Fed's Mester says inflation hasn't peaked and multiple half-point rate hikes are needed - Cleveland Federal Reserve President Loretta Mester said Friday that she doesn't see ample evidence that inflation has peaked and thus is on board with supporting a series of aggressive interest rate increases."I think the Fed has shown that we're in the process of recalibrating our policy to get inflation back down to our 2% goal. That's the job before us," Mester said in a live interview on CNBC's "The Exchange.""I don't want to declare victory on inflation before I see really compelling evidence that our actions are beginning to do the work in bringing down demand in better balance with aggregate supply," she added. Mester spoke the same day the Bureau of Labor Statistics reported thatnonfarm payrolls rose by 390,000 in May, and, importantly, that average hourly earnings had increased 0.3% from a month ago, a bit lower than the Dow Jones estimate.While other recent data points have shown that at least the rate of inflation increases has diminished, the policymaker said she will need to see multiple months of that trend before she'll feel comfortable."It's too soon to say that that's going to change our outlook or my outlook on policy," Mester said. "The No. 1 problem in the economy remains very, very high inflation, well above acceptable levels, and that's got to be our focus going forward."Recent statements from the rate-setting Federal Open Market Committee indicate that 50 basis point — or half-point — rate increases are likely at the June and July meetings. Officials are then likely to evaluate the progress that the policy tightening and other factors have had on the inflation picture. A basis point equals 0.01%.But Mester said any type of pause in rate hikes is unlikely, though the magnitude of the increases could be reduced."I'm going to come into the September meeting, if I don't see compelling evidence [that inflation is cooling], I could easily be at 50 basis points in that meeting as well," she said. "There's no reason we have to make the decision today. But my starting point will be do we need to do another 50 or not, have I seen compelling evidence that inflation is on the downward trajectory. Then maybe we can go 25. I'm not in that camp that we think we stop in September." Mester's comments were similar to statements Thursday from Fed Vice ChairLael Brainard, who told CNBC that "it's very hard to see the case" for pausing rate hikes in September. She also stressed that quashing inflation, which is running near 40-year highs, is the Fed's top priority.
Fed starts experiment of letting $8.9 trillion portfolio shrink - The Federal Reserve is about to start shrinking its $8.9 trillion balance sheet, deploying a second tool along side higher interest rates to curb inflation, though officials don’t know just how effective it will be. After doubling in size through asset purchases in the first two years of the pandemic, the balance sheet will be reduced at a pace that’s almost twice as fast as after the last financial crisis. While the process officially commences on Wednesday, the first U.S. Treasury securities won’t run off until $15 billion mature on June 15. The Fed is capping monthly runoff at $47.5 billion — $30 billion for Treasuries and $17.5 billion for mortgage-backed securities — until September. Those thresholds will then double to a combined $95 billion. That compares to a peak of $50 billion a month when the Fed performed the exercise starting in 2017.
Biden to meet with Federal Reserve chair to discuss economy amid high inflation - President Biden will meet Federal Reserve Chairman Jerome Powell on Tuesday to discuss the national economy amid high inflation, which has hurt Biden’s job approval rating. It’s the first meeting between Biden and Powell since November, Bloomberg noted. A schedule released by the White House said they will “discuss the state of the American and global economy.” The meeting comes while the country continues to struggle with rising prices in many sectors of the economy. The price of oil has risen to its highest level in two months since Biden announced in late March that he would tap into the Strategic Petroleum Reserve to release 1 million barrels a day for six months. The personal consumption expenditures (PCE) price index, a Fed-monitored inflation gauge, rose by 6.3 percent over the previous year ending in April, down slightly from the 6.6 percent annual inflation rate reported in March. The Fed has promised to raise interest rates aggressively to keep inflation in check, a prospect that that roiled the stock markets in recent weeks. Fed board members discussed the possibility of raising the federal funds rate by 50 basis points several more times and moving beyond a “neutral” monetary stance to a restrictive one. The aggressive stance taken by the central bank in recent months has put downward pressure on stocks, sending the S&P 500 down more than 20 percent from its record high. Republicans have repeatedly bashed Biden for rising prices, blaming his fiscal policy and the passage of the $1.9 trillion American Rescue Plan for contributing to inflation. Democratic lawmakers have responded by arguing inflation is driven by supply-chain breakdowns related to the COVID-19 pandemic and a drop in oil and wheat supplies caused by Russia’s invasion of Ukraine.
Biden, in rare Powell meet, seeks to deflect inflation blame -President Biden used a rare meeting with Federal Reserve Chair Jerome Powell to declare that he’s respecting the central bank’s independence — while simultaneously shifting responsibility for taming decades-high inflation ahead of the November midterms. Biden seized on the Oval Office session to argue that while fighting price increases is his top priority, that work was primarily the purview of the Federal Reserve.“My plan is to address inflation. That starts with a simple proposition: respect the Fed, respect the Fed’s independence, which I have done and will continue to do,” Biden said.
Biden says inflation is top priority after meeting with Fed Chair Jerome Powell — President Joe Biden met on Tuesday with Federal Reserve Chair Jerome Powell to discuss the administration's plan to combat high inflation, which Biden said has become his top domestic priority. Biden said the Federal Reserve will play a key role in bringing down the highest inflation rates in decades, but that he wouldn't "interfere with their critically important work." "My plan to address inflation starts with the simple proposition: Respect the Fed, respect the Fed's independence, which I have done and will continue to do," Biden told reporters during the meeting with Powell, who was confirmed this month to a second term as Fed chair. Ahead of the meeting, the White House said Biden planned to speak with Powell about "the state of the American and global economy, and the president’s top economic priority: addressing inflation as we transition from a historic economic recovery to stable, steady growth that works for working families." Biden's meeting with Powell in the Oval Office came as he wrestles with a low approval rating and criticism from Republicans, who blame him for the economy's troubles. The president, however, has pointed to the war in Ukraine and supply chain issues for rising prices for gas and other necessities. The meeting also took place about five months before November's midterm elections, as voters say inflation and the economy are their top concerns. In an op-ed published by The Wall Street Journal on Monday laying out his plan to fight inflation, Biden said the Federal Reserve "has a primary responsibility to control inflation." Biden said his plan calls on Congress to revise the tax code, reduce the deficit, make housing more affordable and lower prescription drug costs. He also said Congress could help immediately by passing clean energy tax credits and investments he’s proposed.
Politics at play behind Biden’s Fed blessing - In their first policy meeting in nearly a year, Joe Biden gave Jerome Powell something no other president has given to a Federal Reserve chairman: his blessing to raise interest rates. Biden, in brief remarks given Tuesday afternoon in the Oval Office, said he would respect the Fed’s independence as it took steps to cool down inflation, which has been running at a four-decade high. Biden will sign directives today aimed at preparing the U.S for a new era of quantum computing, as Chinese agencies and companies pour billions of dollars into the next-generation technology. “My job as president is not to nominate highly — not only nominate highly — highly qualified individuals for that institution, but to give them the space they need to do their job,” Biden said. “I’m not going to interfere with their critically important work.”
The significance of Jay Powell's Tuesday meeting with Joe Biden -If you hung out near the White House on Tuesday, you may have seen Federal Reserve Chairman Jerome Powell, who stopped by for a meeting with President Biden to chat about the administration's “top economic priority” — inflation.White House officials and the Fed were mum about the details of the meeting itself, which was closed to the press.But before the door to the Oval Office closed, Biden said lowering inflation begins with a "simple proposition: respect the Fed."Translation: Biden will not force the Fed to raise interest rates at a certain pace or magnitude.And although Powell is no stranger to the White House — he visited President Trump twice despite the former president's consistent critiques on Twitter — yesterday's meeting does signal some level of concern over the economic outlook.Fed chairs have a history of face-to-face meetings with the president. Fed Chairman Ben Bernanke visited the White House frequently during the 2008 financial crisis and Janet Yellen (now Treasury Secretary) swung by five timesduring her tenure.Tuesday's meeting marked the first time Powell had met with the president since Biden nominated him for a second term as Fed Chair in November 2021.Biden’s meeting with Powell yesterday also coincided with a Wall Street Journal op-ed illustrating his focus on lowering inflation.“What [Biden's] doing with Powell and the op-ed… is basically getting the message out there: ‘Hey we’re fighting inflation. This isn’t really our fault, et cetera,’” said Steve Sosnick, chief strategist at Interactive Brokers.The president also in his op-ed said the Fed has the “primary responsibility” to dampen the rapid pace of price increases.And although blander than the photo op with BTS, the Powell meeting telegraphs Administration's intention to unite monetary policies (higher rates from the Fed) and fiscal policies (targeted relief from the White House and Congress) in the common goal of lowering inflation.But there have been temptations within previous White Houses to influence the Fed.Higher rates, which can choke off economic growth, have been a historical thorn in the sides of politicians facing re-election. During the high inflation of the 1980s, then-Fed Chair Paul Volcker dodged efforts from the Reagan administration to coerce the central bank into not raising rates before the 1984 election. Volcker didn’t raise rates — because the economic conditions didn’t warrant it at the time. But he refused to give Reagan a “yes, sir” to preserve the central bank’s independence.“What saves the Federal Reserve in the long run is that the Congress doesn’t want the Administration to have control of the Fed, and the Administration doesn’t want the Congress to have control of the Fed,” Volcker said. “That is the unique aspect of the Federal Reserve, and it saves you.”
Yellen says she was ‘wrong’ about ‘path that inflation would take’ -Treasury Secretary Janet Yellen acknowledged in an interview on Tuesday that she was “wrong” about “the path that inflation would take,” as the lagging COVID-19 pandemic and Russian invasion in Ukraine have kept prices persistently high. During an interview with CNN’s Wolf Blitzer, the network played a clip of previous comments she made in 2021, in which she said inflation would be a “small risk” and added that she didn’t “anticipate that inflation is going to be a problem.” “Well, look, I think I was wrong then about the path that inflation would take,” the Treasury secretary said when asked about her previous comments. “As I mentioned, there have been unanticipated and large shocks to the economy that have boosted energy and food prices and supply bottlenecks that have affected our economy badly that I didn’t — at the time didn’t fully understand. But we recognize that now.” “The Federal Reserve is taking the steps that it needs to take. It’s up to them to decide what to do. And, for our part, President Biden is focused on supplementing what the Fed does with actions we can take to lower the cost that Americans face for important expenditures they have in their budgets,” she added. The interview came as Yellen met earlier on Tuesday with President Biden, Federal Reserve Chairman Jerome Powell and National Economic Council Director Brian Deese as the Biden administration navigates persistent inflation.
Inflationary Pressure Is Worse Than They Say by David Stockman --Last week Wall Street greeted the “strong” April PCE number with a spree of dip-buying, but you have to wonder just how long households can keep reaching into their cookie jars in order to spend what they are not earning. According to the Commerce Department, the abysmal 4.4% personal savings rate posted for April was the lowest level since August 2008, and we know what happened next! Its also damn obvious from the chart that the triple whammy of the Covid-Lockdowns, the stimmy bacchanalia and red hot acceleration of global inflation and supply chain breakdowns has sent the standard economic numbers into a tailspin. After all, when the savings rate goes from an out-of-this-world 34% to a rock bottom 4% in just 24 months, you are not dealing with a standard economic cycle. Instead, what you have is uncharted waters in every sense of the term. So more than ever, it is essential to pick through the statistical noise in order to identify the true fundamentals at work. For our money, that investigation starts with the obvious truth that when you are drawing-down your savings rate you are spending more than you earn. And since November 2020, that’s exactly what has been happening. Household wages and salary compensation (purple line) is up by 14.8% in nominal terms but personal consumption expenditures have risen by 21% more. That is, April PCE (brown line) was 17.9% above what was already a Trump “stimmy” bloated level in November 2020. Wage And Salary Disbursements Versus Personal Consumption Expenditures, November 2020 to April 2022 Moreover, these nominal numbers do not tell even half the story. When you wring out the inflation, what you get is some pretty midget numbers. That is, real PCE has been growing at only a 2.56%annual rate since the February 2020 pre-Covid peak—-$6 trillion of stimmies not withstanding. The reason is no mystery: Inflation-adjusted wage and salary incomes are are up by only two-thirds that level at a 1.66% per annum rate. So to keep the spending game going, households are breaking into their piggy banks. So, no, we don’t think there is anything “strong” about household spending. What is actually strong is the rate at which inflation has been eating into real purchasing power. Thus, what last week’s spending and income report also showed was that the headline PCE deflator continues to rise, posting at 6.27% on a Y/Y basis, the highest gain since January 1982. That Y/Y gain compares to the 4.44% rate posted last October and the 3.58% Y/Y rate recorded last April. So that’s acceleration with a vengeance. In fact, the PCE deflator first crossed the Fed’s sacred 2.00% inflation target in March 2021 and has essentially tripled since then. Still, the more revealing trend in the April spending and income report was the continued decline of the government transfer payments rate. After peaking at an otherworldly $8.05 trillion annualized rate owing to the Biden Stimmy in March 2021, transfer payments have come back to earth, posting at well less than half that level, $3.83 trillion, in April. Consequently, further PCE growth will be dependent upon wage and salary income gains, which gains are currently being outrun by inflation. Moreover, the apparent “normalization” of transfer payments shown in the chart below is not exactly what it appears to be. In December 2019, before the Covid and Stimmy perturbances knocked the numbers into a cocked hat, annualized government transfer payments stood at $3.11 trillion. The gain during the 29 months since then, therefore, computes to a sizzling 9.31% annualized growth rate. Yet here we are with the consumer digging deep into savings because even $3.83 trillion of free stuff is proving insufficient to fund the household shopping machine.
The Fed’s ‘cure’ for inflation is worse: Recession -Amazon founder Jeff Bezos and Tesla and SpaceX CEO Elon Musk blame the government and the Fed for inflation. In Musk’s words, “The obvious reason for inflation is that the government printed a zillion more dollars than it has. This is not super complicated.”They and other luminaries subscribe to the inflation sophism: “too much money chasing too few goods.”Yes, we’ve had “too few goods,” due to a pandemic perfect storm — depressed U.S. oil production and manufacturing output, severe supply chain disruptions and war-like labor shortages — but that won’t endure. It was exacerbated by Russia’s invasion of Ukraine, which has radically reduced global purchases of Russian oil, grain and fertilizer and drastically diminished Ukrainian grain exports.Meanwhile, our economy rebounded much faster than expected (due largely to the dollars pumped-in by the government and Fed), reviving demand that couldn’t be readily met. It’s true that when our economy was blindsided by COVID, the government borrowed trillionsto send stimulus money to most Americans, and — as it had after the financial crash — the Fed electronically “printed money” to buy nearly $5 trillion of government debt and mortgage securities. But according to a Washington Post analysis, most of those dollars can’t possibly have stoked inflation — because the financial institutions the Fed paid parked over $2 trillion in their accounts at the Fed, and American households saved a big chunk of their stimulus, banking about $3 trillion. The Post quotes a former Treasury Department official: “The money supply went up, but… they’re not spending it.” In fact, money is moving through our economy more slowly than at almost any time in 65 years.Clearly, what impelled inflation was the unprecedented confluence of supply and demand incongruities as a result of the pandemic and war in Ukraine, not “too much money.” So it’s understandable Fed Chairman Jerome Powell recently said, “Now, we think more of just the imbalances between supply and demand in the real economy rather than monetary aggregates” (our total money stock, referred to as M2, is the paramount monetary aggregate). A refrigerator and pantry stuffed with food won’t make you fat unless you overeat; likewise, even an economy awash with dollars doesn’t inevitably induce lending and spending.Yet the Fed and a lot of smart people cling to the canard that Fed tightening is necessary to tame inflation — even if it results in a recession.Indeed, with one exception, the Fed has brought on recessions with every tightening cycle that continued for over a year — the more prolonged and pronounced the Fed funds rate increases, the longer and deeper the recession. The lone exception was in the middle of the raging 1990s tech boom, which the Fed eventually did kill by more than doubling the Fed funds rate from its 1994 trough.The Fed and haughty experts ignore that while higher prices are certainly painful, they’re far preferable to the trauma of losing a job — and at least somewhat neutralized by compensation increases. Social Security is indexed to the CPI, significantly insulating nearly 50 million retired seniors.
Fed's Beige Book: "Residential real estate contacts observed weakness" --Fed's Beige Book "This report was prepared at the Federal Reserve Bank of Philadelphia based on information collected on or before May 23, 2022." (excerpt) All twelve Federal Reserve Districts have reported continued economic growth since the prior Beige Book period, with a majority indicating slight or modest growth; four Districts indicated moderate growth. Four Districts explicitly noted that the pace of growth had slowed since the prior period. Contacts in most Districts reported ongoing growth in manufacturing. Retail contacts noted some softening as consumers faced higher prices, and residential real estate contacts observed weakness as buyers faced high prices and rising interest rates. Contacts tended to cite labor market difficulties as their greatest challenge, followed by supply chain disruptions. Rising interest rates, general inflation, the Russian invasion of Ukraine, and disruptions from COVID-19 cases (especially in the Northeast) round out the key concerns impacting household and business plans. Eight Districts reported that expectations of future growth among their contacts had diminished; contacts in three Districts specifically expressed concerns about a recession. [...] Most Districts reported that employment rose modestly or moderately in a labor market that all Districts described as tight. One District explicitly reported that the pace of job growth had slowed, but some firms in most of the coastal Districts noted hiring freezes or other signs that market tightness had begun to ease. However, worker shortages continued to force many firms to operate below capacity. In response, firms continued to deploy automation, offer greater job flexibility, and raise wages. In a majority of Districts, firms reported strong wage growth, whereas most others reported moderate growth. However, in a few Districts, firms noted that wage rate increases were leveling off or edging down. Moreover, while firms throughout the country generally anticipate wages to rise further over the next year, one District indicated that its firms' expected rate of wage growth has fallen for two consecutive quarters.
Beige Book Shows Fed Quietly Freaking Out About Widespread Economic Slowdown --A little over a month after the Fed's April Beige Book found that the US economy was growing at a "moderate pace", and spotted the first instances of demand destruction and slowing wage growth, things have gone from medicore at best to simply dire.Not that one would necessarily get that sense reading the summary of overall economic activity which was relatively cheerful, with the Fed noting that all twelve Federal Reserve Districts reported "continued economic growth since the prior Beige Book period, with a majority indicating slight or modest growth" and four Districts indicated moderate growth. To be sure, it is notable that the Fed admitted that four Districts explicitly noted that the pace of growth had slowed since the prior period, even as contacts in most Districts reported ongoing growth in manufacturing.On the other hand, a glimpse of the real underlying weakness emerged when the Fed warned that "some softening as consumers faced higher prices, and residential real estate contacts observed weakness as buyers faced high prices and rising interest rates." Still, contacts tended to cite "labor market difficulties as their greatest challenge, followed by supply chain disruptions" in other words, the covid/China legacy bottlenecks remain, even though soaring inflation is finally destroying the most demand in years. And indeed, "rising interest rates, general inflation, the Russian invasion of Ukraine, and disruptions from COVID-19 cases (especially in the Northeast) round out the key concerns impacting household and business plans."Most ominous of all, whereas eight Districts reported that expectations of future growth among their contacts had diminished; "contacts in three Districts specifically expressed concerns about a recession." And if the Fed will state that publicly, it means that all 12 Fed districts are starting to freak out.
Top Moody’s economist puts ‘even odds’ on recession in next two years - The chief economist for Moody’s Analytics on Tuesday said there was a 1 in 3 chance of an economic recession this year and “even odds” for one within two years. Economists have offered various views on the likelihood that the Federal Reserve’s efforts to fight inflation will result in a recession, with the Fed itself conceding that a “soft landing” could be difficult, though is still possible. “I would put the odds of a recession beginning in the next 12 months at about 1 in 3, and probably close to even odds over the next couple of years,” Mark Zandi, chief economist at Moody’s Analytics, said Tuesday on C-SPAN. “Recession risks are high, but I think that if we do suffer one over the next year or two, it will be a more typical, relatively mild economic downturn.” Inflation remains at its highest level in years, due to factors including pandemic supply chain bottlenecks, spikes in demand after COVID-19 shutdowns, and Russia’s invasion of Ukraine, which has hit energy and food prices particularly hard. The Federal Reserve has begun a series of interest rate hikes aimed at cooling off the economy, raising rates by half a percentage point in May, the largest increase since 2000. President Biden has taken various measures to reduce gas prices and combat inflation since March, including releasing 1 million barrels of oil per day from the nation’s Strategic Petroleum Reserve — a strategy Zandi said “seemed to help quite a bit” in curbing gas price increases.
US bank chief warns of economic “hurricane” -Jamie Dimon, the chief executive of America’s largest bank, JPMorgan Chase, has warned that an economic “hurricane” is about to hit the US because of the war in Ukraine and the tightening of monetary policy by the US Federal Reserve. Two weeks ago, Dimon warned of “storm clouds” gathering over the US economy. He escalated that assessment at a financial services conference yesterday. “I said they’re storm clouds, they’re big storm clouds here. It’s a hurricane. That hurricane is right out there down the road coming our way,” he said. “We just don’t know if it’s a minor one or Superstorm Sandy [the devastating hurricane of 2012] … And you better brace yourself,” he told investors at the conference. He warned the Ukraine war would continue to put upward pressure on oil prices, which could go to as high as $150 or $175 per barrel. At present oil is over $120 after a spike following the decision by the European Union to ban seaborne oil imports from Russia as part of its tightening sanctions regime. Dimon warned that oil prices would continue to rise over the longer term. “We’re not taking the proper actions to protect Europe from what’s going to happen to oil in the short run. And we’re not taking the proper actions to protect you all from what’s going to happen to oil in the next five years, which means it almost has to go up in price.” He also directed attention to the monetary tightening initiated by the Fed. This consists of two components: Interest rate rises each of 0.5 percent over the next two meetings of its policymaking body, with more to follow; and a winding down of the $9 trillion of financial assets purchased by the Fed in response to the 2008 financial crisis and the market meltdown in March 2020 at the start of the pandemic. The effects of interest increases are generally known, at least if historical experience is any guide. They must be lifted to “stunt” economic growth, in the words of one of the Fed governors, Christopher Waller, in a speech delivered on Monday calling for sustained interest rate increases. But the effect on financial markets and the economy more broadly of a continuous reduction in the Fed’s balance sheet, known as “quantitative tightening [QT],” is not because it has never been undertaken in a sustained way before. Before the 2008 crisis the Fed held just under $1 trillion in financial assets in order to facilitate the operation of its monetary policy.
It's "Unprecedented" - Goldman President Echoes Dimon's "Hurricane" Warning -- A day after JPMorgan CEO Jamie Dimon accelerated his anxiety level for the future from "storm clouds" on the horizon to an imminent "hurricane", Goldman Sachs President John Waldron piled on with the pessimistic opinions.At an investor conference this morning, Waldron joked that he’ll avoid “using any weather analogies,” but spelled out his fear that risks from inflation, changing monetary policy and Russia’s invasion of Ukraine could kneecap the global economy.“This is among - if not the most - complex, dynamic environments I’ve ever seen in my career,” Waldron said. “The confluence of the number of shocks to the system to me is unprecedented.” As Bloomberg reports, Waldron emerged as one of the harshest critics of the Fed from the banking sector earlier this year, when he assailed the central bank for what he perceived as its lack of autonomy and resolve to withstand the pressure to carry out measures needed to tame the hottest inflation in 40 years.“We expect there’s going to be tougher economic times ahead,” Waldron said.“No question we are seeing a tougher capital-markets environment.”Finally, Waldron warned of a slowing in the merger market from the current "resilient" levels:“That’s going to start to roll over because you see demand destruction, CEOs get a little less confident,” Waldron said. “That’s a reasonable expectation, but we’re watching that carefully as a signal.”The sudden volte face from so many of the elites is perhaps no surprise given the extremely abrupt reversal in the trend of global macro data - suddenly turning to serial disappointment since the end of April as QT loomed...
Bank economists advise caution but don't expect a recession - The U.S. economy will slow this year and through 2024 but avoid recession, despite a cavalcade of threats that include soaring inflation, war in Europe and nagging supply chain disruptions, a team of prominent bank economists said.The American Bankers Association’s Economic Advisory Committee, composed of 13 chief economists from some of North America’s largest banks, expects the Federal Reserve’s current rate hike agenda to help gradually curb inflation from above 8% now to near the Fed’s objective of 2% over this year and next. The Fed twice raised rates in the spring and signaled that several more increases are on the horizon this year. This comes after the country's rapid recovery from a pandemic-induced slump ignited a surge in inflation. The U.S. Labor Department said its consumer price index in April hit 8.5%, nearly a four-decade high. Inflation has exceeded 6% for seven consecutive months.
Atlanta Fed Slashes Q2 GDP Forecast As Stagflation Looms -Amid a wall of relatively hawkish Fed Speak today (all pronouncing the economy's 'underlying strength'), this morning's Manufacturing survey data raised the threat level for stagflation and prompted The Atlanta Fed to slash its forecast for Q2 GDP growth from +1.9% to +1.3%... getting ever closer to recession (after Q1's contraction).As The Atlanta Fed writes, the GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2022 is 1.3 percent on June 1, down from 1.9 percent on May 27. After this morning's Manufacturing ISM Report On Business from the Institute for Supply Management, and this morning’s construction spending report from the US Census Bureau, the nowcasts of second-quarter real personal consumption expenditures growth and real gross private domestic investment growth declined from 4.7 percent and -6.4 percent, respectively, to 4.4 percent and -8.2 percent, respectively.
Q2 GDP Forecasts: Around 3.0% --- From BofA: We continue to track 3.0% qoq saar growth for 2Q. Weaker than expected vehicle sales were offset by better inventories and capex spending [June 3 estimate] From Goldman: We boosted our Q2 GDP tracking estimate by 0.2pp to +3.0% (qoq ar). [June 1 estimate] And from the Atlanta Fed: GDPNow The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2022 is 1.3 percent on June 1, down from 1.9 percent on May 27. [June 1 estimate]
Business Cycle Indicators at June’s Start - by Menzie Chinn - With the release of monthly GDP today, and income and consumption earlier, we have the following picture of series followed by the NBER BCDC. Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus of 6/1 for employment (blue +), industrial production (red), personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), consumption in Ch.2012$ (light blue), and monthly GDP in Ch.2012$ (pink), all log normalized to 2020M02=0. NBER defined recession dates, peak-to-trough, shaded gray. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (6/1/2022 release), NBER, and author’s calculations.Manufacturing and trade sales fell more than what I forecasted using retail sales, while consumption grew faster than I forecasted using retail sales and food services, in this mid-May post.IHS Markit notes:Monthly GDP rose 0.5% in April, more than reversing a 0.3% decline in March that was revised up from a previously estimated 0.4% decline. The increase in monthly GDP in April mainly reflected positive contributions from personal consumption expenditures and net exports.With the second release of official Q1 GDP, and IHS Markit monthly GDP, we have the following picture.Figure 2: GDP (blue bar), GDPNow nowcast of 6/1 (brown bar), and monthly GDP (black line), in billions Ch.2012$, SAAR, all on log scale. Source: BEA, Q1 second release, Atlanta Fed 6/1/2022, IHS Market 6/1/2022. In sum, rising industrial production, income, consumption and employment in April suggest a recession is not yet imminent, despite the flatlining in monthly GDP November-March.
Four 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. Note: Apple has discontinued "Apple mobility", and restaurant traffic is mostly back to normal. The TSA is providing daily travel numbers. This data is as of May 29th. 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 9.5% from the same day in 2019 90.5% of 2019). (Dashed line) Air travel has been moving sideways over the last three months, off about 10% from 2019. This data shows domestic box office for each week and the median for the years 2016 through 2019 (dashed light blue). The data is from BoxOfficeMojo through May 26th. Movie ticket sales were at $98 million last week, down about 48% 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. Dashed purple is 2019 (a strong year for hotels). This data is through May 21st. The occupancy rate was down 3.5% compared to the same week in 2019. The 4-week average of the occupancy rate is at the median rate for the previous 20 years (Blue). Here is some interesting data on New York subway usage. This graph shows how much MTA traffic has recovered in each borough (Graph starts at first week in January 2020 and 100 = 2019 average). Manhattan is at about 39% of normal. This data is through Friday, May 27th.
Energy expenditures as a percentage of PCE- During the early stages of the pandemic, energy expenditures as a percentage of PCE hit an all-time low of 3.3% of PCE. Then energy expenditures increased to 2018 levels by the end of last year. With the invasion of Ukraine, energy expenditures as a percentage of PCE increased further over the last few months.Here is an update through the April 2022 PCE report.This graph shows expenditures on energy goods and services as a percent of total personal consumption expenditures. This is one of the measures that Professor Hamilton at Econbrowser looks at to evaluate any drag on GDP from energy prices. Data source: BEA. In general, energy expenditures as a percent of PCE has been trending down for decades. The huge spikes in energy prices during the oil crisis of 1973 and 1979 are obvious. As is the increase in energy prices during the 2001 through 2008 period.In April 2022, energy expenditures as a percentage of PCE were at 4.6% of PCE, down slightly from the March level. This is above the pre-pandemic level, but excluding March, this was the highest level since 2014.Note: Professor Hamilton discusses the recent increase in energy prices here, and here is his slide deck:Sanctions, Oil Prices, and Recession. Hamilton's conclusion "oil price increase so far not enough to cause a recession"
The push to supersize Pentagon spending ratchets up - The bid for a larger Pentagon budget is gaining steam, as top lawmakers and the defense industry push to enlarge President Joe Biden’s already historically high $813 billion military spending proposal. Defense leaders, meanwhile are signaling that they would take Congress up on having more money to fight inflation. Rising costs, along with balancing the response to Russia’s invasion of Ukraine with the long-term challenge posed by China, are fueling the fight to increase the defense topline as congressional committees begin their deliberations on Pentagon programs next week. Top Republicans, who contend inflation will devour Biden’s proposed 4 percent defense hike, envision an even larger cash infusion when annual defense policy and spending bills come up for debate in the coming weeks. “I just think we have everything on our side on this thing,” Sen. Jim Inhofe of Oklahoma, the top Senate Armed Services Republican, said in a brief interview. “We ought to be able to get the adequate increases that we want.” Democrats will be forced to either back Biden’s blueprint or — as they did last year — ladle on billions more in military spending. “There’s always upward pressure on the topline on the budget. We’ll have to deal with that,” Senate Armed Services Chair Jack Reed (D-R.I.) told POLITICO. “We’re trying, I think, collectively — House, Senate, leadership ... and the White House — to come up with a topline.” Biden is proposing a $30 billion increase in national defense spending in his fiscal 2023 budget from the current level. Congress already allocated roughly $29 billion more than the commander in chief sought for defense in fiscal 2022, with Democrats and Republicans joining forces to rebuke Biden’s first Pentagon plan. The $813 billion national defense proposal includes $773 billion for the Pentagon, as well as tens of billions for nuclear weapons programs overseen by the Energy Department. Progressive Democrats who’ve pushed to constrain military spending will almost certainly put up a fight, and may even push for a level lower than Biden’s proposal. But the party’s left flank has to date been steamrolled by bipartisan majorities that back more money for defense. The Senate Armed Services Committee will consider its annual version of the National Defense Authorization Act in mid-June. The House Armed Services Committee will unveil the initial details of its defense bill and hold subcommittee markups next week. House appropriators are aiming to approve legislation for the Pentagon before the end of the month.
Climate activists frustrated as another deadline passes without spending deal Climate advocates are frustrated that Democrats will miss yet another major deadline to pass a spending bill advancing environmental priorities. The apparent lack of progress ahead of Memorial Day further raises tensions between the left flank of the party’s base and its leadership as the window for a deal is closing. “Every day that passes without a deal, is a day that young people grow more and more disillusioned with the party and its ability to do anything about the crises that confront us and the crises that they promised to get solved,” said John Paul Mejia, a spokesperson for the Sunrise Movement. For months, Democrats have been trying to get a spending bill that includes several of their desired policies across the finish line. The House has passed an iteration of what’s known as a budget reconciliation bill, which only requires 50 votes to advance in the Senate instead of the upper chamber’s usual 60. But the legislation was effectively killed when key swing vote Sen. Joe Manchin (D-W.Va.) announced in December that he opposed it. In the months since, lawmakers have sought to renegotiate with Manchin to revive the package, with some indicating that they hoped to secure a deal by this weekend. While Manchin appears to be in talks with Democratic leadership — a person familiar said that he met Majority Leader Chuck Schumer (D-N.Y.) Wednesday to discuss reconciliation — it’s unclear whether those discussions will ultimately amount to anything. Experts previously told The Hill that passing the bill would be paramount to achieving President Biden’s climate goals, saying the necessary emissions reductions would be difficult to achieve otherwise. For his part, Manchin reiterated openness to a deal this week, telling Axios he’s serious about talks with Schumer on a climate, energy and deficit reduction package. The news outlet reported that some Democrats now believe that $300 billion in energy tax credits are possible. Manchin has previously praised some of the clean energy tax credits that his colleagues have pushed. But, with another key date gone, skepticism is growing among climate advocates. Brett Hartl, chief political strategist at the Center for Biological Diversity Action Fund, compared Manchin’s actions to “Charlie Brown and Lucy pulling the football away over and over again.”
Democrats and the endless pursuit of climate legislation -Twelve years ago, when Democrats controlled both houses of Congress and the presidency, the country teetered on the edge of passing its first-ever comprehensive climate bill. A triumvirate of senators were negotiating bipartisan legislation that would invest in clean energy, set a price on carbon pollution, and — as a carrot for Republicans — temporarily expand offshore drilling. Then an oil rig — the Deepwater Horizon — exploded in the Gulf of Mexico. The loose bipartisan coalition collapsed. As President Barack Obama later wrote in his memoir, A Promised Land, “My already slim chances of passing climate legislation before the midterm elections had just gone up in smoke.” Today, the sense of déjà vu is strong. The first half of 2022 has been stacked with events that have pushed climate change far down the list of priorities. The Biden administration has been caught between the war in Ukraine, surging inflation, the fight over Roe v. Wade, and, horrifically, continued gun violence. A month ago, many Democrats cited the Memorial Day recess as a loose deadline for having a climate reconciliation bill — one that could pass the Senate with only 50 votes — drafted or agreed upon. Any later, and the summer recesses and run-up to midterms could swallow any legislative opportunity. That date has now come and gone. “If you’re paying attention, you should be worried,” Jared Huffman, a Democratic representative from California, told E&E News last week.It’s both a sluggish and anticlimactic result for a party that, in 2020 and 2021, threw its weight behind climate action. The Build Back Better Act, President Biden’s massive $2 trillion spending framework, passed the House of Representatives last November, with $555 billion in spending for climate and clean energy. The bill would have invested in wind, solar, and geothermal power, offered Americans cash to buy EVs or e-bikes, retrofitted homes to be more energy efficient, and much, much more — but it died in the Senate, when Senator Joe Manchin of West Virginia refused to support it. Since then, climate action has virtually disappeared from the public and political agenda. Activists — who during the Trump administration seemed poised to transform U.S. politics — aretired and disillusioned. Meanwhile, in Congress, Manchin has arranged bipartisan energy talks and waffled on the importance of electric vehicles and even renewables. In theory, some form of energy reconciliation package is still possible, one that would preserve some of the major green investments of Build Back Better. Josh Freed, the senior vice president for climate and energy at the Washington, D.C.-based think tank Third Way, gave the odds of passing something before the midterms at around 50 percent. “I don’t think that’s either optimistic or pessimistic,” he said. Democrats, he argued, are going to be under intense pressure — both to further their agenda and to have concrete action to show to voters in November. He compared the state of the bill to the Black Knight in Monty Python and the Holy Grail: “Everything’s cut off, but it’s not dead yet.”
Manchin's bipartisan energy talks crumble, paving way for Democrat-only deal - Bipartisan Senate energy talks led by Sen. Joe Manchin (D-W.Va.) are essentially over, with Republican senators convinced that Manchin is close to a reconciliation deal with Majority Leader Chuck Schumer (D-N.Y.), according to people familiar with the matter. The death of the bipartisan approach will allow Manchin and Schumer to focus on a potential deal that includes green energy tax credits and the tax increases to pay for them. But any deal will also need 49 other Senate Democrats, including the support of Sen. Kyrsten Sinema (D-Ariz.), who hasn't been directly involved in the Manchin and Schumer negotiations. Any Senate package will also need buy-in from House Speaker Nancy Pelosi and President Biden. "These talks had been a long shot to begin with,” Sen. Kevin Cramer (R-N.D.) told Axios. "Manchin informed us in the last meeting that reconciliation is probably the route he’s going down." "We do not have any meeting scheduled that I know of, not at this point." "Sen. Manchin continues to work with his bipartisan colleagues to find solutions that address our nation’s climate and energy security needs," a Manchin spokesperson said. In an interview with Axios last week, Manchin breathed new life into his talks with Schumer to rescue the climate and prescription-drug element of Biden's Build Back Better agenda. He called the talks "encouraging" but cautioned that a final deal was far from finalized. "There could be nothing," Manchin told us in an interview. "There could be truly nothing. That's all I can tell you." Last Wednesday, in their most recent — and potentially final — bipartisan meeting, Manchin revealed just how far along he was with Schumer. Once the senators processed what Manchin told them — and read his public comments — many of them concluded that the bipartisan talks were actually over. The bipartisan talks were always viewed with skepticism by some Democrats who weren’t convinced Republicans would agree to the corporate tax increases that Manchin wanted for deficit reduction and to fund green energy tax credits. But there was some hope the bipartisan talks would gather steam because many of Manchin's and Sinema's priorities — like permitting reform and changing mining regulations — could only be done via regular order and not in reconciliation. A Democrat-only bill still has a long way to go, and it won't include some of Manchin's own priorities, like making it easier to approve pipelines. But it's the only viable path for the next few weeks.
House Republicans' climate strategy draws Democrats' jeers - The Washington Post - House Minority Leader Kevin McCarthy (R-Calif.) plans to unveil a strategy today outlining how Republicans would address climate change, energy and environmental issues if the party gains control of the House in the midterm elections, according to three individuals familiar with the matter, Maxine and our colleague Jeff Stein scooped on Wednesday evening.The strategy calls for streamlining the permitting process for large infrastructure projects, increasing domestic fossil fuel production and boosting exports of U.S. liquefied natural gas, which proponents say is cleaner than gas produced in other countries, according to the individuals, who spoke on the condition of anonymity to describe details that are not yet public.However, the GOP plan drew immediate criticism from congressional Democrats, who noted that leading scientists have said the world must rapidly phase out fossil fuels to stave off catastrophic consequences of the climate crisis.To meet the more ambitious goal of the 2015 Paris agreement, the world must eliminate coal use within 30 years, according to the U.N. Intergovernmental Panel on Climate Change. Gas dependence should be reduced by 45 percent, while oil use must fall 60 percent by the middle of the century, the IPCC said in a recent report that concluded humanity is running out of time to meet global climate goals.“I welcome the efforts of anyone, regardless of party, who is willing to seriously tackle climate change — but on its face this does not look like a serious proposal,” said Rep. Don Beyer (D-Va.). “Most people understand that a serious climate solution requires a shift toward cleaner sources of energy, but the Republicans apparently want to take us in the opposite direction, with more dependence on dangerous, dirty energy sources.”Rep. Ro Khanna (D-Calif.), who has been participating in bipartisan energy talks led by Sens. Joe Manchin III (D-W.Va.) and Lisa Murkowski (R-Alaska), echoed that sentiment.“Any climate plan must be judged on whether it reduces emissions and invests in renewables to diversify energy sources and bring a long-term reduction and stability in prices for all Americans,” Khanna said. “Based on what's been reported, this plan is just a Big Oil wish list.”
House Republicans unveil energy and climate plan that would boost fossil fuels, hydropower -- Republicans this week introduced a road map describing how they would mitigate rising gasoline prices and address climate change if the party wins control of the House of Representatives in the November midterms. The plan arises from the energy, climate and conservation task force established last year by House Minority Leader Kevin McCarthy, R-Calif., and involves proposals that run counter to the warnings of climate scientists.The strategy provides a broad overview of how the party would address high energy prices but doesn't set specific greenhouse gas emission targets. It calls for ramping up fossil fuel production and liquefied natural gas exports, as well as streamlining the permitting process for major infrastructure projects,according to The Washington Post, which first reported the plan.The agenda also endorses legislation to expand hydropower, one of the oldest and largest sources of renewable energy, and condemns policies that increase U.S. demand for critical minerals mined from China, which are necessary for electric vehicle and renewable energy production. In a document introducing the road map, House Republicans cited Department of Energy statisticsshowing that only 3% of the more than 80,000 dams in the U.S. currently generate electricity."If Republicans earn back the House majority in the fall, we will be ready to enact that strategy and ease the suffering of working Americans' wallets," Rep. Garret Graves, R-La., the task force chair, wrote in a blog post.Climate scientists have warned the world must dramatically reduce fossil fuel production to avoid the worst consequences of climate change. A recent report from the Intergovernmental Panel on Climate Change said that limiting global warming to close to 1.5 degrees Celsius will become impossible in the next two decades without immediate and major emissions cuts.The GOP has historically opposed measures to tackle the climate crisis. The Trump administration, for example, sought to reverse more than 100 environmental rules it deemed burdensome to the fossil fuel industry.This week's plan takes a vastly different approach to addressing climate change than the Biden administration's agenda, which involves slashing emissions in half by 2030 and reaching net-zero emissions by 2050.
US gives Ukraine blank check for strikes inside Russia - With the ink barely dry on the $40 billion weapons and aid package signed May 21 by the Biden administration, the United States is further expanding the range of weapons it is flooding into Ukraine, creating conditions for a vast enlargement of the terrain over which the war is being fought. On Saturday, Ukrainian Defense Minister Oleksii Reznikov said that Ukraine had begun to take delivery of the Harpoon anti-ship missile transferred by the US via Denmark, as well as the M109 Paladin armored self-propelled howitzer directly from the US. The M109, weighing in at nearly 30 tons, is capable of firing artillery rounds, each weighing 100 pounds, at distances of over 25 miles. The Harpoon, according to manufacturer Boeing, is “the world’s most successful anti-ship missile … capable of executing both land-strike and anti-ship missions.” Boeing writes, “The 500-pound blast warhead delivers lethal firepower against a wide variety of land-based targets, including coastal defense sites, surface-to-air missile sites, exposed aircraft, port/industrial facilities and ships in port.” The provision of these weapons systems means that Ukrainian forces will be using the same anti-ship missiles and mobile artillery systems as the US Navy and Army. Reznikov also announced that Ukraine had recently received more than 100 drones. With the M109’s 25-mile firing range, the Harpoon’s 77-mile range, and the US-procured Bayraktar drones with a range of thousands of miles, the United States has already provided Ukraine with means to strike dozens or hundreds of miles into Russian territory. Last week, a US official told Reuters that the US is putting no geographic limits on the use by Ukrainian forces of the weapons it is providing. “We have concerns about escalation and yet still do not want to put geographic limits or tie their hands too much with the stuff we’re giving them,” the official said. In other words, the US is effectively providing Ukraine with a blank check on strikes inside Russian territory.
U.S. is sending advanced rocket systems to Ukraine, Biden says - The Washington Post - President Biden on Tuesday confirmed that his administration is sending medium-range advanced rocket systems to Ukraine, responding to a top request from Ukrainian officials who say the weapons are necessary to curb the advance of Russian forces in the east. Biden said the more advanced rocket systems and munitions, which can pinpoint an enemy target nearly 50 miles away, will enable Ukraine “to more precisely strike key targets on the battlefield.” Ukrainian officials provided assurances they would not use the weapons to strike targets inside Russia, a senior U.S. official said. Such a move could risk an escalation in the conflict, potentially provoking Russian retaliation against U.S. forces or allies. “America’s goal is straightforward: We want to see a democratic, independent, sovereign and prosperous Ukraine with the means to deter and defend itself against further aggression,” Biden said in an essay published Tuesday evening in the New York Times. “We do not seek a war between NATO and Russia,” his essay added. An announcement on advanced rocket systems had been expected this week, as officials weighed how to help Kyiv defend itself without further inflaming tensions with Russia. The United States is sending the High Mobility Artillery Rocket System, or HIMARS, which will extend Ukraine’s reach in the ongoing artillery war with Russia, a senior administration official said Tuesday. The United States will not provide the longest-range munitions for the system to Ukraine, said the official, who spoke on the condition of anonymity to discuss sensitive military matters. The advanced weapons are part of a new $700 million package of military equipment. HIMARS is a type of Multiple Launch Rocket System. Typical rockets fired by these systems have a range of about 43 miles, according to U.S. Army data. Ukrainians currently use a Russian-made version of this system, the official said.
Russia says Biden escalating war by armed Ukraine with missile --The Kremlin accused the US of “adding fuel to the fire” in eastern Ukraine with President Biden’s decision to arm Kyiv with missile systems — and warned that the aid increases the risk of a direct conflict with Washington.“We believe that the United States is purposefully and diligently adding fuel to the fire,” spokesman Dmitry Peskov told reporters, claiming that the precision weaponry would discourage Ukraine from resuming stalled peace talks.When asked how Moscow would respond if Ukrainian forces used the US-supplied rockets to attack Russian territory, Peskov only responded: “Let’s not talk about worst-case scenarios.”Asked later if America’s plans increased the chances of a third country becoming involved in the conflict with Ukraine, Russian Foreign Minister Sergei Lavrov said: “Such risks certainly exist.”President Biden announced that the US would send the advanced missile system to Ukraine in an op-ed in Tuesday’s New York Times, an abrupt about-face from his statement a day earlier that his administration would not supply weapons that could strike inside Russia.
Russia Holds Nuclear Forces Drill As Biden Unveils $700M More In Arms For Ukraine - Some Western media reports are seeing the drill as a response and warning to Washington over the White House approving yet more military aid and weapons to Ukraine, particularly longer range rockets. Newsweek, for example, writes that "The report follows the announcement that the U.S. has approved a $700m package of security assistance to be sent to Kyiv, which will include helicopters, anti-tank weapon systems and medium-range high mobility artillery rocket systems." The Kremlin is meanwhile issuing new warnings over the US violating its stated "red lines"... It also comes interestingly as a new consensus has emerged that Russian forces are winning in Donbas, amid the latest steady gains over the whole of Luhansk province, and as the final Ukrainian holdout city of Sievierodonetsk is poised to fall to the Russians. The fresh White House move to send in longer range rockets (which are in effect 'medium-range') seems aimed at stalling the Russian gains made in Donbas. The Biden administration last week said it would reject the possibility of sending long-range rockets, fearing things could spiral toward rapid escalation with Russia, after the Kremlin declared "red lines" concerning this type of major West-supplied weaponry. In President Biden's Tuesday New York Times op-ed outlining "what America will do and not do in Ukraine," he stressed that he doesn't believe Russia intends to use nuclear weapons. "I know many people around the world are concerned about the use of nuclear weapons," he began on this point. "We currently see no indication that Russia has intent to use nuclear weapons in Ukraine, though Russia’s occasional rhetoric to rattle the nuclear saber is itself dangerous and extremely irresponsible. Let me be clear: Any use of nuclear weapons in this conflict on any scale would be completely unacceptable to us as well as the rest of the world and would entail severe consequences," the president said.
Biden’s reckless escalation toward nuclear war with Russia --The Biden administration’s decision to provide Ukraine with what the president himself described yesterday in a New York Times column as “advanced rocket systems” is a massive escalation of the war with potentially catastrophic consequences.Biden’s claim that “We do not seek a war between NATO and Russia” is a lie. NATO, supplying Ukraine with unlimited financial and military support, is at war with Russia. And having made this vast commitment, the US is taking reckless actions to defeat Russia.Biden writes: “So long as the United States or our allies are not attacked, we will not be directly engaged in this conflict, either by sending American troops to fight in Ukraine or by attacking Russian forces.”But this statement is contradicted by the fact that the US is providing Ukraine with weapons and logistical support to attack Russian forces, including the assassination of Russian generals and the sinking of a Russian ship.Biden states: “We are not encouraging or enabling Ukraine to strike beyond its borders.” But the United States is sending Ukraine “advanced rocket systems” that, in fact, encourage and enable Ukraine to attack Russia.Biden is providing Ukraine a carte blanche to use these weapons in whatever way it believes necessary. Ukraine will take actions to provoke military confrontation between NATO and Russia. Striking Russia with US-supplied rockets will achieve that aim. Russia will retaliate.Biden casually notes in passing: “I know many people around the world are concerned about the use of nuclear weapons.” He then proceeds to dismiss such concerns by absurdly reassuring readers:We currently see no indication that Russia has intent to use nuclear weapons in Ukraine, though Russia’s occasional rhetoric to rattle the nuclear saber is itself dangerous and extremely irresponsible.But what is “Russia’s occasional rhetoric to rattle the nuclear sabre” other than an extremely serious “indication” of an “intent to use nuclear weapons”? And if it is not such an indication, why does Biden describe it as “dangerous and extremely irresponsible”?
NATO secretary general to meet with top US officials -- NATO Secretary General Jens Stoltenberg will meet with top U.S. officials beginning on Wednesday, close to two weeks after top leaders from Finland and Sweden met with President Biden about joining the military alliance. Stoltenberg will meet with Secretary of State Antony Blinken on Wednesday, and the two will hold a press conference, according to a press release from NATO.. He will make joint remarks with Defense Secretary Lloyd Austin on Thursday. The NATO secretary general is also expected to meet with national security adviser Jake Sullivan, according to the NATO release. Biden earlier this month met with Finnish President Sauli Niinistö and Swedish Prime Minister Magdalena Andersson, whose countries have formally applied for NATO membership after the Russian invasion shifted the nations’ stances on joining the alliance. Biden voiced his support for both joining the military alliance, saying, “Finland and Sweden make NATO stronger.” Stoltenberg also met with Finnish and Swedish officials earlier this month after the countries submitted their applications. All 30 NATO nations must agree on NATO membership for both, though Turkey has objected to their memberships. Last Friday, Blinken said the U.S. was “confident” that both countries would be able to join the military alliance.
U.S. Split Over Next Round Of Russia Sanctions - Biden administration officials are divided over how much further the US can push sanctions against Russia without sparking global economic instability and fracturing transatlantic unity. While President Joe Biden’s team rallied behind a sanctions plan it rolled out just after Russia’s invasion of Ukraine, the debate is more heated now that President Vladimir Putin has shrugged off the early economic penalties and is forging ahead with his war, according to officials familiar with the discussions. The people, who asked not to be identified discussing internal deliberations, said factions have emerged over how hard to push. One group, which includes many officials at the State Department and White House, advocates even stricter measures known as secondary sanctions in response to Russian atrocities, arguing opposition from allies can be overcome. Another group of officials, many based at Janet Yellen’s Treasury Department, worry about further strains on a global economy already suffering from supply-chain woes, inflation, volatile oil prices and a potential food crisis. Some fret about the looming midterm elections and Democrats’ chances if prices at the pump stay high. They argue for a different, untested approach: a cap on oil prices that would allow countries to buy Russian energy while limiting Moscow’s income. “We’re now just coming up to the limit of how severely you can impose sanctions against a major economy without it having such bad spillover effects that you are creating a ton of bushfires elsewhere,” The challenges have been exacerbated by the departure of Daleep Singh, the deputy national security adviser who was managing the administration’s sanctions rollout, according to one person familiar with the internal dynamics. His absence will fan concerns that the US lacks an influential voice to play that role at an even more perilous time.
Pentagon vs. Congress tension builds over monitoring billions in Ukraine aid - The Pentagon was already struggling to keep up with Congress’ demands for oversight of its spending. Then, lawmakers earmarked an extra $40 billion for Ukraine. Concerns are mounting on Capitol Hill about the Biden administration’s ability to properly account for the unprecedented wave of cash and to track the thousands of U.S. weapons heading to Ukraine for its war with Russia. And given the Pentagon’s recent track record concerning congressional oversight, it’s coming under increased scrutiny from members of both parties — from progressive Elizabeth Warren to libertarian Rand Paul. Some lawmakers are already warning the Biden administration that a future aid package could lose the overwhelming congressional support that has been a hallmark of the previous efforts. A key barometer will be the Pentagon’s handling and complete accounting of the funds, which has lagged in other areas, sparking scrutiny from congressional committees. Sen. Warren (D-Mass.), a member of the Armed Services Committee, said in an email that a full accounting of the already-appropriated funding will be “critically important for both past and future funding requests.” “The U.S. government is sending billions in humanitarian, economic, and military assistance to help the Ukrainian people overcome Putin’s brutal war, and the American people expect strong oversight by Congress and full accounting from the Department of Defense,” she added. Pentagon spokesperson Marine Corps Lt. Col. Anton Semelroth said the department is “committed” to transparency with the public and with Congress about the security assistance funds. But he stressed that war involves risk, and called on Russia to end the conflict. “Risk of diversion is one of many considerations that we routinely assess when evaluating any potential arms transfer,” Semelroth said. “In this case, risk would be considerably minimized by the full withdrawal from Ukraine by Russian forces.”
Ukrainian first lady urges US ‘do not get used to this war’ -Ukraine’s first lady urged the United States to “not get used to this war” during an interview aired Thursday as the Russian invasion in the former Soviet Union nation nears close to 100 days of fighting.Ukrainian first lady Olena Zelenska spoke to ABC News in her first televised solo interview since the start of the Russian invasion, warning Americans to not become desensitized to the pain felt by Ukrainians in the ongoing conflict.“To the people of the United States, do not get used to this war. The war may be conducted far, far away. There’s some distant territories. It’s been conducted for a certain period of time, already for a long period of time,” she said when asked if she had a message for Americans.“But don’t get used to that. Otherwise … we are risking to have a never-ending war, and this is not something that we would like to have. And don’t get used to our pain as we have … families that are being separated because of this war,” she added. Zelenska’s remarks come as the Russian invasion, which began in February, has raged on for close to 100 days, as Moscow’s attempts to quickly seize Kyiv were unsuccessful.
Gas prices have hit record highs but don't expect Biden to lower them: 'They already used their biggest bullet' - The cost of gas is surging across the US, but drivers shouldn't expect any action taken by President Joe Biden's administration to bring down prices at the pump ahead of summer driving season. The White House is staring down a global energy crunch sparked by Russia's invasion of Ukraine, as well as domestic supply strains across energy commodities. "There are very few tools the US administration has because the biggest drivers for gasoline prices are driven by global fundamentals," Matt Smith, lead oil analyst, Americas at Kpler, told Insider. "You can make decisions on domestic supply, but if it doesn't have an impact on the global picture, it won't have an impact at the pump." Gas prices have blown past record after record in recent weeks. On Friday, the average gallon of gas in the US hit $4.599 — roughly 51% higher than a year ago, according to AAA data. The average on Monday, after drivers hit the road for Memorial Day getaways, was $4.619.Even prior to the war in Ukraine, however, supply was tight."[Before February], US inventories were low compared to historical benchmarks — for crude, gas and diesel," Smith said. "Meanwhile, demand was getting back to pre-pandemic levels while supply lagged as refining activity remained subdued."At the end of March, President Biden moved to stem rising gas prices and compensate for the loss of Russian supply by ordering the release of 1 million barrels a day over six months from the Strategic Petroleum Reserves. About 59% of the price of gas at the pump comes from the cost of crude in global markets, but the additional release of barrels, or even increases in US production, would only add a "proverbial drop in the bucket in the 100-million-barrel-per-day global oil market," Dallas Fed economists wrote earlier this month. Yet, according to Smith, there's little else Biden can do. "They already used their biggest bullet [with the strategic petroleum release]," Smith said. "That was probably the best shot of keeping prices down, since that crude is ultimately going to make its way to the global market, in theory."Amid the scramble to bring down prices ahead of the midterm elections, the White House has reached out to the oil industry to inquire about firing up shuttered refineries, Bloomberg reported Friday. But there's a meager chance that comes to fruition, Smith explained. "Companies had already assessed the cost of restarting and running these refineries and judged it an uneconomic proposition," he said. "There's little the US administration can do to get these refineries to restart — unless they wanted to invest the money themselves, which isn't going to happen."Biden has not yet ruled out using export restrictions to ease soaring fuel costs, US Energy Secretary Jennifer Granhold said Tuesday. She told CNN the President is "obsessed" with lowering prices.
Congress begins effort to end US role in Yemen war - Amazingly, after nearly eight years of relentless war, the U.N.-negotiated ceasefire has held up in Yemen for the last two months. As the U.N. Special Envoy begins his effort to extend this temporary truce into a longer-term deescalation, Congress once again has the opportunity to retake its war powers authority and provide the president with a tool to end U.S. involvement. Today, a bipartisan group of House lawmakers, led by Congressional Progressive Caucus Chair Rep. Pramila Jayapal (D-Wash.) and Rep. Peter DeFazio (D-Ore.), introduced a measure to invoke Congress’s war powers “to end unauthorized United States military involvement in Saudi Arabia’s brutal war in Yemen.” Sen. Bernie Sanders will introduce a companion bill when the Senate reconvenes. With the administration and some of itscongressional allies toadying to Saudi Arabia and the United Arab Emirates in a shameless attempt to stabilize international energy markets, this war powers resolution on Yemen couldn’t be more timely. Prior to the current war, most lawmakers (mistakenly) saw Yemen solely through the lens of counterterrorism. Although the conflict is a result of a coup during Yemen’s post-revolutionary transition in September 2014, Washington has largely bought into the false Gulf narrative that the war was instigated by Iran. The Obama administration began backing Saudi Arabia and the UAE’s military coalition, after it intervened in Yemen’s civil war in 2015. Since then, Washington has provided aerial refueling, targeting intelligence, and U.S. advisers without authorization from Congress. Since the March 2015 intervention, the Saudi and Emirati-coalition has conducted an aerial and ground military campaign that has relied heavily on U.S. weapons, as well as American logistical and intelligence support. The coalition has also enforced a siege against rebel-held territory in Yemen by blocking its air and sea ports, which has severely hampered the import-reliant economy and catalyzed the spiral of Yemen’s pre-existing humanitarian crisis into what the United Nations has called “the world’s worst humanitarian crisis.” While Houthi forces abuse those living under their corrupt rule, forcibly recruit child soldiers, and launch mortar shells and missiles into civilian areas, the U.S.-supported, Saudi-led coalition has also engaged in a consistent pattern of airstrikes targeting civilian objects and civilian infrastructure, including a school bus full of children, public markets,weddings, port docks and cranes, funerals, Doctors Without Bordershospitals and other medical facilities, camps for internally displaced people, and boats filled with African refugees. These attacks have a direct correlation to the humanitarian crisis, as the destruction of such vital civilian infrastructure has directly hampered humanitarian and commercial import access to the country, which before the conflict imported nearly 90 percent of its food supply. Civilians have borne the brunt of this crisis, with an estimated 337,000 dead as a result of the fighting, starvation, and disease. Despite progress in gaining humanitarian access to previous frontlines during the current truce, three-quarters of the population, nearly 20 million people, are acutely food insecure. For years, under three administrations, State Department officials havevoiced concern about U.S. complicity, and the potential legal culpability of U.S. personnel in aiding and abetting the coalition’s apparent war crimes. Yet despite the clear humanitarian, strategic, and moral imperatives, three presidents have failed to make meaningful changes to US policy that could help end Yemen’s suffering.
Biden Planning Saudi Trip As Gas Prices Soar, But MbS Still Unpunished Over Khashoggi Murder - As gas prices soar, President Biden is reportedly planning a trip to Saudi Arabia this month, the AP reports, but also notes that it's "a trip that would likely bring him face-to-face with the Saudi crown prince he once shunned as a killer."Indeed Biden is also on record as calling Mohammed Bin Salman a "pariah" - but more recently this rhetoric has been missing as the Ukraine crisis has left Washington quietly begging the world's top oil exporter to urgently loosen up supply, giving MbS leverage, witnessed for example in the White House dispatching CIA director William Burns to meet with the crown prince in an attempt to smooth over relations in April.And more recently National Security Council Middle East coordinator Brett McGurk alongside Amos Hochstein, a senior adviser for energy security at the State Department, traveled to hold preparatory talks with the Saudis.If such a high-level trip as a personal Biden visit to Riyadh materializes, it's expected to include meetings with other members of the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates), but also Egypt, Iraq and Jordan, based on White House sources cited by the AP.Bloomberg is meanwhile reporting that the Biden Saudi trip is "likely" but as yet unconfirmed that it would include a personal meeting with MbS. However, it's almost impossible to conceive of such a trip without the US president meeting with or getting the blessing of the kingdom's de facto ruler.A Biden trip to Saudi Arabia has been rumored and reportedly in the making for months, since the Russian invasion of Ukraine brought turmoil and extreme uncertainty to oil markets. But the Saudi state-ordered murder of Washington Post journalist Jamal Khashoggi in the Istanbul consulate in 2018 still looms large, and though multiple investigations (including a report by the CIA), have pointed the finger directly at MbS, the Biden administration has thus far not taken any steps to punish the Saudi ruler. That possibility now seems further away than ever.There's also political risk for Biden in appearing too willing to mend ties, as the AP aptly summarizes, "For Biden, the political dangers of offering his hand to Prince Mohammed include the potential for an embarrassing last-minute public rebuff from a still-offended crown prince known for imperious, harsh actions."
Biden Kowtows To Saudi Arabia - Yves here. Recall that there is tons of antipathy, meaning personal antipathy, between Saudi Crown Prince Mohammed bin Salman and Biden. Biden and the Dems lambasted MbS over the execution and dismemberment of Jamal Khashoggi. MbS snubbed Biden by refusing to take Biden’s call when he tried to browbeat the Kingdom into falling in line with Russia sanctions.Apparently President Biden will be visiting Riyadh as part of his forthcoming Middle East tour. The report on this coincides with an apparent end to negative comments about the nation’s Crown Prince Mohammed bin Salman (MbS), whom the CIA has accused of having ordered the execution and chopping up of journalist Jamal Khashoggi. It must be admitted that MbS has made some progressive moves, allowing women to drive and reigning in to some extent the power of the Mutaween religious police. But he has also thrown many critics and just rivals into jail or confinement, in the case of wealthy rivals stripping them of much of their assets. A not regularly recognized fact is that MbS came to power by carrying out a coup against the former crown prince, Mohammed bin Nayef, with it likely he was encouraged in this by Donald Trump and Jared Kushner, with the latter getting paid off with $2 billion by MbS after Trump left office.Biden had avoided meeting MbS or even communicating with him. He also had cut off some of the military support the US had provided for MbS’s war in Yemen. Now he will be meeting him. Juan Cole claims that there are four reasons for this change of attitude: oil, Yemen, Israel, and Iran. Much of this reflects unfortunate events, with in my view prospects for improvements not likely on most of these fronts. The oil problem arises from Russia’s invasion of Ukraine and the subsequent sanctions on Russian oil, which have led to substantial oil price increases, exacerbating inflation in the US. Apparently Biden would like the Saudis to increase oil production. But they have been in cahoots with Russia in wanting restrain production and prop the price of oil up for a long time. It is not at all obvious Biden will get anything out of MbS on this matter. Yemen is one matter here where something good may be happening. A cease fire has been in place for two months, and Biden wishes to encourage this with hope of a full blown end to the war there. This is a worthy matter that I applaud. Apparently Israel has encouraged Biden to make this trip and hopes for Saudi Arabia to join, UAE, Bahrain, and Morocco in the Abraham Accords in recognizing Israel. I am not against that, per se, but supposedly Israel and Saudi Arabia are already cooperating on a number of initiatives. This certainly removes the Saudis from providing any pressure for a better treatment of the Palestinians. And part of the matter with Israel involves the fourth matter, Iran. On this I see nothing good. Israel and Saudi Arabia both are pleased to see that the US has not reentered the JCPOA nuclear deal with Iran. The US should never have left the deal, and Biden should have gotten back into it soon after becoming president. But he followed the demands of Israel and various politicians in the US in making demands on Iran to do more things like end its missile program that were not part of the JCPOA and which most observers accurately forecast Iran would not go along with. That has proven the case. In any case, the Israelis and Saudis want to emphasize the US not rejoining the JCPOA. I note that the Saudis probably will not give Biden a nice oil production increase. Does he want that? He should reenter the JCPOA and end the sanctions on Iran. They can provide that oil production increase, or at least some of one.
Democrats must limit oil shocks along with climate risks - Energy issues are defining U.S. consumer, economic and security challenges more profoundly than any time since the oil embargoes of the 1970s. Russia’s invasion of Ukraine has placed enormous pressure on global oil and natural gas supplies, driving up prices around the world, and exacerbating already high domestic inflation, with U.S. consumers facing new record gasoline prices of more than $4.50 a gallon in part due to the new EU embargo on Russian oil this week. Yet, the crisis comes with real opportunity. Consumer anger over energy costs and new concerns about U.S. energy security are together providing key Democrats, especially perpetual swing vote Sen. Joe Manchin (D-W.Va.), with fresh political motivations to enact a sweeping package of clean energy tax incentives that can also limit future oil shocks. Late last week, Manchin indicated that renewed talks with Senate Majority Leader Chuck Schumer (D-N.Y.) and Senate Finance Chair Ron Wyden(D-Ore.) may yet yield a deal on clean energy, as part of a scaled back Democratic-only budget reconciliation bill also focused on deficit reduction and Medicare prescription drug price cuts. And while Manchin has said reducing inflation is his chief policy concern, he and other Democrats have been slow to acknowledge that a revolution in domestic clean energy innovation and commercialization through tax incentives can help insulate America from future global oil shocks, improving U.S. energy security, along with addressing climate change. Gaining long-term benefits of cheaper energy and insulation from fossil fuel commodity price shocks, however, will require a period of time where certain technologies need pending tax incentives to gain market share, help balance the electrical grid and lower prices. The costs of wind and solar power has fallen by more than 80 percent in just the last decade, making it cheaper than fossil energy in many markets, but due to it’s intermittency these climate-friendly renewable energy sources will require greater deployment of electricity storage and smart grid technologies encouraged through the tax code and federal innovation incentives. Electric vehicle adoption can over time reduce U.S. oil demand dramatically, lowering consumer fuel and maintenance costs, and helping America manufacturers compete with foreign EV producers, especially China. But today, EVs typically have sticker prices of at least $10,000 more than comparable gasoline-powered cars, although auto producers project rapidly reduced new EV prices as production lines reach scale. This is precisely why a pending Senate Finance Committee bill proposes consumer tax credits for EVs of at least $7,500. Under current law, domestic EVs produced by GM and Tesla no longer qualify for tax credits, so Congress must act to help our own manufacturers. Even so, the U.S. will still need to produce more oil and natural gas for years to come to limit price shocks and improve energy security, as many Democrats have been slow to admit. But greater renewable electricity, along with existing and new nuclear, hydropower, geothermal, hydrogen and other sources, can reduce domestic price pressures on U.S. natural gas, more of which will need to be exported to help our EU allies break free from Russian gas. More broadly, the reduction in U.S. oil and gas reliance must remain a central long-term goal, both to address climate change and to wean the world from the influence of petro-dictators like Russian President Vladimir Putin. Historically, in the face of Russian aggression, Middle East hostility, and oil price spikes, the U.S. has responded with bipartisan policies to increase energy supplies, reduce oil demand and address resulting economic and security vulnerabilities. In the 1970s, legislation supported by both Democrats and Republicans created the U.S. Energy Department, instituted the first auto fuel efficiency regulations, and created the Strategic Petroleum Reserve. Again in the 2000s during the Iraq War, Congress passed the Energy Policy Act of 2005 with bipartisan support to increase alternative supplies, and a Democratic House and President George W. Bush were able to pass a bill to raise domestic auto fuel efficiency to cut oil demand in 2007. Yet, in a stunning demonstration of the high cost of extreme political partisanship to average Americans, Congress has been unable to pass major bipartisan energy and climate legislation, even as the energy crisis has worsened.
Biden sees exodus of Black staffers and some frustration among those who remain - At least 21 Black staffers have left the White House since late last year or are planning to leave soon. Some of those who remain say it’s no wonder why: They describe a work environment with little support from their superiors and fewer chances for promotion.The departures have been so pronounced that, according to one current and one former White House official, some Black aides have adopted a term for them: “Blaxit.”The first big exit came in December, when Kamala Harris’ senior adviser and chief spokesperson Symone Sanders announced she was leaving, ultimately for a gig at MSNBC. Since then, Harris senior aides Tina Flournoy, Ashley Etienne and Vincent Evans, and public engagement head Cedric Richmond have left.Public engagement aide Carissa Smith, gender policy aide Kalisha Dessources Figures, National Security Council senior director Linda Etim, digital engagement director Cameron Trimble, associate counsel Funmi Olorunnipa Badejo, chief of staff Ron Klain advisers Elizabeth Wilkins and Niyat Mulugheta, press assistant Natalie Austin, National Economic Council aides Joelle Gamble and Connor Maxwell, and presidential personnel aides Danielle Okai, Reggie Greer and Rayshawn Dyson have all departed too. Deputy White House counsel Danielle Conley and Council of Economic Advisers aide Saharra Griffin are among others planning to leave in the coming weeks, according to White House officials.The exodus has raised concerns among outside observers who push for the diversification of government ranks.“I have heard about an exodus of Black staffers from the White House — ‘Blaxit’ — and I am concerned,” said Spencer Overton, president of the Joint Center for Political and Economic Studies, which tracks government staff diversity numbers. “Black voters accounted for 22 percent of President Biden’s voters in November 2020. It is essential that Black staffers are not only recruited to serve in senior, mid-level and junior White House positions, but are also included in major policy and personnel decisions and have opportunities for advancement.”A White House official pushed back on those concerns, saying that around 14 percent of current White House staffers identify as Black — in line with national proportions. The official added that the number is expected to increase as more Black staffers are brought on board and that 15 percent of Black staffers have been promoted in the last year.
Black Americans less enthusiastic about Biden, voting in upcoming election than in 2020: poll -- Black voters’ support for President Biden remains the highest among most demographics, but it has weakened since he took office, according to a recent Washington Post-Ipsos poll. The poll of about 1,250 Black Americans found that 70 percent approve of how Biden is handling his job, but only 23 percent “strongly approve.” The results may signal Black voters’ frustration with a lack of progress Biden and congressional Democrats have made on certain key issues as the midterm elections approach. Black voters consistently vote overwhelmingly in favor of Democratic candidates, and Biden carried Black voters in the 2020 presidential election with 92 percent of the vote, according toPew Research Center. Biden was the first Democratic presidential nominee to win Georgia since 1992, at least in part a result of encouraging more Black Americans more Black Americans to vote. The Post poll found that only 60 percent of respondents said they feel Biden is keeping most of his major campaign promises. Biden has backed several pieces of legislation related to issues that impact many Black voters, such as police reform and voting rights, but an evenly-divided Senate has allowed Republicans to block those measures. Democrats have a tie-breaking vote in Vice President Harris, but they need to attain at least 60 votes to overcome a filibuster and advance legislation. More than 60 percent of respondents said they were disappointed or angry about Democrats’ failure to pass voting rights legislation, but more than 80 percent said they blame Biden “not at all” or “a little,” according to the Post. Still, the number of respondents who said they think Biden is sympathetic to Black Americans’ problems dropped from 74 percent in 2020 to 66 percent. About 75 percent of those polled said Biden has done “a little” or “nothing” to reduce discrimination in the criminal justice system.
Pelosi says House will vote on gun package next week --Speaker Nancy Pelosi (D-Calif.) on Thursday announced the House will vote on a sweeping gun package next week, less than a month after two mass shootings that killed more than 30 people in Buffalo, N.Y., and Uvalde, Texas. The package,, which the House Judiciary Committee marked up on Thursday, would raise the age requirement for purchasing semi-automatic weapons from 18 to 21 years old, prohibit civilian use of high-capacity magazines and bump stocks and mandate that purchases of so-called ghost guns are subject to background check requirements. Additionally, the package includes measures that would bolster firearm storage requirements and would disallow straw purchasing of guns, which is when someone who is unable to pass a background check buys a firearm through a proxy buyer. iN a letter to colleagues on Thursday, Pelosi said the package “will make an enormous difference in our fight against gun violence.” House Judiciary Committee Chairman Jerry Nadler (D-N.Y.) also told reporters on Thursday that the House will bring the package to the floor next week. The vote will come less than a month after a gunman reportedly targeting a Black community opened fire at a grocery store in Buffalo, killing 10 people. Ten days later, another gunman killed 19 students and two teachers at Robb Elementary School in Uvalde. And on Wednesday, a gunman killed four people at a medical clinic in Tulsa, Okla. The House is also slated to vote on a separate bill next week that would nationalize “red flag” laws, which seek to keep firearms away from people who are deemed a danger to themselves and others. That legislation, according to Pelosi’s letter, will “keep guns out of the hands of those who pose a threat to themselves or others by implementing a nationwide extreme risk law and encouraging states to enact their own extreme risk laws.” The Speaker on Thursday also announced that the House will bring the Active Shooter Alert Act to the floor in the coming weeks. The bill, sponsored by Rep. David Cicilline (D-R.I.), would establish a program to inform the public when active shooters are in their area. It would be similar to the AMBER Alert system used by law enforcement. She also said the House will “soon” hold a hearing regarding a bill to ban assault weapons, which she first announced at an anti-gun violence event in San Francisco on Wednesday.
21 Democrats ask leaders to split up gun package - A group of 21 House Democrats led by Rep. Abigail Spanberger (D-Va.) is asking leadership to split up a package of eight gun bills and hold individual votes on each measure, in hopes of maximizing Republican support for each as they head to the Senate. In a Thursday letter to Speaker Nancy Pelosi (D-Calif.), Majority Leader Steny Hoyer (D-Md.), Majority Whip James Clyburn (D-S.C.) and House Judiciary Committee Chairman Jerry Nadler (D-N.Y.), the 21 Democrats suggested that some of the measures may get support from House Republicans if considered individually, making them better-positioned for consideration in the Senate. “While we wish every Member of Congress in the House and Senate would join us in supporting all these bills, we know that is not our current reality, and given the composition of the U.S. Congress, we know we must have bipartisan support for bills we want to become law,” the lawmakers wrote. Leaders combined eight gun reform measures into a single package called the “Protect Our Kids Act” — a direct response to a pair of mass shootings last month, including one at an elementary school in Uvalde, Texas, where a lone gunman with a semi-automatic rifle killed 19 children and two teachers. The Democrats’ package includes measures to raise the purchasing age for semi-automatic rifles to 21 years old, outlaw magazines that hold more than 10 rounds, strengthen storage requirements, codify a ban on bump stocks, prohibit straw purchases of firearms and combat untraceable “ghost guns.” “We fully expect each of these bills will pass in the House, but as we focus on actually delivering for a hurting America, passing each bill individually will ensure that every commonsense measure we are putting forth arrives in the U.S. Senate with the maximum bipartisan support it may garner, recorded through individual votes – giving us the maximum chance of passing gun violence prevention legislation in the Senate and into law,” the lawmakers wrote. The letter, first reported by Punchbowl News, arrived in the middle of a much-watched gathering of Nadler’s Judiciary Committee, which had returned to Washington for a special markup on the same eight-bill omnibus package the 21 Democrats want to split apart. It also coincided with another letter sent Thursday from Pelosi to House Democrats laying out the party’s voting strategy on gun reform following last week’s massacre in Uvalde. In it, Pelosi informs her members that the package of bills being marked up by the Judiciary panel will receive a vote next week.
Biden: ‘Unconscionable’ for GOP to oppose debate on gun laws --President Biden on Thursday called Republican opposition to even debating various proposals to strengthen gun laws “unconscionable” and predicted the GOP would pay a price at the ballot box if Congress fails to pass legislation after a string of mass shootings. “This time, we have to take the time to do something. This time, it’s time for the Senate to do something. But as we know, in order to get anything done in the Senate, we need a minimum of 10 Republican senators,” Biden said in a primetime address from the White House laying out his proposals to curb gun violence and urging Congress to act. “I support the bipartisan efforts that includes a small group of Democrats and Republican senators trying to find a way,” Biden continued. “But my god, the fact that the majority of Senate Republicans don’t want any of these proposals even to be debated or come up for a vote, I find unconscionable.” Biden’s speech came a day after a gunman killed four people at a Tulsa, Okla., medical building; nine days after 21 people, including 19 children, were slaughtered in a shooting at a Uvalde, Texas, elementary school; and 19 days after a gunman killed 10 people at a supermarket in Buffalo, N.Y. The president urged lawmakers to reauthorize an assault weapons ban or at minimum raise the age requirement to purchase assault weapons from 18 to 21. He also called on Congress to strengthen background checks, repeal liability immunity for gun manufacturers and enact red flag legislation, which would allow authorities to take weapons away from those who may pose a threat to themselves or others. While the House has passed expanded background checks and will vote next week on red flag legislation, those bills face an uphill fight to pass the Senate, which is divided evenly between Republicans and Democrats. Any legislation would need 60 votes to overcome the legislative filibuster.
Our Country Is Trading Children’s Lives for Guns - Mass shootings are good for gun sales. In the days following the horrific massacre of 19 children and two teachers in Uvalde, Texas, firearm manufacturers’ stock prices predictably rose. Gun owners, who have been conditioned to purchase weapons out of fear of not being able to buy more guns, tend to run out and buy more weapons in anticipation of coming restrictions. That in turn boosts gun profits and stock prices. It is a macabre cycle that appears to be fueled by Republican-led fear-based culture wars. Gun buyers behave in ways that suggest they logically anticipate that lawmakers will respond to a mass shooting by making it harder to buy a gun. After all, when consumer products are found to be a danger to humans, they are often regulated. The federal government routinely recalls dangerous products—such as a line of children’s bunk beds whose defective ladder resulted in the death of a 2-year-old child from Ohio. In that case, nearly 40,000 units sold to the public were recalled. The U.S. Public Interest Research Group has a lengthy list of toys that the federal government has recalled that have posed choking hazards for kids. It makes sense to regulate harmful products, especially where children’s health and safety are concerned. The government doesn’t sidestep the issue by saying that it was the fault of the child or the parents that a product caused harm. Instead, it acts on the assumption that only safe products should be available for purchase, and it punishes the manufacturer. But, time and again, gun owners’ very rational fears remain unfounded as thousands of children are victims of gun violence each year, and yet firearms manufacturers are absolved of blame and weapons of war remain easily available for purchase. The Uvalde shooter reportedly bought two AR-15-style rifles legally from a federally licensed gun store just days before the massacre and used one of them to end 21 lives. A group of pediatricians published a plea in Scientific American in response to the Uvalde shooting and to the fact that gun violence is now the leading cause of death among young people aged 1 to 19. The doctors wrote, “We must do better for our children,” and pointed to “the politicization of guns taking priority over public health.” How else to explain the endless proliferation of deadly killing machines, when we won’t even tolerate a faulty ladder on a bunk bed?
Graham: ‘It is time to mobilize our retired and former service members’ to secure schools -Sen. Lindsey Graham (R-S.C.) on Tuesday called for retired and former military members to step up to enhance security in schools following the mass shooting at an elementary school in Uvalde, Texas, last week.Graham wrote in a thread posted to his Twitter account that the U.S. has “hundreds of thousands” of former military members “who could bring a lot to the table” in protecting schools and that trained ROTC instructors should be able to carry firearms to make schools more secure.The senator also said that he is working on creating a certification process for former military members that will allow them to go through security training and prepare them to help schools across the country.“It is time to mobilize our retired and former service members who are willing to help secure our schools,” Graham added in a follow-up tweet. “Our schools are soft targets. They contain our most valuable possession – our children, the future of our country – and must be protected.” Graham’s remarks reflect a GOP-led push to sharpen security in schools — and reject gun restriction proposals called for by Democrats and gun control advocates — following the massacre at Robb Elementary School in Uvalde that killed 19 students and two teachers.
Gun maker Whose Rifle Was Used in Uvalde Offers Buy Now, Pay Later: NYT - The gunmaker that made the rifle used in the Texas elementary-school shooting uses online direct-to-consumer advertising tactics to attract young buyers, according to The New York Times.Daniel Defense also runs ads modeled after the popular video game "Call of Duty,"most likely also aimed to appeal to a younger audience, per the Times. The Uvalde shooter is said to have bought the rifle used in the attack days after his 18th birthday.The Times reported how Daniel Defense also runs a buy-now, pay-later payment plan, which is advertised on the home page of its website.The financing program allows buyers to spread out the cost of an assault-style rifle, some models of which retail for more than $1,800, over numerous pay periods in "three easy steps."The plan is in partnership with Credova, a buy-now, pay-later company, according to Daniel Defense's website.The Uvalde shooter reportedly bought a military-style rifle online from Daniel Defense a week before the massacre which left 19 children and two adults dead on May 24.Legislators in several US states are pushing to strengthen gun laws. Gov. Phil Murphy of New Jersey called on his state's senate last week to pass a bill that would raise the legal gun-purchasing age to 21 from 18, progress on which was stalled last year.Gov. Gavin Newsom of California also said that he would move to expedite stricter gun laws, including allowing people to sue gun manufacturers, according to Forbes.
Supreme Court may soon expand gun rights amid roiling debate - The Supreme Court will soon issue its first major Second Amendment opinion in more than a decade, coming after a pair of recent mass shootings sent the nation reeling and reignited a tense debate over gun rights and public safety. The conservative majority court is expected to rule in the coming days or weeks in a pending dispute over New York state’s tight limits on the concealed carry of handguns. Experts said that while it’s unclear just how broadly the Supreme Court would rule, the restrictive New York law is likely to be invalidated in a decision that could have ramifications for gun control efforts across the country. “It does seem relatively clear that the court is going to strike down New York’s law and make it harder for cities and states to restrict concealed carry of firearms,” said Adam Winkler, a professor at UCLA School of Law. “It remains to be seen exactly how broad the Supreme Court goes, but one thing is clear: as mass shootings become more of a political issue, the court is going to take options away from lawmakers on the basis of the Second Amendment.” The justices are expected to hand down an opinion as soon as next week but no later than late June or early July.
Vaccine injury compensation programs overwhelmed as congressional reform languishes - A pair of federal programs compensating people who suffer injuries from vaccines and pandemic treatments are now facing so many claims that thousands of people may not receive payment for their injuries any time soon. The first program, meant for standard vaccines, such as measles and polio, has too little staff to handle the number of reported injuries, and thousands of patients are waiting years for their cases to be heard. A second program designed for vaccines and other treatments created or used during pandemics has seen unsustainable growth. Between 2010 and 2020, the Countermeasure Injury Compensation Program received 500 complaints. In the two years since Covid-19 appeared, it has received over 8,000 complaints. More than 5,000 of those are directly related to the Covid-19 vaccines, with injuries ranging from a sore shoulder to death, according to the Health Resources and Services Administration. An additional 3,000 complaints related to everything from drugs and devices to the failure of hospital staff to limit infection spread have also been filed. Yet the pandemic fund has paid zero claims, in part because officials are waiting for people to submit detailed medical records and documentation to back up their allegations. “Compensation determinations are made based on individual case reviews, and the statute sets a very high standard that a claimant must meet to be eligible for compensation,” HRSA spokesperson David Bowman said. Should Covid-19 shots become routine once the pandemic ends, alleged injuries would eventually be handled by the already over-burdened standard Vaccine Injury Compensation Program. Patient advocates, attorneys and the pharmaceutical industry fear that without drastic reforms, that program could collapse. Despite bipartisan calls for change, Congress has failed to act, frustrating those who say that the VICP — which covers nearly three times as many vaccines today as it did when it was created three decades ago — is overwhelmed. There are fears those optics could fuel vaccine hesitancy if the public mistakes the situation as too many injuries flooding the program, when in fact the number of vaccines covered by the program has grown without a commensurate increase in resources. “The cost of this program failing will be like throwing kerosene on the antivax fire,”
White House says kids under 5 could get COVID-19 vaccines by June 21 -The White House said Thursday that COVID-19 vaccinations for children under 5 could begin as soon as June 21, if the Food and Drug Administration (FDA) authorizes the shots. “We expect vaccinations will begin in earnest as early as Tuesday, June 21, and really roll on throughout that week,” White House COVID-19 response coordinator Ashish Jha told reporters. An FDA advisory committee is scheduled to meet on June 14 and 15 to consider the applications from Pfizer and Moderna, and Jha said a decision on authorization is expected “soon thereafter.” The Centers for Disease Control and Prevention (CDC) would then also have to sign off. The comments illustrate that vaccinations for children under 5 could finally be getting close, after many parents have been frustrated by months of delays. Children under 5 are the only age group that still has no vaccine available. While Jha said it will take some time to ramp up the vaccination program, he expects that “within weeks every parent who wants their child to get vaccinated will be able to get an appointment.” A larger question is how many parents will want to get their young children vaccinated. While some are eager to do so as soon as possible, vaccination rates have lagged for older children, indicating rates may lag for young children as well. Only about 30 percent of children 5 to 11 have been vaccinated, according to the CDC.
Biden compounds his baby formula problems --The White House has compounded its problems — again — this time in addressing a baby formula shortage that President Biden admitted he was not personally aware of until months after the shutdown of a plant that manufactured a significant chunk of the nation’s products. Biden’s admission that he wasn’t aware of the gravity of the situation until April, when store shelves were already empty, confounded some observers who saw it as a political mistake that made the optics of the administration’s response worse. “I almost couldn’t believe what I was hearing,” said one Democratic strategist. “He has to show that he’s on top of these situations. The last thing they want is to be the subject of another Republican talking point.” The administration had already been struggling to handle questions on the baby formula shortage, and Biden’s statement left it scrambling to lay out a clear timeline of who was working on the issue in February and March and why the president was not informed sooner. It’s far from the first time the White House has had to deal with such a problem. The strategist pointed to the White House being caught flat-footed on a number of issues dated back almost one year ago. “Almost everything since the Afghanistan withdrawal foul-up has been Biden and the White House playing catch up,” the strategist said. A second strategist added, “This looks so bad. It raises questions about competency and the more that comes out, the worse it looks.” Administration officials for weeks have said they’ve been working to address the shortage since February, when a recall of Abbott Nutrition products, the maker of Similac baby formula, left the administration seeking to bring in products from other countries. Biden in May invoked the Defense Production Act in a bid to increase supply. But Biden, at an event with formula manufacturers on Wednesday, said he “became aware of this problem sometime in early April, about how intense it was. We did everything in our power from that point on.” “I don’t think anyone anticipated the impact of the shutdown of one facility,” Biden added. The president’s admission came minutes after executives from some of the leading manufacturers said they knew the shutdown would have a significant impact on formula availability.
Social Security solvency boosted by economic recovery from the pandemic - Riding the recovery wave flowing throughout much of the U.S. economy, the Social Security trust fund for retirement benefits is now projected to last until 2034, one year later than previously estimated, according to a trustees’ report released Thursday by the Treasury Department. The Social Security disability insurance fund, which pays out disability benefits, is faring even better. For the first time since 1983, it’s expected to outlast its 75-year projection period, representing a boost in the health of the fund that last year was expected to run out in 2057. When the retirement fund runs out twelve years from now, tax revenues will be able to pay for 77 percent of the scheduled benefits, the Treasury report said, up slightly from a 76 percent projection made last year. The retirement fund pays out benefits to 65 million Americans and draws on earnings from nearly 180 million Americans. Taken together, Social Security’s retirement and disability funds will now last until 2035, at which time continuing tax income will be able to pay for 80 percent of the funds’ scheduled commitments. Medicare Part A, which helps pay for medical services like inpatient hospital care, will be able to pay its benefits until 2028, two years later than the last Treasury estimate. The report noted that “the recovery of employment, earnings, and GDP [gross domestic product] from the 2020 recession has been faster and stronger than projected in last year’s report, resulting in higher payroll tax receipts and higher revenue from income taxation of Social Security benefits.” This lines up with the Congressional Budget Office’s (CBO) latest economic outlook, which found that the budget deficit for 2022 would be $1.7 trillion less than previously expected, as pandemic-related spending falls off and revenues increase. “Relative to the size of the economy, federal debt held by the public is projected to dip over the next two years, to 96 percent of GDP in 2023,” the CBO’s latest report said. CBO said it projects that the federal budget deficit will “shrink to $1.0 trillion in 2022 (it was $2.8 trillion last year) and that the annual shortfall would average $1.6 trillion from 2023 to 2032. The deficit continues to decrease as a percentage of gross domestic product (GDP) next year as spending related to the coronavirus pandemic wanes, but then deficits increase, reaching 6.1 percent of GDP in 2032.” The deficit has been greater than that six times since World War II.
Medicare funding outlook improves slightly -- The financial outlook for Medicare improved in the past year, and the program’s funding to pay all the costs for hospital services of older and disabled beneficiaries won’t run out until 2028, two years later than last year’s estimated date. Once the program’s reserves are depleted, it would only be able to cover 90 percent of the expected costs, according to the annual report from Social Security and Medicare trustees released Thursday. According to the report, the COVID-19 pandemic has had significant effects on the short-term financing and spending of Medicare, but will not have any long-term impact on the solvency of Medicare. “What we’ve experienced so far through the pandemic is that there’s been an additional cost associated with the identification and treatment of COVID related costs. But at the same time, more than offsetting those increases in costs have been a reduction in the use of services,” a senior administration official said during a briefing with reporters. The long-term expectation is that the COVID-19 treatments will effectively become part of the standard care that’s being provided to Medicare beneficiaries, the official said. Medicare beneficiaries who died due to complications of COVID-19 ended up reducing costs because their medical bills were much higher than the average Medicare beneficiary prior to the onset of the pandemic. The surviving Medicare population had a lower morbidity and reduced costs by 1.5 percent in 2020 and 2.9 percent in 2021. This morbidity effect is expected to continue over the next few years but is assumed to decrease over time before ending in 2028. Still, the program is not on sound financial footing, and the trustees warned that Congress needs to take action. “Medicare still faces a substantial financial shortfall that will need to be addressed with further legislation. Such legislation should be enacted sooner rather than later to minimize the impact on beneficiaries, providers, and taxpayers,” the trustees warned.
Biden enforces largest Medicare premium hike in history while funneling more profits to private insurers - In a move that received minimal media attention, last week the Biden administration reaffirmed its decision to enact the largest Medicare premium hike in the program’s 57-year history. The president is also endorsing a plan to funnel more money to private insurance companies and escalating plans to privatize the government insurance program for seniors and those with disabilities. Medicare enrolled 62.7 million people in 2021. The White House announced May 27 that Medicare recipients will not see their premiums lowered this year. This is despite the fact that a rate hike confirmed last November was due in large part to projected costs for a drug to treat Alzheimer’s disease that have now been lowered. In November 2021, the Centers for Medicare and Medicaid Services (CMS), part of the Department of Health and Human Services (HHS), announced an approximately 14.5 percent increase to premiums for Medicare Part B, which covers doctor visits and some preventive care and outpatient services. The standard monthly premium rose from $148.50 in 2021 to $170.10 this year. The hike came largely as a result of uncertainty over whether Medicare would cover the costs of Aduhelm, an exorbitantly expensive drug to treat Alzheimer’s. Under pressure from the pharmaceutical industry, the controversial drug was approved for use by the Food and Drug Administration (FDA) in June 2021, despite disputes over whether it is effective in treating the debilitating disease. Biogen, the maker of Aduhelm, originally priced the drug at $56,000 a year. After a considerable outcry from patient advocates and others, Biogen announced that the drug would cost $28,200 effective January 1, 2022, when the Medicare premium hikes kicked in. In April, Medicare instituted strict rules regarding who could receive Aduhelm, restricting its use mainly to clinical trials. On May 27, the Biden administration said that despite the halving of Aduhelm’s cost, and also its restriction to a small patient pool, it would not be lowering the monthly premiums deducted from seniors’ Social Security benefits. The administration justified this move on the basis of “legal and operational hurdles.” In a report to HHS Secretary Xavier Becerra, CMS wrote that “a mid-year administrative redetermination [of Medicare premiums] would be prohibitively complex and highly risky, requiring significant resources and unproven technical solutions from the varied entities which manage premium collection and payment.” In practical terms, this means that Medicare enrollees will not be receiving either a refund on the premium increases already collected this year, nor will premiums be adjusted for the balance of 2022.
Peter Navarro, Former Trump Aide, Gets Grand Jury Subpoena in Jan. 6 Inquiry - Peter Navarro, who as a White House adviser to President Donald J. Trump worked to keep Mr. Trump in office after his defeat in the 2020 election, disclosed on Monday that he has been summoned to testify on Thursday to a federal grand jury and to provide prosecutors with any records he has related to the attack on the Capitol last year, including “any communications” with Mr. Trump. The subpoena to Mr. Navarro — which he said the F.B.I. served at his house last week — seeks his testimony about materials related to the buildup to the Jan. 6 attack on the Capitol, and signals that the Justice Department investigation may be progressing to include activities of people in the White House. Mr. Navarro revealed the existence of the subpoena in a draft of a lawsuit he said he is preparing to file against the House committee investigating the Jan. 6 attack, Speaker Nancy Pelosi and Matthew M. Graves, the U.S. attorney for the District of Columbia. Mr. Navarro, who plans to represent himself in the suit, is hoping to persuade a federal judge to block the subpoena, which he calls the “fruit of the poisonous tree.” The Justice Department and the U.S. Attorney’s Office declined to comment. The grand jury’s subpoena, Mr. Navarro said, builds on a separate subpoena issued to him in February by the committee. That subpoena sought documents and testimony about an effort to overturn the election nicknamed the “Green Bay Sweep,” and a Jan. 2, 2021, call that Mr. Navarro participated in with Mr. Trump and his lawyers in which they attempted to persuade hundreds of state lawmakers to join the effort. Mr. Navarro has refused to cooperate with the committee. He was found in contempt of Congress, and the House referred the contempt case to the Justice Department for possible criminal prosecution. In his draft lawsuit, he called the committee’s subpoena “illegal and unenforceable.” Mr. Navarro said the grand jury subpoena was directly related to the contempt of Congress referral. Asked if he planned to comply and appear on Thursday to testify, Mr. Navarro responded, “T.B.D.” The subpoena is the latest sign the Justice Department’s investigation into the attack has moved beyond the pro-Trump rioters who stormed the Capitol. Federal prosectors have charged more than 800 people in connection with the attack. The subpoena sent last week to Mr. Navarro is the first known to have been issued in connection to the department’s Jan. 6 investigations to someone who worked in the Trump White House. But it follows others issued to people connected to various strands of the sprawling investigation of the Capitol attack and its prelude.
Navarro formally sues Jan. 6 committee, DOJ --Former Trump White House economic adviser Peter Navarro formally filed suit Tuesday against the Jan. 6 committee and the Department of Justice (DOJ) in a case where he will be acting as his own attorney. The filing comes after Navarro released a draft of the suit Monday evening, revealing he has likewise been the subject of a grand jury subpoena by Matthew Graves, the U.S. attorney for D.C. According to Navarro, the latest subpoena from the DOJ seeks largely the same set of materials as a February subpoena from the House committee investigating the attack, which asked about his communications with former President Trump as well as his work promoting his claims of widespread election fraud. Navarro said his lawsuit is mainly directed at the committee, but he included DOJ in his suit after being served the subpoena early Monday morning as he was finalizing his lawsuit. “It is 99 percent aimed at the kangaroo committee that [House Speaker Nancy] Pelosi [D-Calif.] formed. I drafted my lawsuit prior to any communication from the U.S. attorney. And just before I was going to file it I got this other subpoena so I just included that in the filing,” Navarro told The Hill. The lawsuit lays out similar arguments as others that have challenged the committee, including a focus on its composition, and reiterates Navarro’s earlier claims that as a former White House employee he cannot be called to testify. Trump has not asserted executive privilege with respect to Navarro. The full House voted to hold Navarro in contempt in April after he failed to comply with the committee’s subpoena. DOJ, however, has yet to take any action on their referral, which could carry up to two years in prison and a $200,000 fine. According to Navarro, Monday’s grand jury subpoena from DOJ asks him to turn over documents by Thursday, something he said he is not yet sure he will do. “I’m not commanded to testify, I’m just commanded to produce documents,” Navarro said. Navarro has detailed some of his efforts to aid Trump publicly, both in a book and in a three-part series on his website, dubbed the Navarro Report, which claims to “provide a demonstration that President Trump had a good faith belief that the November 3, 2020 Presidential election results, were, indeed, the poisonous fruit of widespread fraud and election irregularities.”
Meadows burned papers after meeting with Scott Perry, Jan. 6 panel told - Then-White House chief of staff Mark Meadows burned papers in his office after meeting with a House Republican who was working to challenge the 2020 election, according to testimony the Jan. 6 select committee has heard from one of his former aides.Cassidy Hutchinson, who worked under Meadows when he was former President Donald Trump’s chief of staff, told the panel investigating the Capitol attack that she saw Meadows incinerate documents after a meeting in his office with Rep. Scott Perry (R-Pa.). A person familiar with the testimony described it on condition of anonymity. The Meadows-Perry meeting came in the weeks after Election Day 2020, as Trump and his allies searched for ways to reverse the election results.It’s unclear whether Hutchinson told the committee which specific papers were burnt, and if federal records laws required the materials’ preservation. Meadows’ destruction of papers is a key focus for the select committee, and the person familiar with the testimony said investigators pressed Hutchinson for details about the issue for more than 90 minutes during a recent deposition. Before the 2020 election, Perry — who represents the Harrisburg, Pa. region — had a relatively low national profile. But testimony and documents obtained by congressional investigators show he was the first person to connect Trump with Jeffrey Clark, a top Justice Department official who sympathized with the then-president’s efforts to overturn his loss to Joe Biden.
House panel investigating Jared Kushner over Saudi investment with private firm -The House Committee on Oversight and Reform on Thursday announced a probe into an investment by the government of Saudi Arabia into a private investment firm managed by Jared Kushner, the son-in-law of former president Trump. Rep. Carolyn Maloney (D-N.Y.), the chairwoman of the House panel, said in a news release she is investigating a $2 billion investment from the Saudi Public Investment Fund (PIF), which is controlled by Crown Prince Mohammed bin Salman, into Kushner’s investment firm A Fin Management, LLC (Affinity). Kushner incorporate Affinity in Delaware in January 2021, shortly after Trump exited the White House. He secured the $2 billion Saudi investment six months later, according to the House panel. In a letter to Kushner, Maloney said she is probing whether Kushner improperly used his influence as a government official to secure the investment, saying she was “concerned by your decision to solicit billions of dollars from the Saudi government immediately following your significant involvement in shaping U.S.-Saudi relations.” “Your close relationship with Crown Prince bin Salman, your pro-Saudi positions during the Trump Administration, and PIF’s decision to fund the lion’s share of your new business venture — only six months after the end of your White House tenure — create the appearance of a quid pro quo for your foreign policy work during the Trump Administration,” Maloney wrote. The Hill has reached out to Kushner for comment. Maloney is requesting Kushner supply the panel with documents, including his communications regarding the PIF investment and with the crown prince. In some cases she asked for documents and communications dating back to January 2017, when he first assumed the role of senior adviser to Trump. This isn’t the first time the Trump administration’s ties to the Saudi government have been scrutinized. The former president in 2018 said the Saudis are “very nice,” adding that he makes “a lot of money with them.” His administration also approved arms sales worth hundreds of millions of dollars to Saudi Arabia amid the country’s role in the civil war in Yemen. After the death of journalist Jamal Khashoggi in 2018, Trump downplayed the Saudi government’s role in his murder, contradicting U.S. intelligence that concluded the crown prince was behind the brutal killing at a Saudi consulate in Turkey. Kushner was reported to have a close relationship with the crown prince, calling him during the Khashoggi crisis and communicating with him informally over WhatsApp. Kushner was also reported to have pushed Trump to inflate numbers for arms sales to Saudi Arabia. Maloney accused Kushner in the letter of multiple other close dealings with the Saudi government and said he was the crown prince’s “most important defender” in the White House after Khashoggi’s murder. “Your support for Saudi interests was unwavering, even as Congress and the rest of the world closely scrutinized the country’s human rights abuses in Yemen, the murder of journalist Jamal Khashoggi by Saudi assassins tied to Crown Prince Mohammed bin Salman, and Saudi Arabia’s crackdown on political dissidents at home,” the chairwoman wrote.
Crackhead MILF And Incest Porn: Hunter Biden Search History Revealed; Texted Pornhub Link To 'Dad' -- Hunter Biden, who dated his late brother's wife Hallie, had an obsession with 'MILF crack cocaine porn,' lonely widows, and incest fantasies, according to his internet search history covering just six days before his laptop broke in March 2019.According to the Daily Mail, Hunter also loved filming himself banging prostitutes and then uploading them to his own Pornhub account, "RHEast," none of which showed Hunter's face.In one instance, Hunter texted a Pornhub page to a phone number saved in his contacts as "Dad" on Oct. 22, 2018 - however the Mail points out that Hunter and Joe Biden used each other's phone numbers at various times - so it's unclear if Joe was the intended recipient.Then we get to widow porn...Hunter, who had a controversial relationship with his brother's widow, also repeatedly searched Pornhub for videos involving widows, including 'Homemade widow porn', 'Homemade lonely widow porn' and 'Lonely widow porn'.The Biden son, who was 49 at the time, searched for porn videos involving teenagers according to his browsing history.Videos he visited included '18 Yrs old and really Good at Riding D***', 'TEENFIDELITY Country Girl Raylin Ann C****pie' and 'Lucky Foreign Student Stripped & F***ed by Horny Teen Pals'. -Daily Mail And Hunter's seven searches for "Washington DC Milf Crack Cocaine" right before he dropped the laptop off for repair.Hunter's Pornhub stats show he's watched 3,361 videos, had 24 subscribers and 66 'friends' on the site. He went under the name "Harper," a 45-year-old single, heterosexual male living in Paris. The profile picture for his account is a photo of two women (pictured) sitting on him on a bed in a messy room, with a small white dog also perched on the bed in the background
Avenatti gets 4 years in prison for cheating Stormy Daniels - Michael Avenatti was sentenced Thursday to four years in prison for cheating client Stormy Daniels, the porn actor who catapulted him to fame, of hundreds of thousands of dollars in book proceeds. The California lawyer, currently incarcerated, learned his fate in Manhattan federal court, where Judge Jesse M. Furman said the sentence will mean that Avenatti will spend another 2 1/2 years in prison on top of the 2 1/2 years he is already serving after another fraud conviction. The judge said Avenatti’s crime against Daniels was made “out of desperation” when his law firm was struggling. He called Avenatti’s behavior “craven and egregious” and blamed it on “blind ambition.” Prior to sentencing being announced, Avenatti, wearing his prison uniform, choked up several times as he delivered a lengthy statement, saying he had “disappointed scores of people and failed in a cataclysmic way.” At trial earlier this year, Avenatti represented himself, cross-examining his former client for hours about their experiences in early 2018, when she signed a book deal that provided an $800,000 payout. Prosecutors said he illegally pocketed about $300,000 of her advance on “Full Disclosure,” published in fall 2018. The book’s publication came at a time when Avenatti’s law practice was failing financially even as he appeared regularly on cable television news channels. In the appearances, he attacked then-President Donald Trump as he represented Daniels in lawsuits meant to free her from a $130,000 hush payment she received shortly before the 2016 presidential election to remain silent about a tryst she said she had with Trump a decade earlier. Trump denied it.
Supreme Court blocks Texas law on social media ‘censorship’ - The Supreme Court has suspended a Texas law banning online platforms from restricting user posts based on their political views, representing a major win for social media companies.In a 5-4 ruling, the court granted an emergency stay request on Tuesday from tech industry groups that petitioned to block the law, which is being appealed in a federal appellate court. The companies have argued the law violates their First Amendment rights to control what content they disseminate on their websites and platforms.The Texas law — which a federal appeals court allowed to go into effect on May 11 — allows both the state of Texas and individual Texans to sue companies if they “censor” an individual based on their viewpoints or their geographic location by banning them or blocking, removing or otherwise discriminating against their posts.No one had yet filed lawsuits under the law, and Tuesday’s decision means it will remain blocked as the case moves through the 5th U.S. Circuit of Court of Appeals.Chief Justice John Roberts, along with Justices Stephen Breyer, Sonia Sotomayor, Brett Kavanaugh, and Amy Coney Barrett granted the stay, which overturned the 5th Circuit ruling lifting an earlier injunction from a Texas district court. The district court has not yet ruled on the underlying merits and constitutionality of the case.Justice Samuel Alito wrote a dissent that was joined by Justices Clarence Thomas and Neil Gorsuch. While Justice Elena Kagan also dissented, she didn’t join Alito’s dissent nor did she explain her own reasoning.The law, HB 20, could drastically change the way social media companies operate by restricting their freedom to police their platforms and forcing the platforms to justify decisions they make on multitudes of posts a day.“We are encouraged that this attack on First Amendment rights has been halted until a court can fully evaluate the repercussions of Texas’s ill-conceived statute,” said Matthew Schruers, president of the Computer and Communications Industry Association, which filed the petition. Its members include Facebook, Twitter and Google.Alito wrote in his dissent that he hadn’t formed a “definitive view on the novel legal questions” presented from Texas’ decision to address “the ‘changing social and economic’ conditions it perceives.”
Elon Musk Says Bill Gates' Short Position In Tesla Has Ballooned To $1.5 To $2 Billion - The Elon Musk vs. Bill Gates beef that has been brewing for years now looks as though it's raging on. The Tesla CEO took to Twitter last week to accuse Gates of having a short position in Tesla that would need between $1.5 billion and $2 billion to close out, Bloomberg reported. Musk said that Gates' short position in Tesla used to be $500 million, but that it grew after Tesla "went up a lot". "Since Gates still has a multi-billion dollar short position against Tesla while claiming to help with global warming, I guess I have some trust issues with him too," Musk wrote in a Tweet stream discussing Gates. Gates, meanwhile, has been publicly asked about whether or not he has a short position, but he told CNBC last year: "I don't talk about my investments". I think we all know what that means... As one astute observer noted about Gates' short position, all he seemed to do was trust Musk when the Tesla CEO said the price was too high... Regardless, the discussion was part of a broader discussion Musk was having online about who people trust less; billionaires or politicians. Politicians overwhelmingly won Musk's non-scientific poll. Recall, back in April, Musk rebuffed a charity request by Gates and compared him to the new pregnant man emoji."Bill said he hasn’t closed it out, so Elon told him to get lost," a blog wrote about Gates' short position last month.“Do you still have a half billion dollar short position against Tesla?” Musk asked Gates in a Tweet. Gates replied: “Sorry to say I haven’t closed it out. I would like to discuss philanthropy possibilities."To which Musk wrote: “Sorry, I cannot take your philanthropy on climate change seriously when you have a massive short position against Tesla, the company doing the most to solve climate change.”
Credit Unions and Banking Groups Warn of “Devastating Consequences” of a U.S Central Bank Digital Currency By Pam and Russ Martens: - Credit union and banking trade groups have released a joint letter to the chair and ranking member of the House Financial Services Committee, warning of “devastating consequences” if the Federal Reserve moves forward with a Central Bank Digital Currency (CBDC). The letter was sent on May 25, one day before the Committee convened a hearing on “Digital Assets and the Future of Finance: Examining the Benefits and Risks of a U.S. Central Bank Digital Currency.” That hearing took testimony from only one witness, Lael Brainard, the Vice Chair of the Federal Reserve.The fact that credit unions, which frequently serve unionized labor, joined with banking trade groups to sign off on the letter, lends credibility to the “devastating consequences” the letter enumerates of a Central Bank Digital Currency.A CBDC would allow the Federal Reserve to compete for deposits with credit unions and banks. The letter correctly assesses the downside of such a move as follows:“Private money is created through financial intermediation by banks and credit unions– the process in which financial institutions take deposits and lend out and invest those deposits. Private money is used by financial institutions to provide funding for businesses and consumers and thus supports economic growth. Introducing a CBDC would be a deliberate decision to shift some volume of private money to public money, with potentially devastating consequences for the cost and availability of credit for consumers and businesses. In sum, the savings of businesses and consumers would no longer fund the assets of banks – primarily, loans – but instead would fund the assets of the Federal Reserve – primarily securities issued by the Treasury Department, Fannie Mae, and Freddie Mac.”In a similar vein, the letter warns:“In effect, a CBDC will serve as an advantaged competitor to retail bank deposits that will move money away from banks and into accounts at the Federal Reserve where the funds cannot be lent back into the economy. These deposit accounts represent 71% of bank funding today. Losing this critical funding source would undermine the economics of the banking business model, severely restricting credit availability, increasing the cost of credit, and causing a slowdown of the economy. ABA estimates that even a CBDC where accounts were capped at $5,000 per ‘end user’ could result in $720 billion in deposits leaving the banking system.”The joint letter also calls out the absurdity that the dollar is not already digitized. (Anyone who uses a “pay by phone” method to pay a monthly bill in seconds from their checking account or a debit card to pay for purchases fully appreciates how rapid and streamlined the digital dollar already is.) The credit unions and banking groups write as follows:“Contrary to the assertions of some CBDC proponents, a U.S. CBDC is not necessary to ‘digitize the dollar,’ as the dollar functions primarily in digital form today. Commercial bank money is a digital dollar, and is currently accepted without question by businesses and consumers as a means of payment.”
There's no such thing as a safe stablecoin by Frances Coppola --Stablecoins aren't stable. So-called algorithmic stablecoins crash and burn when people behave in ways the algorithm didn't expect. And reserved stablecoins fall off their pegs - in either direction. A stablecoin that does not stay on its peg is unstable. Not one of the stablecoins currently in circulation lives up to its name. Don't believe me? Well, here's the evidence. Exhibit 1, USDT since the end of April: Exhibit 2, USDC over the same time period: Both coins de-pegged on 12th May. Neither has returned to par. Stable, they are not. And no, USDC is not "more stable" than USDT. A stablecoin that can't hold its peg when everyone is piling into it is no more stable than one that can't hold its peg when everyone is selling it. Indeed, since stablecoins can be created without limit, there is arguably much less excuse for a stablecoin de-pegging on the upside. Stablecoin issuers can run out of reserves, but they can't run out of their own tokens. So USDC and USDT are equally unstable, just in opposite directions. Why is this? The reason for the discrepancy appears to be market perception that USDC is "safe", while USDT is risky. On 12th May, crypto markets melted down as the UST algorithmic stablecoin crashed, triggering a flight to what in the crypto world passes for "safety". For genuine crypto diehards, "safety" is BTC, which although highly volatile does seem to generate value over the longer term. But for the thousands of speculators, investors and amateur traders who are dabbling in crypto in the hope of finding some yield in an era of low interest rates, "safety" is fiat currency. Specifically, U.S. dollar-denominated "safe assets". Like traditional financial markets, crypto markets use safe assets as media of exchange, collateral, and a safe haven in times of distress. The world's premier safe assets are USD-denominated assets such as dollar bills, FDIC-insured bank deposits, and U.S. treasury bills. But these aren't terribly liquid on crypto markets and can be in very short supply. So the crypto world has created its own versions of them that can be produced in potentially unlimited quantities to meet the crypto market's need for safety and liquidity. USD-pegged stablecoins are crypto versions of USD-denominated safe assets. But not all stablecoins are perceived as completely safe. There's very definitely a hierarchy of stablecoins. "Fully reserved" stablecoins such as USDC are premium products, since they are seen as safe stores of value as well as highly liquid media of exchange. Fractionally reserved stablecoins like USDT are convenient as media of exchange but are distrusted as stores of value. And algorithmic stablecoins mostly seem to be used as a risky lending product generating very high returns.
Some investors got rich before a popular stablecoin imploded, erasing $60 billion in value — In May, the collapse of one of the most popular U.S. dollar-pegged stablecoin projects cost investors tens of billions of dollars as they pulled out in a panic that some have compared to a bank run. But before that, the stablecoin known as terraUSD (or UST, for short) and its sister token luna, had experienced a pretty spectacular run-up — and some investors made a killing before it all collapsed.Venture capital firm Pantera Capital tells CNBC it earned a 100-fold return on its $1.7 million investment in luna. Hack VC and the Winklevoss-backed CMCC Global didn't share their exact gains, but CMCC told CNBC that it closed its luna position in March, while Hack reportedly got out in December.The scheme relied largely on faith and the promise of future returns, plus a complex set of code, with very little hard cash to back up the whole arrangement.Unlike USDC (another popular dollar-pegged stablecoin), which has fiat assets in reserve as a way to back their tokens, UST was an algorithmic stablecoin created and administered by Singapore-based Terraform Labs. It depended on computer code to self-stabilize its value by creating and destroying UST and luna in a sort of supply-and-demand seesaw effect.For a while, it worked.UST held its dollar peg and the luna token soared. The luna token rose to more than $116 in April, up more than 135% in less than two months. Traders were able to arbitrage the system and profit from deviations in the price of the two tokens. But perhaps the greatest incentive of the entire scheme was an accompanying lending platform, called Anchor, which promised investors a 20% annual percentage yield on their UST holdings — a rate many analysts said was unsustainable.Widespread buy-in — and public PSAs — from respected financial institutions lent credibility to the project, further driving the narrative that the whole thing was legit.Most everyone was happy until it all came crashing down in early May.
Redditors Are Furious at the SEC’s New Ad Campaign Portraying them as Idiot Investors By Pam and Russ Martens ~ Redditors at the subreddit Superstonk are posting obscenities directed at Gary Gensler, Chair of the Securities and Exchange Commission (SEC), over the new ad campaign from the SEC that appears to target young Reddit investors as fools that do no research before investing, lose all their money, and deserve a whipped-cream pie in the face. (Yes, a young investor actually gets a whipped-cream pie in the face during two of the ads. See videos below.) CNBC ran one of the new SEC ads yesterday. So-called “meme stocks” are heavily associated with Reddit and are specifically called out in the SEC ads, thus Redditors have concluded that the ads are directed at them.We’ve been carefully observing the Securities and Exchange Commission for the past 37 years. This is the first time that we have ever witnessed the SEC heaping humiliation on the investing public – the investing public that it is paid by the taxpayers of America to protect from the scams that it has allowed to proliferate.The SEC is a federal agency with law enforcement powers. The ad campaign the SEC is currently running is such an embarrassment to a federal agency that one has to seriously question the real agenda. Is the SEC attempting to get out in front of the implosion of these scams by building the narrative that the public should have known better and done their own research? It sure looks that way.One of the ads features a slick game show host offering young contestants choices from an “Investomania” board that features such offerings as “meme stocks,” “crypto to the moon,” “tulip bulbs,” “celebrity endorsements,” among other offerings. (Tulip bulbs are a likely stand-in for blank-check companies (SPACs) which are allowed to list on the New York Stock Exchange or Nasdaq, while having zero business operations.) The SEC could have stepped in at any time and stopped bogus companies and bogus investment fads from turning U.S. markets into a giant casino. But it didn’t.
Crypto scams have cost people more than $1 billion since 2021, says FTC -More than 46,000 people say they lost over $1 billion in crypto to scams since the start of 2021, according to a report released by the Federal Trade Commission on Friday. Losses last year were nearly 60 times what they were in 2018, with a median individual loss of $2,600.The FTC notes that the top cryptocurrencies people said they used to pay scammers were bitcoin (70%), tether (10%), and ether (9%).One key feature of cryptocurrencies like bitcoin is that payment transfers are final and can't be reversed. This isn't always a good thing. Chargebacks — a type of tool designed to protect consumers — allow consumers to reverse a transaction if they claim they have been fraudulently charged for a good or service they did not receive. Nearly half the people who reported losing crypto to a scam since 2021 said it started with some kind of message on a social media platform. The top platforms mentioned in these complaints were Instagram (32%), Facebook (26%), WhatsApp (9%), and Telegram (7%). Fake investment opportunities were by far the most common type of scam. In 2021, $575 million of crypto fraud losses reported to the FTC related to investment opportunities. People reported that investment websites and apps would let them track the growth of their crypto, but the apps were fake, and when they tried to get their money out they could not. "There's no bank or other centralized authority to flag suspicious transactions and attempt to stop fraud before it happens," the FTC warns in its report. "These considerations are not unique to crypto transactions, but they all play into the hands of scammers." Romance scams are the second-most common source of crypto fraud losses, followed by business and government impersonation scams, which the FTC said can often start with fake messages purporting to be from tech companies like Amazon or Microsoft. Younger consumers were more likely to be taken in by crypto scams. The FTC reports that people aged 20 to 49 were more than three times as likely as older age groups to report losing crypto to a scammer. To avoid being scammed, the FTC says, people should understand that cryptocurrency investments never have guaranteed returns, avoid business arrangements that require a crypto purchase, and watch out for romantic come-ons accompanied by a crypto solicitation.
California’s top regulator launches effort to regulate crypto financial products— California’s top financial regulator took the first step toward oversight of cryptocurrency financial products by issuing a broad public request for information on the fast-growing but volatile crypto market. California’s Department of Financial Protection and Innovation said Wednesday that it wants input on the risks posed by crypto financial products and how it can better protect consumers from frauds and scams. The input will help the agency develop guidance, regulatory clarity and supervision of crypto financial products and services in California. On the heels of an executive order from Gov. Gavin Newsom, California's Department of Financial Protection and Innovation has launched an inquiry into regulating crypto assets.The inquiry comes on the heels of a broad executive order that Democratic Gov. Gavin Newsom signed last month directing the state’s DFPI to conduct a market-monitoring inquiry of crypto.
Wells Fargo, First Republic cases offer fresh SEC warnings to industry -Days after SEC and FINRA enforcement officials stressed the regulators’ focus on anti-money laundering rules and the duty of best execution, two new cases added examples to their words.In respective separate May 20 and May 19 settlements with the SEC, Wells Fargo Clearing Services — which operates under the trade name of Wells Fargo Advisors — agreed to pay $7 million over the regulator’s allegation it failed to file dozens of suspicious activity reports in a timely manner, while First Republic Investment Management — an RIA subsidiary of First Republic Bank — will pay $1.8 million to settle SEC charges it breached best execution and fiduciary rules. In settling the cases, the firms neither admitted nor denied the allegations.The two cases followed Wells Fargo’s FINRA case in December relating to recordkeeping obligations under anti-money laundering laws, as well as JPMorgan Chase’s agreement that month to pay $200 million to settle its own recordkeeping cases with the SEC and the Commodity Futures Trading Commission. First Republic’s settlement comes after more than 100 cases in recent years involving disclosures of conflicts of interest and best execution requirements in wealth managers’ mutual fund recommendations. Enforcement officials discussed both kinds of cases last week in a panel at FINRA’s annual conference.
Senator Sherrod Brown Goes After 0-Count Felon Wells Fargo; Ignores 5-Count Felon JPMorgan Chase - By Pam Martens and Russ Martens -- Brown is going after Wells Fargo and its CEO Charles Scharf – which has zero felony counts notched in its belt – while ignoring JPMorgan Chase and its Chairman and CEO, Jamie Dimon, who has presided over five criminal felony counts, all of which the bank admitted to, while entering into an endless series of highly-suspect non-prosecution agreements and probation periods with the U.S. Department of Justice.Yesterday Brown’s office sent out a press release assailing Wells Fargo and Scharf, calling out its “history of consumer abuses and gross mismanagement.” While it’s true that Wells Fargo has not been an Eagle Scout , it’s also true that when it comes to criminal activities, Wells Fargo is completely out of the league of JPMorgan Chase.JPMorgan Chase’s first two felony counts from the Justice Department came in 2014 for its aiding and abetting role in the way it handled the business bank account of Ponzi-schemer Bernie Madoff. The bank told U.K. authorities that it thought Madoff was running a Ponzi scheme while failing to report its suspicions and money laundering by Madoff to U.S. authorities. The very next year the bank pleaded guilty to its role in a bank cartel (actually called “The Cartel”) that rigged the foreign exchange market. That resulted in felony count three.There was a litany of other non-felony charges brought against the bank between 2015 and 2019. See its jaw-dropping Rap Sheet here. Then in September 2020 the bank agreed to pay criminal fines and admit to two felony counts of wire fraud for manipulating (spoofing) trading in the precious metals and U.S. Treasury markets. The Justice Department charged that JPMorgan Chase’s traders engaged in “tens of thousands of instances of unlawful trading in gold, silver, platinum, and palladium…as well as thousands of instances of unlawful trading in U.S. Treasury futures contracts and in U.S. Treasury notes and bonds….” Not to put too fine a point on it, but the U.S. Treasury market is how the U.S. government pays its bills and instills trust in the U.S. dollar as the world’s reserve currency.In every one of these criminal cases, instead of going to trial, JPMorgan Chase was simply allowed to admit guilt and was given a deferred prosecution agreement by the U.S. Department of Justice. And, more outrageous, after every criminal count, the Chairman and CEO of the bank, Jamie Dimon, was not only allowed to remain in place but ended up with a bigger salary and bonus. (See After JPMorgan Chase Admits to Its 4th and 5th Felony Charge, Its Board Gives a $50 Million Bonus to Its CEO, Jamie Dimon.)That $50 million “retention” bonus, by the way, was voted down by shareholders two weeks ago but the bank’s Board decided to ignore what its shareholders wanted and pay the bonus anyway. The $50 million bonus was on top of Dimon’s regular compensation for 2021, which totaled $34.5 million.If Senator Brown is looking for the quintessential symbol of “gross mismanagement,” let us spell it out for him: the year after JPMorgan Chase, under Dimon’s management, scores its fourth and fifth criminal felony counts from the Justice Department, its Board of Directors awards Dimon a total of $84.5 million. That’s because the Board of JPMorgan Chase is, itself, a study in outrageous conflicts of interest.In the letter that Brown sent to Wells Fargo’s CEO Charles Scharf yesterday, he says this about keeping the growth restriction that the Fed placed on Wells Fargo in 2018:“It is clear that Wells Fargo still has a long way to go to fix its governance and risk management before it should be allowed to grow in size.”But despite the fact that Jamie Dimon has presided over an unprecedented series of criminal charges, his bank has been allowed to grow to a mind-boggling size. Since the criminal charges started in 2014, JPMorgan’s deposit base has been allowed to double in size, from $1 trillion to more than $2 trillion according to the Federal Deposit Insurance Corporation’s data.
Banks, advocates spar over CFPB’s role in bank mergers — From the beginning, the Consumer Financial Protection Bureau has been front and center in the Biden-era tussle over bank merger rules. Now, the role the agency will play in bank mergers is a key point of division between advocates for more stringent rules and banking groups, who mostly want the rules tweaked to account for fintech entrants into the financial system. The bank-merger policy fight started with Rohit Chopra, director of the CFPB, and Martin Gruenberg, the now-acting chair of the Federal Deposit Insurance Corp., pushing to review merger rules in a conflict that ultimately led to the resignation of former FDIC Chair Jelena McWilliams. That battle is playing out as the policy review moves forward, and as the agency considers giving the CFPB a more formal role in the bank merger review process. Martin Gruenberg, head of the Federal Deposit Insurance Corp., has led the review of bank merger policy after former Chair Jelena McWilliams resigned.
California AG: Local prosecutions of national banks should continue -California’s attorney general is asking a federal appeals court to confirm that local prosecutors can sue national banks, saying that their national charters do not shield them from lawsuits alleging mistreatment of local residents.The request came in a so-called friend-of-the-court filing in a case involving four local prosecutors and Credit One Bank. The prosecutors allege that the Las Vegas-based credit card issuer has harassed consumers through debt-collection calls. Credit One Bank, whose spokespeople did not respond to a request for comment, has said that the local prosecutors overstepped their boundaries. They have argued in court filings that only the state attorney general, not local prosecutors, is allowed to sue a national bank for alleged violations of state laws.
As banks feel heat on climate change, PNC’s chief executive pushes back -Banks are under increasing pressure from investors, lawmakers and regulators to change various business practices in an effort to fight climate change and inequality, but one outspoken industry leader pushed back forcefully on Thursday. In remarks at an industry conference, PNC Financial Services Group CEO Bill Demchak argued that it’s inappropriate to rely on critiques of Wall Street rather than making broader policy choices on social and environmental issues. “The political football that has become banking, as a way to somehow cause social change, because our politicians don't have the backbone to actually do what they want to do, or be out loud about it, is bulls---,” Demchak said.
ESG Equity Funds See Record Outflows In May -This year’s weak performance by US stocks has forced many investors to recalibrate their portfolios. And they’re fleeing do-good strategies. After more than three years of inflows, investors are now pulling cash out of US equity exchange-traded funds with higher environmental, social and governance standards. May saw $2 billion of outflows from ESG equity funds, according to data from Bloomberg Intelligence -- the biggest monthly cash pullback ever. “There’s no way to know for certain why the outflows were so extreme,” said Bloomberg Intelligence analyst James Seyffart, who noted that the funds had started from a high-asset base after years of inflows. “But also ESG ETFs may be finding that people care a lot more about them in bull markets.” Meanwhile, fixed-income ESG funds are faring better than their equity counterparts. About $75 million has poured into those ETFs last month, with three iShares products -- ESG Aware USD Corporate Bond ETF (SUSC), ESG Aware US Aggregate Bond ETF (EAGG) and USD Green Bond ETF (BGRN) -- responsible for the bulk of the flows. While a portion of those purchases could be attributed to a broader shift away from equities, Seyffart said they’re likely the result of “set it and forget it” allocations as buyers look to park cash rather than trade. Do-good investing boomed during the pandemic, with more than $68 billion flowing into ESG equity funds in the past two years. Many believed that this momentum would continue into 2022. But the spike in oil prices since Russia invaded Ukraine has lifted fossil-fuel shares, driving the S&P 500 Energy Index to gain 59% this year even as the benchmark overall has dropped 14%. This has made do-good investing more of a sacrifice. RBC Wealth Management recently surveyed over 900 of its US-based clients and 49% said that performance and returns were a higher priority than ESG impact, up from 42% last year. “The story has been told that you don’t have to give up returns in order to do ESG, but everyone assumed that you would get the same exact return profile as a traditional benchmark, which is absolutely not true because traditional benchmarks are not looking at ESG factors,”
Aggregate ESG confusion --It’s tempting to sigh “it’s always Deutsche” on news that 50 German police earlier today raided DB and its asset management unit DWS over greenwashing claims. The reality is that the whole ESG edifice is a mess. Here’s Bloomberg’s scoop on the raids: DWS has been facing the allegations since its former chief sustainability officer, Desiree Fixler, went public with them in August, prompting regulatory probes in the US and Germany. While DWS has denied the claims, the raid adds to a list of regulatory and legal issues for Deutsche Bank Chief Executive Officer Christian Sewing just as he emerges from a successful turnround of the lender Fixler has said that DWS’s claims that hundreds of billions of its assets under management were “ESG integrated” were misleading because the label didn’t translate into meaningful action by relevant fund managers. DWS has since stopped using the label.In a statement DWS said: “We have continuously co-operated fully with all relevant regulators and authorities on this matter and will continue to do so.” Of course, DB has some form when it comes to regulatory infractions, but if it is guilty of unlawful greenwashing then there are likely a lot of investment groups that should feel uneasy.The problem is that ESG — as a whole, and each of the E, S and G individually — is an unholy mess of subjective assessments based on patchy arbitrary data that allows anyone to say they are ESG compliant.Just the fact that over 3,000 investment groups with $103tn of assets have pledged to somehow “integrate” ESG into their process shows just how meaningless it has become. The broader a term, the more waffly it becomes.A new paper from Florian Berg, Julian Kolbel and Roberto Rigobon from MIT/the University of Zurich highlights just how tricky it is to come up with an objective, rigorous ESG investing framework. The title is appropriate: “Aggregate Confusion.”The paper, published by the Review of Finance earlier this month, examines the ESG ratings of KLD, Sustainalytics, Moody’s, S&P Global, Refinitiv and MSCI, and shows that correlations between then range from 0.38 to 0.71.For comparison, the correlation between credit agency ratings is 0.92 when it comes to the longer-established, more quantitative but still subjective grades of creditworthiness. The divergence is even stronger in subcategories than it is in aggregate. In other words, even the professionals that do nothing but judge ESG scores all day long cannot agree on what is good or bad. “This disagreement has several important consequences,” the three researchers note. Quite. First, it makes it difficult to evaluate the ESG performance of companies, funds, and portfolios, which is the primary purpose of ESG ratings. Second, ESG rating divergence decreases companies’ incentives to improve their ESG performance. Third, markets are less likely to price firms’ ESG performance ex-post. ESG performance may be fundamentally value-relevant or affect asset prices through investor tastes. However, in both cases, the divergence of the ratings disperses the effect of ESG performance on asset prices. Fourth, the disagreement shows that it is difficult to link CEO compensation to ESG performance. Contracts are likely to be incomplete, and CEOs may optimise for one particular rating while underperforming in other important ESG issues — that is, CEOs might hit the target set by the rating but miss the point of improving the firm’s ESG performance more broadly.Finally, the divergence of ratings poses a challenge for empirical research, as using one rater versus another may alter a study’s results and conclusions. The divergence of ESG ratings introduces uncertainty into any decision taken based on ESG ratings and, therefore, represents a challenge for a wide range of decision makers.The paper explores what causes this “aggregate confusion” among ESG ratingagencies. Basically, it comes almost solely down to what they measure, rather than how they weight different factors.
Litigation leaves CFPB’s payday rule in limbo --For the past five years, the payday lending industry has successfully fought off federal regulations of short-term, small-dollar loans by suing the Consumer Financial Protection Bureau. The years-long litigation over the CFPB’s payday rule may finally be coming to a head, but the fact that the industry has been able to stall the rule for so long has infuriated consumer advocates. “They are trying to defeat the rule if they can but if nothing else, they have slowed it down and gummed it up," said Chris Peterson, a law professor at the University of Utah and former advisor to former CFPB Director Richard Cordray. "It shows that any series of initiatives to just fix problems can get undone and undermined."
Louisiana governor vetoes bill to allow high-cost installment loans -Louisiana Gov. John Bel Edwards has vetoed a bill that would have allowed consumer lenders to offer short-term installment loans with triple-digit interest rates. The bill sought to establish a new type of consumer loan of up to $1,500 and with a term of between 90 days and one year. Edwards, a Democrat, objected to the prices that the measure would have allowed lenders to charge. Edwards said the bill “purports to create additional loan opportunities” for people with lower credit scores but allows for “exponentially higher” interest rates than people can get at a bank.
All together now: Regulators tout benefits of CRA revamp — Banking regulators put on a united front in defending their revamp of anti-redlining legislation in the first time policymakers have talked about the rewrite since releasing it last month. All three major banking regulatory agencies were represented at the Urban Institute event in a show of solidarity, with acting Comptroller of the Currency Michael Hsu, acting chairman of the Federal Deposit Insurance Corp. Martin Gruenberg and Vice Chair of the Federal Reserve Lael Brainard appearing in front of an audience in a rare COVID-era in-person event. Vice Chair of the Federal Reserve Lael Brainard largely led the Community Reinvestment Act revamp. Banking agencies released their rewrite of the Community Reinvestment Act together — a marked change from the Trump-era attempted solo revamp by former Comptroller Joseph Otting. Hsu alluded to previous attempts to modernize the law by emphasizing the importance for stakeholders to weigh in on regulators’ joint attempt this time.
BankThink: ABA misses the mark in its defense of the Federal Home Loan banks | American Banker - About six months ago I co-wrote a Bank Think article stating that, in light of its declining fortunes and its failure to adapt to a changing marketplace, the mission of the Federal Home Loan Bank System ought to be reevaluated. I followed that up weeks later with an open letter to FHFA director-designate Sandra Thompson, who regulates the system. These articles led to a particularly useful meeting with Ms. Thompson and her senior staff on the topic. Later at a public event, Ms. Thompson commented favorably on the notion of establishing an advisory committee to explore the possibilities of modernizing the Home Loan Bank System. These calls for reform were met with silence from the System and from the Federal Home Loan banks. Then last week, a community banker who also serves as vice chair of the American Bankers Association, came to the system’s defense. Her exhortation, “Don’t mess with success,” was a disappointment. Touting the dubious success of a deeply flawed system fails to recognize the enormous potential of that system.
Zombie homes up for first time since moratorium ended - The number of zombie properties — vacant homes that have not yet been foreclosed on — increased 2.8% on a quarter-to-quarter basis in the first rise since a COVID-related moratorium ended. At the end of the second quarter, 7,559 pre-foreclosure properties sat vacant, up from 7,363 in the first quarter but down from 8,078 one year prior, according to Attom Data Solutions. "The incidence of zombie-foreclosures tends to be higher in cases where the foreclosure process has dragged on for many months and sometimes even for years," Rick Sharga, executive vice president of market intelligence at Attom, said in a press release. "We're now seeing properties where the borrower was already in default prior to the government's moratorium re-enter the foreclosure process, and undoubtedly some of these homes will have been vacated over the past 26 months."
Fannie Mae: Mortgage Serious Delinquency Rate Decreased in April --Fannie Mae reported that the Single-Family Serious Delinquency decreased to 0.94% in April from 1.01% in March. The serious delinquency rate is down from 2.38% in April 2021. This is almost back to pre-pandemic levels. These are mortgage loans that are "three monthly payments or more past due or in foreclosure".The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59% following the housing bubble and peaked at 3.32% in August 2020 during the pandemic.By vintage, for loans made in 2004 or earlier (1% of portfolio), 2.98% are seriously delinquent (down from 3.12% in March). For loans made in 2005 through 2008 (1% of portfolio), 4.88% are seriously delinquent (down from 5.14%), For recent loans, originated in 2009 through 2021 (97% of portfolio), 0.74% are seriously delinquent (down from 0.81%). So, Fannie is still working through a handful of poor performing loans from the bubble years.Mortgages in forbearance are counted as delinquent in this monthly report, but they will not be reported to the credit bureaus.The pandemic related increase in delinquencies was very different from the increase in delinquencies following the housing bubble. Lending standards had been fairly solid over the previous decade, and most of these homeowners had equity in their homes - and the vast majority of these homeowners have been able to restructure their loans once they were employed.
As mortgage market cools, fraud risk heats up -With rising interest rates cooling down the mortgage market, researchers warn the risk of mortgage fraud may be heating up.Risky loan applications have been trending up for the past year, rising 75% during 2021, according to the real estate analytics group CoreLogic, which compiles a quarterly index of fraud risk. As mortgage transactions fall and the balance of applications shifts from refinancing loans more toward purchases, that threat level is likely to jump in the months ahead, said Bridget Berg, the firm’s head of fraud solutions.
Real estate agents got $3.9 billion in Covid relief PPP loans. The housing market boomed, but few repaid the loans. -While Covid was battering the U.S. economy, Gary Goldberg seems to have done OK.During 2020, the pandemic’s first year, the Santa Barbara, California, real estate agent sold more than $27 million worth of luxury homes, slightly down from the $31 million he closed the year before, according to data from Zillow. In 2021, he sold $82 million worth of real estate.He also applied for and received two loans totaling $95,832 via the federal government’s Covid relief Paycheck Protection Program, according to public records. In his applications, he listed one employee. He asked for the first loan on April 15, 2020, and the second on Jan. 30, 2021. Federal records show he also asked for and received forgiveness for both loans by November 2021, meaning he had met certain criteria and did not have to pay them back.In the United States, the average gross commission for real estate sales is 2.5 percent of the sale price, and the agent usually gets 85 percent of that, according to Real Trends Consulting, a firm that tracks home sales and commissions. According to that formula, Greenberg may have earned six figures in 2020 and seven figures in 2021.Goldberg declined to comment for this article.There’s no indication Goldberg did anything illegal and he’s certainly not alone. As real estate sales — and commissions — rose during the pandemic, individual agents also got a helping hand from taxpayers.The federal government authorized more than 300,000 loans to real estate entities claiming just one employee, adding up to $3.9 billion in Paycheck Protection Program (PPP) loans backed by the U.S. Small Business Administration, according to data from the government’s Pandemic Response Accountability Committee (PRAC), which oversees pandemic relief spending.On average these real estate businesses got $13,000, but 146 entities got more than $90,000 each, according to the PRAC data, all of which is public record.PPP loans went to real estate agents in booming markets — $3.6 million to real estate entities in Beverly Hills, $4.3 million to entities in El Paso, Texas, and $14.9 million in 1,107 loans to real estate entities in Charlotte, North Carolina. All the loans were made with the understanding that they would be forgiven if the recipient met certain criteria, like spending 60 percent of the loan on payroll, and the rest on eligible expenses. So far $3.1 billion of these real estate loans have been forgiven, and the government has significantly sped up its forgiveness in the past eight months. For the remaining $800 million in loans, borrowers have either not asked for forgiveness, they have been denied or the SBA and the lenders who issued the loans have not yet granted it.The $789 billion Paycheck Protection Program was intended to rescue American jobs and shore up businesses during the pandemic. Now 80 percent of all PPP loans — 9.9 million of them — and 84 percent of the total dollar amount have been forgiven by the SBA, according to the PRAC.For real estate entities the percentage of forgiveness is almost the same, at 83 percent of all loans and 84 percent of the dollar amount, according to the PRAC website. A senior SBA official told NBC News the multiple pieces of legislation that were voted on by both Democrats and Republicans and signed by President Donald Trump were “extremely liberal” and “extremely generous” when it came to loan forgiveness.
Worst Housing Affordability" since 1991 excluding Bubble; Real House Prices and Price-to-Rent Ratio in March Today, in the Calculated Risk Real Estate Newsletter: Worst Housing Affordability" since 1991 excluding Bubble Excerpt: I’ve put together my own affordability index - since 1976 - that is similar to the FirstAm approach (more of a house price index adjusted by mortgage rates and the median household income).I used median income from the Census Bureau (estimated 2021 and 2022), assumed a 15% down payment, and used a 2% estimate for property taxes, insurance and maintenance. This is probably low for high property tax states like New Jersey and Texas, and too high for lower property tax states. If we were including condos, we’d also include HOA fees too (this is excluded).For house prices, I used the Case-Shiller National Index, Seasonally Adjusted (SA). Also, for the down payment - there wasn’t a significant difference between 15% and 20%. For mortgage rates, I used the Freddie Mac PMMS (30-year fixed rates).So here is what the index looks like (lower is more affordable like the FirstAm index):Note that by this index, during the early ‘80s, homes were very unaffordable due to the very high mortgage rates. During the housing bubble, houses were also less affordable using 30-year mortgage rates, however, during the bubble, there were many “affordability products” that allowed borrowers to be qualified at the teaser rate (usually around 1%) that made houses seem more affordable. In general, this would suggest houses are the least affordable since the housing bubble. Andexcluding the bubble - with all the “affordability products” - this is the worst affordability since 1991.Look down to the second graph below (real house prices) and look what happened after 1991. House prices were mostly down or flat for the next 5 years in real terms.Also, in March, the average 30-year mortgage rates were around 4.2%, and currently mortgage rates are close to 5.4% - so we already know the “Affordability Price Index” will increase further over the next couple of months (meaning houses are even less affordable).
Mortgage Applications Decrease in Latest MBA Weekly Survey - Mortgage applications decreased 2.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 27, 2022.... The Refinance Index decreased 5 percent from the previous week and was 75 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 14 percent lower than the same week one year ago.“Mortgage rates fell for the fourth time in five weeks, as concerns of weaker economic growth and the recent stock market sell-off drove Treasury yields lower. Mortgage applications decreased to its lowest level since December 2018, as the purchase market continues to struggle with supply and affordability challenges,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “With the 30-year fixed rate at 5.33 percent, the refinance market continues to shrink, led by larger decreases last week for FHA and VA refinance applications. The refinance index was 75 percent below last year’s level, when rates were more than 200 basis points lower.”Added Kan, “Purchase applications last week were 14 percent lower than last year, with more activity in the larger loan sizes. Demand is high at the upper end of the market, and supply and affordability challenges are not as detrimental to these borrowers as they are to first-time buyers.”...The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) decreased to 5.33 percent from 5.46 percent, with points decreasing to 0.51 from 0.60 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
Mortgage volumes fall back to late 2018 levels: MBA -Mortgage activity continued its 2022 slowdown last week, as a decrease in both purchases and refinances led to the most subdued pace in years. The Mortgage Bankers Association’s Market Composite Index, which measures weekly application volumes through surveys of MBA members, dropped a seasonally adjusted 2.3% from the previous seven days for the period ending May 27. Mortgage applications decreased to its lowest level since December 2018, according to Joel Kan, MBA’s associate vice president of economic and industry forecasting. Compared to the same week last year, volumes were 54% lower. The Purchase Index declined a seasonally adjusted 1% week over week and came in 14% lower than one year ago, “as the purchase market continues to struggle with supply and affordability challenges,” Kan said in a press release. But high-priced properties are still garnering interest, he noted.
Mortgage originations could sink more than expected --The year-to-date drop-off in mortgage originations exceeded Fitch Ratings expectations, indicating a larger decline is likely than either the Mortgage Bankers Association or Fannie Mae predicted.When combined with lagging reduction in capacity, it will create pressure on earnings at the nonbank lenders Fitch covers. Other factors include: continued monetary policy tightening; the Federal Reserve’s tapering of mortgage-backed security purchases; housing inventory deficits; and sustained double-digit home price appreciation."The challenging operating environment is pressuring all issuers, although issuer-specific effects will depend on the mix between origination and servicing as well as channel and strategy, with weaker players that lack scale or have outsized exposure to the wholesale channel facing potential consolidation," a Fitch report said.
Realtor.com Reports Weekly Inventory Up 11% Year-over-year Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report released this morning from Chief Economist Danielle Hale: Weekly Housing Trends View — Data Week Ending May 28, 2022. Note: They have data on list prices, new listings and more, but this focus is on inventory. Active inventory continued to grow, rising 11% above one year ago. In a few short weeks, we’ve observed a significant turnaround in the number of homes available for sale, going from essentially flat at the beginning of May weeks ago to +11% in this data from the last week of the month. This is helping to rebalance the housing market, but the trend must be understood in context. Our May Housing Trends Report showed that the active listings count remained nearly 50 percent below its level at the beginning of the pandemic. In other words, home shoppers continue to see a historically low number of homes for sale.Here is a graph of the year-over-year change in inventory according to realtor.com. Note: I corrected a sign error in the data for Feb 26, 2022.Note the rapid increase in the YoY change, from down 30% at the beginning of the year, to up 11% YoY now. It will be important to watch if that trend continues.The second graph is from the May Housing Trends Report referenced above.This shows realtor.com's estimate of active inventory over the last six years.Note that inventory was declining rapidly for most of 2020, and it is very likely that inventory will be up compared to 2020 later this year.
Suddenly Here Comes the Inventory: Homes Listed for Sale Jump Amid Price Reductions and Sagging Sales - By Wolf Richter, “Inventory” in housing means homes listed for sale. Then there’s the shadow inventory – vacant homes that owners want to sell eventually because they have already moved into a new place but want to ride up the surge in home prices all the way, and then at the tippy-top, they’ll sell it to maximize their profits.We have seen this during the past 18 months when home prices spiked: people bought a home and moved in, and they moved out their other home, but didn’t sell it, expecting a 10% or 20% or 30% gain in price on a leveraged bet with a much bigger gain on equity. The math makes sense, though it doesn’t always work out, and now it’s starting to be time to put those vacant homes on the market, and here they come, just as home sales are dropping because layers and layers of buyers have been removed from the market by the rising mortgage rates and sky-high prices.Active listings jumped. In May, inventory of homes actively listed for sale jumped by 26% from April and are suddenly up by 8% from a year ago, the first year-over-year increase since June 2019, according to the National Association of Realtors today. There were about 38,000 more homes listed for sale in May than a year ago (data via realtor.com):The strategy of not putting the old home on the market after moving out has had the effect of creating record low inventories for sale, and inventories remain low, but that is now changing, and very suddenly so.Active Listings Jumped for Two Reasons: One, falling sales, as potential buyers left the market due to sky-high home prices and holy-moly mortgage rates. The NAR’s metric of “pending listings” for May, which tracks listings that are in various stages of the sales process, but before the deal closes, dropped by 12.6% year-over-year in May, after the 8.7% drop in April, the ninth month in a row of year-over-year declines: Reported later in the month, closed sales have also dropped for the ninth month in a row, and the closed sales data for May should be another doozie.And two, the suddenly surging number of new listings in May. New listings jumped by 10% in May from April, and are now up 6.3% from May last year, the second month in a row of year-over-year increases, after April at 1.3% year-over-year. The 541,000 homes newly listed for sale in May was the largest number of new listings since June 2019.Price reductions jumped by 74% in May from April, and by 69% from May last year, in a sudden and massive U-turn from the very low levels last year and earlier this year:Among the largest 48 metros (data for Oklahoma City and Hartford were excluded due to “data inconsistencies,” the NAR said), the number of active listings in May jumped the most on a year-over-year basis in Austin (+85.8% from May last year); and fell the most in Miami (-32.1% from May last year).Among the 48 metros, active listings fell in only six of them as homeowners there apparently haven’t got the memo yet.Among the 48 metros, active listings surged by the double digits year-over-year in half of them (24).The table is sorted by the year-over-year % change of active listings:
FHFA House Price Index: up 2.1% in March -The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for March. Here is the opening of the press release: – House prices rose nationwide in February, up 2.1 percent from the previous month, according to the latest Federal Housing Finance Agency House Price Index (FHFA HPI®). House prices rose 19.4 percent from February 2021 to February 2022. The previously reported 1.6 percent price change for January 2022 remained unchanged.For the nine census divisions, seasonally adjusted monthly house price changes from January 2022 to February 2022 ranged from +1.3 percent in the East North Central division to +2.9 percent in the South Atlantic division. The 12-month changes ranged from +15.3 percent in the East North Central division to +24.3 percent in the Mountain division.“House prices rose to set a new historical record in February,” said Will Doerner, Ph.D., Supervisory Economist in FHFA’s Division of Research and Statistics. “Acceleration approached twice the monthly rate as seen a year ago. Housing prices continue to rise owing in part to supply constraints.” 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 20.6% year-over-year in March - -S&P/Case-Shiller released the monthly Home Price Indices for March ("March" is a 3-month average of January, February and March 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 Annual Home Price Gain Of 20.6% In March: The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 20.6% annual gain in March, up from 20.0% in the previous month. The 10-City Composite annual increase came in at 19.5%, up from 18.7% in the previous month. The 20-City Composite posted a 21.2% year-over-year gain, up from 20.3% in the previous month.Tampa, Phoenix, and Miami reported the highest year-over-year gains among the 20 cities in March. Tampa led the way with a 34.8% year-over-year price increase, followed by Phoenix with a 32.4% increase, and Miami with a 32.0% increase. Seventeen of the 20 cities reported higher price increases in the year ending March 2022 versus the year ending February 2022....Before seasonal adjustment, the U.S. National Index posted a 2.6% month-over-month increase in March, while the 10-City and 20-City Composites posted increases of 2.8% and 3.1%, respectively. After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 2.1%, and the 10-City and 20-City Composites posted increases of 2.2% and 2.4%, respectively. In March, all 20 cities reported increases before and after seasonal adjustments. “The National Composite Index recorded a gain of 20.6% for the 12 months ended March 2022; the 10- and 20-City Composites rose 19.5% and 21.2%, respectively. For both National and 20-City Composites, March’s reading was the highest year-over-year price change in more than 35 years of data, with the 10-City growth rate at the 99th percentile of its own history. The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000). The Composite 10 index is up 2.2% in March (SA).The Composite 20 index is up 2.4% (SA) in March. The National index is 60% above the bubble peak (SA), and up 2.1% (SA) in March. The National index is up 117% from the post-bubble low set in February 2012 (SA). The second graph shows the year-over-year change in all three indices.The National index SA is up 20.6% year-over-year. Price increases were above expectations. I'll have more later.
Comments on March Case-Shiller and FHFA House Price Increases; New Record Monthly Increase -- Today, in the Calculated Risk Real Estate Newsletter: Case-Shiller National Index up 20.6% Year-over-year in March; New Record Monthly IncreaseExcerpt: This graph below shows existing home months-of-supply (inverted, from the NAR) vs. the seasonally adjusted month-to-month price change in the Case-Shiller National Index (both since January 1999 through March 2022). Note that the months-of-supply is not seasonally adjusted.There is a clear relationship, and this is no surprise (but interesting to graph). If months-of-supply is high, prices decline. If months-of-supply is very low (like now), prices rise quickly.In March, the months-of-supply was at 1.9 months, and the Case-Shiller National Index (SA) increased 2.09% month-over-month. The black arrow points to the March 2022 dot. In the April existing home sales report, the NAR reported months-of-supply increased to 2.2 months.This month was very likely the peak YoY growth rate - just above the peak last August. Since inventory is now increasing year-over-year (but still low), we should expect price increases to slow.The normal level of inventory is probably in the 4 to 6 months range, and we will have to see a significant increase in inventory to sharply slow price increases, and that is why I’m focused on inventory!Since Case-Shiller is a 3-month average, and this report was for March (includes January and February), this included price increases when mortgage rates were significantly lower than today. In January, the Freddie Mac PMMS averaged 3.4% for a 30-year mortgage, and 3.8% in February. Currently mortgage rates are around 5.25%.emphasis added There is much more in the article.
Rent Increases Up Sharply Year-over-year, Pace is slowing -- Today, in the Calculated Risk Real Estate Newsletter: Rent Increases Up Sharply Year-over-year, Pace is slowing A brief excerpt: Here is a graph of the year-over-year (YoY) change for these measures since January 2015. All of these measures are through April 2022 (Apartment List through May 2022).Note that new lease measures (Zillow, Apartment List) dipped early in the pandemic, whereas the BLS measures were steady. Then new leases took off, and the BLS measures are picking up....The Zillow measure is up 16.4% YoY in April, down from 17.0% YoY in March. This is down from a peak of 17.2% YoY in February.The ApartmentList measure is up 15.3% YoY as of May, down from 16.4% in April. This is down from the peak of 17.9% YoY last November.Construction Spending Increased 0.2% in April --From the Census Bureau reported that overall construction spending increased: - Construction spending during April 2022 was estimated at a seasonally adjusted annual rate of $1,744.8 billion, 0.2 percent above the revised March estimate of $1,740.6 billion. The April figure is 12.3 percent above the April 2021 estimate of $1,553.5 billion.Private spending increased and public spending decreased:Spending on private construction was at a seasonally adjusted annual rate of $1,394.7 billion, 0.5 percent above the revised March estimate of $1,387.9 billion. ...In April, the estimated seasonally adjusted annual rate of public construction spending was $350.1 billion, 0.7 percent below the revised March estimate of $352.7 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 31% 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 18.4%. Non-residential spending is up 10.1% year-over-year. Public spending is up 1.8% year-over-year.This was below consensus expectations of a 0.5% increase in spending; however, construction spending for the previous two months was revised up slightly.
Lawler: Large Builders Acquired Lots of Lots over the Last Year -- From housing economist Tom Lawler: Over the last year some of the nation’s largest home builders acquired an enormous number of lots – either owned outright or “controlled” via land purchase option or other contracts – over the last year in anticipation of a continuation of a strong and perhaps even over-heated economy. Here are the number of lots owned or “controlled” for the three largest home builders.Obviously, the land/lot acquisition strategy of these (and other) builders over the last 15 months reflected an assumption that the exceptionally strong (frothy?) housing market over that period would continue throughout this year. If, in fact, housing demand slows considerably this year, then there could be some serious weakness in the land/lot markets.Note: This was from housing economist Tom Lawler.
Update: Framing Lumber Prices Down 50% Year-over-year; Still up Sharply from Pre-pandemic Levels --Here is another monthly update on framing lumber prices. This graph shows CME random length framing futures through May 31st. Lumber was at $656 per 1000 board feet this morning. This is down from the peak of $1,733, and down 50% from $1,284 a year ago. Prices are still up sharply from the pre-pandemic levels of around $400. There is somewhat of a seasonal demand for lumber, and lumber prices usually peak in April or May (although it seems likely lumber prices peaked earlier this year).The slowdown in housing - and some supply improvement - has pushed down prices.
Vehicles Sales Decreased to 12.68 million SAAR in May - Wards Auto released their estimate of light vehicle sales for May. Wards Auto estimates sales of 12.68 million SAAR in May 2022 (Seasonally Adjusted Annual Rate), down 11.2% from the April sales rate, and down 24.9% from May 2021. This graph shows light vehicle sales since 2006 from the BEA (blue) and Wards Auto's estimate for May (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.The second graph shows light vehicle sales since the BEA started keeping data in 1967. Sales in May were below the consensus forecast of 14.5 million SAAR.
GM slashes prices of Chevy Bolt EVs despite rising commodity costs – Despite rising commodity costs, General Motors on Wednesday slashed the price of its 2023 Chevrolet Bolt EV, likely making it the least expensive electric vehicle on sale in the U.S. The Detroit automaker cut the cost of the Bolt EV to a starting price of $26,595, down $5,900 from the 2022 model year. GM also reduced the price of its larger Bolt EUV by $6,300 to start at $28,195. All pricing includes a mandatory $995 destination charge. The cuts come as automakers, especially pure EV companies, hike prices on their electric vehicles amid changing market conditions and rising commodity costs, specifically for key materials needed for EV batteries. Automakers such as Tesla and GM's Cadillac brand, as well as EV start-ups Rivian and Lucid, have increased prices on EVs. GM warned during its first-quarter earnings call in April that it expects overall commodity costs in 2022 to come in at $5 billion, double what the automaker previously forecast. A Chevrolet spokesman declined to discuss the profitability or build costs of the Bolt models, but they're likely lower than newer vehicles. The Bolt EV has been in production since 2016 and features older battery technology than the company's new EVs such as the GMC Hummer pickup and Cadillac Lyriq, which feature its "Ultium" technologies. The price adjustment is an effort to stay competitive in the EV marketplace and "better aligns" the manufacturer's suggested retail price with the average sale price for the customer, Chevrolet spokesman Shad Balch said in an email. The Bolt EV is expected to be the least expensive EV on sale in the U.S. However, not all automakers have released their pricing for the 2023 model year. The lower prices should help bolster Bolt sales, which Steve Majoros, vice president of Chevrolet marketing, last month said is expected to reach a record in 2022. GM electric vehicles don't qualify for federal tax incentives, which can total up to $7,500 for other automakers, because the company has sold so many. However, Bolt owners could be eligible for state EV incentives, which would bring the price down further. Production of the 2023 Bolts is expected to begin in the summer. GM is in the midst of refilling its dealership pipeline with the vehicles after a recall due to fire risks shut down sales and production for several months of the past year. The Bolt EV has a range of up to 259 miles on a full charge. The larger Bolt EUV has a range of 247 miles on a full charge.
ISM® Manufacturing index Increased to 56.1% in May -The ISM manufacturing index indicated expansion. The PMI® was at 56.1% in May, up from 55.4% in April. The employment index was at 49.6%, down from 50.9% last month, and the new orders index was at 55.1%, up from 53.5%. From ISM: Manufacturing PMI® at 56.1% May 2022 Manufacturing ISM® Report On Business® “The May Manufacturing PMI® registered 56.1 percent, an increase of 0.7 percentage point from the reading of 55.4 percent in April. This figure indicates expansion in the overall economy for the 24th month in a row after a contraction in April and May 2020. This is the second-lowest Manufacturing PMI® reading since September 2020, when it registered 55.4 percent. The New Orders Index reading of 55.1 percent is 1.6 percentage points higher than the 53.5 percent recorded in April. The Production Index reading of 54.2 percent is a 0.6-percentage point increase compared to April’s figure of 53.6 percent. The Prices Index registered 82.2 percent, down 2.4 percentage points compared to the April figure of 84.6 percent. The Backlog of Orders Index registered 58.7 percent, 2.7 percentage points higher than the April reading of 56 percent.The Employment Index went into contraction territory at 49.6 percent, 1.3 percentage points lower than the 50.9 percent recorded in April. The Supplier Deliveries Index reading of 65.7 percent is 1.5 percentage points lower than the April figure of 67.2 percent. The Inventories Index registered 55.9 percent, 4.3 percentage points higher than the April reading of 51.6 percent. The New Export Orders Index reading of 52.9 percent is up 0.2 percentage point compared to April’s figure of 52.7 percent. The Imports Index fell into contraction territory, decreasing 2.7 percentage points to 48.7 percent from 51.4 percent in April.” This suggests manufacturing expanded at a faster pace in May than in April. This was above the consensus forecast, although the employment index was weak in May.
May Markit Manufacturing: Growth Slows - The May US Manufacturing Purchasing Managers' Index conducted by Markit came in at 57.0, down 2.2 from the final April figure. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.Here is an excerpt from IHS Markit in their latest press release: Chris Williamson, Chief Business Economist at IHS Markit said:“A solid expansion of manufacturing output in May should help drive an increase in GDP during the second quarter, with production growth running well above the average seen over the past decade. However, the rate of growth has slowed as producers report ongoing issues with supply chain delays and labor shortages, as well as slower demand growth.“A cooling in new orders growth was in part linked to customers pushing back on high prices, though also reflected shortages and growing concern about the outlook.“Input cost pressures meanwhile intensified further during the month. Although delivery delays were the least widespread for 16 months, pricing power remained firmly in the hands of the supplier, with rising energy, wage and transportation costs adding to firms’ cost burdens. The result was the steepest rise in costs since November, feeding through to yet another near-record factory gate price increase and serving as a reminder that inflationary pressures remain worryingly elevated.” [Press Release]Here is a snapshot of the series since mid-2012.
May Dallas Fed Manufacturing: Growth increase, but with weakness -- The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for May. The latest general business activity index came in at -7.3, down 8.4 from last month. All figures are seasonally adjusted. Here is an excerpt from the latest report:Texas factory activity expanded at a fairly robust pace in May, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from 10.8 to 18.8, signaling an acceleration in growth from April. Expectations regarding future manufacturing were mixed but generally less optimistic than in April. The future production index remained positive but fell from 34.7 to 19.9, a reading now well below average. The future general business activity index fell eight points to -6.5, entering negative territory for the first time in two years. Other measures of future manufacturing activity 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.
May 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. According to their website, "The Chicago Fed Midwest Manufacturing Index (CFMMI) is undergoing a process of data and methodology revision. In December 2013, the monthly release of the CFMMI was suspended pending the release of updated benchmark data from the U.S. Census Bureau and a period of model verification. Significant revisions in the history of the CFMMI are anticipated."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 May is 0.46, down from the previous month.
ISM Services Report: 14 Industries Reported Growth in May -The Institute of Supply Management (ISM) has now released the May Services Purchasing Managers' Index (PMI). The headline Composite Index is at 55.9 percent, down 1.2 from 57.1 last month. Today's number came in below the Investing.com forecast of 56.4 percent. Here is the report summary: “In May, the Services PMI® registered 55.9 percent, 1.2 percentage points lower than April’s reading of 57.1 percent. This is the lowest reading since February 2021, when the index also registered 55.9 percent. The Business Activity Index registered 54.5 percent, a decrease of 4.6 percentage points compared to the reading of 59.1 percent in April, and the New Orders Index figure of 57.6 percent is 3 percentage points higher than the April reading of 54.6 percent.“The Supplier Deliveries Index registered 61.3 percent, 3.8 percentage points lower than the 65.1 percent reported in April. (Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.) “The Prices Index dropped from the all-time high of 84.6 percent in April, decreasing 2.5 percentage points to 82.1 percent. Services businesses continue to struggle to replenish inventories, as the Inventories Index grew, but at a slower rate. The reading of 51 percent is down 1.3 percentage points from April’s figure of 52.3 percent. The Inventory Sentiment Index (44.5 percent, down 2.2 percentage points from April’s reading of 46.7 percent) contracted in May for the third consecutive month, indicating that inventories are in ‘too low’ territory and insufficient for current business requirements.” “According to the Services PMI®, 14 industries reported growth. The composite index indicated growth for the 24th consecutive month after a two-month contraction in April and May 2020. Growth continues — albeit slower — for the services sector, which has expanded for all but two of the last 148 months. The sector’s slowdown was due to a decline in business activity and slowing supplier deliveries. The Employment Index (50.2 percent) returned to expansion territory, and the Backlog of Orders Index grew, though at a slower rate. COVID-19 continues to disrupt the services sector, as well as the war in Ukraine. Labor is still a big issue, and prices continue to increase.” [Source] Unlike its much older kin, the ISM Manufacturing Series, there is relatively little history for ISM's Non-Manufacturing data, especially for the headline Composite Index, which dates from 2008. The chart below shows the Non-Manufacturing Composite.
May Markit Services PMI: Growth Continues - The May US Services Purchasing Managers' Index conducted by Markit came in at 53.4 percent, down slightly from the final April estimate of 55.6. Here is the opening from the latest press release:"Alongside the slowing in the manufacturing sector, the cooling pace of expansion in the service sector takes the pace of US economic growth down to the weakest so far in the pandemic recovery with the sole exception of January's slowdown at the height of the Omicron wave. While the survey readings are consistent with GDP growing at an annualized rate of just under 2%, supporting the view that GDP will return to growth in the second quarter, it is worrying that growth momentum is being lost so quickly. Businesses report ongoing difficulties finding staff and souring raw materials, while demand growth measured by inflows of new orders for goods and services is expanding at the slowest rate for almost one-and-a-half years, as spending power is reduced by soaring inflation."The inflation surge meanwhile shows no signs of abating, with firms' costs soaring higher at yet another survey record rate in May, reflecting rising energy, materials and staff costs." [Press Release] Here is a snapshot of the series since mid-2012.
Weekly Initial Unemployment Claims Decrease to 200,000 - The DOL reported: In the week ending May 28, the advance figure for seasonally adjusted initial claims was 200,000, a decrease of 11,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 210,000 to 211,000. The 4-week moving average was 206,500, a decrease of 500 from the previous week's revised average. The previous week's average was revised up by 250 from 206,750 to 207,000.The following graph shows the 4-week moving average of weekly claims since 1971.
ADP: Private Employment Increased 128,000 in May --From ADP: Private sector employment increased by 128,000 jobs from April to May according to the May 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“Under a backdrop of a tight labor market and elevated inflation, monthly job gains are closer to pre-pandemic levels,” said Nela Richardson, chief economist, ADP. “The job growth rate of hiring has tempered across all industries, while small businesses remain a source of concern as they struggle to keep up with larger firms that have been booming as of late.”This was below the consensus forecast of 280,000 for this report. The BLS report will be released Friday, and the consensus is for 320 thousand non-farm payroll jobs added in April. The ADP report has not been very useful in predicting the BLS report, but this suggests a weaker than expected BLS report.
May Employment Report: 390 thousand Jobs, 3.6% Unemployment Rate -From the BLS: Total nonfarm payroll employment rose by 390,000 in May, and the unemployment rate remained at 3.6 percent, the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in leisure and hospitality, in professional and business services, and in transportation and warehousing. Employment in retail trade declined....The change in total nonfarm payroll employment for March was revised down by 30,000, from +428,000 to +398,000, and the change for April was revised up by 8,000, from +428,000 to +436,000. With these revisions, employment in March and April combined is 22,000 lower 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, 27 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 May, the year-over-year change was 6.5 million jobs. This was up significantly year-over-year. Total payrolls increased by 390 thousand in May. Private payrolls increased by 333 thousand, and public payrolls increased 57 thousand.Payrolls for March and April were revised down 22 thousand, combined.The third graph shows the employment population ratio and the participation rate. The Labor Force Participation Rate increased to 62.3% in May, from 62.2% in April. This is the percentage of the working age population in the labor force.The Employment-Population ratio increased to 60.1% from 60.0% (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 was unchanged in May at 3.6% from 3.6% in April.This was above consensus expectations; however, March and April payrolls were revised down by 22,000 combined.
May jobs report: a little softening, but very positive; non-managerial workers are now working *more* total hours than before the pandemic --Like the past few months, I was most interested in three main issues:
- 1. Is the pace of job growth decelerating? (Yes, but it is still very strong by historical standards)
- 2. Is wage growth holding up? Is it accelerating? (It is still strong, but decelerated again slightly)
- 3. Are the leading indicators in the report beginning to flag? (Not yet)
We still have 822,000 jobs, or 0.5% of the total to go to equal the number of employees in February 2020 just before the pandemic hit. At the current average rate for the past 6 months of 505,000 jobs added per month, that’s 2 months from now. Perhaps even more importantly, non-managerial workers are now working in total *more* hours than they did before the pandemic hit.Here’s my in depth synopsis of the report:
- 390,000 jobs added. Private sector jobs increased 333,000. Government jobs increased by 57,000 jobs.
- The alternate, and more volatile measure in the household report indicated a gain of 321,000 jobs. The above household number factors into the unemployment and underemployment rates below.
- U3 unemployment rate was unchanged 3.6%, 0.1% above the January 2020 low of 3.5%.
- U6 underemployment rate *rose* 0.1% to 7.1%, 0.2% above the January 2020 low of 6.9%.
- Those not in the labor force at all, but who want a job now, declined -178,000 to 5.681 million, compared with 4.996 million in February 2020.
- Those on temporary layoff declined -43,000 to 810,000.
- Permanent job losers were unchanged at 1,386,000.
- March was revised downward by -30,000, but April was revised upward by 8,000, for a net decline of -22,000 jobs compared with previous reports.
- the average manufacturing workweek, one of the 10 components of the Index of Leading Indicators, was unchanged at 41.3 hours (but last month was revised down -0.1%).
- Manufacturing jobs increased 18,000. Since the beginning of the pandemic, manufacturing is now down only -17,000 jobs, or -0.1% of the total.
- Construction jobs increased 36,000. All of the jobs lost during the pandemic, plus another 774,000, have been made up.
- Residential construction jobs, which are even more leading, increased 5,000. Since the beginning of the pandemic about 60,000 jobs have been gained in this sector.
- Temporary jobs rose by 19,300. Since the beginning of the pandemic, about 250,000 jobs have been gained.
- the number of people unemployed for 5 weeks or less declined by -161,000 to 2,066,000, which is 57,000 *lower* than just before the pandemic hit.
- Professional and business employment increased by 75,000, which is about 800,000 above its pre-pandemic peak.
- Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $0.15 to $27.33, which is a 6.5% YoY gain, down from its 6.7% peak at the beginning of this year.
- the index of aggregate hours worked for non-managerial workers rose by 0.3%, which is now 0.2% *above* its level just before the pandemic.
- the index of aggregate payrolls for non-managerial workers rose by 0.8%, which is a gain of 14.0% (before inflation) since just before the pandemic.
- Leisure and hospitality jobs, which were the most hard-hit during the pandemic, rose 84,000, but are still -1,345,000, or -7.9% below their pre-pandemic peak.
- Within the leisure and hospitality sector, food and drink establishments added 46,100 jobs, and is still -750,700, or -6.1% below their pre-pandemic peak.
- Full time jobs rose 733,000 in the household report.
- Part time jobs declined -325,000 in the household report.
- The number of job holders who were part time for economic reasons rose 295,000 to 4,328,000, which is still below their level before the pandemic began, although it is 611,000 above their low this past January.
- The Labor Force Participation Rate rose 0.1% to 62.3%, vs. 63.4% in February 2020.
SUMMARY: One month ago, while the Establishment report was very good, the Household report was not good at all. This month both sides of the jobs report were very positive.While the pace of jobs growth isn’t as blistering as previously, it is still excellent by ordinary standards. The unemployment rate is still near historic lows. The leading sectors are almost all positive, indicating growth should continue. Wage growth is still very strong. With the exception of labor and hospitality, plus education, almost all sectors of the jobs market have made up, or almost entirely made up, their pandemic losses. In another two to three months we are likely to have more jobs than we did before the pandemic hit. What’s more, non-supervisory workers in total are now working a total of *more* hours than they did before the pandemic hit.About the only soft spots were the upward tick in the underemployment rate, part of which was the continued increase in involuntary part-time workers, the 0.2% decline from best levels in the manufacturing workweek, and the second month in a row of downward revisions to previous reports. In short, a little softening, but still very positive.
Job and wage growth moderate in May: The labor market is not overheating --Below, EPI economists offer their initial insights on the jobs report released this morning, which showed 390,000 jobs added in May and wage growth moderating. From EPI senior economist, Elise Gould (@eliselgould): Read the full Twitter thread here.
- In May, there were employment gains in leisure and hospitality, professional and business services, and education and health services while there were notable losses in retail trade. pic.twitter.com/98NV5znEH6 — Elise Gould (@eliselgould) June 3, 2022
- The labor market bounce back remains very strong, strikingly stronger–four years faster–than the prolonged recovery from the Great Recession. Private-sector employment is now within 0.2% of pre-pandemic levels. pic.twitter.com/98okzQv8p8 — Elise Gould (@eliselgould) June 3, 2022
- No matter how you look at it, nominal wage growth is moderating this year (and decidedly not accelerating). Year-over-year wage growth ticked down from 5.5% in April to 5.2% in May as more recent trends show even slower growth. pic.twitter.com/33FTUpKAxw — Elise Gould (@eliselgould) June 3, 2022
From EPI president, Heidi Shierholz (@hshierholz): Read the full Twitter thread here.
- Wage growth is also decelerating. Quarterly wage growth ticked down in May and has dropped substantially in recent months. 2/ pic.twitter.com/xWoahpNIqt— Heidi Shierholz (@hshierholz) June 3, 2022
- One big concern: There is still a giant gap in state and local govt jobs—they are down 634,000 since Feb ‘20, with close to half of that, 281,000, in education. It’s crucial that state and local govts use their ARPA funds to raise pay and refill those jobs. 4/ — Heidi Shierholz (@hshierholz) June 3, 2022
Comments on May Employment Report - The headline jobs number in the May employment report was above expectations, however employment for the previous two months was revised down by 22,000. The participation rate and the employment-population ratio both increased slightly, and the unemployment rate was unchanged at 3.6%. Excluding leisure and hospitality, the economy has more than added back all the jobs lost at the beginning of the pandemic. Leisure and hospitality gained 84 thousand jobs in May. At the beginning of the pandemic, in March and April of 2020, leisure and hospitality lost 8.20 million jobs, and are now down 1.35 million jobs since February 2020. So, leisure and hospitality has now added back about 84% all of the jobs lost in March and April 2020. Construction employment increased 36 thousand and is now 40 thousand above the pre-pandemic level. Manufacturing added 18 thousand jobs and is just 17 thousand below the pre-pandemic level. Earlier: May Employment Report: 390 thousand Jobs, 3.6% Unemployment Rate. In May, 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 May, the number of permanent job losers was unchanged at 1.386 million from 1.386 million in the previous month. These jobs were likely the hardest to recover, so it is a positive that the number of permanent job losers is essentially 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 May to 82.6% from 82.4% in April, and the 25 to 54 employment population ratio increased to 80.0% from 79.9% 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 working part time for economic reasons increased in May to 4.328 million from 4.033 million in April. This is at pre-recession levels. These workers are included in the alternate measure of labor underutilization (U-6) that increased to 7.1% from 7.0% in the previous month. This is down from the record high in April 22.9% for this measure since 1994. This measure is close to 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 1.356 million workers who have been unemployed for more than 26 weeks and still want a job, down from 1.483 million the previous month. This does not include all the people that left the labor force. Summary: The headline monthly jobs number was above expectations; however, the previous two months were revised down by 22,000 combined. The headline unemployment rate was unchanged at 3.6%. There are still 0.8 million fewer jobs than prior to the recession. Overall, this was another strong report.
BLS: Job Openings Decreased to 11.4 million in April -- From the BLS: Job Openings and Labor Turnover Summary:The number of job openings decreased to 11.4 million on the last business day of April, the U.S. Bureau of Labor Statistics reported today. Hires and total separations were little changed at 6.6 million and 6.0 million, respectively. Within separations, quits were little changed at 4.4 million, while layoffs and discharges edged down to a series low of 1.2 million.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.Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers. This report is for April, the employment report this Friday will be for May.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 spike in layoffs and discharges in March 2020 is labeled, but off the chart to better show the usual data.Jobs openings decreased in April to 11.400 million from 11.855 million in March. The number of job openings (yellow) were up 23% year-over-year. Quits were up 10% year-over-year. These are voluntary separations. (See light blue columns at bottom of graph for trend for "quits").
Job openings declined in April while layoffs hit a series low - Below, EPI senior economist Elise Gould offers her initial insights on today’s release of the Job Openings and Labor Turnover Survey (JOLTS) for April. Read the full Twitter thread here.
- Hires and quits rates both held steady in April as layoffs edged down. Hires remain elevated by historical standards as workers get (re)absorbed into the labor market. High quits is a sign of a strengthening labor market where workers can quit, search, and obtain new jobs.pic.twitter.com/gjrHN2sPPQ— Elise Gould (@eliselgould) June 1, 2022
- While overall hires and quits rates held steady, some sectors experienced a drop in April. While accommodations and food services remains the sector with the highest churn, as job openings fell, hires and quits also fell in that sector. A key sector to watch on jobs day Friday!pic.twitter.com/NlJd1EzbEa— Elise Gould (@eliselgould) June 1, 2022
- Today’s job openings report confirms what we already knew about the recovery. The labor market continues to experience a historically fast bounce back from the pandemic recession because policymakers sought solutions at the scale of the problem.https://t.co/rofL5ahSvw— Elise Gould (@eliselgould) June 1, 2022
First Big Drops in Astronomical Job Openings in Key Sectors, But Spikes to Record in Manufacturing & Construction - by Wolf Richter -- Large companies in tech (including Microsoft), social media (including Facebook and Twitter), streaming services (including Netflix), used-vehicle tech (including Carvana), and other segments have spread the news that they’re imposing hiring freezes on part or all of their operations, or that they’re actually laying off people, to cut costs as their stocks have come down hard or collapsed. Most of this started in late April and in May. But companies in manufacturing and construction have been lamenting the opposite: labor shortages that keep production down.Today’s Job Openings and Labor Turnover (JOLTS) for April is beginning to shed the first glimmers of light on these shifting hiring priorities, in a labor market that remains overall super-heated.In some industries, job openings spiked to new records; in other industries, job openings fell sharply for the first time in this cycle, but remained in the astronomical zone. There were huge numbers of “hires” and near-record “quits” in a sign of massive churn as people quit one job to take a better job somewhere else; accompanied by record low layoffs – that was in April.Job openings in the astronomical zone. At the end of April, there were a record 12.0 million job openings, not seasonally adjusted, up by 54% from April 2019, according to the JOLTS data released today. On a seasonally adjusted basis, job openings dipped from the record in March to 11.4 million, still up by 57% from April 2019.These job openings are not based on online job postings, but on what companies and government entities said their hiring needs were: The JOLTS data is routinely cited by the Fed in its rate-hike decisions, specifically the astronomical job openings and the quits – aspects of a “very, very, very strong labor market,” as Powell likes to call it at the FOMC press conferences.Job openings fell/plunged in big industries, still astronomical. Professional and business services (includes tech and social media companies and is the largest category by job openings): Job openings fell by 149,000 seasonally adjusted in April from March, the largest drop since April 2020.But that drop came off the record level of job openings in March, and barely made a dent, with job openings at the end of April at 2.18 million, the second highest ever, and up a stunning 87% from April 2019.Note that most of the hiring-freeze-and-layoff news from tech and social media came out in May, which should provide for a further and perhaps bigger decline in the next JOLTS release: Healthcare and social assistance: Job openings plunged by 266,000 in April from March, seasonally adjusted, the largest drop on record, to 1.80 million openings. But this was still up by 44% from April 2019: Leisure and hospitality: Job openings have been dropping for months. These companies had hiked pay and were able to fill a large part of the jobs that had vanished during the pandemic, as consumers stormed back to restaurants, hotels, and bars. In April job openings dropped by another 147,000 from March, to 1.51 million, still up by 48% from April 2019: Education and health services: Job openings plunged by 274,000 in April from the record in March, seasonally adjusted, the largest drop ever. But at 2.0 million job openings, the industry is still in the astronomical zone, up by 45% from April 2019: Retail trade: Job openings plunged by 162,000 in April from the record in March, seasonally adjusted, the biggest drop since November 2019. At 1.1 million, job openings are still up by 45% from April 2019: Manufacturing: Job openings spiked to a new record of nearly 1 million, seasonally adjusted, up by 115% from April 2019: Construction: Job openings rose to a record 449,000, seasonally adjusted, up by 8.5% from the one-month-miracle spike in April 2019, and up by 91% from April 2018:
Orlando nurses walk out in protest after understaffing led to unnoticed patient suicide - According to reports on social media, on Friday, May 27, around 40 nurses walked off the job at Orlando Regional Medical Center (ORMC) in downtown Orlando, Florida. The spontaneous walkout was in protest against inhuman workloads, which led to a tragic suicide by a patient going unnoticed for hours.Nurses were apparently forced to sign non-disclosure forms and are unable to speak about any of the conditions at the hospital or face retaliation, including the loss of their jobs. As a result, nurses are speaking through prominent nurse advocates on social media, such as Nurse Nander, who are anonymously sharing reports, photos and information from ORMC nurses because they have been silenced by the hospital.According to reports, on Monday, May 16, sometime between 7:00-11:00 p.m., a patient on the 8th floor of the hospital used a bedside table to break a window and then jumped to his death. The patient in the room below apparently thought the sound was from construction work. What is especially disturbing is that patient loads in the Progressive Care Unit (PCU), where the patient was located, were so high that his suicide was not discovered for some time.In the aftermath of the May 16 patient death, state agents were called in to investigate the incident. Nurses reported that the window that had been broken was quickly replaced, and the grass below the hospital where his body was found was burned. Every effort was made to quickly clean up the scene. Adding insult to injury, additional staffing was supplied to bring down the nurse-to-patient ratios during the inspection to portray better staffing levels. The farce was dropped once the officials left, and patient loads skyrocketed back to their unbearable levels.
COVID-19 cases rise in the Mid-Atlantic as school districts refuse to impose any safety measures -- The Mid-Atlantic United States, home to nearly 60 million people, has seen a drastic increase in the number of people infected with the latest coronavirus variants. However, the official response to this alarming trend has been mostly silence in order to make it so the virus is not as serious as it appears.Last week, the School District of Philadelphia (SDP) began to reinstate its mask mandate in schools. This occurred one month after a city-wide order calling for indoor masking was rescinded, reducing the requirement for masks to a “strong recommendation.”In addition, the city eliminated its tiered COVID response system. For the week of May 15–21, 592 new cases were reported, representing a gradual increase in numbers from week to week despite low testing numbers. Over 16,100 cases of COVID-19 have been reported since the beginning of the year.The SDP introduced a “Mask to Stay” option on May 13 where students exposed to COVID-19 but not showing any symptoms would be permitted to remain in school if they wore a mask 10 days following exposure and are self-monitored. Otherwise, the student would have to quarantine for 10 days. .In Maryland, Baltimore City Public Schools (BCPS) reported 1,121 casesfrom May 19 through May 28, including 78 cases at Francis Scott Key Elementary/Middle School. The quarantine and isolation period is five days, reduced from 10 days on January 18. Masks have been optional in the BCPS system since March 14.In the Washington D.C. region, COVID-19 cases have risen exponentially. In the week ending May 26, the District of Columbia reported 11,934 cases in a “school setting.”The Washington Post week wrote last week, “4,698 D.C. Public Schools students had been identified as a close contact of someone who tested positive within the last 10 days.” But far from taking a public health-conscious approach such as returning to remote learning, “Students who are vaccinated, or contracted the virus in the last 90 days, are not required to quarantine.”
Dallas school district’s proposed budget cuts teacher pay while union declares “victory” - The Dallas Independent School District FY 2022-23 budget makes further attacks on teachers and staff, using inflation to cut pay while ensuring the continuation of the hated “Teacher Excellence Initiative,” which ties the administration’s evaluation of a teacher’s performance to pay raises not years of experience. Notably absent from any announcement by the district is any mention of health care costs. Under the budget, teachers will start at $60,000 per year, up from $57,000 per year for the FY 2021-22 school year, a mere 5 percent increase. Teachers with more experience will have even less of a wage increase; those with five years of experience will have a base pay of $63,250, up from $61,210 per year. Teachers with 10 or more years of experience will have a base salary of $65,450, up from $63,400 per year, a 3 percent increase. When factoring in inflation, which stands at 8.5 percent, these are in fact 3.5 to 5.5 percent wage cuts. This does not even cover rising gas prices which have increased 43.6 percent, according to US Inflation Calculator in 2022, in part due to the US-NATO oil sanctions on Russia. The district, which has been bleeding qualified staff, has tacked on small “stackable,” one-time hiring incentives ranging from $2,000-$5,000 in an piecemeal effort to make up for this loss. Bus drivers will get even less: A driver with a commercial driver’s license will make $25 an hour, $17.49 for an multi-purpose vehicle driver, and bus monitors only $15. The union local, Alliance AFT, has praised in particular the bus monitors’ pay as a “victory,” writing on Facebook, “Great work to everyone who has called, emailed and lobbied the district to increase the minimum wage to $15/hour.” The much hyped “$15/hour” was a poverty wage two years ago, when Alliance AFT started its phony campaign, and it is even truer now. It is an unoriginal scam, with similar exercises in deception having been pulled by the Democratic Party in 2021 and the pseudo-left DSA years earlier. For reference, the average Walmart worker in Dallas makes $16 an hour, according to Zip Recruiter. The call by the Alliance AFT for educators to channel their efforts into groveling for poverty wages before the DISD board, which has attacked wages and working conditions for decades, is a dead end.
Amid desperate teacher shortage, East Baton Rouge Parish Public Schools eliminates hundreds of positions - Teacher shortages are creating crisis conditions throughout the state of Louisiana, where there are more than 2,500 certified teacher vacancies. According to State Superintendent of Education Cade Brumely, an estimated 50,000, K-12 students, roughly 7 percent of the total, are directly affected by teacher vacancies. However, this leaves out the indirect impact on students whose teachers are stretched thin, sacrificing planning periods and taking on extra work to cover the shortages. Students have been herded into cafeterias and auditoriums to be supervised because there is no one to teach them, an increasingly common practice across the US. A recent report by the state Legislative Auditor found that Louisiana has the fifth-highest percentage nationwide of uncertified teachers, at 9 percent compared to the national average of 3.2 percent. The state also has the fourth-highest percentage of inexperienced teachers, with 16.1 percent of teachers in their first or second year, compared to the national average of 11.7. Within charter schools, the percentage of uncertified teachers jumps to 49.7 percent, compared to only 7.9 percent in traditional public schools. Following Hurricane Katrina, the entire city of New Orleans was converted into the country’s first all-charter school district. The staffing shortages extend beyond the classroom. Louisiana employs one school psychologist for every 3,300 students, nearly one-seventh the National Association of School Psychologists’ recommended ratio of one for 500. This is enough to place the state in the bottom ten nationwide. Stop-gap legislative efforts to bandage the shortage include a miserly $1,500 pay raise for teachers, a pending bill that would incentivize retired teachers to return to work while still receiving retirement benefits, and a proposed scholarship fund to recruit high school students into the profession. According to the National Education Association, in the 2020-2021 school year, Louisiana ranked 43 out of 50 for average teacher salary at just $52,472 compared to the national average of $65,293. It is within the context of severe shortages that a recent mass layoff took place in the East Baton Rouge Parish Public Schools district (EBR). In May, despite a budget surplus and over 600 vacancies for the 2022-2023 school year, at least 230 employees were informed that their positions were being eliminated. The employees, including both teachers and staff, were told they could apply for or be reassigned to vacant jobs at other schools. According to The Advocate, 54 schools lost at least one position, and 23 schools lost at least five positions. One middle school, Park Forest, will lose eight teachers.
Parents and teachers defend Seattle principal fired for exposing district’s abandonment of contact tracing - Over two weeks ago, on May 10, Seattle high school principal Catherine Brown was fired for informing families of changes to the district’s COVID-19 guidelines and the consequences these changes would have on the school. The district fired Brown to prevent the further exposure of the fact that the COVID-19 guideline changes were intended to cover up transmission rates and further abandon mitigation measures. Principal Brown revealed what was at stake in an email sent May 10 to parents and staff of Cleveland STEM High School. The email said: “I have been under investigation for an allegation that I disobeyed a directive. The specific allegation at issue is that I failed to follow a directive to withhold information about changes in COVID-19 contact tracing from the Cleveland community. While the process for determining if I will be subject to discipline for that is not yet complete, as you now know, SPS [Seattle Public Schools] has determined that I will not be the principal at Cleveland High School next year.” Brown then pointed to the fact that “the interviewing of individuals, including staff, to determine if a close contact occurred will only occur in a limited number of cases with this change [to the guidelines].” When Brown chose to inform families in January of the change to the guidelines, COVID-19 case numbers in Seattle were rising rapidly during the the Omicron surge. Over 50,000 students were sent back to in-person learning, even as 2,200 to 5,600 cases were confirmed each day in the city of Seattle. Hundreds of students were sent home each day due to COVID-19, and for the first three weeks of January, over 1,000 cases a week were reported on the Seattle Public Schools Covid Dashboard. From the week ending May 7 of this year to May 20, 1,675 COVID-19 cases were recorded by SPS, eclipsing the record set by the Omicron surge. But now, individual contact tracing is no longer offered, and the mask mandate has been abandoned since early March. Students who have tested positive are now able to return to school after only five days of quarantine, and students and staff are no longer required to be tested even if they are symptomatic. The guidelines “recommend” students and staff get tested if they are symptomatic. Under these protocols, it is nearly impossible to identify asymptomatic cases. As of May 27 the CDC reports at least 1,527 children have died from COVID-19, and more than 13 million children have been infected. These are only official counts, and with the lack of any systematic reporting, these numbers are undoubtedly far higher. The abandonment of safety measures creates enormous risks for huge numbers of children suffering from Long COVID. Many teachers, parents and school staff are outraged by Brown’s firing. On May 20, a protest was held in defense of Brown outside the high school. The principal set to replace Brown, Marni Campbell, withdrew her application hours before the protest began.
Biden cancels all remaining student loan debt from Corinthian Colleges - The Biden administration plans to forgive all federal student loan debt still owed by more than a half million borrowers who attended Corinthian Colleges, capping off one of the most notorious for-profit college fraud scandals whose fallout has now spanned three presidencies. The debt relief will provide $5.8 billion worth of loan forgiveness to some 560,000 borrowers who attended dozens of Corinthian campuses scattered across the country during the company’s two decades of operation. Vice President Kamala Harris is set to formally announce the loan forgiveness — which marks the largest ever single discharge of federal student loan debt —during remarks at the Education Department on Thursday. She’ll be joined by Secretary Miguel Cardona and other officials. As attorney general of California, Harris in 2013 sued Corinthian, which helped push the company, once one of the largest for-profit colleges in the country, out of business. Harris touted her prosecution of Corinthian in her run for Senate and then again in the 2020 campaign. Harris will roll out the nearly $6 billion in loan forgiveness on Thursday as the White House finalizes plans for student debt relief of $10,000 per borrower for Americans earning below a certain income level. But those sweeping debt cancellation plans are separate from the Corinthian loan forgiveness, which is the culmination of a years-long saga over how and whether the Education Department should provide relief to the hundreds of thousands of students who attended the schools. “For far too long, Corinthian engaged in the wholesale financial exploitation of students, misleading them into taking on more and more debt to pay for promises they would never keep,” Cardona said in a statement. Corinthian was accused by a wide range of state and federal agencies, including the Education Department, of misleading borrowers about job prospects and potential earnings after graduation, among other things. “We’ve reached a determination that every borrower who attended Corinthian was subject to illegal conduct at Corinthian,” another senior administration official told reporters on Wednesday. The official said the Education Department “determined that these Corinthian borrowers as a group are eligible for borrower defense.”
$5.8 Billion in Loans Will Be Forgiven for Corinthian Colleges Students -The Education Department said it would wipe out the debts of 560,000 borrowers who had enrolled in the for-profit college chain, which collapsed in 2015. In its largest student loan forgiveness action ever, the Education Department said on Wednesday that it would wipe out $5.8 billion owed by 560,000 borrowers who attended Corinthian Colleges, one of the nation’s biggest for-profit college chains before it collapsed in 2015.The debt cancellation will be automatic, meaning former Corinthian students will not have to apply to have their debts canceled. The Education Department will eliminate any remaining balance on the federal student loans of those who attended any Corinthian campus or online program during the chain’s 20-year existence.“For far too long, Corinthian engaged in the wholesale financial exploitation of students, misleading them into taking on more and more debt to pay for promises they would never keep,” Education Secretary Miguel Cardona said.President Biden faces intense pressure from student borrowers and progressive lawmakers to take executive action to broadly cancel federal student loan debts. Mr. Biden, who promised during his campaign to knock $10,000 off the loans of “everybody in this generation,” said in April that he was “considering dealing with some debt reduction,” but White House officials said no final decision had yet been made. As an interim step, his administration has significantly expanded the government’s use of relief programs aimed at a variety of borrowers, including public service workers, those who are permanently disabled and people who were defrauded by colleges. Corinthian became one of the most prominent examples of bad behavior in the often-troubled for-profit-college industry. Founded in 1995, the company acquired a string of schools nationwide and at its peak enrolled 110,000 students at more than 100 campuses. But allegations of illegal recruiting tactics, shoddy educational programs, and false promises to students about their career prospects and potential future earnings shadowed the company for years, leading to a string of investigations and lawsuits by state and federal agencies. As its enrollment plunged, Corinthian shut down its campuses and filed for bankruptcy, stranding tens of thousands of students who were pursuing degrees and certificates. That meltdown gave rise to a grass-roots backlash. A group of students who called themselves the Corinthian 15 started a debt strike and refused to pay their federal student loans.They also uncovered an obscure clause in the law governing the loans: If borrowers were significantly misled by their school, they could ask the government to forgive their loans. Just as a bank appraises a house before it issues a mortgage, the Education Department is supposed to ensure that the programs it lets taxpayer-backed loans pay for are legitimate.The Corinthian 15, backed by the Debt Collective, enlisted hundreds of students to flood the department with applications for loan relief through a program that became known as “borrower defense to repayment.” Tens of thousands of former Corinthian students eventually joined the action. In 2015, Arne Duncan, the education secretary at the time, announced that the government would wipe out their loans.But the process dragged on, and by the time President Barack Obama left office, relatively few of the debts had been discharged. Betsy DeVos, who took over as education secretary under President Donald J. Trump, froze the program and tried to slash the relief offered to successful applicants.Mr. Biden reversed those moves, and some 100,000 former Corinthian students have already had their loans fully forgiven. Wednesday’s action will extend the relief to hundreds of thousands more, who had not submitted borrower defense applications. And those who made payments on federally owned loans that are still outstanding will receive refunds for their past payments, Education Department officials said on Wednesday.
Corinthian move seen as pivotal point in student debt forgiveness debate -President Biden’s decision to cancel billions in student debt for former Corinthian College students is raising pressure on the White House to offer more extensive relief. The White House has signaled it is considering eliminating up to $10,000 in student loans per borrower, and the cancellation for the former Corinthian students is being seen by progressives as a pivot point. In canceling $5 billion in debt held by 560,000 former students of the now-closed college, advocates say the administration is signaling it does have the authority to move forward on the issue without Congress. The question, advocates say, is whether Biden has the will. “Voters strongly support canceling student debt for people who have been defrauded by exploitative for-profile schools,” said Marcela Mulholland, political director at the liberal think tank and polling firm Data for Progress. “It’s important that we take action to cancel debt for those who were taken advantage of … and relieve them of this financial burden.” Supporters of relief argue action could give a political boost to the White House and Democrats at a critical time before the midterm elections, but Republicans have pushed back hard on the debt relief. They say it amounts to taxpayers who have paid their own bills footing the tuition of students and have signaled they’ll work to use the issue against Biden and Democrats in the fall. Biden and the White House have been long debating and have at times seemed near a decision. It will come at a precarious moment for the president. For months, Biden has suffered sagging poll numbers, and that Democrats fear will be extremely challenging to turn around by November given rising inflation and other hard-to-control economic issues. He is facing a mountain of domestic and international crises and is under pressure to deliver more results. Angst is particularly high on the left. After Build Back Better, Biden’s social spending bill, stalled in the Senate, progressive lawmakers tweaked their strategy to call for the president to take more executive action. The Corinthian news, first reported by The Hill, indicated Biden is reacting to those calls.
There’s a better solution for student loans than forgiving debt, experts say -- President Biden is considering forgiving $10,000 in student loans per borrower, but eliminating interest on the debt could be a more effective way to reduce the financial burden, according to experts.The impact of 0% interest has been apparent amid the pandemic freeze on student loan repayments, which is scheduled to end on Aug. 31. With interest eliminated, borrowers saved $37.8 billion through the end of the last year. And in the first quarter of 2022, the total national student loan debt increased just 1.95%, the lowest rate in at least two decades, according to the Education Data Initiative.“Zero interest is another way to soften the blow of repayment and help borrowers out so their payments aren’t as big and their loan isn't as costly,” said Jan Miller, president at Miller Student Loan Consulting.
Uvalde students won’t return to Robb Elementary School -The superintendent of the Uvalde, Texas, school district announced on Wednesday that students will not be returning to Robb Elementary School after the mass shooting there last week that left 19 children and two adults dead. “Students and staff will not be returning to the Robb Elementary campus. We are working through plans on how to serve students on other campuses and will provide that information as soon as it is finalized. We are also working with agencies to help us identify improvements on all UCISD campuses,” Uvalde Consolidated Independent School District Superintendent Hal Harrell wrote in a letter, which was also on behalf of the district’s board of trustees. Harrell wrote that the school is continuing to cooperate with authorities on the shooting and would be providing counseling services to staff and families “for the foreseeable future.” At least 2 people injured in shooting at Wisconsin cemetery Tomi Lahren inks deal with conservative media outlet Outkick The superintendent noted they would not be commenting on the investigation into the massacre until a review had been completed by law enforcement, noting it “is ongoing and information is evolving.” There is increasing scrutiny over authorities’ response to the shooting, given a more than hour lapse between when the gunman entered the school and when law enforcement killed him. Discrepancies have also emerged in the original version of events as detailed by police. Meanwhile, the shooting has reigniting the national conversation around gun violence, with Democrats in Congress pledging to hold votes on gun law reform.
Texas police admit to failed shooting response, say kids in room with gunman called 911 - Texas’s top public safety official said officers on the scene failed to follow protocol at the Uvalde elementary school shooting, with officers standing in the hallway as children in the classroom called 911 as their classmates were killed.At a Friday afternoon press conference, state Director of Public Safety Steven McCraw said that 19 officers stood in the hallway outside the fourth-grade classroom on Tuesday while students inside the room called 911 for help. McCraw said the on-site commander, school district Police Chief Pete Arredondo, thought there was no longer a threat to the children inside, so he waited for nearly an hour to breach the room because the gunman had locked the door.“From the benefit of hindsight, where I'm sitting now, of course it was not the right decision,” McCraw said. “It was the wrong decision, period. There is no excuse for that. But again, I wasn't there. I'm just telling you, from what we know, we believe there should have been an entry as soon as you can.”At a press conference later in the day, Gov. Greg Abbott claimed he had been misled by authorities and was "absolutely livid" after initially praising the law enforcement response on Wednesday. Speaking moments after he addressed the National Rifle Association's annual meeting in a pre-recorded video message, Abbott said that "every act by every official involved in this entire process is under the investigation conducted both by the Texas Rangers and by the FBI" and information he had been given about the shooting "turned out in part to be inaccurate." When asked why authorities didn’t enter the Robb Elementary classroom, McCraw said that “it was believed at the time that the subject was stationary, barricaded and there was no risk to other children.” But, he said, “clearly there were kids in the room, clearly they were at risk, and, oh, by the way, even when you go back to shooting, there may be kids that were injured, they may be shot but injured, and it’s important for lifesaving purposes to immediately get there and render aid.”
Uvalde Gunman Co-Workers Nicknamed Him 'School Shooter' Before Attack A former co-worker of the Uvalde gunman who attacked Robb Elementary School told The New York Times they and other workers at the local Wendy's had nicknamed him "school shooter" prior to the incident that killed 21 people. The New York Times reported the gunman's co-worker said he would frequently snap at colleagues and customers. His long hair and dark clothing, combined with his hostile behavior, led them to call him names.He would go on to open fire on an elementary school classroom, killing 19 students and two teachers. Multiple people told The New York Times the gunman was "aggressive" and "intimidating," including former classmates and people the 18-year-old had spoken to online. He frequently discussed and threatened violence, posting pictures of guns online and sending harassing messages to girls on Instagram. "He'd reply to my stories with things like 'i wanna kill u' or like 'i hate you,'" Kendra Charmaine, a 17-year-old in California who interacted with the shooter online, told The New York Times.
Before massacre, Uvalde gunman frequently threatened teen girls online - He could be cryptic, demeaning and scary, sending angry messages and photos of guns. If they didn’t respond how he wanted, he sometimes threatened to rape or kidnap them — then laughed it off as some big joke. But the girls and young women who talked with Salvador Ramos online in the months before he killed 19 children in an elementary school in Uvalde, Tex., rarely reported him. His threats seemed too vague, several said in interviews with The Washington Post. One teen who reported Ramos on the social app Yubo said nothing happened as a result. Some also suspected this was just how teen boys talked on the Internet these days — a blend of rage and misogyny so predictable they could barely tell each one apart. One girl, discussing moments when he had been creepy and threatening, said that was just “how online is.” In the aftermath of the deadliest school shooting in a decade, many have asked what more could have been done — how an 18-year-old who spewed so much hate to so many on the Web could do so without provoking punishment or raising alarm. But these threats hadn’t been discovered by parents, friends or teachers. They’d been seen by strangers, many of whom had never met him and had found him only through the social messaging and video apps that form the bedrock of modern teen life. The Washington Post reviewed videos, posts and text messages sent by Ramos and spoke with four young people who’d talked with him online, who spoke on the condition of anonymity for fear of further harassment.
The gunmaker whose rifle was used in Uvalde shooting reportedly runs direct-to-consumer ads to aimed at younger buyers - The gunmaker that made the rifle used in the Texas elementary-school shooting uses online direct-to-consumer advertising tactics to attract young buyers, according to The New York Times.Daniel Defense also runs ads modeled after the popular video game "Call of Duty,"most likely also aimed to appeal to a younger audience, per the Times. The Uvalde shooter is said to have bought the rifle used in the attack days after his 18th birthday.The Times reported how Daniel Defense also runs a buy-now, pay-later payment plan, which is advertised on the home page of its website.The financing program allows buyers to spread out the cost of an assault-style rifle, some models of which retail for more than $1,800, over numerous pay periods in "three easy steps."The plan is in partnership with Credova, a buy-now, pay-later company, according to Daniel Defense's website.The Uvalde shooter reportedly bought a military-style rifle online from Daniel Defense a week before the massacre which left 19 children and two adults dead on May 24.Legislators in several US states are pushing to strengthen gun laws. Gov. Phil Murphy of New Jersey called on his state's senate last week to pass a bill that would raise the legal gun-purchasing age to 21 from 18, progress on which was stalled last year.Gov. Gavin Newsom of California also said that he would move to expedite stricter gun laws, including allowing people to sue gun manufacturers, according to Forbes.
Maker of rifle used in Texas shooting faces outrage over ad featuring child The maker of the rifle used in the Texas elementary school shooting is facing fresh outrage over an advertisement featuring a young child posted days before the killings.Georgia-based Daniel Defense, which manufacturers the gun used in the Uvalde mass shooting where 21 people died, posted an ad on Twitter on 16 May showing a toddler holding a rifle, with the caption: “Train up a child in the way he should go, and when he is old, he will not depart from it.”The child, wearing a shirt reading “Rascal”, sits cross-legged with the rifle in both hands as a partially visible adult points at him.Daniel Defense is one of the largest privately owned rifle manufacturers in the US. Founded by Marty Daniel, it was already known for controversial ads that have broken with industry standards.One ad from 2014 involved a fictional Marine talking about defending his wife and baby using Daniel Defense products. It was rejected for a televised slot during the Super Bowl.The company’s social media ads often blend Bible verses with images of their guns. In an Easter-themed post on 17 April of this year, the caption “He is Risen!” ran underneath an image of a cross, atop a rifle, lying on an open Bible. The Uvalde attack is also not the first time that Daniel Defense weapons have been involved in a mass shooting. Guns manufactured by the company were in the arsenal of the gunman who killed 58 people and injured more than 500 in Las Vegas in 2017.Months before that attack Daniel Defense had acknowledged the impact of high-profile shootings on gun sales. “The mass shooting at Sandy Hook elementary in 2012 drove a lot of sales,” Daniel told Forbes. “That was a horrible event and we don’t use those kinds of terrible things to drive sales but when people see politicians start talking about gun control, they have this fear and they go out and buy guns.” In the aftermath of Uvalde, gunmaker stock prices have risen, reports Fortune. Shares of Sturm, Ruger & Company rose by about 5.8% and Smith & Wesson is up 10%.
An Army of All-American Paramilitary Death-Squad Soloists -In their 2014 Super Bowl ad (declined by the NFL), Daniel Defense, the AR-15 merchants of death, EXPLICITLY tied a ‘paramilitary army-of-one’ motif to its role as a military-industrial complex supplier. A man arrives home — presumably from a tour of duty — and enters the house past a conspicuously displayed, framed photo of him in his Marine uniform. Behind that photo is another photo with a wide frame labeled “FAMILY… they are always…” the last words are hidden behind the photo of the Marine. He walks into the next room where his wife is folding baby clothes and they hug. His voice over narrative: “And my family’s safety is my highest priority. I am responsible for their protection.” The two of them then walk over and peek into the baby’s room. Baby is awake so they enter. Baby smiles as Dad reaches down to pick her (signified by a pink blanket) up. “And no one,” his narrative continues, “has the right to tell me how to defend it.”“So I’ve chosen the most effective tool for the job.” The screen changes to a black background with a gray silhouette of an AR-15 and the Daniel Defense logo. A different, corporate voice takes over the narrative, “Daniel Defence,” the voice intones. “defending your nation. Defending your home,” as those words appear on the screen.The YouTube copy of the ad has had 341,665 views since it was posted to the company’s channel on November 27, 2013. The 353 comments are almost all positive. On May 16, eight days before a gunman murdered 20 children and two school teachers with one of Daniel Defense’s commodities in Uvalde, Texas, the company tweeted the following message, since deleted:The text is from Proverbs 22. I won’t bother scrounging through Proverbs to show that the passage is not about teaching a toddler how to use an AR-15. There is no point agonizing about the obscenity of the juxtaposition of a small child and murder weapon. It is a minor obscenity compared to the immense obscenity of the elected representatives who appropriate money to pay the company that promotes that message.Are the Republicans culpable? Yes. Are the Democrats absolved of complicity? No.As the Daniel Defense video makes abundantly clear, the rationale for self-appointed vigilante violence is directly linked to the funding of the “support our troops” military-industrial complex.Regardless of what their rhetoric is on “gun control” supermajorities of both parties — 84% of Senate Democrats and 92% of Republicans — voted to bestow $778 billion on the military-industrial complex. That’s why its real name is the military-industrial-congressional complex. You can bet your bottom dollar some of that money went to Daniel Defense. Some of the money DD receives from taxpayers pays for lobbying to make sure they continue to get more money from taxpayers. Some of that money goes to lobbying to insure that their gun sales to child murderers are not impeded. And some of goes to marketing their “most effective tool for the job” to 18-year old psychopaths as a way to protect their second amendment right to slaughter schoolchildren.
The Only Possible Solution to School Shootings (and You Can Get It Here) by Yves Smith -America is going through one of its regular paroxysms of grief and outrage over yet another mass school shooting, this one in Uvalde, Texas. We’re in the midst of the predictable calls for a response that would make sense, namely gun control, which is certain to go nowhere. Biden punted before an effort even got started:Another line of thought is to “harden schools” as if they weren’t already on the way to being prisons. Will all the doors have bulletproof locks? Armed guards? Presumably all lower-floor windows will have to have metal grills, since an assailant could shoot out glass. And fortifying buildings is not foolproof, since kids are vulnerable when the walk from the street to the school entrance. Since we found out that police with active shooter training hung outside the Uvalde school till they (mistakenly) thought the threat was over, it seems that the idea of arming teachers is likely to be ineffective at best and potentially worse than the disease. Recall that police officers, who have more regular weapons training than teachers would, hit their target only 15% or so of the time when they shoot. . In a crowded classroom situation, it’s not hard to imagine students being victims of friendly fire.On the other end of the spectrum, we have variants on the “thoughts and prayers” level of effectiveness. We already know from the Biden statement that political measures will go nowhere. Divesting from gun manufacturers is virtue-signaling, since cold-blooded value investors and gun enthusiasts will bid up their stock prices. So we are left with admissions of failure: supporting victims of gun violence, and a subset of that idea, giving blood.But have no fear, there is a real and effective remedy!Our modest proposal: All public school students will wear bulletproof vests and bulletproof helmets when they are on school grounds. They may take their helmets off their heads once inside as long as they can be put on immediately, as in they are hanging on the back of their neck, are in one hand, or are placed on their desk or are suspended by their chinstrap from their chair.The vests don’t have to look like SWAT gear. This discreet model is $279. But for traditionalists, there are multi-threat jackets (this one $449) that are also “strike and slash resistant”. And the macho look is a deterrent in and of itself:I would imagine schools could buy the material in bulk and it could be a local/regional griftingentrepreneurial opportunity to stitch them up from approved patterns. They could even have school logos or be in school colors. A bulletproof hoodie is even an option (this one retails at $479) but schools would presumably want a uniform and hoodies have bad connotations with gens d’armes: Or the sporty outdoor jacket look (for you at $475):Some of these items are not unduly expensive. For instance, this is a used unisex military surplus helmet, from Italy, only $49 when in stock:But what about the lower body? For very nervous school systems, additional options include groin protectors. Forgive the camo gear colors but this one is a screaming bargain at $27…if it’s ever in stock. This image allows you to see that they typically attach to the vest. And the point isn’t just to protect the crown jewels but also the femoral artery:Another choice would perfectly ordinary looking yet bulletproof pants, yours for a mere $525:Needless to say, the prices may seem a bit daunting, but remember, these are retail offerings sold individually, while schools should be able to order in bulk at police or even US military prices (oops, that might not be a bargain). And remember these items are super durable, so they would presumably be used over several school years, by different students, greatly reducing the effective cost.
Coronavirus Daily: Covid Is More Lethal to Kids Than The Flu – Bloomberg -In the US, nearly six times more kids and teens died from Covid in one year than did from the flu, according to a new analysis of pediatric mortality data. Millions of kids get sick with the seasonal flu each year. But although it can be dangerous — especially for those who are unvaccinated — it's much less lethal than Covid. According to Centers for Disease Control and Prevention data, childhood flu deaths during the regular season have ranged from 39 to 199 since 2004. Meanwhile, in 2021 alone, more than 600 children died from Covid-19, according to the analysis done by Jeremy Faust, a professor at Harvard University Medical School and physician at Brigham and Women’s Hospital in Boston. Faust used death data from the CDC to compare Covid deaths during the pandemic to flu deaths over the last decade, to highlight the differences in severity between the viruses in kids.
COVID is significantly more lethal to kids than the flu - COVID-19 is much more fatal to children than is commonly assumed.An examination of mortality data from the Centers for Disease Control and Prevention shows that COVID killed 600 children in 2021, which is five times higher than the average number of children (120) who died of the flu each year in the 10 years leading up to the pandemic.At the height of the Omicron outbreak, 156 children in the U.S. died in a single month, January 2022, says Dr. Jeremy Faust, Harvard University Medical School professor and physician at Brigham and Women’s Hospital in Boston, who compiled the data.“Since the turn of the century, there have been just seven instances in which a respiratory virus killed more than 65 children in a single month in the U.S.,” says Faust in his study. “Influenza did it twice: once during the H1N1 pandemic of 2009 (which hit children harder than most realize) and once in March of 2009. COVID-19 accounts for each of the other five instances, all of which occurred between just August 2021 and January 2022.”The study looked at children up to the age of 17, many of whom were not eligible for vaccination during parts of the pandemic. On Thursday, the White House announced children under 5 could begin receiving COVID-19 vaccinations as early as June 21.Faust challenges what he calls minimizers, who point to the death rate of elderly patients versus pediatric ones, saying comparing the two groups is akin to apples and oranges.“You wouldn’t downplay pediatric cancer by noting that 80-year-olds die of cancer at a rate that is 541 times greater that of 8-year-olds (which, by the way, is true),” he writes. “You’d assess these groups on their own terms.” Separate studies have shown an increase in the number of pediatric patients with long COVID as well. Of known respiratory viruses, Faust notes, only one—COVID-19—has ever killed more than 100 children in a month in the U.S. And it did so three times during the Delta and Omicron waves.
Pfizer, BioNTech report 80 percent efficacy of Covid-19 vaccine for youngest children - Pfizer and BioNTech announced today that they plan to submit data to the Food and Drug Administration for three doses of their Covid-19 vaccine for children at least 6 months old up to children under 5 years old.The companies released top-line results showing that three pediatric doses of their Covid-19 vaccine generated a comparable immune response in children as two full doses did in young adults — the primary end goal the FDA set for pediatric vaccine manufacturers. About 19 million children in the U.S. are in this age group, none of whom are currently eligible to receive a Covid-19 vaccine.Three doses of the vaccine also appeared to reduce cases of symptomatic disease by 80.3 percent among the youngest kids. However, at the time of analysis, only 10 children in the study developed symptomatic Covid-19 up to seven days after their third shot, according to a press release. The companies previously specified they would analyze effectiveness after 21 children developed Covid following their third shot and plan to release updated data when available.No children in the trial had any serious side effects, the release said.“These topline safety, immunogenicity and efficacy data are encouraging, and we look forward to soon completing our submissions to regulators globally with the hope of making this vaccine available to younger children as quickly as possible, subject to regulatory authorization,” Albert Bourla, Pfizer’s chief executive officer, said in a statement. Pfizer and BioNTech initially asked the FDA to authorize their two-shot Covid-19 regimen for kids 6 months to under 5 in February. The agency delayed the advisory committee meeting that would discuss the vaccine for this population, opting to wait for more data on a third dose. Pfizer tested a dose for children equal to about one-tenth of what adults received. Two kid-sized doses in children 6 to 24 months old generated immunity comparable to that in young adults who received two full doses. The same two pediatric doses didn’t generate similar immunity in children 2 to 5 years old.
Reports of ‘Paxlovid rebound’ have Covid experts looking for theories - As he was treating some of the nation’s first coronavirus patients, Andre Kalil noticed something unusual about the new virus: Patients didn’t always progress linearly. They’d get better, then worse. Then sometimes better again.Initially, most researchers figured these undulating symptoms were collateral damage, as a riled-up immune system kept firing long after most of the virus was gone. Sometimes, though, Kalil could swab the lungs of a patient in the ICU and find virus still replicating weeks after they were admitted. Often, the amount of virus bounced up and down by the day. “I cannot tell you how many times I’ve seen patients that late in the disease, with very, very high viral load,” said Kalil, a physician and professor at the University of Nebraska Medical Center, home to the nation’s only federal quarantine center. “This virus is different than other viruses in the past. It has the capacity to replicate for much longer.”Kalil has been thinking about those early patients again as researchers around the world race to solve a growing mystery: Paxlovid rebound.Almost 90% effective at preventing hospitalizations from Covid-19, Pfizer’s antiviral pill has quickly become one of the most powerful additions to the pandemic arsenal since the advent of mRNA vaccines. But as it’s become more widely available, a growing number of people have found the drug only temporarily effective.In these cases, a patient diagnosed with Covid-19 was typically prescribed Paxlovid, took it, felt better, perhaps even tested negative, and then suddenly tested positive days or even more than a week later. For some, the resurgences were asymptomatic. But for others, they were as bad or worse than the original illness“There were a lot of symptoms associated with the rebound, actually, almost as much as there was for the original infection,” said Davey Smith, an infectious disease specialist at University of California, San Diego, who recently documented one such case. “Headache, fatigue, cough.”Tatiana Prowell, an oncologist at Johns Hopkins School of Medicine, has for the past week documented on Twitter a household member’s struggle with rebound. Twenty days after first testing positive, the person is positive again and suffering sore throat, fatigue, runny nose, and nonstop coughing.These stories raise important questions about how doctors should use the most effective Covid-19 treatment to date: It might mean some patients need longer courses of medicine; guidelines for who should take it could be refined; recommendations for exiting quarantine may have to be updated.
CDC Director Issues Alert On Pfizer's COVID-19 Pill - Centers for Disease Control and Prevention Director Rochelle Walensky warned that Pfizer’s COVID-19 pill Paxlovid can lead to a rebound in symptoms.“If you take Paxlovid, you might get symptoms again,” Walensky told CBS News on Tuesday.“We haven’t yet seen anybody who has returned with symptoms needing to go to the hospital. So, generally, a milder course.”Another researcher who is not affiliated with the CDC said that he has observed such a scenario. “People who experience rebound are at risk of transmitting to other people, even though they’re outside what people accept as the usual window for being able to transmit,” Dr. Michael Charness of the Veterans Administration Medical Center in Boston told CNN on Tuesday.After a patient recovers from COVID-19, the aforementioned rebound has occurred between two and eight days later, according to the CDC. The agency, however, told CBS that the benefits of taking Paxlovid outweigh the risks of COVID-19, namely among those who are at a high risk of developing severe symptoms from the virus.About a week ago, the agency issued an alert to health care providers about the rebound, saying that patients who took Paxlovid either test positive for the virus after having tested negative or will experience COVID-19 symptoms.“A brief return of symptoms may be part of the natural history of SARS-CoV-2 infection in some persons, independent of treatment with Paxlovid and regardless of vaccination status,” the federal health agency said at the time. SARS-CoV-2 is another name for the CCP (Chinese Communist Party) virus, which causes COVID-19. “Limited information currently available from case reports suggests that persons treated with Paxlovid who experience COVID-19 rebound have had mild illness; there are no reports of severe disease. There is currently no evidence that additional treatment is needed with Paxlovid or other anti-SARS-CoV-2 therapies in cases where COVID-19 rebound is suspected,” the CDC added.
Inaccurate oxygen level readings delayed COVID-19 therapies for Black, Hispanic patients: study -COVID-19 patients in racial and ethnic minority groups were delayed in receiving therapies because of an inaccurate reading of oxygen saturation levels, according to a new study. The study, published Tuesday in JAMA Internal Medicine, found that “overestimation of arterial oxygen saturation levels by pulse oximetry” in COVID-19 patients from racial and ethnic minority groups contributed to “unrecognized or delayed recognition of eligibility to receive COVID-19 therapies.” “Black and Hispanic patients were more likely to experience unrecognized and delayed recognition of eligibility to receive COVID-19 therapy,” the study also said, adding that such disparities could be the reason for differing COVID-19 outcomes between races. Throughout the pandemic, data from the Centers for Disease Control and Prevention (CDC) has shown that Black and Hispanic Americans were disproportionately more likely to die of COVID-19. In October 2020, the CDC said 24 percent of COVID-19 deaths between May and August of that year were Hispanic or Latino and 19 percent were Black. But the U.S. population is just 18 percent Hispanic and 12.5 percent Black. The Food and Drug Administration (FDA) issued a warning for pulse oximeters, which work by shining a red light through a patient’s fingertip, last February. saying that they “may be less accurate in people with dark skin pigmentation.” “The U.S. Food and Drug Administration is informing patients and health care providers that although pulse oximetry is useful for estimating blood oxygen levels, pulse oximeters have limitations and a risk of inaccuracy under certain circumstances that should be considered,” the FDA said at the time.
“Battle Of Omicron” Being Won In U.S. By New BA.4 And BA.5 Variants – -Estimates released by the Centers for Disease Control and Prevention today indicate that the share of cases tied to Omicronvariants BA.4 and BA.5 increased 79% in the past week. That means, even as the more transmissible BA.2.12.1 Omicron subvariant became officially dominant in the U.S. last week, it’s already being pushed out by newcomers BA.4 and BA.5. The result would seem to be overlapping waves of Omicron.While BA.2.12.1 gained an advantage by being more transmissible than BA.2 before it, the two newer variants are said to be making inroads at least in part because of their abilities to reinfect.“We now report findings from a systematic antigenic analysis of these surging Omicron subvariants,” says a recent paperpublished to the BioRxiv preprint server. “BA.2.12.1 is only modestly (1.8-fold) more resistant to sera from vaccinated and boosted individuals than BA.2. On the other hand, BA.4/5 is substantially (4.2-fold) more resistant and thus more likely to lead to vaccine breakthrough infections.” If true, that means the new variants have a much larger population that they can potentially access via breakthrough infections, where previous variants like BA.2.12.1 produced far fewer breakthrough infections.The result has been what epidemiologist and biostatistician Dr. Katelyn Jetelina — who blogs under the moniker Your Local Epidemiologist — calls the “battle of Omicron.”“After our first massive BA.1 wave,” Dr. Jetelina wrote today in her email newsletter, “BA.2 tried to take hold only to be overtaken by BA.2.12.1. Now, BA.4 and BA.5 are gaining traction very quickly and seem to be easily outcompeting the rest. Given recent lab studies, though, this isn’t a surprise. BA.4/5 are particularly good at escaping antibodies and reinfecting people previously infected with Omicron, as well as boosted individuals.”The CDC data released today show BA.4 and BA.5, which are folded into the B.1.1.529 designation but likely make up the vast majority of the new cases in that grouping, still with a modest 6.1% share of new cases analyzed at the end of last week. Compare that to 59% for BA.2.12.1 and 6.1% doesn’t seem like much, but the fact that BA.4 and BA.5 are making inroads at all is remarkable.Even as BA.2.12.1 continues to expand, the new South African variants are slowing its spread. While BA.2.12.1 accounts for 59% of variants identified, that’s only up from 52% last week, a roughly 7% increase overall. As previously mentioned, BA.4 and BA.5 increased 79%, from 3.4% to 6.1%.Like BA.2.12.1 before them, the new Omicron strains have taken root more rapidly some parts of the U.S. than others. While BA.2.12.1 spread quickly first the Northeast, it’s now the Midwest — specifically Iowa, Kansas, Nebraska and Missouri — that are feeling the brunt of BA.4 and BA.5.While the national share of cases attributed those variants is 6.1% this week, in that four-state region it’s 12.4%. The area seeing the smallest share of the new strains is the region of the Northeast that’s been hit hardest by BA.2.12.1: New York, New Jersey and Connecticut.
Can long Covid lead to death? A new analysis suggests it could - The Centers for Disease Control and Prevention is analyzing more than 100 deaths that could be attributed to long Covid by looking at death certificates from across the country over the last two years, according to two people familiar with the matter.The National Center for Health Statistics, a division within the CDC, collects death certificates from states after they have been completed by a coroner, medical examiner or doctor. NCHS is now reviewing a batch of those files from 2020 and 2021.The review at the CDC, the details of which POLITICO obtained, is the first of its kind and indicates that long Covid and the health complications associated with it could lead to death. NCHS is set to publish preliminary data from its analysis in the coming days.It’s unclear whether the people who died had underlying health issues, whether long Covid was the cause of their deaths or whether it was a contributing factor.The new data comes as state and federal health officials work to understand the significance and severity of long Covid, which may affect as many as 30 percent of people who contract the virus, according to studies published in the Journal of the American Medical Association. Two years into the pandemic, relatively little is known about long Covid’s prevalence, how to diagnose it or the best practices for treatment.“The overall risk factors for mortality with long COVID are going to be important and evolving,” said Mady Hornig, a physician-scientist at the Columbia University Mailman School of Public Health who is researching long Covid. The CDC is still collecting and revising data, but NCHS has so far identified 60 death certificates that list long Covid or similar terminology — for example, “post-Covid” — in 2021 and another 60 during the first five months of 2022.A spokesperson for the CDC said the agency is “working on identifying any deaths attributed to … long Covid-19” and plans to publish the numbers “soon.”There is no test for long Covid, and the CDC and the medical community have no official definition. But health care workers across the country are diagnosing patients who have previously contracted Covid-19 based on a wide-ranging set of symptoms that often include fatigue, shortness of breath and brain fog. Researchers and scientists have said that between 10 and 30 percent of people who have survived a Covid-19 infection will develop long Covid. A CDC study released May 27 said one in five adults in the U.S. may develop the condition.
Covid was vanishing last Memorial Day. Cases are five times higher now. Covid-weary Americans enter Memorial Day with little effort to contain a still-raging pandemic - The Washington Post For the third year, Americans are greeting the unofficial start of summer shadowed by the specter of the coronavirus amid rising covid-19 cases and hospitalizations across the country.The United States is recording more than 100,000 infections a day — at least five times higher than this point last year — as it confronts the most transmissible versions of the virus yet. Immunity built up as a result of the record winter outbreak appears to provide little protection against the latest variants, new research shows. And public health authorities are bracing for Memorial Day gatherings to fuel another bump in cases, potentially seeding a summer surge.It’s a far cry from a year ago, with predictions of a “hot vax summer” uninhibited by covid concerns. Back then, coronavirus seemed to teeter on the brink of defeat as cases plummeted to their lowest levels since spring 2020 and vaccines became widely available for adults. Even the vaccinated and boosted now grudgingly accept the virus as a formidable foe that’s here to stay as governments abandon measures to contain it.As the virus morphs and the scientific understanding of how it operates shifts with each variant, Americans are drawing their own lines for what they feel comfortable doing.“This time last year, I was so hopeful,” said Margaret Thornton, a 35-year-old Philadelphia researcher preparing to spend her summer socializing mostly outdoors because of her weakened immune system. “Now, I don’t know when it’s going to be over, and I don’t think there is necessarily a light at the end of the tunnel. Or rather, if there is a light, is it an opening to get out? Or is it a train?”Parents of children too young to be vaccinated are making cross-country travel plans. Octogenarians are venturing to bars. And families are celebrating graduations and weddings with throngs of mostly unmasked revelers — mindful they may get sick. Again. More than half of the U.S. population is living in areas classified as having medium or high covid-19 levels by the Centers for Disease Control and Prevention. The latest cases have yet to overrun hospitals, but that could change as the virus spreads among more vulnerable people. The dominant strains circulating in the United States are the most contagious thus far.
Officials, media spread complacency as US enters third summer of COVID infections and death -Coronavirus infections, hospitalizations and deaths are rising fast in the United States, belying the official optimism and the complacent declarations that the pandemic is over. Case counts have more than quadrupled since the low point in mid-March, after the huge spike triggered by the Omicron variant in December and January. The Memorial Day weekend (this year May 28-30) is the traditional start of summer festivals and other mass social activities. At this time last year, US coronavirus infection levels were only one-sixth those of today. And even with that much lower starting point, some 65,000 Americans died of COVID-19 during the summer of 2021. This summer promises to be far worse, as the starting point is far higher, new variants are emerging, and virtually all efforts to limit the spread of the potentially deadly infection have been shut down. Even the federal Centers for Disease Control and Prevention (CDC), one of the main promoters of public complacency, reports that 45 percent of the American population live in areas of medium to high levels of community spread. If the CDC had not changed its method of estimation earlier this year, that figure would be over 90 percent. The Washington Post, in one of the few serious media treatments of the COVID danger this summer, wrote soberly: “Immunity built up as a result of the record winter outbreak appears to provide little protection against the latest variants, new research shows. And public health authorities are bracing for Memorial Day gatherings to fuel another bump in cases, potentially seeding a summer surge.” The Post continued: “Even the vaccinated and boosted now grudgingly accept the virus as a formidable foe that’s here to stay as governments abandon measures to contain it.” The prediction that the virus is “here to stay” is a self-fulfilling prophecy. It is because “governments” abandoned “measures to contain it” that SARS-CoV-2 has been given the opportunity to spread, mutate, and infect hundreds of millions, and potentially billions, around the world. Tragically, the prediction that “Memorial Day gatherings” would generate another rise in infections is already about to be realized. Mass gatherings are no longer described as “superspreader” events, but the change in language does not alter the reality.
If you’re still waiting for herd immunity for COVID-19, it's time to move on: Experts - Early in the pandemic, scientists and public health experts leaned on their experience with other viruses to make predictions about COVID-19, hopeful that when enough people developed immunity, the virus would be stopped in its tracks. But in the years that followed, and even after the introduction of highly effective vaccines, vaccine scientists and public health experts interviewed by ABC News realized COVID-19 is unlikely to completely disappear. Although herd immunity through widespread vaccination can be a successful strategy for certain viruses, such as those that cause smallpox and polio, scientists no longer consider it an appropriate management strategy for the virus that causes COVID-19, these experts said. Herd immunity refers to a situation where a virus can't spread because it keeps encountering people who are resistant to it. As a result, a small number of people who lack resistance can still be protected by the "herd" of resistant people around them, because the virus is less likely to spread to them. But herd immunity depends on some hidden assumptions. First, that resistant people stay resistant. Second, that resistant (or vaccinated) people cannot transmit the virus. Scientists learned over the past two years that these assumptions do not hold for COVID-19. Vaccine scientists and public health experts said herd immunity isn't realistic for COVID-19 because of what we've learned about the virus itself. Chiefly, immunity wanes relatively quickly, and vaccinated people can still transmit the virus, especially when confronted with rapidly evolving new variants. Meanwhile, human behavior has been hard to predict, with a slower-than-hoped vaccine rollout, and constant changes in social distancing hampering scientists' ability to anticipate and prepare for the future. Rarely does a vaccine offer total and complete protection against infection. On the one hand, tetanus shots can stay durable for over 30 years. But for COVID-19, both infection- and vaccine-induced immunity wanes over time.
San Francisco Bay Area becomes California’s COVID-19 hotspot after serving as model for pandemic response - Recent reports from health officials in California have indicated that the state is experiencing a sixth wave of the COVID-19 pandemic with an exceptionally high positivity rate in the San Francisco Bay Area. The state’s health department revealed that, as of May 28, the top three counties include Contra Costa, with 12.3 percent, and Marin and Solano, both with 10.9 percent. Experts warn that gatherings associated with the Memorial Day weekend will exacerbate the situation, leading to further infections and hospitalizations. According to the San Francisco Chronicle, the San Francisco Bay Area reported a COVID-19 incidence of 54 per 100,000 residents on May 20, an 80 percent increase from the previous week’s 30, while hospitalizations nearly doubled over the last month to a total of 1,708. This significant upsurge has emerged as part of the pandemic’s sixth wave under conditions in which, as the Centers for Disease Control and Prevention (CDC) reported on May 20, the United States’ seven-day moving average daily case rate increased by 18.8 percent relative to the previous week, along with the 24.2 percent rise in hospitalizations, both largely driven by the highly infectious and immune-evading BA.2 and BA.2.12.1 Omicron subvariants. The official numbers put out by the CDC, however, are likely an underestimate of the infection rate, as they fail to account for asymptomatic infections or sick individuals who do not get tested. Dr. Bob Wachter, chair of medicine at University of California, San Francisco (UCSF), recently told the New York Times that as many as one in 20 people are asymptomatic but infectious with COVID-19. Recent data has pointed out that even infected individuals who feel fine can later suffer from long-term complications caused by COVID. Rather than stimulating calls for the immediate closure of schools and nonessential workplaces or even the reinstatement of mask mandates—necessary measures that effectively curtail transmission—state and local officials have largely responded to this latest surge with feckless recommendations for indoor masking, in line with the Biden administration’s adamant opposition to any collective strategy to elminate SARS-CoV-2 in favor of forcing individuals to learn to “live with the virus” that has already killed at least one million Americans.
COVID comeback: Much of Florida at high risk of straining hospitals; indoor masks urged - The latest wave of infections, driven by omicron subvariants, has surged so much that the U.S. Centers for Disease Control and Prevention recommends that people in most of central and southern Florida should mask up while indoors.The CDC's "COVID-19 Community Levels" system says the disease has a high risk of straining hospitals in much of Florida, including its east coast south of St. Johns County; Alachua County; counties along Interstate 4; and the parts of Interstate 75 stretching from Tampa Bay through Sarasota County.In these counties, infection tallies have soared past 200 cases for every 100,000 residents in the past week. Over that same time period, COVID hospitalizations have risen past 10 per 100,000 in the same period or at least 10% of hospital beds are occupied by patients who tested positive.Two weeks ago, only the South Florida counties of Palm Beach, Broward and Miami-Dade were categorized as high risk. The CDC recommends indoor masking only in high-risk counties.Florida health officials logged an average of 69,329 new cases weekly since May 20, the last time the state published its COVID-19 report. That's the biggest weekly caseload increase since Feb. 11.The state Health Department has documented almost 6.2 million infections since the start of the pandemic. Seven-day sums have grown since late March, fueled by subvariants of the omicron variant.About 16.2% of tests statewide came back positive in the past week, state health officials reported Friday. That's 2.8 percentage points higher than two weeks ago, on May 20. On that date, the positivity level had risen more than four points over two weeks prior. But many cases go unreported because people use at-home tests, which are not counted in official statistics. Plus, people who don't feel sick rarely get tested.
Colorado's COVID-19 hospitalizations jump as new cases keep rising Colorado’s COVID-19 hospitalizations jumped 38% this week, and a rise in positive tests showed last week’s slowdown in confirmed new cases was a just blip. The Colorado Department of Public Health and Environment reported 225 people with COVID-19 were hospitalized across the state Tuesday, up from 163 a week earlier. The average number of people admitted with the virus doubled in that time, to 108
Beijing man sends 5,000 people into quarantine after breaking Covid isolation - A Beijing man is under criminal investigation after he skipped out on mandated home isolation, prompting authorities to send his more than 5,000 neighbours into home or government quarantine. The actions by the man, who later tested positive, come as the Chinese capital and Shanghai begin to ease restrictions.On Monday officials said the man, in his early 40s, had been told to isolate at home after he entered a shopping plaza deemed a risk area on 23 May. They alleged that during his period of isolation he “went out many times, and moved in the community, risking the spread of the epidemic”, before he and his wife tested positive five days later. In response, authorities ordered 258 people who lived in his building to go to government quarantine centre, and the more than 5,000 others who lived in the residential community to stay at home.China has imposed harsh curbs on its population as it works to eliminate outbreaks of the highly transmissible Omicron variant of Covid-19. China’s zero-Covid policy has come under criticism for its significant negative impact on the economy and people, particularly in Shanghai, but the country’s leader, Xi Jinping has doubled down on demands that it continue, and succeed.The strict measures have sparked widespread frustration and exhaustion among residents, but with reported case numbers now dropping and restrictions beginning to ease, online people reacted angrily to the actions of the Beijing man.“It’s been two days since it’s been cleared, what is this man doing? Doesn’t he want to clear the epidemic in Beijing? Does he have to come out and harm people when the situation is almost stable?” said one commenter.“The community and the patient each share 50% responsibility, as the community did not install a door magnetic alarm … and there was a management responsibility which the community should shoulder,” said another. On Sunday authorities reported 122 new community cases across the country, outside quarantine settings and including 102 asymptomatic carriers. In Beijing just 12 locally transmitted cases were reported on Sunday, and libraries, museums, theatres and gyms were allowed to reopen in areas where there had been none for at least seven days.
Hong Kong’s Omicron crisis: ‘It took just 10 days for everyone to be infected’ - BBC (video) More than 9,000 people have died of Covid-19 in Hong Kong since the start of the year, giving it one of the highest fatality rates in the world.Over half of those to die in the latest wave were care home residents. BBC Chinese was given rare access to one such home.
Fighting For Survival in the Shadow of Covid-19 -A nurse dressed in a white hazmat suit stands at a rickety wooden table folding surgical instruments into sheets of blue paper and placing them into a cardboard box on the floor. Next to her sits a white microwave-looking machine, one that is supposed to help sanitize scalpels and forceps, but is on the fritz — the door keeps popping open.“We have to try and sanitize each tool individually ourselves,” she says. “Then we wrap it to save it for the next surgery.”It’s hardly the ideal way of cleaning and storing tools, but it is the only option for the health care staff here at Kings Medical Center in Bolgatanga, located in the Upper East Region of Ghana near the border of Burkina Faso. Ghana, often cited as having one of the strongest health care sectors in sub-Saharan Africa, has in recent years experienced chronic underfunding. Health care workers here say Covid-19 completely depleted their facilities’ coffers, preventing doctors and nurses from being able to provide for patients with chronic, and often deadly health conditions. Now, staff in Bolgatanga, a region with one of the strongest public health offices in Ghana, and health care workers across the country are increasingly concerned about their ability to treat patients and save lives in the coming years, especially as some of the most well-funded hospitals in the country are taking on fewer cases in order to preserve resources. If new Covid variants cause cases to spike or there is another large-scale infectious disease outbreak, Ghana’s entire health system could collapse.While the World Health Organization, the United Nations and various other global health organizations have tried to help low-income countries like Ghana build up their health care sectors over the last two decades, the investments have not met the need, health care workers here say. Without additional and sustained assistance from the international community and the Ghanaian government for equipment, medicines and additional staffing, doctors and nurses at the King’s Hospital worry they will never be able to catch up — putting millions of people at risk during the next pandemic. Without more help, they won’t have the resources they need to give tests, and administer shots and therapeutics — to save lives, they say. And if health care workers in Ghana are worried, so too are those working in other countries in the region where receiving any health care is seen as a luxury, such as Sierra Leone and Uganda.Since the start of Covid, little funding has been put aside by the international community specifically to expand the scope of the world’s investment in health system strengthening as it relates to pandemic preparedness. In 2021, the World Bank, in coordination with the U.S., created the Financial Intermediary Fund — a pot of money set up to help low-income countries build the capacity of their health systems so that they can more quickly contain outbreaks.
COVID-19 cases compound economic crisis in North Korea - North Korea is currently facing a surge of COVID-19 cases amid a worsening economic crisis. The situation is compounded by the impoverished country’s isolation from the rest of the world, a result of both US-led sanctions as well as Pyongyang’s own self-imposed border closing for most of the pandemic. The spate of missile tests in recent months, including the launching of three ballistic missiles on May 25, must be seen within this context. An employee of Songyo Knitwear Factory in Songyo district disinfects the work floor in Pyongyang, North Korea, Wednesday, May 18, 2022, after the country's leader Kim Jong Un said Tuesday his party would treat the country's coronavirus outbreak under the state emergency. (AP Photo/Jon Chol Jin) Pyongyang publicly admitted to COVID-19 cases within North Korea for the first time on May 12, though it is believed there have been other outbreaks. The government declared a “major national emergency,” which included lockdowns in every city, in an attempt to curb virus transmission. Daily infections reached as high as 392,920 on May 15, with these classified as “fever cases,” since North Korea reportedly lacks adequate testing capabilities. This is an indication that many more cases may be unidentified, suggesting an even larger health crisis. On June 1, Pyongyang reported 93,180 daily cases. Officially, more than 3.74 million have been identified as likely cases since the end of April. Only 70 deaths have so far been reported. China has pledged to assist North Korea with the outbreak, citing “a fine tradition of mutual assistance” between the two, according to Beijing’s Foreign Ministry. On May 16, North Korea flew three cargo planes to China and back, a South Korean government source told CNN, though it is unknown what they carried. Radio Free Asia (RFA), a mouthpiece for US imperialism, reported on May 26 that North Korea had only recently begun its mass inoculation program with vaccines from China, though they are supposedly only available for soldiers involved in construction projects in the capital.
Pentagon reports high levels of ‘forever chemicals’ in drinking water near bases --The Defense Department is reporting high levels of toxic perfluoroalkyl and polyfluoroalkyl substances (PFAS) in drinking water near several of its bases, according to new data released by the department.Drinking water testing near bases in Washington state, Pennsylvania, Florida and Michigan found levels of the chemicals well above a health threshold set by the Environmental Protection Agency (EPA). PFAS is the name for a group of thousands of chemicals, some of which have been linked to health issues such as kidney and testicular cancer and liver damage. The substances have been used in products such as firefighting foam, which is used by the military. For this reason, PFAS can be found near military bases and can contaminate nearby water. They are often referred to as “forever chemicals” because they build up in the human body and environment instead of breaking down over time. While it has long been known that PFAS have leached into groundwater near military installations, the new data provides an official glimpse into how it is impacting nearby drinking water. While the EPA has said that levels of two types of PFAS called PFOA and PFOS should not exceed 70 parts per trillion (ppt) — and states have called for even lower levels — findings at some of the bases far exceed that. One assessment from October found a sample of drinking water near the Naval Air Station at Washington State’s Whidbey Island contained 4,720 ppt of PFOS. In September, a sample containing 208 ppt of PFOA was detected. Meanwhile, a drinking water sample near Washington state’s Joint Base Lewis-McChord Yakima Training Center was found to have 800 ppt of PFOS in January. A separate sample from January at the base was found to have 130 ppt of PFOA. A sample from near Pennsylvania’s Willow Grove base was found to have 864 ppt of PFOS in October. Meanwhile an August sample from around Florida’s Naval Air Station Whiting Field was found to have 206 ppt of PFOA in August. A sample from December was found to have 130 ppt of PFOS. A November sample from Michigan’s Camp Grayling Army Airfield was found to have 119 ppt of PFOA. “These levels are extremely high,” Jared Hayes, policy analyst at the Environmental Working Group, said in a statement.
FDA agrees to reassess BPA risks --After more than a decade of pressure from environmental health advocates, the Food and Drug Administration is set to reconsider the health effects of a common and controversial industrial chemical often used in plastics. At issue is BPA, or bisphenol A, a widely used compound that often serves as an additive in the production of polycarbonate, a hard type of plastic commonly used in consumer products, like reusable water bottles. The chemical has proved highly useful in making items sturdier, leading to its widespread use. But scientists and public health groups have worried for years that BPA, an endocrine disruptor that affects human hormones, poses risks for fetal development and to people, including infants and children. Other concerns include increased blood pressure, Type 2 diabetes and cardiovascular disease. Despite those risks, U.S. regulators have repeatedly punted on a BPA crackdown even as their European counterparts have charged ahead. Advocates hope that is about to change. “There is a sense of urgency on our part, and FDA should feel it, too, to make sure they reach a conclusion relatively quickly, because everyone is being exposed to too much of this BPA,” said Maricel Maffini, an independent consultant and scientist who focuses on chemicals and public health issues. FDA’s reassessment stems from a petition submitted by the Environmental Defense Fund and multiple partners, including Breast Cancer Prevention Partners, Clean Water Action/Clean Water Fund, Consumer Reports, the Endocrine Society, the Environmental Working Group and Healthy Babies Bright Futures. They were joined by Maffini and Linda Birnbaum, who formerly led the National Institute of Environmental Health Sciences. The groups filed an initial petition in January calling on regulators to limit BPA in food packaging. They cited recent draft findings from the European Food Safety Authority that showed effects linked to BPA could occur at levels 100,000 times lower than previously acknowledged (Greenwire, Jan. 27). But FDA said it would not accept the petition because the EFSA findings underpinning it had only been released in draft form, and the European agency was still accepting public comments on it. Three months later, after the European comment period closed, the environmental health groups refiled their petition with FDA. The new submission included supplemental information pulled from comments filed with European regulators. That included, among other research, a recent epidemiological study linking BPA exposure in utero to increased asthma in young girls as they grew. The first-of-its-kind human study closely mirrored previous results from studies involving mice. That additional information, the groups said, “reinforces our calls for an expedited review.” In interviews, Maffini and Birnbaum expressed exasperation that FDA has not approached BPA with the same sense of urgency as European regulators. “The Europeans have moved ahead, dramatically lowering their regulator limit, and what has FDA done? Almost nothing,” said Birnbaum. “So this is an effort to get some action.” The petition specifically asks FDA to revoke all approval of BPA in metal can coatings and to strictly limit the allowed migration of BPA from polycarbonate plastic. It also asks FDA to remove the use of BPA in two adhesives approved for use in food containers.
Viruses on hiatus during Covid are back — and behaving in unusual ways - For nearly two years, as the Covid pandemic disrupted life around the globe, other infectious diseases were in retreat. Now, as the world rapidly dismantles the measures put in place to slow spread of Covid, the viral and bacterial nuisances that were on hiatus are returning — and behaving in unexpected ways. Consider what we’ve been seeing of late. The past two winters were among the mildest influenza seasons on record, but flu hospitalizations have picked up in the last few weeks — in May! Adenovirus type 41, previously thought to cause fairly innocuous bouts of gastrointestinal illness, may be triggering severe hepatitis in healthy young children. Respiratory syncytial virus, or RSV, a bug that normally causes disease in the winter, touched off large outbreaks of illness in kids last summer and in the early fall in the United States and Europe. And now monkeypox, a virus generally only found in West and Central Africa, is causing an unprecedented outbreak in more than a dozen countries in Europe, North America, the Middle East, and Australia, with the United Kingdom alone reporting more than 70 cases as of Tuesday. These viruses are not different than they were before, but we are. For one thing, because of Covid restrictions, we have far less recently acquired immunity; as a group, more of us are vulnerable right now. And that increase in susceptibility, experts suggest, means we may experience some … wonkiness as we work toward a new post-pandemic equilibrium with the bugs that infect us. Larger waves of illness could hit, which in some cases may bring to light problems we didn’t know these bugs triggered. Diseases could circulate at times or in places when they normally would not. “I think we can expect some presentations to be out of the ordinary,” said Petter Brodin, a professor of pediatric immunology at Imperial College London. “Not necessarily really severe. I mean it’s not a doomsday projection. But I do think slightly out of the normal.”
Monkeypox fears spur EPA disinfectant guidance - Regulators are responding swiftly amid concerns about the spread of another virus in a country still battling a deadly pandemic. In an announcement yesterday, EPA said it has triggered its emerging viral pathogen (EVP) guidance as recent cases of monkeypox tick upward in the United States. That limited procedure will allow for manufacturers to advertise their products as effective against the virus to health care facilities and officials, among other notable decisionmakers. Like in the fight against Covid-19, the agency hopes to jump-start efforts to contain the virus if things should spiral. “When rare or novel viruses cause outbreaks of disease, there may be few if any disinfectants that have been tested and registered for use against that specific pathogen,” the agency said in a statement. In order to prepare for those instances, EPA has mechanisms in place to speed up a process that can otherwise be lengthy. When triggered for a specific virus, the EVP guidance allows manufacturers with pre-qualified products to make the claim that those disinfectants are potentially effective against the infectious agent. The policy does not allow for registrants to add a label to a product themselves. But it does enable them to include a statement attesting to EPA’s sign-off in a variety of instances as companies provide technical literature to facilities like hospitals, along with avenues like social media. “While there are no disinfectants registered for use against monkeypox, all products with EVP claims have been tested against viruses that are more difficult to kill than monkeypox,” EPA said. EPA’s moves reflect growing national fears that another disease outbreak may be on the rise. Typically confined to West and Central Africa, monkeypox is a rare virus that has begun to spread rapidly in recent weeks, alarming public health officials. Officials in Europe, North America, Israel and Australia have reported hundreds of monkeypox cases, with the virus now in seven U.S. states as of yesterday, including California, Florida, Massachusetts, New York, Utah, Virginia and Washington. Unlike Covid-19, monkeypox is not a new virus, with the first human infection having occurred in 1970. Belonging to the same family as smallpox, the virus jumps from animals like rodents to people, typically yielding limited outbreaks. It is known to spread through close personal contact, often involving skin-to-skin touch but also through bodily fluids, respiratory droplets and contaminated materials, according to the World Health Organization. Signs of the disease can include fever and chills, along with aches and fatigue early on, with rashes developing on the face and genitals in more advanced cases as lesions break out. Symptoms typically arrive within a week or two after exposure, and a person can remain contagious for several additional weeks.
WHO labels monkeypox a ‘moderate’ public health risk -The World Health Organization (WHO) has labeled monkeypox a “moderate” public health risk, after more than 250 confirmed cases were reported across the globe.In a statement on Sunday, the health agency said monkeypox is a “moderate” public health risk because it has been reported in varying geographical locations for the first time. The illness had typically been found in central and western African regions. “Currently, the overall public health risk at global level is assessed as moderate considering this is the first time that monkeypox cases and clusters are reported concurrently in widely disparate WHO geographical areas, and without known epidemiological links to non-endemic countries in West or Central Africa,” the health agency wrote.A total of 257 laboratory confirmed cases of monkeypox have been reported throughout the world since May 26, according to the WHO. Roughly 120 suspected cases were reported to the health agency. There have been zero reported deaths. Ten cases have been confirmed in the U.S., with Centers for Disease Control and Prevention Director Rochelle Walensky saying last week that some of the infections were connected to individuals who traveled to areas that are experiencing monkeypox outbreaks. The WHO on Sunday said it expects more cases of the disease to pop up “as surveillance expands in non-endemic countries, as well as in countries known to be endemic who have not recently been reporting cases.” “The sudden appearance and wide geographic scope of many sporadic cases indicates that widespread human-to-human transmission is already underway, and the virus may have been circulating unrecognized for several weeks or longer,” the health agency added. Monkeypox is spread through prolonged skin-to-skin contact. Symptoms include lesions, which spread the disease, fever, muscle aches, swollen lymph nodes and fatigue.
Chicago, Philadelphia, LA County record first monkeypox cases -Chicago, Philadelphia and Los Angeles County all announced their first monkeypox cases Thursday amid growing concerns about the outbreak in the United States.All three locations’ public health departments are currently awaiting final confirmation from the Centers for Disease Control and Prevention (CDC) for the presumed cases.“The patient is an adult resident who recently traveled and had a known close contact to a case. Although the patient is symptomatic, they are doing well and not hospitalized. They are isolated from others,” the Los Angeles County announcement said, assuring that the general public’s risk of monkeypox remains low.“The Chicago Department of Public Health and Illinois Department of Public Health, announced today a single presumptive monkeypox case in an adult male Chicago resident with recent travel history to Europe,” wrote the Chicago agency in its announcement.“The threat to Philadelphians from monkeypox is extremely low,” said Health Department Acute Communicable Disease Program Manager Dana Perella, with the health department adding that any details about the patient’s case will remain anonymous to protect the privacy of the patient.“Monkeypox is much less contagious than COVID-19 and is containable particularly when prompt care is sought for symptoms,” Perella added. “Vaccine to prevent or lessen the severity of illness is available through the CDC for high-risk contacts of persons infected with monkeypox, as is antiviral treatment for patients with monkeypox. I believe that residents and visitors should feel safe to do all the fun things Philadelphia has to offer, with the proper precautions.”
Where Has Monkeypox Spread To? -The monkeypox virus has sprung up in countries around the world, including in places where the virus does not usually exist. While there are several disease outbreaks of similar size at the moment, for example hemorrhagic fever in Iraq or the bubonic plague in the Democratic Republic of the Congo, monkeypox has caught the media and the public’s attention, as it seems to be spreading in European and North American countries.According to BNO News, the UK had the highest numbers of recorded cases in a non-endemic country, with 190 people known to have the disease, followed by 142 in Spain and 119 people in Portugal. Table Source: BNO News. The US reportedly has 18 confirmed cases in California, Florida, Colorado, New York, and Utah...Unlike Covid-19, which was a new disease in humans, monkeypox has been known to exist for the past 50 years and has made its way out of endemic countries before, albeit in singular cases which subsequently disappeared.Experts say the situation is unusual now because of how many countries are seeing an outbreak.Over past years, we have seen an increase in the number of cases in countries where monkeypox is endemic in wildlife.The Democratic Republic of Congo has seen the highest number of confirmed monkeypox infections, according to the WHO, with 1,284 confirmed cases between 1 January and 8 May 2022, including 58 deaths. The next highest figures were seen in Nigeria between 1 January and 30 April 2022, with 46 cases and no deaths, and in Cameroon with 25 reported cases, including nine deaths.As Statista's Anna Fleck notes, one of the reasons that monkeypox is believed to be spreading now is because of the population’s diminishing protection from smallpox vaccines.Smallpox, which is in the same family as monkeypox, was eradicated in the 1980s through mass vaccination. The lack of immunity in younger generations which have not received the vaccine, and are now growing up, means that it’s increasingly common for people to get monkeypox. However, wider causes are also to blame, according to The Guardian, as deforestation and a rapidly changing climate render new land masses liveable for potentially infectious insects, force animals out of their habitats, and increase the likelihood of animals interacting with people.
More cases of monkeypox expected as CDC warns of community spread - The Centers for Disease Control and Prevention warned on Friday that monkeypox may be spreading person-to-person in the United States, after the agency confirmed three cases in individuals with no recent links to international travel. The public health agency has confirmed 20 monkeypox cases in 11 states. Most of the patients have traveled internationally and were likely exposed overseas, the CDC said, but three did not, and either may have had contact with a known case or didn’t know how they were infected. “I want to emphasize that this could be happening in other parts of the United States,” said Jennifer McQuiston, the incident manager for CDC’s monkeypox response, during a briefing on Friday. “There could be community-level transmission that is happening, and that’s why we want to really increase our surveillance efforts.” Since May, there have been more than 700 global cases of monkeypox identified in countries outside West and Central Africa where the virus is endemic. Though no deaths have been reported so far, the highly unusual outbreak has health officials around the world scrambling to understand how the virus is spreading and to ensure there are enough vaccines and treatments on hand should it pick up speed. “We should expect to see more cases and more tests in the coming days,” Raj Panjabi, senior director for Global Health Security and Biodefense in the White House, said during the press briefing. The World Health Organization said last week that the outbreak presented a “moderate” risk to global public health. On Thursday, Maria Van Kerkhove, who leads emerging diseases and zoonoses teams at the WHO, said the organization suspects that person-to-person transmission has been happening for weeks in Europe. The CDC maintains the risk to Americans is “low,” but is holding regular briefings about the status of the outbreak. Most cases in the U.S. have been among men who identify as gay, bisexual or men who have sex with men, but health officials caution that the disease can spread through close contact between any individuals. The federal government has distributed 1,200 smallpox and monkeypox vaccines and 100 treatment courses to eight states to inoculate close contacts of monkeypox patients. Over 340 contacts of confirmed cases have been identified, with more than 20 considered to be at “high” risk and more than 120 considered to be at “intermediate” risk.
Here's what monkeypox looks like in 2022 — and why doctors may be missing cases -- For the first time in history, the world is facing an international outbreak of monkeypox. Doctors havedetected nearly 800 cases across the globe, from Argentina to the United Arab Emirates. The U.K. and Portugal have detected the most cases, with about 200 and 100 cases in each country, respectively. The U.S. has recorded 21 cases and Canada has 58.Such a broad geographic spread suggests "widespread human-to-human transmission is currently underway," said Dr. Maria van Kerkhove, with the World Health Organization, on Thursday. This transmission has "likely been ongoing for several weeks, if not months," she noted.Two studies, published Thursday, demonstrate the virus is spreading, undetected, in some communities of Portugal and the U.K. — because, by and large, the cases are not linked to each other or linked to a common place or activity. So health officials don't know where people are catching it, and many cases aren't being diagnosed, the scientists conclude.Here in the U.S., officials don't know where one of the cases caught monkeypox. "There could be community level transmission that is happening. And that's why we want to really increase our surveillance efforts," Jennifer McQuiston, who's deputy director of the Division of High Consequence Pathogens and Pathology at the Centers for Disease Control and Prevention, said Friday. "I want to emphasize that this could be happening in other parts of the United States."This gap in detection may be because the symptoms of monkeypox in this outbreak can be much more subtle than in past cases.As a result, health officials are asking health-care workers – and individuals who may have been exposed – to be on the lookout for signs of monkeypox, especially signs of a rash.But what does that rash often look like? Turns out, it's not what medical textbooks show, says infectious disease doctor Donald Vinh at McGill University. Those images depict people with their trunk or hands covered with pus-filled blisters. What's happening in this outbreak can be much more subtle, Vinh and other doctors involved with the outbreak say.In fact, some patients have only one or two small lesions that can easily be confused with lesions caused by several sexually transmitted diseases, such as herpes and syphilis."I think that's actually supercritical," Vinh says, "Because you can see how these patients can be missed. But they are still contagious and may propagate the disease."
Genetic data indicate at least two monkeypox outbreaks underway -The Centers for Disease Control and Prevention said Friday that new genetic sequencing data indicate there are at least two distinct monkeypox outbreaks underway outside Africa — a surprise finding that one official said suggests international spread is wider, and has been occurring for longer than has been previously realized.Three of 10 viruses the CDC has sequenced from recent U.S. monkeypox cases — two from 2021 and eight from 2022 — are different from the viruses that have been sequenced by several countries involved in the large outbreak that is spreading in and from Europe. That outbreak is currently being driven by infections in gay, bisexual, and other men who have sex with men.While the three divergent viruses are clearly linked to one another and have a common ancestor, they also differ more from one another than do the other viruses, Inger Damon, director of CDC’s division of high-consequence pathogens and pathology, told STAT in an interview.The people infected in these three cases contracted the virus over a surprising geographic range of places — one in Nigeria, one elsewhere in West Africa, and the third in either the Middle East or East Africa. This apparent wide dissemination of a related virus — one that differs from the European outbreak strain — suggests monkeypox outbreaks outside of the countries where the virus is considered endemic may have been smoldering for longer than has been appreciated, Damon acknowledged.
What to make of the many mutations on the monkeypox genome – STAT - When scientists investigate the spread of an infectious disease, one area they look at is the genetic sequences of the pathogen. But there’s a snag when it comes to the monkeypox virus, which is now causing an unprecedented outbreak of several hundred infections in some 30 countries where it’s not typically seen. DNA viruses, particularly those with relatively big genomes like poxviruses (the family that includes monkeypox), generally accrue mutations much more slowly than, say, an RNA virus like SARS-CoV-2, which causes Covid-19. That means that examining the sequences might be less fruitful in terms of tracking how the virus is spreading from person to person. There are fewer changes to the virus’ genome that might shine a light on transmission chains. But as researchers around the world share sequences from the current outbreak, the genomes have revealed something odd: There are way more mutations than expected. So many mutations in such a short amount of time might seem worrisome, if, perhaps, it meant the virus was evolving to spread more efficiently among people. But scientists have a different hypothesis (still a hypothesis, they stress, one that needs to be further studied) about what these mutations say about these infections — and, in turn, what that can illuminate about this outbreak. Most notably, there are a whole lot of mutations that appear across the new sequences. The genomes from the current outbreak share 40-some mutations with each other that distinguish them from their closest relatives, which were from around 2018. (The exact number of mutations varies depending on how certain changes are counted.) Based on normal evolutionary timelines, scientists would expect a virus like monkeypox to pick up that many mutations over perhaps 50 years, not four, Neher said. A lot of mutations could be bad — perhaps the virus has changed so much because it’s grown more fit and gotten better at transmitting among people. Monkeypox, unlike something like SARS-2, has historically not been considered to be a particularly efficient person-to-person spreader. But there could be another explanation. Here’s what might be happening: Some hosts (in this case, that’s people) have, as part of their immune systems, enzymes that are designed to induce mutations in whatever viruses they encounter. The idea behind such a sabotage scheme is that if you trigger enough mutations, certainly some of them will be deleterious. The virus won’t be able to replicate, and what will be left “is just a dead piece of DNA,” Neher said. It’d be like rearranging the letters on your enemy’s typewriter so they can’t get a clear message out. (There are different types of enzymes that play this role, but with the monkeypox outbreak, scientists have narrowed in on a family known as APOBEC3 as a prime candidate.) The strategy is not always foolproof, and some viruses might not pick up enough harmful mutations to be stopped. These survivors will, however, carry evidence of the genetic onslaught they encountered in the form of certain mutations, perhaps those that weren’t all that harmful or were neutral. The mutations might appear repeatedly, just like the ones in these monkeypox sequences. Scientists have likened these mutations to scars leftover from past fights with the host. The enzyme vs. virus battles could also explain why the virus picked up so many mutations so fast. The mutations are not from the typical copying mistakes the virus made as it replicated. They’re battle wounds from when the host tried to fight the virus off.
Monkeypox isn’t the disease we should be worried about - In the past three weeks there have been nearly 100 cases and 18 human deaths from a rare tick-borne disease in Iraq; a fourth case of the Ebola virus and more than 100 cases of bubonic plague have been found in the Democratic Republic of Congo; and just two years after Africa was declared free of wild polio, new cases have turned up in Malawi and Mozambique. A dangerous strain of typhus is circulating in Nepal, India and China. There are alarming outbreaks on several continents of mosquito diseases such as malaria, dengue and West Nile virus.Set against this global context, the so-far very limited monkeypox outbreaks that have started to appear in the last month – including 71 cases detected in the UK – are only remarkable because they are being reported in rich countries. It has been a bad month for infectious disease, according to the ProMED website, the world’s largest open surveillance system for reporting outbreaks. Covid and HIV are both still globally rampant, and now animal pandemics are on the march, too. African swine fever continues to ravage the world’s pigs and several strains of lethal avian – or bird flu – are spreading, forcing the cull of hundreds of millions of poultry. Vets and ecologists have warned this month, too, of mysterious fungal diseases being found in fish and marine life in Australia and in Middle Eastern countries, well as lethal dog and other pet illnesses. We live uneasily with many thousands of potentially fatal viruses circulating in other species, but what is remarkable is that most of those that affect humans today were unknown just 70 years ago. Not only are new pathogens jumping from animals to humans more often, but an increasing number are linked to the changes in the global and local environments.It is no coincidence that since 1940, 335 new and potentially fatal diseases have emerged globally, over a period when the human population has trebled, the climate has changed and more meat is being eaten. Disease ecologists say that nothing increases the risk of a crossover of a pathogen from one species to another like the uncontrolled expansion of farming, and the exploitation by humans of wild species.It is now payback time for nature. The more human numbers have grown and we have encroached on wild spaces or imposed unnatural conditions on other species, the more we have created the ideal environments for viruses and pathogens to spill across species, mutate and spread. HIV, Ebola, Lassa fever and monkey pox in Africa; Sars and Covid-19 in China; Chagas, Machupo and Hantavirus in Latin America; Hendra in Australia; Mers in Saudi Arabia – all have all emerged in the past 75 years just as we have accelerated deforestation, moved to cities, come closer to animals and created a global economy.Most worrying for humans is not monkeypox, plague or even Ebola, which sound dangerous and exotic but are actually more or less controllable now with vaccines. Instead, the threat of a new bird flu, just as likely to come out of a farm in New York or England as one in China or Bolivia, now stalks humanity. Chicken is now the rich world’s most popular meat and tens of millions of near-genetically identical birds prone to catastrophic disease are being mass-reared at any one time, often in unhygienic conditions, and are able to mix with wild birds. It is only a matter of decades before a new highly pathogenic avian influenza strain evolves to be easily transmissible between humans.
Hormel CEO Warns "Large Supply Gaps" For Jennie-O Turkey Brand - A top US food processing company warned of an upcoming shortage of its turkey products at supermarkets following one of the worst bird flu outbreaks. "Our Jennie-O Turkey Store team is facing an uncertain period ahead," Hormel Foods Corporation CEO Jim Snee told investors in an earnings call. "Similar to what we experienced in 2015, (avian influenza) is expected to have a meaningful impact on poultry supplies over the coming months."Snee said the "large supply gaps in the Jennie-O Turkey Store will begin in the third quarter." He said highly pathogenic avian influenza was confirmed in "our supply chain" in March. Since the USDA first detected bird flu in the US in mid-February, more than 38 million birds in 35 states have died. Out of that figure, 5 million turkeys in the US have been killed, with most deaths in Minnesota and South Dakota. Bird flu has decreased the total number of egg-laying hens, sending egg prices at supermarkets sky-high. Prices of chicken meat have also risen. Now, according to the CEO of Hormel, the Jennie-O Turkey Store brand could face product shortages by mid-summer. Fixing supply chains is out of the Federal Reserve's purview and will have trouble taming food inflation as shortages of all sorts of food persist. This could only suggest supply shocks will continue to hit people's living standards even as the Fed tightens monetary policy.
Two birds infected with H5N8 bird flu found in Israel - -Two wild birds were found to be infected with the H5N8 strain of avian influenza this month in Israel, according to an Agriculture Ministry report to the World Organization for Animal Health (OIE).According to the report, a Eurasian Sparrowhawk was found near Petah Tikva and tested positive in mid-April. In early May, a White Stork which was found near Ruhama in southern Israel tested positive for the bird flu.The Agriculture Ministry has not issued a statement about the new cases. No new cases have been reported since, although the report described the event as "ongoing." Before these two cases, the last time the H5N8 strain was reported in Israel was April 2021.The new cases come just months after a large outbreak of H5N1 avian influenza swept through Israel during the winter with the last outbreak reported in February in northern Israel.In mid-January, the Agriculture Ministry announced that the bird flu outbreak was under control.The new infections in Israel come as North America and Europe continue to suffer from one of the worst outbreaks of H5N1 bird flu ever recorded.As of May 27, nearly 38 million birds from 172 backyard flocks and 183 commercial flocks in 35 states had been affected by the outbreak in the US, according to the Animal and Plant Health Inspection Service of the US Department of Agriculture. Infections in wild birds have been detected in additional states.A series of outbreaks have been reported in Canada as well. In late April, a case of H7N3 bird flu was reported in Mexico, according to a periodic update by the UN's Food and Agriculture Organization.
Congress passes legislation to address toxic algal blooms in South Florida, bill to target manatee restoration - Congress passed legislation in May, aiming to focus federal responses to South Florida’s harmful algae blooms, but local officials worry the bill may not be a timely enough effort to combat the decreasing manatee population.The South Florida Clean Coastal Waters Act of 2021 would create a federal task force responsible for reducing and controlling harmful blue-green algal blooms in specific areas of South Florida and addressing hypoxia, or low oxygen conditions, in surrounding bodies of water.The group would have 540 days to come up with a comprehensive plan before submitting their first assessment to Congress and President Joseph Biden. Then, a final examination would be conducted over the course of three years after the federal task force has assessed federal and state agencies, academia as well as the private industry.The U.S. House of Representatives passed the act on May 11, and the bill specifically identifies the regional waters along Biscayne Bay, the Caloosahatchee Estuary, Florida Bay, Indian River Lagoon and the St. Lucie River Estuary.There is a combination of factors that causes blue-green algae blooms, such as excess nutrients that come from runoff within urban areas or discharge from wastewater treatment facilities, according to the Florida Department of Health.Blue-green algae can cause rashes, vomiting or nausea among people, and these specific blooms can also block sunlight, killing seagrasses that manatees eat to survive. Blue-green algae has been present along Martin County’s waterways since May 2016.Patrick Rose, executive director for Save the Manatee Club, said although he feels the federal legislation “will do good” to help address certain issues, state and federal leaders already know much about what needs to be done.“It’s important to do those kinds of studies, make the recommendations and evaluations,” Rose said. “But, quite honestly, we are at a point where we know a tremendous amount about what needs to be done.”
How the magic went away from my family’s summer escape - There’s a little pond on Cape Cod that’s been a treasured place for three generations of my family. The five acres of Moll’s Pond were larger than life for me, and, later, for my own kids. My mom and dad both had their ashes scattered there. Since 2012, the little pond has periodically closed due to cyanobacteria blooms. Also known as blue-green algae, cyanobacteria can cause digestive or respiratory problems in people or pets. At its worst it can also kill. Here‘s the cherry on the toxic sundae: Warmer summers make the algae outbreaks more certain. Unfortunately, it's not just Cape Cod. Until 2011, blue-green algae had never been a visitor to Oklahoma. But a combination of farm runoff and unusually hot summer weather brought the green slime to the Grand Lake o’ the Ozarks in the northeast corner of the state. Senator Jim Inhofe went for a morning swim near his lake house. By nightfall, the Senate’s Alpha-dog climate denier was “deathly ill” with an upper respiratory illness. He canceled a keynote speaker appearance at the Heartland Institute’s annual Deny-a-Palooza conference (my name for it, not theirs). Inhofe quipped that the environment was exacting revenge for his Senate career. (On Friday, Florida's Department of Health (DOH) issued a blue-green algae alert for Indian River County.) The warnings had been out there for years, from scientists, activists, and reporters. Lake Erie’s return from biological death wasn’t a done deal. Blue-green algae blooms were a known threat to Toledo’s water system for years before the summer of 2014, when the algae hit the fan and half a million Toledoans lost their water supply for three days. The culprits? Agricultural runoff at the end of a particularly hot summer. Saltwater has similar threats. A regular feature along the Louisiana Gulf Coast is the late summer Dead Zone. It’s a byproduct of the torrent of farm chemicals and fertilizers that make their way from mid-America’s fields to a growing area of offshore lifelessness. All of which makes my little five acre pond seem like a petty complaint. But a beautiful, unforgettable place it is. Or was.
Groups Aim to Protect Old Forest in Northern Appalachian Acadian Ecoregion -Conservationists in the Northern Appalachian-Acadian region are changing how they think about forest protection and management, by bringing together mainstream ecological knowledge with Indigenous ecology and culture. Five regional partners including the Wildlands Network and Two Countries One Forest held a conference outlining a shared vision, called "Future Forests Reimagined," and now they are working to apply it. Megan de Graaf, forest program director for Forests International, stressed the importance of working across state and national boundaries. The forest region covers the territory of the Wabanaki Confederacy, stretching across Northern New England and into the maritime provinces of Canada."The forest type here is unique, and also fairly imperiled," de Graaf pointed out. "There are the twin crises of biodiversity loss and climate change that go hand in hand. And one of the biggest but less-seen crises is that of overlooking Indigenous contributions and Indigenous knowledge." The initiative has three prongs: to identify and protect areas of old, wild forests; establish new areas that can grow into future old forests; and spread the use of "ecological silviculture," storing carbon, preserving biodiversity and landscape connectivity while also yielding forest products communities rely on.
The Wetlands Are Drowning - SCHOENOPLECTUS AMERICANUS, or the chairmaker’s bulrush, is a common wetland plant in the Americas, and it has an existential problem. It has chosen to live in a place where it is always at risk of being drowned. Like all plants, the bulrush requires oxygen to produce energy. One solution is obvious: Send shoots skyward like straws to suck down oxygen to the roots. But the bulrush also employs a more unusual strategy: raising the ground on which it grows. The plant builds its roots near the surface, where they trap the sediment and organic muck that flows into the marsh. Eventually, the whole ecosystem stands a little taller, and the bulrush isn’t smothered.“We often call them ecosystem engineers,” says Pat Megonigal, an ecologist who directs the Smithsonian’s Global Change Research Wetland and studies the plants. “If the water gets deep, they have the ability to raise themselves up. And, in fact, right here at this marsh they’ve been doing it for 4,000 years.”For a long while, wetland researchers have wondered whether that skill could help the plants build their way out of climate change. As sea levels rise, bringing fiercer and more frequent storm surges, so does the risk that the plants will drown. But increasing levels of carbon dioxide in the atmosphere are also a boon to the plants’ basement construction project, providing more fuel for photosynthesis and helping them build bigger roots. For 30 years, Megonigal and his predecessors have been watching this marathon unfold in a single marsh in Maryland on the Chesapeake Bay. It’s a duel between sea rise and plant growth, two forces with a common origin—humans burning fossil fuels, adding more CO2 to the air—and at this point, the result is becoming clear: The wetlands are losing.Those findings, which were published last week in Science Advances, are upending some of the more optimistic assumptions about how coastal areas might adapt to rising seas. Wetlands are important ecosystems in their own right, and they mediate the flow of nutrients between land and sea. They also punch above their weight in terms of carbon storage, packing it away in dense peaty soils at concentrations that exceed those found in tropical forests. But the fate of those areas is uncertain in the face of climate change. By the end of the century, estimates suggest that climate-induced changes may cause 20 to 50 percent of those ecosystems to be lost. The ability of wetlands to raise themselves above rising waters is a key factor that will determine whether they can persist where they are or will need to migrate inland.
The Climate Crisis Is Messing With Earth’s Water Cycle -Last month, an ongoing drought forced officials in Southern California tolimit around six million people to just one day of outdoor water use a week this summer for the first time ever. On the other side of the world, the heaviest rainfall in 60 years put South Africa through its deadliest storm on record. These are the kinds of contrasting extremes we can expect to see more of in the future, according to a study published in Nature earlier this year.“The biggest kind of headline from the study is that the water cycle, which is the rainfall and evaporation that happens over the globe, is getting stronger twice as fast as we previously thought,” study lead author lead Dr. Taimoor Sohail, a mathematician and postdoctoral research associate at University of New South Wales (UNSW) Science, tells Treehugger in an interview. “And what it means when the water cycle is getting stronger or intensifying, is basically that wet parts of the world are getting wetter twice as fast as we previously anticipated, and dry parts are getting drier twice as quickly.” Several scientific studies, including the Intergovernmental Panel on Climate Change’s (IPCC) Sixth Assessment Working Group I report on the Physical Science Basis, have found the climate crisis is speeding up the water cycle. This happens in part because hotter surface temperatures in the tropics lead to more evaporation.“Then you'll have cloud feedbacks in the overall transport of heat, and overall atmospheric circulation will intensify, which will transport that water towards the poles,” Sohail says. However, it has been hard for scientists to determine exactly how much the water cycle is changing because around 80% of global rainfall and evaporation occur over the ocean, a UNSW press release explains. One way to get around this is to look at the salt content at different locations throughout the ocean."In warmer regions, evaporation removes freshwater from the ocean leaving the salt behind, making the ocean saltier,” study co-author Jan Zika, an associate professor in the UNSW School of Mathematics and Statistics, explains in the press release. “The water cycle takes that freshwater to colder regions where it falls as rain, diluting the ocean and making it less salty.”The researchers looked at three datasets to determine salinity in different parts of the ocean from 1970 to 2014. “That has been done before,” Sohail tells Treehugger. “But we came up with a few methodological tricks that basically allow you to track more cleanly how the salinity is changing.” These new methods enabled the researchers to better match the changes in ocean salinity to rainfall and evaporation patterns in the atmosphere. Using them, they discovered that 46,000 to 77,000 more cubic kilometers (approximately 11,036 to 18,473 cubic miles) of freshwater moved from the tropics towards the poles during the study period than previously believed. That’s two to four times more water moving poleward than climate models anticipated. The Nature study isn’t the only piece of recent research to use salinity to determine that the water cycle is speeding up. Another study published in Scientific Reports in April looked at satellite measurements of ocean salinity and found that the salty parts of the ocean were getting saltier and the fresher parts were getting fresher, also revealing an accelerated water cycle.
World Economic Forum Urges People To Eat Seaweed, Algae, & Cacti To Save The Planet - World Economic Forum technocrats are urging people to ditch meat and other foods deemed to be harmful to the planet and instead consume “climate beneficial foods” such as seaweed, algae and cacti. The WEF made the call as it wrapped up the 2022 meeting of global elitists in Davos, Switzerland.A video summary was posted to Twitter in which the WEF promoted alternatives to a food system it claimed is responsible for two thirds of global carbon dioxide emissions.A starter list published by the organization triumphs algae as being “an ideal replacement for meat” because it has a “carbon-negative profile” and is high in “essential fatty acids and high vitamin and antioxidants content.”The guide also highlights cacti as containing “high amounts of vitamins C and E, carotenoids, fibre and amino acids,” noting that it is already commonly eaten in Mexico.“This food crisis is real, and we must find solutions,” World Trade Organization Director-General Ngozi Okonjo-Iweala said.Back in December 2020, the World Economic Forum published two articles on its website which explored how people could be conditioned to get used to the idea of eating weeds, bugs and drinking sewage water in order to reduce CO2 emissions.Earlier this year, Vanderbilt University Professor Amanda Little argued that everyone in the world needs to start dining on insects and that the EU’s approval of them conferred a form of “dignity” to their consumption.In February, billionaire-owned news outlet Bloomberg said Americans should cope with soaring inflation by eating lentils instead of meat.A group of environmental economists in Germany also demanded that huge taxes be imposed on meat products to fight climate change, with calls for beef to be 56 per cent more expensive. “There is no record of exactly what was served to the 2,500 invited delegates dining at the elite gathering in Davos and whether or not the WEF’s own dietary instructions were followed by participants,” writes Simon Kent.
Yellowstone bison will be studied for federal protection - Yellowstone-area bison — an animal not to be trifled with — will now be studied for possible protection under the Endangered Species Act. Following an initial review that happened to coincide with a dicey encounter between an aggrieved bison and an overly curious park visitor, the Fish and Wildlife Service today announced that several petitions presented “substantial” information indicating that ESA protections “may be warranted.” “We find that the petitioners present credible and substantial information that range curtailment may be a potential threat to the Yellowstone bison,” the agency stated. FWS added that there’s credible information that management actions taken under an interagency bison management plan “may curtail the species’ available winter habitat through culling, hunting, hazing, and quarantine.” This so-called 90-day finding will now lead to a 12-month assessment of whether to list under the ESA a distinct population segment of the plains bison in and around Yellowstone National Park. The upcoming assessment has been years in the making, and it’s starting with a reminder that respect is owed the surprisingly fleet-footed animal that can tip the scales at upward of 2,000 pounds. On Monday morning, Yellowstone National Park officials reported that a 25-year-old woman from Grove City, Ohio, came within 10 feet of a bison near a boardwalk at Black Sand Basin, just north of Old Faithful. “The female, on the boardwalk, approached it,” the park stated. “Consequently, the bison gored the woman and tossed her 10 feet into the air.” The woman sustained a puncture wound and other injuries. “Bison have injured more people in Yellowstone than any other animal,” the park service noted, adding with alarming specificity that “they are unpredictable and can run three times faster than humans.” .
Forest Service struggles to keep pace amid climate disasters - Less than a year ago, Superior National Forest in northern Minnesota was swept by wildfire, including parts of the 1.1-million-acre Boundary Waters Canoe Area Wilderness.This week the same forest is being ravaged by floods — so much so that some portages and campsites are submerged in several feet of cold water. .“We haven’t officially closed any areas of the BWCAW but want visitors to be aware of conditions and prepared for flooding and fast-moving water,” What’s happening in the Minnesota forest isn’t unique.Climate disasters are occurring across the nation’s public lands with unprecedented regularity and severity, experts say. National forests and grasslands from the Great Lakes to the Great Basin to New England are feeling the burden, and so are the people who manage them.Jim Furnish, who spent 34 years in the Forest Service, including as deputy chief from 1999 to 2002, says he’s watched climate change affect wilderness areas such as Oregon’s Siuslaw National Forest for decades, long before global warming became a pressing issue.But the frequency, size and complexity of climate disasters is head-spinning even to a seasoned forester like Furnish, who authored the 2015 book “Toward a Natural Forest: The Forest Service in Transition.”“It just makes it more difficult to manage [forests] when there’s no norm to work with,” Furnish said this week from his home near the Gila National Forest in New Mexico. “It’s near impossible to identify what is normal, what is the standard, to try to develop management protocols when things are shifting right in front of us.”Adding to the challenge for the Forest Service is its multipronged public mandate to manage the nation’s 193 million acres of national forests for three purposes: conservation, recreation and natural resource extraction.These three priorities are often in conflict, Furnish noted. And when competing goals and policies are overlain with climate stressors such as drought, fire, flood, and migrating disease and pests, the stakes can get much higher.“In my day, the big management issue was, ‘What national forest lands are we going to hyphenate next?’ Today it’s which forest is going to catch fire next,” said Steve Ellis, chair of the National Association of Forest Service Retirees. Ellis spent more than two decades in the Forest Service and Bureau of Land Management as both a lands manager and policy expert.Ellis said climate disasters also are making it more difficult for the Forest Service to develop long-range plans, usually published every 10 to 15 years, because past and current conditions do not necessarily inform future conditions within a given forest.
U.S. Forest Service planned burn caused massive New Mexico wildfire— Two fires that merged to create the largest wildfire in New Mexico history have both been traced to planned burns set by U.S. forest managers as preventative measures, federal investigators announced Friday.The findings shift responsibility more squarely toward the U.S. Forest Service for initiating a natural disaster that has destroyed at least 330 homes as flames raged through nearly 500 square miles of high-altitude pine forests and meadows. The wildfire also has displaced thousands of residents from rural villages with Spanish-colonial roots and high poverty rates, while unleashing untold environmental damage. Roughly 3,000 firefighters, along with water-dropping planes and helicopters, continue to fight the blaze as it approaches mountain resorts and Native American communities. Firefighting costs already surpass $132 million, climbing by $5 million a day. Fire and law enforcement officials offered a cautious but hopeful Friday night status report, with fire behavior analyst Stewart Turner noting they need to watch the so-called "red flag" conditions — warm, dry weather with high winds — starting Saturday. "The weather is a big concern for us," Turner acknowledged, saying even an errant pine cone rolling down a slope and crossing a control line could spread flames. "Red flag warning is a big message for tomorrow." He said dry conditions are expected through Tuesday, but some moisture and even thunderstorms are possible starting Wednesday. Congresswoman Teresa Leger Fernández described a rising sense of outrage as the fire triggers new evacuations of families and livestock. Fear of flames is giving way to concern about erosion and mudslides in places were superheated fire penetrates soil and roots. "The destruction these two fires caused is immeasurable and will be felt for generations," said Leger Fernández, sponsor of a bill that would reimburse residents and businesses routed by the fire. The Forest Service has not yet released detailed planning documents for the original planned burns that might indicate whether fire protocols were followed.
New Mexico wildfire scar burn has forest officials worried - As more than 3,000 firefighters in northern New Mexico continued to battle the nation's largest active wildfire Sunday, federal forest officials worried about future flash floods, landslides and destructive ash from the burn scar. The 7-week-old fire, the largest in New Mexico history, remained 50% contained after charring 492 square miles in rugged terrain east of Santa Fe. Two planned burns merged to form the massive blaze at the southern tip of the Rocky Mountains in the Sangre de Cristo range. One of the fires was previously traced to April 6, when a planned burn set by U.S. Forest Service firefighters to clear out small trees and brush was declared out of control. On Friday, investigators said they tracked the source of the second fire to the remnants of a planned January burn that lay dormant through several snowstorms only to flare up again last month. Firefighting costs already surpass $132 million, climbing by $5 million a day, according to authorities. New Mexico Gov. Michelle Lujan Grisham already has asked President Joe Biden to direct the Federal Emergency Management Administration to pay for all costs related to a broad range of recovery efforts.A Forest Service Burned Area Emergency Response team has started publishing data from its post-fire assessments. Micah Kiesow, team leader and a soil and watershed program manager with the Santa Fe National Forest, said steep mountain slopes had acted like a sponge before the fire. "Post-fire in some of these areas, especially the high soil burn severity areas and the moderate, we're looking at now a steep slope that's more like a parking lot," Kiesow told the Santa Fe New Mexican. He said that could signal an "extreme change in watershed response" during monsoon season. Flooding presents another problem for communities near burn scars with ash flowing into rivers and streams, according to Kiesow. Many water treatment facilities aren't equipped for the expensive, time-intensive process of filtering ash. Experts say ash and debris can harm water quality with high levels of nitrates and phosphorus.
Bear Dance fire burns on the Southern Ute Reservation, forces evacuations -A wildfire is burning on the Southern Ute Reservation in southern Colorado, and evacuations have been ordered.The Southern Ute tribal campus has been evacuated, officials said on Twitter. All Southern Ute tribal campus offices are evacuated and the Sky Ute Casino and Resort has also been evacuated.The Bear Dance fire has burned about 5 acres and residential areas along Country Road 517 and 516, north toward Sundance Road. The fire is along Bear Dance Road and moving north along the Pine River.Just before 6 p.m., pre-evacuation notices for residences along CR 517 and CR 516 north to the intersection of CR 518 were lifted. Bear Dance Road at the intersection of CR 321 and Ute Park Road had reopened. Ute Park Road from the intersection of Bear Dance Road and CR 517 remains closed.There are power outages in Ignacio, as the fire burns near a main electrical line, tribe officials said. About 5,000 customers of the the La Plata Electric Association are without power in the Ignacio and Bayfield areas. The power outages are planned at the request of firefighters over safety concerns, said Hillary Knox, an executive with LPEA, in an email. The fire has not directly caused outages.Smoke is visible along Colorado 172 and is impacting local communities. The Southern Ute Tribe is working with oil and gas operators in the area to “shut-in facilities” in the fire area, officials said. Stage 1 fire restrictions were enacted for the reservation on May 20.Weather in the area on Friday was warm, sunny, dry and windy, according to the National Weather Service. The temperature in Ignacio was expected to reach 84 degrees, with winds gusting to 30 mph and relative humidity at about 8%.The Bureau of Indian Affairs, Southern Ute Agency Fire Management and the Los Pinos Fire Protection District are fighting the fire. Firefighting air craft is being used to battle the fire and additional fire fighting resources have been ordered. The cause of the fire is under investigation.
Midwest drought impacting wheat crop as supply remains tight — An untimely drought in the southern U.S. plains is threatening the winter wheat crop here at home, as the war between two of the world’s largest wheat exporters rages on.The new challenge comes at a time when global wheat prices are skyrocketing, in part, due to the ongoing war in Ukraine and economic sanctions against the world’s top wheat exporter, Russia.This year’s U.S. season-average farm price is projected to reach a record $10.75 per bushel. As recently as the 2020-2021 season, that price was below $6 per bushel.Earlier this month, the United States Department of Agriculture (USDA) released its first winter wheat production forecast, estimating that output is set to decrease 8% from 2021. Winter wheat accounts for approximately 70% of the total U.S. wheat production on average.That decline is largely attributed to an ongoing drought across much of the Great Plains. In fact, 68 percent of winter wheat production is in areas experiencing drought as of early May, according to the USDA.In Kansas, the nation’s top wheat producer, the 2022 winter yield is projected to be 25% less than a year ago. “It’s too late to save the wheat,” Kyle Deaver, a third-generation Kansas farmer, told NewsNation affiliate KSN-TV. “Dryland wheat is basically done and it didn’t get enough rain for it.”It’s too soon to know what impact, if any, the challenging conditions will have on prices at the grocery store.According to the latest inflation data, prices for cereal and bakery products have risen 10.3% since April 2021.In the Northern Plains, areas of Montana and the Dakotas have had the opposite problem. Wet conditions have slowed down planting of the spring wheat crop. As of May 8, only 27% of the U.S. spring crop had been planted. Usually, 47% has been planted at this point, according to USDA data. The bad weather is just the latest setback for farmers who have seen operating costs rise dramatically over the past year. Diesel fuel prices have surged to record highs in recent weeks and the price of fertilizer has also risen.
Worsening Texas drought sparks wildfires, water restrictions, crop failures -An increasingly severe drought now covers more than 90% of Texas, according to the U.S. drought monitor, affecting more than 16 million Texans and stressing ecosystems in nearly every region of the state.In West Texas, a wildfire has burned at least 27 homes and forced much of Taylor County to evacuate; it’s one of nine wildfires that firefighters battled to contain last week. In the Panhandle, the drought has devastated the wheat crop. In South Texas, the Rio Grande has run dry in some areas.Since September, average rainfall in Texas is less than 10 inches — the first time that’s happened since 1925, according to state climatologist John Neilsen-Gammon.“This is only the second drought where you have more than half of the state in extreme drought conditions,” Nielsen-Gammon said.East Texas has fared better so far, but the National Weather Service predicts that dry conditions could push further east by the end of this summer.The drought was prompted by La Niña, a natural Pacific Ocean cycle that impacts weather and typically brings dry and warm conditions to Texas, and its consequences have been accelerated by climate change. According to National Weather Service experts, the current pattern looks similar to 2010-11, when the last major drought wreaked havoc with the state’s municipal water supplies and agriculture yields.“The worst [recent] drought in Texas by far was in 2011,” said Aaron Treadway, lead forecaster for the National Weather Service in the Austin-San Antonio region. “We’re slowly creeping up there again.”
Southwest megadrought pushes hydropower to the brink - - As the megadrought gripping the Southwest stretches into its third decade, energy providers are preparing for a future where hydropower is no longer a reliable renewable resource.This month brought a raft of warning signs. The Colorado Basin River Forecast Center reported below-normal snowmelt across the Southwest, several large Western reservoirs are at perilously low levels, and the Interior Department is holding back the release of 480,000 acre-feet of water from Arizona’s Glen Canyon Dam to prevent a hydropower shutdown (Greenwire, May 3).Utilities and grid operators say they have this summer’s energy needs covered, despite the low snowpack. But the drought has forced them to reconsider hydropower’s long-term role as a steady backstop resource, as well as grapple with a lack of water for coal and nuclear plants, and the heat impact on the grid.“The premise behind hydropower being a reliable resource is that there’s water behind the dam,” said Nick Schlag, a partner with the consulting group Energy and Environmental Economics Inc. (E3). “When water levels are so low that you can’t actually run water through the turbines, the reliability value has been jeopardized.”Climatologists have called the Southwest’s record-breaking drought the region’s driest period in at least 1,200 years. The drought has also coincided with a regionwide generation transformation as utilities bring on more renewables and retire coal plants, creating a grid that is more efficient but comes with reliability questions.The North American Electric Reliability Corp. (NERC) recently warned that the drought could threaten electricity supplies in the Western Interconnection, especially during a heat wave. The combination of high demand with low reservoir levels in the late summer can force electricity providers to lean on heavy-emitting fossil fuel plants or risk power outages (Climatewire, May 20). In a report this month, the U.S. Energy Information Administration predicted that a drought could halve the contribution of hydroelectricity to California’s summer generation mix. That, in turn, would force the state to purchase more from nearby markets and rely on natural gas generation, increasing wholesale electricity prices and overall carbon dioxide emissions.
Huge Rockslide Crashes Down On Drought-Stricken Lake Powell - Utahns were out on their motorboats scooting around drought-stricken Lake Powell on Memorial Day when a massive rockfall crashed into the waters, producing a tidal wave for nearby boaters. Boater Mila Carter captured a video of the dramatic rockslide. She told CNN that she was en route to Antelope Point Marina with her husband when they noticed rocks and sand falling off a cliff near Warm Creek. They stopped to get a better view when suddenly, a huge piece of the cliff plunged into the water. "We were not expecting anything like that," Carter said. Memorial a day boaters captured a massive slab of sandstone crashing into Lake Powell yesterday! pic.twitter.com/hlFzgTmIiG As the cliff fell into the lake, a tide wave began to form, she said, adding, "I feel like the video didn't capture the wave at the end ... it was very impressive." The rockslide comes as Lake Powell's water level is at a historic low amid an unprecedented megadrought beating down on the westernmost states of the US. The water level at the second-largest reservoir in the country is so low that the federal government took emergency action to delay water releases earlier this month. The reservoir supplies water and power to millions of people in seven states. It stands at 3,531 feet, its lowest level since the reservoir was filled after the government dammed the Colorado River at Glen Canyon more than a half-century ago. "Rising water levels can saturate rocks along the shoreline and weaken the cementing agents that bond the rock together, while declining water levels can destabilize the slopes by removing some of the rocks' confining pressure," CNN noted. Some of these cliffs are being dewatered for the first time in decades; it certainly suggests that more of these rockslides can occur.
Massive Lake Powell rockslide caught on video - (videos) A massive rock face collapsed into Lake Powell near Antelope Marina, Arizona on May 30, 2022. The event was witnessed and recorded by a group of people spending Memorial Day boating on the lake.
California drought resurrects decades-old plan for controversial Sites Reservoir --A long-dead proposal to flood a bucolic valley north of Sacramento and create a massive reservoir for thirsty Southern California is finding new life — and opposition — amid the effects of climate change and worsening drought. First conceived in the 1950s, the Sites Reservoir project was abandoned in the 1980s — the twilight years of America’s big Western dam-building projects. Now, decades later, a Southwestern megadrought and historic water restrictions in Los Angeles, Ventura and San Bernardino counties are fueling renewed interest in the plan, much to the dismay of environmentalists. Recently, the Metropolitan Water District of Southern California appropriated $20 million for project planning, saying the reservoir would make the region’s water supply more resilient in times of drought.The proposal has also gained bipartisan support led by Gov. Gavin Newsom, $816 million from a voter-approved bond and more than $2.2 billion in loans offered by state and federal agencies.“Drought is pushing this project forward,” said Rep. John Garamendi (D-Walnut Grove), a longtime supporter of the proposal. “We are in the third year of a serious drought, and the frequency of drought has shifted from every 10 years to every few years.” “We’re actually going to get the project done,” Newsom said during a tour of Oroville Dam last month. The reservoir, he said, was “something I’ve long supported.”The controversy has transformed the western Sacramento River valley into a battleground. Hardly a day goes by during which web pages of agricultural interests and petitions circulated by conservation groups don’t feature some divisive development or fiery comment.The $4-billion off-stream reservoir is intended to hold storm water from the Sacramento River and would not dam the river or block fish migration. Operating under the public-private joint powers authority, it would contain, at capacity, 1.5 million acre-feet of water and would be available to investors for consumption, sale or lease. (An acre-foot of water is enough to supply three households for a year.)But environmentalists say the reservoir will do little to solve Southern California’s water problem.
Drought threatens starvation in Horn of Africa, U.N., agencies say (Reuters) - Millions of people face severe hunger in the Horn of Africa as the worst drought in more than 40 years could extend to a fifth consecutive failed rainy season, the United Nations and humanitarian agencies warned on Tuesday. The March-May rainy season appears likely to be the driest on record, devastating livelihoods and deepening a humanitarian emergency in Ethiopia, Somalia and parts of Kenya, including a risk of famine in Somalia, they said in a joint statement. There is a risk that the October-December rainy season could also fail. Drought has combined with a global rise in food and fuel prices, pushed up by war in Ukraine, to impact millions of people across the continent. An estimated 16.7 million people currently face acute food insecurity in east Africa and that figure could increase to 20 million by September, the statement said. "The threat of starvation looms in east Africa. This is after four failed rainy reasons," said Clare Nullis, spokesperson at the World Meteorological Organization. "We are particularly concerned that the situation is set to get worse," she told a briefing in Geneva. Aid agencies are seeking to avoid the repeat of a famine a decade ago that killed hundreds of thousands of people. "A rapid scaling up of actions is needed now to save lives and avert starvation and death," the U.N. and agencies said in the joint statement. "However, current appeals to respond to the drought remain well underfunded." Millions of livestock have died in the region while Ethiopia, Somalia, and Kenya have also recorded a significantly higher number of severely malnourished children admitted for treatment this year compared to past years, it said.
Drought Affects Almost Half of Somalia as Famine Looms — At a news conference in Mogadishu, Somalia’s special envoy for humanitarian issues on Monday said more than six million Somalis were affected by the record drought.Abdurahman Abdishakur Warsameh said the number of people suffering was quickly approaching half of Somalia’s population.Warsameh said the drought has hit 72 of Somalia’s 84 districts and that six of them were already facing famine-like conditions with extreme food insecurity.He says our people are starting to die now. Deaths have begun, famine is looming in some areas, and drought is turning into famine. Warsameh says the Somali people at home and abroad should help us in taking on some of the responsibility.The special envoy did not give any figures on how many Somalis have died from hunger but appealed for aid to reach those in need.Warsameh said the current drought, the worst in forty years, had displaced nearly 700,000 Somalis from the countryside and forced them to seek help in nearby cities.He said the U.N. and aid agencies requested $1.4 billion for drought relief but so far received only $58 million.Warsameh said international aid was more focused on the COVID pandemic, Russia’s war on Ukraine, and crises in Afghanistan, Syria, and Yemen.The humanitarian envoy also said not much attention is given to humanitarian needs because of Somalia’s focus on politics last year and a half of delayed elections.International aid agencies warned Monday that the threat of starvation was worsening in Somalia and neighboring countries across Ethiopia and Kenya.The Horn of Africa region is facing a record fifth rainy season without adequate rain, according to meteorological experts and humanitarian groups, which include U.N. agencies.
Submerged Mittani-Empire era-city reappears during drought - -- A 3,400-year-old city believed to be central to the Mittani Empire re-emerged from the Tigris River earlier this year due to extreme drought in Iraq, scientists said Tuesday. A team of Kurdish archaeologists from the Kurdistan Archaeology Organization and German archaeologists from the University of Freiburg and University of Tübingen excavated and documented large parts of the extensive city, a University of Freiburg press release said. The release noted that Iraq, especially the southern part of the country, was affected by climate change-induced extreme drought for months, which led to large amounts of water being drawn out from the Mosul reservoir since December to prevent crops from drying out. The drop in water levels led to the resurfacing of the Bronze Age city located at Kemune in the Kurdistan Region of Iraq that had been submerged decades ago. Scientists analyzed the Bronze Age city in collaboration with the Directorate of Antiquities and Heritage in the Duhok (Kurdistan Region of Iraq) in January and February before it re-submerged as waters rose again, according to the release. They uncovered along with a palace, which had been previously documented in 2018, "several other large buildings--a massive fortification with walls and towers, a monumental, multi-story storage building and an industrial complex," the release said. The urban center uncovered dated back to the time of the Empire of Mittani (from approximately 1550-1350 B.C.), which controlled large parts of northern Mesopotamia and Syria, it noted.
Extreme weather shriveled several crops this year, tomato prices surge 168% YoY -- Extreme weather that scientists have linked to climate change has hit output of several crops this year, making fruits and vegetables costlier. The average retail price of tomatoes, a basic ingredient of most Indian dishes, has surged 70 per cent from a month ago to ₹53.75 a kilogram as on June 2, according to data from the food ministry. This is a 168% increase from a year ago. Supplies of tomato, a base ingredient for most Indian dishes, from states such as Andhra Pradesh and Karnataka, have dwindled during the current lean period. Unseasonal rains had damaged lemon crops during the flowering stage in several states in January. Then, a heatwave during harvesting in March-April crimped output. In April, prices of lemons leapt to unseen levels, reaching up to ₹200 a kilo, leaving consumers angry and shocked. Heavy rains had damaged lemon plantings in December-January during its nascent flowering stage. The average Indian’s grocery bills are rising as consumer inflation quickened to an eight-year high of 7.79% in April from a year ago, driven by food inflation. India’s output of mango crop, the king of fruits, this summer is estimated to have gone down by 20% due to unfavourable weather. “The yield in Uttar Pradesh is less by nearly 20% and quality has been affected too,” said Haji Kalimullah Khan, an award-winning mango-breeder known as “Mango Man of India”. Heavy rains in December-January, when mango trees flower, and early summer, when the crop bears fruit, led to a drop in yield. “It is now widely agreed by scientists that the number of rainy days will decrease due to the impacts of climate change but total quantum of rainfall will remain same,” said KJ Ramesh, a former chief of the IMD. In March, the hottest summer in 122 years in states such as Punjab trimmed wheat output by an estimated 4.7% to 106 million tonne, prompting India to ban exports last month. The ban fanned prices globally, with Chicago futures rising to a two-month high. Households have been warned to brace for more inflation, adding to concerns about its impact on the cost of living of the poorest households, which spend almost all of their income on food and other essentials.
Extremely heavy rains, floods and landslides hit Pernambuco, leaving more than 106 people dead, Brazil - (video) The number of fatalities caused by widespread floods and destructive landslides in the Brazilian northeastern state of Pernambuco since May 23 has risen to 93 on May 31, 2022. There are dozens of people still missing.Very heavy rains started falling over the states of Pernambuco, Alagoas, and Paraiba on May 23, causing the Tejipió river to break its banks and flood parts of the cities Olinda and Recife, Pernambuco.Very heavy rains continued falling over the region, particularly over Recife Metropolitan Region, causing floods and destructive landslides in which at least 19 people died and more than 56 went missing by May 29.In just several hours on Friday and Saturday, May 27 and 28, parts of Pernambuco received 70 percent of the rain they usually get in the entire month of May.1“We never saw so much rain fall in so little time,” said 60-year-old retiree Mario Guadalupe.“I saw the landslide happen. First part of the hill gave way, then it was just a tsunami of mud. It nearly took out my house.”One of the worst events occurred in the Jardim Monte Verde neighborhood, in the southwest part of Recife, where a large landslide inundated a number of houses at the foot of the slope, killing at least 20 people.2 “This appears to be a landslide in heavy weathered and denuded residual soil, probably with some element of static liquefaction, judging by the debris and the runout,” Dr. Dave Petley of The Landslides Blog said.“Once again the deadly cost of urban landslides in Brazil is evident. The country has suffered multiple events of this type over the years, and more will occur in the future.”
Pacific season’s 1st hurricane makes landfall in Mexico (AP) — The strongest hurricane on record to make landfall in May in the eastern Pacific swept ashore on a stretch of tourist beaches and fishing towns in southern Mexico on Monday. Torrential rains and howling winds from Hurricane Agatha whipped palm trees and drove tourists and residents into shelters in a region that is sparsely populated except for a handful of small communities along the shore. Oaxaca state’s civil defense agency showed families hustling into a shelter in Pochutla and a rock and mud slide that blocked the highway between that town and the state capital. Agatha made landfall about 5 miles (10 kilometers) west of Puerto Angel as a strong Category 2 storm, with maximum sustained winds of 105 mph (165 kph). But it quickly began losing strength as it moved inland. By evening, maximum sustained winds fell to 80 mph (130 kph). It was moving northeast at 8 mph (13 kph), heading toward the Gulf of Mexico, where its remnants might re-emerge. Near Puerto Angel, gusts of wind, heavy rain and big waves began lashing the beach town of Zipolite, long known for its clothing-optional beach and bohemian vibe. National emergency officials said they had assembled a task force of more than 9,300 people for the area and more than 200 shelters were opened as forecasters warned of dangerous storm surge and flooding from heavy rains. In the surfing town of Puerto Escondido, to the west, people took shelter and finished putting up plywood to prevent windows from breaking in the strong winds. After forming on Sunday, Agatha quickly gained power, and it made landfall as a strong Category 2 hurricane Monday afternoon, the U.S. National Hurricane Center said. Agatha is the strongest hurricane on record to make landfall in May in the eastern Pacific, said Jeff Masters, meteorologist with Yale Climate Connections and the founder of Weather Underground. He said the region’s hurricanes typically get their start from tropical waves coming off the coast of Africa. “Since the African monsoon typically does not start producing tropical waves until early- or mid-May, there simply aren’t enough initial disturbances to get many eastern Pacific hurricanes in May,” Masters wrote in an email. “In addition, May water temperatures are cooler than they are at the peak of the season, and wind shear is typically higher.” Masters was not sure if Agatha was kicked off by a tropical wave — areas of low pressure that move across the tropics — but the storm benefitted from warm waters and low wind shear. The U.S. National Hurricane Center said the storm was expected to drop 10 to 16 inches (250 to 400 millimeters) of rain on parts of Oaxaca, with isolated maximums of 20 inches (500 millimeters), posing the threat of flash floods and mudslides. In Huatulco, municipal authorities had cancelled schools and ordered “the absolute closure” of all beaches and its seven bays, many of which are reachable only by boat. The government’s Mexican Turtle Center — a former slaughterhouse turned conservation center in Mazunte — announced it was closed to visitors until further notice because of the hurricane.
The remnants of Hurricane Agatha could become Alex this week – CNN -After making landfall Monday afternoon as a Category 2 hurricane just west of Puerto Angel, Mexico, Agatha rapidly weakened and is now just a remnant low-pressure system, according to the National Hurricane Center (NHC).However, some of the remnants of this storm could drift east, help spark a storm off the eastern coast of Mexico and threaten Florida by this weekend."Global model guidance continues to suggest that Agatha's remnants will become absorbed by a larger low-level cyclonic gyre over southeastern Mexico during the next couple of days, with that new system having development potential over the northwestern Caribbean Sea and southeastern Gulf of Mexico by late this week," the National Hurricane Center said Tuesday morning.A low-level, cyclonic gyre is a large-scale pattern of spinning winds in the lower atmosphere. The NHC believes there is a 30% chance this gyre and the remnants of Agatha will spawn a tropical depression over the next two days and an even higher chance, 70%, of it developing over the next 5 days."Regardless of new development, Agatha's remnants and the larger gyre will continue to cause heavy rains and potentially life-threatening flash floods over portions of southeastern Mexico over the next day or two," the NHC said.If it does form into a tropical cyclone over the next few days, it will likely be anywhere between the Yucatán and the southern tip of Florida.And that is worrisome for some meteorologists.For the system to become a named storm, it would need to reach tropical storm strength (39 mph+ sustained winds) and form a center of circulation. If it does, it would become the first named storm of the 2022 Atlantic Hurricane season, and would be called Alex.The forecast models do not have a good handle on this possible storm and are forecasting completely two different outcomes. As of Tuesday morning, the American model shows the disturbance weak and unorganized south of Florida this weekend.On the other hand, the European model shows a stronger storm slamming into southwestern Florida.
‘It could happen fast:’ Meteorologist tells Floridians to monitor Gulf system -The first storm of the Atlantic hurricane season may arrive in time for the season’s first week, and it’s not coming from where you’d expect. Remnants of what was once Hurricane Agatha in the Pacific Ocean earlier this week are now expected to become Tropical Storm Alex in the Gulf of Mexico by Thursday, which would make it the first named storm of the 2022 Atlantic hurricane season. Hurricane Agatha made landfall in southwestern Mexico on Monday as a Category 2 storm that knocked down power lines and dumped as much as 20 inches of rain there. It’s not expected to pack the same punch when its remnants enter the Gulf of Mexico later this week, but local meteorologists are still instructing Tampa Bay residents to be wary as the region is near the system’s projected path. The system on Tuesday afternoon was given a 70% chance of strengthening into a tropical storm or depression by the National Hurricane Center. The center expects the storm to travel across the Gulf of Mexico toward the southern gulf coast of Florida by the end of the week. There’s no reason to worry just yet, however, said Paul Close of the National Weather Service’s Tampa Bay office. The system is still disorganized and its future is particularly uncertain as a result. Three models project the storm will strike either Charlotte or Sarasota counties, just south of Tampa Bay. Others predict the system will never make it off Mexico’s mainland. Close does warn, however, that the already-warm waters of the Gulf of Mexico mean the system could develop quickly and catch some locals by surprise.
NHC issues tropical storm warnings for parts of Florida, U.S. - The National Hurricane Center (NHC) has issued a Tropical Storm Warning for all of the Florida Keys, including the Dry Tortugas and Florida Bay, and for the west coast of Florida south of Englewood at 03:00 UTC on June 3, 2022. A Tropical Storm Watch is in effect for the west coast of Florida south of the Middle of Longboat Key to Englewood; the east coast of Florida south of the Volusia/Brevard County Line to Card Sound Bridge; Lake Okeechobee; Cuban provinces of Matanzas, Mayabeque, Havana, Artemisa, Pinar del Rio, and the Isle of Youth; and the northwestern Bahamas. A strengthening tropical system – currently designated Potential Tropical Cyclone ONE, was located about 155 km (95 miles) N of Cozumel, Mexico and 730 km (450 miles) SW of Ft. Myers, Florida at 06:00 UTC today.1 The system had maximum sustained winds near 55 km/h (35 mph), minimum central pressure of 1 003, and was moving NE at 7 km/h (5 mph). A northeastward motion at a faster forward speed is expected later today and on Saturday, June 4. On the forecast track, the system should move across the southeastern Gulf of Mexico through Saturday morning, across the southern and central portions of the Florida Peninsula on Saturday, and then over the southwestern Atlantic north of the northwestern Bahamas Saturday night and Sunday, June 5. The system is expected to become a tropical depression today and a tropical storm by this evening or tonight (LT). Formation chance through 48 hours is high at 90%. The first name on the 2022 Atlantic hurricane season list is Alex.
At Cape Hatteras, they're waiting for the next house to drop - E&E News -- As he geared up for another busy summer season at Cape Hatteras National Seashore last week, Superintendent Dave Hallac surveyed a short 2 ½-mile stretch of beach and didn’t like what he saw.Despite a massive cleanup after a pair of houses collapsed into the Atlantic Ocean in Rodanthe, N.C., on May 10, small pieces of debris remained buried in the sand (E&E News PM, May 17).“It’s a mess,” Hallac said. “It’s a very sad situation right now. … There’s tar paper, pieces of wood, nails, pieces of insulation, foam, drywall, carpet padding. And it’s funny because you might not see much, but if you get down on your hands and knees and just start pulling your hand through the sand, you realize a lot of it’s already covered up by the sand.” Hallac’s headaches may soon multiply: With the North Carolina beach eroding at a fast pace, officials say it’s all but certain that other homes will soon crumble into the sea and add to the pollution at one of the National Park Service’s most popular sites.Worse yet, nobody’s figured out a workable way to prevent it from happening.“More houses are going to collapse — I mean, that it going to happen in that area,” said Bobby Outten, the manager of Dare County, N.C., which includes the seashore. “We have several tagged, and as it erodes there, then those houses are going to ultimately fall.”Similarly, Hallac warned that more beach houses could collapse “in the near future.”
German judges visit Peru glacial lake in unprecedented climate crisis lawsuit -In a global first for climate breakdown litigation, judges from Germany have visited Peru to determine the level of damage caused by Europe’s largestemitter in a case that could set a precedent for legal claims over human-caused global heating.Judges and court-appointed experts visited a glacial lake in Peru’s Cordillera Blanca mountain range this week to determine whether Germany’s largest electricity provider, RWE, is partially liable for the rise in greenhouse gases that could trigger a devastating flood.Framed by majestic ice-capped peaks, Lake Palcacocha has swollen in volume by 34 times in the last five decades. A peer-reviewed study links accelerated glacial melt caused by global heating to the substantial risk of an outburst flood which could trigger a deadly landslide inundating the city of Huaraz below.In 2017, judges in Hamm, Germany, made legal history by accepting a case brought by farmer and mountain guide Saúl Luciano Lliuya against RWE, asking for €17,000 (£14,490) for the costs of preventing damage from a potentially devastating outburst flood from the lake.“As a mountain guide I have been able to understand from the summit how glacial melt is happening right in front of our eyes,” Lliuya, 41, said, near the Palcaraju glacier, a sheer wall of ice and snow which looms over the lake.Lliuya’s house in Huaraz’s hardscrabble Nueva Florida neighbourhood lies in the flood path where about 50,000 people would be under threat. The local authorities have established an early warning system that would set off sirens in case the lake breaches its banks. “It is a possibility that a large chunk of rock with ice on it falls into the lake then we are talking about the possibility of millions of cubic metres [of water overflowing],”
Changes 'absolutely massive' in warming European Alps - The snow-capped European Alps are gradually turning from white to green as the region warms, new research finds. It’s a transformation so clear that it’s visible from space. The study, published yesterday in Science, used satellite data to map out snow and vegetation cover across the iconic mountain range, which stretches from eastern France all the way into Austria. It finds that plants are springing up at high elevations, places they previously wouldn’t have thrived. About 77 percent of the Alps, above the tree line, have experienced a “greening” over the last 40 years. “The scale of the change has turned out to be absolutely massive in the Alps,” lead study author Sabine Rumpf, an assistant professor at the University of Basel, said in a statement. It’s a phenomenon already well-documented in other cold parts of the planet. Large swaths of the Arctic have also greened over the last few decades, satellite studies have found. The same is true for parts of High Mountain Asia as well. More vegetation may sound like a good thing — and it may be, temporarily, for the plants. But the greening process also has negative consequences, which can outweigh the benefits. When plants spring up in places they didn’t previously exist, they darken the surface of the planet. That causes the area to absorb more heat. As a result, snow melts faster. Vanishing snow can speed up local warming. Because of its bright, reflective surface, snow helps beam sunlight away from the earth. When it disappears, the landscape warms at an even faster rate. Less snow can also be a bad thing for some cold-climate plants. Snow helps insulate the ground in the winter like a fluffy blanket, keeping plants warm and snug until the spring. Later in the year, when it begins to melt, it’s a vital source of fresh water. That could become a problem for the Alps. The new study also finds that snow cover is shrinking in the mountains. For now, declines are only visible across less than 10 percent of the Alps, according to the satellite images. It may not sound like much, but the researchers warn that it could be the start of a concerning trend. And even in places where snow cover is still present on the ground, the total volume of snow may still be shrinking. On-the-ground data collected at weather stations throughout the European Alps have found that average snow depth is decreasing over time.
Historic Greenland ice sheet rainfall unraveled - For the first time ever recorded, in the late summer of 2021, rain fell on the high central region of the Greenland ice sheet. This extraordinary event was followed by the surface snow and ice melting rapidly. Researchers now understand exactly what went on in those fateful summer days and what we can learn from it. The never-before-seen rainfall, on 14 August 2021, made headlines around the world. The upper-most parts of Greenland's enormous ice cap used to be too cold for anything other than snow to fall, but not anymore. Researchers from the Department of Glaciology and Climate at the Geological Survey of Denmark and Greenland (GEUS) in collaboration with colleagues from France and Switzerland have scrutinized these questions and come up with the answers. It didn't only rain at Summit Camp—rain was measured by new automatic weather stations placed across the ice sheet by GEUS' ice-sheet monitoring projects PROMICE and GC-Net. Studying detailed data from these stations alongside measurements of surface reflectivity, or albedo, from the Copernicus Sentinel-3 satellite mission and information on atmospheric circulation patterns, the researchers discovered that the rain had been preceded by a heatwave at a time of year when seasonal melting is usually slowing down. "It turns out that the rain itself wasn't the most important factor," says Prof. Jason Box from GEUS and lead author of the paper reporting their results, which has been accepted for publication in Geophysical Research Letters. "There is an irony. It's not really the rain that did the damage to the snow and ice, it's the darkening effect of the meltwater and how the heat from the event erased snow that had overlaid darker ice across the lower third of the ice sheet. In fact, this sudden increase of surface ice melt on Greenland could have happened without any rain ever touching the ground. The main culprit was the heat itself, melting and completely removing the surface snow, thereby changing the surface albedo, so that Greenland snow and ice absorbed more of the Sun's rays. The researchers found that, between 19 and 20 August 2021, this melt caused the altitude of the ice sheet's snowline near Kangerlussuaq to retreat in elevation by a whopping 788 meters, the snowline retreated, exposing a wide area of dark bare ice. Under normal circumstances, snow would cover and insulate this ice, but the snow melted suddenly and exposed the ice to heat, causing even more melting.
Asteroid 2022 KQ5 to fly past Earth at just 0.1 LD on May 30 - A newly-discovered asteroid designated 2022 KQ5 will fly past Earth at a distance of just 0.1 LD / 0.00027 AU (40 501 km / 25 166 miles) at 17:40 UTC on May 30, 2022. This is the 59th known asteroid to fly past Earth within 1 lunar distance since the start of the year and the 7th so far this month. It is also the 4th closest asteroid flyby so far this year. The event will take place 8 minutes after 2022 KO3 makes a close approach to our planet at 0.7 LD / 0.00195 AU (291 986 km / 181 432 miles). 2022 KQ5 belongs to the Amor group of asteroids – named after the archetype object 1221 Amor. The orbital perihelion of these objects is close to, but greater than, the orbital aphelion of Earth. It was discovered just a few hours ago at Catalina Sky Survey, Arizona, U.S.
Biden wants to ‘rebuild’ the EPA. He doesn’t have the money to do it. - Washington Post - They were locked out. Experts tasked with assessing how hundreds of new chemicals may harm human health couldn’t access the data they needed to do their work.The issue wasn’t chemical manufacturers holding back information. Instead, part of the Environmental Protection Agency’s computer system used to store sensitive data provided by companies went down — and the agency didn’t have the IT support to fix it quickly.“No one could get into it for just about two weeks in October,” said Michal Freedhoff, head of the EPA’s Office of Chemical Safety and Pollution Prevention, in a recent phone interview. “That happens fairly regularly.”After years of neglect, President Biden promised to reinvigorate the EPAas part of his push to tackle climate change and ease the pollution burden placed on poor and minority communities. But the agency’s budgetary woes are preventing the nation’s top pollution regulator from doing its job, in ways large and small.The agency’s funding has remained stagnant since his inauguration. Its work is hamstrung by low staffing levels not seen since Ronald Reagan left office.The lack of resources and workers has undercut its ability to inspect facilities, measure contamination, punish violators and write new rules to stem pollution and climate change at a time when scientists say the world needs to act faster to stop runaway global warming.At the beginning of his term, Biden asked Congress for a big boost to the EPA’s budget, from $9.2 billion to $11.2 billion. But the agency ended up getting only a fifth of that additional $2 billion requested by Biden, an increase that does not keep pace with the rapid rate of inflation.That means the EPA actually has less spending power since Democrats took full control of the executive and legislative branches, even as its responsibilities grow. The budgetary slide continues a trend that deepened under Donald Trump but that began well before he took office.
Experts to White House: EJ screening tool should consider race - The Biden administration must tackle race directly in its new tool to identify “disadvantaged” communities — or risk falling short in its environmental justice efforts.That was the message that ran through the more than 2,000 public comments on the beta version of the Climate and Economic Justice Screening Tool. When finalized, CEJST will help the administration identify the disadvantaged communities in line for extra investment from last year’s infrastructure law and other federal programs.The White House Council on Environmental Quality put out the beta version in February, and public comment closed last week. Commenters urged the administration not only to add race as an indicator, but also to account for the cumulative impacts from pollution and other burdens.Asked why the tool didn’t incorporate race, the White House didn’t answer directly — but seemed to hint that doing so would make the tool less durable.“Because this tool is indispensable to confronting long-standing environmental injustices, it must be built for the long run, be updated and improved over time, and endure,” a CEQ spokesperson said.White House officials have previously expressed concern that the inclusion of race would cause the Justice40 initiative to get bogged down in litigation. That initiative — which will use the tool — aims to allocate at least 40 percent of the “benefits” of federal climate and clean energy spending to communities that have suffered from neglect and environmental injustice.Officials worry about a repeat of last year, when a legal group led by former Trump administration aide Stephen Miller launched a successful discrimination lawsuit against a Biden administration program aimed at helping farmers of color (Greenwire, April 20).The beta version of CEJST skirts race in favor of 21 other environment, economic and health indicators. The White House stressed that the tool as written is a draft and would be updated based on “the robust feedback received.” A final tool and more details on the Justice40 commitment are expected later this summer.“Over time, the tool will continue to be updated — at least annually — based on new data and input,” the White House said.
NY Spurns Recycling Fairy, and Instead Considers New Extended Producer Responsibility Requirements by Jerri-Lynn Scofield -I’m getting sick and tired of seeing the latest recycling misdirection – as I know the plastics – industry sponsors this ’solution’ to the plastics crisis. Which dumps onto you and me responsibility to sort our plastics waste – and send it off to be ‘recycled’.It seems, however, that NY – where I live -might be about to do the right thing about plastics waste management. And by that I mean not offload onto the recycling fairry a magical solution to the plastics crisis, but to place responsibility for managing plastics waste on those who create the problem in the first instance. According to NPR:Now, the New York legislature is deliberating two extended producer responsibility bills as its session nears its June 2 close. Lobbying by business and environmental groups has been particularly intense around details such as what recycling goals must be met and who sets them. Industry and environmentalists alike believe that when a state as big as New York adopts a law, it creates a template or standard that other states might adopt too. More details:Extended producer responsibility — the ungainly name comes from a 1990 paper by Swedish academics Thomas Lindhqvist and Karl Lidgren — took root in Europe 30 years ago. Many U.S. states have such policies for e-waste and mattresses. But their adoption for packaging is fairly recent in the U.S., and those programs won’t be fully up and running for years.While each state’s legislation varies, the system generally works like this:Beverage companies, shampoo-makers, food manufacturers and other producers will keep track of how much of each sort of packaging they use.These producers will reimburse government recycling programs for handling the waste, either directly or through a consortium called a “producer responsibility organization.” Fees will be lower for companies that use easily recyclable, compostable or even reusable packaging, a mechanism that supporters say will provide incentives to adopt more sustainable practices.Recycling centers will use the money to cover their operating costs, expand outreach and education, and invest in new equipment.“We think corporations will produce less virgin materials because they are charged by the amount they put out there, and certainly less eco-unfriendly materials,” said New York state Sen. Todd Kaminsky, a Democrat from Long Island who sponsored one of the bills pending in Albany.
Fashion Industry Efforts to Verify Sustainability Make ‘Greenwashing’ Easier - Environmental certification programs that claim to verify the sustainability of fashion brands actually facilitate “greenwashing” for the apparel industry, according to a recent report by environmental advocacy organization Changing Markets Foundation. The organization, which was founded in 2015 and is based in the Netherlands, seeks to drive change toward a more sustainable economy by exposing what it feels are irresponsible corporate practices. Its analysis of voluntary efforts designed to reduce fashion’s growing environmental footprint found the programs led to increased pollution instead, and are helping to cement the industry’s reliance on fossil fuels.“Waste increases, utilization of clothes decreases, and reliance on fossil fuels increases,” said George Harding-Rolls, a campaign manager at Changing Markets and lead author of the report. “Yet, these schemes continue to exist and say that sustainable fashion is just around the corner. This is actually preventing us from taking the more systemic action that we need, such as more regulation and legislation.” Apparel retailers did not respond to requests for comment from Inside Climate News. Organizations running sustainable fashion certification programs glossed over many of the issues in the report, including the growing use of polymer or plastic fibers used in apparel. Instead, they focused on efforts to reduce plastics used in packaging and displays.The March 24 report evaluated 10 of the most prominent sustainability certification programs for the fashion industry, a rapidly growing sector that produces more than 100 billion garments each year and accounts for anywhere between 2 to 8 percent of global greenhouse gas emissions.The Changing Markets analysis focused on the sustainability programs that claim to address issues of overproduction, including the rise of “fast fashion”—inexpensive clothing designed to keep up with rapidly changing fashion trends. It also addressed end of life management and the use of fossil fuels and toxic chemicals in production and manufacturing. At best, the certification programs provided a “patchy promise of sustainability,” focused on a small section of the supply chain, the report concluded. At worst, the report found the certification programs, which are often funded by the brands that they evaluate, are “unambitious, opaque, unaccountable and compromised.”
EPA's Pebble 'veto' won't stop all mining in Alaska's Bristol Bay - EPA’s move to ban mining the Pebble deposit in the Bristol Bay watershed this week set off a swirl of questions about whether the proposed Clean Water Act veto could have broader implications for mining in one of the world’s premier salmon habitats.But a close look at the agency documents explaining the decision makes it crystal clear: The Pebble veto won’t stop mining in Bristol Bay, much less the rest of the Last Frontier.EPA’s proposed veto Wednesday only targets efforts to mine the Pebble deposit. It was based on a mine plan Pebble LP and its backer Northern Dynasty Minerals Ltd. submitted to the Army Corps of Engineers as part of the Clean Water Act permitting process two years ago.That mine plan specifically affected three watersheds, the South and North Forks of the Koktuli River and the Upper Talarik Creek, where it would permanently damage 99 miles of stream habitat and more than 2,000 acres of wetlands. EPA says it is vetoing the project because it would result in four “unacceptable adverse effects” on aquatic life and habitat, including the loss of salmon habitat and negative effects on the genetic diversity of salmon in the watersheds.The veto is limited to certain headwaters of those watersheds, and includes approximately 309 square miles surrounding the 2020 mine plan. There are other mine claims within that restricted area, however the veto documents are clear that the restriction only applies to mining the Pebble deposit, specifically. What’s more, mining the Pebble deposit is only prohibited by the proposal if dredging and filling of wetlands and streams associated with mining would have similar or greater effects to any one of the four “unacceptable adverse effects” EPA identified the 2020 mine plan would cause.
Hydrogen Fuel Investments Could Risk Making Global Warming Worse - A world desperate for a climate-friendly fuel is pinning its hopes on hydrogen, seeing it as a way to power factories, buildings, ships andplanes without pumping carbon dioxide into the sky. But now scientists are warning that hydrogen leaked into the atmosphere can contribute to climate change much like carbon. Depending on how it’s made, distributed and used, it could even make warming worse over the next few decades, even if carbon poses the bigger long-term threat. Any future hydrogen-based economy, they say, must be designed from the start to keep leaks of the gas to a minimum, or it risks adding to the very problem it’s supposed to solve. Some ideas now being tested, like shipping hydrogen in pipelines built to hold natural gas or burning it in individual homes, could cause an unacceptable level of leaks.
EPA raises amount of ethanol that must be blended with gas - -- The Biden administration on Friday set new requirements that increase the amount of ethanol that must be blended into the nation's gasoline supply but reduce previous ethanol-blending requirements due to a plunge in fuel demand during the coronavirus pandemic. The Environmental Protection Agency said it would set the 2022 levels for corn-based ethanol blended into gasoline at 15 billion gallons. But even as the new rules increased future ethanol requirements, the EPA retroactively reduced levels for 2020 by 2.5 billion gallons and by 1.2 billion gallons for 2021, reflecting the lower amount of ethanol produced and decreased sales of gasoline during a period when the virus led to a drop in driving. Most gasoline sold in the U.S. contains 10% ethanol, and the fuel has become a key part of the economy in many Midwest states. The fuel consumes more than 40% of the nation's corn supply, and ethanol and other biofuel production plants offer jobs in rural areas that have seen steady population declines over the decades. President Joe Biden is among many politicians from both parties who have frequently promised to support increases in the renewable fuel standard. “Today’s actions will help to reduce our reliance on oil and put the RFS program back on track after years of challenges and mismanagement," said EPA Administrator Michael Regan. The Renewable Fuels Association, an ethanol lobbying group, criticized the retroactive reduction of biofuels targets but said the future requirements would bring certainty back to the renewable fuel standard, help lower gas prices and set a foundation for future growth. In the last few days, wholesale ethanol prices have been as much as $1.30 per gallon lower than gasoline, the group said. The final order also denies exemptions for certain oil refineries from ethanol requirements, saying they had failed to show exemptions were justified under the Clean Air Act. The American Fuel & Petrochemical Manufacturers group, which represents refineries, called the 2022 figure “bewildering and contrary to the administration’s claims to be doing everything in their power to provide relief to consumers.” The group said unachievable mandates will increase fuel production costs and keep consumer prices high.
Increasing fuel economy is a simple way to make cars cleaner and better for the climate - The electric vehicle revolution is charging ahead: Global passenger EV sales grew by 103 percent in 2021. In the last quarter of 2021, they accounted for 13 percent of all new vehicle sales.And many more EVs are continuing to roll out. Just last week, Ford delivered the firstelectric version of its F-150 truck, the best-selling vehicle in the United States, to a customer in rural Michigan. Ford plans to invest $25 billion in EVs through 2025. General Motors has two versions of the Bolt for sale, and is planning to begin delivering itsHummer EV this fall. By 2025, GM will invest $27 billion in EVs and by 2035, the company says it will be all-electric.As gasoline prices reach record highs and the summer road trip season kicks off, getting around without gas is a more appealing prospect than ever. And this year may be an inflection point, where the number of internal combustion engines on the road reach their peak. Countries like Finland, Germany, and New Zealand have plans to phase out gasoline vehicles entirely.However, despite their growing popularity and availability, electric vehicles still account for just 3 percent of new car sales in the US, and the average car stays on the road for more than 11 years. That means, by 2035, only 13 percent of vehicles in the US may be electric. So even though EV adoption is accelerating, it will take them years to catch up to gasoline and diesel cars.Meeting climate change goals thus demands a less glamorous and more incremental approach too: Increasing efficiency. And that requires regulations, which the auto industry, oil companies, and some states have long resisted.“Efficiency regulations are still really important even as automakers are making pledges to electrify their fleets,” said Kate Whitefoot, an associate professor of engineering and public policy at Carnegie Mellon University.In particular, California has been a leader in setting cutting edge targets for pollution from vehicles, pushing automakers to hit increasingly tough benchmarks. It’s a privilege the Golden State has held for decades due to a legal quirk. But earlier this month, 17 state Republican attorneys general sued to block the Environmental Protection Agency from upholding California’s special status. If successful, the suit could derail progress toward more efficient cars and trucks.
Report: Electric vehicle sales will triple by 2025, sales of gas-powered vehicles already past their peak - Sales of non-plug-in internal combustion-powered vehicles peaked in 2017, according to a report by industry analysts at Bloomberg New Energy Finance, and have been in "permanent decline" since then as sales of plug-in hybrid and electric vehicles increase.Sales of plug-in vehicles are also expected to triple their current levels by 2025, according to the report."Most importantly, the market is shifting from being driven primarily by policy, to one where organic consumer demand is the most important factor," lead authors Colin McKerracher and Aleksandra O'Donovan wrote in the BloombergNEF report. In 2025, the global auto industry will sell 20.6 million plug-in vehicles, according the report, compared to 6.6 million this year. Sales of purely internal combustion-powered vehicles, while projected to still make up the majority of total car sales in 2025, will have decreased.Fully battery-powered vehicles will make up 75% of plug-in vehicle sales by 2025, according to the report. Plug-in hybrid vehicles are not expected to make a significant percentage of plug-in vehicle sale outside of Europe. Sales of plug-in hybrids will peak around 2026, the report predicts. Fuel cell vehicles, which run on electricity produced from hydrogen gas rather than being stored in batteries, are not expected to play a significant part in the passenger vehicle market.Some automakers, like General Motors, have already announced plans to sell only emission-free vehicles by 2035, but currently make the vast majority of their revenue from gasoline powered trucks and SUVs. Other automakers, like BMW and Toyota, have been more cautious about setting firm deadlines for leaving behind internal combustion.Market penetration of electric vehicles won't be the same everywhere. EVs are expected to reach 39% market share in China and Europe by 2025, the report said. They could make up an even higher portion of sales in some European countries, though, with EVs making up 40% to 50% of passenger vehicles sales in the United Kingdom, Germany and France.China and Europe will account for 80% of all EV sales globally in 2025, the report predicts, with the US representing just 15% of the world's EV sales. Sales in the US will begin trending sharply upwards over the next decade, though, as major automakers and startup companies begin producing electric versions of the sorts of vehicles Americans like to buy.China's BYD is the second-largest electric vehicle brand in the world, selling nearly 600,000 EVs and plug-in hybrids in 2021.
Why hydropower is the forgotten giant of clean energy - Hydropower is by far the largest renewable worldwide, producing over twice as much energy as wind, and over four times as much as solar. And pumping water up a hill, aka "pumped storage hydropower", comprises well over 90% of the world's total energy storage capacity. But in spite of hydropower's outsize impact, we don't hear much about it in the U.S. While the past few decades have seen wind and solar plummet in price and skyrocket in availability, domestic hydropower generation hasremained relatively steady, as the nation has already built hydropower plants in the most geographically ideal locations.Internationally, it's a different story. China has fueled its economic expansion by building thousands of new, often massive, hydroelectric dams over the last few decades. Africa, India, and other countries in Asia and the Pacific are set to do the same.But expansion without strict environmental oversight could lead to trouble, as dams and reservoirs disrupt river ecosystems and surrounding habitats, andrecent studies show that reservoirs can emit more carbon dioxide and methane than previously understood. Plus, climate-driven drought is making hydro a less reliable source of energy, as dams in the American West have lost a significant amount of their electricity generating capacity."In a typical year, Hoover Dam will generate about 4.5 billion kilowatt hours of energy," said Mark Cook, Manager of the iconic Hoover Dam. "With the lake being the way it is now, it's more like 3.5 billion kilowatt hours." Yet experts say that hydro has a big role to play in a 100% renewable future, so learning how to mitigate these challenges is a must.
After years of tension, oil, clean energy find common ground in Washington - Since their emergence more than a decade ago wind and solar energy developers have often operated at odds with oil and gas lobbyists here, as the two sides battled over tax credits and research funding perceived as critical to determining the future of the energy sector.But show up at a congressional hearing in 2022, and it’s not uncommon to see the rival sectors arguing for the same policies, whether it’s speeding the federal government’s years-long process to permit new infrastructure or developing a domestic hydrogen industry - with oil companies supplying the natural gas, and wind and solar companies the electricity.There’s still plenty on which the two sides disagree. But as the wind and solar energy industries look to rapidly expand in the decades ahead to help meet national climate targets and oil companies try to reduce their carbon footprints, they are increasingly finding themselves on the same side of policy debates in Washington. The challenges these industries are having right now are very similar to those of their peers on the other side,” said Steve Everley, a managing director at the consulting firm FTI, who represents clients in both sectors. “Renewable energy developers are increasingly having to deal with disputes over land use, permitting issues, regulatory hurdles, just as oil companies have for decades. There’s a lot we have common.”Top of the list right now is the National Environmental Policy Act - better known as NEPA - a 1970s era policy designed to ensure infrastructure projects like bridges, power lines and roads don’t damage wilderness or areas of cultural or historic significance. With each passing decade, the standards have become more stringent, to the point a NEPA review stretches close to 5 years on average.The Trump administration ordered that timeline be cut to two years, drawing fire from environmental groups that argued it was not enough time to take into account the implications of pipeline, transmission and other infrastructure projects that often stretch hundreds of miles.When President Joe Biden came into office last year, he promised to reverse the policy. He has already rescinded some Trump-era provisions, while his administration works on a larger NEPA overhaul. But over the past 18 months, a coalition of interests from farmers and manufacturers to railroads and oil companies, along with members of his own party, have urged him not to entirely throw out Trump’s reforms, arguing that if the nation is to meet its clean energy target, the administration must speed up permitting for infrastructure.
In a Bid to Save Its Coal Industry, Wyoming Has Become a Test Case for Carbon Capture, but Utilities are Balking at the Pricetag - Wyoming has bet its future on carbon capture technology.The state has poured money into research on how to remove carbon dioxide from industrial emissions, and what to do with the gas once it has been captured. State lawmakers have passed laws to encourage carbon capture and regulations to govern it. As many other states and nations have tried to wean themselves off fossil fuels, Wyoming has done the opposite: In 2020, Gov. Mark Gordon signed a law—the first in the nation—that requires electrical utilities to generate some of their power from coal plants fitted with carbon capture equipment. Wyoming produces 40 percent of the nation’s coal, and relies on fossil fuels to generate nearly 60 percent of state and local revenues. The goal has been to find a way for the coal industry to thrive even as the nation reduces greenhouse gas emissions.But two years later, Wyoming may be no closer to willing this coal-friendly climate solution into being. In March, the utilities covered by the law submitted filings to regulators saying that carbon capture was not economically feasible. Retrofitting their plants would cost hundreds of millions of dollars, at the least, they said, forcing them to raise customers’ electricity bills.Beyond that, the filings said operating carbon capture equipment could spike water use at the coal plants and increase emissions of some air pollutants, as well as solid and liquid waste.Energy companies, labor unions and each of the last four presidential administrations have held out carbon capture and storage as a technology that could help the nation reduce greenhouse gas emissions while continuing to burn fossil fuels. The technology has played an important role in the Biden administration’s climate policy. Last year’s infrastructure bill included more than $12 billion to help pull carbon dioxide from smokestack emissions and straight from the atmosphere. Some states have also joined in: California recently said it will rely partly on carbon capture to meet its climate targets, though primarily in the industrial sector rather than for electrical generation.Nowhere is the support as strong as in Wyoming, which is an ideal testing ground. The state has abundant coal reserves and the right geology to store captured carbon dioxide. Perhaps most importantly, the technology has the unequivocal backing of political leaders, who have stated their intention to use carbon capture to protect their coal industry.“We put all our eggs in one basket,” said Dan Zwonitzer, who sponsored the 2020 carbon capture bill. “We champion coal. And so if we’re going to do that, we’ve got to find ways to make sure it can carry us into the future. And I think CCUS is a way that we need to find,” he said, using an acronym for carbon capture, utilization and storage.
ND Landowners Build Opposition to Land Use for Carbon Pipeline -The list of North Dakota counties voicing concerns about a proposed carbon-emissions pipeline is growing longer. Several are now on record opposing the possibility of using eminent domain against property owners.Summit Carbon Solutions wants to construct a multi-state pipeline to capture carbon emissions from ethanol plants and store it underground in North Dakota. The company is trying to get landowners' permission to build.But Richland County's Todd McMichael is leading a movement in case eminent domain is used. His county has adopted a resolution opposing such action.He acknowledged it's non-binding, but said it could influence state regulators."What the resolution does, and what we have seen from the past," said McMichael, "is that the Public Service Commission will really study what's going on out there." McMichael, who owns a farm along the proposed route, said landowners shouldn't be legally forced to surrender property for a project he feels is motivated by corporate profit. Five counties in the state have approved these resolutions. Summit argues it remains focused on voluntary contracts with residents, and that its project will drastically cut emissions from the ethanol industry. McMichael said even if the company touts open communication with landowners, he worries that approach won't last unless more residents make their feelings known about the project."I do feel that eminent domain could be a plausible action," said McMichael, "if either I don't agree to their dollar amounts, or I just continue to say no." Eliot Huggins, field organizer with the Dakota Resource Council, said his group isn't opposed to all aspects of carbon sequestration. But he said he thinks the company is rushing an unproven approach in areas not ready to embrace it. "Climate solutions should be solutions that benefit, you know, all communities," said Huggins. "In rural America, urban America, everywhere. And so, we don't really think a climate solution should be taking landowners' land without them consenting to it."
Strange Bedfellows: Farmers and Big Greens square off against Biden and the GOP -— Kathy Stockdale is no climate activist. The corn and soybean grower and conservative Christian says God controls the weather — “not the carbon dioxide.”Until now, Stockdale and her husband Ray couldn’t imagine linking arms with the Sierra Club, a critic of the corn ethanol industry and an environmental ally of President Joe Biden.But in this overwhelmingly Republican part of central Iowa, farmers who sell their crop to ethanol makers, like the Stockdales, have been thrust into Biden’s search for a climate policy that both slashes greenhouse gas emissions and satisfies crosscutting political interests.At the center of the drama are three proposed carbon dioxide pipelines — greenhouse gas superhighways that would traverse the nation’s breadbasket, carrying emissions from ethanol refineries to storage in underground rock formations in North Dakota and Illinois.Standing behind one $4.5 billion project is Iowa’s Republican kingmaker and agribusiness mogul Bruce Rastetter, who has made a pitch to farmers and to the Trump-era GOP. Capturing climate pollution from dozens of ethanol refineries across the Corn Belt is good for business, he says, and will help biofuels compete in a low-carbon economy.But just as the pipeline would slice through Iowa’s prized cornfields, it also cuts against the usual grain of American politics and flips age-old alliances on their head. Conservative farmers are teaming up with the Sierra Club in open rebellion against the ethanol industry. They fear a pipeline running under their land could ruin their crop yield and potentially expose their families to a hazardous gas.And the Sierra Club is targeting a Democratic White House eager to bring federal bucks to Iowa and anywhere else willing to invest big on solving the climate problem. The environmental group is pushing back against the idea that any technology that can drive down heat-trapping carbon emissions deserves a place in Biden’s policy playbook.Progressives are upset about Biden’s openness to a decadeslong GOP talking point — carbon capture and storage technology, or CCS, or “clean coal” — the idea that climate pollution can be bagged and eradicated forever at its source: whether it’s a coal plant or an ethanol refinery.For Biden, though, CCS is a critical bargaining chip as he negotiates with Sen. Joe Manchin (D) of West Virginia and pivotal moderates over a $500 billion plan for addressing climate change.But for farmers like the Stockdales, who oppose the pipeline as both unnecessary and a scar on their landscape, Biden is trying to solve a problem that doesn’t exist. And they’ll take allies wherever they can find them.“I told God that I don’t want to do this, I don’t want to be involved at first and he said, ‘No. I want you to,’” Kathy Stockdale says. “Because the land ultimately belongs to him and I need to take care of it. It is our responsibility.”
Eyeing CO2, Trailblazer seeks to move 392-mile gas pipe from FERC's purview - Trailblazer Pipeline has proposed to remove 392 miles of natural gas pipeline, slated for conversion to CO2 transportation, from Federal Energy Regulatory Commission jurisdiction, and plans to lease capacity from Rockies Express Pipeline to replicate the existing gas transportation service for shippers.Trailblazer and REX, both units of Tallgrass Energy, filed the application for certificate and abandonment with FERC on May 27, stating the proposal would result in more efficient use of existing facilities and minimize construction of new pipelines to serve CO2 transportation needs (CP22-468).Trailblazer is seeking to repurpose the abandoned pipeline for CO2 shipment from possible sources in Nebraska, Kansas, and Colorado to a sequestration site in Wyoming or Nebraska, the companies told FERC. They sought authorization in the second quarter of 2023, in line with what they termed a market desire for the project in the first quarter of 2024.Tallgrass in January announced that it received a grant from the Wyoming Energy Authority to fund development of a commercial-scale CO2 sequestration hub in the Denver-Julesburg Basin in eastern Wyoming, slated for service in 2024. In May, it unveiled a sequestration agreement in which Tallgrass would capture CO2 from ADM's corn-processing complex in Nebraska and ship it to the Wyoming hub for underground storage.Under the application at FERC, new REX facilities would allow for continuity of gas flows for Trailblazer firm service through leased capacity from REX. Those new REX facilities include two new laterals totaling about 41 miles of pipe, eight pipeline taps each, and five new booster compressor stations totaling about 7,800 hp.The companies also asked FERC to approve the lease arrangement, which involves 902,000 Dt/d of existing capacity from the REX/Trailblazer Lone Tree receipt point to the East Cheyenne Gas Storage point and 827,000 Dt/d of existing capacity from East Cheyenne Gas Storage point to the Trailblazer East Saline delivery point.The 15-year lease would give Trailblazer access to the same receipt and delivery points it serves now, and REX would maintain control over its system, including the leased capacity, according to the application.
New York just passed a bill cracking down on bitcoin mining — here's everything that's in it - Following an early morning vote in Albany on Friday, lawmakers in New Yorkpassed a bill to ban certain bitcoin mining operations that run on carbon-based power sources. The measure now heads to the desk of Governor Kathy Hochul, who could sign it into law or veto it.If Hochul signs the bill, it would make New York the first state in the country to ban blockchain technology infrastructure, according to Perianne Boring, founder and president of the Chamber of Digital Commerce. Industry insiders also tell CNBC it could have a domino effect across the U.S., which is currently at the forefront of the global bitcoin mining industry, accounting for 38% of the world's miners.The New York bill, which previously passed the State Assembly in late April before heading to the State Senate, calls for a two-year moratorium on certain cryptocurrency mining operations which use proof-of-work authentication methods to validate blockchain transactions. Proof-of-work mining, which requires sophisticated gear and a whole lot of electricity, is used to create bitcoin. Ethereum is switching to a less energy-intensive process, but will still use this method for at least for another few months.The push for an eleventh-hour vote came as leadership in the state capitol managed to flip some of the senators who were previously undecided.Lawmakers backing the legislation say they are looking to curb the state's carbon footprint by cracking down on mines that use electricity from power plants that burn fossil fuels. If it passes — for two years, unless a proof-of-work mining company uses 100% renewable energy, it would not be allowed to expand or renew permits, and new entrants would not be allowed to come online.The net effect of this, according to Boring, would be to weaken New York's economy by forcing businesses to take jobs elsewhere."This is a significant setback for the state and will stifle its future as a leader in technology and global financial services. More importantly, this decision will eliminate critical union jobs and further disenfranchise financial access to the many underbanked populations living in the Empire State," Boring tells CNBC.It is a sentiment echoed by Galaxy Digital's Amando Fabiano, who says that "New York is setting a bad precedent that other states could follow."As for timing, the law would go into effect as soon as the governor signs off.
Natural Gas Vs. Coal Fuel Costs For Power Generation -Natural gas futures prices have rocketed to 14-year highs in the past couple of months — during the lower-demand spring months, no less — and they are now trading at 3x where they were at this time last year. The CME/NYMEX Henry Hub futures for June delivery shot up to a high of $9.40/MMBtu in intraday trading last Thursday, the highest level we’ve seen since summer 2008, before expiring at $8.908/MMBtu, nearly $6 (~200%) higher than the June 2021 expiration settlement at just under $3/MMBtu. The newly prompt July futures retreated ~17 cents Friday to about $8.73/MMBtu, but that’s still nearly triple where July futures traded last year. It’s safe to say the low fuel cost of gas-fired power generation that defined the Shale Era has evaporated. Historically, at today’s sky-high prices, gas would have given up market share to coal in the power sector. However, the coal market is battling its own supply shortage and Eastern U.S. coal prices are at record highs. What does that mean for generation fuel costs and fuel switching? In today’s RBN blog, we break down the math for comparing gas vs. coal fuel costs. As we said in our recent blog on power burn, Can’t Stop Me Now, a tight coal market and record-high coal prices in the Eastern U.S. have suppressed gas-to-coal switching in recent months, despite the gas market also contending with a supply squeeze and gas prices trading at Shale Era highs. The coal-market constraints have contributed to record, or near-record, gas demand in the power sector in most recent months, with gas gaining market share of total generation fuel demand — on top of wind and solar also increasing their share of the pie. Generation fuel dynamics were a driving factor in the tighter gas market balances this past winter and will continue to play a role during the injection season, including how power grids balance cost and reliability during times of extreme customer demand, such as the heat waves we’ve already seen this month in Texas and other parts of the country. In Part 1, we walked through the concepts underlying how generation capacity is dispatched throughout the day, such as the daily load curve and the generation fuel stack. From there, we examined the economic and operational factors that can drive or constrain the dispatch of one fossil fuel over another, including weather conditions, the locations of competing generation capacity on the transmission grid, the operational requirements for keeping the grid reliable during high-demand periods, plant outages, and the fuels’ relative costs. As we concluded in that blog, of all the factors, fuel cost has the biggest influence on fuel switching decisions. So next, we need to understand how to calculate and compare fuel costs for a typical gas vs. coal plant on an apples-to-apples basis. To do that, I’m afraid we have to break out the calculators. Take a deep breath and grab an energy drink. To calculate fuel cost, we start by looking at generation plant economics in terms of efficiency — how efficiently a plant converts coal or natural gas molecules into electricity, also known as the heat rate of a plant. Plant efficiency is measured in British thermal units (a measure of energy) per kilowatt hour, or Btu/KWh. In a perfect power generation plant, it would take 3,412 Btu to generate 1 KWh of electricity at 100% efficiency. That perfect plant does not exist.
Oil Companies In The Middle East To Use Excess Gas For Bitcoin Mining; Report - Crusoe, a Denver-based bitcoin mining company, is deploying equipment to capture flared gasses in Muscat, Oman...Crusoe Energy, a U.S. firm that specializes in using excess natural gas for bitcoin mining, will begin deploying generators and mining equipment to capture flared gas in Muscat, Oman as the Middle East looks to cut its emissions, according to a report from Bloomberg.Chase Lochmiller, Crusoe’s CEO, explained in the report that the company felt it was important to have a presence in the Middle East and North African (MENA) region as the location accounts for 38% of the world’s burning of excess natural gas from oil wells.“Having the buy-in from nations that are actively trying to solve the flaring issues is what we are looking for,” Lochmiller said.The Oman Investment Authority was part of a $505 million funding round for Crusoe this past April. Ismail Ibrahim Al-Harthi, senior manager of technology investments at Oman Investment Authority, reportedly explained the stake in Crusoe did not represent the size of stakes in the company and Crusoe also declined to comment on the terms of the deal.The pilot for the first Middle Eastern deployment is expected to launch by the end of the year or early 2023. Lochmiller also reassured that while the state of financial markets and bitcoin “certainly has some impact on our top-line revenue, it doesn’t impact any plans for growth and expansion.”“Oman is committed to reduce greenhouse gases in line with the Paris climate agreement,” Al-Harthi said in an email with Bloomberg.The Oman government reportedly signed on with the World Bank to end routine flaring by 2030, and invested in Crusoe last year. Oman increased its stake in the company this past April, Al-Harthi reportedly stated in a phone interview.
Sweltering India turns to superheating coal for cooling - India has experienced a series of unusually early and prolonged heat waves this year. To cool off, the country has leaned on the fuel most responsible for the blazing temperatures. Coal generation is surging to meet the demands of cooling systems like fans and some air conditioning, prompting a scramble by the Indian government to reopen mines and secure tons of coal imports to produce electricity as temperatures reach as high as 120 degrees Fahrenheit. But the carbon-intense fuel also contributes to the initial problem. Scientists say that as the planet warms, heat waves are becoming more frequent and severe. The dynamic drives home the dangers of relying on energy sources that push temperatures to the bounds of human livability. It also illustrates the challenge of transitioning to less-polluting electricity, especially when vast quantities of power and green building and design are needed to keep people cool in dangerously hot temperatures, according to Indian climate advocates. And it underscores the global inequities that have hampered climate efforts for decades, with poorer nations arguing they are suffering the effects of warming created by richer ones. “We need to provide them cooling today because today’s warming is on account of what the West has done over the last 150 years, which means that if the only option to give them cooling right now is through the use of air conditioners and fans that run on electricity that unfortunately has to be provided from coal, so be it, because this is here and now danger,” . It’s a challenge India is not alone in facing. Neighboring Pakistan has also been subjected to blistering temperatures. With liquefied natural gas markets strained by the war in Europe, it too has turned to coal to meet its energy needs. Some companies in Pakistan have begun importing coal from Afghanistan to replace their usual shipments from South Africa, which is now sending more coal to Europe. India, a nation of 1.3 billion people, is the second-largest market for coal in the world, trailing only China. It is also feeling the brunt of a warming planet. This March was the warmest in the 122 years that the India Meteorological Department has kept temperature data. A recent analysis by World Weather Attribution, an international collaboration of scientists, found that climate change has made early season heat waves 30 times more likely in Southeast Asia. The blazing heat has sent electricity demand soaring. India recorded a daily demand record on April 29, according to the national grid operator, a day when roughly 70 percent of the country was subject to blistering temperatures. Peak energy demand in April was 5 percent above 2021 levels.As electricity demand has climbed, so has its reliance on coal, which provides about 70 percent of India’s electricity. Emissions from India’s power sector were up 1.7 percent, or 5.9 million tons, through the first three months of the year compared to the same time last year, according to Carbon Monitor, an academic emissions tracking initiative.
Coal ash workers' case heard by Tennessee Supreme Court - (AP) — Tennessee Supreme Court justices fired numerous questions Wednesday at a company that is challenging lawsuits alleging its workers were sickened or died after cleaning up the nation's worst coal ash spill, which happened more than a decade ago. Oral arguments centered on Jacobs Engineering's contention that the workers' claims should fall under a Tennessee law that limits legal challenges involving exposure to silica, a component of coal ash. Workers who participated in the cleanup of the 2008 spill at Tennessee Valley Authority’s Kingston Fossil Plant and their family members watched intently in court, many wearing “Remember Kingston” pins. Mark Silvey, an attorney for the workers and families, said there would be “virtually no kind of claim that would not be covered by the Tennessee Silica Claims Priorities Act" under Jacobs' interpretation. Some examples, he said, are if a bag of concrete, which contains silica, falls on someone's head as they walk through a construction area; if someone is killed with a brick, containing silica, and the family wants to sue for wrongful death; or if there was a product liability issue with irritation from children's diapers, which can contain silica. Justice Kirby Holly said the court has to consider how the interpretation would apply otherwise, noting further that breakfast cereal and the pain reliever Motrin contain silica. “If I eat a breakfast cereal and my claim is that it had ground glass in it, according to your definition, I think I would be completely precluded from immediate injuries that took place,” Kirby said. Dwight Tarwater, an attorney representing Jacobs, said the law has a “spectacularly broad definition” of what it would cover and that includes the alleged illnesses the workers suffered as a result of their exposure to coal ash. "The words say what they say, they mean what they say,” he said. He said if opposing attorneys have questions about the scope of the law, they should take it up with state lawmakers. He also noted that coal ash has a large concentration of silica. “Would it apply to a 'brick' situation? Probably not, from just a commonsense standpoint," Tarwater said. "But the words say it would. The words say that it's to be interpreted broadly. The words say it applies to any contact with, any inhalation of." The worker's attorneys argue the silica law was never meant to apply to cases like theirs. The act specifically refers to silica, which is just one component of coal ash. The components they believe caused the worker injuries include arsenic, lead, cadmium, mercury and radium, but not silica. The law also refers to claims for very specific injuries — silicosis and pulmonary fibrosis — that are not at issue in this case.
Justices weigh how to apply industry protection law to coal ash - If I hit you with a brick, does Tennessee's silica law protect me from being sued?That fantastical scenario gets to the heart of how broadly the legal system should interpret the law, which was passed in 2006 to protect industries that were worried about false injury claims stemming from silica exposure.On Wednesday, the Tennessee Supreme Court grilled attorneys representing Jacobs Engineering, the firm that oversaw safety during the cleanup of the 2008 Kingston power plant coal ash spill, and the workers who say they were sickened during the cleanup by exposure to the residue that's left over when coal is burned to produce electricity.The justices were pressing about how far they should go in applying the silica law.Jacobs is trying to use the silica law to derail lawsuits by hundreds of workers who say their exposure to coal ash has caused them to become ill, or even die in the cases of more than 50 workers. The company is arguing that because coal ash contains silica, the statute applies. Silica is the most common element in the Earth's crust and is found in everything from breakfast cereal to bricks. It most often comes into play in lawsuits when it is turned into dust, like what happens during construction activities such as sawing concrete or bricks.It also comes into play in figuring out how to classify coal ash, especially fly ash, a dry form of the substance. Fly ash was kicked up constantly by machinery used during the cleanup, swirling around the 300 acres that were deluged by more than a billion gallons of coal ash slurry that burst through a broken dike at the Tennessee Valley Authority's Kingston plant storage pond on Dec. 22, 2008. The workers are arguing that because they don't have the diseases mentioned in the act, such as silicosis or pulmonary fibrosis, the law does not apply.
Court stops nuclear power plant from restarting -- A Japanese court has stopped a nuclear power plant in Hokkaido from restarting operations after accepting an application by over 1,000 people who opposed its operations.In a rare decision, the Sapporo District Court ruled that Hokkaido Electric Power Co. should not resume operation of all three reactors at its Tomari nuclear plant in northern Japan, due to safety concerns.According to a Kyodo News report, the decision marks the third such court ruling for a nuclear plant's operations to be suspended in the country.The court decision also comes just as the operator was seeking permission from authorities to restart the plant.
Small Nuclear Reactors Won’t Avoid the Problem of Radioactive Waste - Some next-generation reactors may generate more or longer-lasting waste than conventional ones do, according to new research. The world needs abundant, carbon-free power, and advanced nuclear reactors for years have promised an attractive source of that, as well as a supplement to intermittent renewable energy from the sun and wind. So-called small modular reactors (SMRs), which can generate up to a third of the power of existing gigawatt-scale plants, are promoted as less expensive and cumbersome than conventional light-water reactors. Regulatory and other barriers preventing their construction are substantial — and have eclipsed scrutiny of proponents’ claims about radioactive waste, according to new research published today in the journal Proceedings of the National Academy of Sciences. The authors cite one US report stating that highly radioactive wastes could fall 94% by mass and 80% in long-lived radioactivity with the switch to advanced reactors.
Small modular reactors produce high levels of nuclear waste | Stanford News -Nuclear reactors generate reliable supplies of electricity with limited greenhouse gas emissions. But anuclear power plant that generates 1,000 megawatts of electric power also produces radioactive waste that must be isolated from the environment for hundreds of thousands of years. Furthermore, the cost of building a large nuclear power plant can be tens of billions of dollars.To address these challenges, the nuclear industry is developing small modular reactors that generate less than 300 megawatts of electric power and can be assembled in factories. Industry analysts say these advanced modular designs will be cheaper and produce fewer radioactive byproducts than conventional large-scale reactors.But a study published May 31 inProceedings of the National Academy of Sciences has reached the opposite conclusion.“Our results show that most small modular reactor designs will actually increase the volume of nuclear waste in need of management and disposal, by factors of 2 to 30 for the reactors in our case study,” said study lead author Lindsay Krall, a former MacArthur Postdoctoral Fellow at Stanford University’s Center for International Security and Cooperation (CISAC). “These findings stand in sharp contrast to the cost and waste reduction benefits that advocates have claimed for advanced nuclear technologies.”
Energy in nuclear waste could power the U.S. for 100 years, but the tech was never commercialized - There is enough energy in the nuclear waste in the United States to power the entire country for 100 years, and doing so could help solve the thorny and politically fraught problem of managing spent nuclear waste. That's according to Jess C. Gehin, an associate laboratory director at Idaho National Laboratory, one of the government's premier energy research labs. The technology necessary to turn nuclear waste into energy is known as a nuclear fast reactor, and has existed for decades. It was proven out by a United States government research lab pilot plant that operated from the 1960s through the 1990s. For political and economic reasons, the technology has never been developed at commercial scale. Today, there's an increased urgency to address climate change by decarbonizing out energy grids, and nuclear power has become part of the clean energy zeitgeist. As a result, nuclear fast reactors are once again getting a serious look. "It feels like it's real — or realer — than it has ever has been to me," said Brett Rampal, a nuclear energy expert at Segra Capital Management and Veriten. He did his senior project at the University of Florida on the subject in 2007 and remembers his professors arguing about the future of the technology even then. Proven technology There are 93 commercial nuclear reactors at 55 operating sites in the United States, according to Scott Burnell, spokesperson for the Nuclear Regulatory Commission. Twenty-six are in some stage of decommissioning process. All of the nuclear reactors that operate in the U.S. are light-water reactor designs, Burnell told CNBC. In a light-water reactor, uranium-235 fuel powers a fission reaction, where the nucleus of an atom splits into smaller nuclei and releases energy. The energy heats water, creating steam which is used to power a generator and produce electricity. VIDEO03:18 Nuclear power 'can be affordable' and 'is becoming safer': Barclays The nuclear fission reaction leaves waste, which is radioactive and has to be maintained carefully. There are about 80,000 metric tonnes of used fuel from light-water nuclear reactors in the United States and the existing nuclear fleet produces approximately an additional 2,000 tons of used fuel each year, Gehin told CNBC. But after a light-water reactor has run its reactor powered by uranium-235, there is still tremendous amount of energy potential still available in what is left. "Fundamentally, in light-water reactors, out of the uranium we dig out of the ground, we use a half a percent of the energy that's in the uranium that's dug out of the ground," Gehin told CNBC in a phone interview. "You can get a large fraction of that energy if you were to recycle the fuel through fast reactors." Fast reactors don't slow down the neutrons that are released in the fission reaction, and faster neutrons beget more efficient fission reactions, Gehin told CNBC. "Fast neutron reactors can more effectively convert uranium-238, which is predominantly what's in spent fuel, to plutonium, so you can fission it," Gehin said.
Ohio Oil and Gas Association Details Utica Players' ESG Achievements in Inaugural Report - Ohio oil and natural gas operators produced 15 times more natural gas in 2018 than in 1990 while slashing carbon dioxide emissions by 37.3 million metric tons, according to the Ohio Oil and Gas Association’s (OOGA) first Community Impact and Sustainability Report OOGA surveyed its member companies on environmental stewardship, community engagement and energy education for the report. Member companies also provided insight on the impact of technological upgrades to reduce emissions. According to the report, OOGA producers fell “well below the .28% goal the OneFuture Coalition set to limit methane emissions from production operations.”Our Nation’s Energy Future, aka ONE Future, comprises companies throughout the natural gas value chain that account for 19% of U.S. production, 56% of pipeline mileage and 40% of natural gas delivered in the United States. The coalition was formed in 2014 with the goal of achieving less than 1% methane emissions intensity across member companies’ operations by 2025. It reportedly accomplished that goal in 2017.In 2021, Ascent Resources Utica Holdings LLC, Ohio’s largest oil and natural gas producer, reduced its methane and greenhouse gas emissions by about 20%.Similarly, Antero Resources Corp., which holds 78,000 net acres across Ohio’s Utica formation, avoided 2,766 metric tons (mt) of carbon dioxide in 2020 by reducing its diesel fuel consumption by 37% with a bi-fuel fleet.Dominion Energy Inc., which supplies 1.2 million Ohioans with natural gas, implemented its Zero Emissions Vacuum and Compression (ZEVAC) units across its pipeline systems to capture and use natural gas, preventing 250,000 mt of methane from entering the atmosphere in OOGA’s sustainability report. The Ohio Oil and Gas Energy Education Program (OOGEEP), a non-profit aimed at educating the public on the daily impact of natural gas and oil, has received more than $23 million from the oil and gas industry since its founding. The OOGEEP has awarded $267,000 in scholarships to students with an interest in the oil and gas industry since 2017.OOGA is a statewide trade association with around 1,300 members from small independent conventional producers, and large independent horizontal operators exploring the Utica Shale formation. The association includes midstream, large-scale transmission line companies, contractors, oilfield service and supply providers, manufacturers, gas utilities and other professional entities.
Signing Bonuses, Royalties, New Leases Pick Up in Ohio Utica - It seems that the higher prices natural gas is fetching are finally translating into higher royalty checks for landowners–at least in the northern part of the Utica Shale in Ohio (likely everywhere). The Youngstown Business Journal spoke to landowners with leased and producing acreage in Columbiana County and found not only have their royalty checks increased, so too has new leasing activity and along with it, new lease bonuses. see: As Oil and Gas Prices Climb, So Do Royalties
Company to widen a portion of County Road 74 - Ascent Resources Utica will widen a portion of County Road 74 in Richland Township at no cost to the county, so the company can have better access an oil and gas site. Guernsey County Engineer Paul Sherry said site contains the equipment, impoundments and pipelines needed for development and operations. Ascent will widen a 1.36 mile portion of County Road 74 (Salem Road) between Ohio 313 and Township Road 59 and do full-depth reclamation with a 3-inch overlay. It will also perform base repairs and 3-inch overlay on the 1.7 mile portion of County Road 74 from Township Road 59 to Township Road 427. There is no timeline when the work will be complete. Ascent Resources is a private exploration and production company focused on acquiring, developing, producing and operating natural gas and oil properties in the Utica shale. It is based in Oklahoma City, Oklahoma.
Balderson pushing to designate natural gas a green, clean energy - As energy costs are rising, natural gas could help lower costs, according to Licking County's congressman. Rep. Troy Balderson, R-Zanesville, announced at a Pataskala oil and gas well site Wednesday that he had introduced a resolution in the U.S. House of Representatives to designate natural gas as a green and clean energy source. "It is green. It is clean. And it is abundantly right underneath our feet right here in Ohio," he said. George Brown, executive director of the Ohio Oil and Gas Energy Education Program said Ohio has reduced carbon dioxide emissions by 37% over the last decade thanks to the conversion to natural gas electric generation.Balderson, who represents Ohio's 12th U.S. congressional seat, said natural gas will save families money and protects the country's safety and energy independence. "At a time when energy prices across the board are headed upward, consumers need affordability," he said. "Unleashing America’s abundant natural gas is the solution to affordable energy, a cleaner environment and securing American energy independence now."
6 New Shale Well Permits Issued for PA-OH-WV May 23-29 | Marcellus Drilling News - It appears the wind has gone right out of the sails when it comes to issuing new permits for shale drilling in the Marcellus/Utica. For the week of May 23-29, only six new permits were issued. Four of the permits were issued in Pennsylvania, two in West Virginia, and none in Ohio. This is the lowest number in a single week we’ve seen in maybe forever. A measly, lousy six permits!
GAO report questions Northeast oil, gas reserves — A new review of the federal government’s heating oil and gas reserves for the Northeast shows they hold only enough for two days’ worth of consumption. The U.S General Accountability Office said in a report on Wednesday that the region’s reserves, which total 2 million barrels, were established to reduce the impact of severe supply disruptions. “We found the current reserves are not well suited to this task,” the GAO said. “They have only been used once to date, after Hurricane Sandy in 2012, and hold less than 2 days’ worth of consumption in the Northeast.” To put the 2 million barrels in context, the GAO noted that the U.S. Department of Energy maintains a reserve of 565 million barrels of crude oil, enough for more than 30 days of national crude oil consumption. The accountability office also raised questions about the ability to tap reserves quickly and concluded that the energy department has not fully considered future risks to regional petroleum product supplies, including risks posed by storms, noting that such supplies are commingled in tanks with commercial supplies. “State officials we interviewed also highlighted power outages as an impediment to accessing existing fuel supplies during some emergencies,” according to the GAO report. “For example, Hurricane Sandy-related power outages shut down many gas stations. After this experience, New York State passed a law requiring some gas stations to install a transfer switch so that a back-up generator can be used in the event of an emergency.”
Unleashing LNG: Pittsburgh region seen as a catalyst for solving European energy woes - In the hours after Russia's invasion of Ukraine in late February, southwestern Pennsylvania's energy leaders gathered for a previously scheduled roundtable. It was, Range Resources Corp. VP Tony Gaudlip told the Washington County Chamber of Commerce audience, not just an issue that was taking place half a world away. If the supply of energy from Russia to Europe was cut off, he said, the United States would be called upon to replace it with domestically produced liquefied natural gas. A portion of the nation's LNG and natural gas liquids production — at least 20% of it — is exported from gas produced in Washington County. "You may not see the link or know the link, but what is right below our feet is going to help that region," Gaudlip predicted. The four months since Gaudlip's forecast has only strengthened the argument. Two years ago the natural gas industry was on its heels with rock-bottom commodity prices, a sharp decline in demand, declining drilling, wells shut and a falloff in Wall Street favor. It was on the defensive about its role in climate change and how it could survive in a low-carbon future. But now, with natural gas prices quadrupling amid a supply shortage plus concerns about energy security with a seemingly endless war in Ukraine, the idea of ramping up natural gas production in the United States to protect freedom overseas has gained traction. And with it, the Marcellus and Utica shales could play a huge role. Liquefied natural gas (LNG) is a form of natural gas that has been cooled to an extreme temperature (260 degrees below zero Fahrenheit), through which about 600 times more LNG can be stored compared to traditional natural gas. The product is shipped by huge oceangoing tankers all over the world. No matter where it ends up, LNG is heated and then converted back to natural gas.LNG exports have long been seen as a potential expanding market for domestic natural gas producers, but up until recently it’s been more of an aspiration than reality. The LNG export market has traditionally been dominated by other players, including Qatar and Saudi Arabia.But the shale revolution has allowed the U.S. to go from an LNG importer to an exporter. Over the past two years, aided by new processing and export terminals, primarily in the Gulf Coast, U.S. LNG exports have been soaring: Exports grew from 3 billion cubic feet per day less than two years ago to 13 billion cubic feet per day in 2022, according to data from the U.S. Energy Information Administration.In late March, the Biden administration authorized additional exports of LNG from facilities along the Gulf Coast, amounting to 0.72 billion cubic feet per day of additional exports. It will help wean Europe off Russian natural gas, but it's only the tip of the iceberg: Under an agreement with the European Union, U.S. LNG will top 50 billion cubic meters per year by 2030.But natural gas producers say that isn't half of what's needed to guarantee energy security for the U.S. and its allies in an energy picture that looks different than even on New Year's Day."This is not something you can flip a switch and fix overnight," said Anne Bradbury, CEO of the American Exploration and Production Council, a group of natural gas drillers. "But there are a certain number of things this administration can and should be doing to support our allies in Europe and around the globe."
Pottstown explosion: At least 5 people killed in house explosion in Pennsylvania - -At least five people were killed, including four children, and two others were taken to area hospitals when a house exploded in Pottstown, Pennsylvania, Thursday evening, CBS Philadelphia reports. Crews are still spraying the home with water as neighbors try to pick up the pieces, the station reported Friday. The victims were identified as Francine White, 67; Alana Wood, 13; Jeremiah White, 12; Nehemiah White, 10; and Tristan White, 8. Eugene White, 44, and Kristina Matuzsan, 32, were injured and remain in critical condition at nearby hospitals, police said in a press release Friday afternoon.Everyone who was in the home has been accounted for, police said.Three homes were destroyed in the explosion, according to CBS Philly. The blast sent debris, including dry wall, into neighboring yards, CBS Philly's Kerri Corrado reports.A man who lives nearby heard a loud bang and felt the impact."I was in my room chilling," Kaleef Blackwood told CBS Philly. "I was upstairs and the next thing you know I just heard a big boom like a bomb went off or something. It just shook the whole house."The town's schools will be closed Friday.Montgomery County officials believe a gas explosion started the fire, CBS Philly reports. Authorities are still at the scene and investigating the incident.
PECO: No gas service at Pottstown explosion site— The question which hangs over the tragic explosion at two homes on Hale Street Thursday continues to be top of mind: “What caused it?” Social media posts have been relentless at speculating about the cause. We have at least been able to disprove the theory that it was caused by a plane crashing into the home, which got some early traction as facts were still being gathered. But given the size and power of the explosion, and the presence of so many PECO workers Thursday night into Friday, many have begun to ask aloud whether it could have been caused by natural gas. Many area residents told journalists over the past two days there have been many occasions during which they smelled gas and called to report it. During a press conference Friday, borough officials could not answer questions about the frequency of gas odor reports. However, PECO issued a statement about 7 p.m. Friday. “There has been speculation about the cause of this explosion; however, this investigation is still ongoing. The following details confirm PECO’s involvement and support in the ongoing investigation of this incident:“Shortly after 8 p.m. on May 26, PECO was notified by the Fire Department of a reported explosion on Hale Street in Pottstown. PECO crews responded and worked to shut off natural gas and electric service to secure the area and ensure the safety of first responders and residents. Currently, 10 customers remain without electric service. Additional Key Facts:
- • No Natural Gas Service at the Impacted Properties: There is no record of natural gas service at the affected addresses of 453/455 Hale Street, which sustained significant damage in the event. To clarify, these properties were not PECO natural gas customers. The Pottstown Fire Department reported that a propane tank was present at one of the impacted properties. Both propane and natural gas utilize odorants to help people identify a potential leak.
- • Nearby Natural Gas Mains: While these properties were not served by PECO natural gas, there are natural gas mains in the vicinity of the home and natural gas service is provided to nearby customers.
- • PECO’s Current Investigation Work: PECO crews are currently on-site supporting the investigation. This work includes inspections of natural gas mains, service lines leading to properties and natural gas meters. Customer-owned appliances and piping may also be investigated. Area inspections will encompass homes and natural gas equipment in a wide area to ensure there is no additional damage.
Pottstown explosion not caused by meth lab fire chief says, possible propane or natural gas sources under scrutiny — Officials in charge of the investigation into the Hale Street home explosion that killed five people last Thursday are not yet ready to say what the cause was, but they will say what it wasn’t.It was not a methamphetamine lab, as has been speculated relentlessly on social media and elsewhere.Standing at the explosion site Wednesday morning, Pottstown Fire Chief Frank Hand said the lead agency in the investigation is the federal Bureau of Alcohol, Tobacco and Firearms. “They’ve narrowed it down but one thing we do know is it was not a meth lab, that has been ruled out,” he said. At about the same time Hand was speaking with MediaNews Group, PECO Energy, which supplies natural gas to the neighborhood, released a statement largely similar to the one released on Friday, stating the homes that exploded were not PECO natural gas customers. The statement released Wednesday, merely adds “our investigation continues, and to date, we have not found evidence that PECO’s natural gas caused this incident. To be clear, the investigations are ongoing, and we have not been advised of any final determinations by investigating authorities.”
Biden's EPA aims to erase Trump-era rule keeping states from blocking energy projects - The Biden administration on Thursday proposed undoing a Trump-era rule that limited the power of states and Indigenous American tribes to block energy projects like natural gas pipelines based on their potential to pollute rivers and streams.The Clean Water Act allows states and tribes to review what effect pipelines, dams and other federally regulated projects might have on water quality within their borders.The Trump administration sought to streamline fossil fuel development and made it harder for local officials to block projects.The Biden administration’s proposed rule would shift power back to states, tribes and territories.The administrator of the Environmental Protection Agency (EPA), Michael Regan, said the draft regulation would empower local entities to protect water bodies “while supporting much-needed infrastructure projects that create jobs”.The Trump-era rule required local regulators to focus reviews on pollution projects might discharge into rivers, streams and wetlands. It also rigidly enforced a one-year deadline for regulators to make permitting decisions. Some states lost authority to block projects based on allegations they missed the deadline.Now, the EPA says states should have the authority to look beyond pollution discharged into waterways and “holistically evaluate” impacts on local water quality. The proposal would also give local regulators more power to ensure they have the information they need before facing deadline pressure over a permit.The public will have an opportunity to weigh in on the EPA proposal. The final rule isn’t expected to take effect until spring 2023. The Trump-era rule remains in effect.
NYMEX natural gas futures tumble amid bearish weather, production data - NYMEX front-month natural gas futures May 31 picked up where they left off before the long holiday weekend by tumbling to start the abbreviated trading week. At the end of trading, the NYMEX July 2022 gas futures contract lost 58.2 cents to close at $8.145/MMBtu. The downside action in prices stemmed from a bearish June temperature outlook according to one of the alternative weather forecast models, as well as dry gas production that inched higher in recent days, testing the 96 Bcf/d area. While the two major weather forecast models, the Global Forecast System (GFS) and the European (ECMWF) models, continue to show a relatively neutral to slightly bullish outlook for the lower 48 states over the course of June, the Coupled Forecast System model version 2 (CFSv2) is depicting a notably cooler forecast for the month. Even though the CFSv2 isn't ranked as high as the GFS and ECMWF models in terms of industry standard usage, the CFSv2 does have a history of scoring coups against the major models in recent years. The most recent runs of the CFSv2 are showing a warm bias for the Southwest region of the US, while the rest of the nation, including the Northwest, the Great Plains (including Texas), and the near entirety of the remaining eastern third of the US is forecast to be quite cool by June standards. Only time will tell if this outlook verifies, but if the CFSv2 model is correct, much of the nation may be able to dodge an energy shortage bullet and would allow the gas storage deficit to be more quickly eaten away in the weeks ahead. From the fundamental supply/demand perspective, lower 48 dry production levels are measuring between 95 Bcf/d and 96 Bcf/d for the final gas day of May, which is down by about 460 MMcf from the previous day. Texas and the Northeast regions are each down about 120 MMcf, while the Midcontinent, Southeast and Western regions are respectively down 82 MMcf, 66 MMcf, and 67 MMcf for May 31. On the demand side of the spectrum, modestly above-average temperatures will remain around for another day or so, with lower 48 mercury levels averaging above 70 degrees. These conditions will remain steady for much of the week as climatological or seasonal historical averages edge higher. Demand levels for the first couple of days of June are estimated at more than 62 Bcf/d but then will ease to 60.5 Bcf/d over the latter part of the week. LNG feedgas was under 12 Bcf/d due to lower processed volumes at Sabine Pass.
Natural Gas Futures Pare Losses Early as Production Readings Dip -A dip in the latest production estimates helped natural gas futures pare their losses in early trading Wednesday, while technical factors also pointed to potential upside for prices. After a 58.2-cent sell-off in Tuesday’s session, the July Nymex contract was up 13.2 cents to $8.277/MMBtu at around 8:55 a.m. ET.Production estimates early Wednesday were showing “phantom” declines typical of the first-of-the-month, according to EBW Analytics Group.The “raw figures” were “suggesting a day/day supply loss of 2.0-2.5 Bcf/d,” EBW senior analyst Eli Rubin said. “Most of the losses are likely due to intra-month pipeline nomination patterns rather than physical changes, but lower supply readings may help natural gas establish firmer support in the coming days.”From a seasonal perspective, the outlook for natural gas “remains strong,” suggesting a “sharp turn higher is possible,” according to Rubin. However, “deeper price consolidation is likely first.”In terms of the storage outlook, it’s possible weekly injections already peaked at 89 Bcf, which would make this the first summer without a triple-digit build in six years, Energy Aspects said in a recent note.This comes as pricing along the summer strip has been “failing to provide injection incentives,” according to the firm. The market is “seeking industrial price triggers as structural demand growth is hard to reverse.” Three estimates submitted to Bloomberg as of early Wednesday for this week’s Energy Information Administration (EIA) storage report showed injection expectations from 79 Bcf up to 91 Bcf.The five-year average build for the week ended May 27 is a 100 Bcf injection, which also matches the year-earlier build, EIA data show.
Natural Gas Futures Bounce Back, while Strong Power Burns Keep Upward Pressure on Cash A large decline in production fueled a rebound in natural gas futures midweek, with lower wind generation providing additional market support. The July Nymex contract settled Wednesday at $8.696/MMBtu, up an astounding 55.1 cents on the day. August futures climbed 54.8 cents to $8.686. Spot gas prices also rallied on robust power burns, with NGI’s Spot Gas National Avg. up 9.5 cents to $8.200. After coming within an earshot of late 2021 highs after the Memorial Day holiday, production on Wednesday took a nosedive. Though first-of-the-month declines are common, traders took notice of the roughly 2 Bcf day/day drop in output. Bloomberg data showed big production drops in several regions. The Haynesville was down more than 5% day/day, while the Midcontinent was down around 3.5%. Appalachia and Rockies output also fell around 3%. Total output was seen at around 94.5 Bcf on Wednesday, off about 2.4 Bcf day/day. Even with expectations that production could get revised higher rather quickly, there are other factors that may have influenced pricing midweek. Wind generation, for example, fell from holiday weekend highs and was seen falling even lower as the week progresses. This drop in wind generation – which likely equates to at least some pickup in natural gas demand – drove increases in the cash market midweek and could help send futures back above $9.000 over the next week or two if current wind forecasts pan out, according to Bespoke Weather Services. However, the firm noted that the next round of government inventory data may take priority in the near term, with the market on watch for signs of continued tightness in the market following last week’s bullish surprise. Ahead of the report, analysts were looking for an injection in the 80s Bcf. A Wall Street Journal poll produced estimates ranging from 73 Bcf to 92 Bcf, with an average build of 84 Bcf. A Bloomberg survey had a tighter range of projections and landed at a median injection of 86 Bcf. Reuters polled 14 analysts, whose estimates ranged from injections of 76 Bcf to 93 Bcf, with a median increase of 87 Bcf. Last year, 100 Bcf was added into storage during the similar week, while the five-year average injection also is 100 Bcf. Energy Aspects pointed out that with heat building, particularly in the southern United States, the market may have already seen its peak injection for the season at 89 Bcf. If that proves to be the case, it would mark the first summer without a triple-digit build in six years. Rising exports amid growing summer demand in Asia and an ongoing urgency to replace Russian gas supply in Europe mean the market has few levers to pull to refill stocks.
U.S. natgas slips 2% on big storage build, lower demand forecast (Reuters) - U.S. natural gas futures slid about 2% on Thursday on a slightly bigger than expected storage build and forecasts for lower demand next week than previously expected. Earlier in the day, the contract was up about 3% and on track to close at a 13-year high due to a drop in output in recent days, an increase in the amount of gas flowing to liquefied natural gas (LNG) export plants and record power demand in Texas. Power use in Texas reached the highest level on record for the month of May on Tuesday and will likely break the grid's all-time high early next week, as economic growth boosts overall usage and hot weather causes homes and businesses to crank up their air conditioners. The U.S. Energy Information Administration (EIA) said utilities added 90 billion cubic feet (bcf) of gas to storage during the week ended May 27. That compares with the 86 bcf build analysts forecast in a Reuters poll. It also compares with an increase of 100 bcf in the same week last year, and with a five-year (2017-2021) average increase of 100 bcf. Traders said the build was smaller than usual because power generators burned more gas last week to produce electricity due to high coal prices and a lack of wind power. After dropping about 7% on Tuesday and rising about 7% on Wednesday, front-month gas futures for July delivery fell 21.1 cents, or 2.4%, to settle at $8.485 per million British thermal units (mmBtu). The contract closed at $8.8971 on May 25, its highest settle since August 2008. U.S. gas futures are up about 127% so far this year, as much higher prices in Europe and Asia keep demand for U.S. liquefied natural gas (LNG) exports strong, especially since Russia's Feb. 24 invasion of Ukraine stoked fears that Moscow might cut gas supplies to Europe. Gas was trading around $27 per mmBtu in Europe and $24 in Asia. Data provider Refinitiv said average gas output in the U.S. Lower 48 states fell to 94.5 billion cubic feet per day (bcfd) so far in June from 95.1 bcfd in May. That compares with a monthly record of 96.1 bcfd in December 2021. Refinitiv projected average U.S. gas demand, including exports, would rise from 85.1 bcfd this week to 85.9 bcfd next week. The forecast for this week was higher than Refinitiv's outlook on Wednesday, while the forecast for next week was lower. The average amount of gas flowing to U.S. LNG export plants rose to 12.7 bcfd so far in June from 12.5 bcfd in May. That compares with a monthly record of 12.9 bcfd in March. The United States can turn about 13.6 bcfd of gas into LNG.
Natural Gas Futures Take Breather, but Highs Could Be Tested Again Soon -- Natural gas futures price action quieted down a bit Friday, no doubt with traders’ heads still spinning from the prior day’s wild swings. The July Nymex gas futures contract settled 3.8 cents higher to end the week, at $8.523/MMBtu. August futures picked up 3.6 cents to reach $8.510. Spot gas prices retreated after several days in the green, with a moderate outlook for the three-day period through Monday. NGI’s Spot Gas National Avg. plunged 48.0 cents to $7.895. With weather models trending slightly cooler for next week, it appears that Friday’s modest price rally was likely inspired by the ongoing digestion of the latest storage data. The Energy Information Administration’s (EIA) 90 Bcf injection initially was viewed as bearish versus expectations and helped send futures tumbling on Thursday, but Bespoke Weather Services said the data “was not really bearish when stepping back and looking at the big picture.” After all, supply/demand balances are still tighter than they need to be for the market to have “any true sense of comfort,” according to Bespoke. Furthermore, the weather pattern looks set to move materially hotter around the middle of the month, with gas-weighted degree days moving above normal by around June 13. Although wind output is expected to rise from recent lows, it should remain off the peaks seen in April and May. “In our view, we would not be shocked to see prices test the highs again” over the next week, Bespoke said. Mobius Risk Group agreed the storage situation remains precarious. Regionally, there were notable storage deficit expansions observed in the West and South Central. The Pacific and Mountain regions posted a cumulative build of 9 Bcf, which is 9 Bcf lower than the same week last year. Additionally, this was the ninth straight week in which there has been an increase in the year/year storage deficit, Mobius said. In the South Central region, the weekly inventory report showed almost no change to the year/year storage deficit, which now sits at just over 140 Bcf. Notably, Thursday’s 20 Bcf net injection was inclusive of a 3 Bcf salt withdrawal. “In order to have an adequate pre-winter inventory level, there will be a dire need to refill salt storage, which thus far is not occurring at a substantial rate,” Mobius said. The Schork Group analyst team said “the future is now” for injections. They noted that the month of May is typically when the market sees the largest injection of the year. Storage builds then start to fall in June when air-conditioning demand begins to ramp up in the northern states and ease further as heat intensifies in July and August. Looking ahead to the next EIA report, early estimates are pointing to a build in the high 90s or even low triple-digits. Assuming this stock increase comes to fruition, the cumulative injection for the month of May would be spot on the 30-year mean of 381 Bcf, according to The Schork Group.
Drought Adds To Pressure On US Gas Inventories -- U.S. gas prices have climbed to the highest for more than 13 years as inventories remain well below average while the drought and lack of hydro generation threatens to stretch them even further. Front-month futures prices for gas delivered at Henry Hub in Louisiana have climbed to around $9 per million British thermal units, up from $3 at the same point a year ago. Prices are the highest after adjusting for inflation since October 2008, when the financial crisis was intensifying and the economy was heading deeper into the great recession. In real terms, front-month prices are in the 86th percentile for all months since 1990, signalling the need for significant steps to relieve the gas shortage.Last week, working stocks in underground storage were 348 billion cubic feet (16%) below the pre-pandemic five-year seasonal average (“Weekly natural gas storage report”, Energy Information Administration, May 26).Inventories increased by just 430 bcf between April 1 and May 20, below the pre-pandemic seasonal average of 461 bcf, so the storage deficit is increasing rather than reducing. The result is that the one-year calendar spread has moved into a record backwardation of almost $4 per million British thermal units as traders anticipate stocks will remain tight. High prices signal the need to reduce consumption, including by switching from gas-fired to coal-fired generation as much as possible, while maximising drilling and production. The total number of rigs drilling for gas has climbed to 150, the highest since late 2019, and up from just 100 this time a year ago, according to field services company Baker Hughes. The number of oil rigs, which produce associated gas as a by-product, has climbed to 576, up from 343 a year ago, and the highest since just before the first wave of the pandemic arrived in early 2020.Increased drilling should ensure gas production continues increasing throughout the rest of this year and into the first quarter of 2023.But the last two months have been hotter-than-normal for the time of year boosting air-conditioning and refrigeration demand. The Lower 48 states have experienced a total of 171 population-weighted cooling degree days so far this year compared with a long-term seasonal average of 124.At the same time, the worsening drought across the western states is cutting power generation from hydro-electric sources and increasing reliance on gas-fired generators. In California, drought could cut hydro to just 8% of total generation, from a median of 15% in recent years, according to the EIA.Increased gas-fired generation is likely to make up around half the shortfall (“Drought effects on California electricity generation and western power markets”, EIA, May 2022).Large volumes of gas will also continue to be exported in the form of LNG to Europe and Asia to cover high demand in those regions, especially for alternatives to Russian gas, tightening the market further.Traders expect the market to remain tight, with exceptionally high prices signalling the need for even more drilling and running non-gas generation units for as many hours as possible this summer.
BSEE conducts unannounced oil spill response inspections in Gulf - As part of its mission to ensure that oil and gas companies are prepared to respond quickly and effectively to an offshore oil spill, the Bureau of Safety and Environmental Enforcement held a Government Initiated Unannounced Exercise (GIUE) on May 24, and an equipment deployment June 1, to assess an operator's ability to activate its Incident Management Team in Houston and carry out the procedures described in its approved oil spill response plan. “One of BSEE’s top priorities is to ensure oil and gas companies can respond to offshore oil spills effectively and as quickly as possible,” Eric Miller, chief BSEE Oil Spill Preparedness Division, said in a statement announcing the exercise. “BSEE conducts unannounced exercises on a regular basis to evaluate an operator’s oil spill response plan and gauge their ability to successfully accomplish objectives with a hypothetical oil spill scenario.” The exercise required the operator, Equinor USA E&P Inc., to respond to a simulated discharge of oil resulting from exploration drilling activity in Walker Ridge block 316, about 167 miles off the Louisiana coast. The scenario began with the operator receiving information from the drillship indicating they were having trouble preventing a blow-out from occurring at the well. About an hour after the exercise was initiated, a BSEE controller provided the operator additional information indicating that an uncontrolled discharge of oil was observed on the water below the drillship. Except for regulatory notifications, all response actions were simulated during the exercise. The company was evaluated on its capacity to promptly mobilize a workforce and effectively organize a response. The company had to simulate an oil slick trajectory and develop a plan to secure the source of the spill to meet certain objectives for the exercise. Additionally, BSEE evaluated the operator’s Dispersant Use Plan, drafted by the operator during the exercise, to determine if it included updated monitoring requirements that were officially incorporated into the National Oil and Hazardous Substances Pollution Contingency Plan in January 2022.
The Oil Industry’s Downstream Nightmare Is Here To Stay - Last week, Bloomberg reported, citing anonymous sources, that the Biden administration was looking into the possibility of restarting idled refineries in order to boost fuel production and tame prices. Meanwhile, operating refineries are running at utilization rates of over 90 percent, which, according to industry insiders, is an unsustainable rate. And come hurricane season, if there is refinery damage, things could get really ugly with the fuel supply situation.Welcome to the downstream nightmare of the energy world.The United States has lost around 1 million bpd in refining capacity since 2020, according to a Reuters report that also cited one analyst, Paul Sankey, as saying this meant the country is in what is effectively a structural shortage of such capacity. Globally, refining capacity has shrunk by over 2 million bpd since 2020.According to the International Energy Agency, this is not a problem at all. The IEA estimated that global refining capacity shed 730,000 bpd last year and that, this year, refinery runs would be about 1.3 million bpd lower globally than what they were in 2019. The reason that would be no problem for the IEA is that demand for oil is seen as 1.1 million bpd lower than what it was in 2019.Not everyone is so calm, however, especially in the United States, where retail fuel prices are breaking records while refiners convert their refineries to biofuels production plants.“It’s hard to see that refinery utilization can increase much,” Gary Simmons, chief commercial officer of Valero, told Reuters. “We’ve been at this 93% utilization; generally, you can’t sustain it for long periods of time.”Interestingly enough, despite the imbalance in supply and demand, which has pushed the crack spreads to the highest in years, refiners do not seem to be planning new capacity additions. .“Investors do not want to see companies pouring money into organic oil and gas growth,” In addition to this, building a new refinery is a lengthy and expensive endeavor that few refiners appear to believe is justified despite the record crack spreads. At the same time, demand for refined products remains strong: U.S. fuel exports are running at record rates, a lot of them going to Europe, which, like the U.S., reduced its refining capacity over the last two years but now needs new sources of oil products after it embarked on an emergency course to cut its dependence on Russian oil and fuels.Speaking of Russia, sanctions have resulted in a substantial reduction of refining capacity, with Reuters estimating as much as 30 percent idled, with some 1.2 million bpd in capacity likely to remain offline until the end of the year, according to JP Morgan.Meanwhile, in Asia and the Middle East, refining capacity has been on the rise. In Asia, the new additions have topped 1 million bpd, according to a Bloomberg chart, while in the Middle East, new refining capacity since 2019 has reached about half a million barrels daily.The balance of refining capacity, then, has not just changed but also shifted geographically. The U.S. two weeks ago exported 6 million bpd in refined petroleum products. After the EU approved an embargo on Russian crude and products, albeit “in principle” for now, chances are that demand for imports from the U.S. will rise further, straining U.S. refiners even more.Then it will be time for hurricane season, and even if the Gulf Coast gets lucky this year, refinery closures in anticipation of storms making landfall are pretty much guaranteed, based on what we have seen in the past. This does not bode well for fuel prices, which have become a major issue for governments on both sides of the Atlantic. There is a certain sense of irony in that one, although by no means the only, reason for the capacity imbalance is investors’ focus shift from oil and gas to alternative energy sources.
New Map Shows More People Live within Oil and Gas Threat Radius- -A newly created map reveals more Americans are being exposed to health threats from proximity to oil-and-gas production facilities. The map's release Tuesday comes ahead of new industry safeguards expected from the Environmental Protection Agency. Map co-creator Alan Septoff with the group Earthworks said more than 144,000 New Mexicans live within a "threat radius" of an oil or gas facility - defined as being a half-mile. Since the group's first nationwide analysis in 2017, Septoff said, millions more people have been added to the threat radius map."Seventeen-point-three million people live within the threat radius - up 4.7 million from five years ago," he said. "Almost 4 million kids under 18 live within the threat radius; 3.2 million students go to school at 12,400 schools."New safeguards being considered by the EPA would reduce greenhouse-gas emissions and associated toxic air pollution from new and existing oil-and-gas facilities and address routine flaring. The gases from extraction are known to increase rates of cancer, asthma and other diseases. Earthworks' Andrew Klooster is an optical gas imaging thermographer based in Colorado, a state with some of the strongest regulations in the country. Nonetheless, he said, what's written on paper and what's happening on the ground do not align - because the state doesn't have the capacity to enforce its regulations."In all the states that we work, whether it's Colorado or Texas," he said, "sites are not being inspected frequently enough and regulations are not being enforced as forcefully as they should be."Despite a new reporting program implemented by the New Mexico Oil Conservation Division, quarterly reports show 262 operators did not file information about how much natural gas was lost to venting and flaring. Klooster said that's why new oil-and-gas development is making the problem worse. "The industry, by and large, is still policing itself when it comes to air-quality violations," he said, "and there's a presumption on the part of regulators that they're voluntarily complying with most of the rules that have been adopted. The result of this presumption is pollution that continues to harm communities in all of the states that we work."
To understand the orphan well problem in NM, someone’s going to have to count them - The 50-square-mile stretch of public land known as Glade Run is described on the Bureau of Land Management’s website as a “great spot for the weekend warrior.” Glade Run is punctured by 600 oil and gas wells, connected by hundreds of access roads and an arterial network of buried gathering lines that leave unvegetated, eroded scars on the land. It’s not far from Mike Eisenfeld’s home. He’s the energy and climate program manager for the San Juan Citizens Alliance. He lives in Farmington, N.M, an agricultural community transformed into a center of oil and gas production.“You should be reclaiming and revegetating well pads and pipeline right of ways,” Eisenfeld said, driving past a cleared well pad, his voice sputtering as his truck traversed the washboard roads that have become a popular off-roading venue for locals. “And cleaning up the mess you have created.”The U.S. Senate passed the bipartisan infrastructure package last year with nearly $44 million to plug and reclaim orphaned oil and gas wells in New Mexico. The first round of funding is part of a nationwide push to address growing concerns over abandoned wells’ environmental and health impacts — particularly the release of the potent greenhouse gas methane.“Orphan wells are an enormous source of methane, a greenhouse gas that is 86 times more potent than CO2,” wrote Sen. Martin Heinrich in an emailed statement to Source New Mexico. “These emissions have devastating impacts on our climate and the health of our communities.” While many have lauded the move to identify and plug orphan wells, the true scope of the problem in New Mexico is still poorly understood. On federal lands in New Mexico — where the majority of oil and gas extraction takes place — the number of orphan wells is still unknown. The Bureau of Land Management leases oil and gas permits on such land. Through the agency’s process of reviewing records and inspecting wells deemed high-priority, BLM has not identified any on federal lands in the largest oil and gas region in the state, according to a spokesperson. “BLM New Mexico is not aware of any federally managed orphaned wells residing under its administration within the state of New Mexico,” wrote BLM’s Allison Sandoval in an email to Source New Mexico. Eisenfeld said this is dubious, and that there are likely many on BLM land. Logan Glassenap, a staff attorney for the New Mexico Wilderness Alliance, agrees.“We know there is a problem. We don’t know its scope,” he said. In March, the alliance wrote a letter to BLM requesting an audit of all inactive oil and gas wells.
Settlement jeopardizes nearly all Trump-era oil and gas leases in Wyoming - The Biden administration will redo the environmental review of more than 2,000 Wyoming oil and gas leases sold between 2015 and 2020 — including virtually all of the leases issued under former president Donald Trump — in accordance with atrio of settlement agreements approved Wednesday by a federal judge.None of the leases have been vacated, but their future is uncertain. The Department of the Interior now has to reevaluate and retroactively justify more than two dozen lease sales. If it decides it can’t, or its reasoning doesn’t satisfy the court, the sales could be reversed and any existing permits revoked.Jeremy Nichols, climate and energy program director for plaintiff WildEarth Guardians, said the decision was unprecedented.“This is getting to the heart of the federal oil and gas program,” Nichols said. “The question here will be not whether it’s OK to lease in the Red Desert or the Powder River Basin, but whether the federal oil and gas program even makes sense in the midst of the climate crisis.”Industry responded by asking Congress to play a greater role in decisions affecting the energy sector. “Backroom court settlements like this, negotiated by the Biden Administration and its anti-domestic oil and gas allies, will continue to decide the fate of Wyoming’s primary economic driver until Congress reasserts its control and establishes a coherent national energy policy,” Ryan McConnaughey, communications director for the Petroleum Association of Wyoming, said in an emailed statement.WildEarth Guardians and several other environmental groups filed three lawsuits against the interior department, in 2016, 2020 and 2021, challenging the climate analysis for a total of nearly 4 million acres leased for oil and gas development across Wyoming, Colorado, Montana, New Mexico and Utah.Close to 2.5 million of those leased acres — more than 3,500 square miles — are located in Wyoming.U.S. District Judge Rudolph Contreras ordered the department in 2019 to reassess some of the Wyoming leases. A year and a half later, he declared the agency’s second attempt inadequate.Around the same time, the interior department acknowledged “the same sort of deficiencies” in subsequent sales’ climate analyses, said Kyle Tisdel, senior attorney and climate and energy program director for the Western Environmental Law Center, another plaintiff.If the agency wants future lease sales to hold up in court, Tisdel said, its climate analysis will have to meet the higher bar the cases have established. Federal attorneys have cited Contreras’ decisions and other, similar rulings to explain why it took the Biden administration more than a year to complete the review process for its first round of onshore lease sales.
Undoing Trump, EPA to empower states and tribes to oppose pipelines - The Environmental Protection Agency announced on Thursday it would seek to return authority to states to oppose gas pipelines, coal terminals and other projects that pose a threat to lakes, rivers and streams — reversing a major Trump administration rule. For half a century, states under the Clean Water Act had broad authority to alter or even block many energy projects and other infrastructure that threatened to pollute or harm waterways within their borders. But in 2020, President Donald Trump issued a regulation reining in that power. Now, the EPA is seeking to restore states’ authority, making it easier for local officials, including Native American tribes, to scrutinize proposals to build many highways, hydroelectric dams, shopping malls, housing developments and even wineries and breweries.“For 50 years, the Clean Water Act has protected water resources that are essential to thriving communities, vibrant ecosystems, and sustainable economic growth,” EPA Administrator Michael Regan said in a statement. “EPA’s proposed rule builds on this foundation.”Although the proposed rule does not explicitly target fossil-fuel infrastructure, Democrats may seek to invoke it to reduce emissions contributing to global warming. New York, for instance, once used its power under the Clean Water Act to nix a gas pipeline that it said was “inconsistent” with the state’s climate goals.Under the Clean Water Act, the federal government cannot issue a permit for projects that may harm protected waterways without getting permission from states, territories or tribes. The new rule will give local officials more time and leeway when making those decisions.The agency officials will take public comment on the proposal over the next 60 days, with plans to revise and finalize the rule after getting that feedback by the spring of next year.
Companies pull out of drilling leases at Arctic Wildlife Refuge -Companies are backing out of controversial plans to drill in the Arctic National Wildlife Refuge, which is home to a number of animal species.A company called Regenerate Alaska, which leased more than 23,000 acres in the refuge’s coastal plain at an auction held by the Trump administration last year, has since asked to have the lease rescinded, according to an Interior Department spokesperson. The spokesperson said Thursday that the Bureau of Land Management last month rescinded and canceled the lease, and the Office of Natural Resources Revenue refunded the company’s bonus bid and first year rentals. The sale last year, in which Regenerate had won its lease, earned much less than its Republican proponents had predicted. The Biden administration has suspended leases at the refuge as it takes a second look at the Trump-era decision to open it up. A Chevron spokesperson also confirmed Thursday that earlier this year the company pulled out of a lease on land owned by an Alaska Native corporation inside the refuge. “Chevron’s decision to formally relinquish its legacy lease position was driven by the goal of prioritizing and focusing our exploration capital in a disciplined manner in the context of our entire portfolio of opportunities,” said company spokesperson Deena McMullen.The Anchorage Daily News, which first reported the cancellations, also reported that Hilcorp Energy Company also pulled out of a lease on land owned by the Alaska Native corporation. Leasing at the refuge is controversial because it is home to grizzly bears, polar bears, gray wolves and more than 200 species of birds. It also contains land considered sacred by the Gwich’in people.
These Public Oil Companies Are Joining Forces With Bitcoin-Miners To Reshape The Industry - In the news media and general discourse, the focus on partnerships between miners and oil companies has primarily centered on North America. Most of this attention is being paid here for good reason as several of the biggest names in the oil industry are working with North American miners.In 2021, ExxonMobil reported annual revenue of more than $285 billion with global daily production during the same period reaching more than two million barrels per day of oil and gas. This titan of the oil industry is also reportedly working with a bitcoin mining company in North Dakota to turn otherwise wasted gas into energy for mining operations. This news spread like wildfire through the Bitcoin community when it was first published, but some off-grid mining teams already knew of Exxon’s relationships with miners. In August 2021, for example, Giga Energy co-founder Matt Lohstroh said Exxon was already selling some gas to miners.But as the premise of this article suggests, Exxon is far from the only oil company dealing with miners.
- ConocoPhillips is also supplying gas to bitcoin miners, which has been widely reported by various mainstream media outlets, including CNBC and Bloomberg.
- Marathon Oil, a multi-billion-dollar oil company based in Houston, also powers co-located bitcoin mining operations with its gas. On its website’s page about emissions control, Marathon indicates it uses gas “that would otherwise be flared due to lack of a gas connection or gas takeaway capacity constraints [to] generate electricity to power co-located computing and data centers used for Bitcoin mining.”
- EOG Resources, another American oil company, is also rumored to be dealing with miners by members of the industry, although official deals have not yet been reported.
- And Texas Pacific Land recently signed a deal with two mining companies, Mawson and JAI Energy, to begin what JAI Energy co-founder Ryan Leachman called “the biggest bitcoin related announcement in oil and gas to date.”
US Nat Gas Prices Have Exploded Thanks To Soaring LNG Exports To Europe - Regular readers will be aware of our view regarding the soaring US nat gas price, which we have repeatedly said is to a large extent a function of US nat gas exports to Europe, meant to ease Europe's historic natgas shortage which is the direct result of the Ukraine war (as Putin turns the screws on European nat gas exports) and Europe's disastrous "green" policies which virtually assured that the continent would have a historic energy crisis. Indeed, as we noted a few days ago in "US NatGas Prices Top $9, Hit 2008 Highs As EU 'Convergence' Accelerates", when addressing a recent Pew Poll which found that "61% of Americans would favor exporting large amounts of natural gas to Europe", we doubt 61% would be supportive of such policies if they knew they are behind the historic spike in domestic nat gas prices. Today, none other than Reuters' senior energy analyst John Kemp confirms that behind the surge in US nat gas prices are LNG exports to Europe, writing that "US natural gas production will have to accelerate significantly if the country is to keep growing record export volumes without creating shortages for consumers at home." And while we may avoid shortages, we certainly will have much, much higher prices to look forward to before the European nat gas crisis "converges" with the US.According to Kemp, gas exports in the form of LNG were up by 674 billion cubic feet or 87% in the first three months of 2022 compared with the same period in 2019. Domestic consumption was flat over the same period, selected to span the pandemic, according to the latest monthly data compiled by the U.S. Energy Information Administration.But domestic production increased by only 433 billion cubic feet (5%), mostly as a result of low prices and consolidation within the industry. In consequence, LNG exports have grown to around 12% of domestic gas production, up from 4% in 2019, and the proportion is set to increase further. Net exports in all forms, by pipeline as well as LNG, hit a record 377 billion cubic feet in March 2022, up from just 121 billion in March 2019. Rapid growth in LNG exports, in excess of domestic production, has put increasing downward pressure on gas inventories and upward pressure on prices. At the end of March, working stocks in underground storage were 318 billion cubic feet below the pre-pandemic five-year average. After adjusting for inflation, front-month futures prices climbed in May to their highest since November 2008, on the eve of the financial crisis and great recession. In order to keep Europeans warm or cool, and avoid having them pay too high prices for Russian gas, real US prices are in the 83rd percentile for all months since 1990, up from the 8th percentile three years ago, signalling the need for more production and discouraging consumption. Reflecting the anticipated shortage of gas, futures prices for the current year compared with one-year forward have moved into a record backwardation. There are, however, signs that domestic producers are starting to respond to the strong price incentive to raise output. The number of rigs drilling specifically for gas has increased by 50% over the last six months, albeit from a low base, which should ensure output grows faster over the next year than in the last one. The increase in the number of rigs drilling for oil should also help by increasing the amount of associated gas production. The U.S. gas industry has been very successful in marketing its production to consumers in Europe and Asia who are anxious to diversify their sourcing and lock in reliable supplies. Now the industry must show it can produce enough gas to feed the export machine, or else it will be US consumers who are left footing the bill.
Canada ‘Missing the Boat’ on More LNG Export Opportunities, E&P Execs Warn --Canada’s energy industry and the regulators that oversee it need to get serious quickly if the country expects to be a player in the global natural gas market, a panel of exploration and production (E&P) executives said this week at a conference in Vancouver, British Columbia (BC). Countries across the world are scrambling for additional liquefied natural gas (LNG) supplies, especially after Russia invaded Ukraine. Competition has increased and prices have risen.“We always seem to be, quite literally, missing the boat on this opportunity,” Peyto Exploration and Development Corp. CEO Darren Gee said Tuesday at the Canada Gas & LNG Exhibition and Conference.The industry wants to better capitalize on the country’s prolific natural gas resources, particularly near proposed export projects in the Western Canadian Sedimentary Basin (WCSB) of BC and Alberta. According to the government, 18 LNG export facilities have been proposed in Canada, mostly in BC. The Shell plc-led LNG Canada project north of Vancouver is the only one under construction.“The problem with Canadian LNG projects is we’re in our own way,” Gee said. “We take too long, there is too much bureaucracy, there’s too much regulation, we miss the pricing window, we have cost overruns and the economic advantage that we should have is lost along the way.”The Peyto CEO and others that joined him on the panel noted how quickly the United States has built out LNG export infrastructure. They lamented that Canada now has to compete with dominant players along the Gulf Coast for offtakers. The first LNG exports left the Lower 48 in 2016. American export capacity is expected to reach 13.9 Bcf/d by the end of this year and surpass 16 Bcf/d in 2024 when the eighth U.S. terminal comes online.“If we would just not politicize this and do the best we can to exploit our resources – we have vast resources here in the WCSB – we could help the world,” LNG projects in Canada have moved so slowly that producers are now committing natural gas supply to Gulf Coast projects. Top producers Tourmaline Oil Corp. and Arc Resources Ltd. have signed deals with Cheniere Energy Inc. to capture the upside of overseas benchmarks in deals linked to the Japan-Korea Marker.“As Canadians, we want to keep this resource in Canada and export from Canada,” Gee said. “The last thing we should be doing is paying the U.S. a great big fee to run through all their infrastructure to get it on a boat.” Peyto has operations in the WCBS near LNG Canada and other proposed export terminals in BC.
BC’s Port Edward LNG Project Working to Quickly Move Canadian Natural Gas to Asia - Port Edward LNG Ltd. President Chris Hilliard, who is leading development of a small-scale liquefied natural gas (LNG) facility on the west coast of Canada, believes the project has unique advantages to become one of the country’s first LNG export terminals Hilliard said the 300,000 metric tons/year project could be in service by 2024. Considering development started in 2020, that would be a lightning timeline. However, the project is fully permitted by the British Columbia (BC) Utilities Commission and BC Oil and Gas Commission. It would also be supplied by the Pacific Northern Gas pipeline and electrified by nearby hydropower, leaving little infrastructure to be built.Canada’s oil and gas industry has struggled to get LNG export projects off the ground in the face of regulatory hurdles and prolonged negotiations with Indigenous First Nations. According to the government, 18 larger LNG export facilities have been proposed in Canada, mostly in British Columbia. The massive Shell plc-led LNG Canada project north of Vancouver is the only one under construction. It’s about 60% complete, but it’s not expected to come online until 2025 at the earliest. Hilliard’s $300 million project would have about 1% the capacity of a larger export facility. The plant would be built on a 37-acre site in Port Edward near the city of Prince Rupert, more than 600 miles north of Vancouver. Vessels could reach Asia about a week faster than those carrying LNG from the Gulf Coast, Hilliard said. Under the plans, Port Edward would load 40 ISO, i.e. International Organization for Standardization, containers each day, which would then be trucked to port for shipment overseas.
With Russia's Invasion of Ukraine, Mexico Said Facing 'Historic' Economic Opportunity -The war in Ukraine coupled with supply chain rebalancing brought on by the coronavirus pandemic is creating unique economic opportunities in Mexico, according to energy industry professionals who spoke Wednesday at the Mexico Gas Summit in San Antonio, TX. “It’s a historic opportunity,” said Francisco Acuña, president of Sonora State’s sustainable development committee. But, he said, “this opening is not going to last forever.” The opportunity, according to Acuña, was in the next year and a half. The executive said projects in Sonora were being developed, and natural gas is a key part of competitiveness. Sonora is home to Mexico Pacific Ltd.’s (MPL) planned liquefaction project envisioned for Puerto Libertad. “All the regions in Mexico that have developed economically have access to natural gas,” he said. Bank of America Merrill Lynch Director of Commodities Alfonso Martín said natural gas remains the cheapest molecule of energy globally, even at $9.00/MMBtu. This “creates a lot of opportunities” for Mexico. In Monterrey, in Nuevo Leon, “everyone is growing, everyone is building,” he said. He called manufacturing the “regal engine of growth in Mexico.” Manufacturing is energy intensive and benefits from natural gas across the border. He cited the squeeze industries in Europe were facing with natural gas prices many times higher than in Mexico.Participants expressed the need to develop Mexico’s natural gas resources, particularly its unconventional deposits in the north. Mexico imports as much as 90% of the natural gas it consumes.The Energy Commision of Tamaulipas’ Fernanda Alemán Alcocer, director of projects, said 67% of imported gas in Mexico runs through her state. She said natural gas generates jobs and “there haven’t been negative consequences from developing natural gas infrastructure – the opposite.”But, she said, Winter Storm Uri last year “exposed our vulnerability.” Mexico “is consuming gas that we have beneath our soil… Natural gas is about national security, and we need to pay attention.”
UK windfall tax hits North Sea-focused oil firm valuations— — Oil and gas exploration and production companies in the North Sea are set to miss out on billions of dollars of cash after the UK implemented a windfall tax on energy firms to tackle the rising cost of living. Analysts at Jefferies investment bank lowered price targets for UK-listed Harbour Energy Plc, EnQuest Plc and Serica Energy Plc, estimating that the energy profit levy will cost the companies $3.3 billion through 2025. Despite the hit, the bank retained a buy rating on the firms as higher oil and gas prices still means the three firms’ free cashflow levels will be more than 60% higher than their combined market capitalization based on current commodity forward prices. The UK government announced May 26 that it would impose a 25% windfall tax on oil and gas companies to help those being crippled by soaring energy costs. The measure also includes an 80% new-investment allowance that means energy companies can reduce the amount they pay if they commit to fresh capital expenditure. The North Sea was once dominated by Big Oil firms such as Shell Plc and BP Plc, but these have increasingly retreated from the area’s maturing fields. Private equity-backed firms, including Harbour and NEO Energy, have in turn gained ground, with the former now the biggest producer in the UK North Sea. The impact on Shell and BP will be less severe as their UK North Sea operations represent less than 10% of their operations, Still, BP has said it will review its investment plans in the UK, while Shell said the levy “creates uncertainty about investment in North Sea oil and gas for the coming years.”
Why Britain is spending £37 billion to make its energy-supply crisis worse --As he opened the COP26 climate talks in November, Boris Johnson warned “it’s one minute to midnight” in the race to slash planet-heating carbon emissions. His government has since announced £37 billion of funding focused squarely on subsidizing the consumption of energy -- much of it fossil fuels. The prime minister didn’t come to this point by choice. He’s reacting to a cost-of-living crisis that has impoverished millions of Britons. But his government has been forced to address this problem with tools that are both costly and climate-busting in large part because of past policy failings. Over the last decade, a raft of energy-efficiency measures such as home insulation have been botched or abandoned under successive Conservative prime ministers. The expansion of onshore wind power has also slowed markedly due to their restrictive policies. British consumers’ annual energy bills would be £2.5 billion ($3.2 billion) lower today if those things hadn’t happened, according to an analysis by Carbon Brief. The support for households announced this week was “absolutely necessary and the right thing to do” said Luke Murphy, associate director for energy and climate at the Institute for Public Policy Research, a progressive think tank. “But it should have been accompanied by investment in home insulation and an expansion of onshore wind to lower bills, increase energy security and tackle climate change.” Failure on these policies has left Johnson’s government “lurching from crisis to crisis, coming back with ever greater short-term fixes,” Murphy said. When COP26 concluded Alok Sharma, the conference president and UK cabinet minister, told the nearly 200 national delegations departing Glasgow that he would be pressuring them to stick to their climate promises. Six months later, it’s the hosts themselves rowing back on commitments signed at the United Nations summit.
Gazprom Suspends Gas to Important Energy Supply Link - In a statement posted on its Twitter page on Tuesday, Gazprom announced that it has completely suspended gas supplies to Netherlands’ GasTerra B.V. “due to failure to pay in rubles”. The Twitter statement comes with a link to a press release on the Gazprom website, although Rigzone is currently not able to access Gazprom’s site and has not been able to for some time. In a statement posted on its website on Monday, GasTerra said it had decided not to comply with Gazprom’s “one-sided payment requirements”. “In a decree issued on 31 March, Russian President Putin stated that, from now on, Russian gas would have to be paid for in rubles,” GasTerra said in the statement. “This means that anyone wanting to buy gas would have to open both a euro and a ruble account with Gazprombank in Moscow. GasTerra will not go along with Gazprom’s payment demands. This is because to do so would risk breaching sanctions imposed by the EU and also because there are too many financial and operational risks associated with the required payment route,” GasTerra added in the statement. “In particular, opening accounts in Moscow under Russian law and their control by the Russian regime pose too great a risk for the Groningen company,” GasTerra went on to note. GasTerra highlighted that the cessation of supply by Gazprom means that, between now and October 1, 2022, approximately two billion cubic meters of contracted gas will not be delivered. GasTerra said it has anticipated this by buying gas from other providers. “The European gas market is highly integrated and extensive. However, it is impossible to predict how the lost supply of two billion cubic meters of Russian gas will affect the supply/demand situation and whether the European market can absorb this loss of supply without serious consequences,” GasTerra said in the statement. “GasTerra has repeatedly urged Gazprom to respect the contractually agreed payment structure and supply obligations, but to no avail,” GasTerra added. GasTerra is a wholesaler that buys gas from domestic and foreign producers and on the open gas market. The company describes itself as an important link in the energy supply inside the Netherlands and Western Europe.
Russia expands Europe gas supply cutoffs -Russia is cutting off additional supplies of natural gas to Europe — this time impacting countries including Germany — as the continent moves ahead with its own ban on Russian oil. Russian company Gazprom said in Telegram posts on Tuesday that it would cut off gas supplied under a contract with Shell to Germany and under a contract with Danish company Ørsted and Dutch company GasTerra BV. The cutoffs come after the three companies failed to comply with Russia’s new requirement to pay for gas in Russian rubles, Gazprom said. The announcements represent an escalation in an ongoing energy battle between Russia and Europe as the European Union and its allies continue to sanction Russia over its invasion of Ukraine. A number of countries, including the U.S., have banned Russian oil. On Monday, the European Union agreed to an embargo of most of Russia’s oil imports by the end of the year. The companies all said in statements that they would purchase gas from elsewhere. Shell spokesperson Curtis Smith said via email that the company has “access to a diverse portfolio of gas from which we will continue to supply our customers in Europe.” Ørsted CEO Mads Nipper said the company has been “preparing for this scenario, so we still expect to be able to supply gas to our customers.” Nipper said that there is no gas pipeline that goes directly between Russia and Denmark, so Russia would not be directly cutting of the country’s supply. GasTerra said it “has anticipated this by buying gas from other providers” but also said that it is “impossible to predict” whether the European market can absorb the lost supply without serious consequences. GasTerra also said it would not meet Russia’s demand to pay in rubles because doing so “would risk breaching sanctions imposed by the EU” and cause “financial and operational risks,” such as government control of accounts in Russia. Meanwhile, Ørsted said in a statement that it was “under no obligation” under its contract to pay in rubles and “will continue to pay in euros.”
Russia's Gazprom cuts off some natural gas to Germany after Shell refused to pay for it in rubles - Russian energy-giant Gazprom said it has completely halted natural-gas supply to Shell under a contract that supplies the fuel to Germany, Europe's largest economy. The move came after Shell refused to pay Gazprom in rubles.Gazprom made the announcement on Wednesday — a day after itcut off natural-gas supplies to the Netherlands for the same reason.In a March 31 decree, Russian President Vladimir Putin demanded that natural-gas payments be made in rubles, which would entail opening a euro and ruble account with the country'sGazprombank to process payments.Gazprom said in its Telegram channel on Tuesday that Shell Energy Europe had notified Gazprom "it does not intend to make payments under the contract for the supply of gas to Germany in rubles.""As of the end of the business day on May 31 (the payment deadline stipulated by the contract), Gazprom Export had not received payment from Shell Energy Europe Limited for gas supplies in April," the Russian company wrote."Gazprom Export notified Shell Energy Europe Limited of the suspension of gas supplies under this contract from June 1, 2022" — until payment is made in rubles, the Russian company continued.Contracts for Russian gas to Europe transported via pipelines are typically denominated in euros, according to the Financial Times.Gazprom supplies up to 1.2 billion cubic meters of natural gas a year to Shell. That's just 1.3% of the 95 billion cubic meters of natural gas Germany consumes each year, according to the country's economy ministry.
Gazprom Suspends Gas Supplies to Orsted - Gazprom has announced that it has completely suspended gas supplies to Denmark’s Orsted Salg & Service A/S “due to failure to pay in Rubles”. The announcement was made on the company’s Twitter page and included a link to a press release on the Gazprom website, although Rigzone is currently not able to access Gazprom’s site and has not been able to for some time. In a statement posted on its website on Tuesday, Ørsted announced that Gazprom Export had informed Ørsted that the company would halt the supply of gas to Ørsted on June 1, 2022, at 6:00 CEST. “At Ørsted, we stand firm in our refusal to pay in Rubles, and we’ve been preparing for this scenario, so we still expect to be able to supply gas to our customers,” Mads Nipper, the group president and CEO of Ørsted, said in the statement. “The situation underpins the need of the EU becoming independent of Russian gas by accelerating the build-out of renewable energy,” Nipper added in the statement. In a statement posted on its website on May 30, Ørsted revealed that it had repeatedly informed Gazprom Export that it would not pay for gas supplies in Rubles. The company warned in the statement that there was a risk that Gazprom Export would stop supplying gas to Ørsted. “Since there is no gas pipeline going directly from Russia to Denmark, Russia will not be able to directly cut off the gas supplies to Denmark, and it will thus still be possible for Denmark to get gas,” Ørsted said in the statement. “However, this means that the gas for Denmark must, to a larger extent, be purchased on the European gas market. We expect this to be possible,” Ørsted added. The company outlined in the statement that it had been preparing for this scenario to minimize the risk of its gas customers, which it pointed out are primarily “major” companies in Denmark and Sweden, experiencing shortfalls in gas supplies. “Ørsted has storage capacity in e.g. Denmark and Germany, and we are currently filling up these storage facilities to secure gas supplies to our customers and contribute to the market’s security of supply,” Ørsted said. “We are in ongoing dialogue with the authorities about potential scenarios, and we trust that the authorities, who have the overall overview of the supply situation in Denmark, are prepared for the situation. We will remain in close dialogue with the authorities regarding the situation,” the company added.
Gazprom’s gas exports to Europe via Ukraine remain steady | Hellenic Shipping News Worldwide -- Russian gas producer Gazprom said its supply of gas to Europe through Ukraine via the Sudzha entry point was seen at 42.1 million cubic metres (mcm) on Friday versus 41.81 mcm on Thursday. An application to supply gas via another major entry point, Sokhranovka, was rejected by Ukraine, Gazprom said.
Burning gas to produce electricity is 'stupid,' the CEO of power giant Enel says --The CEO of Italian power firm Enel has cast doubt on the continued benefit of using gas to produce electricity, telling CNBC it is "stupid" and that cheaper and better alternatives are now available. Speaking to CNBC's Steve Sedgwick at the World Economic Forum, Francesco Starace discussed where Europe had sourced its gas from over the years, name-checking both Libya and Russia. Russia was the biggest supplier of petroleum oils and natural gas to the EU last year, according to Eurostat. The bloc is now attempting to wean itself off Russian hydrocarbons following the country's invasion of Ukraine. "I think this is a big wake up call," Starace said, adding that "too much gas" was being used "in a stupid way, because burning gas to produce electricity is, today, stupid." Instead, Starace said there were more attractive alternatives. "You can produce electricity better, cheaper, without using gas ... Gas is a precious molecule and you should leave it for … applications where that is needed," he added. These industrial uses include chemical applications, the paper industry and use in the production of ceramics and glass, he said. "Spare gas for them," Starace said. "Stop using gas for heating, stop using gas for generating electricity when there are alternatives that are better." Alternative methods of electricity generation include wind and solar power, among others. . According to a recent report from Ember, a think tank focused on moving the planet away from coal to what it calls "clean electricity," fossil fuels were responsible for 37% of EU electricity generation in 2021. Breaking down the above figure, Ember's report — published in February — said fossil gas power produced 18% of the EU's electricity, a three-year low. Renewables were responsible for 37%, while nuclear produced 26% of the bloc's electricity last year, Ember said. Across the Atlantic, preliminary figures from the U.S. Energy Administration show that natural gas was used in 38.3% of utility scale electricity generation in the United States in 2021.
Qatar LNG Output Falls As Desperate Market In Crisis Begs For More - LNG production in Qatar has fallen this year, even with increased calls for the fuel amid an energy crisis in Europe as the bloc attempts to wean itself off Russian gas,Bloomberg reported on Friday. Qatar exported less than 35 million tons of LNG from January to May—a loss of 1 million tons from the same period in 2021, according to ship-tracking data compiled by Bloomberg.The news comes just a few short months after Qatar wanted guarantees from Europe—leading up to Russia’s invasion of Ukraine—that the bloc would limit the resale of any LNG cargoes outside Europe on the spot market. Qatar also asked the EU to resolve an investigation dating back to 2018 into the Middle Eastern country’s long-term supply contracts.But even then Qatar wasn’t talking about increasing production. It was considering increasing its shipments to Europe by diverting LNG cargos away from Asia.Germany’s Economy Minister Robert Habeck recently visited Qatar with an eye to securing additional LNG cargo.“Qatar is in the process of increasing its gas extraction and we need more gas in the short term to replace Russian supplies,” Habeck said at the time.In 2021, Qatar made the FID on an LNG expansion project that would increase its annual capacity from 77 million tons to 110 million tons. But the $29 billion project isn’t set to be complete until 2025.According to Bloomberg, Qatar managed to export 84 million tons of LNG last year, despite its stated 77 million ton annual capacity.Germany has plans to build two import terminals to receive shipped LNG when it locates a source. But last month, Germany and Qatar hit a roadblock in their talks over long-term LNG deals. Qatar is looking for long contracts, while Germany is looking to leave room to transition away from fossil fuels.
EU To Block Seaborne Russian Oil Deliveries, Not Pipeline, To Satisfy-Hungary - Last week EU leaders held what was deemed an "awkward" summit, as one diplomat attendee put it, given the don't mention the Russian oil ban elephant in the room. Given Prime Minister Viktor Orban's Hungarian government recently likened a Russian oil ban to dropping a nuclear bomb on its economy (and with some smaller EU countries quietly agreeing with that assessment), there seems a growing consensus - at least behind the scenes - that a total embargo is completely unrealistic and untenable, especially amid steadily ratcheting energy prices.But the European Commission seems to have quickly changed its tune while facing certain 'hard realities', as many predicted, coming off a mere month ago when its head Ursula von der Leyen said, "This will be a complete import ban on all Russian oil, seaborne and pipeline, crude and refined." Now just weeks later, on Saturday the European Commission hinted it will move toward a ban only on seaborne deliveries, but not pipeline supplies as part of its "phased approach".Bloomberg on Saturday cited EU officials privy to the ongoing discussions who pinpointed that this allows a broader ban without significantly impacting Hungary's primary supply, which is transferred through the massive Druzhba pipeline, which is also the world's world's longest oil pipeline.Industry publications point out that in the month prior to the Russian invasion of Ukraine, some 750,000 b/d of Russian crude flowed through the Druzhba to various refineries in Europe.Bloomberg writes of the impending modified oil ban that "The proposal would give extra time to Hungary, which has antagonistic the deal, to discover a technical resolution that satisfies its power wishes. It might additionally cope with the worries of different landlocked nations, together with Slovakia and the Czech Republic."And further, "Bulgaria would get a transition duration till June or December 2024 and Croatia may get an exemption for imports of vacuum fuel oil. The fee additionally proposed proscribing re-exports of Russian oil provided by way of pipeline to different member states or 3rd nations."Hungary's strong resistance is not the only factor driving a compromised "ban" - as Von der Leyen described in an interview days ago with MSNBC that she fears Russia's Vladimir Putin "might be able to take the oil that he does not sell to the EU to the world market, where the prices will increase, and sell it for more – and that would fill his war chests." For example China has reportedly stepped up purchases for its strategic reserves, with India also said to be salivating over more imports.
EU leaders agree to ban 90 percent of Russian oil by year-end (AP) — European Union leaders agreed Monday to embargo most Russian oil imports into the bloc by year-end as part of new sanctions on Moscow worked out at a summit focused on helping Ukraine with a long-delayed package of new financial support. The embargo covers Russian oil brought in by sea, allowing a temporary exemption for imports delivered by pipeline, a move that was crucial to bring landlocked Hungary on board a decision that required consensus. EU Council President Charles Michel said the agreement covers more than two-thirds of oil imports from Russia. Ursula Von der Leyen, the head of the EU’s executive branch, said the punitive move will “effectively cut around 90% of oil imports from Russia to the EU by the end of the year.” Michel said leaders also agreed to provide Ukraine with a 9 billion-euro ($9.7 billion) tranche of assistance to support the war-torn country’s economy. It was unclear whether the money would come in grants or loans. The new package of sanctions will also include an asset freeze and travel ban on individuals, while Russia’s biggest bank, Sberbank, will be excluded from SWIFT, the major global system for financial transfers from which the EU previously banned several smaller Russian banks. Three big Russian state-owned broadcasters will be prevented from distributing their content in the EU. “We want to stop Russia’s war machine,” Michel said, lauding what he called a “remarkable achievement.” “More than ever it’s important to show that we are able to be strong, that we are able to be firm, that we are able to be tough,” he added. Michel said the new sanctions, which needed the support of all 27 member countries, will be legally endorsed by Wednesday. The EU had already imposed five previous rounds of sanctions on Russia over its war. It has targeted more than 1,000 people individually, including Russian President Vladimir Putin and top government officials as well as pro-Kremlin oligarchs, banks, the coal sector and more. But the sixth package of measures announced May 4 had been held up by concerns over oil supplies. The impasse embarrassed the bloc, which was forced to scale down its ambitions to break Hungary’s resistance. When European Commission President Ursula von der Leyen proposed the package, the initial aim was to phase out imports of crude oil within six months and refined products by the end of the year. Both Michel and von der Leyen said leaders will soon return to the issue, seeking to guarantee that Russia’s pipeline oil exports to the EU are banned at a later date. Hungarian Prime minister Viktor Orban had made clear he could support the new sanctions only if his country’s oil supply security was guaranteed. Hungary gets more than 60% of its oil from Russia and depends on crude that comes through the Soviet-era Druzhba pipeline. Von der Leyen had played down the chances of a breakthrough at the summit. But leaders reached a compromise after Ukrainian President Volodymyr Zelenskyy urged them to end “internal arguments that only prompt Russia to put more and more pressure on the whole of Europe.” The EU gets about 40% of its natural gas and 25% of its oil from Russia, and divisions over the issue exposed the limits of the 27-nation trading bloc’s ambitions.
EU Approves New Sanctions Package, Including Partial Russian Oil Ban, After Compromise With Orban - The European Union has once again reportedly backed off a more hardline position in its newest anti-Russia sanctions package based on the objections of Viktor Orban.According to news wires, the sanctions deal has been approved after a measure that imposed individual sanctions on Russian Orthodox Patriarch Kirill has been removed. Hungary's Orban had rejected the move which he argued threatens religious freedom. Importantly, the partial Russian oil embargo has been approved. Bloomberg reports:The European Union approved a sixth package of sanctions including a partial ban on Russian oil imports after Hungary dropped objections that had been holding it up for weeks.EU ambassadors meeting on Thursday backed the measures, which would represent the EU’s toughest yet and are aimed at curbing Russia’s ability to finance the war in Ukraine, according to people familiar with the matter. And more:The measures would forbid the purchase of crude oil from Russia delivered to member states by sea in six months and refined petroleum products in eight months. Pipeline crude would be temporarily spared as a concession to Hungary and other landlocked countries, which rely on Russian supplies through the Druzhba pipeline.Earlier, Politico detailed that Orban has long been on record as saying this is a religious freedom matter, and that the precedent of sanctioning top religious figures cannot be set with the new sanctions package.
IEA: Current Energy Crisis Is “Much Bigger” Than 1970s Oil Crunch - The world faces a “much bigger” energy crisis than the one of the 1970s, the Executive Director of the International Energy Agency (IEA), Fatih Birol, told German daily Der Spiegel in an interview published on Tuesday.“Back then it was just about oil,” Birol told the news outlet. “Now we have an oil crisis, a gas crisis and an electricity crisis simultaneously,” said the head of the international agency created after the 1970s shock of the Arab oil embargo.The energy crisis started in the autumn of last year, but the Russian invasion of Ukraine made it much worse as the markets fear disruption to energy supply out of Russia, while Western governments are imposing increasingly restrictive sanctions on Moscow over the war in Ukraine.The EU agreed late on Monday to ban most of the imports of Russian oil, leaving pipeline supply exempted from the embargo, for now. This will further tighten already tight crude and product markets.The world, especially Europe, could face a summer of shortages of gasoline, fuel, and jet fuel, the IEA’s Birol told Der Spiegel.Fuel demand is set to rise as the main holiday season in Europe and the United States begins, Birol added.Upended crude oil flows add to reduced global refinery capacity resulting in low inventories of products, including in the United States.Refinery capacity for supply, globally and in the U.S, that is now a few million barrels per day lower than it was before the pandemic.Some 1 million bpd of refinery capacity in the U.S. has been shut permanently since the start of the pandemic, as refiners have opted to either close losing facilities or convert some of them into biofuel production sites. Globally, refinery capacity is also stretched thin, especially after Western buyers—including in the U.S.—are no longer importing Russian vacuum gas oil (VGO) and other intermediate products necessary for refining crude into gasoline, diesel, and jet fuel.The fuel market is extremely tight in Europe, too, and is set to tighten further after the EU ban on most Russian imports.
EXPLAINER: Effects of EU Russia oil ban, Moscow's response - (AP) — The European Union has agreed to slash Russian oil imports in a tough escalation of the bloc's campaign of sanctions to punish Moscow for its invasion of Ukraine. It's a landmark decision that will hit Russian coffers in the long term, but could also hurt consumers across the European continent. The move agreed late Monday at an EU leaders' summit in Brussels comes amid soaring energy prices in Europe and could spark more rises, particularly later this year as nations compete for natural gas supplies to heat homes and fire industries, analysts say. Just hours before U.S. markets opened Wednesday, benchmark U.S. crude had climbed $1.25 to $115.92 per barrel in electronic trading on the New York Mercantile Exchange. Analysts say that amid high oil prices, the sanctions are unlikely to hit Russia hard soon, but they deprive Moscow of one of its most important customers for oil — likely for a long time to come. European Union leaders agreed to cut Russian oil imports by about 90% over the next six months, a dramatic move that was considered unthinkable just months ago. The 27-country bloc relies on Russia for 25% of its oil. The ban applies to all Russian oil delivered by sea. It contains a temporary exemption for oil delivered by the Russian Druzhba pipeline to certain landlocked countries in Central Europe. Germany and Poland have agreed to stop using oil from the northern branch of the pipeline. Russian oil delivered by sea accounts for two-thirds of the EU’s oil imports from Moscow. Russia has the world’s largest natural gas reserves and is the biggest global exporter, according to the International Energy Agency. But don't expect the 27-nation bloc's leaders to sign off on a ban on Russian gas imports any time soon. The bloc imports 40% of its gas — used for everything from generating electricity to heating homes — from Russia, and finding alternative supplies is tougher than for oil. “Russian oil is much easier to compensate for ... gas is completely different, which is why a gas embargo will not be an issue in the next sanctions package,” said Austria’s Chancellor Karl Nehammer. That doesn't mean gas is immune from the geopolitical tensions. Russia is flexing its economic muscle and retaliating to other sanctions by cutting off or restricting gas supplies to some European nations. Russian state energy giant Gazprom said this week it is halting the flow of gas to Dutch trader GasTerra and Denmark’s Oersted company and is also stopping shipments to Shell Energy Europe that were bound for Germany. Germany has other suppliers, and GasTerra and Oersted said they were prepared for a shutoff. Gazprom previously stopped the flow to Bulgaria, Poland and Finland..Amid concerns about the devastating war in Ukraine and moves to punish Russia invading its neighbor, energy bills and gasoline prices have been high for months and governments have been cutting taxes in a bid to spare their citizens.Even so, energy consumers — that's basically everybody who flicks a light switch, takes a shower, looks at their phone screen or fills their car's fuel tank — are feeling the pinch and looking for ways to cut costs where they can.As oil prices rose again Wednesday, motorists in the eastern Netherlands were crossing the border in droves to refuel in neighboring Germany, where government tax cuts have made a liter of gasoline much cheaper than in the Netherlands. Dutch broadcaster NOS showed lines of cars with Dutch license plates waiting outside German gasoline sellers. Short term, the oil ban will likely not hurt Russia too much amid high oil prices that mean Moscow can sell at a discount to clients in Asia and still make a profit, said Chris Weafer, CEO at Macro-Advisory Ltd., a consulting firm. “The financial pain for Russia probably will come more next year or over the next couple of years if it still has to offer discounts,” Weafer told the AP.
EU Continues to Try to Hurt Russia by Shooting Itself in the Foot –Yves Smith - It's hard to make any sense of what EU leaders think they are accomplishing in their latest round of sanctions against Russia. Oh, and in case you lost count, this is the sixth package.German industrialists have to be sweating bullets over the prospects of high energy costs and even shortages making them uncompetitive. Sure, some may be able to use an EU energy train wreck as an excuse to accelerate shifting production to Asia and other cheaper locations outside Europe. But the war-mongering explanation for the US, state capture by arms merchants, isn’t strongly operative there.For the details: this sixth package gets the EU its much-sought-after embargo of Russian oil, although it’s only a partial embargo, thanks to prime minister Viktor Orban acting like a bad Hungarian populist rather than a good European. Orban threatened to veto a full-bore embargo since all of Hungary’s oil comes via the Druzhba pipeline. By contrast, most of the EU’s oil comes by tanker, which as we’ve pointed out and Alexander Mercouris has confirmed, allows for Russian oil to still come to Europe via out and out laundering through cut-outs and mixing with non-Russian source product, albeit at a higher cost. So landlocked countries on a Russian pipeline can’t cheat while the others can. So after weeks of wrangling, the EU relented and voted through the Hungarian scheme. The summary from the Wall Street Journal:The embargo would include an exemption for oil delivered from Russia via pipelines, an amount that makes up one-third of EU oil purchases from Russia. EU officials said that by the end of this year, the embargo would cover 90% of previous Russian oil imports. It would be phased in over several months….The moves include the removal of three Russian banks—including the largest, Sberbank—from the Swift financial-transactions network; a ban on three leading Russian broadcasters in the bloc; and targeted sanctions against Russian military officials and other leading figures.If you think the EU will really, truly, will have cut its imports of Russian oil by 90% in a few months, I have a bridge I’d like to sell you. And yet more sanctioning of individuals is a sign that the EU is hitting the bottom of the barrel.And let us also not forget that the outlook for food this year was bad already between climate change and Covid. France, the number 4 wheat producer v. Ukraine as number 5, had a disastrous year. US output is down. Canada’s will be up but our readers contend the headlines exaggerate by how much. But Russia, the biggest wheat exporter, is set to have a bumper year.So if all these countries really need food, and food scarcities are the number one producer of social upheaval and government overthrow, pray tell how does piling more sanctions onto Russia make sense as they are also asking for more grain and fertilizer? Are they so stuck in their colonialist way of thinking that they think it makes sense to try to harm a country economically while demanding it export to you?The readouts from the Kremlin of the calls were remarkably similar, suggesting that these European big dogs all had pretty much the same talking points, and Putin had to keep repeating the same response. From the readout of the call from Macron and Scholz:Vladimir Putin explained the real reasons for the unstable food supplies, saying that the disruptions were due to Western countries’ erroneous economic and financial policies, as well as their anti-Russia sanctions. He substantiated his statements with evidence and specific data. Russia, on the other hand, is ready to help find options for unhindered grain exports, including the export of Ukrainian grain from the Black Sea ports. Increasing the supplies of Russian fertilisers and agricultural produce will also help reduce tensions in the global food market, but that will definitely require the lifting of the relevant sanctions.Shorter Putin: “What about ‘You have to drop the sanctions’ don’t you understand?”
The EU Needs More Than $1 Trillion For Plan To Ditch Russian Oil And Gas - The European Union’s REPowerEU seeks to reduce the European Union’s dependency on Russian fossil fuels and accelerate the transition away from carbon-intensive energy sources. The European Commission’s cost estimate, however, may fall short as Rystad Energy analysis suggests the plan will require at least €1 trillion in investment to meet the core objective of increasing renewable generation from 40% to 45% of total energy supply by 2030. Additional investment will be required to meet targets, including grid and battery storage developments to ensure a stable supply of energy as the whole European power system will need to be restructured. While the plan defines different angles to tackle the current crisis, the most detailed section outlines the roadmap for solar PV. The strategy aims to bring 320 gigawatts (GW) of solar PV online by 2025 and almost 600 GW by 2030, aiming to displace 9 billion cubic meters (Bcm) of gas demand. Europe currently has around 189 GW of installed solar PV capacity, meaning 131 GW need to be installed by the middle of the decade, or an equivalent of 44 GW per year. This would mean almost doubling the installation rate, which was 24 GW in 2021 and is expected to be 29 GW this year. To reach the targeted 600 GW by 2030, around 56 GW of new solar PV capacity would need to be installed during the following five years.Assuming an average cost for solar PV of €1.1 million per megawatt (MW) of installed capacity, installing 411 GW between now and 2030 would represent an investment of €452 billion. Reaching 45% renewable energy supply by 2030 additionally requires significant investments in wind capacity – for which the plan does not have a lot of detail. Rystad Energy’s estimates suggest another 450-490 GW of wind capacity would need to be installed by 2030 to reach the target of 45% renewable energy supply, requiring an additional €820 billion in investments.Such a transition will require huge investments but thus far the European Commission has been unclear about the total amounts allocated to achieve its goals. Recent announcements and communications mention that €225 billion is already available in loans and that an additional investment of €300 billion could be needed by 2030. Regardless of the total amount being assigned to new renewable energy developments, the figures seem to fall considerably below the required additional investment needed in power transmission, storage, gas infrastructure, and hydrogen production. Furthermore, such a large demand for new capacity will put additional pressure on the supply chain for solar panel and wind turbine manufacturing and could lead to a further increase in costs for these technologies.“The ambition of the REPowerEU plan is huge. Power companies and energy markets will be looking for details on investments and infrastructure. While the targets are achievable, it will require wartime-like planning, levels of investment, construction, and production to meet goals by 2030,” says Carlos Torres Diaz, head of power research at Rystad Energy.
Despite sanctions and boycotts, Russia could still rake in $800 million a day from oil and gas this year — more than it pulled in last year -Russia has been hit with intensifying sanctions ever since it invaded Ukraine — but Moscow could still rake in $800 million a day from oil and gas revenues this year amid soaring energy prices, according to Bloomberg Economics.President Vladimir Putin's regime has been holding up so far as oil prices have risen about 50% this year and are at 13-year highs. The gains could bring Russia's oil and gas sales to total $285 billion this year, Bloomberg forecasts. This is 20% higher than the country's $235.6 billion takings from oil and gas in 2021.The European Union's (EU) reliance on Russian energy is contributing to Moscow's windfall, as the bloc gets about 40% of its natural gas from the country.On Monday, the EU agreed to slash 90% of Russian oil imports to the bloc by the end of 2022 — but some countries in the group, includingGermany, Europe's largest economy, continue to be heavily dependent on Russian gas and have caved in to Putin's demands to pay in rubles. This is in turn driving up demand for the Russian currency, which has become the world's top-performing currencyagainst the US dollar this year so far. Meanwhile, countries like China and India are buying discounted Russian oil, further undermining international sanctions.Notably, that forecast $800 million a day windfall is from energy alone. Russia is also a major producer of other commodities like wheat and metals such as palladium and platinum.The country's earnings from the raw materials trade are likely to exceed $300 billion this year, per Bloomberg Economics. This could offset the same amount in Russia's foreign reserves that have been frozen under international sanctions.Russia's gains from the commodities rally predate the war as prices of raw materials have been on the up due to supply-chain challenges and recovering demand as pandemic restrictions ease. Russia's invasion of Ukraine worsened trade dislocations and pushed up prices even more as the two countries are key commodity exporters.
Why clean fuels won't replace Russian oil in Europe - Europe’s decision to ban the vast majority of Russian oil imports has the potential to remake global markets. What it means for the climate is less certain. Analysts said the announcement this week from the European Commission that it would ban Russian seaborne crude imports has the potential to alter trade flows, hinder Russia’s oil industry and contribute to a sustained period of high crude prices. That level of disruption could prompt serious attempts to green global energy systems. But whether the world takes the opportunity to transition to cleaner fuels is an open question, observers said.In Europe, where leaders have doubled down on their pledge to supercharge deployment of renewables, electric vehicles and heat pumps, countries face urgent logistical and technological challenges to their green ambitions. Siting reform is needed to ensure wind and solar projects can be built. Electric vehicle manufacturing needs to rapidly expand. And new technologies, like green hydrogen, must be perfected to offer alternatives to hard-to-green sectors of the economy like industry.The rest of the world’s challenges may be even more daunting.The United States lacks Europe’s political commitment to climate action, as seen by stalled attempts to pass climate legislation in Congress. Emerging markets face the challenge of rising interest rates and a strengthening dollar, making an already expensive transition even pricier. And while rising oil prices make alternatives more attractive financially, they also make the politics around energy more volatile. Consumers become particularly attuned to perceived increases in energy bills when prices are already high. “High prices tend to expel incumbent politicians faster than they encourage new technology,” Europe’s ban on most Russian oil imports is significant because of its potential role in global oil markets. In 2020, Europe accounted for 14.5 percent of global oil consumption, according to BP PLC’s most recent Statistical Review of World Energy. Much of that oil comes from Russia, which competes with the United States and Saudi Arabia as the world’s leading crude exporter.ClearView estimates roughly 45 percent of Russian oil exports were shipped to Europe in 2021. Seaborne shipments delivered via oil tankers accounted for about two-thirds of Russian exports to Europe.The embargo, part of a sixth round of sanctions aimed at preventing Russia’s ability to finance its war in Ukraine, does exempt oil that arrives via pipeline. But European Commission President Ursula von der Leyen said yesterday she expected the ban would grow to encompass 90 percent of all Russian imports once Germany and Poland cease pipeline deliveries by the end of the year.Europe is served by the Druzhba pipeline, which supplies Russian oil to Germany and Poland in the north, while a southern spur sends oil to Hungary and Slovakia. Oil will continue to flow to those countries for the time being, though how much longer remains to be seen.“This is a topic we will come back to,” von der Leyen said Monday in announcing the embargo. “But it is a big step forward from what we did today.”
G-7 says OPEC has key role to play to ease tight energy markets — The Group of Seven urged OPEC to pump more oil, even as it made new pledges to try to fight climate change. “We call on oil and gas producing countries to act in a responsible manner and to respond to tightening international markets, noting that OPEC has a key role to play,” ministers said in a communique after a meeting in Berlin. OPEC, which has an alliance with Russia known as OPEC+, has so far resisted calls from the U.S. to crank up its production beyond the gradual increases it has long planned. The cartel meets next week and is expected to stick to its plan even as the war in Ukraine is causing a surge in oil and gas prices that’s fueling a cost-of-living crisis for consumers. The G-7 has been a forum for pushing the climate agenda. But the war has made consumer nations reassess their priorities -- with short-term energy security trumping longer-term climate plans. The group recognized that change of priorities, acknowledging that government measures to ease the crunch for consumers -- for example with subsidies for fossil-fuel use -- go against previous climate promises. “Nevertheless, we aim for our relief measures to be temporary and targeted and we reaffirm our commitment to the elimination of inefficient fossil fuel subsidies by 2025,” the communique read. Energy ministers also vowed to end direct public support for foreign fossil-fuel projects by the end of this year -- while allowing for exceptions “defined by each country.” The move was also caveated with the recognition that “advancing national security and geostrategic interests is crucial.
Russian foreign ministry says EU oil sanctions will lead to further price rises - The Russian Foreign Ministry said June 2 that the latest EU sanctions restricting imports of Russian oil and banning shipping insurance, will lead to further price rises. Oil prices have seen major volatility in recent months, as Russia’s invasion of Ukraine raised supply security risks and triggered sanctions and self-sanctions on purchases of Russian oil. Dated Brent was assessed at $100.49/b by S&P Global Commodity Insights on Feb. 23 – the day before Russia invaded Ukraine. It soared to $137.64 March 8 before dropping back down. It was last assessed at $122.96/b on June 1. “The EU’s decisions to partially phase out Russian oil and oil products, as well as to ban the insurance of Russian merchant ships, are highly likely to provoke further price increases, destabilize energy markets, and disrupt supply chains,” the Russian Foreign Ministry said in a statement. On May 30, EU leaders agreed to ban most Russian oil imports. Deliveries via the Druzhba pipeline are excluded from the ban. Platts Analytics estimates the latest EU measures will hit some 1.9 million b/d of Russian crude imports by the year end, with some 300,000 b/d still flowing to Hungary, Slovakia and the Czech Republic via pipeline. Another 1.2 million b/d of refined product imports from Russia would cease by the end of the year. Hungarian imports via Druzhba are currently at around 20,000 mt/day, Peter Szijjarto, Minister of Foreign Affairs and Trade of Hungary said June 2. “We have a very stable supply of that amount of oil on a daily basis, so what we count on is that deliveries will be according to the contract,” Szijjarto said.
Russia hits back at the EU's partial oil embargo, says it will find other importers for its crude - Moscow has pledged to find other importers for its oil shortly after the world's largest trading bloc agreed to impose a partial embargo on Russian crude. The European Union on Monday decided to ban most Russian oil imports by the end of the year as part of new measures designed to punish the Kremlin over its unprovoked invasion of Ukraine. The move was hailed by EU foreign policy chief Josep Borrell as a "landmark decision to cripple [Russian President Vladimir] Putin's war machine." It covers Russian oil brought into the bloc by sea, with an exemption carved out for imports delivered by pipeline following opposition from Hungary. The EU's long-delayed sixth package of sanctions against Russia required approval from all 27 member states and has yet to be formally ratified. Responding to the measures, Mikhail Ulyanov, Russia's permanent representative to international organizations in Vienna, said the oil ban reflects negatively on the bloc. "As she rightly said yesterday, #Russia will find other importers," Ulyanov said via Twitter, referring specifically to European Commission President Ursula von der Leyen. The commission is the executive body of the EU. "Noteworthy that now she contradicts her own yesterday's statement. Very quick change of the mindset indicates that the #EU is not in a good shape," he added. The EU's von der Leyen welcomed the bloc's agreement on oil sanctions against Russia. She said the policy would effectively cut around 90% of oil imports from Russia to the bloc by the end of the year, and soon return to the issue of the remaining 10% of pipeline oil. Roughly 36% of the EU's oil imports come from Russia, a country that plays an outsized role in global oil markets. 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. Ukrainian officials have repeatedly insisted the EU impose a total embargo on Russian oil and gas, with energy-importing countries continuing to top up Putin's war chest on a daily basis. Estonia's prime minister, Kaja Kallas, on Tuesday called for the EU to go even further and discuss the prospect of a Russian gas embargo in the next round of sanctions. Austria's chancellor, Karl Nehammer, abruptly rejected this idea, however, saying it will not be a topic for discussion in the next set of measures. The split comes as Russia's state-owned energy giant Gazprom fully cut off supplies to Dutch gas trader GasTerrra, and as Denmark's Orsted warned it too was facing a halt to supplies. Oil prices jumped on Tuesday afternoon. International benchmark Brent crude futures rose 1.5% to $123.48 a barrel, while U.S. West Texas Intermediate futures climbed 3% to $118.56. European Council President Charles Michel said the compromise on oil sanctions reaffirmed the bloc's unity in response to the Kremlin's onslaught. It had been thought that a failure to secure any type of deal would likely have been heralded as a victory for Putin.
How Russia could try to get around the European Union's oil sanctions - Moscow could respond to European sanctions on Russian oil by seeking other buyers for its crude or cutting production to keep prices high. Its actions would have a global economic impact — unless OPEC intervenes. EU leaders on Monday agreed to ban 90% of Russian crude by the end of the year as part of the bloc's sixth sanctions package on Russia since it invaded Ukraine. "The Russian response obviously will bear close watching," Russia is the world's third-largest oil producer after the U.S. and Saudi Arabia, and the second largest crude oil exporter behind Saudi Arabia, according to the International Energy Agency. "What is going on now will change oil-natural gas trade into the future. Oil prices will not decline any time soon and the fallout of Russian sanctions will be felt for a few years," Whether Russia manages to offload its sanctioned crude and how much it can sell would affect oil prices globally. Roughly 36% of the EU's oil imports coming from Russia. Mikhail Ulyanov, Russia's permanent representative to international organizations in Vienna, said the country will look for other buyers for its oil. "Whether those barrels find homes in India, China, and Turkey could hinge on whether the EU ultimately opts to target shipping and insurance services and whether the US chooses to impose Iran-style secondary sanctions," RBC's Croft wrote. Moscow already has two likely buyers for its crude: China and India. The countries have been buying discounted Russian oil and industry watchers say that looks set to continue. While India traditionally imports very little crude from Russia — only between 2% to 5% a year, according to market watchers — its purchases have soared in recent months. India bought 11 million barrels in March and that figure jumped to 27 million in April and 21 million in May, according to data from commodity data firm Kpler. That's a stark contrast to the 12 million barrels it bought from Russia in all of 2021. China was already the largest single buyer of Russian oil but its oil purchases have also spiked. From March to May, it bought 14.5 million barrels — a three-fold increase from the same period last year, according to Kpler data. Russia could also cut crude production and exports to cushion the blow to its finances. On Sunday, Russian oil firm Lukoil's vice president, Leonid Fedun, said the country should slash oil output by up to 30% to push prices higher and avoid selling barrels at a discount. "Officials in Washington have expressed concern that Moscow might move to upend an orderly year-end wind-down by slashing exports over the summer to inflict maximum economic pain on Europe and test the collective resolve of the member states to defend Ukraine," Croft said on Tuesday. Given the "alarmingly low" inventory and the scarcity of refining capacity, a preemptive Russian cut-off could have a very damaging economic impact this summer, she added. "For Russia, we think the impact of lower export volumes this year will be mostly offset by higher prices," Since the beginning of the Russia-Ukraine war, there have been 180 ownership changes of vessels from Russian entities to non-Russian ones, according to maritime artificial intelligence firm Windward, which cited its own proprietary data.Many of the Russian vessels were sold to firms based mostly in Singapore, Turkey, United Arab Emirates, and Norway, according to Windward.
Russia’s Oil Output Up 5% in May – Vedomosti - Russia's oil production increased by 5% in May after it saw one of its steepest drops the previous month under Western pressure over the war in Ukraine, the Vedomosti business daily reported Friday. Russian crude output last month totaled 43.1 million tons and averaged 10.2 million barrels per day, Vedomosti cited an unnamed industry source as saying. That marked a 5% increase from 10 million bpd extracted in April, when Russia saw one of the sharpest falls since the collapse of the Soviet Union. Vedomosti’s data showed Russian production at 11 million bpd in March and 11.1 million bpd in February. In annual terms, Russia’s May 2022 output dropped 2.5% from May 2021. So far this year, Russia’s crude output totaled 219.9 million tons in January-May, a 3.5% increase over the same period last year. Russia’s Finance Ministry forecasts a 17% decline in oil production this year, averaging an 18-year low of 9.13 million bpd. On Monday, the European Union agreed to ban 90% of Russian crude by the end of 2022 as part of its sixth sanctions package over Russia’s invasion of Ukraine. The embargo includes carve-outs for EU member states most dependent on Russian oil. Experts interviewed by Vedomosti linked last month’s rebound in crude output to new Asian buyers sought after by Russia following U.S. and British sanctions and falling demand in Europe.
Russia Sends Record Volumes Of Oil To India, China -While Europe shuns Russian oil amid sanctions and expectations of an oil embargo on Russian oil imports, India and China have stepped up purchases and are importing record volumes of Russian crude, according to data from energy analytics company Kpler cited by Bloomberg on Friday. Russia had up to 79 million barrels of crude either traveling on tankers or held in floating storage over the past week, Kpler’s estimates have shown. That’s more than double the 27 million barrels of crude Russia had seaborne in February, just before Putin’s invasion of Ukraine.Before the war, Russia was primarily selling its crude to Europe, but this is no longer the case after buyers, governments, international trading houses, and oil majors are all avoiding dealing with Russian oil, all the more so given the EU sanctions ban on bank transactions with the biggest Russian oil producers, including Rosneft. Trade majors have now wound down purchases of Russia’s oil.But China and India aren’t shying away from Russian crude, although some Chinese state giants haven’t ramped up imports of spot cargoes from Russia despite the steep discounts at which Russian oil is selling.In India, cheap Russian crude oil is attracting India’s price-sensitive buyers to the point that Russia became the fourth largest oil supplier to India in April, moving up from the 10th place in March, according to shipment-tracking data compiled by Reuters.The significant increase in India’s purchases of Russian crude has already drawn the attention of the United States, which has reportedly sent a U.S. federal government official to discuss U.S. sanctions on Russia and try to convince India to reduce its purchases of Russian oil.China, for its part, registered in April its first annual increase in crude oil imports since January as shipments rebounded on the back of higher arrivals from Russia, analysts say.“Some of the interested buyers in Asia are more motivated by economics rather than taking a political stand,” Jane Xie, a senior oil analyst at Kpler in Singapore, told Bloomberg.
Oil imports from Russia likely to go up by 20 per cent in June- Imports of Russian crude by India are likely to grow by 20% month-on-month to 1.05 million barrels per day (bpd) in June, as per the data compiled by commodity analysts Kpler. The data highlighted India imported 840,645 barrels per day (bpd) of Russian crude in May, up from 388,666 bpd in April and 136,774 bpd in May last year. Currently, India requires a total of 5 million barrels oil per day for its usage. It means, considering all these figures, 25% of India’s oil need is fulfilled by Russian crude. India, which usually imports nearly 2% of its oil needs from Russia, has enhanced its imports ever since the war broke out between Russia and Ukraine. Russia is the world’s second-largest oil producer, and it supplies nearly 35% of natural gas to Europe. However, following the war, western countries have put various sanctions on Russia, including banning Russian crude in the European market. These countries are pressuring India not to trade crude from Moscow at ‘cheaper rate’. However, India has refused to do so, and on the contrary, it has raised its crude purchase manifold from Russia. “India will continue to buy crude at competitive prices wherever it may be available across the world to fulfill its requirement for economic growth,” said Gaurav Moda, India energy leader, EY. India is the world’s third-largest oil importer, it imports nearly 80% of its crude requirement. India imports 52.7% from the Middle-East countries,15% from Africa and 14% from the US. It sources nearly 86% of crude oil, 75% of natural gas, and 95% of LPG from members of the OPEC+.
Russia Sanctions: India Profiting From Russian Oil Trade by Exporting Refined Petroleum --India is defying western sanctions to buy millions of barrels of discounted Russian crude oil and exporting refined petroleum products with a big markup to make a huge profit. China has yet to increase its oil imports from Russia, according to news reports. Meanwhile, India's neighbors Bangladesh and Pakistan are abiding by western sanctions and paying much higher market prices to buy oil for their domestic needs, and hurting their people. Such double standards are not going unnoticed. India is importing large amounts of deeply discounted Russian crude, running its refiners well above capacity, and capturing the economic rent of sky-high crack spreads and exporting gasoline and diesel to Europe, according to MarketWatch. “As the EU weans from Russian refined product, we have a growing suspicion that India is becoming the de facto refining hub for Europe,” said Michael Tran, global energy strategist at RBC Capital Markets, in a Tuesday note. Here’s how the puzzle pieces fit together, according to Tran:"India is buying record amounts of severely discounted Russian crude, running its refiners above nameplate capacity, and capturing the economic rent of sky-high crack spreads and exporting gasoline and diesel to Europe. In short, the EU policy of tightening the screws on Russia is a policy win, but the unintended consequence is that Europe is effectively importing inflation to its own citizens. This is not only an economic boon for India, but it also serves as an accelerator for India’s place in the new geopolitically rewritten oil trade map. What we mean is that the EU policy effectively makes India an increasingly vital energy source for Europe. This was historically never the case, and it is why Indian product exports have been clocking in at all-time-high levels over recent months". Bangladesh and Pakistan are afraid to buy Russian oil for fear of western sanctions while American ally India feels free to do so. As Pakistani Finance Minister Miftah Ismail told CNN's Becky Anderson in an interview, “It is very difficult for me to imagine buying Russian oil. At this point I think that it would not be possible for Pakistani banks to open LCs or arrange to buy Russian oil". Similarly, Bangladeshi Foreign Minister AK Abdul Momen told journalists: “You are seeing that they (western nations) keep bossing us and you (journalists) also encourage them. Every day, they come up with new issues. We used to call them development partners. They do not pay for the development but keep giving advice.” “We do not want to get into any problem. We want peace in the world,” Momen added. The West, particularly the United States, is turning a blind eye to India's actions when it comes to busting sanctions on Russia. Indian Prime Minister Narendra is openly funding the war in Ukraine by buying weapons and oil from Russia. At the same time, India's smaller neighbors feel intimidated by the threat of western sanctions if they follow Modi's example. Such double standards are not going unnoticed.
Global refiners struggle to meet global demand amid high prices, shortage -Refiners worldwide are struggling to meet global demand for diesel and gasoline, exacerbating high prices and aggravating shortages from big consumers like the United States and Brazil to smaller countries like war-ravaged Ukraine and Sri Lanka. World fuel demand has rebounded to pre-pandemic levels, but the combination of pandemic closures, sanctions on Russia and export quotas in China are straining refiners' ability to meet demand. China and Russia are two of the three biggest refining countries, after the United States. All three are below peak processing levels, undermining the effort by world governments to lower prices by releasing crude oil from reserves. Global refining capacity fell in 2021 by 730,000 barrels a day, the first decline in 30 years, according to the International Energy Agency. The number of barrels processed daily slumped to 78 million bpd in April, lowest since May 2021, far below the pre-pandemic average of 82.1 million bpd. Fuel stocks have fallen for seven straight quarters. So while the price of crude oil is up 51% this year, U.S. heating oil futures are up 71%, and European gasoline refining margins recently hit a record at $40 a barrel. The United States is "structurally short" on refining capacity for the first time in decades. U.S. capacity is down nearly 1 million barrels from before the pandemic to 17.9 million bpd as of February, the latest federal data available. LyondellBasell recently said it would shut its Houston plant that could process more than 280,000 bpd, citing the high cost of maintenance. Operating U.S. refiners are running full-tilt to meet demand, especially for exports, which have surged to more than 6 million bpd, a record. Capacity use currently exceeds 92%, highest seasonally since 2017. The U.S. ban on Russian imports has left refiners in the northeast United States short of feedstocks needed to make fuel. Phillips 66 has been running its 150,000-bpd catalytic cracker at its New Jersey refinery at reduced rates because it cannot source low-sulfur vacuum gasoil, Russia has idled about 30% of its refining capacity due to sanctions, according to Reuters estimates. Outages are currently about 1.5 million bpd, and 1.3 million bpd will likely stay offline through the end of 2022, China, the second-largest refiner worldwide, has added several million barrels of capacity in the last decade, but in recent months has cut production due to COVID-19 restrictions and capped exports to curb refining activity as part of an effort to cut carbon emissions. China's throughput dropped to 13.1 million bpd in April, the IEA said, down from 14.2 million bpd in 2021. Other countries are also not adding to supply. Eneos Holdings, Japan's largest refiner, does not plan to reopen recently closed refineries, a spokesperson told Reuters. Some new projects worldwide have been hit by delays. A 650,000-bpd refinery in Lagos was supposed to open by the end of 2022 but is now delayed until the end of 2023. A source with direct knowledge said the refinery has not yet hired a company to do commissioning work which will take several months. Diesel users have been squeezed, particularly in agriculture. Ukrainian farmers are short, as supply from Russia and Belarus has been cut off due to the war. Sri Lanka, which is in the midst of a fuel crisis, shut its only refinery in 2021 because it lacked sufficient foreign exchange reserves to buy imported crude. "If refineries in the U.S. get damaged during hurricane season, or anything else contributes to the market's tightness, we could be in real trouble," said a Brazilian refining executive.
Petersburg Oil Terminal completed testing of its floating oil spill containment booms -Petersburg Oil Terminal (POT) says it has successfully completed testing of its floating oil spill containment booms. Sets of booms allow for prompt isolation of oil spill areas within the terminal waters in case of emergency. The length of floating booms is 760 meters. Petersburg Oil Terminal has conducted its annual maintenance of floating booms designed for oil containment during emergency oil spills while handling crude oil/petroleum products tankers. The booms are normally anchored to seabed. When activated they come up to the surface and surround the spill area. “We have been constantly improving environmental safety of POT. Floating booms have been acknowledged to be excellent since 2018 when they were installed in the water area of the terminal. The recent inspection has confirmed the parameters declared by the manufacturer,” said POT. Total length of the boom system is 760 meters. Time needed for activation of the two lines of floating booms is 8 and 15 minutes accordingly. Remote activation of the equipment involves compressor units, air hoses and cable winches. This unique system is the longest in the North-West of Russia and in the countries of the Baltic region. Safety of the terminal is also ensured by the company’s emergency response team set up in 2018. Besides, reconstruction of the terminal is underway to replace obsolete storage facilities of the Soviet time with a modern complex for transshipment of oil products. The new facilities of the same capacity will be built with application of double-wall tank technology virtually eliminating the risk of oil spills.
Libya oil company says broken pipeline causes crude spill - ABC News -- A pipeline rupture in Libya is spewing thousands of barrels of oil into the desert, as workers scramble to seal off the leak, authorities said Wednesday. The damage to a land pipeline linking the Sarir oil field to the Tobruk terminal on the Mediterranean was the latest blow to Libya’s struggling oil industry, as renewed tensions again divide the chaos-stricken country. The Arabian Gulf Oil Company, which operates the pipeline, estimates that some 22,000 barrels a day were being lost from the leak, which started Tuesday. It posted footage of the spill and said efforts to stop it were still underway. The company, which is an affiliate of the state-run National Oil Corporation and based in the eastern city of Benghazi, blamed lack of pipeline maintenance for the leakage. The spill comes as crucial oil facilities including the country’s biggest field were still closed amid a political impasse that threatens a return of violence. Libya’s prized light crude has long featured in the North African country’s civil war, with rival militias and foreign powers jostling for control of Africa’s largest oil reserves. Libya has been wrecked by conflict since the NATO-backed uprising-turned-civil war toppled and later killed longtime dictator Moammar Gadhafi in 2011.
First barge arrives for removal works at Port of Devonport - The first barge has arrived at the Port of Devonport in preparation for the removal of two tugs which sank in a collision and have been spilling oil. The 55m-long receiving barge, the Intan, arrived at the Port of Devonport to remove the wrecks of the York Cove and Campbell Cove tugs from the Mersey River. On 28 January 2022, cement carrier Goliath collided with two berthed TasPorts tugs at the Port of Devonport — York Cove and Campbell Cove. The impact of the collision caused significant damage to the tugs, ultimately causing both vessels to sink. TasPorts responded quickly, deploying oil spill response equipment, and activating its crisis response teams. TasPorts has continued to actively monitor the incident site 24 hours a day, seven days a week since the collision, with a focus on ensuring the integrity of the oil spill containment area and the salvage of hydrocarbons from the wrecks. These activities continue to be supported by the Environmental Protection Authority (EPA). The lifts of the wrecked tugs will commence as soon as the 60m-long lifting barge, the St Vincent, arrives in Devonport from Brisbane. The St Vincent’s departure has been impacted by bad weather. The barge’s owners are waiting for a window in the weather system to start the voyage, expected to be late next week. Keeping the barge safe is of critical importance. Given its size, it has limited flexibility with respect to environmental parameters when transiting in open waters. The crane barge will pick up one tug at a time, lift them clear of the water and lower them into a specially constructed cradle on the receiving barge. The tugs will be sea fastened and transported to Bell Bay for disposal. TasPorts Chief Operating Officer, Stephen Casey, said specialist salvage divers and salvors from United Salvage, the Australian-based company appointed to recover the wrecks, had been working to prepare the tugs for lifting over many weeks. “These significant preparatory works means that the salvage operation proper can commence as soon as possible after both barges arrive at Devonport,” Mr Casey said. Mr Casey said TasPorts had been focused on removing the York Cove and Campbell Cove wrecks and returning all commercial berths at the Port of Devonport to full operations, while at the same time carefully managing environmental and maritime safety matters.
Iran says revenue from energy exports up 60% from last year — Iran’s foreign currency earnings from exports of oil, gas condensate, natural gas and petrochemicals rose more than 60% from March 21 to May 21, compared to the same period last year, the oil ministry’s official news agency, Shana, reported. Export revenues from petrochemicals increased to $2.45 billion in the first two months of the current Iranian calendar year, which started on March 21, Ali Forouzandeh, director of public relations at Iran’s oil ministry was quoted as saying. He said the figures reflected foreign currency transactions on the Central Bank of Iran’s official currency trading platform for exporters and importers, known as NIMA, according to Shana.
Iran's revenue from oil and gas exports has jumped 60% as Russia's war sends energy prices soaring -Iran has seen revenue from energy exports jump 60% year-on-year in the last two months, thanks to a sharp rise in market prices.Russian oil ministry official Ali Forouzandeh said the country is seeing a "dramatic" increase in revenues from the sales of oil and related energy products, despite the tough sanctions on the country, Shana reported Sunday.Forouzandeh told the state news agency that revenues for the first two months of the calendar year, which began March 21, were $2.45 billion. That compares with $1.5 billion in the same period a year earlier. Russia's invasion of Ukraine in late February has pushed global energy prices up sharply. The UK and US have banned oil imports from Russia. Hungary has opposed the European Union's plan to do the same, but many Western companies are "self-sanctioning."Brent crude oil, the international benchmark, traded at around $116 per barrel Monday, up roughly 50% since the start of the year.The rise in energy prices has eased some of the financial pain of sanctions slapped on Russia, and has helped Moscow generate foreign currency.It has also benefited Iran, despite its own tough Western sanctions that limit the country's ability to sell its oil. The latest sanctions were put in place by President Donald Trump, after the US pulled out of the Iran nuclear deal in 2018."The receipt of revenues from the export of oil, gas condensate, natural gas, petroleum products and petrochemical products in the first two months of this year has increased dramatically compared to the same period last year," Forouzandeh said, according to Shana.Saudi Arabia has also received a boost, with oil exports reaching a six-year high of $30 billion in March alone, according to the country's statistics office.
These charts show how Russia's invasion of Ukraine has changed global oil flows - European Union leaders reached an agreement this week to ban the majority of Russian crude oil and petroleum product imports, but nations were already shunning the country's oil, altering global flows for the commodity that powers the world.Russian oil exports had already been hurt by some EU members acting preemptively in anticipation of potential measures, in addition to bans from countries including the United States, according to commodity data firm Kpler.The amount of Russian crude oil that's "on the water" surged to nearly 80 million barrels this month, the firm noted, up from less than 30 million barrels prior to the Ukraine invasion."The rise in the volume of crude on the water is because more barrels are heading further afield —specifically to India and China," "Prior to the invasion of Ukraine, a lot more Russian crude was moving to nearby destinations in Northwest Europe instead," he added.Russia's invasion of Ukraine at the end of February has sent energy markets reeling. Russia is the largest oil and products exporter in the world, and Europe is especially dependent on Russian fuel.EU leaders had been debating a sixth round of sanctions for weeks, but a possible oil embargo became a sticking point. Hungary was among the nations that did not agree to a blanket ban. Prime Minister Viktor Orban, an ally of Russian President Vladimir Putin, said a ban on Russian energy would be an"atomic bomb" for Hungary's economy.Monday's agreement among the bloc's leaders targets Russian seaborne crude, leaving room for countries, including Hungary, to continue importing supplies via pipeline.In March, oil prices surged to the highest level since 2008 as buyers fretted over energy availability, given the market's already tight conditions. Demand has rebounded in the wake of the pandemic, while producers have kept output in check, which means prices were already rising prior to the invasion."Russia's invasion of Ukraine has sparked an unraveling of how the global market historically sourced barrels," RBC said Tuesday in a note to clients.The International Energy Agency said in March that 3 million barrels per dayof Russian oil output was at risk. Those estimates have since been revised lower, but data collected prior to the EU agreeing to ban Russian oil show that exports of Russian fuel into Northwest Europe had already fallen off a cliff.But Russian oil is still finding a buyer, at least for now, as the country's Urals crude trades at a discount to international benchmark Brent crude.More oil than ever is heading to India and China, according to data from Kpler.Wolfe Research echoed this point, saying that while Russian oil production has declined since the start of the war, exports have remained "surprisingly resilient."The firm said that Russia has rerouted exports to places including India, which shows up in vessel traffic through the Suez Canal. Analysts led by Sam Margolin noted that traffic through the key waterway is up 47% in May as compared with this time last year."Rerouting Black Sea tankers down Suez as opposed to Europe is a longer route and therefore inflationary to oil prices, and these 'last resort' trade patterns can portend bigger supply problems in the future because the market is clearly down to its last options to clear," the firm said.
OPEC+ seen sticking with supply plan even as EU sanctions Russia — The OPEC+ coalition will likely hold firm to its oil production plans this week even as the European Union moves to sanction group member Russia, delegates said. Global oil supply and demand levels remain stable, with no severe disruption yet to Russian exports, and thus require little action from the 23-nation alliance, according to the officials. With most members besides Saudi Arabia and its neighbors struggling to increase production, the group’s decisions are in any case becoming largely symbolic. Oil prices continue to climb, surpassing $124 a barrel in London on Tuesday, as the EU’s planned embargo stands to tighten a global market already squeezed by rising fuel consumption and limited supplies. The rally has fed into the inflationary pressure that threatens to tip the global economy into recession, and the cost-of-living crisis hitting consumers around the world. Spiraling costs pose a growing political risk for U.S. President Joe Biden, who has called on the Organization of Petroleum Exporting Countries to open the taps and is mulling a visit to Saudi Arabia to try and repair frayed diplomatic relations. Riyadh and its partners -- who still hold several million barrels of untapped spare capacity -- have so far remained unmoved, however. OPEC has already “done all it can” to stabilize global markets, which face no shortfall of oil, Saudi Foreign Minister Prince Faisal bin Farhan said last week at the World Economic Forum in Davos, Switzerland. Prices are being whipped up not by a shortage of crude, but a lack of refining capacity in consuming nations to produce fuels like gasoline, Saudi Energy Minister Prince Abdulaziz bin Salman said earlier this month. As a result, OPEC+ looks poised to rubber-stamp a modest increase of 430,000 barrels a day for July as the group -- in theory, at least -- revives production halted during the pandemic. Eleven out of 13 traders and analysts surveyed by Bloomberg predicted this status-quo outcome when the alliance convenes online on Thursday. In practice, most expect the group will struggle to deliver half this planned increase -- if any -- as diminished investment and political instability take a toll on the capacity of many members. Angola and Nigeria have suffered some of the most severe output setbacks.
Brent crude breaks $120 a barrel as gas prices soar --Brent crude, the international oil benchmark, has surpassed $120 a barrel, reaching a two-month hgh as gasoline and diesel fuel prices continue to rise. The U.S. oil benchmark, West Texas Intermediate, also rose, reaching more than $116 a barrel. The price spike comes at a time when demand in the United States is expected to rise with the start of the summer driving season and European leaders trying to reach agreement on a Russian oil embargo. The last time Brent crude breached $120 a barrel was in late March, shortly before President Biden authorized the release of 1 million barrels a day for a period of six months from the Strategic Petroleum Reserve. That move sent the price of Brent to as low as $98 a barrel in early April, but it has since climbed back to well over $100 a barrel. European leaders are meeting in Brussels Monday and Tuesday to negotiate a Russian oil embargo, but the talks are being held up by Hungary, a major consumer of Russian oil. Biden signed an executive order in March banning the import of Russian oil, liquefied natural gas and coal, which has contributed to higher energy prices. The national average gas price has reached $4.62 a gallon, according to AAA. The average gas price was $3.00 a gallon a year ago. Economists have attributed rising prices to rising demand and limited supply caused by loosening COVID-19 restrictions in China, the start of the U.S. driving season and disruptions caused by the war in Ukraine.
Oil prices jump after EU leaders agree to ban most Russian crude imports - Oil prices jumped after EU leaders reached an agreement late Monday to ban 90% of Russian crude by the end of the year. U.S. crude futures for July were trading just under 3% higher at $118.46 per barrel by 8 a.m. ET, while Brent crude futures were up 1.44% at $123.42. At one point, U.S. crude rose to $119.42 per barrel — a 12-week high, according to Refinitiv data. Contracts for August also traded higher: WTI crude pared some gains to trade around 3% higher at $115.63, and Brent was up 1.4% at $119.22 per barrel by 8 a.m. ET. The agreement resolves a deadlock after Hungary initially held up talks. Hungary is a major user of Russian oil and its leader, Viktor Orban, has been on friendly terms with Russia's Vladimir Putin. Charles Michel, president of the European Council, said the move would immediately hit 75% of Russian oil imports. The embargo is part of the European Union's sixth sanctions package on Russia since it invaded Ukraine. Talks to impose an oil embargo have been underway since the start of the month. "The European Council agrees that the sixth package of sanctions against Russia will cover crude oil, as well as petroleum products, delivered from Russia into Member States, with a temporary exception for crude oil delivered by pipeline," according to a May 31 statement from the European Council. The European Council added that in case of "sudden interruptions" of supply, "emergency measures" will be introduced to ensure security of supply.That temporary exception covers the remaining Russian oil not yet banned, European Commission President Ursula von der Leyen said in a press conference. "We have agreed that the Council will revert to the topic as soon as possible in one way or the other. So this is a topic where we will come back to and where we will still have to work on, but this is a big step forward, what we did today," she said, referring to the temporary exemption. Von der Leyen explained that the temporary exemption was granted so that Hungary, along with Slovakia and the Czech Republic — all connected to the southern leg of the pipeline — have access which they cannot easily replace. Roughly 36% of the EU's oil imports come from Russia, a country that plays an outsized role in global oil markets.
WTI, Brent Surge 3% After EU Agrees on Russian Oil Ban - Oil futures advanced more than 3% early Tuesday, lifting the international crude benchmark above $124 barrel (bbl) after the European Union agreed to ban all seaborne shipments of Russian crude and petroleum products until the end of the year, accounting for about 90% of all Russian oil exports to the EU.Excluded from the ban are oil shipments through the southern route of the Druzhba pipeline that delivers crude to the landlocked countries of Slovakia, Hungary and Czech Republic. Germany and Poland that receive some of their oil from the northern route of the Druzhba said they have agreed to halt those shipments until the end of the year as a response to Russia's continued aggression in the Ukraine."This immediately covers more than 2/3 of oil imports from Russia, cutting a huge source of financing for its war machine," tweeted President of the European Council Charles Michael. About 2.3 million barrels per day (bpd) of Russian crude and 1.2 million bpd of petroleum products head west through a network of pipelines and ports. Redirecting those flows would be a massive undertaking on the part of Moscow, with analysts now calling for a deeper disruption to Russian oil production this year. International Energy Agency previously forecasted Russia's output could drop as much as 3 million bpd in the second half of the year.Interestingly, some Russian oil executives called on the government of President Vladimir Putin to announce mandatory cuts to oil production in a move that would raise prices further to avoid selling barrels at a discount. Leonid Fedun, vice president of Russian oil company Lukoil said Russia should cut oil production by 20% to 30% this year to 7 million to 8 million bpd to "stay in the business."Based on Bloomberg calculations, Russia's current production is below 10 million bpd at around 9.16 million bpd, and more than 1 million bpd below its quota under an OPEC+ production agreement. IEA Executive Director Fatih Birol said this morning the energy crisis is much bigger than the 1970s oil shocks, and that he expects it to last longer. The Russian oil embargo also heightened concerns over inflation and potential recession across the 27-nation economic bloc. Inflation in the Eurozone surged to a new record high 8.1% in the 12-month period ending in May, up from 7.4% in April and well ahead of analyst forecasts for a rate of 7.7%. The development had been expected after Germany, Spain, and Belgium all reported above-consensus figures Monday. Germany showed a 7.9% spike in consumer prices from a year earlier compared with 7.4% reported in April. Near 7:30 a.m. EDT, U.S. crude benchmark for July delivery rallied $2.83 to trade near a $118.39 barrel (bbl) after trading at a nearly three-month high at $119.43. ICE Brent July futures advanced $2.24 to $121.67 bbl ahead of its expiration this afternoon while rallying to a $124.10 nearly three-month high, with the August contract trading at a $4 bbl discount to the expiring contract. NYMEX RBOB June futures traded at a record high $4.1930 ahead of expiration, with the July contract trading at an 11-cent discount. NYMEX June ULSD futures surged 20.87 cents to $4.2116 gallon, with the next-month ULSD contact trading near $4.1332 gallon.
Oil prices jump after EU leaders agree to ban most Russian crude imports Oil prices surged on Tuesday after EU leaders reached an agreement to ban 90% of Russian crude by the end of the year. However, prices reversed course around 2 p.m. ET Tuesday following a report from The Wall Street Journal that OPEC is considering suspending Russia from the group's output agreement."It could certainly facilitate an early end to the current production agreement and a Saudi/UAE ramp up," said Helima Croft, managing director and head of global commodity strategy at RBC. "However in most cases it is the actual stressed producer that asks for the exemption. An involuntary exemption might mean the breakup of OPEC+," she added.U.S. crude futures ended the day 40 cents, or 0.35%, lower at $114.67 per barrel. Earlier in the session it traded as high as $119.43, a price last seen in early March.Brent crude futures last traded 1% higher at $112.84 per barrel.Oil's jump earlier in the session came after the EU's agreement on an oil embargo, following weeks of deadlock after Hungary initially held up talks. Hungary is a major user of Russian oil and its leader, Viktor Orban, has been on friendly terms with Russia's Vladimir Putin.Charles Michel, president of the European Council, said the move would immediately hit 75% of Russian oil imports.The embargo is part of the European Union's sixth sanctions package on Russia since it invaded Ukraine. Talks to impose an oil embargo have been underway since the start of the month."The European Council agrees that the sixth package of sanctions against Russia will cover crude oil, as well as petroleum products, delivered from Russia into Member States, with a temporary exception for crude oil delivered by pipeline," according to a May 31 statement from the European Council.The European Council added that in case of "sudden interruptions" of supply, "emergency measures" will be introduced to ensure security of supply. That temporary exception covers the remaining Russian oil not yet banned, European Commission President Ursula von der Leyen said in a press conference. "We have agreed that the Council will revert to the topic as soon as possible in one way or the other. So this is a topic where we will come back to and where we will still have to work on, but this is a big step forward, what we did today," she said, referring to the temporary exemption. Von der Leyen explained that the temporary exemption was granted so that Hungary, along with Slovakia and the Czech Republic — all connected to the southern leg of the pipeline — have access which they cannot easily replace. Roughly 36% of the EU's oil imports come from Russia, a country that plays an outsized role in global oil markets.
JPM Sees Oil Rising Up To $136 This Month Depending On What China Does, As Trader Bets Millions On Crude Explosion To $200 - When it comes to forecasts for the price of oil, two distinct camps have emerged on Wall Street. In one, we have Citi, whose chief commodity strategist, Ed Morse, has been pounding the table calling for lower oil and most recently telling BBG TV that the fair value of Brent futures is in the $70 range even though the international benchmark is trading around $120 a barrel. Needless to say, Morse has been dead wrong so far, and anyone who listened to him has suffered catastrophic losses on the short side, although maybe he will be correct in the end: his forecast is predicated on unprecedented demand destruction, with Citi cutting its demand estimate for products to 2.2 million barrels a day, down from 3.6 million barrels at the start of the year. Alas, despite record prices for every energy product, there has so far been zero demand destruction as even Bloomberg's resident in-house commodity expert Javier Blas pointed out earlier today. In the other corner, we have pretty much everyone else, including such commodity bulls as Goldman and JPMorgan, the latter of which just published a note (available to ZH pro subs in the usual place), in which the bank's oil analyst, Natasha Kaneva, writes that while the recent decision by the EU to ban Russian oil as part of its sixth package of sanctions, sent the price of oil to the highest level in two months, "where prices go from here will depend on whether Russia can divert its oil to China." According to JPM, Russia has so far been able to find plenty of willing buyers for its deeply discounted crude oil, and has so far not only been able to fully offset the 0.7 mbd crude export loss to its traditional customers in the US and Europe, but has managed to sell an additional 1.4 mbd to Asia buyers! Accordingly, Russian oil production has stabilized, and after averaging about 1 mbd lower in April, it has increased 200-300 kbd MoM in May, with more volumes expected to be restored next month. While India has been snapping up distressed crude cargoes from Russia to feed its giant refining complexes, the increase to China, the world’s biggest importer, has been more modest—just 165 kbd—and has come chiefly from Eastern Russia ports rather than Russia’s Baltic and Black Sea ports which traditionally fed into Europe. India’s daily shipments from Russia have surged from zero in the weeks prior to the invasion to 953 kbd in April and have come from Western Russia ports, replacing some European demand.What does that mean for the price of oil? Well, according to JPM, given time, and given large discounts to encourage exports to Asia, Russia will be able to redirect most of its exports and peg maximum impact on Russian production at 1.5 mbd (Exhibit 1). As such, the bank maintains its Brent price forecast of $114/bbl for 2Q22, with a peak month average of $122/bbl in June and averaging $104/bbl for 2022. For its view to materialize, the largest US commercial bank assumes India’s purchases of Russian crude will stabilize at a pace of around 500 kbd, and that, as Chinese demand recovers from nearly two months of COVID lockdowns, China would add another 1 mbd to its crude imports of Russian origin.
Oil group OPEC+ reportedly considering suspending Russia from supply deal - Some members of the energy alliance OPEC+ are considering whether to suspend Russia from an oil production deal, The Wall Street Journal reported, citing unnamed OPEC delegates.The news, reported Tuesday, comes at a time when non-OPEC leader Russia, a major player in global energy markets, faces a barrage of Western sanctions and a partial oil ban from the European Union in the wake of the onslaught in Ukraine.OPEC delegates are reportedly concerned about the growing economic pressure on Russia and its ability to pump more crude to cool soaring prices.CNBC has contacted OPEC and a spokesperson for Russia's Energy Ministry and for comment.OPEC and non-OPEC countries are scheduled to discuss the next phase of production policy on Thursday.Oil prices on Tuesday turned negative on the news.International benchmark Brent crude futures rebounded on Wednesday morning, trading up 1.3% at $117.14 a barrel. U.S. West Texas Intermediatefutures rose 1.4% to trade at $116.35 during midmorning deals in London.Read the full Wall Street Journal article here.
No, OPEC+ Isn't About To Break Up And No, Saudis Aren't About To Pump More Crude --Yesterday oil tumbled because, as Bloomberg put it, among the many reverberations from Russia’s invasion of Ukraine another might be an early end to OPEC+'s oil supply pact. The 23-nation alliance, led by Saudi Arabia and Russia, is due to finish restoring production halted during the pandemic by the end of September, but the Wall Street Journal reported - in a report that has not been confirmed anywhere else - that OPEC is contemplating suspending Russia from the coalition’s quota system, as sanctions prevent Moscow from increasing output. The Saudis and the United Arab Emirates might fill the resulting supply gap, the WSJ said, potentially setting in motion a breakdown of the alliance. And even though oil prices slumped following the report, ignoring Europe's all too real (if rather delayed) embargo on Russian oil and focusing on hope that we may get a few hundred thousand extra barrels of Saudi oil supply, none of what the WSJ reported is going to happen, and as Bloomberg's Grant Smith writes this morning, when OPEC+ gathers tomorrow, the agenda will more likely be business as usual.For those who missed it, the WSJ reported that Saudi Arabia and the UAE could fill Russia’s unused quotas, helping to tame inflation and earning President Biden’s appreciation in the process.Well, don't hold your breath: as Smith correctly notes, such a move would be a grave step, rupturing ties between the Gulf nations and the Kremlin and risking the disintegration of the whole OPEC+ network. Delegates across the group don’t consider that imminent... or even realistic.Yes, there are some - such as RBC's Helima Croft - who point out that the Biden administration has been intensifying its diplomatic push to get Riyadh to open the taps, and one option we could see in coming weeks or months is that the kingdom speeds up the return of barrels still offline since the pandemic. But even if such an improbable deal is struck -- and there’s no guarantee it will be, after all the last time Biden called the Saudis, nobody picked up the phone -- it’s too far off to affect deliberations when the OPEC and its partners meet tomorrow. As a result, they’re likely to stick with the script and rubber-stamp another modest supply increase for July.Meanwhile, cementing ties between Moscow and Riyadh, on Wednesday, Russia said Saudi Arabia hailed their oil-market cooperation in the OPEC+ alliance as Foreign Minister Sergei Lavrov visited the kingdom for talks with Gulf officials. The trip comes as Moscow faces growing pressure from the US and its allies over its invasion of Ukraine. Yet despite western pressure, oil-exporting Gulf nations have maintained close ties with Moscow and have ignored sanctions imposed by the US and its allies.Lavrov and his Saudi counterpart, Prince Faisal bin Farhan, “praised the level of cooperation in the OPEC+ format,” the Foreign Ministry in Moscow said in a statement. “They noted the stabilizing effect that tight coordination between Russia and Saudi Arabia in this strategically important area has on the global hydrocarbon market.”
Lavrov Hails OPEC+ Cooperation Russia said Saudi Arabia hailed their oil-market cooperation in the OPEC+ alliance as Foreign Minister Sergei Lavrov visited the kingdom for talks with Gulf officials. The trip comes as Moscow faces growing pressure from the US and its allies over its invasion of Ukraine. Oil-exporting Gulf nations have maintained ties with Moscow and haven’t joined in the sanctions imposed by the US and its allies. Lavrov and his Saudi counterpart, Prince Faisal bin Farhan, “praised the level of cooperation in the OPEC+ format,” the Foreign Ministry in Moscow said in a statement. “They noted the stabilizing effect that tight coordination between Russia and Saudi Arabia in this strategically important area has on the global hydrocarbon market.” Saudi Arabia’s state-run news agency reported the meeting but did not provide a detailed readout. The meeting comes as the European Union this week approved a plan to curtail Russian oil exports to the bloc, ratcheting up sanctions against the Kremlin over President Vladimir Putin’s invasion of Ukraine. Lavrov is scheduled to meet Thursday with his counterparts from around the region at a meeting of the six-nation Gulf Cooperation Council in Riyadh. The GCC includes major OPEC members aside from Saudi Arabia, including the United Arab Emirates and Kuwait. OPEC+ is due to finish restoring production halted during the pandemic by the end of September. But with Russian exports threatened by sanctions, Riyadh could bring back the barrels earlier than scheduled, RBC Capital Markets LLC predicts. The Wall Street Journal reported earlier that OPEC is contemplating an even more radical option: suspending Russia from the coalition’s quota system, as sanctions prevent Moscow from increasing output. Saudi Arabia and the United Arab Emirates would fill the resulting supply gap, the WSJ said.
WTI Holds At Day's Low After Crude Inventory Draw -Oil prices pumped (after OPEC+ rejected WSJ's comments on Russia yesterday and cut its estimate for global year-end over-supply) and dumped to end the day near their lows after the Biden administration said it still hopes to engage with Saudi Arabia. Markets took the headline as a concrete step by the administration to actively fight energy costs, traders said.“Meaningful progress probably takes time to come to fruition but headlines around progress will keep some sort of a governor on crude rallies,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management Traders were predicting a drop in crude oil inventories, but an increase in gasoline and distillate stockpiles.API
- Crude -1.181mm (-67k exp)
- Cushing +177k
- Gasoline -256k
- Distillates +858k
US crude stocks fell for the 3rd straight week, with a bigger than expected draw last week. Interestingly,. Distillates saw their 3rd straight weekly build...WTI was hovering around $114.75 ahead of the API print, unchanged on the day and didn't move after the data hit. “Oil markets are a dead cert to tighten further following EU’s ban on Russian oil,” PVM Oil Associates analyst Stephen Brennock said in a note. “This, in turn, should ensure further upside in oil prices in the second half of this year. The Russian oil embargo is finally over the line, but more price pain is on the horizon for the EU and its Western partners”The 3-2-1 crack, which approximates turning crude into gasoline and diesel, soared to a new record high of $55.26 today...
Oil Gains After EU, UK Slap Insurance Ban on Russian Oil - Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange settled the first trading session of June higher, underpinned by an announcement from the European Union to embargo Russian seaborne oil imports joined by a U.K. ban on providing insurance for waterborne Russian oil cargoes in a move that further limits Moscow's ability to circumvent Western sanctions despite an increasingly tightening global oil market. The United Kingdom and EU have agreed on a coordinated ban to ensure ships carrying Russian oil would be denied insurance coverage from London-based Lloyds, exposing shippers to major losses should they continue to carry Russian oil. The London based insurance giant represents roughly 90% of the global insurance market for shippers, leaving Moscow no alternative but to look for smaller and less developed markets to insure Russian oil cargoes. Russia is the world's largest exporter of petroleum products and the second largest crude oil exporter behind only Saudi Arabia. According to International Energy Agency, Russia exported 7.8 million barrels per day (bpd) of oil and refined products in December 2021, of which crude and condensate accounted for 5 million bpd and oil products accounted for about 2.85 million bpd. The insurance ban would surely have a crippling effect on Russia's oil industry, with analysts estimating the country's oil production already plunged below 10 million bpd in early May from 11.3 million bpd in January. Faced with those headwinds, OPEC+ is reportedly considering an exemption for Russia from an oil production agreement that is unwinding steep production cuts made in April 2020 in gradual monthly installments. Russia has missed its production targets for several months now, with the latest data indicating the country's output is close to 9.7 million bpd -- some 1 million bpd below its allotted quota. "It does not make sense to make them stick to a quota," said one OPEC delegate. Reports of a possible exemption for Russia raised speculation other OPEC+ countries could increase production more aggressively in coming months to offset the loss of Russian barrels on the global market. However, Saudi Arabia, the de facto leader of the cartel, has repeatedly stressed that the group's spare capacity is limited, estimating it at just 2 million bpd. Spare capacity is the amount of untapped production that can be quickly turned on. "You need a resilient and strong spare capacity to make sure that you can absorb any supply shocks," Nasser said last week. At settlement, NYMEX West Texas Intermediate for July delivery gained $0.59 to $115.26 bbl, with the new front-month Brent contract advancing $0.69 to $116.29 bbl. NYMEX RBOB July futures rallied 15.54 cents to $4.0716 gallon and the July ULSD contract surged more than 20 cents to $4.1433 gallon.
Crude oil futures plummet amid reports of extra Saudi supply ahead of OPEC meeting Crude oil futures were sharply lower in mid-morning Asian trade June 2 amid reports that some OPEC producers were prepared to raise output beyond their pledged quotas as the wider OPEC+ group prepares to convene later in the day. At 11:04 am Singapore time (0304 GMT), the ICE August Brent futures contract was down $2.26/b (1.94%) from the previous close at $114.03/b, while the NYMEX July light sweet crude contract fell $2.45/b (2.13%) at $112.81/b. Media reports indicated that Saudi Arabia has told Western leaders that the country is prepared to raise output beyond its pledged quota to make up for the shortfall in Russian supply. This follows on from reports earlier in the week that OPEC delegates were discussing exempting Russia from OPEC+ production quotas, which could potentially pave the way for other members to further raise output. "It seems the ground is being laid for Saudi Arabia and the United Arab Emirates to ramp up production to take the heat out of oil prices," OANDA Senior Market Analyst Jeffrey Halley told S&P Global Commodity Insights. "There could be some back room deals being cut between Saudi/UAE and the US," said Halley, citing extra political impetus from US President Joe Biden due to soaring gasoline prices ahead of the mid-term elections and high oil prices aiding Russia's finances. "This afternoon's OPEC+ meeting is shaping up to be a pivotal event of the week, maybe even the year," he added. The front-month ICE Brent crude marker had plunged by as much as 3% in early-morning trade in response to the reports, though as it has recouped some of its losses since then. While many OPEC producers face difficulties in raising output due to domestic turmoil or lack of investment, analysts noted that several members such as Saudi Arabia or the United Arab Emirates nonetheless still have untapped spare capacity. Oil prices also remained at the mercy of sentiments in the broader financial markets, which have been buffeted in recent days by fresh concerns about a global recession amid a worsening outlook from the US Federal Reserve and bearish comments from Wall Street executives. Dubai crude swaps and intermonth spreads were lower in mid-morning trade in Asia June 2 from the previous close. The August Dubai swap was pegged at $102.89/b at 10 am Singapore time (0200 GMT), down $2.34/b (2.22%) from the June 1 Asian market close. The July-August Dubai swap intermonth spread was pegged at $2.59/b at 10 am, down 30 cents/b over the same period, and the August-September intermonth spread was pegged at $1.96/b, down 33 cents/b. The August Brent/Dubai EFS was pegged at $10.80/b, down $1.09/b.
Oil prices slide after report Saudi Arabia could step up if Russian output dips under sanctions -- OPEC and its oil-producing allies agreed on Thursday to hike output in July and August by a larger-than-expected amount as Russia's invasion of Ukraine wreaks havoc on global energy markets. OPEC+ will increase production by 648,000 barrels per day in both July and August, bringing forward the end of the historic output cuts OPEC+ implemented during the throes of the Covid pandemic. The group has been slowly returning the nearly 10 million barrels per day it agreed to pull from the market in April 2020. In recent months, production has risen between 400,000 and 432,000 barrels per day each month. Oil prices reversed early losses during mid-morning trading, and continued to move higher during the session. By 12 p.m. on Wall Street West Texas Intermediate crude futures, the U.S. oil benchmark, stood 1.3% higher at $116.80 per barrel. International benchmark Brent crude added 1% to trade at $117.53. The decision comes as the world grapples with surging energy prices. Governments, including the Biden administration, have been calling on producers to raise output in an effort to dampen oil's wild ride. White House press secretary Karine Jean-Pierre said the administration welcomed OPEC+'s announcement. "We recognize the role of Saudi Arabia as the chair of OPEC+ and its largest producer in achieving this consensus amongst the group members," she said in a statement, before adding that the "United States will continue to use all tools at [its] disposal to address energy prices pressures." While in theory output will be higher looking forward, OPEC+ has been struggling to meet production quotas. Moreover, the additional barrels slated to hit the market will not make up for the potential loss of more than 1 million barrels per day from Russia as nations around the world ramp up sanctions following the invasion of Ukraine. EU leaders on Monday agreed to ban 90% of Russian crude by the end of the year as part of the bloc's sixth sanctions package on Russia since the late February invasion. In March, crude hit the highest since 2008, and has stayed firmly above $100. The rapid rise is a major contributor to decades-high inflation being seen across economies. On Thursday the national average for a regular gallon of gasoline in the U.S. hit another record high of $4.71. Oil prices had moved lower earlier in the session following a report from the Financial Times, citing sources, that Saudi Arabia was aware of the risks of a supply shortage and that it is "not in their interests to lose control of oil prices." Sources told the FT that Saudi Arabia, OPEC's de facto leader, has not yet seen genuine shortages in the oil markets. But that situation could change as global economies reopen amid the pandemic recovery, driving higher demand for crude. China, the world's largest oil importer, is starting to ease restrictions as daily Covid cases taper off. "Whilst it's not an outright promise, Saudi Arabia [has] seemingly thrown the West a bone,"
Oil Jumps After OPEC+ Agrees To Boost Output By 648K Barrels - After just 11 minutes, a new record for brevity, the OPEC+ minister meeting ended and as noted earlier, concluded by agreeing to a 648K increase for both July and August, the first time that OPEC+ has deviated from its standard monthly increase of 432K since the increments were started last summer. The decision will accelerate the completion of OPEC's reversal of several years of output cuts a month earlier than planned. In the grand scheme of things, the 200K or so increase in output does nothing. Furthermore, as Bloomberg notes, any bigger increase will be shared pro-rata by all participants which is "going to eat into the volume actually delivered by quite a bit."The decision means that Saudi Arabia has finally agreed to Biden's constant pleading for extra barrels, as the president seeks help with runaway crude prices -- and to fill the impending supply gap, not to mention the rapidly depleting US strategist petroleum reserve.According to Bloomberg, the deal would mean Saudi production goes higher earlier than scheduled - with output at 10.957 million barrels a day in August. If demand is continuing to bounce back and sanctions are taking a further toll on Russian exports, will we see the kingdom above 11 million before the summer is over? And how long before Saudis Arabia can't pump any more at a time of peak demand, and a US SPR draining at 1mmb/d. What everyone is asking for! The new quota table ! #OOTT #opec pic.twitter.com/SkITTarZjV The reality is that the actual production delivered to the market will inevitably be much smaller than advertised: As most OPEC+ members are unable to increase output, any additional barrels will need to come from Saudi Arabia, the UAE and Iraq. How much relief consumers feel at the pump is an open question. Judging by the surge in oil prices, not much. More importantly, the strong consensus by all participants confirms that OPEC+ is nowhere near breaking apart, an outcome that would have been catastrophic for oil. As a result, oil has popped to session highs, trading in the mid-$115, and erasing all post FT-article losses.
WTI Extends Gains After Bigger Than Expected Crude Draw - Oil prices are surging higher this morning, erasing overnight losses, despite OPEC+ hiking output (celebrated by The White House) as the 'hope' that the rumors around Russian exemptions from the last couple of days might lead to an OPEC breakup have been been smashed on the shores of reality. It appears the Saudis promised just enough to offer an olive branch for Biden ahead of his visit to The Kingdom but not enough to prompt any impact on the global supply tightness.“This is a pretty minor tweak, but it is a nod toward looming tight balances later this year when the EU sanctions on Russia start having an impact,” said Bill Farren-Price, a director at Enverus Intelligence Research. “The question is whether there is any more in the OPEC tank?”Additionally, as Bloomberg reports, the output increase will be divided proportionally between members in the usual way. Countries that have been unable to raise production, such as Angola, Nigeria and most recently Russia, would still be allocated a higher quota. That could mean that the actual supply boost is smaller than the official figure, as has often been the case in recent months. For now, all eyes are on gasoline data for any signs of demand destruction. DOE
- Crude -5.068mm
- Cushing +245k
- Gasoline -711k
- Distillates -529k
The official DOE data showed crude stocks plunged far more than API reported, drawing down 5.07mm barrels last week...The headline draw in crude stockpiles of 5.4 million barrels was boosted by the withdrawal of more than 5 million barrels of crude from the Strategic Petroleum Reserve last week. Total nationwide crude inventories (including commercial stockpiles and oil held in the SPR) fell by 10.5 million barrels in the week to May 27.
Oil Rallies as OPEC+ New Quotas Disappoint, US Stocks Fall - Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange powered higher on Thursday, lifting RBOB futures to a fresh record-high settlement. Futures were spurred by larger-than-expected draws from U.S. oil and petroleum products stocks during the final week of May, while the decision by OPEC+ to increase its production rate by a modest margin this summer failed to relieve concerns over a structural supply shortfall on the global oil market. OPEC+ oil ministers agreed on Thursday to raise their collective oil production for July and August by 648,000 barrels per day (bpd), 216,000 bpd above monthly targets that were planned for this summer. According to OPEC+ delegates, the production increase was made to cover for demand growth this summer rather than to fill in for the loss of Russian oil output. Even though the output hike is larger-than-expected, there is a healthy degree of skepticism in the market as to whether increasing production is possible, with several OPEC+ countries having consistently missed their output targets in recent months. Saudi Arabia and the United Arab Emirates are believed to be the only two members that have enough spare capacity to boost output. On one hand, the decision might suggest Saudi Arabia and the UAE have acknowledged calls from Western nations to deliver more barrels to the market. On the other, it does little to heal a long-term supply shortfall exacerbated by Western sanctions on Russia. As much as 3 million barrels in Russia's daily oil exports are currently at stake as European Union tightens the screws on the Russian oil industry in response to Moscow's aggression in Ukraine. Russia is the world's largest exporter of petroleum products and the second-largest crude oil exporter behind only Saudi Arabia. According to International Energy Agency, Russia exported 7.8 million barrels per day (bpd) of oil and refined products in December 2021, of which crude and condensate accounted for 5 million bpd and oil products accounted for about 2.85 million bpd. Further supporting the oil complex, U.S. Energy Information Administration late morning reported domestic commercial crude oil inventories declined by a massive 5.1 million bbl last week, well above calls for a 500,000-bbl draw. Refiners, meanwhile, processed 236,000 bpd less crude compared to the previous week at 16.03 million bpd. Lower refinery activity came as demand for refined fuels picked up in the final week of May, with gasoline demand in the United States climbing to the second-highest weekly rate this year at 8.977 million bpd. Demand for distillate fuels also edged higher to 3.969 million bpd, up 102,000 bpd. As a result, distillate inventories declined by 529,000 bpd from the previous week to a 17-year low 106.4 million bbl, some 24% below the five-year average. Gasoline inventories also dropped by a larger-than-expected 711,000 bbl to 219 million bbl and are about 9% below the five-year average. At settlement, NYMEX West Texas Intermediate for July delivery rallied $1.61 to $116.87 per bbl, and ICE August Brent futures advanced $1.32 to $117.81 per bbl. NYMEX RBOB July futures surged 11.93 cents to $4.1909 per gallon, and the July ULSD contract rallied to $4.2084 per gallon.
Oil set for sixth weekly gain as OPEC+ supply boost disappoints – Oil headed for a sixth weekly advance after a keenly anticipated OPEC+ meeting delivered only a modest increase in output that failed to assuage concerns over a widening supply deficit. The producer cartel agreed to a hike that amounts to just 0.4 percent of global demand over July and August. There had been speculation the Saudis were preparing to pump significantly more as part of a reset of relations with the US, and there were even suggestions that Russia might be exempted from the alliance’s monthly supply agreements. That didn’t happen, with West Texas Intermediate closing up 1.4 percent after the decision and trading near $117 a barrel in Asia on Friday. A six-month long rally in the US benchmark—the longest such run in more than a decade—now looks set to continue. A report showing American crude stockpiles falling more than twice as much as expected last week at the start of the summer driving season highlighted the growing supply deficit. OPEC+ agreed to production hikes of 648,000 barrels a day for July and August, about 50 percent larger than the increases seen in recent months. The decision came after the European Union approved a partial ban on Russian oil imports and after months of pressure by Washington on Saudi Arabia. There were doubts the group would be able to fully deliver on the pledged increases, given they will be spread across its members, many of whom have struggled to raise output. The decision by OPEC+ could, in practice, mean 132,000 barrels a day each month of actual additional output from Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq, Citigroup Inc. said in a note. Prices have been marching higher in the past week as markets assessed the EU move, Chinese lockdowns were lifted and the US summer driving season got underway, it said. “The agreed supply increases look big on paper, but in reality it is very unlikely the group will manage to hit these production targets,” “Russian output is likely to edge lower in the months ahead as sanctions bite, while there’s limited spare capacity among other members.” ING’s forecast for Brent to average $122 a barrel over the second half remains unchanged, he said. Oil has been driven higher this year on rebounding demand as countries threw off virus restrictions, while Russia’s invasion of Ukraine has reduced supply from one of the world’s three-biggest producers. A potential resurgence in consumption in China, the world’s biggest crude importer, is now threatening to add even more upward pressure to prices. The ramp up in OPEC+ supply wouldn’t be enough to balance a market that’s shifting into deficit due to the demand recovery in China, Goldman Sachs Group Inc. said in a note. The bank said its expectations for output from the alliance are skewed to the downside, given the European ban on Russian imports and a lack of progress on negotiations with Iran. It reiterated its forecast for Brent to average $125 a barrel in the second half. The OPEC+ announcement also didn’t have much impact on oil’s market structure. Brent’s prompt timespread was $2.62 a barrel in backwardation—a bullish pattern where near term prices are higher than those further out—compared with $2.73 at the close on Wednesday. US crude stockpiles fell around 5.1 million barrels last week, more than the median estimate for a decline of 2.1 million barrels, according to an Energy Information Administration report Thursday. New York-area gasoline stockpiles dropped to the lowest level since 2017.
WTI, Brent Advance on China's Reopening, EU Oil Embargo -- Oil futures rallied more than 2% on Friday, with all petroleum contracts posting a seventh consecutive week of steep gains. The gains were spearheaded by China's reopening from draconian lockdowns that strangled its economy for three months and a European Union embargo on Russian oil imports joined with a sweeping ban on insurance coverage for waterborne Russian oil and petroleum products globally. Even news OPEC+ agreed to raise oil production by a larger-than-expected 648,000 barrels per day (bpd) in July and August had a short-lived impact on prices, with both crude benchmarks finishing a volatile week as much as 3% higher. NYMEX West Texas Intermediate for July delivery settled Friday's session at $118.87 per bbl, up $2, with the international crude benchmark Brent contract rallying $2.11 to $119.72 per bbl, with gains accelerating post-settlement. The advance by refined products futures once again outpaced those for the crude complex, with nearby-delivery month RBOB settling the session 6.13 cents higher at a fresh record-high $4.2522 per gallon, and ULSD July futures rallied 7.19 cents or 3.16% to $4.2803 per gallon. Lending upside price pressure for oil products, U.S. Energy Information Administration in its weekly inventory report released Thursday showed a larger-than-expected draw from gasoline and distillate stocks as demand for motor gasoline roared higher. U.S. distillate inventories now stand at their lowest level in 17 years at 106.4 million barrels (bbl), and some 24% below the five-year average. Gasoline inventories also dropped to 219 million bbl and are about 9% below the five-year average. Crude futures also found buying support after EIA reported U.S. commercial crude oil inventories plunged by a massive 5.1 million bbl from the previous week to 15% below the five-year average at 414.7 million bbl compared with expectations for stockpiles to have shed just 500,000 bbl, with the large draw exacerbating concerns over a broadening supply shortfall heading into the summer. Underlining gains in the oil complex this week are two bullish developments that, combined, will likely send prices even higher in the summer months. First, while the agreed-to phased-in EU embargo on Russian oil and products, which joins sanctions by the United States, Canada and United Kingdom, restricts where Moscow can sell its oil, the insurance ban by EU and UK is likely to bite harder. Lloyd's of London covers as much as 90% of waterborne oil deliveries, greatly limiting where Russia and shippers willing to ship Russian oil can turn to for essential liability coverage. As much as 3 million bpd of Russian oil exports could be lost to the global oil market. In Asia, China finally took the initial steps to ease its three-month lockdown in Shanghai, a city of 25 million people, and removed some COVID controls in its capital Beijing. Both megacities allowed for free movement of people and public transport, while also authorizing factories in low-risk areas to operate at 90% of capacity. The encouraging developments fueled investor hopes that the worst of the COVID restrictions that ravaged the regional economies is now over and would lead to a gradual path toward a sustainable reopening.
OPEC+ has ‘kind of broken down’ as Russia loses relevance and group faces tight spare capacity - OPEC+ has "kind of broken down," the lead analyst of an oil research firm said after oil prices rose despite the alliance announcing that it would increase supply more quickly.OPEC and its allies decided to take nearly 10 million barrels off the oil market in 2020 when Covid first hit and demand evaporated.The alliance on Thursday said it would increase production by 648,000 barrels per day in July and August to bring output cuts to an end earlier than previously agreed.Both West Texas Intermediate crude futures and international benchmark Brent crude settled more than 1% higher after the news.The problem is that countries in the OPEC+ alliance have not been meeting their targets, ."The whole system of OPEC has kind of broken down right now," he told CNBC's "Squawk Box Asia" on Friday. OPEC typically can influence oil prices by controlling its output, but Sankey said the market sees oil supply issues persisting despite the announcement. Only two or three countries in OPEC have spare capacity, he said.Saudi Arabia, the kingpin in OPEC and the world's second-largest oil producer, has about a million barrels per day of extra production capacity, but doesn't want to use all of it, said Sankey."Saudi has to make a choice — do we let the price go higher while maintaining a super emergency, super crisis level of spare capacity?" he asked. "Or do we add oil into the market and go to effectively almost zero spare capacity, and then what happens if Libya goes down?"A political deadlock in Libya has led to a partial blockade of oil facilities,Reuters reported in May.The new quota also includes Russian production, which has been constrained by sanctions because of the war in Ukraine, he said. Russian oil output will slowly decline "by default.""It'll become less relevant in this cartel group as Europe and the rest of the world starts to sanction Russia,"
Rapidly Decaying Supertanker Could Explode at Any Time - A rapidly decaying supertanker in the Red Sea could explode at any time, a joint statement from representatives of the U.S. and Netherlands governments has warned. “The Safer is a rapidly decaying and unstable supertanker that contains four times the amount of oil spilled by the Exxon Valdez,” the statement, which was published on the U.S. Department of State’s website late last week, noted. “It could leak, spill, or explode at any time, severely disrupting shipping routes in the Gulf region and other industries across the Red Sea region, unleashing an environmental disaster, and worsening the humanitarian crisis in Yemen,” the statement added. Representatives of the governments of the United States and the Netherlands have partnered to support the UN efforts to address and avert the economic, environmental, and humanitarian threats posed by the Safer oil tanker, the Department of State noted on its site. Last Friday, the Dutch Ambassador to the United States, André Haspels, hosted a meeting joined by U.S. Special Envoy Lenderking, Yemeni Ambassador to the United States Mohammed al-Hadrami, and representatives from the diplomatic community in Washington, D.C., according to the joint statement. They are said to have stressed the importance of raising $144 million to fund the UN’s operational plan, which includes $80 million for an emergency operation to offload the oil from the Safer to a temporary vessel, the statement highlighted. At the pledging event co-hosted by the UN and the Netherlands earlier this month, nearly half the funds required for the emergency operation were raised, but more is urgently needed to move forward, the statement warned. Back in April, U.S. Special Envoy for Yemen Tim Lenderking and Dutch Ambassador to Yemen Peter Derrek Hof joined UN Resident and Humanitarian Coordinator for Yemen David Gressly on a regional trip in the Gulf to increase awareness of the imminent risks the Safer poses to the entire region, the statement outlined. r Due to the ongoing conflict in Yemen, all production and export operations related to the floating storage and offloading (FSO) Safer vessel have been suspended, but nearly 1.1 million barrels of crude oil is estimated to remain onboard, according to an International Maritime Organization (IMO) focus page on the vessel, which was last updated on May 20. The FSO has not been inspected or maintained since 2015 and has been out of class since 2016, leading to serious concerns about its integrity, the focus page notes. It is understood there is currently no oil leaking from the unit, but it is considered that the risk of an oil spill from the FSO Safer is increasing as its structure, equipment and operating systems continue to deteriorate, the focus page adds. “The main risks associated with the FSO are the possible structural failure of the unit due to the lack of maintenance that could result in a leak from storage tanks due to a fracture forming on the hull or as a large release due to an explosion from the build-up of flammable gases,” the IMO page states. “The situation is particularly complex due to conflict in the region and the ongoing Covid-19 pandemic,” the page adds.
Congress begins effort to end US role in Yemen war - Amazingly, after nearly eight years of relentless war, the U.N.-negotiated ceasefire has held up in Yemen for the last two months. As the U.N. Special Envoy begins his effort to extend this temporary truce into a longer-term deescalation, Congress once again has the opportunity to retake its war powers authority and provide the president with a tool to end U.S. involvement. Today, a bipartisan group of House lawmakers, led by Congressional Progressive Caucus Chair Rep. Pramila Jayapal (D-Wash.) and Rep. Peter DeFazio (D-Ore.), introduced a measure to invoke Congress’s war powers “to end unauthorized United States military involvement in Saudi Arabia’s brutal war in Yemen.” Sen. Bernie Sanders will introduce a companion bill when the Senate reconvenes. With the administration and some of itscongressional allies toadying to Saudi Arabia and the United Arab Emirates in a shameless attempt to stabilize international energy markets, this war powers resolution on Yemen couldn’t be more timely. Prior to the current war, most lawmakers (mistakenly) saw Yemen solely through the lens of counterterrorism. Although the conflict is a result of a coup during Yemen’s post-revolutionary transition in September 2014, Washington has largely bought into the false Gulf narrative that the war was instigated by Iran. The Obama administration began backing Saudi Arabia and the UAE’s military coalition, after it intervened in Yemen’s civil war in 2015. Since then, Washington has provided aerial refueling, targeting intelligence, and U.S. advisers without authorization from Congress. Since the March 2015 intervention, the Saudi and Emirati-coalition has conducted an aerial and ground military campaign that has relied heavily on U.S. weapons, as well as American logistical and intelligence support. The coalition has also enforced a siege against rebel-held territory in Yemen by blocking its air and sea ports, which has severely hampered the import-reliant economy and catalyzed the spiral of Yemen’s pre-existing humanitarian crisis into what the United Nations has called “the world’s worst humanitarian crisis.” While Houthi forces abuse those living under their corrupt rule, forcibly recruit child soldiers, and launch mortar shells and missiles into civilian areas, the U.S.-supported, Saudi-led coalition has also engaged in a consistent pattern of airstrikes targeting civilian objects and civilian infrastructure, including a school bus full of children, public markets,weddings, port docks and cranes, funerals, Doctors Without Bordershospitals and other medical facilities, camps for internally displaced people, and boats filled with African refugees. These attacks have a direct correlation to the humanitarian crisis, as the destruction of such vital civilian infrastructure has directly hampered humanitarian and commercial import access to the country, which before the conflict imported nearly 90 percent of its food supply. Civilians have borne the brunt of this crisis, with an estimated 337,000 dead as a result of the fighting, starvation, and disease. Despite progress in gaining humanitarian access to previous frontlines during the current truce, three-quarters of the population, nearly 20 million people, are acutely food insecure. For years, under three administrations, State Department officials havevoiced concern about U.S. complicity, and the potential legal culpability of U.S. personnel in aiding and abetting the coalition’s apparent war crimes. Yet despite the clear humanitarian, strategic, and moral imperatives, three presidents have failed to make meaningful changes to US policy that could help end Yemen’s suffering.
Greece Alerts Its Tankers In Gulf After Iran Threatens More 'Retaliation' Seizures - The government of Greece has issued an alert warning all Greek ships currently sailing in Persian Gulf waters to adapt and remain aware of heightened threats against them following last week's seizure of two Greek oil tankers by Iran's military. Maritime tanker monitors suggest at least a dozen Greek tankers are currently in waters near Iran.The alert told vessels to immediately "adapt to the unacceptable situation and reality created by the Iranian government’s tactic," according government spokesman Ioannis Oikonomou at a Monday press briefing in Athens, per Bloomberg reporting.Tasnim news agency over the weekend threatened that 17 other Greek-flagged tankers in the Persian Gulf risk seizure by the Islamic Republic as further retaliation for the US stealing Iranian oil in the Mediterranean when a Russian-flag tanker carrying Iranian crude was recently seized off Greece. "The vessels were seized a day after Athens assisted the United States in seizing an Iranian oil tanker over alleged sanctions violations," RFERL reported. And Politico noted:Nour News, a website close to Iran’s Supreme National Security Council, had warned earlier on Friday that Tehran planned to take “punitive action” over Greece assisting the U.S.Iran struck an apparent act of 'revenge' last Friday. Greece's foreign ministry confirmed that the Greek-flagged Delta Poseidon was boarded by Iranian militants via helicopter, later identified in international reports as IRGC operatives. The ministry had called the act "piracy" and a "violent taking over of two Greek-flagged ships." At least two Greek citizens were detained in that first boarding."A similar incident was reported on another Greek-flagged ship, carrying seven Greek citizens, off the Iranian coast," the ministry had described of the second ship, identified as Prudent Warrior, which is operated by the Greek company Polembros Shipping.
Iran’s seizure of Greek tankers heightens risk on key oil route — Iran’s seizure of two Greek oil tankers in the Persian Gulf raises the risk of further interruptions to shipments from a region that’s a vital source of global energy supplies.On Friday, Iran diverted two Greek tankers, each loaded with about 1 million barrels of oil, into its territorial waters -- an apparent tit-for-tat for a vessel that the European country seized. Greece is the world’s largest oil tanker-owning nation, making any spat with Iran potentially serious for the global market. Likewise, about one fifth of daily crude supply passes through the Strait of Hormuz, the narrow waterway separating the Persian Gulf from the Indian Ocean and crude buyers all over the world.“Iran are approaching any seizure of their vessels or assets as a quid pro quo,” said Matt Stanley, a trader and broker with Starfuels in Dubai. “Shippers will need to be more vigilant. Iran will be extremely protective of any and all assets.”Greece alerted all vessels from the country to “to adapt to the unacceptable situation” when sailing in the Persian Gulf. About 27% of the global fleet of oil tankers is Greek owned, according to data from Clarkson Research Services Ltd., a unit of the world’s largest shipbroker.The seized tankers, Prudent Warrior and Delta Poseidon, were taken by Iranian forces in the Persian Gulf on Friday, according to the US 5th Fleet in Bahrain. Both are Greek-owned and flagged, and had loaded cargoes in Iraq, according to tanker tracking data compiled by Bloomberg.The Prudent Warrior had been sailed near the Iranian port of Bandar Abbas, just off the country’s coast, as of Monday afternoon, according to tanker tracking data compiled by Bloomberg.Oil prices have surged by more than 50% this year, with Brent crude trading near $120 a barrel after Russia’s invasion of Ukraine roiled global markets for commodities and energy. Consumers were already suffering higher costs for fuels like natural gas and coal as supply shortages hit Europe and Asia during the winter months. With most of the world’s spare oil production capacity held by Gulf producers, the region is key for balancing markets.The seizure of the vessels came not long after Greek authorities, in coordination with US counterparts, stopped an Iranian-flagged tanker and confiscated its cargo.
UN Warns Iran's Enriched Uranium Stockpile Now 18 Times Imposed Limit -- The UN nuclear watchdog International Atomic Energy Agency (IAEA) announced Monday that it estimates Iran's stockpile of enriched uranium has grown to more than 18 times limits put in place by the 2015 JCPOA nuclear deal with world powers, brokered under Obama.This includes uranium enriched up to 20%, with the IAEA in a fresh report saying its monitors "estimated that, as of May 15, 2022, Iran’s total enriched stockpile was 3,809.3 kilograms." The 2015 deal set the ceiling at 300 kilograms. Further the deal, which the US pulled out of in 2018 under the Trump administration, puts enrichment levels at 3.67%.The report further indicates the amount enriched to 60% is now at 43.1 kilograms. To be considered weapons grade, Iran would have to enrich to about 90%.But Tehran has long argued that it's none other than Washington which unilaterally pulled out of the deal, that Iran has held up its end of the bargain. Further Iranian officials argue that its the US side holding up a finalized restored JCPOA. According to the latest statements from Tehran featured in state media:The US shows no action vis-a-vis Vienna talks, Amir Abdollahian said in a meeting with his Finnish counterpart Pekka Olavi Haavisto on Sunday.He stressed that the Islamic Republic of Iran is quite serious in reaching a good, strong and sustainable agreement in Vienna.Earlier this month, the Secretary of Iran's Supreme National Security Council (SNSC) Ali Shamkhani pointed out that the US must urgently drop anti-Iran sanctions if its hopes to finally secure a deal. "The Vienna talks have reached a stage where the knot can only be untied through the adherence of the violator party to Iran's logical and principled approaches,” he said."The US, by breach of promise, and Europe, by inaction, scuttled the opportunity to benefit from Iran's proven goodwill. If they have the will to return, we are ready and an agreement is within reach," Skamkhani added.But recently, the IAEA has voiced that it's "extremely concerned" about lack of Iranian communication over possible undeclared nuclear sites:"I am referring to the fact that we, in the last few months, were able to identify traces of enriched uranium in places that had never been declared by Iran as places where any activity was taking place," IAEA head Rafael Grossi told a European Parliament Committee."The situation does not look very good. Iran, for the time being, has not been forthcoming in the kind of information we need from them… We are extremely concerned about this," Grossi continued.Last week, the Israelis presented what they say is evidence proving a calculated inspections evasion process on the part of the Iranians. A major investigative report in The Wall Street Journal alleges that Iran has been covering up its nuclear weapons aspirations for years by allegedly falsifying a document trail with an eye toward covering up past work on a hidden nuclear weapons program...
Erdogan Announces New Major Military Operation In Northern Syria Against Kurds --Despite recent warnings not to do so from the United States, Turkey's President Recep Tayyip Erdoğan on Wednesday announced a fresh 'special operation' of the Turkish army to clear "terrorist elements" from northern Syria's Tal Rifaat and Manbij areas. The operation hearkens back to when an initial major Turkish offensive kicked off in the region, which is on sovereign Syrian territory south of Turkey's border, in 2019 which earned international outrage and condemnation. "We are taking another step in establishing a 30-kilometer security zone along our southern border. We will clean up Tal Rifaat and Mambij," Erdogan announced, saying that the operation will from there continue to other parts of northern Syria."We are moving to a new phase to create a 30 km deep safe zone," Erdogan said further in making the announcement. "We will clear Tal Rifaat and Manbij from terrorists."And that's when he seemed to poke the West over the ongoing row caused by Ankara's refusal to admit Finland and Sweden into NATO: "Let's see who will support us and who will stand against us," he stressed.According to Turkey's Daily Sabah, the Turkish leader has grown more and more frustrated over US as well as Russian 'inaction' against armed Kurdish groups in northern Syria. In the case of the US, a limited force of some 900 American troops still occupying northeast Syria continues to directly support the Syrian Democratic Forces militarily. The SDF is dominated by the Syrian Kurdish YPG - which Turkey argues is but an extension of the 'terror'-designated PKK:
Ukraine suffers on battlefield while pleading for U.S. arms — The ambulances hurtled into the parking lot one after the other, each carrying wounded troops directly from the nearby front line. One young man stared straight ahead, his face swollen, his neck and back dripping with blood. Others lay silently under foil blankets.Some stumbled out the back doors and collapsed into wheelchairs as staff members rushed to push them inside. Nearby, bloodied cots sat propped against a tent and other wounded soldiers lingered about, their faces grim, their heads, arms or legs bandaged as the sound of outgoing artillery boomed across the sky.About 10 wounded soldiers arrived at this hospital in eastern Ukraine in less than an hour Sunday morning — the latest military casualties as Ukrainian forces, outgunned by Russia in the country’s east, continue to lose territory at a critical moment in the war.Soldiers also helped one civilian woman with leg wounds out of a military ambulance.The Washington Post is withholding the name and precise location of the hospital out of concerns from staff members that it could be targeted by Russian forces.“Seventy people from my battalion were injured in the last week,” said a soldier and ambulance driver just outside the hospital gates who identified himself only as Vlad, 29. “I lost too many friends; it’s hard for me. I don’t know how many. … It’s getting worse every day.”The night before, he said, the shelling was so loud he hardly got any sleep. “It’s all artillery bombing down,” he said. “All the wounded are coming from shrapnel. Most guys in the trenches haven’t even seen the enemy face-to-face.”Last week, one battalion of young soldiers on a road near Kramatorsk spent their days digging defensive trenches in a pocket not far from the front line.They were gearing up to provide additional support for the soldiers battling the Russians head-on, preparing for a worst-case scenario in which Russian forces continue or accelerate their current advance. That would be a potential turning point on the battlefield. It would come at a particularly desperate moment for the Ukrainians. Kyiv is already enraged that some Western voices are floating the idea of ceding territory to Moscow. And the Biden administration is taking weeks to decide whether to provide heavier weaponry that could aid Ukrainian troops at this critical juncture in the war.
Biden: U.S. will provide precision rockets to Ukraine – - The U.S. will provide Ukraine with more advanced rocket systems and precision-guided munitions that will give them an edge on the battlefield, President Joe Biden wrote in an opinion article in the New York Times published Tuesday.But Kyiv has given the United States assurances that the new weapons will be used in Ukraine and not against targets in Russia, senior administration officials told reporters after Biden’s op-ed was published.“America’s goal is straightforward: We want to see a democratic, independent, sovereign and prosperous Ukraine with the means to deter and defend itself against further aggression,” Biden wrote. “We do not seek a war between NATO and Russia.”Ukrainian officials have been clamoring for advanced, longer-range rocket systems for weeks, but Washington has been concerned with the range of the weapons. Officials worried that sending weapons that could reach targets in Russia could provoke President Vladimir Putin into committing further atrocities or escalating the conflict by using chemical or nuclear weapons.The High Mobility Artillery Rocket System (HIMARS) that the U.S. is sending is a mobile rocket launcher that can strike targets from 40 to over 300 miles away, depending on the type of rocket it is outfitted with. The rockets that the administration has decided to send are on the shorter end, reaching up to 48 miles, the officials said.Along with the HIMARS, the U.S. will send “munitions that will enable the Ukrainians to more precisely strike targets on the battlefield from a greater distance,” according to one of the officials.The officials stressed that the new rockets will be used solely to strike targets on the battlefield in Ukraine, not into Russia.“We are not encouraging or enabling Ukraine to strike beyond its borders,” the official said. In his op-ed, Biden addressed worldwide concerns about the conflict sparking a nuclear war. The U.S. currently sees “no indication that Russia has intent to use nuclear weapons in Ukraine,” Biden said though he stressed that Moscow’s “occasional rhetorical to rattle the nuclear saber is itself dangerous and extremely irresponsible.”
US, UK to deliver advanced longer-range missile systems to Ukraine - US President Joe Biden announced on Wednesday that Washington will deliver advanced longer-range missile systems HIMARS (High Mobility Artillery Rocket System) to the Ukrainian army, as part of yet another $700 million in military aid that the White House announced on May 31. This latest tranche brings the total direct military aid committed by the Biden administration since the beginning of the war three months ago to $4.6 billion. Hours after this announcement from Washington, Politico reported that British Prime Minister Boris Johnson and Biden had spoken Wednesday morning about the transfer of US-made M270 Multiple Launch Rocket Systems (MLRS). UK Foreign Secretary Liz Truss and US Secretary of State Antony Blinken are set to discuss further details on the deliveries on Thursday morning. Out of all of the imperialist provocations of recent months against Russia in their proxy war in Ukraine, the US and NATO delivery of longer-range missile systems is one of the most dangerous. Both the HIMARS and MLRS are advanced long-range missile systems which, depending on the munition, can launch rockets as far as 300 kilometers, or 186 miles, away. According to CNN, both “are fired from a mobile vehicle at land-based targets, which would allow the Ukrainians to more easily strike targets inside Russia.” As for munitions, the US will deliver the Guided Multiple Launch Rocket System rockets that can strike targets that are 80 kilometers, or 50 miles, away. In an op-ed for the New York Times, Biden said that these missiles “will enable them [the Ukrainian army] to more precisely strike key targets on the battlefield in Ukraine.” The delivery of these advanced missile systems is clearly meant to shift the balance of forces in the imperialist proxy war in Ukraine against Russia back to Ukraine’s NATO-backed military. Unlike in the first stage of the war, when Ukraine’s military and paramilitary could drag down Russian forces in bloody urban fighting, the war is now almost entirely fought in East Ukraine, and artillery is playing a much bigger role, giving Russia an advantage. After a humiliating first stage of the war and major military losses, Russia has made significant advances in recent weeks. The strategic port city of Mariupol is now under Russian control, enabling the Kremlin to form a land bridge between the Crimean Peninsula in the Black Sea and the territories around Donetsk and Lugansk, which have been held by pro-Russian separatists since 2014. Russian forces also appear to be in the process of taking over the strategic city of Severodonetsk (or Sievierodonetsk). Ukraine’s President Volodymyr Zelensky acknowledged last week that his army was losing “between 60 and 100” men each day in the war in the Donbass while 500 are being wounded on a daily basis. Many estimate that Ukrainian losses may be even higher. Above all, however, the HIMARS and MLRS deliveries raise the direct prospect of Ukraine firing missiles far into Russian territory. Leading Russian officials have made stark warnings of the potential escalation of the war and its expansion beyond the borders of both Ukraine and Russia.
Russia Holds Nuclear Forces Drill As Biden Unveils $700M More In Arms For Ukraine - Some Western media reports are seeing the drill as a response and warning to Washington over the White House approving yet more military aid and weapons to Ukraine, particularly longer range rockets. Newsweek, for example, writes that "The report follows the announcement that the U.S. has approved a $700m package of security assistance to be sent to Kyiv, which will include helicopters, anti-tank weapon systems and medium-range high mobility artillery rocket systems." The Kremlin is meanwhile issuing new warnings over the US violating its stated "red lines"... It also comes interestingly as a new consensus has emerged that Russian forces are winning in Donbas, amid the latest steady gains over the whole of Luhansk province, and as the final Ukrainian holdout city of Sievierodonetsk is poised to fall to the Russians. The fresh White House move to send in longer range rockets (which are in effect 'medium-range') seems aimed at stalling the Russian gains made in Donbas. The Biden administration last week said it would reject the possibility of sending long-range rockets, fearing things could spiral toward rapid escalation with Russia, after the Kremlin declared "red lines" concerning this type of major West-supplied weaponry. In President Biden's Tuesday New York Times op-ed outlining "what America will do and not do in Ukraine," he stressed that he doesn't believe Russia intends to use nuclear weapons. "I know many people around the world are concerned about the use of nuclear weapons," he began on this point. "We currently see no indication that Russia has intent to use nuclear weapons in Ukraine, though Russia’s occasional rhetoric to rattle the nuclear saber is itself dangerous and extremely irresponsible. Let me be clear: Any use of nuclear weapons in this conflict on any scale would be completely unacceptable to us as well as the rest of the world and would entail severe consequences," the president said.
Lavrov Accuses Ukraine Of Drawing Outside Countries Into War - US Missiles A 'Direct Provocation' -In some of the Kremlin's strongest words yet denouncing Western arms shipments, Russian Foreign Minister Sergey Lavrov warned Ukraine that newly ramped up arms transfers including US missile systems being sent to Kiev risks drawing a third country into the war.In the Wednesday statements, he accused Ukraine of seeking to involve outside countries, and slammed the missile transfer as marking a 'direct provocation'. His words come on the heels of Biden on Tuesday night announcing longer range missile systems for Ukraine, which however likely can't reach Russian territory, given they are short to "medium range" systems. Moscow previously called the White House's expressed desire to avoid direct confrontation with Russia a "rational" policy. But Lavrov took the opportunity to warn hawks both in the US and Europe: "I will say it frankly: not everyone in the European Union, especially in its northern part [understands this]. There are politicians, who are ready to do this madness in order to satisfy their ambitions. But serious countries in the EU naturally are well aware that such scenarios are unacceptable," the top diplomat said according to state media. The blistering attack also seemed aimed a Germany, which just announced new anti-air radar and defense systems for Ukraine:Germany will supply Ukraine with the IRIS-T modern air defence and radar systems, Chancellor Olaf Scholz has said, stepping up arms deliveries amid criticism that Berlin is not doing enough to help Kyiv in its fight against Russia. “The government has decided that we will send the IRIS-T system – the most modern system that Germany currently possesses,” the German chancellor told parliament. In separate statements on the same day, Kremlin spokesman Dmitry Peskov told reporters that Russia "does not believe Ukrainian President Vladimir Zelensky’s claims that Kiev will not attack Russian territory, should it obtain US-made long-range multiple launch rocket systems." Already there have been multiple cross-border incidents in which Russian towns or villages were shelled. According to TASS, Peskov said: "No," the spokesman said, answering a question whether the Kremlin trusts Zelensky’s words. "In order to trust, there must be previous experience when such promises were fulfilled. Unfortunately, such experience is completely nonexistent," Peskov explained. "On the contrary, the entire history of events proves that, starting with Zelensky’s main campaign promise to end the war in Ukraine’s southeast once and for all, [the promise] was not fulfilled, and the Minsk Agreements were not implemented, they sunk into oblivion, and by Ukraine’s fault at that," the spokesman pointed out."So we don’t really have any trust credit for the Ukrainian side," he emphasized in follow-up.
Milley Says Using Military To Open Ukrainian Ports Would Be "High Risk" - Amid growing calls for naval intervention to open up Ukrainian ports for grain exports, Chairman of the Joint Chiefs of Staff Gen. Mark Milley said such an operation would amount to a "high risk military operation."The West is blaming Russian ships for blocking grain exports from leaving Ukrainian ports, but there are other factors, including mines laid by Ukraine. Russia said last week that it cleared mines around Mariupol and that the Azov Sea port is now open to civil vessels.This week, Retired Adm. James Stavridis, a former supreme allied commander of NATO, suggested that naval vessels under the auspice of the UN or NATO could escort convoys of grain ships out of Ukraine.Ukrainian Foreign Minister Dmytro Kuleba suggested on Tuesday that Ukraine was pushing for a UN convoy to open its ports. "Ukraine is working on an international UN-led operation with navies of partners ensuring a safe trade route with no security risks," he wrote on Twitter.Milley said such a plan would be high risk due to the presence of Russian ships and mines in the waters:"You can take the grain out by truck or train, or you can take it out by sea. Right now, the sea lanes are blocked by mines and the Russian navy. In order to open up those sea lanes would require a very significant military effort," Milley said."It would be a high-risk military operation that would require significant levels of effort."Whether under the banner of the UN or not, trying to send Western warships into Ukrainian ports obviously risks sparking a direct war with Russia. Meanwhile, Defense News notes that amid a looming global food supply crisis, "The White House last week rejected an offer from Russian President Vladimir Putin to facilitate grain and fertilizer exports from in exchange for the West to lift sanctions against Moscow over the war in Ukraine."
The War Situation Has Developed Not Necessarily to Ukraine’s or the West’s Advantage But They Plan to Negotiate When They’ve Turned Things Around a Bit by Yves Smith --Just because Russia has been slow and methodical about grinding up Ukraine’s army and materiel in Donbass does not mean that there’s reason to think Ukraine can turn its losses around with generous applications of Western funding, weapons, and hopium. And on the economic war front, even though Russia has taken a hit, it seems to be making surprisingly solid progress in adjusting, while conditions in the US and Europe look to be worsening, and at an accelerating rate.Admittedly, the press, presumably reflecting the readings of military experts, has greatly reduced coverage of the conflict now that even generous applications of porcine maquillage can no longer hide that things are going from bad to worse for Ukraine. Recall that Scott Ritter, early on in his many detailed analysis, said that if one side was consistently inflicting casualties at a higher rate than the other, even at a ratio of say 1:1.2, the side with the lower losses would prevail.Recall also that Ukraine has not made a single significant offensive since the war began. The most it has been able to achieve are small tactical gains that don’t amount to anything over time.And more recently, its efforts have ranged from misguided to desperate. Its “offensive” near Kharkiv amounted to taking terrain where Russia didn’t have many troops to begin with and Russia pulled back. Russia has since gotten within shelling range of Kharkiv, which is a more important advance. In Kherson, the most significant of three little advances was disaster, resulting in over 200 men dead and Russia taking out a command center in Mykolaiv to boot, which killed officers and (according to Russia) even some generals. Russia let Ukraine keep two other wee spots in Kherson it captured that on a map look like they consist of 12-16 blocks with a few buildings. In other words, tactically as well as strategically unimportant.In a post earlier this week, Moon of Alabama argued that there was evidence that Ukraine was having to resort to Kampfgruppen: During the last years of World War II the German Wehrmacht often used Kampfgruppen (combat groups). These were a mix of remnants of mostly destroyed regular units put together under the command of one officer and often formed for a specific task. The subunits came from different command cultures and localities and would often not know each other. They were not trained to the same level. To coordinate them was difficult.There are signs that the Ukraine is now using such a Kampfgruppen concept. Several recent reports of this or that operation or town lost or gained by Ukrainian forces named three or four involved brigades. However, when one looked at the size of those places or operations there was no way that so many full fledged units were involved. That is another sign of a fraying and increasingly ineffective fighting force. Truth be told, Western officials and the media are increasingly acknowledging that Ukraine can’t win this war, and therefore the two sides need to negotiate a peace. But to invoke a saying I heard in Venezuela, “They have changed their minds, but they have not changed their hearts.” The US and NATO have consumed so much Ukraine Kool-Aide that they are light-year away from what a realistic settlement would have to include. And that’s because they still can’t admit to themselves that Russia is wining, and at this rate, will have taken Odessa before Zelensky will even be willing to cede Donbass. For instance, look at this key statement from Joe Biden’s New York Times op-ed earlier this week:
'Minor' $1.9 Million Failed Bond Interest Payment Triggers Russian "Failure-To-Pay" Event -- In what seems a major action over what many outside observers may see as but a relatively minor technical issue, Russia's failure to include less than $2 million interest on a late bond payment made at the start of last month has triggered a "failure-to-pay" event, the EMEA Credit Derivatives Determinations Committee has ruled. It has brought the country a significant step closer to a dreaded possible first major external debt default in over a century.Russia failed to add the precisely $1.9 million in additional interest accrued on credit-default swaps. The ruling came after inquiry from overseas holders of the Russian sovereign bond in question, allowing them to seek payout on the default insurance on as much as $3.2 billion of debt (an amount likely determined later at auction).But Reuters, which was the first to report the ruling by the panel of investors notes that "At the same time, the size of the accrued interest and the fact that the principal payment has already been paid means the ruling won’t spark a broader default on Russia’s bonds."The committee indicated it plans to take up the matter further when it meets Monday, June 6. It could have huge future implications for the some $40 billion of the country's still outstanding international bonds - nearly $2 billion of which is due through the end of the year.Russia last month rushed to send dollars through investors after the Credit Derivatives Determinations Committee logged its first "potential failure-to-pay" event when Moscow first tried to transfer rubles on the note.Meanwhile, the Reuters report reviews: "There are currently $2.54 billion of net notional credit default swaps outstanding in relation to Russia, including $1.68 billion on the country itself and the remainder on the CDX Emerging Markets Index, according to JPMorgan calculations."Just prior to the Feb.24 Ukraine invasion Russia possessed nearly $650 billion of available gold and currency reserves, and currently takes in billions of dollars a week selling oil and gas - which Europe is currently seeking to blunt amid its mulled oil embargo - against the backdrop of of its $40BN sovereign debt estimate.
Shanghai emerges out of lockdown after beating back Omicron -- Shanghai, a city of 26 million inhabitants and China’s commercial hub, has beaten back the Omicron variant in just two months with fewer than 600 deaths. The infrastructure and economy of the metropolis are intact, and steps are being taken now to lift the lockdown. Health and city officials announced Saturday they intend to formally end its lockdown after Wednesday, having already relaxed restrictions last week. Meanwhile, Europe and the US have repeatedly lied to their population that little could be done against the contagious variant and had to go it alone as the opening of the economy essentially remains a priority. These lies have been accompanied by a scurrilous slander campaign against China, portraying its highly successful and widely popular Zero-COVID policy as an unacceptable infringement on the rights of the people. US President Joe Biden joined the chorus last week, dismissing China’s pandemic policy as a failure while hailing India’s disastrous results as a triumph of democracy. To put Biden’s blatant lie into context, China and India have comparable populations of over 1.4 billion people each. India’s official COVID death count is nearing 525,000, while China’s is just over 5,000, a hundred times less. The disparity is actually even more dramatic. According to the World Health Organization’s (WHO) recent report on global excess deaths from January 2020 to December 2021, a more accurate measure of the impact of the pandemic, India suffered 4.74 million excess deaths, the most of any country. During the same period, China experienced fewer deaths than would have been predicted, with a figure of negative 52,000 excess deaths. The measures taken to suppress the COVID-19 pandemic actually had a spillover effect in reducing deaths from other causes as well. It also bears comparing the US and China on the state of the COVID pandemic considering Biden’s malicious statement. Since the pandemic, the US has reported over a million COVID deaths, with a population 4.2 times smaller than China’s. On a per capita rate, the “leader of the free world” killed one in every 330 of its own citizens. China’s per capita rate was an infinitesimal one in every 250,000 people. At last count, the total number of COVID deaths in “autocratic” China has reached 5,226 across 31 provincial-level regions, far below even Hong Kong’s foray with Omicron that claimed over 9,000 lives with just 7.5 million people.
Crude Steel Production in 2021 Shifted from China to Other Countries amid Supply Chain Chaos: US Production Spiked 15% as China’s Fell - By Wolf Richter -Production of crude steel – ingots, semi-finished products (billets, blooms, slabs), and liquid steel for castings – soared globally, and spiked in the US, but fell in China for the first time in years. And China’s share of global crude steel production, after soaring for years, fell for the first time since 2010.Global production of crude steel rose 3.8% in 2021, from the prior year, to 1,952 million metric tonnes (Mt), according to the World Steel Association. But global production without China jumped by 12.8%, including in North America, where production soared by 16.6%, and in the US alone where production soared by 15.2%.There have been three episodes of falling annual crude steel production since 1995 – and the pandemic wasn’t one of them: The Asian Financial Crisis in 1998 (-2.7%); the Global Financial Crisis in 2009 (-7.8%); and in 2015 (-3.0%). But during the pandemic in 2020, steel production ticked up a little, and in 2021, it rose 3.8%:In China, crude steel production in 2021 fell 3.1%, to 1,032 Mt the first decline since 2015, and the largest decline in the data going back to 1996.But in the rest of the world, production jumped by 12.8% to a record 920 Mt, after having sagged in 2020 and 2019. In 2017, China started outproducing the rest of the world, and the gap exploded in 2019 and 2020. But in 2021, the gap narrowed, and China’s share of global production fell by nearly 4 percentage points to 52.9%.The year 2021 was a reversal. In 2020, of the top five largest producers – China, India, Japan, the US, and Russia – only China increased production. But in 2021, China’s production fell; in the other four countries, in fact in 18 of the remaining top 19 countries, production rose, and in some countries by the double digits, including the US (+15.2%). The other exception was Iran (-1.9%).Over the two decades since 2001, global crude steel production surged by 129%, and nearly all of that gain was produced in China. Production in NAFTA (the US, Canada, and Mexico) exceeded China’s production through the year 2000. In 2001, China’s production blew past NAFTA and the gap exploded from there, as NAFTA’s production declined, and China’s soared. But in 2021, the gap narrowed. That’s why the reversal in 2021 was so peculiar: Production of crude steel in India, the second highest in the world, jumped 15.2% in 2021, to a record 118 Mt. But China’s production, even after the drop in 2021, was still nearly 9 times the magnitude of India’s production; and it was 12 times the magnitude of production in the US. Production crude steel in Canada and Mexico is hard to even see: Most of the crude steel that China produced was used in China as input material for higher-value finished steel products for construction and manufacturing in China. In 2020, China used 56% of the world’s crude steel in its construction and manufacturing industries, roughly the same portion of global crude steel that it manufactured.
Why this metal may see an ‘absolutely ballistic’ price spike. -- Goldman Sachs metals strategist Nick Snowdon believes the global renewable power drive will push copper prices from the current US$4.29 per pound to US$6.80 per pound by the end of the decade. He adds that the fundamental supply and demand outlook is so dire that he doesn’t rule out an “absolutely ballistic” temporary price spike to over US$20 per pound before 2030. Mr. Snowdon appeared on Bloomberg’s Odd Lots podcast on May 30 (available on Apple podcasts here and Google here) with a remarkably bullish story. The key points were that copper inventories are already low, the metal is largely irreplaceable as an electricity conductor for electric vehicles and renewable power, and there’s little-to-no new copper production on the horizon. Goldman Sachs estimates global copper production of 24 million tonnes for 2022. Of that only 1.5 million tonnes will be consumed by decarbonization efforts - primarily electric vehicles and new wind and solar power. Renewable power-related demand for copper, however, is set to climb to between six and seven million tonnes annually by 2030, according to the strategist. There has been, in Mr. Snowdon’s words, “a complete absence of fresh investment in the sector” despite the expected jump in demand. This sets the stage for the largest ever copper supply deficit by the middle of this decade. Mining companies have remained disciplined on spending. The permitting process for new mines has extended in length from six to 12 months in the 2000s to between two and three years now. The end result is that not a single new copper mine has been approved over the past 24 months. There are previously permitted projects coming onstream in Latin America and Africa in the next 18 months, but nothing afterwards. For Mr. Snowdon, the expected supply shortage “is not resolvable at current prices,” meaning that prices are too low now to spur the necessary investment in new production. Decarbonization will not be possible without much higher copper prices first.
Apple iPad, Soon Made in Vietnam - China's epic recurring COVID-19 shutdowns have frustrated multinational corporations aiming for predictability in their supply chains. Sure, China still benefits from having globally-renowned tech clusters. However, having your production capabilities curtailed again and again due to a handful of (relatively mild) COVID-19 cases doesn't encourage foreign firms, as you would expect. Not so long ago, I covered Vietnam's emergence as a major assembly hub for South Korea's Samsung [1, 2]. In the years since, it's developed a reputation as a reliable production center for MNCs. It was perhaps inevitable that Apple, frustrated like many others with the PRC's lockdown shenanigans, would look to set up shop elsewhere. Voila! Apple is coming to Vietnam:For the first time ever Apple is moving some iPad production out of China and shifting it to Vietnam after strict COVID lockdowns in and around Shanghai led to months of supply chain disruptions, Nikkei Asia has learned.The U.S. company has also asked multiple component suppliers to build up their inventories to guard against future shortages and supply snags, sources said.China's BYD, one of the leading iPad assemblers, has helped Apple build production lines in Vietnam and could soon start to produce a small number of the iconic tablets there, people with knowledge of the matter said.To be sure, Apple already makes its wireless earphones in Vietnam. It makes business sense: experiment first with some components, and then shift further assembly work if things go well:The iPad will become the second major line of Apple products made in the Southeast Asian country, following the AirPods earbud series. The move highlights not only Apple's continuous efforts to diversify its supply chain but also the growing importance of Vietnam to the company.Also keep in mind that Vietnam is still mostly an assembly hub--stick socket A into socket B sort of mundane work. Many of the components for the "Vietnam-made" iPad will still come from, you guessed it, China. Hence, Apple wants to bolster supplier capabilities in parts of China that have a lower likelihood of being shut down based on the historical record:
Thai, Vietnam rice price hike plan 'impossible', Thai export body says -A pact between Thailand and Vietnam to raise rice prices would be "impossible", a top Thai industry official said on Monday, amplifying opposition to a government-proposed plan for a rice cartel and questions over its viability. Thailand's government said on Friday it planned with Vietnam to create a pact between the world's second- and third-largest rice exporters to boost their bargaining power and help mitigate rising production costs. Vietnam has yet to confirm such a plan was being discussed. Chookiat Ophaswongse, honorary president of Thailand's Rice Exporters Association, said his body had not been consulted, and the idea was poorly thought out. "Thailand and Vietnam are not the largest exporters, combined it's less than India and would have buyers turn to competitors," Chookiat told Reuters, adding rice cannot be stored for long enough while awaiting a climb in price. "Politicians don't understand the rice market and did not discuss this with the association," he said. His comments are similar to those of the head of Vietnam's food association, who last week said raising prices at a time of global food uncertainty would be unreasonable. Vietnam's agriculture ministry did not immediately respond to Reuters requests for comment on Monday.
Centre restricts sugar exports to check domestic inflation -India on Tuesday restricted exports of sugar, a surplus commodity, to 10 million tonnes this season amid record overseas sales to check domestic inflation and channel more sugarcane into ethanol production.The country will allow export of the sweetener only with permits, according to two separate notifications. The export cap applies for the marketing year that runs from October to September.The curbs on sugar export have come for the first time in six years. The country last restricted export of the sweetener by imposing an export duty of 20% in 2016.India is the world’s second-largest sugar producer and exporter behind Brazil. Export restrictions by India will send international prices soaring in the middle of a global commodities-price spiral. The government has also set up a cross-ministry panel to monitor prices of all imported commodities, especially industrial raw materials, the official cited above said.Along with the May 13 ban on private wheat export, whose effects rippled across the globe by pushing up prices, these steps mark an aggressive stance to tame runaway inflation. Consumer prices in April leapt to an eight-year high of 7.79%, well above the Reserve Bank’s tolerance limit of 6% for four straight months, threatening growth and stoking public angst.A smaller cane crop in the world’s top producer Brazil and high global oil prices have increased overseas demand for Indian sugar, as millers globally seek to pump more sugarcane into ethanol products.A restriction on exports will make more of the surplus sweetener available for domestic ethanol-making, for which the country has set new fuel-blending targets and is a top government priority. Mixing petrol with ethanol, which is made from molasses, a byproduct of sugar, will help lessen the amount of oil India imports. “In order to find a permanent solution to address the problem of excess sugar, government is encouraging sugar mills to divert excess sugarcane to ethanol,” an official statement on May 19 said.
Biden hails Modi, the butcher of Gujarat, for India’s COVID policy of mass death - A revealing exchange took place between US President Joe Biden and Indian Prime Minister Narendra Modi during a closed-door session of the “Quad Summit” of the US, Australia, India and Japan held last week. According to a report published by the Press Trust of India (PTI), Biden “praised” Modi “for handling the Covid pandemic ‘successfully’ and contrasted India’s success with China’s ‘failure’ in dealing with coronavirus, according to a senior Indian official.” The PTI added that “Biden said Modi’s success has shown the world that democracies can deliver, and busted the myth that ‘autocracies’ like China and Russia can handle the rapidly changing world better…” By what metric he was measuring the “success” of India or, for that matter, its “democratic” character, Biden did not say. But let us review the facts. India officially reports more than 525,000 deaths from COVID-19, out of 43.2 million cases. These figures—a staggering loss of life in and of themselves—are universally acknowledged, except by the Indian government of course, to be a massive undercount. In its report on “excess deaths” released earlier this month, the World Health Organization (WHO) estimated that the real figure is between 3.3 million and 6.5 million, with a mean estimate of 4.7 million dead in India in 2020 and 2021. Indeed, of the total estimated global excess deaths from COVID-19 (14.9 million), India accounts for nearly one-third. An earlier report from the British medical journal Lancet estimated India’s total excess deaths in 2020 and 2021 at more than 4 million. Thus, according to Biden, the “success” of the Modi government consists in having overseen the most COVID-19 deaths of any country on the planet. India’s performance in this regard was significantly higher, in absolute terms, than the United States, which “succeeded” in killing only 1.13 million of its citizens, coming in second place, according to Lancet. As a percentage of the population, however, the death rate is approximately equal. The real success, for Biden and the financial oligarchy that he represents, is that India was able to keep production running throughout the pandemic, not least of all at the major production facilities of transnational corporations, including US auto manufacturers. There have been a series of strikes by autoworkers in India, including in June, following Modi’s declaration that he would “save the country from lockdown.” As a result of Modi’s policy, the virus was allowed to spread without restraint, and funeral pyres were lit throughout the country.
Vizag gas leak: Andhra govt forms joint committee to ascertain cause --The Andhra Pradesh government has constituted a joint committee to ascertain the cause behind a chemical gas leak in Visakhapatnam, industries minister Gudivada Amarnath informed on Saturday, news agency ANI reported. On Friday, 178 workers complained of eyesore and nausea after they inhaled a poisonous gas leaked from a chemical factory in Atchutapuram. The large campus houses three companies including Porus Laboratories Pvt Ltd, a veterinary drugs company. Chief minister YS Jagan Mohan Reddy has ordered a detailed investigation into the accident. He also asked authorities to take necessary measures to avoid similar incidents. Andhra Pradesh Pollution Control Board (APPCB) and police officials are carrying out the preliminary investigation. The gas is likely to have leaked from Porus Laboratories. The condition of affected workers is reported to be stable. Most of those who fell ill belonged to the Brandix factory -- an apparel company also housed in the same campus. The situation at the campus is reported to be under control now. Following the incident, the entire area was evacuated and sanitised. Porus Laboratories was also the site of an explosion in April in which six people died - they were burned to death - and 15 were injured. Meanwhile, Telugu Desam Party (TDP) national president and former chief minister N Chandrababu Naidu demanded stringent action against those responsible for the gas leak incident. He also targeted the state government, saying, "failure of the government's departments and the absence of monitoring have become a curse for the public".
Pakistan increases petrol, diesel prices by 17% to control fiscal deficit - Pakistan increased petrol and diesel prices for consumers by 17 per cent at the pumps starting on Friday, finance minister Miftah Ismail announced. Both being raised 30 Pakistani rupees each per litre.This is the second time in a week Pakistan will slash the fuel subsidies in a bid to control the fiscal deficit and secure International Monetary Fund bailout money.Ismail said there remained a subsidy of about 9 Pakistani rupees per litre, reported news agency Reuters.The Dawn reported that after the latest round of hike, petrol will be priced at 209.86 PKR, diesel at 204.15 PKR, kerosene oil at 181.94 PKR and light diesel at 178.31 PKR. Only kerosene oil's price was hiked by less than 30 PKR.On May 27, the Pakistan government increased the rate of petroleum products by 30 PKR per litre, or up to one-fourth of their existing prices.The move is expected to help defuse the landmines laid by the government of former prime minister Imran Khan on the one hand, and will save the country from looming default on the other.Ismail said the government was holding talks with the IMF on a daily basis, adding "we cannot accept all their demands but there are certain points that we have to agree to." Ismail, however, said the government would ensure stability in prices of sugar and wheat at 70 PKR per kg and 40 PKR per kg respectively at utility stores countrywide.
Pakistan On The Verge Of Inflationary Collapse - Pleads For Larger IMF Bailout -- Pakistan, a nuclear power with at least 165 warheads from short range to medium range, is facing potential economic collapse according to the country's Finance Minister, Miftah Ismail. With an official inflation rate of over 13.37% (double the official CPI to get a more accurate picture of true price inflation), the 2nd fastest rising rate in Asia, Pakistan has sought relief from foreign debt obligations and an IMF bailout deal. Initial arrangements for a three year deal with the IMF began in 2019, but Pakistan says that deal, originally for $6 billion USD, is 'outdated' due to the covid pandemic and new global financial pressures. The nation now says it is in 'dire need' of at least $36 billion in order to stay afloat.Pakistan is slated to pay back over $21 billion USD in foreign debt within the next fiscal year. It is also struggling with extensive food inflation and supply chain disruptions as the government seeks to import at least 3 million tons of wheat and 4 million tons of cooking oil to alleviate shortages.This is yet another example of the spread of global inflation/stagflation that is going largely ignored by western media outlets. Nations like Pakistan with already weakened economic conditions are canaries in the coal mine; leading indicators of what is likely to happen throughout more affluent first world nations should current conditions continue. With globalist institutions like the UN, the IMF, the BIS, World Bank and the WEF all predicting major food shortages this year, the mainstream media has been noticeably quiet when it comes to nations where the crisis is already bubbling to the surface.The reason the instability in Pakistan is particularly concerning is because it is one of nine countries in the world (officially) with a nuclear arsenal, not to mention an ongoing border conflict with India which sparked two wars in 1947 and 1965, as well as a limited war in 1999. As economic instability rises so does public discontent and rebellion. By extension, political elites commonly offer war as a “release valve” for public anger and a distraction from financial pain. Otherwise, the potential for widespread civil unrest grows daily. To be sure, Pakistan is not the only country facing these conditions today, it is one of many. However, unlike many African or South American nations where the effects of inflationary collapse remain mitigated to domestic concerns, a collapse in Pakistan could have international implications.Beyond the threats associated with sinking economies and regional conflicts, the IMF has become the go-to loan shark, circling struggling nations when it smells blood in the water. As more and more countries face declines associated with inflation/stagflation, it is not conspiratorial to suggest that the IMF greatly benefits. As the world breaks down, more nations become beholden to the IMF debt structure until eventually they are owned lock, stock and barrel by a handful of banking elites.
Turkey's inflation soars to 73%, a 23-year high, as food and energy costs skyrocket -Turkey's inflation for the month of May rose by an eye-watering 73.5% year on year, its highest in 23 years, as the country grapples with soaring food and energy costs and President Recep Tayyip Erdogan's long-running unorthodox strategy on monetary policy.Food prices in the country of 84 million rose 91.6% year on year, the country's statistics agency reported, bringing into sharp view the pain that regular consumers face as supply chain problems, rising energy costs and Russia's war in Ukraine feed into global inflation.Turkey has enjoyed rapid growth for years, but Erdogan has for years refused to meaningfully raise rates to cool the resulting inflation, describing himself as a sworn enemy of interest rates. The result has been a plummeting Turkish lira and far less spending power for the average Turk.Erdogan instructed the country's central bank — which analysts say has no independence from him — to repeatedly slash borrowing rates last year even as inflation continued to rise. Central bank chiefs who expressed opposition to this course of action were fired; by the spring of 2021, Turkey's central bank had seen four different governors in two years.The Turkish president vowed to deliver a new economic model that would bring about a boom in export wealth thanks to a cheaper lira, and then tackle inflation by getting rid of Turkey's longtime trade deficit. That has not happened, and now sky-high costs for energy imports that need to be paid in dollars — a lot more dollars, thanks to the weakness of the lira — are putting intense pressure on the economy.Economic analysts expect the trajectory for Turkey's inflation will only get worse."The laser focus on heterodox measures over conventional monetary policy will unlikely solve the inflation challenge and we anticipate levels breaching 80% y/y in Q3-22," Ehsan Khoman, director of emerging markets research for Europe, the Middle East and Africa at MUFG Bank, wrote on Twitter following the release of figures.Speaking to CNBC, Khoman added that he expects Turkey's inflation to "stay north of 70% y/y until November owing to a confluence of elevated commodity prices, rising domestic production costs and a precipitously depreciating lira.""Turkey back in the inflation age of the 1990s. Looks as if Erdogan has lost his last econ credibility," Holger Zschapitz, finance editor at German daily Die Welt, wrote on Twitter. "Erdogan's unorthodox strategy for managing the country's $790bn econ continued to backfire," he wrote in another tweet.The 73.5% figure for Turkey's consumer price index is up from 70% the month before.
A record 86 million people forcibly displaced worldwide - The number of people living in internal displacement around the world reached 59.1 million at the end of 2021, up from 55 million and 50 million in 2020 and 2019, according to the Internal Displacement Monitoring Centre (IDMC)’s annual global report. There are an additional 26.6 million registered refugees living outside their country of origin, taking the total number of forcibly displaced people to 86 million. To put this figure in context: the equivalent of the population of Germany, or more than one percent of the world’s 7.9 billion population, have been driven from their homes. And this is only the recorded number. The real figure is higher. The UN High Commissioner for Refugees (UNHCR), whose annual Global Trends Report on forced displacement is due to be published on June 16, puts the total number including asylum seekers at more than 100 million. The record number of internally displaced people (IDPs) is the result of wars, conflicts and violence provoked or directly waged by the imperialist powers, as well as natural disasters, often created or exacerbated by the activities of the world’s giant corporations and their governments. Last year saw 38 million new IDPs created, with sub-Saharan Africa the most affected area. More than five million people were displaced in Ethiopia alone, the highest figure ever for a single country in one year, due to the civil war against Tigrayan rebels that has spread to neighbouring provinces. The Democratic Republic of Congo (DRC), Afghanistan and Myanmar also registered unprecedented numbers of IDPs in 2021. The DRC has for decades been the arena of largely unreported and forgotten wars, fought by shifting alliances aided and abetted by neighbouring countries and the local kleptocrats they serve, for control of the country’s vast mineral resources. These are of critical importance for the global manufacturing of the lithium-ion batteries used for electric vehicles (containing cobalt), electronic devices (containing tantalum, tin and gold) and infrastructure (copper for transmission lines). Over 4.5 million Congolese are displaced within the DRC due to violence in the Kasai, Tanganyika, Ituri, and Kivu regions, while more than 864,000 Congolese refugees were recorded in 2021. The DRC also hosts large numbers of refugees from neighbouring countries. The Middle East and North Africa has recorded the smallest number of new IDPs in 10 years, as US-orchestrated conflicts in Syria, Libya and Iraq have to some degree subsided while Washington’s attention is focused on Russia. The overall number of those fleeing evictions, death threats and ethnic cleansing perpetuated by sectarian violence—typically young jobless men, single mothers and unaccompanied children—remains very high. While natural disasters triggered the most internal displacements, conflicts and violence compounded the scale of these disasters, forcing people to flee several times. There were multiple, overlapping crises in Mozambique, Myanmar, Somalia and South Sudan that affected food security and forced people from their homes. The knock-on effects of the COVID pandemic, including loss of employment and global travel restrictions, also exacerbated the situation.
Sanctions Now Weapons of Mass Starvation - -US and allied economic sanctions against Russia for its illegal invasion of Ukraine have not achieved their declared objectives. Instead, they are worsening economic stagnation and inflation worldwide. Worse, they are exacerbating hunger, especially in Africa.Unless approved by the UN Security Council (UNSC), sanctions are not authorized by international law. .Unilateral imposition of sanctions has accelerated over the past 15 years. During 1990-2005, the US imposed about a third of sanctions regimes around the world, with the European Union (EU) also significant.The US has increased using sanctions since 2016, imposing them on more than 1,000 entities or individuals yearly, on average, from 2016 to 2020 – nearly 80% more than in 2008-2015. The one-term Trump administration raised the US share of all new sanctions to almost half from a third before.During January-May 2022, 75 countries implemented 19,268 restrictive trade measures. Such measures on food and fertilizers (85%) greatly exceed those on raw materials and fuels (15%). Unsurprisingly, the world now faces less supplies and higher prices for fuel and food.Monetary authorities have been raising interest rates to curb inflation, but such efforts do not address the main causes of higher prices now. Worse, they are likely to deepen and prolong stagnation, increasing the likelihood of ‘stagflation’.Sanctions were supposed to bring Russia to its knees. But less than three months after the rouble plunged, its exchange rate is back to pre-war levels, rising from the ‘rouble rubble’ promised by Western economic warmongers. With enough public support, the Russian regime is in no hurry to submit to sanctions.War and sanctions are now the main drivers of increased food insecurity. Russia and Ukraine produce almost a third of world wheat exports, nearly 20% of corn (maize) exports and close to 80% of sunflower seed products, including oil. Related Black Sea shipping blockades have helped keep Russian exports down.All these have driven up world prices for grain and oilseeds, raising food costs for all. As of 19 May, the Agricultural Price Index was up 42% from January 2021, with wheat prices 91% higher and corn up 55%.The World Bank’s April 2022 Commodity Markets Outlook notes the war has changed world production, trade and consumption. It expects prices to be historically high, at least through 2024, worsening food insecurity and inflation.Western bans on Russian oil have sharply increased energy prices. Both Russia and its ally, Belarus – also hit by economic sanctions – are major suppliers of agricultural fertilizers – including 38% of potassic fertilizers, 17% of compound fertilizers, and 15% of nitrogenous fertilizers.Fertilizer prices surged in March, up nearly 20% from two months before, and almost three times higher than in March 2021! Less supplies at higher prices will set back agricultural production for years. With food agriculture less sustainable, e.g., due to global warming, sanctions are further reducing output and incomes, besides raising food prices in the short and longer term.
UNICEF Blames World’s Richest Countries For Damaging Child Health Worldwide – -The UN Children’s Fund (UNICEF) has faulted the majority of wealthy countries for creating unhealthy, dangerous and noxious conditions for children across the world. These include Finland, Iceland, the Netherlands and Norway, which are otherwise providing healthier environments for children within their borders.According to the latest Report Card published on May 24 by the UNICEF Office of Research. Gunilla Olsson, Director of the UNICEF Office of Research—Innocenti said the majority of rich countries are in fact failing to provide healthy environments for children within their borders.The latest Innocenti Report Card 17: Places and Spaces compares how 39 countries in the Organization for Economic Co-operation and Development (OECD) and European Union (EU) impact children’s environments.The report states that if everybody in the world consumed resources at the rate people do in OECD and EU countries, the equivalent of 3.3 earths would be needed to keep up with consumption levels.If everyone were to consume resources at the rate at which people in Canada, Luxembourg and the United States do, at least five earths would be needed.The Innocent Report card’s findings include: Over 20 million children in this group of countries have elevated levels of lead in their blood. Lead is one of the most dangerous environmental toxic substances.Finland, Iceland and Norway rank in the top third for providing a healthy environment for their children yet rank in the bottom third for the world at large, with high rates of emissions, e-waste and consumption.In Iceland, Latvia, Portugal and the United Kingdom 1 in 5 children is exposed to damp and mould at home; while in Cyprus, Hungary and Turkey, more than 1 in 4 children is exposed.Many children are breathing toxic air both outside and inside their homes. Mexico has among the highest number of years of healthy life lost due to air pollution at 3.7 years per thousand children, while Finland and Japan have the lowest at 0.2 years.In Belgium, the Czech Republic, Israel, the Netherlands, Poland and Switzerland more than 1 in 12 children are exposed to high pesticide pollution. Pesticide pollution has been linked with cancer, including childhood leukaemia and can harm children’s nervous, cardiovascular, digestive, reproductive, endocrine, blood and immune systems.
Australian Catholic school teachers and support staff hold first strike in 18 years - - Up to 18,000 Catholic school teachers and education support staff in New South Wales (NSW) and the Australian Capital Territory (ACT) took strike action for the first time in 18 years on Friday.Like their public school counterparts, who struck across NSW in December and early this month, teachers in the Catholic system face intolerable workloads, staff shortages exacerbated by the COVID-19 pandemic and sub-inflationary pay “rise” offers from their employers.The diocesan Catholic school system includes around 540 schools in NSW and the ACT. The Catholic Education Office oversees the functioning of the schools, which are largely in working-class areas. Unlike the elite independent schools associated with the Catholic church, which can cost more than $30,000 per year per student, the “systemic” schools charge around $1,360 per year per family in the primary sector and $2,500 per student in the secondary system.Despite the massive wealth of the Catholic church, one of Australia’s largest non-government property owners, the vast bulk of funding for Catholic schools comes from the government. Over the past decade, public spending on Catholic and other private schools has increased at almost five times the rate of public school funding. The slashing of public school funding has led to a decline in enrolments as parents increasingly see independent schools as the only way to provide their children with a decent education.None of these vast and increasing resources are passed on to educators in the Catholic schools, who confront the same low and declining wages and constant overwork as those in the public sector.Striking teachers gathered together in ten rallies across NSW and the ACT. The biggest turnout was in Sydney, where teachers marched from Sydney’s Town Hall to the head office of the Catholic Archdiocese. In Newcastle, striking workers gathered in Wickham Park before marching to the Catholic Schools Office. Hundreds of teachers took part in other regional rallies.The workers are seeking an increase in real wages, a lower teaching load to provide time to prepare lessons, a reduction in paperwork for teachers and pay parity with the public sector for support staff. They are also calling for employers to address chronic understaffing in schools.Schools across the country are suffering as longstanding staff shortages intersect with a growing wave of COVID-19 and flu infections.
Egypt set for world's sixth largest high-speed rail system with backing from Germany's Siemens - A new high-speed rail line is coming to Egypt, with developer Siemens Mobility saying it will link 60 cities across the country.The fully-electrified lines will see trains with a top speed of 230 kilometers per hour and travel from the Red Sea to the Mediterranean, among other destinations.According to Siemens Mobility, the electrification of the network will reduce carbon emissions by 70% when compared to making trips by bus or car. It added that the project would result in the world's "sixth largest high-speed rail system."Siemens Mobility — a separately managed company of industrial giantSiemens — signed the contract to develop the rail line with the Egyptian National Authority for Tunnels, as well as consortium partners The Arab Contractors and Orascom Construction.In a statement Saturday, Siemens Mobility said its share of the combined contract would amount to 8.1 billion euros, or around $8.7 billion. This figure includes a 2.7 billion euro contract signed in Sept. 2021 for the project's initial line.The new network in Egypt will be made up of three parts: a previously announced 660-kilometer line linking Ain Sokhna, on the Red Sea, to Alexandria and Marsa Matrouh on Egypt's Mediterranean coast; a roughly 1,100 kilometer line between Cairo and Abu Simbel, close to the border with Sudan; and a 225 kilometer stretch between Luxor and Hurghada on the Red Sea."Together with our partners, we will develop from scratch a complete and state of the art rail network that will offer a blueprint for the region on how to install an integrated, sustainable, and modern transportation system," Michael Peter, the CEO of Siemens Mobility, said. The International Energy Agency has described rail as being "one of the most energy-efficient transport modes." It is responsible for 9% of worldwide motorized passenger movement and 7% of freight, the IEA says, but only accounts for 3% of transport energy use.It does, however, rely heavily on oil, which represented 55% of the sector's total energy consumption in 2020. Under the IEA's scenario for a net-zero energy system by the year 2050, oil use in rail would have to drop to "almost zero" by the middle of the century, being replaced by electricity — for the vast majority of rail energy needs — and hydrogen.
Composition of Central Bank Holdings, 1965-2021 -by Menzie Chinn - Estimated and reported: Figure 1: Share of central bank foreign exchange reserves in USD + 60% of unallocated reserves (dark blue), euro share + 35% of unallocated reserves (tan), Japanese yen share (green), British pound share (red), and Chinese yuan share (pink). Source: IMF annual reports as reported in Chinn-Frankel (2007), COFER and author’s calculations. Notice that there are few decisive switches in ranking. The one noticeable is the British pound exchanging position with the German mark around 1973. The switchover lags the switch in GDP rankings, but also follows German capital account liberalization. That is suggestive for those that believe Chinese GDP exceeding US GDP is a necessary and sufficient condition for the rise of the renminbi (RMB).
The Oil Boycott Of Russia Will Push The Eurozone Into A Recession - On Tuesday night, EU leaders agreed to ban all Russian seaborne oil imports. The sixth sanction package, including the details, still needs to be officially signed off, but based on earlier statements, import of Russian crude oil via seaborne shipments is set to be barred from the end of this year. The ban on seaborne import of petroleum products should then become effective about two months later. A “temporary” exception is being made for pipeline imports, to accommodate concerns over energy security for Hungary, Slovakia and the Czech Republic. When taking into account that Germany and Poland have said to cut Russian oil imports regardless of the exemption, the current agreement effectively means that about 90% of crude oil imports from Russia would be phased out by the end of the year- which represents around one quarter of total annual crude oil imports in the EU in recent years. It has not yet been agreed how long the exclusion of pipeline oil will last. Importantly, the package will also foresee in a provision to limit re-exports of Russian crude arriving via pipelines and petroleum products based on Russian crude oil. The oil boycott pushes us to downgrade our forecast. We had already highlighted this risk in previous research notes. We expect the Eurozone to enter a recession at the end of this year (Figure 1). Combined with carry over effects from the strong second half of 2021 this means that the economy is still set to grow in 2022, yet to contract in 2023. We have pencilled in growth of 2.2% in 2022 and -0.1% in 2023 -compared to, respectively, 2.9% and 1.5% in our previous forecast. Recently we had already lifted our inflation outlook to 7.5% this year and 3.6% next year, based on our expectation of a Russian oil embargo.In our view, the Russian oil embargo will not lead to large lasting energy shortages. Yet adjustments are likely to take time and it will certainly fuel prices of both crude oil and refined petroleum products. In fact, this morning prices of both crude oil and refined petroleum products such as diesel already pushed higher (Figure 3). It is the price of refined petroleum products that is being felt most by households and hauliers and that price has in fact already seen much sharper increases than crude oil since Russia’s invasion. Driving factors of the so-called crack spread so far have been capacity constraints at refineries worldwide and less imports from Russia. For now, lockdowns in China will continue to cap the price of crude oil, but once China’s lockdowns are lifted, we envisage that the price of crude oil could peak at over $170 a barrel - as can be read in the oil ban scenario analyses we have conducted earlier.
Europe Braces for Stagflation After EU Bans, At Least Officially, Two-Thirds of Russian Oil - The EU’s latest hare-brained gambit is likely to put further downward pressure on economic activity while exerting further upward pressure on inflation, making stagflation all but inevitable.Official inflation reached new record highs in the Euro Area in the month of May, clocking in at 8.1%, well above the consensus estimate of 7.7%. In six of the 19 Euro Area countries the “harmonized” (calculated the same way for all countries) inflation rate was in double digits: Estonia (20.1%), Lithuania (18.5%), Latvia (16.4%), Slovakia (11.8%), Greece (10.7%) and Netherlands (10.2%). The three Baltic States, Estonia, Latvia and Lithuania, were the first EU Member States to stop all imports of Russian oil and gas, which they did in early April.These record-high rates of inflation were all registered before the EU decided (in Yves’ words) “to shoot itself in the foot” by banning shipments of oil from Russia, its biggest oil provider. As such, inflation is likely to rise even higher in the coming months, especially given the central role energy prices have played in driving inflation in Europe. In the last month alone energy prices in the currency bloc have risen by 39%.At the same time, the European economy is de facto stagnating, according to European Central Bank executive board member Fabio Panetta told Italian daily La Stampa at the beginning of May:Growth in the first quarter was 0.2%, and would have essentially been zero without what may have partly been one-off spikes in growth in certain countries. The major economies are suffering – GDP growth has slowed in Spain, halted in France and contracted in Italy. In Germany growth momentum is low and has been weakening since the end of February, which is the point when everything changed.Now, Europe’s political leaders have decided to make matters even worse by further exacerbating its largely self-inflicted energy crisis. As part of its sixth sanctions package against Russia, the EU’s 27 Member States have agreed to ban all seaborne Russian oil, with a temporary exemption for pipeline oil. As a result, roughly two thirds of the oil EU Member States buy from Russia will no longer be available — at least not officially. The Council of the EU said that by the end of the year 90% of Russian oil will be banned.As Yves said in her piece yesterday, “if you believe the EU really, truly, will have cut its imports of Russian oil by 90% in a few months,” she has a bridge she’d like to sell you. She also pointed out that an “EU ban on oil shipped by tanker still allows for Russian oil to come to Europe via out and out laundering through cut-outs and mixing with non-Russian source product, albeit at a higher cost.” In other words, there is whole lot a lot of puff, bluff and bluster to the EU’s latest escalation.But that is not to say it won’t cause yet more economic hurt and hardship to the citizens of EU member states that depend heavily on Russian oil to meet their basic energy needs. Before Monday night Russia supplied around a quarter of the EU’s oil. Given tight — and thanks to the EU’s latest hare-brained gambit, tightening — global supplies of oil, Europe will probably struggle to replenish their supplies without resorting to laundering Russian oil through cut outs.Even then, prices are likely to rise much higher in the coming months. And that is going to put further downward pressure on economic activity while exerting further upward pressure on inflation, which is already at or around decades-highs in many jurisdictions, including the EU.
German Inflation Hits 60-Year-High, 'Worse To Come', Says AllianzGerman inflation hit another post-World-War-II record high, piling pressure on The ECB's need to exit from crisis-era stimulus after numbers from Spain also printed hotter than expected. Driven by soaring energy and food costs, this morning's data showed consumer prices in Europe's largest economy surged 8.7% YoY - far hotter than the +8.1% expected (thge highest since the start of the monthly statistics in 1963). As Bloomberg reports, the report comes just 10 days before a crucial ECB meeting where officials are set to announce the conclusion of large-scale asset purchases and confirm plans to raise interest rates in July for the first time in more than a decade. “Inflation is an enormous economic risk,” German Finance Minister Christian Lindner told a news conference in Berlin. “We must fight it so that no economic crisis results and a spiral takes hold in which inflation feeds off itself.”
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