates of inflation”. Without energy imports from Russia, Germany’s inflation rate could rise to between 7.5 and 9 per cent, said the economists, who advise the German government.Habeck, who is also vice-chancellor, said the early-warning decision was taken in anticipation of the Russian law, which specifies that payments for gas be made in roubles. “We won’t accept a [unilateral] breach of contracts,” Habeck reiterated.
Putin talks tough on gas-for-rubles deadline. But flows continue to Europe - Russian President Vladimir Putin has sought to ratchet up the pressure on foreign buyers of natural gas, telling so-called unfriendly countries to pay in rubles from Friday — or have their supplies cut off. Perhaps surprisingly, however, the leaders of Germany and Italy appear unfazed by Putin's rhetoric. That's because they believe European customers won't be bound by the Kremlin's new mechanism and can instead continue paying for Russian gas in euros or dollars. Putin on Thursday issued a decree insisting foreign buyers of Russian gas must pay in rubles from Friday by opening a Russian bank account or have their contracts for deliveries canceled. Russia's president has repeatedly demanded that so-called unfriendly countries make the currency switch for Russian gas, targeting those behind the heavy economic sanctions designed to isolate Russia over its unprovoked onslaught in Ukraine. "Today I signed a decree that establishes the rules for trading Russian natural gas with the so-called 'unfriendly' states. We offer counter parties from such countries a clear and transparent scheme, in order to purchase Russian natural gas, they must open ruble accounts in Russian banks," Putin said in a televised address, according to a translation. "If these payments are not made, we will consider it a failure of the buyer to fulfill its obligations with all the ensuing consequences." VIDEO03:31 Russia's Putin says gas payments will have to be made in rubles Putin said existing contracts would be stopped if these terms were not met from Friday. Germany, Europe's biggest consumer of Russian gas, said Putin's decree amounted to "political blackmail," while the U.S. said the measure shows financial "desperation" on the part of the Kremlin. Instead of stoking panic in Berlin and Rome, German Chancellor Olaf Scholz and Italian Prime Minister Mario Draghi believe the decree does not apply to them. Russia's state-controlled gas giant Gazprom said Friday it was continuing to supply natural gas to Europe via Ukraine in line with requests from customers, according to Reuters. CNBC has contacted a spokesperson at Gazprom for further details.
Putin Edict on “Gas for Roubles” Consistent With Original Description (and Our Take); Western Officials Nevertheless Claim a Walkback by Yves Smith --Recall that in his original statement, Putin set forth boundary conditions, most importantly that existing pricing mechanisms would stay in place.I have to keep recycling this clip because the Russian leader made clear from the get-go that the contract terms and economics would stay in place. What was being added was the requirement that the payment be tendered in roubles:Folks, this is not hard unless you want to make it hard. It’s a mystery why the press went into MEGO (My Eyes Glaze Over) mode. If your going to leave the contract otherwise in place, all that Putin was appending was a requirement to exchange the euro/dollar/sterling amount due into roubles at the time of payment. Theoretically, Putin could have insisted on an above-market exchange rate, but that would conflict with his stipulation that price terms remain unchanged, since that would de facto change euro/dollar/sterling pricing for a new higher price stated in roubles. We listed a whole set of advantages in our post yesterday that Russia would nevertheless get from a minor-seeming, technical change. The main one was to require gas buyers to tender payments to Russian banks, since only Russian banks could get their hands on enough roubles to execute the foreign exchange transaction (more on an important fine point soon). There aren’t a lot of roubles trading outside Russia. That would prevent the West from sanctioning more Russian banks, something they seemed intent on doing at last week’s series of European summits. It would also mean the foreign currency payments would be in the hands of Russian institutions, and hence not vulnerable to being “frozen,” aka expropriated.The fact that the West seems willing to go along, and is now incorrectly depicting the Russian detailed explanation as a climbdown, makes it awfully hard for them to object when Russia, as it floated on Wednesday, extends this procedure to other commodities, like oil, lumber, wheat, metals, and fertilizer. That means in having payments from “unfriendly countries” on contracts denominated in their currencies be made to an account at an unsanctioned Russian bank with the customer also effectively ordering the currency exchange to roubles.One additional advantage of this procedure: it greases the skids for Russia requiring future contracts to be set in rouble terms, not in “unfriendly country currency” terms. Expect Russia to be smart enough not to do this right away. And expect them to do this first on a long-term contract for a must-have commodity. Gas again seems like the prime candidate but another suitable contract expiration might occur at a propitious time.At the end of this post, we’ve embedded two documents: one, the translation of Interfax’s transcription of Putin’s orders that describe the mechanics. It’s still a bit rough, but still understandable. The second is an official translation of Putin’s speech yesterday, nominally about how Russia is going to build and operate aircraft under sanctions. The opening section is devoted to operation of and rationale for the “roubles for gas” stipulation. Reader Safety First found the Russian text on Interfax. His recap is a lot smoother than the Yandex translation:
- – LNG is excluded, we are only talking about “pipeline gas”.
- – Gazprom is directly prohibited from shipping gas unless it is paid in rubles.
- – To facilitate this, a) Gazprom Bank will open an account in rubles, and a parallel account in foreign currency (termed “K-accounts”, likely for some legal reasons); b) there is a section detailing how these accounts are opened by Gazprom without the “foreign owner” actually participating in the process, basically to get around anti-laundering laws.
- – Customer will deposit euros (let’s say) with Gazprom Bank into “their” euro K-account, and instruct Gazprom to procure X rubles to make the payment for the gas. Gazprom Bank will sell the euros on the Moscow exchange, and credit the rubles thus received to the customer’s ruble K-account, and then pay Gazprom for the gas delivery from that ruble account.
- – The Russian Central Bank is directed to establish all the necessary procedures viz. these K-accounts, then the Customs Service is supposed to confirm the procedures for release of the gas, both “within 10 days” of the decree’s effective date (March 31). The Central Bank also gets leeway to develop “alternative FX trading mechanisms”.
- – There is a government official (from the Foreign Investments Commission) empowered to grant waivers to foreign customers, seemingly at will.
One change from the process we envisaged at the get-go is that Russia has stipulated one unsanctioned bank, Gazprom Bank, to be the payment recipient, as opposed to having any unsanctioned Russian bank be eligible.A second fine point is that this process has the gas buyer “owning” the rouble account as well as the initial euro/dollar/sterling account into which the contactually due payment is initially made. So the gas buyer does in the end make payment in roubles because roubles go from his rouble account to Gazprom
No One Will Win in the Russia-Ukraine Conflict -- Gail Tverberg - Most people have a preconceived notion that there will be a clear winner and loser from any war. In their view, the world economy will go on, much as before, after the war is “won” by one side or the other. In my view, we are basically dealing with a no-win situation. No matter what the outcome, the world economy will be worse off after the fighting stops.The problem the world economy is up against is the depletion of many kinds of resources simultaneously. This depletion is made worse by rising population, meaning that the resources available need to provide an adequate living for an increasing number of world inhabitants. Because of depletion, the world economy is reaching a point where it can no longer grow in the way it has in the past. Inflation, food shortages and rolling blackouts are likely to become increasing problems in many parts of the world. Eventually, the population is likely to fall. We are living in a world that is beginning to behave like the players scrambling for seats in a game of musical chairs. In each round of a musical chairs game, one chair is removed from the circle. The players in the game must walk around the outside of the circle. When the music stops, all the players scramble for the remaining chairs. Someone gets left out. In this post, I will try to explain some of the issues.
- [1] In a world with inadequate resources relative to population, conflicts are likely to become increasingly common. The Russia-Ukraine conflict is one example of a resource-associated conflict. The allies underlying the NATO organization have chosen to escalate the Russia-Ukraine conflict, in part, because the existence of the conflict helps to hide resource shortages and accompanying high prices that are already taking place. No matter how the war is stopped, the underlying resource shortage issue will continue to exist. Therefore, the conflict cannot end well.
- [2] There is a huge resource depletion issue that authorities in many countries have known about for a very long time. The issue is so frightening that authorities have chosen not to explain it to the general population. Mainstream media (MSM) practically never mentions that there is a major issue with resource depletion. Instead, MSM tells a narrative about “transitioning to a lower carbon economy,” without mentioning that this transition is out of necessity: The world is up against extraction limits for many kinds of resources. Besides oil, coal and natural gas, resources with limits include many other minerals, such as copper, lithium, and nickel. Other resources, including fresh water and minerals used for fertilizer are also only available in limited supply. MSM fails to tell us that there is no evidence that a transition to a low carbon economy can actually be made.
- [3] The big depletion issue is affordability of end products made with high priced resources. The cost of extraction rises, but the ability of the world’s citizens to pay for end products made using these high-cost resources doesn’t rise. Commodity prices do not rise enough to cover the rising cost of extraction. When this affordability limit is hit, it is the resource extracting countries, such as Russia, that find themselves in a terrible situation with respect to the financial well-being of their populations. The big issue that hits because of depletion is a price conflict. Businesses extracting resources need high prices so that they can reinvest in new mines, in ever more costly locations, but consumers cannot afford these high prices. As a result, commodity exporters, such as Russia, are caught in a bind: They cannot raise prices enough to make new investments profitable. The problem is that the world’s consumers cannot afford the resulting high prices of essentials such as food, electricity and transportation. Russia reports very high reserve amounts, especially for natural gas and coal. It is doubtful, however, that these reserves can actually be extracted. Over the long term, selling prices cannot be maintained at a sufficiently high level to cover the huge cost of extracting, transporting and refining these resources.
- [4] World economic growth very much depends on growing energy consumption. There are two ways of measuring world GDP. The standard one is with the production of each country measured in inflation-adjusted US$, with the changing relative value to the US$ considered. The other approach uses “Purchasing Power Parity” GDP. The latter is supposedly not affected by the changing level of the dollar, relative to other currencies. Inflation-Adjusted Purchasing Power Parity GDP is only available for 1990 and subsequent years. Figure 3 shows the high correlation between energy consumption and PPP GDP during the period from 1990 through 2020.
Nord Stream 2 cost $11 billion to build. Now, the Russia-Europe gas pipeline is unused and abandoned - One of the early casualties of Russia's invasion of Ukraine — and its continuing geopolitical and economic fallout — has been the Nord Stream 2 gas pipeline, a massive energy project that took several years to build and cost $11 billion. Even before Russia's unprovoked onslaught, the signs were not good for the 1,234-kilometer offshore pipeline — designed to double the flow of gas between Russia and Germany. Now, the major infrastructure project is looking like it has been "killed off," as one analyst put it. The laying of the pipeline started in 2018 but faced several stumbling blocks, becoming something of a geopolitical pinball in Europe and the U.S. before it was finally completed in September 2021. By November last year, however, there were further signs of trouble brewing when the German energy regulator temporarily halted the certification process that would allow it to start operating the pipeline. The suspension came as Russia was amassing tens of thousands of troops along Ukraine's border (although the regulator cited legalities as a reason for the suspension). The final nail in Nord Stream 2's coffin came in February following Russia's fateful decision to formally recognize two pro-Russian, breakaway regions in eastern Ukraine. That prompted the German government under Chancellor Olaf Scholz to stop the certification process altogether. As we all now know, Russia's recognition of the breakaway republics in the Donbas was a precursor to its larger invasion of Ukraine that began on Feb. 24. The war that has ensued has thrown Europe into a geopolitical crisis not seen in years and has put joint projects and business partnerships between (and in) Russia and Europe — like Nord Stream 2 — on a cliff-edge. "Russia's invasion of Ukraine has killed off the Nord Stream 2 project. In short, it would be unthinkable for Germany or any other European country to do a U-turn and authorize the pipeline after Russia's behavior," Kristine Berzina, senior fellow and head of the geopolitics team at the German Marshall Fund of the United States, told CNBC Wednesday. "Even functioning pipelines have a shaky future in Europe," Berzina noted, while for Nord Stream 2, "the pipeline is frozen in its inactive state. Besides ensuring the safety and stability of the structure, I do not anticipate other uses for it."
Germany warns of possible natural gas rationing amid dispute with Russia - Germany has declared an "early warning" that it could soon be facing a natural gas emergency as Europe's largest economy prepares for the risk of a full supply disruption from Russia. The Kremlin has repeatedly demanded that so-called "unfriendly" countries pay in rubles for gas, referring to those behind heavy economic sanctions designed to isolate Russia over its unprovoked onslaught in Ukraine. The G-7, which includes Germany, has rejected that demand. Most countries currently pay for Russian gas in euros or dollars. German Economy Minister Robert Habeck said Wednesday that the "early warning" measure was the first of three stages and does not yet imply a state intervention to ration gas supplies. However, Habeck called for consumers and companies to reduce consumption, telling a news conference that scaling back energy use is a help to both Germany and Ukraine. "We are in a situation where I have to say clearly that every kilowatt hour of energy saved helps, and that is why I would like to combine the triggering of the early warning level for gas supplies with an appeal for help to companies and private consumers," Habeck said, according to a translation by German broadcaster Deutsche Welle. "You are helping Germany, you are helping Ukraine, when you reduce your use of gas or energy in general." European countries' dependence on Russian energy exports has been thrust into the spotlight since the Kremlin launched its invasion on Feb. 24, prompting a barrage of punitive economic measures from the U.S. and international allies. The conflict has triggered a devastating humanitarian crisis and sent shockwaves through financial markets. The front-month gas price at the Dutch TTF hub, a European benchmark for natural gas trading, traded up over 11% at 120.5 euros ($134) per megawatt-hour on Wednesday, according to New York's Intercontinental Exchange. The TTF-month ahead index has traded at elevated levels in recent weeks, partly due to persistent geopolitical concerns.
OPEC warns EU over market consequences of banning Russian oil | S&P Global Commodity Insights -- OPEC has told the EU that global energy markets would be destabilized if European countries follow through with a threat to ban imports of Russian oil, sources in the producer group said, with traders warning of massive price spikes beyond the surge already seen.OPEC, which formed an alliance with Russia in late 2016 to manage the oil market, has been intensely lobbied by western countries and major consumers to increase crude output to offset the impact of sanctions imposed for the Ukraine war. But it has insisted that the disruptions to the market are not its responsibility to mitigate, and delegates say the bloc remains disinclined to cast aside its production quotas or raise them more aggressively. OPEC is scheduled to meet with Russia and its nine other allies on March 31 to discuss May production levels. "The world can't replace Russia's exports," one source said of the group's message to the EU, which was delivered in an online meeting March 16 between Energy Commissioner Kadri Simson and OPEC Secretary General Mohammed Barkindo.Ireland and Lithuania are among the EU member states calling for a ban on Russian oil.Russia is one of the top three crude producers in the world and exports more than 7 million b/d of crude and refined products.Europe imported about 2.7 million b/d of Russian crude and another 1.5 million b/d of refined products, mostly diesel, before the invasion of Ukraine.The meeting, which was requested by the EU, was called to discuss the "extraordinary times for the energy market and the unprecedented oil prices," which pose "a serious risk to the world economy," Simson said on Twitter.The Platts Dated Brent benchmark was assessed at $126.50/b on March 23 and has been extremely volatile in recent weeks, hitting a 14-year high of $137.64/b on March 8 before falling to the month's low of $107.96/b on March 16.Western sanctions targeting Russia's financial sector over the war have tightened the oil market and caused European buyers to seek alternative supplies. Some traders have warned that prices could hit $200/b or more with further hits to Russian oil flows.S&P Global analysts estimate that about 2 million b/d of Russian crude and 700,000 b/d of product exports have been disrupted so far.
Russia Cuts Refinery Output As Diesel Shortage Worsens - Europe's diesel shortage is becoming worse as Russian oil refiners have started to cut back on refinery throughput, according to the chief executive of one of the world's largest independent commodities trading houses, Gunvor. "This is a global problem but for Europe it's very hard because Europe is so short" of diesel, Gunvor CEO Torbjorn Tornqvist said at the Financial Times Commodities Global Summit as carried by Bloomberg.Trade with Russian diesel is becoming scarcer because of buyers in Europe steering clear of Russian shipments, awaiting further sanctions against Russia over its invasion of Ukraine, or simply declining to purchase Russian energy to finance Putin's war in Ukraine.The "self-sanctioning" of the buyers has already started to force Russian refiners to reduce production, according to Gunvor's Tornqvist."What does that mean? It means more crude oil will need to be exported instead of the products, and we believe that is not possible and will lead to cutbacks in Russian production," he said, as carried by Bloomberg.Diesel stocks globally were already low even before the Russian invasion of Ukraine. According to estimates from Reuters' John Kemp, diesel fuel stocks in Europe are at their lowest since 2008, and 8 percent—or 35 million barrels—lower than the five-year average for this time of the year.In the United States, the situation is graver still. There, diesel fuel inventories are 21 percent lower than the pre-pandemic five-year seasonal average, which translates into 30 million barrels.In Singapore, a global energy trade hub, diesel fuel inventories are 4 million barrels below the seasonal five-year average from before the pandemic. On top of exacerbating a global diesel supply crunch, the sanctions against Russia are also likely to force Russian firms to shut in some crude oil production, analysts say. Russia will have to shut in some of its oil production as it will not be able to sell all the volumes displaced from European markets to other regions, with Russian crude production falling and staying depressed for at least the next three years, Standard Chartered said earlier this month.
Rationing Looms As Diesel Crisis Goes Global -Earlier this week, Vitol's chief Russell Hardy warned that a diesel shortage could trigger fuel rationing in Europe. Now, those warnings are multiplying, with fuel rationing no longer looking like an abstract idea. Europe is risking a blow to its economic growth, Reuters reported on Thursday, citing experts. Diesel is what freight transport uses to deliver goods to consumers, but it is also what industrial transport uses for fuel. With Russian refiners cutting their processing rates in the wake of several waves of Western sanctions, already tight diesel supply is going to get a lot tighter."Governments have a very clear understanding that there is a clear link between diesel and GDP, because almost everything that goes into and out of a factory goes using diesel," the director general of Fuels Europe, part of the European Petroleum Refiners Association, told Reuters this week. Europe is not the only one feeling the diesel pinch, however. Middle distillate stocks are on a decline in the United States, too, Reuters' John Kemp wrote in his latest column. Distillate inventories, according to EIA data, have booked weekly declines for 52 of the last 79 weeks, Kemp reported, falling to 112 million barrels last week. The total decline for the last 79 weeks amounts to 67 million barrels. Last week's inventory level was the lowest since 2014 and 20 percent lower than the five-year average from before the pandemic."Diesel is not just a European problem, this is a global problem. It really is," The problem seems to be that diesel stocks were already tight globally when Russia invaded Ukraine and the West responded with sanctions that, although indirectly, targeted its energy industry. In addition to that, according to Vitol's Hardy, there had been a shift in Europe from gasoline to diesel, which has further exacerbated the problem.Then there are the commodity traders who are shunning Russian diesel because of the sanctions as well as payment headaches and transportation challenges as many European ports have banned Russian vessels from docking.TotalEnergies is the latest: the French supermajor has said it will be suspending purchases of Russian diesel "as soon as possible and by the end of 2022 at the latest", the company said, unless it receives other instructions from European governments.Instead of Russian diesel, TotalEnergies said it would switch to other suppliers, notably Saudi Arabia. It will hardly be the only one to look for alternative suppliers. It looks like a hunt for diesel is in the making, if not already fully underway.Meanwhile, the alternative suppliers may not have enough to respond to the spike in demand in short order: Saudi Arabia is already Europe's second-largest diesel supplier after Russia but compared to its 50-percent share of the EU diesel import market, the Kingdom only has a 12-percent share.Per Kemp's report, Asian diesel inventories are also tighter than usual, meaning all large markets for middle distillates are experiencing a shortage. This is pushing all oil prices higher, Kemp noted in his column but this is only the beginning of a bigger problem.In addition to freight transport, diesel is the fuel used to power mining and agricultural equipment, and it is also used in manufacturing. With prices for the fuel higher, the prices of the end products will also climb higher, fueling the inflation that has turned into a major headache for Europe and the United States.Boosting local diesel production is another option, but according to experts, they would be buying their crude oil at higher prices, and the end product will, yet again be more expensive. What's more, this ramp up of middle distillate production will take time to materialize."Over the next three months, diesel output needs to accelerate significantly, consumption growth must slow, and the market must avoid a significant loss of Russian exports," Kemp wrote. That would be a best-case scenario and if it does not play out, Europe in particular is in for "a severe price spike" that would result in demand depression.
Russia's Transneft caps oil pipeline intake on brimming storage (Reuters) - Russia's Transneft, operator of the world's largest oil pipeline network, has set caps on oil received by it as storage filled up amid weak demand for Russian fuel, hit by Western sanctions, five sources familiar with the matter said on Tuesday. Russian oil exports are still flowing as sanctions imposed over the invasion of Ukraine, which Moscow calls a "special military operation", do not directly target the energy trade. However, difficulties with payments, insurance and shipping as well as curbs on dealing with several Russian oil suppliers forced many regular buyers to shun the market, leaving barrels unsold. Transneft has told several Russian oil firms it would limit intake to its system amid high volumes of stored oil, which affect flexibility and threaten normal operations, said the sources, who spoke on condition of anonymity. The curbs mostly cover oil that has yet to find buyers, while companies that have no difficulty selling cargoes would be allowed to supply all their oil to the system, said two of the sources. All the sources declined to be identified because the matter is sensitive. Transneft did not immediately reply to a Reuters request for comment. More than a dozen cargoes of Urals oil from the March loading plan were cancelled, postponed or replaced amid weak demand, traders said, while Russian firms had to divert extra volumes for export, as domestic refinery runs declined. Russian producers Surgutneftegaz SNGS.MM and Zarubezhneft did not award spot tenders this month. The Urals oil loading plan for April has been increased significantly, while nomination of cargoes for primary buyers was slow, traders said.
Lanka runs out of diesel, faces longest-ever blackout - Diesel was no longer on sale across Sri Lanka on Thursday, crippling transport as the crisis-hit country’s 22 million people endure record-long power blackouts. The South Asian nation is in the grips of its worst economic downturn since independence, sparked by an acute lack of foreign currency to pay for even the most essential imports. Diesel — the main fuel for buses and commercial vehicles — was unavailable at stations across the island, according to officials and media reports. Petrol was on sale but in short supply, forcing motorists to abandon their cars in long queues. ‘We are siphoning off fuel from buses that are in the garage for repairs and using that diesel to operate serviceable vehicles,’ transport minister Dilum Amunugama said. Owners of private buses — which account for two-thirds of the country’s fleet — said they were already out of oil and that even skeleton services may not be possible after Friday. ‘We are still using old stocks of diesel, but if we don’t get supplies by this evening, we will not be able to operate,’ chairman of the private bus operators association Gemunu Wijeratne said. The state electricity monopoly said they would be forced to enforce a 13-hour power cut from Thursday — the longest ever — because they did not have diesel for generators. ‘We are promised new supplies in two days and if that happens, we can reduce the length of power cuts,’ Ceylon Electricity Board chairman MMC Ferdinando told reporters. He said hydro reservoirs, which provide more than a third of electricity demand, were also dangerously low. The lengthy power cuts forced the Colombo Stock Exchange to limit its trading by half to two hours, while many offices asked non-essential staff to stay at home. The electricity rationing also hit mobile phone base stations and affected the quality of calls, operators said, adding that their stand-by generators were also without diesel. The shortages have sparked outrage across Sri Lanka, with local television reporting protests across the country as hundreds of motorists block main roads in several towns. Several state-run hospitals have stopped surgeries as they have run out of essential life-saving medicines, while most have stopped diagnostic tests which require imported chemicals that are in short supply. Colombo imposed a broad import ban in March 2020 in a bid to save foreign currency needed to service its $51 billion in foreign debt. But this has led to widespread shortages of essential goods and sharp price rises. The government has said it is seeking a bailout from the International Monetary Fund while asking for more loans from India and China. Sri Lanka’s predicament was exacerbated by the Covid-19 pandemic, which torpedoed tourism and remittances. Many economists also blame government mismanagement including tax cuts and years of budget deficits.
India justifies buying more Russian discounted oil - - As inflation rises in India, Prime Minister Narendra Modi's government may be set to buy more barrels of discounted Russian oil and revive rupee-rouble trade.India is the world's third-largest consumer and importer of oil, importing about 80 per cent of its oil needs. With Western sanctions imposed on Russia after its attack on Ukraine turning off some European buyers, Moscow is now offering oil at a discounted price to Indian companies. State-owned Indian Oil has reportedly bought three million barrels of Russian oil, while Hindustan Petroleum has ordered two million barrels. Nayara Energy, which is partly owned by Russian oil giant Rosneft, has ordered 1.8 million barrels. The purchase prices are not known, but the Financial Times reported that Russian Urals oil, the country's flagship crude blend, was being offered at a discount of about US$25 to US$30 a barrel. To be sure, the amounts purchased by the three Indian companies make up a drop in India's oil imports bucket. The country is estimated to need about 5.15 million barrels of oil daily this year. Most of India's oil imports come from West Asia, with nearly a quarter from Iraq, followed by Saudi Arabia and the United Arab Emirates. Less than 3 per cent comes from Russia. The Kremlin may be seeking to raise that number. On March 11, according to a Russian government statement, Deputy Prime Minister Alexander Novak told Indian Petroleum Minister Hardeep Singh Puri in a telephone call: "Russia's oil and petroleum product exports to India have approached US$1 billion (S$1.36 billion), and there are clear opportunities to increase this figure." Some of India's state-owned oil companies may welcome the bargain prices. Despite international crude prices surging to more than US$100 a barrel since the invasion, the Indian central government did not revise petrol and diesel prices for over four months, possibly to avoid annoying voters ahead of important state elections. The freeze may have cost state fuel retailers about US$2.25 billion in revenue, according to Moody's.
Accident - Oil spill barriers at Kolkata port after Bangladeshi vessel capsize - Oil spill barriers have been set up around the berth at Kolkata port where a container vessel from Bangladesh had capsized on Thursday, minutes after loading of cargo was completed.Port officials said on Friday that the barriers and other devices to soak oil from the water have been installed to prevent oil from spreading into the water if there is any oil spill. The loading of cargo on the vessel, M/v Marine Trust 1, was completed at 9am. Within 15 minutes, the vessel capsized. Several containers went into the water while many were floating.Port sources said the capsized vessel contained 10 kilolitres of oil. “The vessel’s tank would have been filled up before it set sail,” said an official of Kolkata port. The M/v Marine Trust 1 was to sail from Kolkata for Chittagong on Friday.“The port has taken all precautionary measures. Oil spill boom barriers have been rigged all around the vessel to contain oil spill or spill of any chemical in the berth. Skimmers, pumps , oil soaking pads have been kept ready to pick up oil from water, if detected,” a port spokesperson said.Port officials said the oil boom barriers, made of rubber, go two feet deep into the water. These rubber barriers prevent oil, spilled from the vessel, from spreading into the river.Oil skimmers have been deployed, too. Officials said oil skimmers are mechanical devices that skim the
Uganda Develops Oil Spill Contingency Plan - allAfrica.com — Uganda finally launched its national oil spill contingency plan, detailing its preparedness to respond in the event of an oil spill. The East African nation hopes to produce its first oil in the first quarter of 2025. An oil spill contingency plan is simply a detailed spill response and removal arrangement that addresses 'control, containment and recovery of an oil discharge in quantities that may be harmful to navigable waters or adjoining shorelines,' according to the US Environment Protection Agency (EPA). The elements of an oil spill contingency plan, EPA notes, include; definition of the authorities, responsibilities, and duties of all entities involved in oil removal operations; procedures for early detection and timely notification of an oil discharge; assurance that full resource capability is known and can be committed following a discharge; actions for after discovery and notification of a discharge and procedures to facilitate recovery of damaged areas and enforcement measures. Uganda's oil spill contingency plan highlights the responsibility of licensees and operators for prevention of oil spills and the need for investing in preparedness for response to oil spills even if unlikely within the country's territory and shared water bodies. It provides for protection of human health and the environment from oil spills and clearly defines the three different tiers of preparedness or responses. It also establishes an effective and coordinated national oil spill preparedness and response system, including designating responsible institutions. The plan further provides a system for collaboration on oil spill preparedness and response between licensees and operators, local governments and the central government, and also seeks international assistance when necessary. It also establishes an inventory system for oil spill response resources. This is in form of personnel and equipment, including training of personnel, drills and exercises. The Petroleum Authority of Uganda (PAU) in partnership with the Office of the Prime Minister (OPM), and the National Environment Management Authority (NEMA) have been working together on the plan which was approved in February last year. It is premised on the internationally recognized "people, environment, assets and reputation" priority order (PEAR).
Russia-India: India buys cheap Russian oil; China could be next - There's been a "significant uptick" in Russian oil deliveries bound for India since March after Russia's invasion of Ukraine began — and New Delhi looks set to buy even more cheap oil from Moscow, industry observers say. China, already the largest single buyer of Russian oil, is also widely expected to buy more oil from Russia at deep discounts, they say. This could mean higher crude prices to come. Major oil importing countries such as India and China have been grappling with higher crude prices, which have soared since last year. While oil prices have been volatile in recent weeks, swinging between gains and losses, they are still around 80% higher compared to a year ago. "We believe that China, and to a lesser extent, India will step up to buy heavily discounted Russian crude," This would mark a stark contrast from the rhetoric across major world powers and companies which are eschewing Russian oil. As a result of Russia's unprovoked and unjustified war on Ukraine, the U.S. has hit the rogue country with sanctions on energy, while the U.K. plans to do so by the end of the year. The European Union is also considering whether to do the same. But sanctions would leave a gap in the market with Russia finding itself with excess crude it's unable to sell, analysts said. "Urals crude from Russia is being offered at record discounts, but uptake is limited so far, with Asian oil importers for the most part sticking to traditional suppliers in the Middle East, Latin America and Africa," the International Energy Agency said on March 17. Urals crude is the main oil blend that Russia exports. "As of mid-March, we see the potential for 3 million barrels a day of Russian oil supply to be shut in starting from April, but that could increase if restrictions or public condemnation escalate," the IEA said. A couple of commodity trading firms — such as Glencore and Vitol — were offering discounts of $30 and $25 per barrel respectively two weeks ago for the Urals blend, Ellen Wald, president of Transversal Consulting, told CNBC. Cargoes of Russian crude to India were "fairly infrequent," with 12 million barrels delivered across all of 2021, Smith told CNBC. Kpler said he hasn't seen any deliveries to India from Russia since December. However, since the beginning of March, five cargoes of Russian oil, or about 6 million barrels, have been loaded and are bound for India – set to be discharged in early April, he told CNBC in an email. "This is about half the entire volume discharged last year — a significant uptick," Smith said.
Asia will become the 'default market' for Russian oil, Dan Yergin says -Asia will become the default market for Russian oil as the country tries to find buyers for its energy exports, said Dan Yergin, vice chairman of S&P Global.Major oil importers in Asia like China and India have been pressured by oil prices which have soared since Russia invaded Ukraine in late February. Besides the appeal of cheaper Russian oil, both Beijing and New Delhi have close ties with Moscow.Yergin told CNBC's "Street Signs Asia" on Monday: "It does look like Asia would be the default market for barrels of Russian oil that would have normally gone to Europe."The West has punished Moscow for the invasion economically with the U.S. banning Russian crude, the U.K. planning to do the same and the European Union weighing similar measures.Yergin added, "There's a lot of self sanctioning that's going on that's simply people not picking up oil, banks not providing letters of credit, shippers not showing up and, indeed, people in some ports not receiving Russian oil."That leaves Russia with excess crude that is difficult to sell and that situation is likely to worsen, analysts said. Russia, part of the OPEC+ alliance, is the world's largest exporter of oil to global markets and the second largest crude oil exporter behind Saudi Arabia, according to the International Energy Agency."I would have said five weeks ago Russia's an energy superpower ... I think it's still going to be an important player. But it's going to be a reduced energy power compared to where it was before," Yergin said.Earlier this month, the IEA said Russian crude is being sold at record discounts. A couple of commodity trading firms recently offered discounts of $30 and $25 per barrel for the Urals blend, according to analysts.In contrast, prices for other countries' energy exports have spiked to levels not seen in over a decade. Oil prices are around 80% higher than they were a year ago and have been volatile since the war began. Traditionally, India gets its crude from Iraq, Saudi, Arabia, the United Arab Emirates and Nigeria – but they are all dictating higher prices right now as oil prices soar.
China's Sinopec Bows Out Of Russian Petchem, Gas Projects - China's state-run oil refiner, Sinopec, has paused discussions with Russia about a petrochemical investment and a deal to market Russian gas in China, Reuters sources suggested on Friday. Reuters sources have suggested that the reason for the pause in talks is due to China's wariness over its own companies butting up against Western-levied Russian sanctions. While the petrochemical deal wasn't named, Reuters sources said it was in the site selection process and was supposed to be similar in size to the $10 billion Amur gas chemical complex in Siberia. Amur is a joint venture between Sinopec and Russian Sibur. The new investment in question—which was also a deal with Sibur—was estimated at $500 million for a gas chemical plant. Sinopec reportedly paused the talks when it realized that one of Sibur's minority shareholders and board members, Gennady Timchenko, had been sanctioned by the EU and Britain due to his ties with Russian President Vladimir Putin. Timchenko was also on Novatek's board until Monday, when he resigned. Russia is China's second-largest oil supplier and third-largest gas provider. The Amur project is also in jeopardy, as funding sources in Russia, including from Russia's state-run Sberbank, also find themselves limited due to sanctions. Sibur has denied that a new project with Sinopec similar to Amur was in the works. It did say, however, that Sibur continues to work with Sinopec on the Amur project. "Sinopec is actively participating in the issues of the project's construction management, including equipment supplies, work with suppliers and contractors. We are also jointly working on the issues of project financing," Sibur told Reuters. China's Ministry of Foreign Affairs has recently met with Sinopec, CNPC, and CNOOC—its three energy giants—to review its ties to Russia. Reuters sources have suggested that those companies have been told to tread carefully in its dealings with Russia and to not make any rash moves in buying Russian assets.
Chinese petroleum giant plans to invest $31 billion in oil, gas in 2022 --China Petroleum & Chemical Corp, better known as Sinopec, is planning its highest capital investment in history for 2022 after recording its best profit in a decade, echoing Beijing's call for energy companies to raise production. Sinopec expects to spend 198 billion yuan ($31.10 billion) in 2022, up 18% from a year ago, beating the previous record of 181.7 billion yuan set in 2013, according to a company statement filed to the Shanghai Stocks Exchange on Sunday. It plans to invest 81.5 billion yuan in upstream exploitation, especially the crude oil bases in Shunbei and Tahe fields, and natural gas fields in Sichuan province and the Inner Mongolia region. "Looking ahead in 2022, the market demand for refined oil will continued to recover, and demand for natural gas and petrochemical products will keep growing," Sinopec said in the statement. It also warned of potential impacts of geopolitical challenges and volatile oil prices on the investment and operation at overseas businesses. But the firm did not name any specific project. Reuters reported that Sinopec Group had suspended talks for a major petrochemical investment and a gas marketing venture in Russia, heeding a government call for caution as sanctions mount over the invasion of Ukraine. Brent oil prices have gained 52% so far this year and hit as high as $139 a barrel in early March, stoked by fears of supply disruption in the wake of Russia's invasion of Ukraine. Sinopec recorded its biggest profit in a decade in 2021 on the back of recovering energy demand and oil price increases in the post-COVID era, with net earnings reaching 71.21 billion yuan. It plans to produce 281.2 million barrels of crude oil and 12,567 billion cubic feet of natural gas in 2022, up from its output of 279.76 million barrels and 1,199 billion cubic feet in 2021. Beijing seeks to ensure energy safety in the country amid intensifying geopolitical risks. It wants to keep annual crude oil output at 200 million tonnes and crank up natural gas production to more than 230 billion cubic metres (bcm) by 2025 from 205 bcm in 2021. Crude throughput and production of refined oil products at Sinopec are expected to stay around the same level in 2022 from a year ago, at 258 million tonnes and 147 million tonnes, respectively. But demand for gasoline and diesel are dented in China as more than 2,000 of daily COVID cases have triggered local authorities to impose stringent travel restrictions while manufacturers suspended operations amid supply chain clogs.
Oman's oil output rises 8% as exports jump by 18% – Oman’s daily average production of crude oil exceeded 1mn barrels per day (bpd) mark during the first two months of 2022, up by more than 8 per cent in comparison to daily average output recorded in the same period of last year. Oil output during January – February period increased to 1.03mn bpd compared with 954,300 bpd in the corresponding period of 2021, the data released by National Centre for Statistics and Information (NCSI) showed. The sultanate’s total oil production in the first two months of 2022 grew by 8.2 per cent to 60.9mn barrels compared to 56.3mn barrels in the same period of last year. Of the total production, crude output jumped by 11.5 per cent year-on-year to 48.01mn barrels during January – February period, while condensates output slightly decreased 2.4 per cent to 12.9mn barrels during these two months. Oman’s oil exports grew by more than 18 per cent during January – February period of 2022 to 53.4mn barrels compared with 45.1mn barrels recorded in the corresponding period of 2021. The sultanate’s total oil exports for the full year 2021 had inched up 0.7 per cent to 288.9mn barrels from 287mn barrels in 2020. Exports to China, the biggest buyer of Oman’s crude, accounted for over 87 per cent of the sultanate’s total oil exports during the first two months of this year. Total exports to China surged 21.2 per cent at 46.5mn barrels during January – February period of this year compared to 38.4mn barrels in 2021. On the other hand, exports to India decreased by 7.6 per cent to 5.2mn barrels in the first two months of 2022 from 5.7mn barrels in the same period of 2021. The average price at which Oman sold its crude during first two months of 2022 surged by 63.5 per cent to US$76.7 per barrel against US$46.9 per barrel recorded in the same period of 2021. The highest monthly average price of Oman crude was recorded in January at US$80.3 per barrel, while the average price for February stood at US$73.1 per barrel, the NCSI data showed. With global oil prices continuing to rise amid Russia – Ukraine conflict, Oman crude prices recently rose to their highest level in more than eight years. Oman crude price on Friday stood at US$112.3 per barrel (for May delivery) at the Dubai Mercantile Exchange.
Japan, U.S., U.K. lenders loan Kuwait $1bn to boost oil output - HSBC, JPMorgan also join deal amid turbulent energy markets -- Japan's three biggest banks are teaming up with major U.S. and European lenders to loan $1 billion to help Kuwait increase oil output, seeking to calm energy markets roiled by Russia's invasion of Ukraine.
Russian weekly oil exports drop 26% as buyers look elsewhere — Russia’s oil exports shriveled by more than a quarter in the week March 17-23 compared with the prior week, according to industry data. The country’s average daily shipments reached 495,300 tons, down 26.4% from the week before, according to figures seen by Bloomberg. That’s equivalent to about 3.63 million barrels a day. While the data didn’t indicate any reasons for the change, the sharp decline came as Russia faces a growing movement by many of its usual customers to find alternative energy supplies after the country’s invasion of Ukraine. Only a handful of nations -- including the U.S. and the U.K. -- have imposed explicit bans on imports of Russian oil. Still, many of the country’s traditional customers have undertaken a self-imposed buyers’ strike in response to the war. Major companies from Shell Plc to TotalEnergies SE have said they intend to phase out purchases of crude and fuel from Russia. The decline in exports was at least partly driven by lower volumes from Russia’s ports on the Baltic Sea and in the Asia-Pacific region, according to loadings data. Total oil production over the period was little changed, dropping 0.3% from the week before, the output numbers show. The nation pumped about 11.08 million barrels a day on average in the period, according to Bloomberg calculations. Russia is still able to sell its crude due to price discounts and aims to keep output steady even amid unprecedented economic sanctions, Deputy Prime Minister Alexander Novak said last week. The nation will be able to redirect to Asian markets most of the barrels Europe won’t take, Kremlin spokesman Dmitry Peskov told reporters on Monday. “Undoubtedly, declining requests will be compensated by requests from the east,” Peskov said. “It cannot be ruled out that some volumes will be lost, but in any case the global market is more multi-faceted,” and not centered around Europe, he added.
OPEC+ still sees no need to change supply plan despite Russia crisis— OPEC and its allies signaled that they still see no need to adapt their oil-supply plans even as the Russia-Ukraine conflict threatens the biggest market disruption in decades. “We won’t add resources if the market is balanced, and the resources are in the market,” United Arab Emirates Energy Minister Suhail Al-Mazrouei said Monday at a conference in Dubai. OPEC+ isn’t focused on whether the specific loss of Russian shipments is causing an imbalance, he added. A number of delegates said privately they expect the Organization of Petroleum Exporting Countries and its partners to stick to their longstanding plan and ratify another modest supply increase when they meet on Thursday. The 23-nation coalition led by Saudi Arabia has so far rebuffed pressure to fill in for Russian supplies, which have been shunned by some buyers over the invasion of Ukraine. Riyadh and Abu Dhabi are keen to preserve ties with Moscow, indicating that they see no shortage even as Russian exports slump by a quarter and prices hold near $100 a barrel. If no alterations are made, OPEC+ will ratify the increase of 430,000 barrels a day scheduled for May. With many members struggling to fulfill their planned increases over the past few months and global demand bouncing back from the pandemic, that decision may cause markets to tighten further -- exacerbating the inflationary pressure hitting the world economy.
Russia will 'always' be a part of OPEC+, UAE energy minister says - The United Arab Emirates' energy and infrastructure minister has insisted that Russia will always be a part of OPEC+ even as governments across the globe shun the oil exporter over its war in Ukraine. Speaking to CNBC on Monday, Suhail Al Mazrouei, a former president of the oil alliance, said no other country could match Russia's energy output and argued politics should not distract from the group's efforts to manage energy markets. "Always, Russia is going to be part of that group and we need to respect them," he told Hadley Gamble at the Atlantic Council's sixth annual Global Energy Forum in Dubai. "OPEC+, when they speak to us, they need to speak to us including Russia," he said, referring to the group's negotiations with energy importers. The U.S., Europe and Japan have called on oil-producing nations to do more to tackle record-high prices amid the war in Ukraine and ongoing supply shortages. But, Al Mazrouei said Russian oil would play a vital role in achieving that. The comments come as Western allies express concern that Russian energy imports are indirectly topping up President Vladimir Putin's war chest with oil and gas revenue. "Who can replace Russia today? I cannot think of a country that can in a year, two, three, four or even 10 years replace 10 million barrels. It's not realistic," he said. OPEC+, led by Saudi Arabia and Russia, has the capacity to increase oil output and bring down crude prices, which have jumped to over $100 a barrel. "We are in agreement with their target or their objective of trying to calm the market and balance the market," Al Mazrouei said. "But you don't do it this way. You don't do it by putting sanctions on a hydrocarbon that you cannot replace — unless you want the prices to go high." "They are doing something but expecting the opposite reaction, and it's not going to happen." OPEC and non-OPEC ministers are slated to meet on Thursday via videoconference to determine the next phase of production policy. It comes amid renewed pressure for the influential alliance to boost oil supplies after G-7 energy ministers said OPEC "has a key role to play" in easing market tensions. "We call on oil and gas producing countries to act in a responsible manner and to examine their ability to increase deliveries to international markets particularly where production is not meeting full capacity noting that OPEC has a key role to play," G-7 energy ministers said in a joint statement on March 10. "This will help to ease tensions and note with appreciation announcements already made to this end."
Saudi energy minister says oil alliance OPEC+ will leave politics out of output decisions - Saudi Arabia's energy minister said Tuesday that OPEC+ will keep politics out of its decision-making in favor of the "common good" of stabilizing energy prices. Governments and international organizations around the world have imposed punitive sanctions and severed economic ties with Russia after its invasion of Ukraine, but OPEC — the intergovernmental organization of 13 oil exporting countries — does not appear willing to take action against Russia, a key partner in the wider OPEC+ alliance and itself a major exporter of oil. Speaking to CNBC on Tuesday, Saudi Energy Minister Prince Abdulaziz bin Salman bin Abdulaziz Al Saud said the organization's very existence was dependent on a separation of its mission to stabilize oil prices from other geopolitical factors, even in the event of a widely-condemned invasion. Saudi Arabia and the UAE voted in favor of a U.N. General Assembly resolution earlier this month urging Russia to abandon the invasion and withdraw all troops, and Prince Abdulaziz said there were other forums through which the Kingdom could voice its opinion on Russia's actions, which is in line with the global response. "When it comes to OPEC+ — I would take that privilege of saying I've been at it for 35 years, and I know how we managed to compartmentalize our political differences from what is for the common good of all of us," Prince Abdulaziz told CNBC's Hadley Gamble at the World Government Summit in Dubai on Tuesday. "That culture is seeped into OPEC+, so when we get into that OPEC meeting room, or OPEC building, everybody leaves his politics at the outside door of that building, and that culture has been with us." The energy minister noted that OPEC and OPEC+, which was formed after production cut deals were agreed with non-OPEC countries including Russia, had dealt with various countries embroiled in conflict or acts of aggression throughout its history, including Iraq and Iran. "The reason we have managed to maintain OPEC+ is that we discuss these matters, these issues, in an entirely siloed type of approach whereby we are much more focused on the common good, regardless of the politics," he added.
Saudis may hike oil price to record as war reroutes flows — Saudi Arabia, the largest oil exporter, will likely boost pricing of its main crude variety to a record as the impact of Russia’s invasion of Ukraine reverberates through markets more than a month after the assault. Saudi Aramco may raise the official selling price of its key Arab Light crude by $5 a barrel to Asia for May-loading cargoes, according to the median estimate in a Bloomberg survey of five refiners and traders. That would increase the overall differential to $9.95 above the Oman-Dubai benchmark, which would be the widest since Bloomberg began compiling the data in 2000. Oil soared to the highest since 2008 this quarter as the war in Ukraine lifted prices that had already been boosted by expanding global demand and fast-falling stockpiles. The expected hike in pricing for the key Saudi barrels -- which help to set the tone for other grades from the region -- is likely to come despite a spate of virus lockdowns in China, the top oil importer. Brent futures, the global benchmark, reversed intraday losses to trade near $113 a barrel on Tuesday. In the initial aftermath of the Russian invasion, prices rallied close to $140, the highest since 2008. Official selling prices, or OSPs, are the premiums or discounts to regional benchmarks for barrels, and they determine how much buyers with long-term contracts pay for cargoes. The differentials can indicate the strength or weakness of underlying demand. The biggest conflict in Europe since World War II has dented western demand for Russian oil, as well as from Japan and South Korea, boosting prospects for Middle Eastern suppliers like Saudi Arabia. At the same time, some buyers in Asia, especially India and China, have moved to take more Russian flows. As Saudi Aramco prepares to announce selling prices, Riyadh is set to join other producers including Russia at an OPEC+ meeting this week to set production policy for the alliance. Ahead of the gathering on Thursday, members have signaled they still see no need to adapt supply plans.
Saudi Arabia Hikes Oil Prices Despite Record Discounts For Russian Crude --Russia’s invasion of Ukraine has simultaneously both eased and complicated the task of Middle Eastern national oil companies. On the one hand, it had pushed the backwardation in the Brent even steeper, making any flows from Europe to Asia uneconomic, hence safeguarding the usual outlets for Saudi Arabia or Iraq. Simultaneously, the risk of seeing Russian supply sanctioned led to oil prices shooting up above $120 per barrel, making the outright basis of March cargoes remarkably profitable. On the other hand, the likes of Saudi Aramco and SOMO had to increase prices, in fact, they could do it even more substantially as arbitrage flows would be most probably weak in April 2022, however, this could antagonize even further all the Asian buyers that keep on fretting about unprecedentedly high prices. So there was a very fine line to walk, especially considering that the specter of an impending Iranian nuclear deal never really left the decision room. Chart 1. Saudi Aramco’s Official Selling Prices for Asian Cargoes (vs Oman/Dubai average). For the second time in a row, Saudi Aramco hiked all its official selling prices, regardless of the respective continent. Asia-bound April OSPs were increased by $2.15-2.70 per barrel, coming on the back of record-high Dubai backwardation as the M1-M3 Dubai spread rose above $4 per barrel, i.e. almost $2 per barrel higher than last month. The main Saudi export streams – Light, Medium, and Heavy – all saw the same $2.15 per barrel jump, breaking previous all-time highs. Whilst Saudi Arabia, in general, is still some way off bringing aggregate crude production back to pre-pandemic levels, its exports to Asia have already moved in there, hovering around 5.7 million b/d this month.Looking forward, with the Dubai forward structure steepening further, the May 2022 OSPs will inevitably see another month-on-month hike. For Asian countries that, unlike India and to a lesser extent China, are not willing to pick up heavily discounted Russian barrels, spring will bring quite the refining margins as they are compelled by the market to continue buying Middle Eastern crude.
Oil Futures Fall on Shanghai Lockdown, Kazakhstan Exports-- Oil futures fell sharply in early trade Monday, with U.S. and international crude benchmarks trading 5% lower after China announced new quarantine restrictions in Shanghai, the country's financial and business hub, as health authorities there struggle to contain a resurgence of the COVID-19 virus, underscoring ongoing risks for demand growth in a country that is the world's largest importer of crude oil. Near 7:30 a.m. EST, NYMEX May West Texas Intermediate futures plunged below $108 barrel (bbl), trading $5.61 bbl lower, and ICE May Brent futures retreated $5.32 to $114.23 bbl. NYMEX April RBOB futures plummeted 15.5 cents or 5% to $3.3150 gallon, and April ULSD futures dropped back 21.47 cents to $3.8999 gallon. Half of Shanghai, a city of 25 million people, will be locked down between today (3/28) and Friday (4/1), and the other half between April 1st and 5th, with the Huangpu River, which passes through the city, serving as the dividing line as authorities attempt to test the entire megapolis for COVID-19. The city has seen a sharp increase in daily COVID-19 infections over the past two weeks, pressuring mobility and business activity. Peak road congestion in Shanghai was down 36% on Sunday from a year earlier, according to private data, while in Beijing, which is not yet subject to restrictions, traffic levels were 25% lower, year-on-year. China has imposed more quarantine measures over the past two weeks than at any other point in the pandemic as it battles the fast-spreading strain of omicron. Despite the chatter over new sanctions, the European Union did not announce a ban on the purchase of Russian oil during talks with world powers in Europe last week. Countries that are less dependent on Russian oil, such as Sweden, Ireland, and the Czech Republic, view an oil ban as an option while some of the bloc's largest importers, like Germany and Netherlands, remain opposed to the idea. Further pressuring the complex, the operator of Caspian Pipeline Consortium on Friday (3/25) partially restarted flows after Russia throttled capacity on a major pipeline carrying oil from Kazakhstan oilfields to the export ports on the Black Sea. It remains unclear how much crude is currently being offloaded at the port of Novorossiysk. The CPC pipeline has a 1.4 million barrels per day (bpd) throughput capacity and carries crude oil from oilfields in central Asia to export terminals on the Black Sea. A prolonged disruption of the CPC pipeline could have forced Kazakhstan to shutter producing wells because of limited storage capacity that could have inflicted long-lasting damage to the country's production capacity. Kazakhstan Energy Minister Bulat Aqchulaqov indicated on Friday that one of the three moorings at the site sustained little damage from an alleged storm and partially restarted operations. Last week, Russian officials argued it could take up to six weeks to fix damaged infrastructure at the port that processes up to 90% of Kazakhstan oil exports.
Oil slides more than 7% as Shanghai lockdown prompts demand fears -- Oil declined more than 8% at the lows of the day on Monday as concerns over new lockdowns in China and the potential impact on demand sent prices tumbling. West Texas Intermediate crude futures, the U.S. oil benchmark, slipped 8.25% to trade at $104.50 per barrel. International benchmark Brent crude traded 7.4% lower at $111.61 per barrel. However, both contracts recovered some losses during afternoon trading on Wall Street. WTI ended the day at $105.96 for a loss of about 7%. Brent settled 6.77% lower at $112.48 per barrel. "Today's price slide is attributable first and foremost to concerns about demand now that the Chinese metropolis of Shanghai has entered into a partial lockdown," Commerzbank said Monday in a note to clients. China is the world's largest oil importer, so any slowdown in demand will weigh on prices. The nation uses around 15 million barrels per day, and imported 10.3 million barrels per day in 2021, "The magnitude of [the] sell-off reflects fears that Covid lockdowns in China could spread, significantly impacting on demand at a time when the oil market is trying to find alternatives to Russian oil supplies," Another round of peace talks between Ukraine and Russia is slated for this week, which Commerzbank said was also contributing to oil's slide. Crude is coming off its first positive week in the last three, with WTI and Brent ending the week 8.79% and 10.28% higher, respectively. The oil market has been marked by heightened volatility since Russia's invasion of Ukraine at the end of February. Prices shot above $100 per barrel the day of the invasion and kept climbing. WTI topped $130, rising to its highest level since 2008, while Brent almost reached $140. But prices didn't remain there for long, and on March 14 WTI traded under $100. The volatile action reflects, in part, the many unknowns around the future of Russia's oil. The International Energy Agency warned that three million barrels per day of Russian oil output is at risk come April as Western sanctions prompt buyers to shun the nation's oil. But analysts have noted that Russian oil is still finding buyers for the time being, especially from India. Traders say the recent volatility also stems from non-energy market participants using crude as an inflation hedge. In recent weeks, open interest has decreased, making the market susceptible to even larger intraday swings. Despite Monday's slide, oil held above $100. "We still expect that Brent crude will continue to rally as the market continues to price in a rise in energy supply risk amid immense supply disruptions,"
Oil Demand Showing Signs of Weakness - Global oil demand has been showing signs of weakness in March and this weakness is expected to persist through April and May due to the impact of high oil prices, the negative effects of sanctions and war in Russia and Ukraine, and the consequences of increasing lockdowns in China. That’s according to Rystad Energy’s Senior Vice President of Analysis, Claudio Galimberti, who noted that, amid the weakening in oil demand, the supply of oil products remains tight. “The ICE Gasoil-Brent crack in Europe has been trading around unprecedented levels of $25-30 per barrel for the past couple of weeks, higher than even the memorable gasoil crack spike in 2008,” Galimberti said in a Rystad market note sent to Rigzone late Monday. “Russia currently exports around 800,000 barrels per day of diesel/gasoil to Europe. As Europe imports between 1.6 to 2.0 million barrels per day of diesel/gasoil, an effective ban on Russia’s oil product exports could increase the gasoil crack further,” Galimberti added. In the note, Galimberti highlighted that road transport demand has been weakening throughout March. The Rystad analyst outlined that this was driven primarily by OECD countries and less so by China, at least so far, despite news of short-lived, Covid-related lockdowns in some provinces over the past couple of months. “However, Shanghai’s two-week-long, intermittent lockdown launched on 27 March will be amongst the most significant in China thus far this year, due to the size of the population involved (more than 25 million people), with the potential to lower demand by up to 200,000 barrels per day for the duration of the restrictions,” Galimberti said. “Shanghai’s lockdown will give us an indication on the success of China’s zero-Covid policy and whether it will be maintained or abandoned,” Galimberti added. According to the latest data from the World Health Organization (WHO), confirmed Covid-19 cases in China have dropped for the past three consecutive weeks, coming in at 46,962 in the week commencing March 21. Deaths have dropped for the last two consecutive weeks and stood at 1,453 in the week commencing March 21, WHO data showed. As of March 28, 6.23pm CEST, there have been 480.1 million confirmed cases of Covid-19 globally, with 6.1 million deaths, according to the latest WHO figures. As of March 27, a total of 11 billion vaccine doses had been administered, WHO data showed.
Oil Down Sharply on Russia De-Escalation -Oil slumped as Moscow said it would sharply cut military operations near the Ukrainian capital of Kyiv, after negotiators from Ukraine and Russia wrapped up discussions in Turkey aimed at de-escalating the war. West Texas Intermediate erased earlier gains to trade down as much as 5% in New York, before then paring some of those losses. Russia’s defense minister said his country will cut military activity near Kyiv and Chernihiv. The country’s negotiator said a meeting between Presidents Putin and Zelenskiy is possible, according to Tass. Kyiv said before the meeting it is hoping to secure a cease-fire and at least temporarily halt the 34-day war in Ukraine, but heading into the talks both sides differed vastly on disputed positions. Oil has been buffeted by wild swings in recent weeks as liquidity dwindles in the face of huge market volatility. On Monday, West Texas Intermediate lost almost $8 a barrel, while Tuesday’s enormous headline-driven price swings are yet another indication of the liquidity issues currently facing crude.
Oil Trims Losses as Market Assesses Progress in Ukraine-- Oil futures nearest delivery clawed back most of their steep early losses Tuesday, although all contracts settled the session lower amid signs of de-escalation in the Ukraine crisis after Russian officials indicated they are ready to pull back troops from the capital city of Kyiv to allow for diplomatic talks to take place as Moscow attempts a shift in strategy to claim full control over eastern Ukraine. Any comments from Russian officials should be met with a healthy dose of skepticism these days, warned U.S. Secretary of State Antony Blinken, referring to remarks from a senior Russian official who suggested Moscow is now ready to de-escalate the conflict in Ukraine. Wire services in Russia quoted Defense Minister Sergei Shoigu saying the first phase of Russia's military operations has been completed and Russian troops would now focus solely on "liberating" separatist republics of Donbass and Lugansk. Traders quickly judged de-escalation around Kyiv and Chernihiv, key cities in central Ukraine, would not automatically mean the end to the conflict that rattled commodity markets in recent weeks. Russian President Vladimir Putin is reportedly changing strategy after failing to oust Ukrainian President Volodymyr Zelensky, and instead of taking full control of the country is now seeking to divide the sovereign nation into two parts -- an unacceptable condition for Ukraine. NYMEX April ULSD futures declined 6.73 cents to $3.7161 gallon, modestly narrowing the prompt spread to a still wide 32.69 cents gallon. April RBOB futures softened to $3.2033 gallon, down 1.55 cents from the prior session, and the May contract widened its discount to April delivery to 2.66 cents gallon. The April RBOB and ULSD futures contracts expire alongside May Brent Thursday afternoon. The conflict has already led to some loss of Russian oil exports, according to private data, as Western traders and banks refuse to deal directly with Russian oil shipments. Still, it will take around two weeks until there is concrete evidence that quantifies the lost shipments and that the Organization of the Petroleum Exporting Countries would want to assess that data. There have also been reports suggesting Russia turned to selling crude at steep discounts in off-market transactions that allow buyers to shield their identities from the stigma of trading with Russian firms. DTN Refined Fuels Demand data revealed that gasoline demand in the U.S. increased by 0.8% in the reviewed week and now stands roughly in line with demand levels from the same week in 2019. With most U.S. states having rapidly exited pandemic restrictions and traffic volumes seasonally stronger heading into the summer driving season, gasoline consumption is likely to remain near or above pre-pandemic levels over the next few months. Distillate demand however continued to tumble lower, falling 5.3% during the week ended March 25 after eroding 4.5% in the prior week. Total U.S. diesel demand was down 1% year-on-year for the week and down 1.1% from the same week in 2019.
Oil Falls as no Cease-Fire Agreement was Reached | Rigzone - Oil slipped as talks between Russia and Ukraine failed to reach an agreement on a cease-fire, while the U.S. cautioned against declaring progress as they await signs of de-escalation. Futures in New York fell 1.6% to settle around $104 a barrel on Tuesday. Earlier in the session, West Texas Intermediate futures sank more than 7% and briefly traded under $100 after Moscow said it would sharply cut military operations near Kyiv and signaled a willingness to consider a presidential meeting between Vladimir Putin and Volodymyr Zelenskiy. “We are still in a $100 environment, no question,” said Paul Sankey of Sankey Research on Bloomberg Television. China’s continuing lockdowns are also relieving some pressure, but markets remain volatile, he said. “China is taking heat out of the market, but if the heat comes back, that adds $10” a barrel. Crude has largely traded above $100 a barrel since Moscow invaded Ukraine. Ensuing sanctions against Russia have caused extreme price gyrations in the oil market, leaving investors wary of trading. For the month of March, WTI has fluctuated on average over $9 per session. “Fundamental traders and investors have taken their chips off the table in crude due to extremely high volatility, leaving the primary players in the market to be traders looking to hedge geopolitical risks,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management. Following the conclusion of talks between Russian and Ukrainian negotiators in Istanbul, U.S. Secretary of State Antony Blinkin expressed skepticism about Russia’s promise to de-escalate its military activities around Kyiv. “There is what Russia says and there is what Russia does,” he told reporters. WTI for May delivery fell $1.72 to settle at $104.24 in New York. Brent for May settlement lost $2.25 to close at $110.23 a barrel. Elsewhere, China continues to grapple with its biggest Covid outbreak since the pandemic began. The latest restrictions in Shanghai could lower oil demand by as much as 200,000 barrels a day for the duration of the restrictions, consultant Rystad Energy said in a report.
Oil Rallies on Big Drop in US Inventory -- As the U.S. dollar erodes against a basket of foreign currencies to its lowest trade since March 17, oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange rallied in pre-inventory trade Wednesday after preliminary industry data from the American Petroleum Institute showed nationwide petroleum stockpiles decreased by a larger-than-expected margin during the week-ended March 25, while mixed signals from the Russian military on the ground in Ukraine fueled uncertainty over the next stage in the ongoing conflict.API late Tuesday reported U.S. commercial crude oil stocks plummeted 3 million bbl last week, three times calls for a 1 million bbl drop. Inventories at the NYMEX delivery point for West Texas Intermediate in Cushing, Oklahoma, experienced a 1.061 million bbl decline. Cushing stockpiles currently stand at 25.2 million bbl, down from 37.3 million bbl since the end of 2021.Gasoline stockpiles dropped 1.357 million bbl last week versus an expected 1.3 million bbl draw, while distillate supplies decreased 215,000 bbl, falling short of calls for a 1.2 million bbl draw.Wednesday's move higher is also underpinned by a rapidly declining U.S. dollar that slumped 0.4% in index trading to trade at a 97.855 two-week low. Greenback's weakness comes ahead of the release of March employment report from the Automatic Data Processing system that is expected to show U.S. businesses added 438,000 new jobs from February to March after a 475,000 gain the previous month. U.S. unemployment claims have been steadily declining in recent weeks to hit the lowest level since 1969 on March 18.Near 7:45 AM ET, NYMEX May West Texas Intermediate futures jumped $2.59 to $106.85 bbl, and ICE May Brent futures advanced $2.53 to $112.76 bbl. Next-month June Brent futures narrowed its discount to the May contract $2.53 bbl ahead of Thursday's expiration. NYMEX April ULSD futures gained 10.39 cents to $3.8200 gallon, widening the prompt spread to 34.75 cents gallon. April RBOB futures strengthened to $3.2729 gallon, up 6.96 cents from the prior session, and the May contract widened its discount to April delivery to 3 cents gallon. The April RBOB and ULSD futures contracts expire alongside May Brent Thursday afternoon.
Oil jumps 4% on tight supply, prospects of new Russia sanctions -Oil prices gained over 2% on Wednesday as another U.S. crude stock drawdown indicated tight supplies and investors worried about possible new Western sanctions against Russia. Brent futures climbed 2.9% to end the day at $113.35 per barrel. U.S. West Texas Intermediate (WTI) crude settled 3.4%, or $3.58, higher at $107.82 per barrel. U.S. crude stockpiles fell by a bigger-than-expected 3.4 million barrels last week, cutting inventories in the world's top consumer to 410 million barrels, their lowest since September 2018, government data showed. "U.S. crude inventories have shown another draw despite production ticking higher and yet one more solid SPR (Strategic Petroleum Reserve) release into commercial inventories," After seven weeks of holding steady, U.S. crude output inched up 100,000 barrels per day (bpd) last week to 11.7 million bpd, while crude stocks in SPR fell to their lowest since May 2002, and Gulf Coast refinery utilization rose to its highest since January 2020. Price gains were limited by surprise builds in U.S. gasoline and distillate stocks last week and lower demand for both products, traders said. In addition to the bullish data, prices reflected that "the oil market, at least, has a strong degree of scepticism about any 'progress'" in peace talks between Russia and Ukraine Commonwealth Bank analyst Tobin Gorey said in a note. Russian attacks continued a day after crude prices slid as Russia promised to scale down military operations around Kyiv. The United States and its allies plan new sanctions on more sectors of Russia's economy, including military supply chains. "We would see an additional 1 million barrels per day of Russian production at risk if relations with Europe worsen and an oil embargo is put in place, although we still see this as unlikely," consultancy JBC Energy said in a note. The Kremlin indicated that all of Russia's energy and commodity exports could be priced in roubles, as President Vladimir Putin seeks to make the West feel pain for the sanctions. In response to possible Russian gas supply cuts, Germany triggered an emergency plan to manage gas supplies. Other European countries also took steps to conserve gas. Keeping the market tight, major oil producers are likely to stick to their scheduled output target increase of about 432,000 bpd when OPEC+ - the Organization of the Petroleum Exporting Countries and allies including Russia - meets on Thursday, several sources close to the group said. But weakening demand in China is pressuring oil prices, as the country has tightened mobility restrictions and COVID-19-related lockdowns in multiple cities including the financial hub of Shanghai. U.S. data showed private employers maintained a brisk pace of hiring in March, leading investors to worry that a possible rapid rise in interest rates could hurt economic growth and fuel demand.
OPEC+ sticks to modest oil output hike as U.S. considers unprecedented release of reserves - Oil producer group OPEC+ on Thursday decided to stick to its strategy of gradually reopening the taps following reports the U.S. is considering the largest ever draw from its emergency oil reserve. The influential energy alliance of OPEC and non-OPEC partners swiftly agreed to raise its output targets by 432,000 barrels per day from May 1. Energy analysts had widely expected OPEC+ to rubber-stamp another modest monthly increase despite sustained pressure from top consumers calling for the group to pump more to cool soaring oil prices and aid the economic recovery. Oil prices have rallied to a near all-time high on concerns about Russian supply disruptions after the U.S. and international allies imposed a barrage of economic measures against the Kremlin as a result of its unprovoked onslaught in Ukraine. To be sure, Russia is the world's third-largest oil producer, behind the U.S. and Saudi Arabia, and the world's largest exporter of crude to global markets. It is also a major producer and exporter of natural gas. It is against this backdrop that the U.S. is considering a plan to cool soaring crude prices by releasing up to 180 million barrels from the country's strategic petroleum reserve, Reuters reported Wednesday, citing four unnamed sources. President Joe Biden is expected to deliver remarks later on Thursday. The move would mark the third time the U.S. has tapped its SPR in six months and the second since Russia's invasion of Ukraine on Feb. 24. Oil prices dropped sharply on the news. International benchmark Brent crude futures traded 5% lower at $107.69 a barrel Thursday afternoon in London, while U.S. West Texas Intermediate futures fell 5.4% to $101.96.
Oil Futures Fall 5% as Biden considers Huge SPR Release - Reversing Wednesday's advance, oil futures fell more than 5% Thursday morning in reaction to reports suggesting the Biden administration is considering the release of up to 180 million bbl of crude oil from the Strategic Petroleum Reserve over the next six months in a bid to lower oil prices that rallied to 14-year highs in the aftermath of the invasion of Ukraine. U.S. President Joe Biden's planned SPR release would be the largest draw from U.S. emergency reserves in history, with the plan to draw 1 million bpd of SPR crude to add to global oil supply. The SPR currently holds roughly 568 million bbl of crude oil. While details are not fully known, Washington is reportedly coordinating the measure with other countries that are part of the Organization for Economic Cooperation and Development, including Japan and the United Kingdom to join the effort. The United States and allies have sought to bring down prices with strategic reserves previously, but "the cooling effect" proved to be short-lived. Members of the OECD group agreed to release 60 million bbl on March 1, but Brent crude rose more than 7% that day. Goldman Sachs commodity research said this morning the reported SPR release might be different due to the sheer size of that release that would help the global market to rebalance in 2022 but would not resolve its structural deficit. The market's deficit is estimated between 1.5 and 2 million bpd currently -- a trend that is likely to accelerate due to the partial loss of Russian oil exports. For reference, International Energy Agency forecasted Russian oil production could plunge by 3 million bpd beginning in April as Western traders and banks shun from dealing with Russian oil cargoes. Russian pipeline operator Transneft has reportedly restricted oil intake into its network amid rapid buildup in storage levels. According to various estimates, Russian oil flows have fallen by 1.5 million bpd since the Feb. 24th invasion of Ukraine. In early trade, NYMEX May West Texas Intermediate futures plunged nearly $6 to $101.85 bbl, and ICE May Brent futures fell a like amount to $107.55 bbl ahead of expiration this afternoon. June Brent futures narrowed its discount to the May contract to $1.40 bbl in the backwardated market. NYMEX April ULSD futures plummeted 13.35 cents to $3.6750 gallon, but still holds a wide 33.7 cents gallon premium over the May contract ahead of its expiration Thursday afternoon. April RBOB futures declined to $3.1925 gallon, down about 13.25 cents from the prior session ahead of expiration Thursday afternoon, with the May contract trading at a 2.8-cent discount to the expiring contract.
Oil Slumps 7% as U.S. Plans Record Crude Reserve Release (Reuters) -U.S. oil prices fell 7% to close just above $100 on Thursday as President Joe Biden announced the largest ever release from the U.S. Strategic Petroleum Reserve and called on oil companies to increase drilling to boost supply. U.S. West Texas Intermediate futures for May delivery settled down $7.54, or 7%, at $100.28 a barrel, after touching a low of $99.66. Brent crude futures for May, which expired on Thursday, closed down $5.54, or 4.8%, at $107.91 a barrel. The more actively traded June futures were down 5.6% at $105.16, after falling by $7 earlier in the session. Both benchmarks posted their highest quarterly percentage gains since the second quarter of 2020, with Brent soaring 38% and WTI gaining 34%, boosted mainly after Russia's Feb. 24 invasion of Ukraine which Moscow calls a "special operation." "This is a market where every barrel counts and (the SPR release) is a significant volume of oil to be put on the market for an extended period of time," said John Kilduff, a partner at Again Capital LLC. Biden's 180 million-barrel release is equivalent to about two days of global demand, and marks the third time Washington has tapped the SPR in the past six months. Starting in May, the United States will release 1 million barrels per day of crude oil for six months from the Strategic Petroleum Reserve, Biden said, adding that 30 million to 50 million barrels of oil could be released in addition by allies and partners. "We need to increase supply... Oil firms sitting on idle wells or unused leases will have to start producing or pay for their inaction" he said. Other members of the International Energy Agency may also release barrels to offset lost Russian exports after that nation was hit with heavy sanctions for its invasion of Ukraine. IEA member countries are set to meet on Friday at 1200 GMT to decide on a potential collective oil release, a spokesperson for New Zealand's energy minister said. Goldman Sachs analysts said the move would help the oil market to rebalance in 2022 but was not a permanent fix.
Crude Oil Falls on Global Manufacturing Slowdown, Strategic Petroleum Reserve Release -- West Texas Intermediate futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange extended losses into a second session Friday. The moves followed the Biden administration's plan to release a record 180 million barrels (bbl) of crude oil from the Strategic Petroleum Reserve over a six-month period, easing some concern over the loss of Russian barrels on the global oil market. The unprecedented government intervention coincided with a sharp slowdown in manufacturing activity across major global economies amid the fallout from the Ukrainian war and new COVID-19 breakouts and lockdowns in China. Global manufacturers reported slower growth and far more pessimistic expectations for factory activity in March than in any other month this year, as the war in Ukraine weighed on export demand and led to renewed supply bottlenecks, according to industry surveys. In the United States and European Union, manufacturing activity fell to the lowest level since September 2020, when the Delta variant of coronavirus disrupted much of the global economy. "Business optimism in the goods producing sector has collapsed to a level indicative of manufacturing output declining in the second quarter and adding to the risk of the economy sliding into a new recession," said Chris Williamson, chief business economist at S&P Global Platts. European industries in particular have been hard hit with soaring natural gas prices and disrupted trade flows with Ukraine and Russia. For reference, high power prices resulting from the record run in gas prices have taken 900,000 tons of aluminum and 700,000 tons of zinc smelting capacity offline in Europe, according to Goldman Sachs. "Exploding energy prices, but above all a possible gas embargo, would hit energy-intensive industry -- the mother of the industrial network -- hard," Michael Vassiliadis, president of Germany's IGBCE chemical workers union said in a statement. "The consequences would not only be reduced work hours and job losses, but also the rapid collapse of the industrial production chains in Europe -- with worldwide consequences." Faced with prospects of economic slowdown, European countries that are part of the International Energy Agency today agreed to a release of oil from emergency reserves, with details of the plan to be announced early next week. The announcement by the IEA comes atop of a planned U.S. release of up to 180 million bbl of crude oil spread out over a period of six months at 1 million bpd starting in May, the biggest-ever drawdown from the country's emergency stocks which now hold 568 million bbl of crude oil. On the session, NYMEX May West Texas Intermediate futures fell $1.01 to $99.27 per bbl, and the ICE June Brent contract declined $0.32 to $104.39 per bbl. NYMEX May ULSD futures advanced 6.31 cents to $3.4240 gallon, and the May RBOB contract edged up 0.26 cent to $3.1535 gallon.
White House uses oil reserve to place a giant spread trade: Kemp (Reuters) - U.S. President Joe Biden has promised to make an average of 1 million barrels per day of crude available from the Strategic Petroleum Reserve (SPR) for the next six months after consulting with other IEA members. The unprecedented release of 180 million barrels is intended to ease concerns about supply and curb upward pressure on prices following Russia’s invasion of Ukraine and the imposition of sanctions in response.The inventory release is meant “to serve as a bridge until the end of the year when domestic production ramps up,” according to a statement issued by the White House on Thursday.Sale revenues will be used to restock the SPR in future years, ensuring it remains available to respond to future emergencies (“President Biden’s plan to respond to Putin’s price hike at the pump”, White House, March 31).The aim is to ease upward pressure on spot prices by increasing the amount of oil immediately available, while supporting long-dated futures contracts and encouraging more drilling by pledging to buy back the oil later.In effect, the White House has committed itself to a giant 180 million barrel spread trade to relieve anxiety about a sudden reduction in oil exports from Russia as a result of the war or sanctions. In recent weeks, traders have been trying to “buy” the calendar spread, purchasing futures contracts with nearby delivery dates and (in some cases) selling contracts with longer to delivery.As a result, prices for near-dated futures have risen much faster than for those expiring later in 2022 and 2023, as traders anticipate a sudden shortage of crude, heavy fuel oil and diesel exports from Russia.Brent futures for deliveries in June 2022 had climbed by almost $41 per barrel (54%) by March 25 compared with the end of 2021, while futures for deliveries in December 2023 had risen by just $19 (27%) over the same period. Brent’s six-month calendar spread reached a record backwardation of more than $21 by early March and was still trading in a backwardation of more than $18 at the end of last week.Intense upward pressure on near-dated futures contracts has rippled along the supply chain and helped drive up retail prices for gasoline and diesel (https://tmsnrt.rs/3iYeHmd).The White House plan in effect uses the SPR to take the other side of the trade, "selling" the spread by selling physical oil into the spot market with a promise to buy it back later.The main impact should therefore be on the calendar spreads themselves mostly via prices of futures contracts nearest to delivery.Following the SPR announcement, Brent’s six-month calendar spread has already narrowed to a backwardation of $9, still historically high, but the lowest since before Russia’s invasion in late February.The spread between futures contracts for June and July has halved to less than $2 per barrel from a peak of more than $4 early last month. Pledged SPR sales should reduce anxiety about a physical shortage of petroleum and relieve some of the recent illiquidity in futures markets by creating a de facto willing counterparty to traders betting on higher oil prices.
Oil prices ease as nations agree to tap reserves - Oil settled lower on Friday as members of the International Energy Agency (IEA) agreed to join in the largest-ever United States oil reserves release. Both Brent and US crude benchmarks settled down around 13 percent in their biggest weekly falls in two years after US President Joe Biden announced the release on Thursday. Brent crude futures were down 32 cents, or 0.3 percent, at $104.39 a barrel. US West Texas Intermediate (WTI) crude futures fell $1.01, or 1 percent, at $99.27. Biden announced a release of one million barrels per day (bpd) of crude oil for six months from May, which at 180 million barrels is the largest release ever from the US Strategic Petroleum Reserve (SPR). Member countries of the IEA did not agree Friday on volumes or the commitments of each country at their emergency meeting, said Hidechika Koizumi, director of the international affairs division at Japan’s Ministry of Economy, Trade and Industry. He added that additional details could be known “within next week or so.” OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies including Russia, on Thursday stuck with plans for an increase of 432,000 bpd to their May output target despite Western pressure to add more. US energy firms last week added oil and natural gas rigs for a second week in a row but growth in the rig count remains slow as drillers continue to return cash to shareholders from high crude prices rather than boost production. “The looming flood of US barrels does not change the fact that the market will struggle to find enough supply in the coming months,” PVM analyst Stephen Brennock said. “The US release pales in comparison to expectations that three million bpd of Russian oil will be shut in as sanctions bite and buyers spurn purchases.” In a bearish signal for demand, China’s commercial hub of Shanghai ground to a halt on Friday after the government locked down most of the city’s 26 million residents, aiming to stop the spread of COVID-19. JPMorgan said in a note that it had kept its price forecasts unchanged at $114 a barrel for the second quarter and $101 a barrel in the second half of this year. “Crucially, we recognize that a release of oil inventories is not a persistent source of supply, and if stranded Russian barrels average more than 1 million bpd next year, this will leave 2023 in a deep deficit, rendering our $98 a barrel price forecast for the year too low,” the bank said.
Oil Heads for Big Weekly Drop as Biden Seeks to Cool Pump Prices-- Oil is poised for the biggest weekly loss in almost two years after the Biden administration ordered an unprecedented release of strategic U.S. reserves to tame rampant prices. West Texas Intermediate futures fluctuated near $100 a barrel on Friday, and are down around 12% for the week. The U.S. plans to release 1 million barrels a day for six months, although analysts warned any reprieve would be short-lived. The news filtered into the market early on Thursday, just before the OPEC+ alliance gathered to ratify a modest increase in supply for May. Russia’s war in Ukraine has roiled global commodity markets and driven up the price of everything from food to fuels, challenging governments seeking to encourage economic growth after the pandemic. It’s led to tumultuous trading in the oil market, with wild swings during sessions throughout March.President Joe Biden blamed a spike in gasoline prices this year on his Russian counterpart Vladimir Putin and the invasion of Ukraine, calling it “Putin’s price hike.” He also criticized U.S. oil companies that have been reluctant to boost production. The cost of retail gasoline at the pump was already high prior to the invasion, but the war has turbocharged prices worldwide.The market also faced pressure this week from concerns about Chinese demand as the world’s biggest oil importer implements a series of lockdowns to curb a virus resurgence. Those curbs are starting to have an impact on the economy, with manufacturing activity contracting in March.
Oil Incurs Massive Weekly Loss As Biden Drawdown Increasingly Viewed As Futile - U.S. president Joe Biden's latest planned release of emergency strategic reserves to combat high oil prices at the pump was said to have contributed on Friday to the commodity posting its biggest weekly loss in over 10 years, along with nations belonging to the International Energy Agency agreeing to release another round from stockpiles. Member countries of the IEA did not agree on volumes or commitments at an emergency meeting on Friday, but additional details could be revealed "within the next week or so, according to Hidechika Koizumi, director of the international affairs division at Japan's Ministry of Economy, Trade and Industry. Brent declined 32 cents at $104.39 per barrel, while West Texas Intermediate fell $1.01 at $99.27; both benchmarks for the week settled down around 13 percent. The market was also under pressure Friday as WTI fell below its 50-day moving average for the first time since early January (Brent approached toward that level, but only briefly). More bad news for traders came in the form of manufacturing activity in China in March reportedly taking a hit from the series of lockdowns imposed by governments to curb a resurgence of Covid-19. While Biden's latest stockpile release is making headlines, analysts insist that like his previous releases, the amount of oil released compared to the amount lost to high demand and the Russia/Ukraine war is minuscule and doubtful to Key Bunker Prices Stephen Brennock, senior analyst at PVM, said, "The looming flood of U.S. barrels does not change the fact that the market will struggle to find enough supply in the coming months. "The U.S. release pales in comparison to expectations that 3 million barrels per day [bpd] of Russian oil will be shut in as sanctions bite and buyers spurn purchases." JP Morgan agreed, and on Friday stated in a note, "Crucially, we recognize that a release of oil inventories is not a persistent source of supply, and if stranded Russian barrels average more than 1 million bpd next year, this will leave 2023 in a deep deficit, rendering our $98 a barrel price forecast for the year too low."
U.S., Israel and Arab states to expand cooperation in unprecedented meeting — The foreign ministers of the United States, Israel and four Arab governments committed to expand economic and diplomatic cooperation in an unprecedented meeting in Israel’s southern Negev desert on Monday. The presence of top diplomats from the United Arab Emirates, Bahrain, Morocco and Egypt on Israeli soil showed a new level of comfort between Israel and its Arab neighbors even though the parties did not sign any binding agreements or specific policies. Secretary of State Antony Blinken hailed the meeting as the latest indication of a realignment of Middle Eastern relations that could expand the potential for peace and conflict resolution across the region. “Just a few years ago this gathering would be impossible to imagine,” Blinken said. Israel’s foreign minister, Yair Lapid, said the countries would strive to make the summit a yearly event. Ahead of summit, U.S. Middle East allies show Ukraine limited support The six-way meeting in Israel’s southern desert, dubbed the “Negev Summit,” represents the type of rapprochement the United States has long sought. But it also came amid a growing list of tensions between Washington and its Middle East allies, including the revival of the Iran nuclear deal; mounting tensions between Israelis and Palestinians; and a lackluster response to Russia’s invasion of Ukraine from Arab and Israeli partners. Arab governments in attendance thanked Israel for hosting but also maintained that it must make progress on implementing a two-state solution for the Palestinians with East Jerusalem as its capital. “Our message should be that we’re here to defend our values, to defend our interests,” said Morocco’s foreign minister, Nasser Bourita, who said the creation of a future Palestinian state was still “possible.”
Subsidized diesel shortage hits trucking industry --A subsidized diesel shortage has disrupted trucking operations in many parts of Indonesia, as recovering domestic fuel demand meets rising global oil prices. Local news outlets have reported long lines of trucks at fueling stations operated by state-owned oil giant Pertamina across the archipelago, with drivers saying they have had to wait for up to 24 hours for the diesel fuel commonly known as “solar”. Trucking associations say the problem is particularly acute in Sumatra, Kalimantan and Sulawesi. The Indonesian Truck Operators Association (Aptrindo) said on Tuesday that the supply crunch meant drivers either waited longer to refuel or got less fuel than needed, forcing them to refuel more often than usual, causing delays.Oil depot hit by missile attack in western Ukraine - An oil depot in western Ukraine was hit by a missile on Monday, adding to a series of similar attacks in recent days as Russia continues its military invasion of Ukraine.Ukrainian President Volodymyr Zelensky told Russian journalists on Sunday that the attacks on oil depots could be an attempt to disrupt the planting season in the country, which is a major grain producer, NBCreported.During the attacks, missiles have hit oil depots and a military plant in Lviv, a city in western Ukraine near Poland. The region, however, has not experienced combat on the ground like other parts of Ukraine, mostly in the south and far east. Poland has accepted roughly 2.3 million of the nearly 4 million refugees who have fled Ukraine amid Russia's unprovoked attacks that began more than one month ago.Since Russia began its attack on Feb. 24, the United Nations human rights office has said there have been 2,909 civilian casualties, including 1,119 deaths. The office also noted that despite its high tally, "the actual figures are considerably higher" in terms of injuries and the death toll. Now, more than a month into the invasion, delegations from Russia and Ukraine are scheduled to meet in Turkey this week for more peace negotiations, though previous talks have not yielded any breakthroughs.
Russian defence ministry says Ukrainian helicopters attacked oil facility (Reuters) - Russia's defence ministry on Friday said two Ukrainian Mi-24 helicopters were responsible for an attack on a fuel depot in the Russian city of Belgorod, but it added that the facility did not supply fuel to the military. In its statement, the ministry said the two helicopters attacked after crossing the border at an extremely low altitude.
Luhansk 'may hold referendum on joining Russia', Ukraine says 'null and void' - The self-proclaimed "Luhansk People's Republic" in eastern Ukraine said on Sunday it could soon hold a referendum on joining Russia, a move Ukraine said would have no legal basis. "I think that in the near future a referendum will be held on the territory of the republic," local leader Leonid Pasechnik said, according to the region's news outlet. "The people will exercise their ultimate constitutional right and express their opinion on joining the Russian Federation." "For some reason, I am sure this will be the case," he said. "Fake referendums in the occupied parts of Ukraine are null and void. No country in the world will ever recognize the forceful change of Ukraine's internationally recognized borders," Ukrainian Foreign Ministry spokesperson Oleg Nikolenko said in a tweet. Russian President Vladimir Putin on February 21 signed two decrees recognizing "the Luhansk People's Republic" and "the Donetsk People's Republic" as independent and sovereign states. On February 24, Russia authorized "a special military operation" in Ukraine in response to the appeal of the leaders of the "republics" in the Donbass region. Russia is trying to split Ukraine in two to create a Moscow-controlled region after failing to take over the whole country, Kyrylo Budanov, head of Ukrainian military intelligence said on Sunday in a statement. He added that Ukraine would soon launch guerrilla warfare in what he called Russian-occupied territory.
Ukrainian War Update: Ukrainians Burn Russian Spies - The Ukes had some fun that was also a gift to Western Europe, as they identified 600 Russian spies working in the region. NATO counterintelligence is having a busy day.Meanwhile, peace talks continue in Turkey. Though remember this: The Soviets had a tactic called “maskirova.” It’s just basically using one tactic to mask another. The Colonel Green thing. Well, the Ukrainians are using it against the Russians. The Ukes know that every day the war goes on they get stronger and Ivan gets weaker. So they pretend to talk about peace while attriting the Russians to death. More fun! FNC: “Ukraine’s defense intelligence ministry released a list of more than 600 alleged Russian spies working in Europe in an apparent attempt to burn them and weaken Russia’s intelligence operations across the continent.The intelligence wing of the Ministry of Defense of Ukraine released the “list of employees of the FSB of the Russian Federation registered at the address: Moscow, St. Bolshaya Lubyanka” on Monday. The FSB is the successor agency to the KGB, Russia’s notorious spy arm.The list, released in Russian and apparently unavailable on the English version of the ministry’s website, provides names, phone numbers, passport numbers, “registration addresses,” license plate numbers, and occasionally financial details for 620 alleged Russian spies. In a few cases, the list includes a home address.”
Russian oligarch, Ukrainian negotiators had symptoms of suspected poisoning: report --Russian oligarch Roman Abramovich and Ukrainian peace negotiators reportedly had symptoms indicating a possible poisoning after a meeting in Kyiv earlier this month. After their meeting, Abramovich and two senior Ukrainian negotiators, including Crimean Tatar lawmaker Rustem Umerov, had symptoms including red eyes, constant and painful tearing and peeling skin on their faces and hands, The Wall Street Journal reported. A person close to Abramovich told the Journal it was unclear who specifically targeted the trio, but people familiar with the matter placed blame on figures in Moscow who were attempting to foil talks to end the war.Those sources also told the newspaper that the symptoms for Abramovich and the negotiators had improved and their lives were not in danger. They added that Western experts were unable to determine if the reaction was from a chemical or biological agent or an electromagnetic-radiation attack, the Journal reported. But a U.S. official said their condition was due to an "environmental" reason "E.g., not poisoning," according to Reuters.
Ukraine warns negotiators not to eat or drink at Russia talks over poison concerns - Ukraine is warning its negotiators not to eat or drink anything during peace talks with Russian counterparts amid growing concerns over the potential for poison. “I advise anyone going for negotiations with Russia not to eat or drink anything, preferably avoid touching surfaces,” Ukrainian Foreign Minister Dmytro Kuleba said in an interview with a state media outlet on Tuesday, according to The Washington Post.. Russian oligarch Roman Abramovich and several Ukrainian negotiators had reportedly shown symptoms of possible poisoning from a previous meeting. Abramovich along with senior Ukrainian negotiators showed symptoms of red eyes, constant and painful tearing and peeling skin on their faces and hands. Officials have said that Abramovich fully recovered from his symptoms. Abramovich was one of the few Russian oligarchs targeted by Western powers in a round of sanctions for Russia’s invasion of Ukraine. Kremlin spokesperson Dmitry Peskov denied reports of Russia being linked to the poisoning incident, calling the initial reports untrue and part of an "information war."
Russian journalist says families are pressured not to talk about their relatives killed in Ukraine, local papers don't report their deaths A Russian journalist says families of soldiers killed in Ukraine are being told to keep silent about it, and that newspapers are told not to report fatalities. "All local media outlets were instructed by regional government not to publish any data on losses in Ukraine," the journalist, who works in the Siberia region, told BBC World correspondent Olga Ivshina.The journalist said that "there are cases when local officials put pressure on the relatives of the victims, ordering them to stay silent," according to Ivshina. "They say, now there is no need to make a fuss, we will find a way to commemorate your boys later." ‘
Internet Provider to Ukrainian Military Hit With Major Cyberattack - A Ukrainian internet service provider used by the country’s military suffered a massive cyberattack on Monday, Ukrainian officials said, fueling fears that Russia intends to wield more dangerous digital weapons as the war drags into its second month. The attack on Ukrtelecom PJSC was described by some experts as among the most harmful cyberattacks since the Russian invasion of Ukraine on Feb. 24. About 3:30 p.m. ET on Monday, Ukrainian officials said that they had repelled the attack, and that the company could restore services, according to a statement from Ukraine’s State Service of Special Communication and Information Protection, which is responsible for cybersecurity in the country.
Almost 4 million refugees have fled Ukraine: UN Nearly 4 million refugees have fled Ukraine since Russia began its assault on the country more than a month ago, according to the latest estimate from the United Nations High Commissioner for Refugees (UNHCR). Data from the UNHCR released Sunday shows that since Russia’s Feb. 24 invasion, millions of Ukrainians have moved to nearby countries, primarily Poland, Romania, Moldova, Hungary and Slovakia. Hundreds of thousands of Ukrainians have also traveled to Russia, some reportedly by force, along with thousands who have migrated to Moscow ally Belarus. The net number of people who have fled Ukraine was about 672,000 at the end of February but has shot up to more than 3,866,000. “In the first week, more than a million refugees from Ukraine crossed borders into neighbouring countries, and many more are on the move both inside and outside the country,” according to the UNHCR. “As the situation continues to unfold, an estimated 4 million people may flee Ukraine.” By far the most Ukrainians have fled into Poland, which is currently hosting some 2.3 million refugees from the war. The population of Ukrainian refugees in the other host countries stands at hundreds of thousands. Many more Ukrainians remain stuck in battered and besieged cities, as Ukraine says Russia is refusing to respect humanitarian corridors to allow them to flee safely. The UNHCR said the "regional refugee response plan ... focuses on supporting the host country governments to ensure safe access to territory for refugees and third-country nationals fleeing from Ukraine, in line with international standards."
Broke Russian Oligarch Says Sanctioned Billionaires Hold No Sway Over Putin - When I first called Mikhail Fridman to ask if he would talk about what it’s like to be sanctioned, he all but hung up on me. A couple of days later, he said he still didn’t think it was a good idea. After further back and forth he finally agreed, proposing we meet at a hotel in London’s Mayfair district. I countered with his home, Athlone House, a Victorian estate he bought in 2016 for £65 million ($85 million at the current exchange rate). He didn’t like that, which is how we ended up at a cafe in North London, speaking for almost two hours against the constant sound of an espresso machine grinding in the background.Wearing a blue cashmere sweater, a T-shirt, and jeans, he arrives a few minutes early, looking slightly frazzled. In the two weeks sinceRussia invaded Ukraine, the world as he knew it—as we knew it—hadended. Fridman hadn’t thought Putin would launch a full-scale invasion; in the runup to the war, he says, he’d told colleagues atLetterOne, his private equity firm in London, that he couldn’t imagine Russians fighting Ukrainians. This thought reflects his personal story: Fridman, 57, was born and raised in the Soviet Union in the western Ukrainian city of Lviv. He was a first-wave oligarch, making a fortune in banking and energy before Putin’s rise to power. His parents are Ukrainian citizens who until recently lived part of the year in an apartment in Lviv, a city known for anti-Russian sentiment and leadership in Ukrainian nationalism. “I know every corner of that city,” he tells me. “I always thought Ukraine would resist.”
Russian secret service agents seized millions of dollars of Swiss luxury watches from Audemars Piguet in apparent retaliation against sanctions - Russian secret-service agents confiscated millions of dollars' worth of luxury watches from a Swiss watchmaker in apparent retaliation against Switzerland's sanctions over the Ukraine war, Switzerland'sNZZ am Sonntag newspaper reported over the weekend.The watches were confiscated from a local subsidiary of Audemars Piguet in Moscow earlier this month, the report said. Audemars Piguet, a nearly 150-year-old family-owned business, makes luxury watches that typically cost tens of thousands of dollars.Russian authorities cited customs offenses for the seizure of the watches, but Switzerland's foreign ministry said in a confidential memo that it was most likely "an arbitrary repressive measure in reaction to the sanctions," NZZ am Sonntag reported.On February 28, Switzerland departed from its historically neutral status to sanction Russia over its invasion of Ukraine. The restrictions include a ban on the export of luxury g oods to Russia.
Russia Plays Down Progress in Peace Talks, Intensifies Attacks in Eastern Ukraine – WSJ -Moscow dismissed a diplomatic overture by Ukraine in peace talks, while Russian forces hit targets around Kyiv on Wednesday despite saying they would limit attacks there as they stepped up ground and air assaults in eastern portions of the country. Kremlin spokesman Dmitry Peskov said talks Tuesday in Turkey between Ukrainian and Russian delegates didn’t represent a turning point in the conflict. “No one said that the sides have made headway,” he said. “We can’t point to anything particularly promising.”
As Russian forces move east, Ukraine digs in against losing Donbas - As the chances fade that Russia will decapitate Ukraine’s government and seize the capital, concerns are growing that Moscow could seek to force Kyiv to give up part of its territory to end the five-week war and eke out some form of victory. Ukrainian leaders warned of such a possibility this week, saying they will not accept any peace deal that requires ceding land. But if the Kremlin succeeds in encircling and defeating Ukrainian forces in the eastern Donbas region, the country’s industrial heartland, keeping that territory could become Moscow’s principal demand in negotiations. “I see the Russian troops regrouping, reorganizing. I think that they will try to surround the Ukrainian forces quite soon — in the Donbas region in particular,” Polish Prime Minister Mateusz Morawiecki told CNN’s Christiane Amanpour on Thursday. “And then having captured one-third of the land in Ukraine, they will want to negotiate from this … very strong position.” Moscow first announced last week it was shifting its forces to focus on the Donbas, declaring it had accomplished its goals in the first phase of its invasion and would now focus on the “complete liberation” of Donetsk and Luhansk, two provinces in the region. Western officials, however, suspect the strategy switch-up was due to heavy losses for Moscow’s military, which had hoped to quickly topple Kyiv but did not foresee or plan for fierce Ukrainian fighting, which has been able to fend off a complete Russian takeover for more than a month. NATO also estimated last week that between 7,000 to 15,000 Russian soldiers had been killed in the fighting so far — including six generals — with up to 40,000 dead, wounded, captured or missing. Evidence of the new strategy was observed this week, with Ukrainian officials on Thursday reporting heavy shelling of cities in the Donbas and a partial withdrawal of Russians from Kyiv. Almost 700 units of equipment were seen leaving the capital area and headed towards the Belarusian border, according to the Ukraine Media Center. Ukrainian President Volodymyr Zelensky on Thursday issued a stark warning to his citizens — the second such message in 24 hours — saying that in the coming days in Donbas, Mariupol and the direction of Kharkiv “Russian troops are accumulating the potential for strikes. Powerful blows. We will defend ourselves.”
US to assist allies moving Soviet tanks to Ukraine: report -The U.S. will help allies move Soviet-made tanks to Ukraine in an effort to assist the country in protecting its Donbas region amid the Russian invasion, The New York Times reported Friday.A U.S. official, who spoke to the outlet on the condition of anonymity, did not give provide a timeline on the tanks’ transfer, but noted that the movement will happen soon. The official also did not provide details on which countries the U.S. was assisting to move the military vehicles.The transfer marks the first time in the conflict that the U.S. has assisted directly to transfer military resources to Ukraine and comes in direct response to a request from Ukrainian President Volodymyr Zelensky. Zelensky has asked the West to transfer weapons for weeks, the source told the Times.In the past, U.S. officials, including President Biden, have been reluctant to declare a “no-fly zone” over Ukraine for fear that it would be forced to defend the airspace and spark direct conflict with Russia.The Defense Department told The Hill the agency has no comment at this time. The U.S. has indicated Russia is changing its focus on the eastern part of Ukraine in the Donbas region, where Moscow has been backing separatist fighting for years. The Pentagon said Russia is sending 1,000 fighters to Donbas, and Zelensky has vowed to continue to defend the territory.
JPMorgan behind moves to detain Russian billionaire’s superyacht -JPMorgan Chase, the biggest U.S. bank, is behind court moves to seize a superyacht owned by a sanctioned Russian billionaire in Gibraltar. In one of the first public court actions by a bank to enforce on a debt against a sanctioned individual, JPMorgan won a court order authorizing Gibraltar’s port authority to detain the 73-meter (240-foot) yacht Axioma owned by Dmitry Pumpyansky. The five-deck Axioma, which boasts an infinity swimming pool plus a 3D cinema, was impounded last week. Officials in the British territory said that while they wouldn’t normally have allowed the yacht to enter Gibraltar waters given Pumpyansky’s ownership, they seized the vessel “in the interests of creditors with proper claims.”
Russia holdout HSBC has cut references to a 'war' in Ukraine from its analyst research reports, the FT says - Committees at the research department at HSBC — which is under pressure to exit Russia — have softened the language in several publications, the FT said. Zelenskyy says Russian oligarch Roman Abramovich has been trying to help Ukraine during Russia's invasion
Germany may make displaying 'Z' in support of Ukraine invasion criminal: report - A German official said on Monday that residents who displayed the letter “Z” in support of Russia’s invasion of Ukraine could face criminal charges,Reuters reported. Russian military officials have used the letter as a marking on their military vehicles during the conflict, while civilians have adopted it as a symbol of support for the Russian invasion. "The Russian war of aggression on the Ukraine is a criminal act, and whoever publicly approves of this war of aggression can also make himself liable to prosecution," Germany's Interior Ministry spokesperson said in a statement on Monday. German Chancellor Olaf Scholz said on Sunday that the country has considered purchasing a missile defense system to defend itself from a possible Russian airstrike. Scholz told a German media outlet that the country wants to purchase a system similar to Israel’s Iron Dome."This is certainly one of the issues we are discussing, and for good reason," Scholz said.
Stop censoring the opponents of war! -On Saturday, Facebook deleted a video posted by the Socialist Equality Party of Germany opposing the German government’s participation in the US-led NATO proxy war against Russia in Ukraine.The video, titled “No Third World War! Against the war in Ukraine, NATO aggression and German rearmament!”, places the conflict in Ukraine in its historical and political context. It was viewed by 20,000 people before being removed.The Sozialistische Gleichheitspartei (Socialist Equality Party, SGP), which produced the video, wrote to Facebook to demand an explanation for its actions. The SGP has yet to receive an answer. There is no innocent explanation for this action from a company that, earlier in the war, changed its guidelines to allow users in certain countries to publish calls for acts of violence against Russians. It is an act of political censorship directed against anyone who opposes war and militarism.
The IMF Connection with the Ukraine Crisis - (video & transcript) “The conflict the world is currently facing in Ukraine cannot be understood by ignoring the way in which “the West”, after the fall of the Berlin Wall, conquered Eastern Europe, including Russia, with an economic doctrine that was not only inappropriate but brought massive damage to the countries and a sense of being second class people.The result is a large number of states that are not counted as failed states today only because they were able to squander their raw materials in the wake of the opening of all markets. This and absurd privatization attempts orchestrated by the West paved the way for an oligarchy that was initially hailed by the West as a “private solution” to the structural problem, but which proved fatal for the countries’ development chances.In addition, it was precisely these oligarchic structures that blocked any path to a functioning democracy from the outset, because only regimes that came to terms with the oligarchs were allowed by them. However to this day, people in the West do not want to take note of this.”"So, that was a quote taken from Eastern Europe and Russia– The economic disaster we created is forgotten [Part 1] an article authored by Heiner Flassbeck. Heiner Flassbeck served as chief macroeconomist at the German Institute for Economic Research in Berlin, the DIW, from 1988 to 1998. Flassbeck then became State Secretary (Vice Minister) in the Federal German Ministry of Finance from 1998 to 1999.With this kind of firsthand experience Flassbeck goes on to explain how in the 1990s he and some of his DIW colleagues tried to contribute to the rebuilding of the economic structures and economic decision making in one of the former Soviet republics, Kazakhstan. And that other colleagues from the German Institute for Economic Research, travelled just as extensively in Russia, Ukraine, and other countries. The point Flassbeck makes is that everywhere they went the IMF was there.In his article The IMF Connection with the Ukraine Crisis, Prabhat Patnaik writes:It [the IMF] has become an instrument in the hands of international finance capital, enabling its penetration into every corner of the globe. But it is not just an instrument of international finance capital; it also serves as an instrument of Western metropolitan powers that stand behind this capital. While defending the interests of international finance capital, it gets dovetailed into the entire coercive apparatus of Western metropolitan powers.Patnaik goes on to argue that Putin’s regime is by no means detached from the power of finance capital. Joining us from New Delhi, India Prabhat is here to talk to us about all this.Prabhat Patnaik is Professor Emeritus at the Centre for Economic Studies and Planning at Jawarhalal Nehru University in New Delhi. He is author Capital and Imperialism among numerous other books. Welcome, Professor Patnaik.
US, Russia, China, Pakistan to meet over Afghanistan - Officials from the United States, Russia, China and Pakistan are scheduled to meet in China this week to discuss Afghanistan, Reuters reported, citing the State Department and the Chinese foreign embassy. A State Department spokesperson told Reuters that U.S. special representative for Afghanistan Tom West will be attending the talks while a Chinese foreign ministry spokeswoman said that the meeting would be hosted by Chinese special envoy for Afghanistan Yue Xiaoyong. Interfax news agency reported, citing a Russian foreign ministry spokeswoman, that Russian Foreign Minister Sergei Lavrov had arrived for the talks in China, Reuters noted. Pakistan is also slated to participate in the discussions. Taliban representatives have been invited to attend the talks by China, the U.S. understands, the State Department spokesperson told the news wire. “China, the US, Russia and Pakistan are countries with important influence on the Afghan issue. We hope to seek synergy between this meeting and the third Foreign Ministers’ Meeting among the Neighboring Countries of Afghanistan, further build consensus on the Afghan issue, encourage regional countries and the international community to step up support for peace and reconstruction in Afghanistan, and help the country achieve peace, stability and development at an early date,” Chinese Foreign Ministry Spokesperson Wang Wenbin said on Tuesday regarding the talks. A State Department spokesperson told Reuters that the U.S. believed the countries held shared interests in building back Afghanistan’s economy, making sure the Taliban stays true to forming a more inclusive government and combating terrorism. But the development comes amid Russia’s invasion into Ukraine, which is now in its second month, and Lavrov has been targeted by international sanctions.
Xi’s gamble on Putin may be the most dangerous of his 9 years in power - It becomes clearer every day that Chinese President Xi Jinping's decision to double-down on his "no limits" strategic bromance with Russian President Vladimir Putin, just days before the Russian dictator launched his war in Ukraine, marks the most dangerous and short-sighted gamble of his nine years in power. If Europe's bloodiest conflict since World War II produces Putin's military withdrawal, failure, or his political ouster, it has all the ingredients to pose the biggest threat yet to President Xi's leadership, coming as it does in the leadup to his decisive 20th Chinese Communist Party Congress in November. Geopolitical odds-makers still expect a carefully choreographed outcome at the Congress that would anoint President Xi for a third term and perhaps even as "leader for life." That said, a Putin failure of whatever stripe could "create the chemistry necessary for a rethink of Chinese leadership inside the party," Kevin Rudd, the former Australian prime minister, tells me. Though Xi's control remains "comprehensive," Rudd said, "it's not "complete." There's no doubt that President Xi must begin to consider the consequences of Putin's ruin. In perhaps the most significant speech of his long political career, U.S. President Joe Biden in Poland departed from his prepared text to suggest what price Putin should pay for his unjustified, unprovoked and criminal war on Ukraine's civilians. "For God's sake," Biden said, "this man cannot stay in power." The problem for Xi, in this most important of years for his historic legacy, is that his problems are self-inflicted, cumulative, and growing. None on its own would be enough to turn party comrades against him, especially after a series of purges that have removed potential opponents. Taken together, however, they have dramatically changed the mood. Xi's inability to anticipate Putin's military failures and mounting war crimes could increase doubts about the Chinese president's judgment across a number of other fronts as well. These include:
- 1) Xi's more assertive and aggressive global approach, casting aside the guiding international philosophy of Deng Xiaoping's leadership of "hide your strength and bide your time." Even Communist elites, who are otherwise hostile to the United States, are coming to realize that a quieter building of Chinese military, and economic and technological power would have produced better results than "wolf-warrior diplomacy."
- 2) Xi's crackdown on the power and freedoms of the Chinese private sector, and particularly its technological giants, is also backfiring. The lost confidence and reduced foreign investments in China's private sector, which still makes up more than 60% of GDP, is slowing Chinese growth and reducing its competitiveness.
- 3) Many of China's Communist party elite, particularly those of Xi's generation or older, worry about their own careers and fates should Xi be reappointed for a record third term this November. Rumors are rife that Xi will bring in a new generation of leaders, more likely to be compliant, while he pushes off any consideration of successors.
- 4) The myth is being shattered of Xi's mastery of the Covid-19 pandemic, which until recently was one of his primary sources of leadership credibility. Chinese anxiety is rising around new outbreaks, already leading to major lockdowns in Shenzhen and Changchun in northern China. Xi's strict zero-Covid approach has left his country with low vaccination rates, especially around booster shots, less effective vaccines, and unanticipated economic difficulties.
With all that as context, Xi and Putin on February 4 — with the Beijing Winter Olympics opening and more than 150,000 Russian soldiers massing on Ukraine's border — signed their 5,300-word statement "that the new inter-State relations between Russia and China are superior to political and military alliances of the Cold War era. Friendship between the two States has no limits, there are no "forbidden" areas of cooperation.
China begins most extensive lockdown in years to control Shanghai outbreak - Shanghai on Monday launched the most extensive COVID-19 lockdown that China has seen in two years as the city seeks to contain a surge in new coronavirus cases. Authorities in the Chinese financial hub announced the decision on Sunday, saying a 465-square-mile area on the eastern bank of the Huangpu River would be locked down for four days for mass testing. The area set to be locked down is home to about 5.7 million people, according to the South China Morning Post. Five other districts — Jinshan, Fengxian, Chongming, Puxi and part of Minhang — are also set to go under lockdown at staggered periods. As the Post noted, this decision came after repeated assurances from city authorities that another lockdown would not be issued. During the lockdown, all public transportation and private vehicles will be barred from traveling between the Pudong New Area and other regions of the city. Since the beginning of March, Shanghai has seen a new outbreak caused by the omicron variant. As of Sunday, there were about 11,500 reported cases, the Post reported, though most were asymptomatic. As The Associated Press reported, residents in the eastern bank of the Huangpu River were confined to their homes as health care workers arrived to administer COVID-19 tests. Residents on the other side of the river began to stockpile goods and overwhelmed supermarkets as they prepared for their own lockdown. The lockdown is expected to impact major trading and manufacturing facilities, such as Tesla's gigafactory, the Pudong International Airport and production centers for China's largest chip maker, SMIC.
Tesla to halt Shanghai factory production amid Covid curbs: Bloomberg - Tesla is planning to suspend production at its Shanghai factory for at least one day, Bloomberg News reported on Sunday, as China's financial hub said it would go into a lockdown in two stages to conduct Covid-19 testing. Tesla's production in the plant will be halted on Monday, the report said, citing people familiar with the matter, adding that the electric carmaker hasn't yet informed workers if it would extend the suspension beyond Monday. Tesla did not immediately respond to Reuters' request for comment. Shanghai's municipal government said on Sunday that all firms and factories will suspend manufacturing or work remotely during the lockdown. Earlier this month, Tesla had to halt production at the factory for two days as China tightened its Covid-19 restrictions. The company then said it was trying its best to keep production going at the factory.
China is shutting down Shanghai in two phases to control Covid— China's biggest city Shanghai began a two-stage lockdown Monday as authorities attempt different strategies to maintain growth, while trying to control the country's worst Covid-19 outbreak since the pandemic began.Shanghai, a city of 26 million people on the southeastern coast of China, is a hub for finance and international business in the country. The city is also home to the world's largest container-shipping port.The Shanghai Stock Exchange remains in operation. The exchange announced Sunday night that stock issuance applications and other paperwork can be done online, with deadline relaxations as needed.The city-wide lockdown measures include orders to work from home as well as the suspension of public transit and ride hailing, Shanghai city announced Sunday night. Previously, only specific neighborhoods had faced temporary lockdowns to control pockets of outbreaks.The initial phase will run from Monday to Friday morning and apply to the eastern part of the city where the financial center is, the city said. The second phase will apply to the western part of the city, and run from Friday morning to the afternoon of the following Tuesday, April 5, municipal authorities said."The lockdown and mandatory testing district by district in China's largest city, key transportation hub and financial center are highly likely to disrupt the city's commercial activity," said Bruce Pang, head of macro and strategy research at China Renaissance."We think that in the near term, China will stick to its zero-tolerance approach, pursuing [its] zero-Covid position as one of the world's strictest virus elimination policies," Pang said. Tesla, whose Shanghai factory is located in the area covered by the first stage of the lockdown, reportedly halted production for at least a day on Monday,according to Bloomberg, citing sources. The electric car company did not immediately respond to CNBC's request for comment.
China’s Flirtation with “Let ‘Er Rip” Goes Hard Into Reverse with Shanghai Two-Phase Lockdown --by Yves Smith - Only a few days ago, the Western press was almost preening over the idea that first the big Covid wave in Hong Kong and then a Covid spike in Shanghai which was initially met only limited, building-level lockdowns in Shanghai meant that China was falling in with the rest of the world’s “learning to live with Covid” approach, which is tantamount to “putting commerce over lives”.China had already locked down Shenzhen, a tech center of 17.5 million people, for six days starting March 14. The Shenzhen action was successful, with the city getting its cases down to a mere four, small enough to be handled by contact tracing. Even so, while manufacturing plants reopened on the 21st, many restrictions remain.In Shanghai, the local government attempted to avoid large-scale lockdowns via subjecting clusters of building complexes to 48 hour lockdowns with two mandatory tests for everyone, but that apparently exposed that infection levels were what China deemed to be unacceptably high.From the South China Morning Post:Despite previous assurances Shanghai would not be locked down, zones east and west of the Huangpu River will be restricted separately in two-stage plan. On Monday, China logged 1,219 local confirmed cases and 4,996 local asymptomatic infections. Scientist GM explained in mid 2021, by e-mail, why China has a much lower tolerance for Covid than capitalist economies: the old Soviet system — both the healthcare one as designed by N.S. Semashko in the 1920s, the foundational principle of which was prevention of disease and infection, and the overall societal one too — would never have allowed things to unfold as they did over the last 16 months. Transmission would have been stopped at all cost. The residual influence of that is probably a major reason why countries like China, Vietnam and Laos went for elimination from the start.. Let us not forget that lockdowns in China make the Western version pale:People are restricted to their residence. The Republic video suggests they will be allowed out to neighborhood sites to pick up provisions. I would hazard that it applies only to limited areas:Additional detail from the Financial Times:Shanghai pushed ahead with a stringent lockdown on Monday that will divide China’s biggest city into two zones, as authorities struggled to stem record coronavirus cases in the country’s most important financial centre.The government will shut down public transport this week as it conducts mass testing across Pudong, the city’s financial district, located east of the Huangpu river. Similar restrictions will apply from April 1 to the district of Puxi, west of the river.The measures, which marked the first time authorities in Shanghai have imposed a lockdown that confined residents to their homes, sparked panic-buying across the city as shoppers rushed to stock up on vegetables. Notice this reversal happened in a mere 48 hours. Shanghai officials had just reaffirmed its plan to stay largely open. From the Guardian:Shanghai has recorded a sharp rise in Covid-19 cases, but officials have ruled out a full lockdown over the damage it would do to the economy…Shanghai, however, has aimed to ease disruption with a more targeted approach marked by rolling 48-hour lockdowns of individual neighbourhoods and large-scale testing while largely keeping the metropolis of 25 million people running.At a daily Shanghai press conference on Saturday, officials alluded to the importance of avoiding a full lockdown of the huge port city.“If Shanghai, this city of ours, came to a complete halt, there would be many international cargo ships floating in the East China Sea,” said Wu Fan, a medical expert with the city’s pandemic taskforce.“This would impact the entire national economy and the global economy.” Shanghai is keeping the port out of full shutdown, but it’s not clear that partial relief there will make much difference to shipping volumes. From Splash 247:For shipping, congestion at the port – already very high – is expected to increase in the coming days, while overseas, terminals in Europe and North America will have to brace for an even larger whiplash effect when the city regains normal productivity – and comes as global supply chains absorb the fallout from a seven-day lockdown in Shenzhen to the south earlier this month.
The global crisis of COVID orphanhood -The flood of Ukrainian refugees fleeing Russia’s brutal invasion reminds us that the pain of war often falls most heavily on those with the least ability to cope, especially children. The same is true of our battle with COVID-19, which has now left over 7 million children worldwide suffering from the loss of a loving parent or grandparent caregiver. Urgent action is needed to protect these children from the many threats they face. The Biden-Harris administration can lead by using the U.S.-hosted Global COVID-19 Summit this spring to rally the world to care for the hidden victims of the pandemic. COVID-19-associated orphanhood and caregiver loss are increasing at unparalleled speed, with one new child affected every six seconds. It took the HIV-AIDS pandemic 10 years for 5 million children to become orphaned; it’s taken COVID-19 just two years to top that tragedy. While equitable vaccine coverage can slow the rates of caregiver deaths, the numbers of children affected by COVID-19 orphanhood will continue to rise, especially in Africa where less than 10 percent of the population has been fully vaccinated. The lack of strong social safety nets exposes these children to extreme threats, including abuse, violence, high-risk sexual behavior, and institutionalization. These risks increase when breadwinners die — a sobering fact given that 75 percent of COVID-19 orphanhood involves paternal death. Most children losing a parent or primary caregiver to COVID-19 have a living relative who, with adequate support, could care for them. But the time to act is now. Early intervention with educational, economic, and parenting support is needed to ensure that each affected child benefits from the healing hands of a safe and nurturing family — and does not end up in institutional care. The good news is not only do we know how to help these children, but the U.S. is the global leader in supporting orphaned and other vulnerable children through the President’s Emergency Plan for AIDS Relief (PEPFAR). This successful program has saved more than 20 million lives and turned peril into promise for 7.1 million AIDS orphans and others since 2003. Fifteen of the countries having the highest number of children newly orphaned by COVID-19 are in sub-Saharan Africa, where strong PEPFAR, USAID, and CDC programs can be leveraged to engage NGOs, faith-based organizations, governments, and donors in caring for these children. Unfortunately, while we know how to support and protect these children, the current global COVID-19 response framework fails to acknowledge the crisis of COVID-19 orphanhood — despite the fact that “Save Lives Now” is one of its major pillars. As a result, billions of needed dollars are being spent to prevent COVID-19 deaths, but nothing is being done to save the children left behind.
Finance capital demands an end to Shanghai’s lockdown and China’s Zero-COVID policy - Wednesday marked the third day of COVID-19 lockdowns in the eastern half of Shanghai, the most populous urban area in China that is home to over 26 million people. On Friday, all residents west of the Huangpu River, which bisects Shanghai, will go into a four-day lockdown, while those east of the river will largely resume normal activities. Certain neighborhoods in both parts of the city where infections remain high will stay under more extended lockdowns. During the four-day lockdowns for each half of Shanghai, every resident is given two nucleic acid tests, in addition to at-home rapid antigen tests. Since Monday, 9.1 million residents in eastern Shanghai received nucleic acid tests, with the second round of mass testing beginning Wednesday. In total, a network of roughly 6,300 temporary COVID-19 testing sites have been built throughout the vast metropolis, staffed by roughly 17,000 medical personnel. All those who test positive for the virus are provided with medical care and safely isolated from others to prevent further viral transmission. On Wednesday, Shanghai officials announced the results from the initial round of mass testing. A total of 5,982 COVID-19 infections were detected, of which 5,656 were asymptomatic, while China overall reported a record 8,655 new cases Wednesday. Outside of Shanghai, cases have remained relatively low and stable, although the geographic scope of the ongoing outbreak remains widespread, with over 30 cities reporting infections. The highly infectious and immune-resistant Omicron BA.2 subvariant has proven to be the greatest challenge so far to China’s “dynamic zero” strategy that has repeatedly eliminated COVID-19 from the country. There are growing divisions in the Chinese ruling class over whether or not to maintain the elimination strategy, with sections of the bourgeoisie and affluent middle class pressuring the Chinese Communist Party (CCP) regime to adopt a “mitigationist” approach that would limit broad-based lockdowns. Shanghai and Shenzhen, two industrial and financial centers of world capitalism, have now both experimented with temporary and more limited lockdowns than those implemented in other cities. Shanghai is home to the largest port in the world and has long been China’s financial center and a nexus for global finance capital. Despite the lockdowns’ bifurcated and temporary character, and the maintenance of production at key workplaces, there is growing opposition to China’s Zero-COVID policy in the Western media and financial circles. The most vociferous yet is an editorial board statement from the Financial Times (FT), the leading international business newspaper, titled “China’s zero-Covid goal is no longer sustainable.” Speaking for the City of London, Wall Street and the global financial oligarchy that once controlled Shanghai and aims to establish neocolonial domination over all of China, the FT statement denounces lockdowns and all other public health measures that impinge on the production of profits but have saved millions of lives in China.
Does Indonesia’s after-school tutoring culture indicate a failure of standard education? After-school tutoring services are the go-to option for parents who are concerned about their children's academic performance or students who have specific goals, such as passing a university entrance exam. The price range for these services is very broad. Students can pay as little as Rp 25,000 (US$1.74) for a group lesson and as much as Rp 1,000,000 for a private session. The tutors are usually employed to help students gain a better understanding of the topics they are learning in school, and since the pandemic began, this role has grown in importance, especially after the significant learning interruptions that resulted from schools shifting online. But not everyone can afford to employ tutors’ services, which raises several questions, including whether after-school tutoring has become essential and if the country’s standard education system is failing to serve students. Systemic problems Agatha Milenia Rosiani Gather, or Rosi, is a bachelor of education graduate from Surabaya. While she was a student, she used the services of after-school tutors because "when teachers give instruction in school, they tend to only give materials without any clear explanation because of time limitations". Rosi complained that in exams "the questions are always far more elaborate than the previously given explanation". "One thing [that was important for me] in choosing a tutoring service was the exercise bank," she added, referring to a collection of supplementary practice questions that many tutoring agencies offer. The exercise bank that her service provided her had the "right" kind of questions, which helped her pass her exams.
Inflation Blows Out in Germany, Spain. Started a Year Ago on Money Printing, NIRP, Supply Chain Chaos. War Threw Fuel on Already Raging Fire - by Wolf Richter - German consumer price inflation started spiking in January 2021, over a year before Russia’s invasion of Ukraine and already hit 6.0% in November 2021. And energy costs had been spiking for a year as well. And in March, consumer price inflation spiked by 7.6% compared to March 2021, according to the preliminary estimates by the German statistical agency Destatis, based on the Eurostat harmonized method. Russia’s invasion of Ukraine added fuel to the fire that had started raging a year ago. The Eurozone is one of the places where a crazed central bank inflicts negative policy interest rates, and thereby negative bond yields, and increasingly negative interest on bank deposits, on the economy and households. The ECB left its negative interest rate policy (NIRP) unchanged at its last meeting, with its deposit interest rate still at -0.5%, and it is still buying bonds. The ECB’s policies are incomprehensibly reckless in light of inflation that started exploding in January 2021. But rate hikes – way too timid, way too late – are now seen later in 2022. And the ECB has already drastically cut its bond buying program and will taper it further. Month-to-month, Germany’s consumer price inflation spiked by a horrendous 2.5% (30% annualized!). Both inflation figures, the year-over-year 7.6% and the month-to-month 2.5%, blew away the already sky-high expectations that economists had dared to harbor. Based on the German method for calculating inflation, consumer prices spiked by 7.3% from a year ago, the highest since 1981, according to Destatis. The agency cited energy costs (+39.5% year-over-year), and “delivery bottlenecks” that caused prices of goods overall to spike by 12.3%. Food prices jumped by 6.2%. In Spain, consumer price inflation spiked by 3.0% in March from February (36% annualized!), and by 9.8% year-over-year, the highest since May 1985, according to preliminary estimates of Spain’s statistical agency INE today. But this spike took off in March 2021 and by December 2021 already hit 6.5%, the highest since 1990. The war in Ukraine that caused further surges of the already spiking energy costs made it even worse: For February, three European countries had already reported double-digit year-over-year inflation: the Czech Republic (10.0%), Estonia (11.6%), and Lithuania (14.0%), with Belgium not far behind (9.5%). March is going to look a lot worse.
Russia’s War Against Ukraine Might Persistently Shift Global Supply Chains - The havoc brought upon countries by violent warfare causes, next to immeasurable personal pain, heavy economic disruptions. Destruction of production sites, disrupted supply chains, and the displacement of people often provoke a sudden and durable rupture of economic activity. While we do not have much generalisable empirical evidence on the economic costs of international wars, which used to be a rare phenomenon in recent decades, the literature on civil wars coined the term ‘development in reverse’ to describe the often persistent, negative economic effects of sustained episodes of warfare (Collier et al. 2003).Currently, we see such a development in reverse unfolding in Ukraine. Only weeks after Russian forces commenced their invasion of Ukraine, millions of people have left the country, and formerly prosperous towns lie in ruins (Skok and de Groot 2022). At the same time, the international community punishes Russia with sanctions of an unprecedented scale, which have the potential to hurt the Russian economy significantly and end decades of economic collaboration (Berner et al. 2022, Felbermayr et al. 2019). Nonetheless, an embargo on oil and gas imports from Russia has not yet been implemented despite intensive public discussion, as several large European countries fear the economic consequences of forfeiting these hard-to-substitute imports (Bachmann et al. 2022) . Looking at how the international economy coped with prior disruptions to economic exchange caused by violent warfare helps us form expectations about the economic future of Ukraine, Russia, and the sanctioning countries.The war Russia is waging against Ukraine has already halted most of Ukraine’s production capabilities. Similarly, the sanctions raised against Russia by the international community end decades of economic cooperation across several economic sectors. This column draws on empirical evidence from over two decades of civil wars across the world to inform the debate on how international supply chains will adjust to the economic disruptions brought by violence, and how likely it is that the international economy will ever return to the pre-war situation.
Hoarding is suddenly in, "lean" operations are out as shortages ripple across the globe - Ukraine, a major exporter of grains and other food crops, announced soon after the Russian invasion of the country that it would ban exports of many food crops to ensure that Ukraine has enough to feed its population.Russia, another major exporter of grain, especially wheat, curtailed its exports of wheat, rye, barley, and corn. It also curtailed sugar exports.The list of countries banning or reducing exports of foodstuffs is now increasing so quickly that it is starting to look like a pile-up on the freeway:
- Argentina, a major soy exporter, has halted exports of soy oil and soy meal.
- Hungary has banned grain exports.
- Moldova has halted exports of wheat, corn and sugar.
- India, the world's second largest sugar producer, is contemplating capping sugar exports through the end of September. The 8-million-ton cap would effectively cut off sugar exports after May.
- Indonesia, the world's largest exporter of palm oil, has curtailed exports to keep local prices in check as they have risen 50 percent so far this year.
- Serbia will stop exporting wheat, corn, flour and cooking oil.
- Turkey has halted the re-export of grains, oilseeds, cooking oil and other agricultural commoditiessourced from other countries that are now sitting in warehouses and were bound for other countries until the ban.
- Jordan has banned export or re-export of rice, sugar, powder milk, dried legumes, fodders, wheat and wheat products, flour, yellow corn, ghee and all types of vegetable oil.
Of course, there are a wide range of natural resources, manufactured goods and other products that are no longer moving toward Russia because of sanctions resulting from the Russian invasion of Ukraine. And there are counter-sanctions, most notably a ban on fertilizer exports from Russia which is the fourth largest producer of phosphate and nitrogen fertilizers in the world. China, the world's largest producer of phosphate fertilizer, banned exports last year through the end of 2022to make sure China has enough for its own farmers. And China was hoarding grain long before the Russia/Ukraine conflict, stockpiling what is now thought to be half the world's reserves of grain. In fact, the Chinese government went so far as to urge the Chinese public to stock up on food late last year with predictable and chaotic results.
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