global glass onion: week ending Oct 8

"Treasury Market Breakdown Is At Risk": Fed Markets Guru Has A Scary Warning For Powell -- Well, it finally happened: what we've been warning for the past year, namely that the Fed's aggressive rate hikes will break something... ...did in fact break something, actually quite a few somethings: first the BOJ, then the BOE (just maybe Credit Suisse), and as Bloomberg's Garfield Reynold writes, Treasury 10-year yields are surging relentlessly higher in a way rarely seen, as they have "finally" realized the Fed's resolve to tame inflation. They just climbed for a 9th-straight week, the longest such streak since early 1994, jumping 1.18 percentage points in that time. That bond sell-off is only the most savage move since the April-May rout that sent yields up 1.4 points in a nine-week span, but its persistence is noticeable. The message is that the bond market has finally realized just how determined the Fed is about raising and raising and raising interest rates to contain and then cool inflation. You see, the problem is not the tightening itself: a slow, methodical, gradual hike by the Fed would be more than welcome to offset over a decade of catastrophic monetary policy which saw QE and ZIRP (as well as NIRP) become the law of the land. The problem, as Kumal Sri Kumar noted correctly, is that what the Fed is trying to do is equivalent to a patient hoping to undo more than a decade of weight gain by stopping eating altogether in hopes of losing all the weight in a few days. The result is always one and the same and it's always tragic. And yet, looking at Reynold's chart, 10Y TSYs have gone on a crash diet and haven't eaten for a near record 9 weeks, so to speak. And amid this unprecedented food deprivation prompted by the Fed's hyper-aggressive tightening path, it's no longer just us warning that something will break, especially after both the BOJ and BOE broke: in just the past weeks virtually every economist and strategist has joined in the chorus, culminating on Friday with Bank of America's credit team which warned that the bank's proprietary Credit Stress Indicator (CSI) jumped 4 pts on the week to close at 74th %ile, exceeding the June peak of 71 and entering the "critical zone" (north of 75) beyond which the risk the of credit market dysfunction rises exponentially. While its warning was ominous, BofA's conclusion is that it's not yet too late to avoid a catastrophic outcome: as the bank's credit strategists said, it is imperative for the Fed to slow down the pace of rate hikes in "immediate upcoming meetings" to wit: This means slower pace of rate hikes at immediate upcoming meetings and a potential pause subsequently, to allow the economy to fully adjust to all the extreme tightening already implemented, but still working its way through the financial system’s plumbing. Failure to do so raises the risk of credit market dysfunction, which, if occurred, would be difficult to contain and fix. But what if Powell has no intention of slowing down, what happens then? Well, we are talking about the man that tells the Fed what to do - just as he did weeks before the Fed was forced to start "NOT QE" in 2019...... just as he did three days before the Fed stared buying corporate bonds in March 2020, when we flagged his research predicting just that outcome generating massive profits to those who read and acted upon his insight), and the man that even Zoltan Pozsar listens to - we are of course talking about former NY Fed analyst and current BofA rates guru Mark Cabana, who just like his credit peers at BofA, had a rather timely note sent out late on Friday, in which he makes a not too subtle point: unless something changes, and liquidity in the Treasury market isn't promptly refilled, then forget credit, it's the world's biggest and most important market that is about to break.Below we excerpt the key sections from Cabana's note, which centers around the biggest question in finance: will the Fed pivot (i.e., pull a BOE), and when? Well, as Cabana answers, the "Fed could follow BoE" if not for any other reason than US Treasuries, "are fragile, breakdown is risk." Here are the details:

Treasuries liquidity problem exposes Fed to 'biggest nightmare' - The latest bout of global financial volatility has heightened concerns about regulators' continuing failure to resolve liquidity problems with U.S. Treasuries — the debt that serves as a benchmark for the world. It's getting harder and harder to buy and sell Treasuries in large quantities without those trades moving the market. Market depth, as the measure is known, last Thursday hit the worst level since the throes of the COVID-19 crisis in the spring of 2020, when the Federal Reserve was forced into massive intervention. With rising risks of a global recession, escalating geopolitical tensions and the potential for further defaults by developing nations — not to mention ructions in a developed economy such as the U.K. — investors may not be able to rely on Treasuries as the reliable haven they once were. "We have seen an appreciable and troubling deterioration in Treasury market liquidity," said Krishna Guha, head of central bank strategy at Evercore ISI. Regulators "really haven't delivered yet any substantial reforms," he said. "What we are seeing at the moment is a reminder that the work is really important." When the Treasuries market broke down amid a panicked rush into dollar cash in March 2020, the Fed swooped in as buyer of last resort. And while it now has a backstop facility allowing the exchange of Treasuries for cash, volatility, if extreme enough, could still force the Fed into action, observers said. That's particularly awkward now, when policymakers are not only raising interest rates but actively shrinking the portfolio of Treasuries. So-called quantitative tightening is supposed to be playing an "important role" in tightening monetary policy, as part of the central bank's battle to contain inflation. "The biggest nightmare for the Fed now is that they have to step in and buy debt," said Priya Misra, global head of rates strategy at TD Securities. "If the Fed has to step in — when it's in conflict to monetary policy — it really puts them in a bind," she said. "That's why I think regulators need to fix the market structure." The Treasury Department is working on an initiative to enhance transparency in the trading of U.S. government debt, seen as one step that could encourage dealers and investors to boost volumes. News on that front may come at a Nov. 16 annual market-structure conference. But the outlook for bigger reforms, such as the Fed relaxing banks' capital requirements connecting to how much Treasuries they hold, remains unclear. An independent panel this past summer criticized regulators for the slow pace of their efforts. "I do think the official sector is moving, but there's a lot more to do," said Darrell Duffie, a Stanford University finance professor who served on that panel. Duffie, who is currently seconded to the Federal Reserve Bank of New York, added, "The Treasury market is the most important securities market in the world and it's the lifeblood of our national economic security. You can't just say 'we hope it will get better' you have to move to make it better."

A nice jolt for the Fed - Some heat is finally coming off the U.S. labor market.That’s a welcome sign for Federal Reserve officials, who want to see evidence that higher interest rates are prompting employers to scale back hiring plans and wage increases — a key ingredient in lowering inflation, as the Fed sees it.But it also means we’re getting closer to the kind of weak job growth that will be challenging for President Joe Biden’s administration to explain to voters.Let’s review: The Labor Department said Tuesday that job vacancies fell sharply in August, with openings declining to about 10 million, from 11.2 million in July. That’s the biggest drop since April 2020 and also marked another data surprise — economists had predicted no change in the number. Layoffs also inched up to their highest level in 18 months, though they’re still historically low. Fed officials have made clear they want to see signs of slowing inflation before they pull back on their aggressive rate increases. But lately, they’ve also leaned into the idea that they need to see changes in the labor market, too — that is, a better balance between the supply and demand for available workers. After a brief increase in openings in July, the latest Job Openings and Labor Turnover Survey, or JOLTS, clearly showed they’re headed in the right direction “There were likely a few cheers in the Eccles Building when these numbers were released,” said Indeed Hiring Lab’s Nick Bunker, referring to the Fed’s main offices in Washington. Bunker added that it’s “still very much a job seekers’ labor market, just one with fewer advantages for workers than a few months ago.” Translation: We may have a ways to go yet before we see a worrisome dropoff in hiring. (The all-time high for job openings prior to Covid was 7.5 million, Amherst Pierpont’s Stephen Stanley noted.) “This is an interesting table setter in front of Friday’s September employment release,” Stanley said of the JOLTS data. Economists expect that employers added 275,000 jobs in September, which would be a step down from the 315,000 added in August. Given the data surprises we’ve seen during the pandemic, however, each jobs report brings the possibility of a much steeper-than-expected drop. Will this be the month? That would be unfortunate timing for Democrats — it’s the second-to-last jobs report before the midterm elections, and time’s running out.

September job gains affirm that the Fed has a long way to go in inflation fight - September's jobs report provided both assurance that the jobs market remains strong and that the Federal Reserve will have to do more to slow it down.The 263,000 gain in nonfarm payrolls was just below analyst expectations and the slowest monthly gain in nearly a year and a half.But a surprising drop in the unemployment rate and another boost in worker wages sent a clear message to markets that more giant interest rate hikes are on the way."Low unemployment used to feel so good. Everybody who seems to want a job is getting a job," said Ron Hetrick, senior economist at labor force data provider Lightcast. "But we've been getting into a situation where our low unemployment rate has absolutely been a significant driver of our inflation."Indeed, average hourly earnings rose 5% on a year-over-year basis in September, down slightly from the 5.2% pace in August but still indicative of an economy where the cost of living is surging. Hourly earnings rose 0.3% on a monthly basis, the same as in August.Fed officials have pointed to a historically tight labor market as a byproduct of economic conditions that have pushed inflation readings to near the highest point since the early 1980s. A series of central bank rate increases has been aimed at reducing demand and thus loosening up a labor market where there are still 1.7 open jobs for every available worker.Friday's nonfarm payrolls report only reinforced that the conditions behind inflation are persisting.To financial markets, that meant the near certainty that the Fed will approve a fourth consecutive 0.75 percentage point interest rate hike when it meets again in early November. This will be the last jobs report policymakers will see before the Nov. 1-2 Federal Open Market Committee meeting. "Anyone looking for a reprieve that might give the Fed the green light to start to telegraph a pivot didn't get it from this report," In a speech Thursday, Fed Governor Christopher Waller sent up a preemptive flare that Friday's report would do little to dissuade his view on inflation."In my view, we haven't yet made meaningful progress on inflation and until that progress is both meaningful and persistent, I support continued rate increases, along with ongoing reductions in the Fed's balance sheet, to help restrain aggregate demand," Waller said.Markets do, however, expect that November probably will be the last three-quarter point rate hike.Futures pricing Friday pointed to an 82% chance of a 0.75-point move in November, then a 0.5-point increase in December followed by another 0.25-point move in February that would take the fed funds rate to a range of 4.5%4.75%, according to CME Group data.What concerns investors more than anything now is whether the Fed can do all that without dragging the economy into a deep, prolonged recession.September's payroll gains brought some hope that the labor market could be strong enough to withstand monetary tightening matched only when former Fed Chairman Paul Volcker slew inflation in the early 1980s with a fund rate that topped out just above 19% in early 1981."It could add to the story of that soft landing that for a while seemed fairly elusive," said Jeffrey Roach, chief economist at LPL Financial. "That soft landing could still be in the cards if the Fed doesn't break anything." Investors, though, were concerned enough over the prospects of a "break" that they sent the Dow Jones Industrial Average down more than 500 points by noon Friday.Commentary around Wall Street centered on the uncertainty of the road ahead:

From KPMG senior economist Ken Kim: "Typically, in most other economic cycles, we'd be very happy with such a solid report, especially coming from the labor market side. But this just speaks volumes about the upside-down world that we're in, because the strength of the unemployment report keeps the pressure on the Fed to continue with their rate increases going forward."
Rick Rieder, BlackRock's chief investment officer of global fixed income, joked about the Fed banning resume software in an effort to cool job hunters: "The Fed should throw another 75-bps rate hike into this mix at its next meeting ... consequently pressing financial conditions tighter along the way ... We wonder whether it will actually take banning resume software as a last-ditch effort to hit the target, but while that won't happen, we wonder whether, and when, significant unemployment increases will happen as well."
David Donabedian, CIO at CIBC Private Wealth: "We expect the pressure on the Fed to remain high, with continued monetary tightening well into 2023. The Fed is not done tightening the screws on the economy, creating persistent headwinds for the equity market."
Ron Temple, head of U.S. equity at Lazard Asset Management: "While job growth is slowing, the US economy remains far too hot for the Fed to achieve its inflation target. The path to a soft landing keeps getting more challenging. If there are any doves left on the FOMC, today's report might have further thinned their ranks."

The employment data left the third-quarter economic picture looking stronger.The Atlanta Fed's GDPNow tracker put growth for the quarter at 2.9%, a reprieve after the economy saw consecutive negative readings in the first two quarters of the year, meeting the technical definition of recession.However, the Atlanta Fed's wage tracker shows worker pay growing at a 6.9% annual pace through August, even faster than the Bureau of Labor Statistics numbers. The Fed tracker uses Census rather than BLS data to inform its calculations and is generally more closely followed by central bank policymakers. It all makes the inflation fight look ongoing, even with a slowdown in payroll growth.

What's next for the FOMC? | American Banker (interview & transcript) The September Federal Open Market Committee meeting may provide a turning point for monetary policy. Join us live on Sept. 22 at 2 p.m. as Brendan Murphy, head of global fixed income, North America, at Insight Investment offers his thoughts about the meeting, Chair Powell's press conference, the Summary of Economic Projections (SEP) and what they all suggest the FOMC will do next.

Fed's John Williams says rates could hit 4.5% over time - The Federal Reserve may need to raise interest rates to "somewhere around 4.5% over time" to tamp down high inflation, New York Federal Reserve President John Williams warned Friday. During a speech at SUNY Buffalo State College in Buffalo, Williams made it clear that he thinks interest rates need to rise even further if the Fed is going to achieve its two primary goals of maximum employment and price stability. "On maximum employment, things look very strong," Williams said. "But on price stability, we're a long way from what we need to be." The timing of lifting the benchmark rate to 4.5%, and the steepness of the rise, depends on the data. "It's going to depend on what happens with inflation, employment, the global economy … and how quickly does the economy … respond to the higher interest rates," Williams said. The U.S. central bank's Federal Open Market Committee, of which Williams is vice chair, has already hiked its benchmark interest rate by 3 percentage points since March. In September, it raised it by three-quarters of a percentage point to a target of 3% to 3.25%. That marked the third consecutive FOMC meeting that the Fed has raised its interest rate by 75 basis points, and it put the Fed's key interest rate at its highest level since 2008. Williams' comments came during a two-day trip to western New York, where he met with government, business and community development leaders as part of the New York Fed's in-person visits to gauge the economic conditions of the Federal Reserve's Second District. Williams said there are signs of a slowing economy — U.S. gross domestic product is shrinking and the housing market is cooling, for example — and while the labor market is strong, it soon might "not be as strong in terms of job growth" due to "very high inflationary pressures," he said.

Global Fallout From Rate Moves Won’t Stop the Fed - The Federal Reserve has embarked on an aggressive campaign to raise interest rates as it tries to tame the most rapid inflation in decades, an effort the central bank sees as necessary to restore price stability in the United States.But what the Fed does at home reverberates across the globe, and its actions are raising the risks of a global recession while causing economic and financial pain in many developing countries.Other central banks in advanced economies, from Australia to the eurozone, are also lifting rates rapidly to fight their inflation. And as the Fed’s higher interest rates attract money to the United States — pumping up the value of the dollar — emerging-market economies are being forced to raise their own borrowing costs to try to stabilize their currencies to the extent possible.Altogether, it is a worldwide push toward more expensive money unlike anything seen before in the 21st century, one that is likely to have serious ramifications.Higher rates slow inflation by cooling consumer demand and allowing supply to catch up, paving the way for more moderate price increases. But in the process, they slow down hiring, weaken wage growth, prompt job losses and ripple through financial markets in sometimes disruptive ways.How much pain today’s moves will ultimately cause remains unclear: So many countries are raising rates so quickly — and so in sync — that it is difficult to determine how intense any slowdown will be once it takes full effect. Monetary policy takes months or years to kick in completely.But many economists and several international bodies have warned that there’s a pronounced danger or overdoing it, including a United Nations agency that warned the damage could be particularly acute in poorer nations. Developing economies had already been dealing with a cost-of-living crisis because of soaring food and fuel prices, and now their American imports are growing steadily more expensive as the dollar marches higher.The Fed’s moves have spurred market volatility and worries about financial stability, as higher rates elevate the value of the U.S. dollar, making it harder for emerging-market borrowers to pay back their dollar-denominated debt.It is a recipe for globe-spanning turmoil and even recession. Despite that, the Fed is poised to continue raising interest rates. That’s because the Fed, like central banks around the world, is in charge of domestic economy goals: It’s supposed to keep inflation slow and steady while fostering maximum employment. While occasionally called “central banker to the world” because of the dollar’s foremost position, the Fed goes about its day-to-day business with its eye squarely on America.“Of course, as a human, you care about the pain other countries are experiencing — but as a policymaker, I have a single tool,” Mary C. Daly, president of the Federal Reserve Bank of San Francisco, said in an interview on Tuesday. “It’s a blunt tool, even for the U.S. goals of full employment and price stability.”

Critics worry the Federal Reserve has gone too far, too fast - This year, the Federal Reserve has raised interest rates by 75 basis points, or three-quarters of a percentage point, at three consecutive policy meetings, while leaving room for more hikes to come. Not everyone is happy with the speed of these rate increases, which are meant to chill economic activity in an effort to rein in inflation that has reached a four-decade high. In Congress, progressives like Sen. Elizabeth Warren of Massachusetts have been especially vocal in their ire. The key issue for many: Will the rapid hikes put the economy in a recession without substantially bringing down prices?“I think [Fed Chair Jerome] Powell’s interest rate bender has us on the precipice of global recession,” said Lindsay Owens, a former Warren adviser and the executive director of the Groundwork Collaborative, a progressive policy organization. “He is really going hard on rate hikes. And the consequences could be tremendous for so many.” “Marketplace” host Kai Ryssdal spoke with Owens about what those consequences might be. The following is an edited transcript of their conversation. To listen, use the media player above.

The Bank of England Just Made a Hard Pivot on Monetary Policy. Will the Fed Follow Suit? - The Bank of England recently caught the entire investing world by surprise when it decided to deviate from the more restrictive policy that central banks all over the world are employing to combat surging inflation, and returned to quantitative easing (QE).With the Bank of England doing a quick pivot on monetary policy, is it only a matter of time before the Fed follows suit? Let's take a look.The move by the Bank of England caught markets by surprise because the central bank had been trending in a somewhat similar direction as the Fed, due to some of the highest levels of inflation seen in 40 years. The Bank of England raised its benchmark base rate from 0.1% last December to roughly 2.25% now, which included a 0.50% rate hike in August, the largest rate hike it has done in 27 years. But problems have arisen recently in the foreign exchange markets, with a surging U.S. dollar and falling British pound sterling. The pound weakened more after British Prime Minister Liz Truss introduced a series of tax cuts that many investors worried would exacerbate already high inflation. With the pound approaching parity with the dollar, the Bank of England stepped in to try to stabilize the currency by saying it would buy $65 billion of long-term pounds up until Oct. 15. However, the Bank of England also reiterated its long-term strategy of shrinking the balance sheet. On the day the Bank of England announced QE, the Dow Jones Industrial Average jumped nearly 550 points higher, implying that investors -- at least on that day -- thought the Fed was capable of such a reversal.Some, like ARK Invest founder Cathie Wood, say they believe the surging dollar will force the Fed to pivot because the strength of the currency is going to hurt the ability of the U.S. to compete, as exports become too expensive and thus unattractive to other countries. But remember, the Bank of England was reacting to a currency crisis that some say was necessary to avoid the failure of a large pension fund or financial entity.Unless there is a similar crisis in the U.S., Fed Chairman Jerome Powell has been crystal clear that the Fed will continue to raise rates until there is enough evidence to show that inflation is on the decline. The Fed's median forecast for rates implies another 125 basis points (1.25%) of rate hikes before the end of the year. I also do think the Fed will want to decrease its balance sheet, which is currently around $8.8 trillion in assets.With that said, I believe we will start to see inflation show more clear evidence of peaking and declining soon, which could lead the Fed to slow or reverse rate hikes. If there is a more severe recession next year, it will also be difficult for the Fed to press ahead with rate hikes and potentially QT as well, although I think the impact of QT is harder to predict right now. So, while I do not see a Fed pivot as imminent, I could see it happening in 2023 depending on how the economy shapes up.

Why Is the Fed Always Late to the Party? – Barry Ritholtz -One of the really strange things about watching Federal Reserve policy is the excess of deference that is given to the Fed’s judgment. While the Fed deserves credit for when they get things right – e.g., rescuing the credit system from the great financial crisis (GFC) – they also deserve plenty of blame for the multitude of sins they commit.I am not a Fed hater or part of the crew that wants to “End the Fed.” All too often, Fed criticism is thinly-veiled excuse-making for underperforming alpha chasers. “If only the Fed didn’t do X, our portfolio would have been much better” seems to be a terrible approach to managing assets for clients.Still, as the Fed Funds chart above shows, if you want to critique America’s central bank, there is plenty of deserving criticism:

– They were a major factor (out of many) contributing to the GFC;
– Their forecasts are terrible (to be fair, so are everyone else’s);
– They hold fundamental beliefs which are misguided or wrong. (Wealth effect, Inflation expectations, etc.)

We can hold for a future date further criticism of how the Fed can improve, but for today let’s just stay focused on the FOMC’s interest rate policy.Consider the errors of just the past few years and you can see the biggest mistake they make seems to be either arriving way too late to the party or once they are there, is overstaying their welcome.

2000s: Kept rates too low for too long following 9/11 and dotcom implosion – FOMC Rate did not get over 1% until 2004.
2010s: Remained on an emergency footing post GFC for far too long – Starting in 2008, they left rates at 0 (zero) until December 2015.
2020s: Again, remained on emergency footing post Covid, despite broad evidence of economic recovery. Following the rate cuts inMarch 2020, the Fed stayed at Zero until March 2022. During the same period of time, the S&P 500 rose 67.9% (2020) and 28.7% (2021).¹

To sum up, the Fed was late to recognize post 9/11 the impact their ultra-low rates were having; Post 2008-09 crisis, they kept rates at zero until 2015, post-Covid, they kept rates at zero despite inflation and market signals. Despite myriad signs, we are way past peak inflation, the FOMC is again late to recognize it.Once again, the FOMC is the party guest who was late to arrive, and now, is wildly overstaying their welcome.

Opinion: The Fed doesn't have a choice anymore. Get ready for a recession - To many economists and analysts, the US economy has represented a paradox this year. On the one hand, GDP growth has slowed significantly, and some argue, even entered a recession. On the other hand, overall employment growth has been much stronger than normal. While GDP declined at an annualized rate of 1.1% in the first half of 2022, the US economy added 2.3 million jobs in the last six months, far more than in any other six-month period in the 20 years prior to the pandemic. This tight labor market – and the rapid wage growth it has spurred – is causing inflation to become more entrenched. The Consumer Price Index, which measures a basket of goods and services, was 8.3% year-over-year in August. That’s lower than the 40-year high of 9.1% in June, but still painfully high. To address it, the Federal Reserve is likely to drive the economy into a recession in 2023, crushing continued job growth. Why has employment growth remained so strong? First, the US economy is holding on better than many expected. The Atlanta Fed’s GDPNow estimate for real GDP growth in the third quarter of 2022 is 2.3%, suggesting that while the economy is now growing much more slowly than it did last year, we are still not in a recession. When the demand for goods and services strengthens, so does the demand for workers producing these goods and services. Second, despite the slowing of the economy and the growing fears of recession, layoffs are still historically low. Initial claims for unemployment insurance, an indicator highly correlated with layoffs, were 219,000 for the week ended October 1 – higher than the week prior, but still one of the lowest readings in recent decades. After years of increasingly traumatic labor shortages, many employers are reluctant to significantly reduce the number of workers even as their businesses are slowing. Third, many industries are growing faster than normal because they are still recovering from the pandemic. Convention and trade show organizers, car rental companies, nursing homes and child day care services, among others, are all growing fast because they are still well below pre-pandemic employment levels. Fourth, just as some industries are growing because they are still catching up, others are experiencing high growth as they adjust to a new normal of higher demand.Demand for data processing and hosting services, semiconductor manufacturing, mental health services, testing laboratories, medical equipment and pharmaceutical manufacturing is higher than before the pandemic. Fifth, during the pandemic, corporate investments in software and R&D reached unprecedented levels, which drove a rapid increase in new STEM jobs. Because these workers are especially well paid, they have had plenty of disposable income to spend on goods and services, which has supported job growth throughout the economy. These factors are spurring positive momentum that will not disappear overnight. Employment growth is likely to slow down from its historically high rates, but it will still remain solid in the coming months. ManpowerGroup’s Employment Outlook Survey shows that the hiring intentions for the fourth quarter are still very high, despite dropping from the previous quarter. Next year, however, will look very different. Many of the industries that are still recovering from the pandemic will have reached pre-pandemic employment levels. With demand saturated, those industries may revert to slower hiring. But this alone is unlikely to push job growth into negative territory. What will do that is monetary policy.There are two ways to rein in the labor market: Either reduce demand for workers or increase the labor supply. But it’s hard to engineer a boost in labor supply. That takes the kind of legislative action needed to increase immigration, drive people into the labor force or grow investment in workforce training. This is likely to prove elusive in today’s polarized political environment.The only option that leaves the Fed is to engineer a recession by continuing to raise interest rates. Expect to see that happen in 2023.

New York Fed taps BlackRock executive as legal counsel - — The Federal Reserve Bank of New York has hired a BlackRock executive to lead its legal division. Richard Ostrander will join the reserve bank next month as general counsel and head of its legal group. He will also be added to the bank's executive committee and serve as deputy general counsel for the Federal Open Market Committee, which sets the Fed's monetary policy.

Four High Frequency Indicators for the Economy - These indicators are mostly for travel and entertainment. The TSA is providing daily travel numbers. This data is as of October 2nd. 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 dashed line is the percent of 2019 for the seven-day average. The 7-day average is down 10.9% from the same day in 2019 (89.1% of 2019). (Dashed line) Air travel - as a percent of 2019 - had picked up towards the end of Summer, but is now, off about 10% from 2019 like earlier in the year. 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 September 29th. Movie ticket sales were at $83 million last week, down about 41% 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 (STR is comparing to a strong year for hotels). This data is through Sept 24th. The occupancy rate was down 1.5% compared to the same week in 2019. The 4-week average of the occupancy rate is above the median rate for the previous 20 years (Blue). This graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week of 2019. As of September 23rd, gasoline supplied was down 5.6% compared to the same week in 2019. Recently gasoline supplied has been running below 2019 and 2021 levels - and sometimes below 2020.

Business Cycle Indicators at October’s Start by Menzie Chinn - With September IHS-Markit (Macroeconomic Advisers) monthly GDP, we have the following picture of some key indicators followed by the NBER Business Cycle Dating Committee. Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus as of 10/4 for NFP (blue +), civilian employment (orange), 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), official GDP (blue bars), all log normalized to 2021M11=0. Lilac shading denotes dates associated with a hypothetical recession in H1. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (10/4/2022 release), and author’s calculations.Note that monthly GDP moved up sharply in September. From IHS-Markit:Monthly GDP rose 0.8% in August following a 0.2% increase in July. The latter was revised lower by 0.2 percentage point. The increase in August was accounted for by large increases in nonfarm inventory investment and net exports. Final sales to domestic purchasers were
essentially flat in August. The sharp gain in inventory investment in August is likely to be reversed in September, as inventories (outside of motor vehicles and parts), by our estimation, were already somewhat overbuilt heading into AugustGDP and other indicators seem to be at variance; however, if we look at GDO, they seem more consistent. Figure 2: Nonfarm payroll employment (dark blue), Bloomberg consensus of 10/14 (blue +), civilian employment (orange), 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), Gross Domestic Output, GDO (blue bars), all log normalized to 2021M11=0. Lilac shading denotes dates associated with a hypothetical recession in H1. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (10/4/2022 release), and author’s calculations.For more discussion of GDP vs. GDO and other related measures, see this post from the beginning of the month, and discussion of GDP annual revision, here. With consumption, employment and production measures rising throughout H1, and GDO trending sideways, it does not seem likely that H1 will be declared a recession, defined as a broad based and persistent decline in economic activity.

US National Debt Tops $31 Trillion for First Time - — America’s gross national debt exceeded $31 trillion for the first time on Tuesday, a grim financial milestone that arrived just as the nation’s long-term fiscal picture has darkened amid rising interest rates. The breach of the threshold, which was revealed in a Treasury Department report, comes at an inopportune moment, as historically low interest rates are being replaced with higher borrowing costs as the Federal Reserve tries to combat rapid inflation. While record levels of government borrowing to fight the pandemic and finance tax cuts were once seen by some policymakers as affordable, those higher rates are making America’s debts more costly over time. “So many of the concerns we’ve had about our growing debt path are starting to show themselves as we both grow our debt and grow our rates of interest,” said Michael A. Peterson, the chief executive officer of the Peter G. Peterson Foundation, which promotes deficit reduction. “Too many people were complacent about our debt path in part because rates were so low.” The new figures come at a volatile economic moment, with investors veering between fears of a global recession and optimism that one may be avoided. On Tuesday, markets rallied close to 3 percent, extending gains from Monday and putting Wall Street on a more positive path after a brutal September. The rally stemmed in part from a government report that showed signs of some slowing in the labor market. Investors took that as a signal that the Fed’s interest rate increases, which have raised borrowing costs for companies, may soon begin to slow. Higher rates could add an additional $1 trillion to what the federal government spends on interest payments this decade, according to Peterson Foundation estimates. That is on top of the record $8.1 trillion in debt costs that the Congressional Budget Office projected in May. Expenditures on interest could exceed what the United States spends on national defense by 2029, if interest rates on public debt rise to be just one percentage point higher than what the C.B.O. estimated over the next few years. The Fed, which slashed rates to near zero during the pandemic, has since begun raising them to try to tame the most rapid inflation in 40 years. Rates are now set in a range between 3 and 3.25 percent, and the central bank’s most recent projections saw them climbing to 4.6 percent by the end of next year — up from 3.8 percent in an earlier forecast. Federal debt is not like a 30-year mortgage that is paid off at a fixed interest rate. The government is constantly issuing new debt, which effectively means its borrowing costs rise and fall along with interest rates. The C.B.O. warned about America’s mounting debt load in a report earlier this year, saying that investors could lose confidence in the government’s ability to repay what it owes. Those worries, the budget office said, could cause “interest rates to increase abruptly and inflation to spiral upward.”

Pentagon: No sign Putin is planning to use nukes after Biden's 'Armageddon' comment - The Pentagon said Friday that it still has seen no indications that Vladimir Putin is planning to launch nuclear weapons after President Joe Biden warned of the risk of a nuclear “Armageddon.”Biden’s comments show how seriously the U.S. is taking Putin’s threats to use nuclear weapons, Defense Department spokesperson J. Todd Breasseale said in a statement to POLITICO.“However — and to be clear: we have not seen any reason to adjust our own strategic nuclear posture nor do we have indications that Russia is preparing to imminently use nuclear weapons,” he said.U.S. officials told POLITICO that nothing has changed on the nuclear front in the past 24 hours. On Thursday, Pentagon press secretary Brig. Gen. Patrick Ryder told reporters that the department does not have any information that would cause it to change its nuclear posture.On Thursday night, Biden issued a stark warning during remarks at a Democratic fundraiser in New York, where he was introduced by James Murdoch, son of media mogul Rupert Murdoch, according to the White House.Biden compared Putin’s recent threats to use a nuclear weapon to the 1962 Cuban Missile Crisis, the moment when the two nuclear superpowers last came close to a nuclear crisis.“First time since the Cuban Missile Crisis, we have a direct threat of the use [of a] nuclear weapon if in fact things continue down the path they are going,” Biden said. “I don’t think there’s any such thing as the ability to easily [use] a tactical nuclear weapon and not end up with Armageddon.”

Nothing’s More Important Than Avoiding Nuclear War: Notes From The Edge Of The Narrative Matrix – Caitlin Johnstone - Avoiding nuclear war is the single most important agenda in the world. The single most important agenda in history. It is more important than your political faction. It is more important than how Vladimir Putin makes your feelings feel. It is more important than anything else. Whenever I say this I always get some liberal saying “Some things are worth dying for” or some shit. Actually, no. Nothing, literally nothing, is worth the obliteration of all life on earth. It’s not worth gambling all terrestrial life to please your dopey egocentric fixations. People who think nuclear brinkmanship is worth the risk either haven’t thought hard enough about what nuclear war is and what it would mean, or they just hate life and have some sick desire to see the end of everything. Either way they should be dismissed with extreme aggression. If there’s one thing everyone should be able to come together on, it’s that every measure should be taken to avoid the end of everything. It is only because our civilization is awash with war propaganda that this isn’t glaringly obvious to everybody. That necessarily means de-escalation and detente. It means compromise. It means change. It means acknowledging what your side did wrong to bring us this close to the edge and taking drastic measures to change that and make sure it never happens again. It’s not egoically pleasing, but it’s necessary. More so than anything has ever been. Risking the annihilation of all terrestrial life is not worth the egoic gratification we get from our narratives about “winning” and “losing” and “good guys” and “bad guys”. This is infinitely more important than that. ❖ Our civilization is so backwards and insane that people will act like you’re the worst person in the world for saying we should try to avoid nuclear armageddon. I and many others have been screaming for years that US policy toward Russia is bringing us closer and closer to nuclear war; now we’re on the brink and the people we were screaming at are acting like we’re the assholes. Two administrations ago the US had a president who mocked the idea that Russia was a primary rival and said Ukraine was a core interest to Russia but not the US, and liberals thought he was awesome. After four years of intelligence agency-driven narratives marrying Russia to Trump, liberals are now braying for World War III.

Opposing Armageddon To Trigger The Libs: Notes From The Edge Of The Narrative Matrix – Caitlin Johnstone -- Everyone has lost their fucking mind. Propaganda has made madness look like sanity and sanity look like madness, has normalized cheerleading for nuclear world war and abnormalized calls for de-escalation and detente. It’s truly as bat shit insane as anything could possibly be. Over and over again we’re being fed the message from the US and its proxies that this game of nuclear chicken can only escalate and never de-escalate. They are lying. They are playing games with all our lives in service of a dark god named unipolarism, and we gain nothing from it.The only positive I can see in this mess is that any further movement toward madness will have to be a move into sanity, because we’ve taken madness as far as we can possibly take it and we’ll necessarily have to circle back round again. You can only turn 180 degrees away from the light before you’re turning back toward it again. You can only run halfway into the woods before you’re running out of it. “Kids, there’ve been some nuclear explosions and everyone on earth is certain to die horribly, but we need to understand that it was very important for our government to help Ukraine recapture the annexed Donetsk, Luhansk, Kherson and Zaporizhzhia territories from the Russians.” I started writing because I was worried I wouldn’t leave a healthy world to my kids. I’ve been screaming for years that we’re drawing closer to nuclear war. Now we’re on the brink, and people are saying I’m only protesting because I love Russia and think Putin is great. Assholes.How fucking brainwashed do you have to be to think the only possible reason someone might object to gratuitous nuclear brinkmanship is because of some weird, arbitrary loyalty to some random foreign government on the other side of the planet? Bunch of mindless fucking automatons. It just says so much about where we’re headed as a society that the most surefire way to enrage a liberal in 2022 is to say that reckless nuclear brinkmanship is probably a bad idea. Mainstream liberals are so fucking stupid that they think the only possible choices with regard to Russia are either (A) handing Putin the entire world on a silver platter or (B) just continually charging toward direct confrontation as though Russia doesn’t have nukes. They don’t know what detente is. At all. They don’t even know it’s a thing, let alone an option here. Like if you ask them they don’t know about the existence of the word or the concept. I’ve been complaining about this since long before the invasion.Detente used to be a household word. Mainstream politicians campaigned on and debated about it. Now hardly anyone knows it’s even a thing, let alone a real option in dealing with the horrifying escalations between NATO and Russia. This is because the political/media class never tells them.It’s supposed to be the news media’s job to create an informed populace, but because their real job is propaganda they actually do the opposite. News media never mentioning detente is like a preschool teacher never mentioning sharing or cooperation and just telling kids to fight. This is the only reason anyone who advocates de-escalation and detente gets met with “SO YOU’RE SAYING WE SHOULD JUST GIVE PUTIN WHATEVER HE WANTS???” instead of a sane adult response. It’s because people haven’t been told that de-escalation and detente are historically viable and successful. Since 2016 progressive Democrats have been worse than useless on the single most important issue in the world, namely de-escalating tensions between the US and Russia. They’ve been feeding into the Russia hysteria that got us here and backing proxy warfare in Ukraine to the hilt.

Putin spokeswoman US sabotaged Nord Stream sell gas to Europe - Maria Zakharova, Vladimir Putin’s spokeswoman in the Kremlin, has accused the US of being responsible for sabotaging the Nord Stream pipelines. She claimed that Washington carried out the attack to leave Europe cornered into purchasing supplies from America instead.Posting on her Telegram channel, Zaknarova wrote: “On September 30, U.S. Secretary of State Blinken and Canadian Foreign Minister M. Joly held a joint press conference in Washington. Blinken spoke openly and unashamedly about the motives of the US and its NATO partners for destroying the Nord Stream 1 and Nord Stream 2 gas pipelines”.“Quote 1: ‘Nord Stream 1 and Nord Stream 2 were not pumping gas to Europe at the time. Nord Stream 2, as you know, was never put into operation. Nord Stream 1 was stopped for several weeks because Russia was using energy as a weapon….'”.“Russia has never used energy as a weapon. Russia, and before it the USSR, simply supplied Europe with gas. Uninterruptedly, for 50 years. Washington’s lies only confirm his criminal manipulation of the subject”.“Quote 2: ‘We have greatly increased our production and also made LNG (liquefied natural gas) available to Europe. We are now the leading supplier of LNG to Europe, helping to make up for any loss of oil and gas to Europe as a result of Russian aggression against Ukraine'”.“And there’s the motive. Only Ukraine has nothing to do with it. If it is to be remembered in the context of U.S. energy interests, we should talk about the fact that under the pressure of U.S. officials, Kyiv politicians constantly put conditions on the Russian side on the verge of blackmail on gas transit”.“Quote 3: ‘…and in the end, it’s also a huge opportunity. This is a tremendous opportunity to get rid of dependence on Russian energy once and for all and thus deprive Vladimir Putin of using energy as a means of advancing his imperial designs. This is very important and opens up enormous strategic opportunities for the coming years…'”. She concluded her post with “Curtain”.

U.S. announces new sanctions in response to North Korean missiles tests - The United States on Friday announced new sanctions on North Korea in response to the flurry of missile tests the country conducted this week, including one launched over Japan on Tuesday.The sanctions target three entities and two individuals who assisted in exporting petroleum to North Korea, “which directly supports the development of DPRK weapons programs and its military,” a statement from the Treasury Department said.“The DPRK’s long-range ballistic missile launches, including over Japan, demonstrate a continued disregard for United Nations Security Council resolutions,” Treasury Undersecretary Brian Nelson said in a statement. “The United States will continue to enforce multilateral sanctions and pursue the DPRK’s sanctions evasion efforts worldwide, including by designating those who support these activities.”The sanctions are the latest in a handful of efforts the U.S. has taken to address the missile launches. President Joe Biden condemned the launch over Japan during a call with Japanese Prime Minister Fumio Kishida Wednesday. The leaders recognized the launch as “a danger to the Japanese people, destabilizing to the region, and a clear violation of United Nations Security Council resolutions,” the White House said.The U.S. and South Korea also launched their own missile test Wednesday, firing U.S.-made ATACMS short-range ballistic missiles into the sea. On Thursday, the U.S., Japan and South Korea performed a joint missile defense exercise in the Sea of Japan, which was part of an effort “to deter aggressive, provocative actions out of the north,” and to “make sure we have the appropriate military capabilities at the ready in the region in case we need them,” National Security Council spokesperson John Kirby said during an interview on CNN Thursday.

Musk offers proposal on China-Taiwan tensions, after Russia-Ukraine plan (Reuters) - Elon Musk, the chief executive of electric car maker Tesla Inc, said he believes the dispute over Taiwan could be resolved by giving China some control. Mr. Musk also proposed a plan to end the war in Ukraine on the 3rd, but he was criticized by President Volodymyr Zelensky and others. "Why don't we consider a special administrative region of Taiwan, which is reasonably acceptable, but probably won't please everyone," he said in an interview with the Financial Times reported on Sunday. I think we can probably do it," he said. The Chinese government has made Taiwan part of its own country and has not ruled out the use of force to unify it. Taiwan strongly opposes this. Musk also said he sought assurances from the Chinese government that Starlink, the satellite internet service of his private space company SpaceX, would not be offered in the country. A Chinese foreign ministry spokesman was questioned about Musk's remarks at a press conference on the 8th, saying that Taiwan is an "internal affair" of China, and that China will continue to "resolutely crush" Taiwanese independence groups and achieve peaceful reunification.

Blinken Calls Sabotage Attacks On Nord Stream Pipelines A "Tremendous Opportunity" - - Ever since the recent unprecedented sabotage attacks on the Russia to Europe Nord Stream pipelines, the central question has continued to remain who did it and correspondingly cui bono? Just when speculation and an avalanche of theories have inundated the web on an array of international outlets, the Biden administration has bluntly (and apparently lacking self-awareness) boasted that the pipeline bombings present an "opportunity".Secretary of State Antony Blinken said in a Friday joint press briefing with Canada's top diplomat that the damage and disruption to the pipelines are being seen in Washington as a "tremendous opportunity" to greatly reduce European energy imports on Russia.In addressing the 'mystery' sabotage incidents, Blinken began, "I think first it’s important to make clear that these pipelines – that is, Nord Stream 1 and Nord Stream 2 – were not pumping gas into Europe at this time. Nord Stream 2 never became operational, as is well known. Nord Stream 1 has been shut down for weeks because of Russia’s weaponization of energy."A mere few sentences later, he followed by saying "ultimately this is also a tremendous opportunity. It’s a tremendous opportunity to once and for all remove the dependence on Russian energy and thus to take away from Vladimir Putin the weaponization of energy as a means of advancing his imperial designs."He at the same time touted that the Untied States has now become "the leading supplier of LNG [liquefied natural gas] to Europe," stressing too that the Biden administration is helping to enable European leaders to "decrease demand" and "speed up the transition to renewables."Tellingly, in that single section of comments while speaking alongside his Canadian counterpart, Foreign Minister Mélanie Joly, Blinken had repeated the word "opportunity" while highlighting the European energy crisis no less than three times. According to @SecBlinken, the Nord Stream pipeline bombing "offers tremendous strategic opportunity for the years to come." Too bad that this tremendous opportunity for DC bureaucrats will come at the expense of everyone else, especially this coming winter. pic.twitter.com/T2eacQUuBF Canada's Joly for her part pointed the finger at Russia for sabotaging its own pipeline during a panel discussion the same day, telling an Atlantic Council conference that the world is "not naïve" about who is responsible for the acts of "sabotage". She's the latest top official of a NATO government to do so.But the Canadian foreign affairs minister stopped short of naming Russia directly in the exchange:"At this point we're still investigating, but obviously we want to make sure that we do things the right way, but we're not naïve," she said."You're not naïve as to who's behind it?" Sciutto responded."As I said, we won't speculate but at the same time, we want to make sure that — the world needs to understand that this is very important European infrastructure that was sabotaged," the minister added.

Escobar: Who Profits From Pipeline Terror? - Secret talks between Russia and Germany to resolve their Nord Stream 1 and 2 issues had to be averted at any cost... A sophisticated military operation – that required exhaustive planning, possibly involving several actors – blew up four separate sections of the Nord Stream (NS) and Nord Stream 2 (NS2) gas pipelines this week in the shallow waters of the Danish straits, in the Baltic Sea, near the island of Bornholm. Swedish seismologists estimated that the power of the explosions may have reached the equivalent of up to 700 kg of TNT. Both NS and NS2, near the strong currents around Borholm, are placed at the bottom of the sea at a depth of 60 meters.The pipes are built with steel reinforced concrete, able to withstand impact from aircraft carrier anchors, and are basically indestructible without serious explosive charges. The operation – causing two leaks near Sweden and two near Denmark – would have to be carried out by modified underwater drones.Every crime implies motive. The Russian government wanted – at least up to the sabotage – to sell oil and natural gas to the EU. The notion that Russian intel would destroy Gazprom pipelines is beyond ludicrous. All they had to do was to turn off the valves. NS2 was not even operational, based on a political decision from Berlin. The gas flow in NS was hampered by western sanctions. Moreover, such an act would imply Moscow losing key strategic leverage over the EU. Diplomatic sources confirm that Berlin and Moscow were involved in a secret negotiation to solve both the NS and NS2 issues. So they had to be stopped – no holds barred. Geopolitically, the entity that had the motive to halt a deal holds anathema a possible alliance in the horizon between Germany, Russia, and China.The possibility of an “impartial” investigation of such a monumental act of sabotage – coordinated by NATO, no less – is negligible. Fragments of the explosives/underwater drones used for the operation will certainly be found, but the evidence may be tampered with. Atlanticist fingers are already blaming Russia. That leaves us with plausible working hypotheses. This hypothesis is eminently sound and looks to be based on information from Russian intelligence sources. Of course, Moscow already has a pretty good idea of what happened (satellites and electronic monitoring working 24/7), but they won’t make it public.The hypothesis focuses on the Polish Navy and Special Forces as the physical perpetrators (quite plausible; the report offers very good internal details), American planning and technical support (extra plausible), and aid by the Danish and Swedish militaries (inevitable, considering this was very close to their territorial waters, even if it took place in international waters).The hypothesis perfectly ties in with a conversation with a top German intelligence source, who told The Cradle that the Bundesnachrichtendienst (BND or German intelligence) was “furious” because “they were not in the loop.” Of course not. If the hypothesis is correct, this was a glaringly anti-German operation, carrying the potential of metastasizing into an intra-NATO war.The whole operation had to be approved by Americans, and deployed under their Divide and Rule trademark. “Americans” in this case means the Neo-conservatives and Neo-liberals running the government machinery in Washington, behind the senile teleprompter reader.This is a declaration of war against Germany and against businesses and citizens of the EU – not against the Kafkaesque Eurocrat machine in Brussels. Don’t be mistaken: NATO runs Brussels, not European Commission (EC) head and rabid Russophobe Ursula von der Leyen, who’s just a lowly handmaiden for finance capitalism.It’s no wonder the Germans are absolutely mum; no one from the German government, so far, has said anything substantial.The Poles, moreover, are terrified that with Russia’s partial mobilization, and the new phase of the Special Military Operation (SMO) – soon to be transformed into a Counter-Terrorism Operation (CTO) – the Ukrainian battlefield will move westward. Ukrainian electric light and heating will most certainly be smashed. Millions of new refugees in western Ukraine will attempt to cross to Poland.At the same time there’s a sense of “victory” represented by the partial opening of the Baltic Pipe in northwest Poland – almost simultaneously with the sabotage. Talk about timing. Baltic Pipe will carry gas from Norway to Poland via Denmark. The maximum capacity is only 10 billion cubic meters, which happens to be ten times less than the volume supplied by NS and NS2. So Baltic Pipe may be enough for Poland, but carries no value for other EU customers.The Russian Foreign Ministry was sharp as a razor: “The incident took place in an area controlled by American intelligence.”

Biden Backs Ongoing LNG Exports to Europe as Russia’s War in Ukraine Rages, Report Says -- The Biden Administration remains committed to supporting robust levels of LNG exports in support of Europe’s efforts to bolster supplies for winter, according to a report Tuesday. The continent is moving with haste to reduce its dependence on Russia amid the Kremlin’s war in Ukraine and is consistently calling for U.S. shipments of the super-chilled fuel. During a scorching summer that fueled robust cooling demand in the Lower 48 and in Europe – combined with precarious storage supplies globally – U.S.prices soared to 14-year highs around $9.00/MMBtu. This elicited calls from consumer and manufacturing advocates to curb exports of liquefied natural gas to preserve supplies for domestic use. This, they argued, could help contain U.S. costs this winter, when both demand and prices are widely anticipated to rise anew after a fall weather reprieve. In a report Tuesday, however, Reuters cited senior White House officials who said Biden, after a new analysis of Europe’s energy needs, had ruled out any limits on natural gas exports during the coming winter. They cited the need to support Europe during the depths of the heating season. The president, shortly after Russia invaded Ukraine in late February, vowed to back the European Union (EU) and North Atlantic Treaty Organization (NATO) as they pushed against the Kremlin and took steps to guard the continent from Kremlin aggression. This included assurances to deliver 15 Bcm of LNG ahead of winter, and the United States already has eclipsed that goal. “President Biden made a commitment in March and we have been moving out on it. We surpassed the LNG export goal President Biden set,” an administration official told Reuters, noting a 30 Bcm in U.S. LNG exports to the EU since early March, double the same period of 2021. “And because of the steps we and our partners have been taking, gas storage in Europe is at a significantly higher level than last year. More work remains,” the official said. EU officials have called on countries across the continent to stock up on LNG to offset supplies from Russia cut off by the Kremlin. Prior to the war, Europe had depended on Russia for roughly a third of its natural gas; it recently has received only about 10% from Russia. Because of LNG from the United States and elsewhere, along with energy conservation, the continent is on track to fill storage to a level adequate for an average winter. But the EU continues to push for more to defend against the potential of a protracted or particularly cold winter. As it stands, according to Rystad Energy, Europe needs at least modest flows of Russian gas or continued strong levels of LNG imports to weather a harsh winter. The latter source appears more reliable. U.S. exporters, already approaching record activity levels ahead of the war, have since operated at or near capacity – aside from repair projects – through the lion’s share of the conflict in Ukraine.

U.S. Treasury seeks phased G7 oil sanctions as EU ban looms -G7 sanctions on Russia will target its oil and products in three phases, senior U.S. treasury official Ben Harris said on Tuesday, as the bloc seeks to limit unintended economic damage while curbing Moscow's funds to wage war in Ukraine. Harris, the Treasury's assistant secretary for economic policy, told the Argus European Crude Conference in Geneva that Group of Seven sanctions will target Russian crude oil, while later ones will focus on diesel and a third phase will tackle lower value products such as naphtha. The timing may complicate a plan viewed with skepticism by industry players worried about sanctions exposure and buyer countries that have not signed up. Sanctions from the G7 and the European Union, which is opting for a two-phase ban, are set to begin on Dec. 5. Both economic blocs aim to limit Russian profits from exporting oil following its invasion of Ukraine. So far Moscow has largely maintained revenues as high prices and increased sales to Asia, especially China and India, have offset the impact of Western energy restrictions. The EU will ban seaborne shipments of Russian oil from Dec. 5 and of products from Feb. 5, cutting the trade off from financial services and potentially halting it worldwide. EU sanctions also aim to match an oil price cap agreed by the G7 powers, diplomats have said. But concern is high that the EU sanctions will drive oil prices still higher, increasing economic pain in countries sanctioning Russia where inflation has already hit multi-decade highs. The United States also wants to shelter emerging markets from the ripple effect of sanctions, Harris said. The risks have put the United States and the G7 in the paradoxical position of trying to guarantee Russian output, albeit at prices that deprive Moscow of revenue for its invasion.

U.S.-Saudi relations take a hit as OPEC cuts oil production - Relations between the United States and Saudi Arabia reached a new low Wednesday, as Saudi-led OPEC voted to slash oil production amid a global run-up in energy prices. The decision represented a win for Russia, which coordinates oil policy with OPEC and is seeking to bolster the value of its exports. It also comes a month before the midterm elections in the United States, where high energy prices are likely to be a central issue. Biden administration officials expressed disappointment in the move and signaled they were open to working with Congress on legislation that would enable the government to bring an antitrust suit against the oil cartel. Two members of Congress said they would introduce legislation to remove U.S. troops and military equipment from the country. “This is going to lead a lot of people in the U.S. to reevaluate the U.S.-Saudi relationship,” said Ben Cahill, a senior fellow at the Center for Strategic and International Studies. “The assumptions have changed.” Analysts said the moves underscored the depths of the gulf between Washington and Riyadh. The two capitals’ interests were once linked: Saudi Arabia exported barrels of oil around the world in exchange for U.S. security guarantees. But recent years have flipped the relationship on its head, and relations have been strained by differences over the Arab Spring, the killing of Jamal Khashoggi and conflicting approaches to a spiraling energy crisis. “The market has moved on, things have changed a lot,” Cahill said. “Saudi Arabia has a much broader array of trade partnerships and interests. Its relationships in Asia have become a lot more important, and I think the U.S. feels a lot more liberated to go its own way and not depend on Gulf oil production.” Analysts said OPEC’s move to slash production appeared to be a response to a looming European embargo on Russian oil exports, which is set to go into effect in December, as well as efforts by the Biden administration and its European allies to place a price cap on Russian crude. Attempts by oil-consuming countries to try and set the price of oil represents a direct threat to OPEC’s ability to direct oil markets, they said. The move will slash OPEC oil production by 2 million barrels a day, or about 2 percent of global oil production. Most analysts expected the actual cuts to be more muted, as most OPEC nations are already failing to meet their stated production targets. “Historically, OPEC has often cut production in the face of weakening demand, yet it has never implemented a cut in such a tight market, with inventories at historically low levels,” Goldman analysts wrote.

White House 'disappointed' with OPEC+ decision to cut oil production, will release more from US reserves - The White House on Wednesday expressed disappointment following the announcement from OPEC+ that it would cut two million barrels per day from its production quotas beginning in November. The decision by the OPEC+ alliance, which includes Russia, is likely a response to oil prices dropping amid less demand stemming from a global economic slowdown. Oil prices currently hover around approximately $80 per barrel, down from the $100-plus cost it hit during late spring and early summer. Reducing supply will likely boost the cost of oil, which could raise the price Americans pay at the gas pump around the November midterm election -- and it comes just a few months after Biden traveled to Saudi Arabia in July to lobby Middle Eastern allies to increase production."The president is disappointed by the shortsighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of Putin's invasion of Ukraine," the White House said in a statement from national security adviser Jake Sullivan and National Economic Council Director Brian Deese.The White House also said President Biden has directed the Department of Energy to release another 10 million oil barrels from the country's Strategic Petroleum Reserve next month, signaling the administration's effort to keep gas prices low with a month until the crucial midterms. The release was previously planned, according to an Energy Department press release.Biden offered little response when asked about the OPEC+ alliance's decision as he left the White House to head to Florida Wednesday morning."I need to see what the detail is," Biden said in response to a reporter's shouted question about the decision. "I am concerned, it is unnecessary."Secretary of State Antony Blinken said that the administration would continue to ensure energy prices are "kept low" in light of the OPEC+ announcement. The national average cost of a gallon of gas is currently $3.83, up about 62 cents from last year, according to AAA.

Biden's 'unthinkable' options for punishing OPEC - President Joe Biden and other Democrats are considering a range of actions to blunt the impacts of OPEC’s decision to cut oil shipments — though none of their options looks appealing.The oil cartel’s move this week to cut output by 2 million barrels a day is threatening to push up U.S. gasoline prices, undercutting Biden’s risky diplomatic outreach to Saudi Arabia in July as well as his boast that he helped drive prices at the pump down for three straight months this summer.Now, White House and congressional leaders are eyeing several responses to protect U.S. consumers, ranging from an effort to wrest market control away from OPEC, limiting U.S. companies’ energy exports, and easing sanctions on unfriendly oil-producing nations — each of which carries serious potential downsides for American interests.“There are a lot of alternatives and we haven’t made up our minds yet,” Biden told reporters Thursday.For now, the White House is pledging to work with Congress on a bill to allow the U.S. to sue oil cartels for antitrust violations, a step that lawmakers from both sides of the aisle have threatened before but which the Biden administration has been wary of taking.“This is really the first time we have a president who’s supporting it with a Congress that looks likely to support it as well,” said Kevin Book, managing director of ClearView Energy Partners, a research firm. “What was previously unthinkable is no longer unthinkable.”Senate Democrats are weighing action, too. “We are looking at all the legislative tools to best deal with this appalling and deeply cynical action,” Majority Leader Chuck Schumer said in a statement.The rest of the menu of options under discussion range from the imperfect to the disastrous, market analysts tell POLITICO.Their consensus opinion is that policy measures that would actually bring down gasoline prices will require long-term planning, so the best thing lawmakers could do for the energy markets now is to shut up.

USA Denies Report of Plans to Change Venezuela Sanctions Policy -The Biden administration has no plans to change its sanctions policy toward Venezuela without positive actions from President Nicolas Maduro’s government, the National Security Council said after a report that the US would scale down restrictions affecting Chevron Corp. “Our sanctions policy on Venezuela remains unchanged,” NSC spokeswoman Adrienne Watson said in a statement. “We will continue to implement and enforce our Venezuela sanctions. As we have previously made clear, we will review our sanctions policies in response to constructive steps by the Maduro regime to restore democracy in Venezuela and alleviate the suffering of the Venezuelan people.” Chevron said in a statement that “we continue to conduct our businesses in compliance with the current sanctions framework provided by the US Office of Foreign Assets Control.” The comment came after the Wall Street Journal reported that the US was preparing to allow Chevron to resume pumping oil, smoothing the road for a possible reopening of US and European markets to oil exports from Venezuela. The newspaper cited people familiar with the proposal who it didn’t identify. Venezuela has been under economic and oil sanctions since 2019, after the US and dozens of other countries recognized opposition leader Juan Guaido as the country’s legitimate president. Over the weekend, the Biden administration said Venezuela had freed seven Americans, including oil executives and a former Marine, in a swap involving two members of Maduro’s family imprisoned in the US.

As gas prices rise, Biden administration puts oil companies on notice - As prices at the pump trend up nationwide, the Biden administration is scrambling to shelter Democrats from consumer frustration, laying blame on oil company opportunism and threatening new restrictions on the industry.In public comments and private meetings with oil executives, administration officials are warning that the White House could take extraordinary — and potentially economically risky — steps to bring costs down if the companies do not move more aggressively to shield Americans from price spikes.The renewed attention on the cost of fuel comes as gas prices have jumped in recent days by as much as 60 cents per gallon in some regions, posing a political challenge for Democrats. A decline in prices that stretched for 99 days helped to improve their prospects in next month’s midterm elections, during which control of Congress and several key governorships is at stake.But now prices are rebounding, and the tools the administration has for curbing them are limited. The most potent policy option the White House has is emergency authority to limit exports to other nations, a strategy that would be targeted at boosting inventories at home but which could destabilize global markets and exacerbate the energy crunch. It would also be tricky to balance with the president’s commitment to keep as much oil flowing to Europe as possible. “After this president has taken an unusually active role in telling American drivers his administration is going to try to keep prices low, the fact that they are rising creates political jeopardy.”The price hikes are substantial in several pivotal states. In California, where there are at least eight hotly contested House seats, the average price of gas is $6.38 per gallon, an increase of 62 cents in the past week. During the same period, it jumped nearly 40 cents in the swing state of Arizona, where polling averages reflect an extremely tight race for governor.Nevada, Washington, Oregon and Alaska have all seen prices jump by at least 40 cents per gallon in the past week. Throughout the swing states of the Midwest, the increase has been less severe, but large enough for drivers to feel the pain.

Opinion | Sure, Biden is concerned about high gas prices — until the election - The Washington Post - So, let’s get this straight: When the price of gasoline was going up this spring, President Biden blamed Vladimir Putin. Then, when prices went down this summer, Biden launched an all-out campaign to take credit. Now, gas prices are going up again, and the White House is — you guessed it — blaming Putin. Sorry, but before the war in Ukraine, Biden presided over the largest year-over-year gas price rise in at least 30 years. He needs to take responsibility for his role in driving up prices. Case in point: After channeling his inner Jimmy Carter, and beggingOPEC Plus to increase oil production, Biden suffered a diplomatic humiliation this week when the oil cartel announced it was cutting production by 2 million barrels a day — a move that the White House, in draft talking points obtained by CNN, called a “total disaster.” Why was Biden rebuffed? Maybe because he promised that on taking office, he would make Saudi Arabia a global “pariah” and stop arms shipment to Riyadh — only to abandon those promises and fist-bump the Saudi crown prince while groveling for increased production. Or maybe because he spent his first two years in office distancing the United States from its Persian Gulf allies while desperately courting our enemy, Iran, in the hopes of striking a nuclear deal that would have given Tehran hundreds of billions of dollars to fund terrorism throughout the region and threaten the security of Gulf states. Whatever the reason, Biden’s oil production diplomacy failed miserably — and he owns that defeat. Worse still, the Wall Street Journal reports, Biden is preparing to lift sanctions on Venezuela’s narco-socialist dictatorship to allow Chevron to resume pumping oil there, paving the way for a potential reopening of oil exports from Venezuela. So much for his promise to lead the forces of freedom in the “battle between democracy and autocracies.”

Disasters divert Biden's fall agenda - This isn’t how President Joe Biden planned to spend his fall. Riding high off the passage of major domestic policy achievements, he just celebrated the passage of major climate and health care legislation with a huge party on the White House South Lawn featuring musician James Taylor. Biden gleefully test-drove a Corvette at the Detroit Auto Show and was schmoozing with donors on the fundraising circuit to try to keep his party in power on Capitol Hill. Then Fiona and Ian charged in. Within two weeks, the ferocious hurricanes had ravaged Puerto Rico and southwestern Florida, taking lives, walloping the power grid, and plowing through homes and businesses. The storms also knocked Biden’s fall agenda off course. The government’s sudden pivot toward hurricane response changed the president’s schedule and his tone heading into the final sprint before the midterm elections. The back-to-back hurricanes, ensuing federal recovery and media frenzy quickly turned Biden into a disaster president. “No one would want this, and it obviously wasn’t planned or desired,” said Celinda Lake, a Democratic strategist who was a pollster for Biden’s 2020 campaign. But, she added, “Biden always excels when you need a leader who is empathetic to people’s situation and rises above partisan politics.” Biden himself has predicted that rebuilding could take years. But in the short term, Democrats think Biden has an opportunity to showcase his statesmanship while also easing tensions with one of his chief political opponents, Florida Republican Gov. Ron DeSantis. Worst case for the president: The recovery goes badly, plaguing his administration and hurting his own reelection prospects in 2024. “There are no winners when there are lives lost and when people lose homes and business and coastlines are destroyed,” said Democratic strategist Joel Payne. But he gave Biden high marks for his response so far. In the wake of natural disasters, people want their leaders to exhibit qualities like empathy and organization, Payne said. “President Biden certainly feels a comfort in playing the role that a commander in chief needs to play. He understands what the moment calls for.”

Biden shifts his climate message to adaptation after storms - E&E News -- President Joe Biden has portrayed himself this week as a leader on climate adaptation while visiting Puerto Rico and Florida in the wake of deadly hurricanes that crushed homes and inundated neighborhoods. But his tours have also raised questions about how his administration, and Congress, is preparing the country for the sharpening impacts of hurricanes, wildfires and flooding that cause roughly $100 billion in damages every year. In Fort Myers, Fla., on Wednesday, Biden noted that newer homes that were built using stronger standards did much better than older structures. As the recovery effort unfolds, entire communities should be rebuilt with an aim to prevent damage from higher seas and more destructive storms, he said. Advertisement “The key here is building back better and stronger to withstand the next storm,” Biden said. “We can’t build back to what it was before. You got to build back better because we know more is coming.” His comments come as climate scientists are warning that human-caused global warming is making such disasters worse. Researchers have found that warmer sea surface temperatures can supercharge hurricanes, that increased moisture in the atmosphere will dump more rainfall and that drier conditions will fuel bigger wildfires. Hundreds of Americans have died in recent years as a result of such conditions. Biden has overseen far-reaching efforts to reduce greenhouse gas emissions by expanding clean energy and increasing the use of electric vehicles. But few leaders in Washington have adequately prepared for the real costs of climate change by supporting climate adaptation, said Rep. Sean Casten (D-Ill.) in an interview. He noted that the Inflation Reduction Act was the biggest climate package to ever pass through Congress, and yet its investments of $369 billion is only 40 percent of what’s necessary to mitigate greenhouse gas emissions. That means each year, adaptation gets harder and more expensive, he said. “Forget about whether the Democrats or the Republicans or the Whigs or the Tories are doing enough about adaptation,” Casten said. “The scope of the problem is growing exponentially every year and any solution designed for last year by definition is inadequate.”

Fla. could get billions from legislation DeSantis opposed - He was new to Congress and eager to establish himself as a budget hawk. Ron DeSantis saw the perfect opportunity on Jan. 4, 2013.One day after taking office, the Republican congressman voted against a bill to help homeowners recover from Superstorm Sandy, calling the measure fiscally irresponsible.The legislation passed anyway — and it now stands to help Florida and DeSantis, the state’s governor, by providing billions of dollars to help rebuild homes that were damaged last week by Hurricane Ian.But the criticism that has been directed at DeSantis by Democrats — who accuse him of hypocrisy for seeking federal help after Ian — misses the point of his 2013 vote.It wasn’t actually about disaster aid. It was on flood insurance. If DeSantis had prevailed nine years ago, Florida residents today might be unable to collect flood insurance claims worth several billion dollars.

Adams drifts to a political island as New York’s migrant crisis grows - — Days after winning his mayoral primary last year, Eric Adams declared ambitions to play a national role in the Democratic Party. Now, 10 months into his first year as mayor, he’s been thrust into the position he coveted — but not for the reason he’d hoped.Adams’ city is buckling under pressure to accommodate tens of thousands of Latin American asylum-seekers — many bused here by Republican Texas Gov. Greg Abbott, who is making a public show of sending border-crossers to New York, Washington and Chicago.It’s also isolated the moderate Democrat mayor, whose political allies are piling on while he’s at war with the GOP and liberal critics protesting his every move.The situation, which Adams has repeatedly labeled a “humanitarian crisis,” is the most sustained problem he has faced to date and shows no signs of abating — the result of national and international policies that he cannot control but must contend with.‘We need help’: Eric Adams declares state of emergency amid migrant arrivals “This is a crisis that’s unfolding and it could undermine our cities in a real way,” Adams said in a phone interview Thursday.And he’s seized on the challenge to shame the partisan margins of American politics while facing an operational emergency that is testing how he executes his “get stuff done” ethos. Adams complained this week, “The far right is doing the wrong thing. The far left is doing nothing.”In the follow-up interview, he extended his criticism to those lobbing attacks without offering space in their own districts.He also blamed the White House, from whom he has requested aid and, so far, received none. “I think they have been not understanding the full depth of this crisis,” Adams said, in a more pointed critique than he often delivers on the Biden administration’s handling of the situation. “This is a national problem that should not fall on [the city of] Washington, New York and Chicago. This is a national problem and it must have a national solution. And right now I don’t feel we received the level of immediate response that we need.”

The Rooney Rule failed. Then it spread. - In 2020, as protests raged after the murder of George Floyd by a Minneapolis police officer, corporate leaders scrambled to show that they, too, were on the side of racial equity. JPMorgan Chase CEO Jamie Dimon took a kneewith bank employees. Hundreds of brands posted black squares on Instagram.And companies across the country flocked to a diversity salve known to be handy during a public relations crisis: the Rooney Rule.This football season, The Washington Post is examining the NFL’s decades-long failure to equitably promote Black coaches to top jobs, despite the multibillion-dollar league being fueled by Black players.The rule, named for a revered Pittsburgh Steelers owner, had been adopted by the NFL 17 years earlier in response to an outcry — and a legal threat — over the glaring dearth of Black head coaches in a league where nearly 70 percent of the players were Black.The rule required teams to interview at least one minority candidate for every head coach opening. Billed as brilliant in its simplicity, it quickly became popular with corporate America, a trend that culminated shortly after Floyd’s death.But even as the Rooney Rule was endorsed by some of the most powerful entities in the country, from President Barack Obama to the nation’s biggest banks to the New York Police Department, the NFL appeared to be coming to terms with an uncomfortable reality.The Rooney Rule had failed.After apparent success initially, including a Super Bowl matching two Black head coaches and a 2011 season with seven Black men at the helm, racial equity on football sidelines has plunged, with once-encouraging news about the NFL’s diversity revival giving way to a bleakly repetitive news cycle: Black coaches are fired, qualified Black candidates are passed over, and teams are accused of gaming the interview requirement with no fear of consequences. NFL officials have repeatedly distanced themselves from those failures by pointing out that the league has no control over its teams’ hiring decisions. That shifts the onus to team owners, the predominantly White and male financial titans who tend to exert fierce control over their corporate fiefdoms.But an investigation by The Washington Post of the rule’s origins and spread — including interviews with insiders to its history and corporate diversity experts, as well as a review of previously unreported documents— suggests the league for years did too little to exert the influence it did have over its 32 teams. Instead, it clung to a policy that repeatedly proved fallible.A similar pattern played out as the policy spread to corporate America. Long promoted as a model policy by the NFL, Wall Street’s interest in the rule skyrocketed after Floyd’s death, The Post found in an analysis of corporate filings. In hundreds of mentions of the policy since 2020, it is touted by companies ranging from Regions Bank to Lyft, which said its “Rooney Rule 2.0” accompanied “difficult yet necessary conversations to align and inspire our entire organization.” But The Post found the Rooney Rule’s broader adoption over the past decade-plus, by entities ranging from Wells Fargo to the state of Oregon to the legal community, has been plagued by familiar flaws: allegations of sham interviews, a lack of enforcement and illusory results. Once considered cutting-edge, the rule now runs counter to more recent scholarship suggesting that corporate diversity is achieved through incentives and culture-building rather than mandates.

Social Security system still failing disabled and poor Americans - Six months after reopening its field offices to the public, the Social Security Administration is struggling to restore basic customer services and is assisting millions fewer of the poor, elderly and disabled people who sought its help before the coronavirus pandemic, federal data shows. Even as prolonged office closures caused applications for disability benefits to plunge, the sluggish response now of the agency meant to assist the country’s most at-risk citizens has led to delays in processing claims for those who manage to file them, and exhausting waits outside government offices around the country for those trying to. Nearly 20 percent of field offices have had 40 or more customers in line on multiple days when the doors opened, according to data Social Security recently provided to Congress. The long queues have raised tempers and safety concerns. One person fainted in line outside the office in Laredo, Tex. Others in Florida slept outside overnight to secure a spot for the next morning. Social Security’s remedy is to push customers to get help by phone or online, but fast service using those options, for many, is proving just as elusive. From April, when the 1,230 local offices began to reopen, through mid-August, the number of people helped by Social Security staff members had dropped by 46 percent from the 43 million visitors served annually before the coronavirus struck, according to data Social Security officials shared with national disability advocates. Visits have edged up in recent weeks but remain well below pre-pandemic levels, according to internal agency data and congressional offices. Those seeking disability benefits are far more dependent on in-person visits than retirees and others needing service from Social Security, as they often lack phones or access to the internet and must turn over original birth certificates, driver’s licenses and other documents. The extreme measures required from them have deepened questions about the capacity of a major federal department that serves as the last lifeline for many Americans. Acknowledging “delays in service and long waits for disability decisions,” Social Security officials took the unusual step last month of pleading with Congress for an extra $800 million as lawmakers negotiated a temporary budget for the new fiscal year. Congress last week approved about $90 million in the temporary spending package that expires Dec. 16. Social Security officials have blamed the stumbles on a staffing crisis and inadequate budgets. But there are many causes, according to lawmakers, current and former Social Security officials and advocates for the disabled: the power of the agency’s labor unions, a hesitance to make temporary pandemic workarounds permanent and an absence of permanent leadership. “They have always been slow,” said Jeff Larsen, a Houston-based attorney with Lone Star Legal Aid who specializes in the disability system. “But it’s much slower now. There’s more friction in the system.”

Inside the GOP's heated, leaky race to lead a powerful House panel - Vern Buchanan‘s GOP colleagues have an anonymous warning for his campaign to lead a powerful House panel: It’s not locked up yet. While early reports indicated the Floridian had the votes for the top GOP spot on the Ways and Means Committee shored up, there are signs Rep. Jason Smith (R-Mo.) has gained ground. He’s aggressively working members of the House Steering Committee — who will decide who gets the plum position — and touting higher fundraising numbers. POLITICO spoke to more than two dozen of the current members of the roughly 30-member committee about who they support, granting anonymity so lawmakers could speak frankly. That vote tally shows the three-way race has no guaranteed winner; one Steering member said the dynamics have “shifted significantly.” Though Rep. Adrian Smith (R-Neb.), who is known as more of a policy wonk, trails the other two. “We knew early on whenever we got in the race that no one had it locked up,” Jason Smith said in an interview. “And the reporting early on said that it was a lock for Vern and we knew that it wasn’t, and I feel comfortable where we’re at.” Among the members who were willing to answer, the results suggest Buchanan and Jason Smith will be going head-to-head, with three main groups in the mix: Buchanan supporters, anti-Buchanan voters and those who are still undecided or declining to answer. The voting process itself could easily work against Buchanan. Members need a simple majority to win, but if no candidate receives a majority in a three-way race, then the lowest person drops out and the panel goes to the second ballot. A handful of Steering members said they are supporting “one of the Smiths,” while others said they were backing Adrian Smith but would shift support to Jason Smith if it went to a second ballot.

Buckle up, Congress: A ‘very lame’ lame duck is coming after the election - Tens of billions in hurricane relief for Florida are landing on Congress’ to-do list for a post-election lame-duck session that already looked grueling. It may take weeks for Florida officials and the Biden administration to come up with a federal aid estimate to rebuild following Hurricane Ian. Ultimately, both parties expect a whopping price tag that loads further labor on lawmakers returning to Washington after the midterms. Thanks to hurricane relief, government spending and more, this year’s lame duck is shaping up as Congress’ busiest and most intense since the bipartisan “fiscal cliff” deal inked 10 years ago after a session that stretched through the caroling season. Senate Minority Whip John Thune (R-S.D.) drolly predicted days filled with “what everyone wanted to do during the Christmas holidays: watch C-SPAN.” There’s the funding deadline on Dec. 16 and the annual must-pass defense bill, which will suck up lots of oxygen. Congress delayed several other tough issues, from same-sex marriage to energy permitting to preventing another Jan. 6 riot, into the post-election session. And hanging over it all is the closely contested midterms. If Democrats lose the Senate, they’ll face enormous pressure to confirm as many judicial nominees as possible to lifetime appointments. If House Democrats improbably hold on to the majority, there may be less of a crush of legislation — but plenty of drama around their caucus’s leadership contest. A complete Republican takeover could leave the GOP eager to clear the decks ahead of 2023. Republicans are also starting to sweat the debt limit, which could be nearly a year away. And some Democrats want to maximize the returns from their time in power, regardless of the Election Day result. “The lame duck is going to be very lame,” said Rep. Emanuel Cleaver (D-Mo.), who wants Democrats to push an expansive agenda while they still control both chambers of Congress. He predicted that pressure would be ”extremely strong to get every piece of legislation that we feel is important to our constituency and to the country on the floor.”

President Biden pardons thousands for 'simple possession' of marijuana - President Joe Biden is pardoning thousands of Americans convicted of “simple possession” of marijuana under federal law, as his administration takes a dramatic step toward decriminalizing the drug and addressing charging practices that disproportionately impact people of color. Mr. Biden’s move also covers thousands convicted of the crime in the District of Columbia. He is also calling on governors to issue similar pardons for those convicted of state marijuana offenses, which reflect the vast majority of marijuana possession cases. Mr. Biden, in a statement, said the move reflects his position that “no one should be in jail just for using or possessing marijuana.” “Too many lives have been upended because of our failed approach to marijuana,” he added. “It’s time that we right these wrongs.” The move also fulfills one of the top priorities of the Democratic nominee in one of their party’s most critical Senate races, as Pennsylvania Lt. Gov. John Fetterman has repeatedly pressed Biden to take the step, including last month when they met in Pittsburgh. Mr. Fetterman, in a statement, took credit for elevating the issue on Mr. Biden’s agenda and praised the decision, calling it “a massive step towards justice.” “This action from President Biden is exactly what this work should be about: improving people’s lives. I commend the president for taking this significant, necessary, and just step to right a wrong and better the lives of millions of Americans,” he said. According to the White House, no one is currently in federal prison solely for “simple possession” of the drug, but the pardon could help thousands overcome obstacles to renting a home or finding a job. “There are thousands of people who have prior Federal convictions for marijuana possession, who may be denied employment, housing, or educational opportunities as a result,” he said. “My action will help relieve the collateral consequences arising from these convictions.” The pardon does not cover convictions for possession of other drugs, or for charges relating to producing or possessing marijuana with an intent to distribute. Mr. Biden is also not pardoning non-citizens who were in the U.S. without legal status at the time of their arrest. The announcement marks Mr. Biden’s reckoning with the impact of 1994 crime legislation, which he supported, that increased arrest and incarceration rates for drug crimes, particularly for Black and Latino people. The Department of Justice is working to devise a process for those covered by Mr. Biden’s pardon to receive a certificate of pardon, which they can show to potential employers and others as needed. “The Justice Department will expeditiously administer the President’s proclamation, which pardons individuals who engaged in simple possession of marijuana, restoring political, civil, and other rights to those convicted of that offense,” the department said in a statement. “In coming days, the Office of the Pardon Attorney will begin implementing a process to provide impacted individuals with certificates of pardon.” Mr. Biden is also directing the secretary of Health and Human Services and the U.S. attorney general to review how marijuana is scheduled under federal law. Rescheduling the drug would reduce or potentially eliminate criminal penalties for possession. Marijuana is currently classified as a Schedule I drug, alongside heroin and LSD, but ahead of fentanyl and methamphetamine. The White House did not set a timeline for the review.

BankThink: The absurdist wait for the SAFE Act drags on | American Banker - When it comes to federal cannabis legislation, it seems that the Secure and Fair Enforcement (SAFE) Banking Act could be the cannabis industry's own version of "Waiting for Godot." For the unfamiliar, the absurdist play has become a phrase used in many ways over the years, be it in personal relationships, business dealings, even government action. No matter the situation or experience, two constants remain: Godot never shows up, and the main characters continue to wait for someone that they're not even sure exists. While we all have a perception and hope of what the SAFE Banking Act will achieve, no one truly knows what to expect and, more maddening, when to expect it. Consensus holds that SAFE will pass someday — so, we stand here and wait for it to be passed into law by Senate Democrats and Republicans. This goes for other pieces of legislation as well, such as the Cannabis Administration and Opportunity Act, the Strengthening the Tenth Amendment Through Entrusting States Act, or the Capital Lending and Investment for Marijuana Businesses (CLIMB) Act. Over 40 states and territories have made cannabis legal already. This is a burgeoning market that is showing no signs of slowing down, and an increasing number of financial institutions are building programs to take advantage of the significant revenue opportunities presented by banking cannabis-related businesses, or CRBs. A large number of financial institutions have been reluctant to work with CRBs. However, a new mindset is increasingly taking hold: The rewards associated with banking a state-licensed CRB outweigh the risks inherent to banking an industry that is currently federally prohibited. The silver bullet that these institutions continue to wait for seems to be the passing of the SAFE Act. The current misconception is that passing federal legislation like SAFE would allow established banks and credit unions to work with CRBs without the fear of being penalized. In return, new and legacy businesses could enter the legal cannabis market with the assurance of being financially protected and secure. In reality, SAFE doesn't eliminate the need for compliance, but in fact will make the current rules more strict. The key difference is that they will be better defined. Lawmakers recently reviewed the legislation, which was first introduced by Rep. Ed Perlmutter D-Colo., during a Senate Banking Committee hearing focused on insurance issues. In June, the Senate rejected, for the sixth time, the bipartisan marijuana banking legislation.

Justices shield spouses’ work from potential conflict of interest disclosures - A year after Amy Coney Barrett joined the Supreme Court, the boutique Indiana firm SouthBank Legal opened its first-ever Washington office in Penn Quarter, a move the firm hailed in a 2021 press release as an “important milestone.”The head of the office, Jesse M. Barrett, is the justice’s husband, whose work is described by the firm as “white-collar criminal defense, internal investigations, and complex commercial litigation.”SouthBank Legal — which lists fewer than 20 lawyers — has boasted clients across “virtually every industry”: automobile manufacturers, global banks, media giants, among others. They have included “over 25 Fortune 500 companies and over 15 in the Fortune 100,” according to the firm’s website.But if anyone wants to find out whether Jesse Barrett’s clients have a direct interest in cases being decided by his wife, they’re out of luck. In the Supreme Court’s notoriously porous ethical disclosure system, Barrett not only withholds her husband’s clients, but redacted the name of SouthBank Legal itself in her most recent disclosure.Over the past year, Virginia Thomas, known as Ginni, has gotten significant attention for operating a consulting business that reportedly includes conservative activist groups with interest in Supreme Court decisions as clients. Her husband, Justice Clarence Thomas, has chosen not to reveal any of his wife’s clients, let alone how much they contributed to the Thomas family coffers, dating back to when her consulting business was founded. But a POLITICO investigation shows that potential conflicts involving justices’ spouses extend beyond the Thomases. Chief Justice John Roberts’ wife, Jane Roberts, has gotten far less attention. But she is a legal head-hunter at the firm Macrae which represents high-powered attorneys in their efforts to secure positions in wealthy firms, typically for a percentage of the first-year salary she secures for her clients. A single placement of a superstar lawyer can yield $500,000 or more for the firm.Mark Jungers, a former managing partner at Major, Lindsey & Africa, the firm that employed Jane Roberts as a legal recruiter before she moved to Macrae, told POLITICO the firm hired her hoping it would benefit from her being the chief justice’s wife, in part, because “her network is his network and vice versa.”Roberts lists his wife’s company on his ethics form, but not which lawyers and law firms hire her as a recruiter — even though her clients include firms that have done Supreme Court work, according to multiple people with knowledge of the arrangements with those firms

Republicans rally behind Herschel Walker after a report that he paid for an abortion in 2009. -National Republicans quickly began to close ranks on Tuesday behind Herschel Walker, the party’s embattled nominee for Senate in Georgia, a day after a report that Mr. Walker, an outspoken supporter of an abortion ban with no exceptions, had paid for a girlfriend’s abortion in 2009.Mr. Walker, a former football star, has denied the report, published in The Daily Beast on Monday, calling it “a flat-out lie.” The site did not identify the woman but said she had produced documentation of Mr. Walker’s role, including a 2009 receipt from the abortion clinic and a deposit receipt with an image of a $700 check said to be from Mr. Walker, dated days later, that she said had covered the cost of the procedure. It also published a “get well” card that the woman said had been signed by Mr. Walker.The Georgia contest is a linchpin to the Republican Party’s chances to take control of the Senate in 2022, and national party leaders signaled Tuesday that they planned to stick with Mr. Walker. At the same time, his son, Christian Walker, who has cultivated a large following on TikTok, Instagram and Twitter, posted videos lashing his father as a liar who had committed “atrocities” against him and his mother.

Walker’s Christian fans unfazed by abortion revelations –— Pastor Anthony George didn’t set out to be a defender of Herschel Walker.But as the prominent Baptist minister welcomed Walker into his church this week for a scheduled prayer event with faith leaders, George found himself making the Christian case for supporting a candidate whose Senate campaign has been marred by personal scandal.What matters most, he said, is what Walker is promising to do once he’s elected.“I think that any Christian who engages in the political process — and especially someone who’s a pastor — you’re always going to be confronted with someone that is either less than ideal, or something that flat-out contradicts what you believe in,” George said in an interview.Since revelations surfaced that the former football star and self-described “pro-life” Republican had allegedly paid for an ex-girlfriend’s abortion in 2009, evangelical Christian leaders in Georgia have banded together to support Walker, as has the Republican Party in general. Walker has staked out a hard-line, “no exceptions” position on abortion.

Opinion | The 2022 House Republican midterm candidates give 'crazy' new meaning - The Washington Post - Much of the public focus in the midterm elections has been on the, er, exotic nature of the Republican nominees in Senate and gubernatorial races, and understandably so. But GOP nominees for the House are no less erratic — just less well known. There’s the woman from North Carolina who was accused of hitting one husband with an alarm clock, trying to hit another with a car (and alsomenacing him with a frying pan) and punching her daughter. She denies that, though she also invoked a conspiracy belief that alien lizards control the government. There’s the man from Ohio who lied about his military record, lavishly promoted QAnon themes, acknowledged bypassing police barriers at the Capitol on Jan. 6, 2021, and with 120 gallons of paint turned his entire lawn into a Trump banner. There’s the man from Michigan who claimed that Hillary Clinton’s campaign chairman participated in a satanic ritual, who once disparaged women’s suffrage, and who, though Black, raised concern about Democrats “eroding the White population.” Then there are: the Texas woman accused by her estranged husband of cruelty toward his teenage daughter; the Colorado woman who backed an effort to secede from her state; the Virginia woman who speculatedthat rape victims wouldn’t get pregnant; and the Wisconsin man who used campaign funds from his failed 2020 race to come to Washington on Jan. 6, 2021, where he apparently breached Capitol barricades. What they all have in common is that they’re in competitive races, which means they could well be part of a Republican House majority in January. And that’s on top of a larger group of GOP nominees in deep-red congressional districts who are a motley assortment of election deniers, climate-change deniers, QAnon enthusiasts and Jan. 6 participants who propose to abolish the FBI and ban abortion with no exceptions, among other things. Maybe this is why Kevin McCarthy, the man who as House speaker would have the task of leading this rogues’ gallery, calls his agenda a “Commitment to America.” Many members of his new majority might be good candidates for commitment. J.R. Majewski, the Trump-backed lawn painter from Ohio, has a different agenda: He wants to “abolish all unconstitutional three letter agencies,” including the CIA. He has said he’s willing to fight a civil war, and he made a campaign video in which he carried a rifle and said he would “do whatever it takes” to “bring this country back to its former glory.” In North Carolina, Sandy Smith is folding into her plans for the country the domestic-abuse allegations against her: “I never ran over anyone with a car and I never hit anyone in the head with a frying pan. … I am bringing a frying pan to DC, though,” she tweeted in May. Smith also wants “executions” of those who, she falsely claims, stole the 2020 election from Donald Trump.

Oath Keepers trial: FBI agent to testify in Day 2 of Jan. 6 case - An FBI agent who began investigating the Oath Keepers days after the Jan. 6 Capitol riot continued testifying Tuesday morning as five associated with the far-right paramilitary group stand accused of conspiring to keep President Donald Trump in office by force.Michael Palian said he had not heard of the Oath Keepers before Jan. 6, 2021, and that he specialized in health-care fraud, not domestic terrorism. But after shepherding U.S. senators to safety that evening, he began investigating the people responsible. He quickly saw videos of people in camouflage gear entering the building together. It appeared “coordinated,” Palian testified. Their outfits bore the label “Oath Keepers.” Nearly two years later, Oath Keepers founder Stewart Rhodes is on trial, accused of seditious conspiracy and other felony charges alongside Florida auto dealer Kelly Meggs, Florida welder Kenneth Harrelson, Ohio bar owner Jessica Watkins and retired Navy intelligence officer Thomas Caldwell of Virginia. “They said out loud and in writing what they intended to do,” prosecutor Jeffrey Nestler said in his opening statement in U.S. District Court in Washington. “In some ways, they planned their conspiracy in plain sight.” As part of his testimony, Palian is going through hundreds of messages sent by Oath Keepers associates between the election and the inauguration discussing forceful resistance to a Biden presidency. Defense attorneys told jurors that those messages were taken out of context. “You may not like some of the things you see and hear ... but they did nothing illegal that day,” Phillip Linder, one of Rhodes’s attorneys, said in his opening statement. David Fischer, who represents Caldwell, echoed him, telling jurors, “They selectively edit and they take the most outrageous statements that politically attuned and politically active people make.” He suggested his client said nothing worse than Rep. Alexandria Ocasio-Cortez (D-N.Y.) has, one of several defense assertions Judge Amit P. Mehta asked the jury to ignore. Only Jonathan Crisp, representing Watkins, acknowledged any of the defendants did anything wrong. “I’m not going to say that what she did in going into that building was okay,” Crisp said. But, he said, “she was a rioter like everybody else” and guilty only of the felony “civil disorder” — not of involvement in a plan to overthrow the government. “They are not the leaders of what happened that day,” he said, noting that the Oath Keepers got to the Capitol half an hour after others broke into the building. “They joined it in some respects. But they didn’t breach the Capitol.”

Proud Boys leader pleads guilty to seditious conspiracy over Jan. 6 actions - Jeremy Bertino, a North Carolina leader of the Proud Boys, pleaded guilty to seditious conspiracy on Thursday, becoming the first member of the group to admit to the charge stemming from the Jan. 6 attack on the Capitol.Bertino appeared before U.S. District Court Judge Tim Kelly to enter his guilty plea, which also included a count of unlawful possession of a firearm.Bertino, who previously testified to the Jan. 6 select committee, was involved in key conversations and chats with other members of the group, including national chair Enrique Tarrio and other leaders facing seditious conspiracy charges in the weeks before Jan. 6.Tarrio is set to go on trial in December, along with Proud Boys Ethan Nordean, Joe Biggs, Zachary Rehl and Dominic Pezzola, who was the first member of the Jan. 6 mob to breach the Capitol when he shattered a Senate-wing window with a police riot shield.Prosecutors say Tarrio and his allies developed a plan to besiege the Capitol, relying on — and in fact organizing and spurring on — members of the mob to help break through police lines and get inside the Capitol. It was part of an effort that prosecutors say was intended to disrupt the peaceful transfer of presidential power.Kelly accepted Bertino’s plea after asking Bertino a series of standard questions to ensure, under oath, that Bertino entered it voluntarily and without being threatened or coerced.The seditious conspiracy charges against the Proud Boys leaders are the gravest leveled by the Justice Department against any of the more than 850 defendants charged in connection with the Jan. 6 attack on the Capitol.Bertino was briefly featured during video testimony aired by the Jan. 6 select committee during its first public hearing in June. He described a surge in Proud Boys membership after then-President Donald Trump urged the group to “stand back and stand by” during a debate against Joe Biden.“Would you say that Proud Boys numbers increased after the stand back, stand by comment?” an investigator asked. “Exponentially. I’d say tripled probably,” Bertino replied.Several leaders of the far-right Oath Keepers, including founder Stewart Rhodes, are currently on trial for seditious conspiracy as well, just down the hall from where Bertino entered his plea. Prosecutors say they spent the weeks after Election Day fomenting an “armed rebellion” against the government and seizing on the opportunity created by the Jan. 6 mob to disrupt the transfer of power.In documents accompanying his plea, Bertino joined the Proud Boys in 2018 and admitted to attending Washington, D.C., rallies with the group after the 2020 election. He was one of a handful who was stabbed during civil unrest at a Dec. 12, 2020, event — which he describes as the reason he wasn’t present on Jan. 6.Bertino was on an encrypted chat with other Proud Boys leaders, including Tarrio, in the weeks before Jan. 6, and he says in his plea documents that he believes the group’s plan “was to stop the certification of the Electoral College Vote” on Jan. 6, even if it involved “using force against police and others.”

Trump Asks Supreme Court to Intervene in Review of Mar-a-Lago Records - — Former President Donald J. Trump asked the Supreme Court on Tuesday to intervene in the litigation over documents marked as classified that the F.B.I. removed from his Florida estate, saying that an appeals court had lacked jurisdiction to rule on the matter. Although the Supreme Court is dominated by six conservative justices, three of them appointed by Mr. Trump, it has rejected earlier efforts to block the disclosure of information about him, and legal experts said Mr. Trump’s new emergency application faced significant challenges. The new filing was largely technical, saying that the U.S. Court of Appeals for the 11th Circuit, in Atlanta, had not been authorized to stay aspects of a trial judge’s order appointing a special master in the case. “The 11th Circuit lacked jurisdiction to review the special master order, which authorized the review of all materials seized from President Trump’s residence, including documents bearing classification markings,” the application said. In September, a three-judge panel for the 11th Circuit, in Atlanta, unanimously granted a request from the Justice Department to block one aspect of a ruling from Judge Aileen M. Cannon, whom Mr. Trump had appointed to the Federal District Court for the Southern District of Florida. Judge Cannon had appointed a special master to review the more than 11,000 files seized in August from the former president’s residence, Mar-a-Lago, and forbade the Justice Department from using them as part of a criminal inquiry in the meantime.The Justice Department’s request to the appeals court was limited, asking only that the 100 or so documents with classified markings be excluded from the special master’s assessment and that its review of them be allowed to continue.In a detailed and forceful 29-page decision, the appeals court agreed, staying Judge Cannon’s order “to the extent it enjoins the government’s use of the classified documents and requires the government to submit the classified documents to the special master for review.” The decision, which was unsigned, was joined by Judges Britt Grant and Andrew L. Brasher, appointed by Mr. Trump, and Judge Robin S. Rosenbaum, appointed by President Barack Obama.

Tillerson testifies he wasn't aware of indicted Trump ally's foreign policy advice - — Former President Donald Trump’s first secretary of State took the stand Monday in the foreign agent trial of Trump’s longtime friend, testifying that he was unaware that real estate investor Tom Barrack was relaying nonpublic information about the Trump administration’s discussions to officials from a foreign government or that he was otherwise involved in Trump’s foreign policy deliberations. Rex Tillerson, who served as the Trump administration’s top diplomat for a little over a year before being fired by tweet, is the first member of Trump’s administration to testify in Barrack’s trial, which began last month in federal court in Brooklyn. Barrack, along with his former aide Matthew Grimes, were charged last year with acting as foreign agents of the United Arab Emirates without notifying the attorney general as prosecutors contend they should have. Barrack is also accused of obstruction of justice and lying to the FBI. Both men have pleaded not guilty. Defense attorneys for Barrack have sought to argue that officials within the U.S. government, and potentially the president himself, were aware that their client was backchanneling with the Emiratis, and during the trial they have asserted that Barrack was under the direction or control of no one but himself. But Tillerson, who was called as a witness by federal prosecutors, testified that he was unaware that Barrack was privy to what he said were “sensitive” internal discussions, nor did he ever request that Barrack serve as a conduit between Washington and Abu Dhabi. “You don’t want outside parties to have that information and try to use it to their advantage,” Tillerson said of such deliberations. Tillerson has, for the most part, remained out of the public eye since leaving office. His testimony on Monday marked the rare occasion that Tillerson has opened up about his tumultuous time in the Trump administration. Tillerson testified that he took the role of secretary of State because he felt a duty to serve after being bypassed in the draft during the Vietnam War. But his tenure was less idyllic, undercut by the former president’s occasionally publicly contradicting his top diplomat as well as the outsize influence of Trump’s son-in-law turned adviser, Jared Kushner, and Trump’s slapdash governing style — tensions that defense attorneys sought to highlight. .

How Influential Senate Democrats Shut Down a Bid to Call Witnesses Against Trump - Jamie Raskin’s eyes bulged as he skimmed the CNN story on his phone. Huddled with his team in the impeachment managers’ holding room after the Senate trial proceedings had finished on Friday evening, the Maryland Democrat was stunned at the revelations: A moderate House Republican whom Raskin had never met was claiming to have firsthand evidence that Trump had sided with the mob on Jan. 6.It was Feb. 12, 2021, and Congresswoman Jaime Herrera Beutler of Washington had told CNN that Kevin McCarthy had confided he had spoken with the president during the insurrection. McCarthy, she said, told her Trump had flatly refused McCarthy’s plea for help despite knowing how chaotic and horrific the Capitol attack had been. In her notes, she had scribbled down one particularly damning utterance from the former president. “Well, Kevin,” McCarthy had recounted Trump as saying, “I guess these people are more upset about the election than you are.” Raskin, the lead manager in Trump’s second impeachment, gaped at the quote. “How can anybody hear this news and not convict him?!” he exclaimed. Other Republicans had also confirmed hearing about the McCarthy-Trump exchange. One even told CNN that Trump, despite his claims of innocence, was “not a blameless observer. He was rooting for them.”But Herrera Beutler had stuck out her neck furthest of all by describing Trump’s selfish nonchalance that day. “That line right there demonstrates to me that either he didn’t care, which is impeachable, because you cannot allow an attack on your soil, or he wanted it to happen and was OK with it, which makes me so angry,” she told CNN. “We should never stand for that, for any reason, under any party flag.”For weeks, Raskin had engaged in a top secret search for a firsthand witness from the president’s inner circle who could add something valuable to the narrative. His team had even privately sparred with Senate Majority Leader Chuck Schumer’s team about leaving open the possibility of calling for new testimony — a move that ran counter to the New York Democrat’s eagerness for a quick trial so the party could move on to confirming President Joe Biden’s nominees. When none of their leads volunteered to come forward, Raskin had shrugged it off, projecting confidence that witnesses weren’t necessary to win. But Herrera Beutler’s account was making him rethink his decision. How could they refuse to have her explain her bombshell story?In the year-and-a-half-long saga of the two impeachments of Donald Trump, few moments better exemplify the susceptibility of impeachment to the political whims of Congress as the last, frantic 24 hours of Trump’s second trial. The absence of key firsthand accounts had created a major roadblock to conviction in Trump’s first impeachment. House Democrats had chosen to avoid pursuing witnesses to get the politically fraught effort over with as soon as possible, but that had cost them support among several moderate House and Senate Republicans who privately had been open to conviction. In the end, that first failed effort boosted the president’s popularity, emboldening rather than constraining him. But more than 250 interviews with key players in both parties would reveal that the same political calculations made on both sides of the aisle that ended up hobbling the first impeachment would also cripple the second. Republicans who had stuck their necks out to impeach Trump after Jan. 6 would hide in fear of political retaliation rather than help the managers in their effort to convict the former president. And Raskin and his team would learn to their dismay that their own party could prove equally obstructionist when it suited their political purposes.

Donald Trump sues CNN for defamation, seeks $475 million - Former president Donald Trump sued CNN on Monday, alleging defamation and seeking $475 million in punitive damages, a move that escalates his conflict with U.S. news organizations that have critically reported on his career. The 29-page lawsuit, filed in the U.S. District Court for the Southern District of Florida, alleges that CNN took part in a “campaign of dissuasion in the form of libel and slander” that “escalated in recent months” because the network feared Trump would again run for president. The lawsuit took issue with CNN’s use of the words “racist” and “insurrectionist,” as well as associations made between the former president and Adolf Hitler. Trump has a history of being highly litigious against critics in the media, though these legal challenges have had little success. In 2020, his campaign separately sued The Washington Post and the New York Times for libel over opinion pieces that linked the campaign to Russian electoral interference. (The suit against the Times was dismissed, while the legal challenge against The Post is still pending.) Trump’s campaign also filed a libel suit against CNN over an op-ed in 2020, which was later dismissed. Jessica Levinson, a law professor at Loyola Marymount University, who reviewed the latest suit, said she sees “no legal path forward” for Trump. “I see no false statements of fact that were made with actual malice,” she said, adding that an “enormous amount” of the CNN comments described as defamatory in the lawsuit appeared to be opinions. In the suit, Trump’s lawyers cite numerous clips and articles from CNN, including a 2019 interview with the singer Linda Ronstadt, who compared aspects of his presidency to Nazi rule in Germany. The attorneys argued that Ronstadt “is a singer, not a historian,” and called the interview a “pretext to repeat CNN’s message under the guise of real ‘reporting.’ ” As a public figure, Trump needs to meet a higher standard to prove that CNN defamed him. His lawyers must show that CNN made false remarks about Trump that were presented as fact, and that the network had knowledge of the false remarks or a reckless disregard for the truth, a standard that historically has been very difficult to reach, Levinson said.

Supreme Court To Hear Case Challenging Tech Industry's Section 230 Immunity - The Supreme Court on Monday agreed to weigh in on whether tech companies should be allowed immunity over 'problematic' content posted by users. The case at hand alleges that YouTube aided and abetted the killing of an American in coordinated 2015 terrorist attacks carried out by ISIS, which killed 130 people. The family of one of the victims, Nohemi Gonzalez, has argued that YouTube's active role in recommending videos overcomes the liability shield for internet companies enacted by Congress in 1996 as part of the Communications Decency Act.Section 230 of that act absolves online platforms of liability from content posted by users - and has come under fire in recent years, with the right claiming that it allows companies to inappropriately censor conservative views, and the left saying it allows social media companies to spread dangerous right-wing wrongthink, CBS News reports.Gonzalez was a 23-year-old college student studying in France when she was killed while dining at a restaurant during the wave of attacks, which also targeted the Bataclan concert hall.Her family is seeking to sue Google-owned YouTube for allegedly allowing ISIS to spread its message. The lawsuit targets YouTube’s use of algorithms to suggest videos for users based on content they have previously viewed. YouTube’s active role goes beyond the kind of conduct that Congress intended to protect with Section 230, the family’s lawyers allege. They say in court papers that the company “knowingly permitted ISIS to post on YouTube hundreds of radicalizing videos inciting violence” that helped the group recruit supporters, some of whom then conducted terrorist attacks. -NBC News Lawyers for Gonzalez's family say YouTube's video recommendations were key to ISIS's ability to spread their message.

Elon Musk Suggests Buying Twitter at His Original Price - Elon Musk, in a surprise move that adds another twist to a months long drama that has preoccupied Silicon Valley, Wall Street and Washington, proposed a deal with Twitter on Monday evening that could bring to an end an acrimonious legal fight between the billionaire and the social media company. The arrangement would allow Mr. Musk to acquire Twitter at $54.20 per share, the price he agreed to pay for the company in April, two people familiar with the proposal who were not authorized to speak publicly said. Twitter, which sued Mr. Musk in July to force him to go through with the deal after he said he wanted to back out, has yet to accept Mr. Musk's new proposal. His advances could be seen as a negotiating tactic to halt Twitter’s litigation against him. Twitter will likely insist on broader protections from a court in Delaware, where its suit was filed, to ensure that Mr. Musk follows through with his plan, legal experts said. But a deal could allow both sides to avoid a messy public trial, which most likely would have featured testimony from Mr. Musk and senior Twitter executives. Mr. Musk is scheduled to be deposed on Thursday and Friday in Austin, Texas, according to a legal filing. The potential agreement comes after months of disputes that have created existential challenges for Twitter, cratering its share price, demoralizing its employees and spooking the advertisers it relies on for revenue.

House Republicans challenge Fed's ability to create CBDC without Congress — A group of Republicans on the House Financial Services Committee have asked Attorney General Merrick Garland for the Department of Justice's analysis on legislation to create a central bank digital currency. The lawmakers, led by House Financial Services Committee ranking member Patrick McHenry, R-N.C., and Rep. French Hill, R-Ark., along with all the members of the Committee Republicans' Digital Asset Working Group, said that despite President Biden's executive order that asks the Department of Justice to consider whether legislative changes would be necessary for creating a CBDC, the power to coin money is "exclusive" to Congress. "The appropriate place for the discussion on whether authorizing legislation is necessary, is in the legislative branch," the lawmakers said in the letter. Biden's sweeping executive order asked a number of government agencies to study various aspects of digital assets, including whether it would be appropriate to create a CBDC. The Federal Reserve has said that it's studying the issue. The central bank, the lawmakers argue in their letter, cannot issue a CBDC without legislation from Congress. While Republicans are currently in the minority, they are favored to take over leadership of the House after the 2022 midterm elections, and leaders on the House Financial Services Committee could stymie any legislation that would give the Fed authority to coin a CBDC. "Committee Republicans emphasized in our CBDC principles that the Federal Reserve does not have the legal authority to issue a CBDC absent action from Congress," the House Financial Services Committee Republicans said. "Both Federal Reserve Chair Powell and Vice Chair Lael Brainard have also testified on the need for authorizing legislation." The Republicans ask for the Justice Department's assessment and "any corresponding legislative proposal" by Oct. 15.

Kim Kardashian Pays Over $1M For Unlawfully Promoting Cryptocurrency - The Securities and Exchange Commission (SEC) has slapped Kim Kardashian with charges for unlawfully touting a cryptocurrency without disclosing that she was paid. In a Monday press release, the SEC said that Kardashian was paid $250,000 to publish a post on her Instagram account about EtereumMax (EMAX) tokens, which contained a link to the EthereumMax website that provided potential investors instructions for how to purchase them.Karsashian has agreed to settle the charges for $1.26 million in penalties, and will cooperate with an ongoing investigation. Of that, $260,000 is disgorgement of her promotional payment, prejudgement interest, and a $1M penalty."This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesn’t mean that those investment products are right for all investors," said SEC Chair Gary Gensler. "We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.""Ms. Kardashian’s case also serves as a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities," he added

FSOC calls for legislation on crypto spot markets — The Financial Stability Oversight Council published its report on crypto regulation Monday, calling for the most significant and specific action from Congress yet out of the batch of reports written at the behest of President Biden. The wide-ranging report asks Congress to pass laws that would help regulators oversee crypto assets that aren't securities, that regulators take steps to prevent regulatory arbitrage and that regulators study digital asset firms that offer direct access to markets by retail customers. It's part of a series of reports in response to Biden's March 9 executive order that called on the FSOC, the Treasury Department and other regulators to study the growing impact of digital assets. The report warns of dangerous regulatory holes in spot markets, an area that other reports on digital assets haven't discussed in detail. Those markets, according to the report, don't have the same kinds of regulations that securities markets do, and regulators have found "possible sources of fraud and manipulation in the spot Bitcoin market." The legislation should give the regulator responsible for these markets enforcement and examination authority, the report said. Acting Comptroller of the Currency Michael Hsu highlighted issues around regulatory arbitrage at the FSOC meeting where the regulators released their report. "We know from the 2008 financial crisis what happens when regulatory agencies fail to coordinate effectively on risks that cut across jurisdictional lines," he said. "An unlevel playing field emerges and financial stability risks grow in the shadows." Some crypto firms, according to the report, prefer to operate in different states and countries, based on the varying regulatory burden in each place. They can also choose different regulatory regimes they want to operate under for different affiliates and subsidiaries. "In such cases, the regulatory system for crypto-assets may not provide any single regulator with a comprehensive view of a firm as a whole or its relationships with third-party service providers," the report said. To that end, the FSOC recommends that federal and local regulators coordinate their efforts. To address the problem specifically in the stablecoin market, council called on Congress to pass a prudential framework for stablecoin issuers.

Crypto overhaul fizzles in Congress, leaving industry and investors in limbo - U.S. lawmakers' efforts to pass significant crypto legislation by the end of the year are on life support, leaving in place Washington's scattershot approach to digital coins. Several high-profile, bipartisan bills that once seemed to have a promising shot of passing before the end of 2022 are held up, with congressional committees pushing off important votes. And now with lawmakers squarely focused on next month's elections, their chances of becoming law in 2022 have all but evaporated. Given the calendar, getting any piece of legislation through both houses is going to be a monumental task," said Perianne Boring, founder and chief executive of the Chamber of Digital Commerce, a trade group. While most business sectors are fine with — or even lobby for — morass in Washington, the crypto industry has been pushing hard for new laws. They say Congress needs to step in because current American financial rules, and the government agencies enforcing them, are ill equipped for digital assets. Recent turmoil in the crypto markets, including the collapse of the popular algorithmic stablecoin TerraUSD, has saddled investors with billions of dollars of losses and increased calls for Capitol Hill to act. In addition to a lack of regulatory clarity and failures in the market, the price of bitcoin — the world's largest cryptocurrency — has fallen by more than 50% since the beginning of the year. Bitcoin's price of $19,853 at 10:08 a.m. New York time was down from a record of more than $68,000 last November. Among the many bills under consideration, legislation to regulate crypto stablecoins and to give the Commodity Futures Trading Commission more power to oversee digital assets have gained the most traction. However, the bipartisan interest so far isn't translating into success.

BankThink: Why the administration is letting crypto burn | American Banker --I've touched on this before, but as we embark on what may be the first plain-vanilla recession of the 21st century it is worth reflecting on how unusual the period between 2008 and 2021 was in hindsight. During those 12 years, the federal funds rate was mostly zero, slowly inching its way up to a whopping 2.25% before the pandemic, then back down to zero until earlier this year when inflation came roaring back. The Fed has raised interest rates in four months as much as it had in four years before the pandemic. It was during that interim period between highly unusual crises — when the normal laws of gravity had apparently been suspended and accommodative monetary policy had been turned on its head — that the crypto market emerged. Bitcoin, the proof-of-concept original cryptocurrency, was sketched out in a white paper published on Oct. 31, 2008, just as the financial crisis was hitting its stride. The cryptocurrency was founded the following year and gradually built not only a dedicated following but a number of imitators and innovators, ultimately ballooning into a multitrillion-dollar global industry by November of last year. Times, as we all know, have changed. The total cryptocurrency market cap has lost about two-thirds of its value since its peak; crypto is on fire, and no one is coming to put it out. That's a notable departure from the last two times trillions of dollars have gone up in smoke. After the 2008 financial crisis, Congress and regulators went to extraordinary lengths to keep the Wall Street titans, General Motors, General Electric, AIG and other key cogs in the financial system afloat. During the initial economic fallout from the COVID-19 pandemic, Congress and the Fed bailed out everyone else, potentially contributing to a host of factors that awoke inflation from its long slumber. But whereas in those past crises the Fed and Congress were unwilling to stand by and let markets correct themselves, this time they are taking a decidedly different tack, and there is no better example of this than the lack of any real discussion anywhere of propping up the crypto market. I suspect that is for several reasons. Crypto is a speculative market and it's rife with bad actors, but the same could have been said for banks and insurance companies before 2008. What's different this time is that crypto is sufficiently siloed from the broader financial system that it can deflate dramatically without a great deal of collateral damage. And, more to the point, the government — and especially the Federal Reserve — has to send the message that the music is stopping and not everyone will get a chair when it does.The low interest rate environment of the last decade or so has had a number of effects, but one of the most salient has been that if you want to make your money turn into more money, you have to invest it in something. What that something is almost doesn't matter — values have ballooned in everything from housing to commercial real estate to stocks to commodities to the magic beans that many crypto tokens have turned out to be. And all the while there has been a nagging concern about what we used to call "moral hazard" — the idea that markets had internalized the message that even if you screw up, someone will come through to bail you out. Until recently, there have been few viable ways for the government to dispel that notion without pulling the pin on the global economy just to make a point — 2008 wasn't the time for it, and 2020 wasn't either. But now, the government — and, again, especially the Federal Reserve — means business. The pain of the coming recession has not yet arrived, but it will, and just as the last decade or so has been dubbed the "everything boom," the indeterminate period between now and when we peek our heads out again will see values drop across the board. I don't think crypto will go away completely, just as stocks and commodities and housing and everything else won't go away completely. But neither I nor anyone else has a very good sense of what the true baseline value of cryptocurrencies or DeFi protocols are. As the administration — and, perhaps, the following one — moves forward with its efforts to set up prudential and supervisory expectations for crypto markets, we will likely gain a better understanding of which of the crypto innovations is here to stay and which are not. But for now, the crypto winter is here — and it's going to be a hard winter. -John Heltman

EU puts crypto at top of list for IMF meetings -The European Union is looking to exchange views on the development of crypto legislation with U.S. officials during next week's International Monetary Fund-World Bank annual meetings, as calls grow for a more coordinated global regulatory framework. "We have a crowded agenda for the U.S. next week, and one of the items that won't be bottom of the list, it will be in there right around the top is crypto," EU Commissioner for financial services Mairead McGuinness said Tuesday at a media roundtable hosted by Bloomberg News in Brussels. "I am sure they want to hear what we've done, how it went, what the problems were. I would be very happy to share our experience but also to hear what the U.S. is planning to do." The EU is moving ahead with key legislation to regulate the crypto sector with common rules across all 27 member states, marking the first time globally that lawmakers have attempted to supervise the industry on such a scale. In June, the bloc reached an agreement on its landmark Markets in Cryptoassets (MiCA) directive as the European Parliament, Council and Commission approved new provisions on the supervision of crypto-asset service providers (CASPs), as well as consumer protection and environmental safeguards for crypto assets such as bitcoin and ether. However, given the global nature of cryptocurrency flows, central bankers have been urging governments around the world to better synchronize regulations. The fallout from the collapse of the TerraUSD stablecoin in May upended markets from Singapore to the U.S., underscoring the need for more concerted efforts. "The message I will be bringing to Washington is that here in the EU we have a piece of legislation, we are a frontrunner in this," McGuinness said. But "a little bit like climate change, addressing crypto alone in the EU is not enough, we need to have global engagement and sharing of experience."

Fed warns that Custodia suit could upend 'careful balance' of authority - The Federal Reserve is using Custodia Bank's own marketing materials to refute the company's claim that it poses no new risks to the central bank's payment system.The Fed pointed to Custodia press releases in which the Wyoming-chartered institution describes itself as a "first-of-its-kind digital asset bank" and details its plan to launch a stablecoin as evidence that the firm's business model warrants more time to scrutinize than that of a traditional bank."In sum, Custodia's request raises technical, complex, and novel issues that present risk to" the Federal Reserve Bank of Kansas City "and that potentially have implications for the stability of our nation's payment system," the Fed stated in a U.S. District Court of Wyoming filing on Tuesday. The Federal Reserve Tuesday said in a court filing that regional banks are not subject to Administrative Procedure Act requirements in deciding whether to grant an applicant a master account, and warned that the court should avoid ruling in such a way as to disrupt the delicate balance of authority vested in the central bank. The filing is the latest in Custodia's lawsuit with the Fed over the company's pending application for membership and a master account with the Kansas City Fed. If granted an account, Custodia would be able to make deposits into the Federal Reserve System and access its payment networks. Custodia, a digital asset custody and payment provider, filed its suit against the Fed in June. It seeks a court order compelling the central bank to make a decision on its master account application, which has been pending for nearly two years. In August, the Fed filed a motion to dismiss the suit, arguing that it was not the court's place to rush a decision on whether to grant an account to an unproven type of bank. Last month, Custodia was joined by several members of Congress, the state of Wyoming and others who filed amicus briefs in support of its claim. The state argued that by meeting the criteria for its special purpose depository institution charter, Custodia should qualify for an account with Kansas City Fed. The lawmakers contend that, as a stipulation of the Monetary Control Act of 1980, the Fed is obligated to grant the bank an account. They also said, per the Administrative Procedure Act, the Fed should have ruled on the application within one year.In this week's filing, the Fed pushed back against these arguments. It argued that Custodia and its allies were misinterpreting the laws governing the Fed in several ways. It noted the administrative laws to which the Fed Board of Governors is subject do not apply to the regional reserve banks. It also asserts the right of the reserve banks to decide whether an organization could be granted an account without creating undue risks to the financial system.Many of Custodia's arguments and the Fed's subsequent responses deal with the question of whether the reserve banks are agents of the government, extensions of the Fed Board of Governors or independent, private entities. The Fed argues that Congress made the board and the reserve banks separate entities and made each reserve bank its "own juridical entity, with its own capacity '[t]o make contracts' and '[t]o sue and be sued.' " Because the matters raised by Custodia are matters of constitutional and administrative law, any decision rendered by the court could have broad ripple effects, the Fed noted. Because of this, it said, the court should allow the Kansas City Fed time to reach a decision on Custodia's application to avoid injecting itself into the matter before all the facts are settled.

Can Fincen deliver on promised regulatory relief? — The Treasury Department finalized its beneficial ownership rule last week, but left timing on the elements that banks care most about vague. The rule is part of the Corporate Transparency Act, which requires businesses to report their beneficial ownership information directly to a registry database maintained by the Financial Crimes Enforcement Network. It's meant to crack down on anonymous shell companies in the United States, and the rule included a major benefit for banks: getting them out of the business of having to collect beneficial ownership information on their clients. Banks have, for years, argued that doing due diligence on their legal entity customers is timely and expensive. The CTA would shift a bulk of that responsibility to legal entities, who would be required to send the information to Fincen's database. Banks would use that database, significantly cutting costs while, they argue, having more effective tools to help law enforcement and police their own accounts. But Fincen has yet to build out the database, or introduce rules about who can access it. The bureau also hasn't updated the rule that would modify banks' due diligence requirements in response to the law's changes. And Fincen didn't give any details on when banks can expect them to tackle those rules when they finalized the first part of the law last week. Until those changes are made, analysts said it's unclear to what degree the CTA will actually cut down on banks' regulatory burden. That leaves banks in a holding pattern, maintaining and growing their own due diligence operations, without any timeline on the rest of the promised relief. "It remains to be seen how useful the registry will be to banks, and whether it will add to or reduce their regulatory burden," said Daniel Stipano, a partner in Davis Polk's financial services practice. And it could be months, or even years, until we find out those answers, far past the statutory deadline of Dec. 31, 2021. While lawmakers have repeatedly pushed Fincen to fully implement the law, the bureau said it's understaffed and underfunded. "Limited resources have presented significant challenges to meeting the implementation requirements of our expanded mandate under the AML Act, including the CTA's beneficial ownership requirements," acting Director Himamauli Das told Congress in April. "As you are aware, we are missing deadlines, and we will likely continue to do so."

Barclays to pay $2 million fine over stock trade-routing lapses -- Barclays will pay a $2 million fine to resolve allegations that it sent client orders to its own trading venue even when customers could have gotten better deals at competing platforms. The bank's U.S. brokerage unit, Barclays Capital, didn't do reasonable reviews of its execution quality for customer orders sent to its dark-pool trading venue, LX, the Financial Industry Regulatory Authority said Wednesday. The alleged activity occurred from January 2014 to February 2019, Finra said in a news release.Barclays declined to comment and neither admitted nor denied the allegations as part of the settlement. U.S. brokers are required to seek the best terms reasonably available for customer orders, including checking to see if clients could get better terms for a trade by routing orders differently. Finra and the Securities and Exchange Commission are increasingly focused on whether brokers are offering the best deals to their clients.

Here’s the Chart of the Global Bank Causing Panic in Markets This Morning - By Pam and Russ Martens -- The Swiss global bank, Credit Suisse, which is a derivatives counterparty to major Wall Street banks and U.S. insurers, raised alarm bells in markets on Friday and is raising more anxiety this morning. Its 5-year credit default swap (CDS), a measurement of its risk of defaulting on its debt, jumped to 250 basis points on Friday and traded as high as 350 basis points in early morning trade today.The big move in the CDS on Credit Suisse is further impacting the price of its common stock. The shares closed on Friday in New York at $3.92, just pennies away from its all-time low, then dropped another 11 percent in early morning trading in Europe today.When a major derivatives counterparty begins to see a blowout in its credit default swaps, that impacts the stock prices of all major Wall Street banks with significant exposure to derivatives. It also raises the risk of systemic contagion — as occurred in the financial crisis of 2008 when Citigroup and Lehman Brothers were teetering and were major derivative counterparties. The chart above shows the dramatic declines in not just Credit Suisse over the past year but in Nomura (NMR), Deutsche Bank (DB), Bank of America (BAC), JPMorgan Chase (JPM), and Citigroup (C).The reputation of Credit Suisse has taken major hits in the past few years. On March 26, 2021, the family office hedge fund, Archegos Capital Management, defaulted on margin calls to its prime brokers and went belly up, leaving major investment banks with more than $10 billion in losses. Credit Suisse took the lion’s share of those losses, acknowledging a loss of more than $5 billion.To understand the nature of the wildly risky structure of the derivatives that led to the blowup of Archegos, see our report: Archegos: Wall Street Was Effectively Giving 85 Percent Margin Loans on Concentrated Stock Positions – Thwarting the Fed’s Reg T and Its Own Margin Rules.Credit Suisse was also deeply enmeshed in the Greensill Capital scandal and has suffered serious reputational damage as a result.Making stock investors equally nervous is the fact that Credit Suisse admitted in its 2021 Annual Report that some of its billions in derivatives are difficult to accurately price. It writes:“In addition, the Group holds financial instruments for which no prices are available and for which have few or no observable inputs (level 3). For these instruments, the determination of fair value requires subjective assessment and judgment depending on liquidity, pricing assumptions, the current economic and competitive environment and the risks affecting the specific instrument. In such circumstances, valuation is determined based on management’s own judgments about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). These instruments include certain OTC derivatives, including interest rate, foreign exchange, equity and credit derivatives, certain corporate equity-linked securities, mortgage-related securities, private equity investments, certain loans and credit products, including leveraged finance, certain syndicated loans and certain high yield bonds.” .. “Loan underwriting and lending commitments to corporate clients, markets and trading activities including securities financing and derivatives products with global institutional clients, including banks, insurance companies, asset managers and hedge funds; through the use of derivatives clients may take positions that are exposed to movements in risk factors such as interest rates, credit spreads, foreign exchange rates or equity prices.” All eyes on Wall Street are going to be watching the price action of Credit Suisse and other major banks on Wall Street this week in an effort to discern which banks are most heavily exposed to Credit Suisse as a derivatives counterparty.

Q3 2022 Update: Unofficial Problem Bank list Decreased to 51 Institutions; Search for "Whale" Continues --The FDIC's official problem bank list is comprised of banks with a CAMELS rating of 4 or 5, and the list is not made public (just the number of banks and assets every quarter). Note: Bank CAMELS ratings are also not made public. CAMELS is the FDIC rating system, and stands for Capital adequacy, Asset quality, Management, Earnings, Liquidity and Sensitivity to market risk. The scale is from 1 to 5, with 1 being the strongest. As a substitute for the CAMELS ratings, surferdude808 is using publicly announced formal enforcement actions, and also media reports and company announcements that suggest to us an enforcement action is likely, to compile a list of possible problem banks in the public interest. NOTE: I'm no longer updating the spreadsheet. Here are the quarterly changes and a few comments from surferdude808: Update on the Unofficial Problem Bank List through September 30, 2022. Since the last update at the end of June 2022, the list decreased by one to 51 institutions after an addition and two removals. Assets decreased by $2.9 billion to $51.5 billion, with the change primarily resulting from a $2.2 billion decrease from updated asset figures through June 30, 2021. A year ago, the list held 59 institutions with assets of $54.9 billion. Added during the third quarter was Unity National Bank of Houston, Houston, TX ($246 million). Removals during the quarter because of action termination included Southwestern National Bank, Houston, TX ($884 million) and Amory Federal Savings and Loan Association, Amory, MS ($74 million). With the conclusion of the third quarter, we bring an updated transition matrix to detail how banks are transitioning off the Unofficial Problem Bank List. Since we first published the Unofficial Problem Bank List on August 7, 2009 with 389 institutions, 1,785 institutions have appeared on a weekly or monthly list since then. Only 2.9 percent of the banks that have appeared on a list remain today as 1,734 institutions have transitioned through the list. Departure methods include 1,024 action terminations, 411 failures, 280 mergers, and 19 voluntary liquidations. Of the 389 institutions on the first published list, only 3 or less than 1.0 percent, still have a troubled designation more than ten years later. The 411 failures represent 23 percent of the 1,785 institutions that have made an appearance on the list. This failure rate is well above the 10-12 percent rate frequently cited in media reports on the failure rate of banks on the FDIC's official list. On September 8, 2022, the FDIC released second quarter results and provided an update on the Official Problem Bank List. While FDIC did not make a comment within its press release on the Official Problem Bank List, they provided details in an attachment that listed 40 institutions with assets of $170 billion. In its 2022 first quarter release, the FDIC list had a material $119 billion increase in assets. Since that release, none of the prudential banking regulators – FDIC, Federal Reserve, and OCC – have publicly released an enforcement action detailing an enforcement action against a large institution. The Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) passed by Congress in 1989 requires publication of enforcement actions.

Fed, FDIC plan for living wills sparks debate about best approach -New guidelines are coming for how large regional banks should prepare themselves for bankruptcies, but some policy experts are already questioning if they will go far enough. The Federal Reserve and the Federal Deposit Insurance Corp. issued a joint statement Friday that they will provide guidance on resolution planning for banks that have at least $250 billion in assets but do not qualify as too-big-to-fail. While the move was embraced by some regulatory advocates who have argued for greater scrutiny of large regional banks, Dennis Kelleher, co-founder, president and CEO of the advocacy group Better Markets, said the fact that the agencies are issuing guidance rather than writing new regulations means the effort is unlikely to have a meaningful impact on bolstering financial stability."The Fed should not be issuing guidance — the Fed should engage in a formal rulemaking process for a regulatory structure that is both enforceable and binding," Kelleher said. "Guidance is just inviting an ongoing dispute with the banks about applicability and enforceability moving forward."If all systemically important banks had sufficient resolution plans, also known as living wills, there would no longer be a need for too-big-to-fail designations, Kelleher said. By definition, a bank's failure would be handled in an orderly fashion without spillover effects, he said.Under the current regulatory regime, he said, the Fed and FDIC can only go so far to make sure banks are fully resolvable. At the same time, because the exact details of individual bank shortcomings are protected as confidential supervisory information, markets cannot adequately price in risk."The Fed's pattern of depriving the public of even the most minimal of information about resolution plan deficiencies eliminates the possibility for market accountability," Kelleher said. Last week's announcement confirmed a course of action on large bank oversight that bank regulators had been signaling for months. Acting Comptroller of the Currency Michael Hsuand acting director of the FDIC Martin Gruenberg had previously spoken about changing policies for Category II and Category III banks. In April, Hsu floated the idea of requiring merged large regional banks to hold on to total loss-absorbing capital that could easily be converted into equity in a crisis. Fed Vice Chair for Supervision Michael Barr was the most recently regulatory chief to address the idea of revisiting living will policies. In a speech at the Brookings Institution last month, Barr said the Fed and FDIC would evaluate their policies on resolution planning.

FDIC's Gruenberg says banks shouldn't depend on government assistance for climate risk Acting Chairman of the Federal Deposit Insurance Corp. Martin Gruenberg told bankers that their institutions shouldn't be "wholly dependent" on government financial assistance in the event of severe weather. In a speech on climate risk at the American Bankers Association's annual convention in Austin, Texas, Gruenberg emphasized the importance of banks considering the risk posed by increasingly severe weather events. Gruenberg in his comments, particularly germane given the damage that Hurricane Ian has dealt to Gulf Coast businesses and communities, said that as government assistance for severe weather events gets potentially more expensive, banks should "explore new ways in managing these risks." "While current insurance policies may cover some or all of the loss associated with many severe weather events, policies may over time become more expensive or unavailable to cover losses for a particular geographic area or business activity, particularly if faced with increasing severity and frequency of severe weather events," he said. "Additionally, while the U.S. government may provide assistance with the costs associated with many severe weather events, financial institutions should not be wholly dependent on this assistance, whether directly or indirectly." The FDIC is not, however, going to tell banks what industries they should or shouldn't consider for investment, Gruenberg said. Regulators singling out industries for special consideration has been a big concern of congressional Republicans, who raised points along this topic repeatedly during the big-bank hearings last month on Capitol Hill. "We will not be involved in determining which firms or sectors financial institutions should do business with," Gruenberg said. "These types of credit allocation decisions are responsibilities of financial institutions. We want financial institutions to fully consider climate related financial risks — as they do all other risks — and continue to take a risk-based approach in assessing individual credit and investment decisions." Gruenberg also addressed one of the industry's biggest fears related to climate risk and how regulators will consider incorporating it into their examinations: scenario analysis. He said that climate risk scenario analysis would be intended for large institutions, particularly those that serve multiple communities, rather than smaller ones. He added that he views scenario analysis as an "exploratory risk management tool," rather than a stress test that could have regulatory capital implications. The Federal Reserve last week announced a climate stress testing pilot program with participation of six U.S.-based global systemically important banks: JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo. The Fed said the program is of an "exploratory nature" and will not entail supervisory or capital adjustments based on the results.

What the White House's blueprint for an AI bill of rights means for banks - The White House has published an AI Bill of Rights that instructs banks and other companies on the kinds of consumer protections they need to build into their artificial intelligence-based programs. The blueprint, issued Tuesday, lays out five rights consumers should have as companies deploy AI: protection from unsafe or ineffective systems; no discrimination by algorithms; data privacy; notification when algorithmic systems are being used; the ability to opt out; and access to customer service provided by human beings. The bill of rights is not law and it's not enforceable, but it does reveal how the Biden administration wants consumer rights to be protected as companies like banks use AI. "You can think of it as a preamble to future regulatory action," said Jacob Metcalf, program director of AI on the Ground for the nonprofit research group Data and Society. The White House Office of Science and Technology Policy, which produced the document, doesn't write laws, but it does set strategic priorities that other government agencies will follow, he explained. "You can really think of it as a tone-setting document," he said. Banks' and fintechs' use of AI has been called into question many times by regulators and consumer advocates, especially their use of AI in lending. Consumer Financial Protection Bureau Director Rohit Chopra warned recently that the reliance on artificial intelligence in loan decisions could lead to illegal discrimination. Banks' use of AI in facial recognition has also been singled out, and their use of AI in hiring has been questioned. This is the tip of the iceberg: Banks and fintechs use AI in many other areas including fraud detection,cybersecurity and virtual assistants. The bill of rights specifically focuses on financial services a few times. For instance, an appendix listing the types of systems the rights should cover includes "financial system algorithms such as loan allocation algorithms, financial system access determination algorithms, credit scoring systems, insurance algorithms including risk assessments, automated interest rate determinations, and financial algorithms that apply penalties (e.g., that can garnish wages or withhold tax returns)." Some in the financial industry are skeptical about how effective this bill of rights will be. Others worry that some of the rights will be too hard to implement. "At least it sends a signal to the industry: Hey, we will be watching," said Theodora Lau, founder of Unconventional Ventures. "That said, however, we are a bit late to the party, especially when even the Vatican has weighed in on the subject, not to mention the EU. More concerning is that this is nonbinding with no enforcement measures, like a toothless tiger. It will be up to lawmakers to propose new bills. And even when anything is passed, having laws is one thing, reinforcing them is another."

Some large banks said to reimburse less than 50% of consumer fraud claims on Zelle -Large banks that own the payment platform Zelle on average are reimbursing less than 50% of fraud claims reported by consumers who say money was stolen from their accounts by fraudsters, and that practice could violate federal law, according to a major critic of the industry on Capitol HIll.A 14-page report about fraud on Zelle released Monday by Sen. Elizabeth Warren, D-Mass., found that large banks that own Zelle's parent company, Early Warning Services, are reimbursing anywhere from 14% to 82% of fraud claims reported by consumers, raising more questions about the wide disparities in bank reimbursements. The numbers, if verified, point to the potential for massive regulatory enforcement actions against banks by the Consumer Financial Protection Bureau. Alternatively, because banks are required by the Electronic Fund Transfer Act to investigate when a consumer alleges fraud, the data may also indicate that consumers are attempting to game the system or that a large percentage of fraud claims simply cannot be verified by banks. Only four of the seven banks that own Zelle submitted data to lawmakers. Of those, Bank of America, PNC Financial Services Group, Truist Financial and U.S. Bancorp reimbursed consumers anywhere from 14% to 82% for fraud claims that were not authorized by their customers. It remains unclear why banks are not reimbursing consumers for such a large number of unauthorized transactions that are purportedly due to fraud and why the discrepancies in reimbursements among banks is so large, experts said."These data are deeply troubling," the report stated. "They not only reveal that banks are breaking their word about repaying victims harmed by Zelle — they also indicate that the banks may be violating the CFPB's Regulation E rules, which require banks to make consumers whole after an unauthorized fraudulent transaction." (Reg E spells out the requirements of the EFTA.) In April, Warren and other Democratic lawmakers opened an investigation into Zelle and requested fraud information from its parent, Early Warning Services, of Scottsdale, Arizona, and of the seven banks that own the company. Both Jamie Dimon, the chairman and CEO of JPMorgan Chase, and Charlie Scharf, the president and CEO of Wells Fargo, promised the lawmakers under oath two weeks ago that they would provide the data. JPMorgan did not provide the information, and Wells provided "only incomplete and confidential data," the report said. Capital One Financial also did not respond to lawmakers' requests, the report said.

Fed says debit cards must connect to multiple networks, even online -Debit card issuers have nine months to ensure all transactions made with their cards — including card-not-present payments — can be processed by at least two unaffiliated networks. The same ban on exclusivity has long applied to in-person debit card transactions under Regulation II. The Federal Reserve Board finalized a rule Monday that applies to all other debit transactions, including e-commerce payments. Part of the Dodd-Frank Act, Regulation II governs debit card interchange fees and routing. The rule was meant to give merchants a way to control their expenses by offering shoppers a way to pick a low-cost routing option when making a purchase. Card issuers and networks argue that their costs are fair and necessary to support innovation and fraud detection for card payments. The rule change has elicited a strong pushback from the banking industry and from at least one member of the Fed Board of Governors, who contend the amendment to Regulation II goes beyond simply clarifying the statute and would constitute a significant burden on issuers. Fed Gov. Michelle Bowman issued a dissenting opinion on the change, asserting that the Fed did not do enough to address the "substantial concerns" raised by community banks during the comment period. "Although the Board has attempted to identify the likely effects of the proposed rule based on available information, I believe that significant questions remain about how the rule will affect banks, and particularly community banks, with respect to both fraud and the cost of compliance," Bowman said in a statement. "Given this continued uncertainty, I do not support the final rule." Spurred by the rise of e-commerce, card-not-present transactions more than doubled between 2011 and 2019, going from 10% of the market to 23%, according to the Fed, with more growth likely occurring during the online shopping boom seen during the COVID-19 pandemic. In 2019, card-not-present transactions grew at more than four times the rate of card-present ones, and had an average transaction value twice the size. Despite this proliferation and improvements to technology to accommodate card-not-present transactions, many card issuers have not taken steps to ensure their products can be used with multiple networks. In 2019, roughly a quarter of issuers subject to Regulation II — collectively accounting for $10 billion of assets and more than half of debit card transactions — only had card-not-present operability with a single network, the Fed found. "When the Board initially issued the rule in July 2011, the market had not developed solutions to broadly support multiple networks for card-not-present debit card transactions," the board said in a statement. "Since that time, technology has evolved to address these barriers." In its memo on the final version of the rule, the Fed noted that the "majority" of community banks already make their debit cards interoperable with multiple networks, meaning the brunt of the new policy will fall on larger issuers.

BankThink: Imagining taxpayers' response to FHFA's Home Loan bank review | American Banker - As reported, the Federal Housing Finance Agency just wrapped up a series of "listening sessions" kicking off its comprehensive review of the Federal Home Loan Bank System, a sprawling government sponsored enterprise whose political muscle far exceeds its economic utility. Over three days, the agency heard from eighty-five speakers. The vast majority of the presenters were closely connected to the Federal Home Loan bank system: member banks, insurance members, trade associations for members, Home Loan Bank directors, and clients. Two significant stakeholders in the system were glaringly absent, however. Those stakeholders are depositors and taxpayers. Let's assume that the spokesperson for the mythical trade association, the Depositors and Taxpayers of America (DTA), was invited to speak. This is how his or her presentation would have gone: "Greetings Director Thompson and FHFA staff. I am here today representing the tens of millions of depositors and taxpayers of this country. DTA and its members ask that, through this 'comprehensive review' of the Home Loan banks, you correct an injustice that has been going on for far too long. Allow me to explain. By denying depositors of all ages a fair return on their deposits, banks, in cooperation with the Home Loan Banks, are contributing to the problem of wealth and economic inequality on a national scale. It is well understood that banks are motivated to fund themselves as cheaply as possible. The lower their funding cost, the higher is their net interest margin, a key success metric for all depository institutions. In this regard, banks have three sources of funding: equity, deposits, and other borrowings. Equity is expensive so banks look to depositors and "other" sources (federal funds, securities lending, brokered deposits, etc.) for funding. Now, most banks, large and small, are members of their local Federal Home Loan Bank. Established by Congress in 1932, these 11 firms have total assets that exceed $1 trillion. They were conceived to support housing finance, but they no longer play that role. Although the word "bank" is in their titles, they are not banks in any normal sense of that word. The Home Loan banks issue debt obligations in the hundreds of billions of dollars. They are the second largest issuer of debt after the U.S. Treasury Department. Their debt is subsidized by all taxpayers — the members of DTA. How so? Buyers of that debt, consisting mostly of money market mutual funds, presume correctly that the federal government will bail the Home Loan banks out if they experience any stress. Therefore, there is a lower risk premium associated with their debt. The Home Loan banks also enjoy an exemption from paying taxes at any level and have a standing line of credit from the federal government. So, banks in search of new funding face a choice. They can either: a) Borrow more money from their customers, which requires them to raise the interest they pay on deposits or b) Borrow from their Home Loan banks at a discount. In a rising rate environment such as we are experiencing now, banks often choose the Home Loan banks over their own depositor-customers, all of whom are members of DTA.

Ian will 'financially ruin' homeowners and insurers - Hurricane Ian is expected to financially ruin countless people in Florida whose homes were not covered by flood insurance when the storm inundated the region with powerful ocean surges and damaging downpours. The personal financial losses are a reflection of Ian’s intensity and the fact that millions of Americans nationwide haven’t bought flood insurance. The federal government’s National Flood Insurance Program — the dominant source of flood coverage in the U.S. — protects only a tiny fraction of homeowners, almost all of them in coastal areas. Ian’s web of damage was unusually widespread as the hurricane drove storm surge onto coastal areas and triggered river overflows and flash flooding across inland Florida, where almost nobody has flood insurance. President Joe Biden declared nine counties disaster areas Thursday, making residents eligible for federal aid to pay for minor home repairs, short-term housing and other emergency costs. But of the 1.8 million households in those nine counties, only 29 percent have federal flood insurance, according to an analysis of government records by POLITICO’s E&E News. That leaves 1.3 million households at ground zero without federal flood coverage. In Hardee County, only 100 households have federal flood insurance — out of 8,000 households in the county. That’s a 1.3 percent coverage rate. Hardee has one of the lowest income levels of any Florida county, and 44 percent of its residents are Hispanic. “Ian could financially ruin thousands of families in Florida. There’s no better way to say it,” said Mark Friedlander of the Insurance Information Institute. Flood coverage is not included in homeowners’ insurance policies. That forces people to buy flood insurance separately, though almost no one who lives inland from a coastal area does. The vast majority of flood coverage in the U.S. is sold through the Federal Emergency Management Agency’s National Flood Insurance Program. It is unclear how many people have flood policies through private insurers. People without flood insurance “could be devastated,” Friedlander said.

Black Knight Mortgage Monitor: "Home Prices Down Again in August ... Now 2% Off June Peak" -- Note: The Black Knight House Price Index (HPI) is a repeat sales index. Black Knight reports the median price change of the repeat sales. Press Release: Black Knight: Home Prices Down Again in August With Average Home Nationally Now 2% Off June Peak; Inventory Growth Stalls as Sellers Step Back Today, the Data & Analytics division of Black Knight, Inc. (NYSE:BKI) released its latest Mortgage Monitor Report, based upon the company’s industry-leading mortgage, real estate and public records datasets. July and August’s month-over-month declines mark the sharpest contractions seen in more than 13 years.“The Black Knight HPI for August marked the second consecutive month that prices pulled back at the national level, with the median home price now 2% off of its June peak,” said Graboske. “Only marginally better than July’s revised 1.05% monthly decline, home prices were down an additional 0.98% in August. Either one of them would have been the largest single-month price decline since January 2009 – together they represent two straight months of significant pullbacks after more than two years of record-breaking growth. The only months with materially higher single-month price declines than we’ve seen in July and August were in the winter of 2008, following the Lehman Brothers bankruptcy and subsequent financial crisis. …Though prices have pulled back from recent historic peaks, housing remains historically unaffordable. After improving slightly in July and early August, surging 30-year rates have pushed home affordability to its worst point in 38 years, easily surpassing June’s – at the time – record-setting 34.3% payment-to-income ratio. With rates at 6.7% as of Sept. 29, 38.2% of the median household income is needed to make the principal and interest (P&I) payment on the median-priced home purchase, the largest share since December 1984, when mortgage rates were at 13.2%. The monthly P&I payment on the median home is up $930 from the same time last year – a 73% increase. The situation is geographically widespread as well, with 84 of the 100 largest U.S. markets now at more than three-decade lows in terms of home affordability. Here is a graph of the Black Knight HPI. The index is still up 12.1% year-over-year but was down almost 1% in August (after a similar decline in July).

Home Prices Crash At Fastest Pace Since Lehman Bankruptcy (see graphic) The housing market is finally getting unglued: less than a week after Case Shiller (which reports home prices with a substantiakl laga) reported the first negative monthly change in home prices...... today Black Knight confirmed that the US housing market has turned decidedly ugly with the two biggest monthly declines since the global financial crisis.According to a Monday report from mortgage-data provider, median home prices fell 0.98% in August from a month earlier, following a 1.05% drop in July.The two periods marked the largest monthly declines since January 2009. In fact, at the current pace of declines, we may soon see a record drop in home prices, surpassing the largest historical slide hit during the global financial crisis.The report noted that July and August 2022 mark the largest single-month price declines seen since January 2009 and rank among the eight largest on record. “The Black Knight HPI for August marked the second consecutive month that prices pulled back at the national level, with the median home price now 2% off of its June peak,” said Graboske. “Only marginally better than July’s revised 1.05% monthly decline, home prices were down an additional 0.98% in August. Either one of them would have been the largest single-month price decline since January 2009 – together they represent two straight months of significant pullbacks after more than two years of record-breaking growth. The only months with materially higher single-month price declines than we’ve seen in July and August were in the winter of 2008, following the Lehman Brothers bankruptcy and subsequent financial crisis.The report also noted that the monthly rate of home price decline is now rivaling that seen during the Great Recession – the question is how long it will continue to do so, and how far off peaks prices will fall.Separately, the August report also found that after rising sharply from May through July, for-sale inventory levels stalled in August, growing at just 1/10th the rate of recent months, as sellers appeared to take a step back from the market, perhaps waiting for mortgage rates to plunge as the recession arrives. The national inventory deficit held relatively steady at -44%, with the market remaining more than 600K listings short as compared to pre-pandemic levels. For its part, Black Knight suggests that sellers are likely being deterred by both falling demand and prices, along with a growing disincentive to give up historically low interest rate mortgages in a sharply rising rate environment.That said, and as is the case with Case Shiller, while prices are falling on a month-over-month basis, they’re still significantly higher than a year earlier when the buying frenzy was just getting started: In August, home prices were 12.1% compared to a year ago, if sharply lower from the 20% Y/Y change hit earlier this summer.The sharpest correction in August was in San Jose, California, down 13% from its 2022 peak, followed by San Francisco at almost 11% and Seattle at 9.9%, the company said.Yet as home prices tumble, there are no surprises in the list of most affordable housing markets, where the usual suspects - those cities where a walk down a street almost guaranteed a gunshot wound - dominate: St Louis, Detroit and Kansas City.Alternatively, while prices may have dropped, the three most unaffordable MSAs remain on the west coast: Sacramento, Seattle and Riverside.Full Black Knight report below (pdf link):

Mortgage Application Pace Plunges To 25-Year Low As Housing Recession Deepens - The pace of mortgage applications has fallen to a multi-decade low amid high housing interest rates, according to the latest data from the Mortgage Bankers Association (MBA). The Market Composite Index, a measure of mortgage loan application volume, declined by 14.2 percent on a seasonally adjusted basis for the week ended Sept. 30, 2022, compared to a year earlier. The Refinance Index fell 18 percent from the previous week, while the Purchase Index registered a decrease of 13 percent.Joel Kan, MBA’s associate vice president of economic and industry forecasting, pointed out that overall mortgage application activity dropped to its “slowest pace” since 1997, according to a press release on Oct. 5. For the week ended Sept. 28, 2022, a 30-year fixed-rate mortgage was 6.70 percent, which is more than double what it was a year ago, at 3.01 percent.“The current [mortgage] rate has more than doubled over the past year and has increased 130 basis points in the past seven weeks alone,” Kan said.“The steep increase in rates continued to halt refinance activity, and is also impacting purchase applications, which have fallen 37 percent behind last year’s pace.”Mortgage numbers were also affected by Hurricane Ian hitting Florida last week, as it triggered widespread evacuations and closures, he noted. Mortgage applications in Florida alone fell by 31 percent.Construction spending in the country, an indicator of total spending on all types of construction, had fallen for the second consecutive month in August, according to a U.S. Census Bureau report, signaling that the housing market is slipping further into a recession. In July, the National Association of Realtors (NAR) had warned that the United States was in a “housing recession,” as existing home sales fell by 5.9 percent. On Sept. 21, the Federal Reserve raised its benchmark federal funds rate by 0.75 percentage points, to a range of 3.0–3.25 percent. In February, the fed funds rate was only at 0.08 percent.This increase in federal rates has inevitably caused a rise in mortgage rates as well, contributing to the dampening of housing demand.Between February and September, the average interest rate on a 30-year fixed-rate mortgage rose from 3.55 percent to 6.70 percent, according to mortgage lender Freddie Mac.“As the Federal Reserve continues to move interest rates upward, mortgage financing has become more expensive, a process that continues to this day,” Craig J. Lazzara, S&P’s Dow Jones managing director, said in a July note.“Given the prospects for a more challenging macroeconomic environment, home prices may well continue to decelerate.”Elevated mortgage rates have worsened home affordability. According to an analysis by Bankrate, owning a home now takes up around 27 percent of a typical family’s monthly income, compared to only 19 percent a year ago.

Realtor.com Reports Weekly Active Inventory Up 30% Year-over-year; New Listings Down 17% - Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report released yesterday from Chief Economist Danielle Hale and Jiayi Xu: Weekly Housing Trends View — Data Week Ending Oct 1, 2022. Note: They have data on list prices, new listings and more, but this focus is on inventory.

• Active inventory continued to grow, increasing 30% above one year ago. Highlighting the roller coaster ride that the housing market and its participants have been on in the last few years, one’s take on the current number of homes for sale depends very much on the comparison point. After a period of unusually hot activity, financial conditions are cooling demand in the housing market and there are substantially more homes for-sale compared to one year ago. However, the market still falls short of pre-pandemic inventory levels by an even greater amount.
• New listings–a measure of sellers putting homes up for sale–were again down, dropping 17% from one year ago. This week marks the thirteenth straight week of year over year declines in the number of new listings coming up for sale. As mortgage rates near 7 percent, which is a level not seen in more than two decades, sellers who are also trying to buy a home, nearly 3 of every 4 potential sellers, have had to alter their trade-up plans.

Here is a graph of the year-over-year change in inventory according to realtor.com. Note the rapid increase in the YoY change earlier this year, from down 30% at the beginning of the year, to up 29% YoY at the beginning of July. However, the Realtor.com data has been stuck at up around 26% to 30% YoY for 14 weeks in a row. This is due to the slowdown in new listings, even as sales have fallen sharply.

Construction Spending Decreased 0.7% in August -- From the Census Bureau reported that overall construction spending increased: Construction spending during August 2022 was estimated at a seasonally adjusted annual rate of $1,781.3 billion, 0.7 percent below the revised July estimate of $1,793.5 billion. The August figure is 8.5 percent above the August 2021 estimate of $1,641.6 billion. emphasis added Both private spending and public spending decreased: Spending on private construction was at a seasonally adjusted annual rate of $1,426.0 billion, 0.6 percent below the revised July estimate of $1,435.2 billion. ... In August, the estimated seasonally adjusted annual rate of public construction spending was $355.3 billion, 0.8 percent below the revised July estimate of $358.3 billion. Click on graph for larger image. This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted. Residential (red) spending is 35% above the bubble peak (in nominal terms - not adjusted for inflation). Non-residential (blue) spending is 24% above the bubble era peak in January 2008 (nominal dollars). Public construction spending is 9% 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 12.5%. Non-residential spending is up 5.5% year-over-year. Public spending is up 3.3% year-over-year. This was below consensus expectations of a 0.3% decrease in spending; however, construction spending for the previous two months combined were revised up sharply.

Construction Spending Ticks up, Non-Residential Hits Record, Residential Stalls after Blistering Boom by Wolf Richter -Construction spending – residential and non-residential – in August ticked up to a record $165.5 billion (not seasonally adjusted), according to estimates by the Census Bureau today. Seasonally, construction spending peaks about this time of the year. Compared to August 2021, total construction spending was up 8.8%. Compared to August 2019, it spending was up 25.8%. Construction spending is not adjusted for price changes; it reflects the actual amounts spent each month. The Census Bureau also provides a “seasonally adjusted annual rate” of total construction spending – what the whole year would look like based on the amounts spent in August. This seasonally adjusted annual rate dipped by 0.7% from July, to $1.78 trillion, up 8.5% from a year ago. These seasonally adjusted annual rates generally show up in the headlines. But I’m going to stick with the actual monthly dollars here. Residential construction – single-family houses and multifamily buildings, plus improvements to residential structures – remained unchanged in August from July, at $86.1 billion. But this was up 12.2% from August 2021 and by a phenomenal 63.9% from August 2019, following a huge construction boom that caused prices of construction materials to blow out:Single-family v. multifamily construction: In terms of the seasonally adjusted annual rates of residential construction, the rate of spending on single-family houses fell for the fifth month in a row, as homebuilders trimmed back to deal with their glut of houses in inventory. But multifamily construction ticked up. But in the multifamily construction segment, the seasonally adjusted annual rate of spending ticked up in August and has been roughly stable at very high levels for the past five months. Non-residential construction – spanning anything from offices and power plants to highways – rose to a record $79.4 billion in August, edging past the prior record of August 2019. This was up 5.2% from August 2021 and 0.4% from August 2019, which had been the prior record.Office construction – a small portion of non-residential construction – also ticked up for the month. But this sector has been languishing ever since work-from-home became the big thing in mid-2020, causing vast amounts of vacant office space to show up on the market across the US. It remains unclear why anyone would now plan another office tower, with this kind of office glut all around, but current construction spending largely reflects projects that were planned years ago. At $7.5 billion in August, spending on office construction was down 0.8% from August 2021, and down 9.4% from the peak in August 2019. This segment will continue to hobble lower as the industry figures out how to approach the new environment for offices:

Kemp suspends Georgia tax on gas until after elections - Georgia Gov. Brian Kemp (R) on Monday extended the suspension of gas taxes in the state until after the midterm elections, citing economic strain from Hurricane Ian, which hit neighboring states hard. “As South Carolina and Florida contend with the damage caused by the storm, and as armies of linemen, emergency response crews, and volunteers continue to move to and through the region, fuel supplies could undergo even greater demand in the days and weeks ahead,” the governor’s office said in a release. Kemp suspended the collection of motor fuel and diesel fuel taxes in an executive order earlier this year, and has since extended the suspension several times. The governor’s office noted that the gas tax suspension will help curb high gas prices, keeping Georgia’s average price around 62 cents below the national average. Kemp in his Monday order also extended a “State of Emergency for Supply Chain Disruptions,” which, among other things, prohibited price gouging on motor and diesel fuel. Both orders will be effective through Nov. 11, after general elections on Nov. 8. “While my executive orders cannot undo the mess caused by Washington, I hope that they alleviate some of the additional strain placed on Georgians by the lingering impact of this major storm,” Kemp said in a statement.

Gas prices continue to rise across Michigan and experts say it may get worse — Gas prices continue to climb across metro Detroit. Right now metro Detroit drivers are paying $4.21 on average at the pump. That's a 16 cents jump from last Monday. Across the state, the statewide average is $4.17 a gallon. That's up 20 cents in just the past week. On a national scale, Michigan has the 9th highest gas prices in the country and the highest prices east of the rocky mountains. According to AAA, higher demand for gas with low supply and the fluctuated price of oil are the main reasons for the price hike. Another issue driving up the cost is Hurricane Ian. Oil production was shut down in the Gulf of Mexico to prevent damage and currently, 9% of oil production remains shut down. According to the Organization of the Petroleum Exporting Countries (OPEC), this may not be the last of the rising prices. The organization is set to announce collective oil production cuts in the coming days. The group could cut up to 1 million barrels a day which would be one of the most drastic reductions in oil production since the start of the pandemic. AAA says if demand remains high while the supply tightens, drivers should expect gas prices to rise again this week. So if you see regular unleaded gas for under $4 a gallon, you may want to stop and fill up. OPEC will be meeting on Wednesday to consider those cuts to oil production.

Gas prices on the rise again: Here's where pump prices stand in Ohio, Kentucky, Indiana - There's been a recent rise in prices at the pump, including in the tri-state area. According to AAA, the rise is attributed to right supply and increased demand as more drivers fuel up are the main culprits. The national average pump price for a gallon of gas rose seven cents over the past week to hit $3.79. “The regional differences in gas prices are stark at the moment, with prices on the West Coast hitting $6 a gallon and higher, while Texas and Gulf Coast states have prices dipping below $3 in some areas.” Andrew Gross, AAA spokesperson, said in a statement. “At least six California refineries are undergoing maintenance, and there is limited pipeline supply to the West Coast from locations east of the Rockies.” AAA said gas prices in the upper Midwest have risen since a deadly refinery fire last month in Toledo, Ohio, which closed the plant. According to the latest reports, the 160,000 barrel-per-day BP-Husky Toledo refinery could be down for months. The current national average of $3.79 is the same as a month ago but 60 cents more than a year ago. Indiana was included in AAA's largest weekly increases, rising 16 cents.

Heavy Truck Sales Up 20% Year-over-year - The BEA released their estimate of vehicle sales for September this morning. This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the September 2022 seasonally adjusted annual sales rate (SAAR). Heavy truck sales really collapsed during the great recession, falling to a low of 180 thousand SAAR in May 2009. Then heavy truck sales increased to a new all-time high of 570 thousand SAAR in April 2019. Click on graph for larger image. Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight." Heavy truck sales declined sharply at the beginning of the pandemic, falling to a low of 308 thousand SAAR in May 2020. Heavy truck sales were at 504 thousand SAAR in September, unchanged from 504 thousand in August, and up from 420 thousand SAAR in September 2021. Usually, heavy truck sales decline sharply prior to a recession. Sales were solid in September.

USA Diesel Demand Bounces Back with a Vengeance - U.S. diesel consumption bounced back with a vengeance from its Labor Day dip and surged well above the levels of the last few years. That’s what energy and environmental geo-analytics company Kayrros noted in a new report sent to Rigzone, outlining that the development was perhaps spurred by early online holiday shopping. “E-commerce is a major driver of U.S. diesel use, as online purchases must be delivered by truck,” Kayrros stated in the report. “Recent polls show nearly half of U.S. consumers planned to start their holiday shopping early to beat inflation. Reports also projected that many more shoppers would be buying their gifts online than last year, with one forecast pegging the annual growth at 12.8 percent - 14.3 percent,” Kayrros added in the report. “If so, the recent spike in diesel use may represent borrowed demand, leading to weaker consumption than would otherwise be expected later in the season,” Kayrros continued. In a separate report sent to Rigzone at the start of September, Kayrros outlined that U.S. diesel demand had increased somewhat, “bouncing back above 2021 levels after slipping below them earlier in the summer”. As of October 4, the average price of diesel in the U.S. is $4.863 per gallon, according to the AAA gas prices website. Yesterday’s average was $4.870 per gallon, the week ago average was $4.890 per gallon, the month ago average was $5.072 per gallon, and the year ago average was $3.356 per gallon, the AAA site showed. The highest recorded average price for diesel in the U.S. was seen on June 19 at $5.816 per gallon, the AAA site points out. In its latest short term energy outlook, the U.S. Energy Information Administration forecasts that retail diesel prices will average $5.20 per gallon in the third quarter of this year, $4.90 per gallon in the fourth quarter, and $4.99 per gallon overall in 2022.

Trade Deficit decreased to $67.4 Billion in August - From the Department of Commerce reported: The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $67.4 billion in August, down $3.1 billion from $70.5 billion in July, revised.August exports were $258.9 billion, $0.7 billion less than July exports. August imports were $326.3 billion, $3.7 billion less than July imports. Exports increased and imports decreased in August.Exports are up 20% year-over-year; imports are up 14% year-over-year. Both imports and exports decreased sharply due to COVID-19 and have now bounced back.The second graph shows the U.S. trade deficit, with and without petroleum.The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products. Note that net, imports and exports of petroleum products are close to zero. The trade deficit with China increased to $37.4 billion in August, from $21.7 billion a year ago.The trade deficit was slightly lower than the consensus forecast.

ISM® Manufacturing index Declined to 50.9% in September - The ISM manufacturing index indicated expansion. The PMI® was at 50.9% in September, down from 52.8% in August. The employment index was at 48.7%, down from 54.2% last month, and the new orders index was at 47.1%, down from 51.3%.From ISM: Manufacturing PMI® at 50.9% September 2022 Manufacturing ISM® Report On Business®“The September Manufacturing PMI® registered 50.9 percent, 1.9 percentage points lower than the 52.8 percent recorded in August. This figure indicates expansion in the overall economy for the 28th month in a row after contraction in April and May 2020. The Manufacturing PMI® figure is the lowest since May 2020, when it registered 43.5 percent. The New Orders Index returned to contraction territory at 47.1 percent, 4.2 percentage points lower than the 51.3 percent recorded in August. The Production Index reading of 50.6 percent is a 0.2-percentage point increase compared to August’s figure of 50.4 percent. The Prices Index registered 51.7 percent, down 0.8 percentage point compared to the August figure of 52.5 percent. This is the index’s lowest reading since June 2020 (51.3 percent). The Backlog of Orders Index registered 50.9 percent, 2.1 percentage points lower than the August reading of 53 percent. After a single month of expansion, the Employment Index contracted at 48.7 percent, 5.5 percentage points lower than the 54.2 percent recorded in August. The Supplier Deliveries Index reading of 52.4 percent is 2.7 percentage points lower than the August figure of 55.1 percent. This is the index’s lowest reading since before the coronavirus pandemic (52.2 percent in December 2019). The Inventories Index registered 55.5 percent, 2.4 percentage points higher than the August reading of 53.1 percent. The New Export Orders Index contracted at 47.8 percent, down 1.6 percentage points compared to August’s figure of 49.4 percent. This is the index’s lowest reading since June 2020, when it registered 47.6 percent. The Imports Index remained in expansion territory at 52.6 percent, 0.1 percentage point above the August reading of 52.5 percent.” This suggests manufacturing expanded at a slower pace in September than in August. This was below the consensus forecast.

September S&P Global US Manufacturing PMI™: Slowing Improvement - The September S&P Global US Manufacturing PMI™ came in at 52.0, up 0.5 from the final August figure. S&P Global US 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:“With US manufacturers reporting a return to growth of order books for the first time in four months, as well as improved job gains, the September survey brings welcome news that business conditions are starting to improve again. However, even with the latest improvement, the weakness of the data in recent months still point to manufacturing acting as a drag on the economy in the third quarter, and demand will need to revive further if any meaningful positive contribution to GDP is going to be seen in the rest of the year.“The brightest signs of life are coming from the domestic market, with producers of both consumer goods and, most notably, business equipment reporting improved sales to the home market. Manufacturers across the board are, however, reporting further export losses, linked to weaker economic growth abroad and the dollar’s strength. “While the strong dollar is curbing exports, a beneficial effect from the greenback’s strength is being seen via lower import costs. With supply chain delays also easing substantially again in September and shipping costs falling, upwards pressure on firms’ costs has moderated sharply, which will feed through to lower goods prices to consumers.” [Press Release] Here is a snapshot of the series since mid-2012. Here is an overlay with the equivalent PMI survey conducted by the Institute for Supply Management (see our full article on this series here).

ISM Manufacturing Unexpectedly Slides In September; New Orders, Jobs Shrink (Graphs Source: Bloomberg) - Expectations were mixed ahead of this morning's Manufacturing sector survey data (ISM expected lower, PMI expected higher), but both were only marginal shifts at best amid rising macro surprise data.

S&P Global's US Manufacturing PMI rose from 51.5 in August to 52.0 for the final September print (above the flash print of 51.8)
ISM's Manufacturing survey headline fell from 52.8 in August to 50.9 in September (well below expectations of 52.0)

PMI data showed new orders rising for the first time in four months, but new export orders fell further as challenging economic conditions and a strong US dollar weighed on foreign customer demand.More problematically, the pace of charge inflation ticked up from August as firms sought to pass through higher cost burdens to clients.Under the ISM hood, things were very different with new orders, employment, and prices all falling in September... Worse still, the ISM data showed New Orders relative to inventories tumbling once again... Worse-est-er even - This was also the biggest drop in ISM employment since the COVID lockdown collapse (second biggest monthly drop in the last decade)...Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:“With US manufacturers reporting a return to growth of order books for the first time in four months, as well as improved job gains, the September survey brings welcome news that business conditions are starting to improve again. However, even with the latest improvement, the weakness of the data in recent months still point to manufacturing acting as a drag on the economy in the third quarter, and demand will need to revive further if any meaningful positive contribution to GDP is going to be seen in the rest of the year.“The brightest signs of life are coming from the domestic market, with producers of both consumer goods and, most notably, business equipment reporting improved sales to the home market. Manufacturers across the board are, however, reporting further export losses, linked to weaker economic growth abroad and the dollar’s strength. “While the strong dollar is curbing exports, a beneficial effect from the greenback’s strength is being seen via lower import costs. With supply chain delays also easing substantially again in September and shipping costs falling, upwards pressure on firms’ costs has moderated sharply, which will feed through to lower goods prices to consumers.”So once again, take your pick - PMI 'good', ISM 'bad' - and is it bad enough to prompt an 'easier' Fed?

ISM® Services Index Decreased to 56.7% in September - The ISM® Services index was at 56.7%, down from 56.9% last month. The employment index increased to 53.0%, from 50.2%. Note: Above 50 indicates expansion, below 50 in contraction. From the Institute for Supply Management: Services PMI® at 56.7% September 2022 Services ISM® Report On Business® In September, the Services PMI® registered 56.7 percent, 0.2 percentage point lower than August’s reading of 56.9 percent. The Business Activity Index registered 59.1 percent, a decrease of 1.8 percentage points compared to the reading of 60.9 percent in August. The New Orders Index figure of 60.6 percent is 1.2 percentage points lower than the August reading of 61.8 percent. This was above expectations.

Weekly Initial Unemployment Claims increase to 219,000 The DOL reported: In the week ending October 1, the advance figure for seasonally adjusted initial claims was 219,000, an increase of 29,000 from the previous week's revised level. The previous week's level was revised down by 3,000 from 193,000 to 190,000. The 4-week moving average was 206,500, an increase of 250 from the previous week's revised average. The previous week's average was revised down by 750 from 207,000 to 206,250. The following graph shows the 4-week moving average of weekly claims since 1971.

BLS: Job Openings Decreased to 10.1 million in August -- From the BLS: Job Openings and Labor Turnover Summary - The number of job openings decreased to 10.1 million on the last business day of August, the U.S. Bureau of Labor Statistics reported today. Hires and total separations were little changed at 6.3 million and 6.0 million, respectively. Within separations, quits (4.2 million) and layoffs and discharges (1.5 million) were little changed. The following graph shows job openings (black 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. 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 August to 10.053 million from 11.170 million in July. The number of job openings (black) were down 5% year-over-year. Quits were up slightly year-over-year. These are voluntary separations. (See light blue columns at bottom of graph for trend for "quits").

ADP Reports Better Than Expected Jump In Jobs In September, Wage Growth Accelerates - Ahead of Friday's big number, and following last month's dismal print (under its new model regime) which dramatically under-predicted the payrolls print in August, ADP was expected to show a modest uptick in September of 200k jobs. The actual print came in at +208k jobs but most notably, the +132k print from August was revised drastically higher to +185k... ADP's Nela Richardson notes that "there are signs that people are returning to the labor market. We're in an interim period where we're going to continue to see steady job gains. Employer demand remains robust and the supply of workers is improving--for now." The goods-producing sector lost 29,000 jobs in September while Services gained 237k...Job changers, who have been notching double-digit, year-over-year gains since the summer of 2021, lost momentum in September. Their annual pay rose 15.7 percent, down from a revised 16.2 percent gain in August. It's the biggest deceleration in the three-year history of our data... For job stayers, annual pay rose 7.8 percent in September from a year ago, up from a revised 7.7 percent in August.

September Employment Report: 263 thousand Jobs, 3.5% Unemployment Rate - From the BLS: Total nonfarm payroll employment increased by 263,000 in September, and the unemployment rate edged down to 3.5 percent, the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in leisure and hospitality and in health care. ... The change in total nonfarm payroll employment for July was revised up by 11,000, from +526,000 to +537,000, and the change for August remained at +315,000. After revision, employment gains in July and August combined were 11,000 higher than previously reported The first graph shows the job losses from the start of the employment recession, in percentage terms. The current employment recession was by far the worst recession since WWII in percentage terms. However, as of August, all of the jobs have returned and are now 514 thousand above pre-pandemic levels. I'll post this graph through the January 2023 report (includes the annual revision). The second graph shows the year-over-year change in total non-farm employment since 1968. In September, the year-over-year change was 5.69 million jobs. Employment was up significantly year-over-year. Total payrolls increased by 263 thousand in September. Private payrolls increased by 288 thousand, and public payrolls decreased 25 thousand. Payrolls for July and August were revised up 11 thousand, combined. The third graph shows the employment population ratio and the participation rate. The Labor Force Participation Rate decreased to 62.3% in September, from 62.4% in August. This is the percentage of the working age population in the labor force. The Employment-Population ratio was unchanged at 60.1% (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 decreased in September to 3.5% from 3.7% in August. This was slightly above consensus expectations; and July and August payrolls were revised up by 11,000 combined.

Employers Added 263,000 Jobs in September, Slightly Less Than Expectations - U.S. employers added 263,000 jobs in September, a hair below consensus forecasts, as the unemployment rate ticked back down, the Labor Department reported on Friday. The report indicates the labor market remains strong even in the face of an aggressive campaign by the Federal Reserve to stem inflation by raising interest rates. Other economic data out this week, including a report Tuesday that there are still 10.1 million jobs available and private payroll firm ADP’s monthly survey showing 208,000 new jobs created, reflect a similar picture of the employment situation. The Fed is hoping the labor market cools down and with it wage inflation. Friday’s report showed a year-over-year gain of 5%, a slight dip from the 5.2% in August.“A labor market characterized by high demand, but limited supply means upward pressure on wages as employers compete to attract and retain employees, putting upward pressure on inflation,” said Odeta Kushi, deputy chief economist at title insurer First American, ahead of the jobs report’s release. “The Federal Reserve is watching wage growth for signs of a cooling economy as it works to tame high inflation.” The wage growth number still leaves many workers behind in the race to keep up with rising prices. As a result, consumers are turning to credit cards and savings to make ends meet. A recent survey from credit firm TransUnion found that consumers are back using their cards after many paid down their balances with money received from three rounds of federal stimulus spending. The average cardholder now carries an average balance of $5,270, “up significantly from 2021, but still below pre-pandemic levels,” TransUnion says. But with interest rates on the rise and a possible weakening of the job market, Americans could be in for a squeeze on their living costs, says Paul Siegfried, senior vice president card and banking business leader at TransUnion.“The folks that are most vulnerable in a high inflation, high interest rate environment are those on a fixed income, or those of low income,” he says.There has been some improvement in the inflation scenario, with gasoline prices down from their midsummer peak and costs of commodities like lumber far below their pandemic levels. But the most recent measures of inflation, such as the August consumer price index, still show it running at twice the rate of the Fed’s 2% annual goal. There are some signs that employers have shifted their hiring patterns and may be expecting a less tight market for new talent, but experts say that the market would still be considered tight by historical standards.“Hiring has softened a little bit,” says Scott Hamilton, global managing director of Gallagher’s human resources and compensation consulting practice, “but we’re still seeing hiring for critical jobs. There’s fewer candidates for these openings and so it’s still tight.”One area where companies are not cutting back, Hamilton adds, is in providing benefits and a flexible workplace, offerings that became critical during the coronavirus pandemic.“I think we’re seeing more of the future of work aligning with the future of living,” he says.And workers are not worried about losing their jobs in the current market, according to data analytics firm Morning Consult. Just 8.1% of employed U.S. adults surveyed in September said they expect to lose employment income in the next four weeks, down from 12.5% in August – an indication recession risks are not yet worrying the average worker,” the company said in a memo on Thursday.“Layoffs in August were up less than 1% from the prior year,” said Bill Armstrong, president of recruiting at Safeguard Global, a workforce management company. “Layoffs, particularly in start-ups, occur in all labor markets but are getting much more attention than they have in the recent past. While certain sectors, such as the mortgage industry, have been hit hard, this has not yet extended into all industries.”

September jobs report: a very positive report within a framework of continued deceleration -- As I have written many, many times, consumption leads employment; and the near stagnation in real sales and spending signaled that we should expect weaker monthly employment reports, with both fewer new jobs and a higher unemployment rate. In September, the former happened; the latter did not. The three month average in employment gains since February has continued to decelerate from over 500,000 to 372,000. But this month the unemployment rate declined back to its post-pandemic low. Here’s my in depth synopsis. HEADLINES:

263,000 jobs added. Private sector jobs increased 288,000. Government jobs decreased by -25,000.
The alternate, and more volatile measure in the household report indicated a gain of 204,000 jobs. The above household number factors into the unemployment and underemployment rates below.
U3 unemployment rate declined 0.2% to 3.5%.
U6 underemployment rate declined 0.3% to 6.7%.
Those not in the labor force at all, but who want a job now, increased 285,000 to 5.834 million, compared with 4.996 million in February 2020.
Those on temporary layoff declined -24,000 to 758,000.
Permanent job losers declined -173,000 to 1,181,000.
July was revised upward by -105,000, and July was unchanged, for a net increase of 11,000 jobs compared with previous reports.
the average manufacturing workweek, one of the 10 components of the Index of Leading Indicators, increased +0.1 hour to 41.1 hours.
Manufacturing jobs increased 22,000, and are at a level higher than before the pandemic.
Construction jobs increased 19,000, also at a level higher than before the pandemic.
Residential construction jobs, which are even more leading, rose by 2,300.
Temporary jobs rose by 27,200. Since the beginning of the pandemic, roughly 300,000 such jobs have been gained.
the number of people unemployed for 5 weeks or less declined by -69,000 to 2,154,000, about equal to its pre-pandemic level.
Average Hourly Earnings for Production and Nonsupervisory Personnel rose $0.10 to $27.77, which is a 5.8% YoY gain, a further decline of -0.3% from last month and its 6.7% peak at the beginning of this year.
the index of aggregate hours worked for non-managerial workers increased 0.5% which is above its level just before the pandemic.
the index of aggregate payrolls for non-managerial workers rose by 0.9%, a very strong increase compared with the last several months’ outright declines in prices.
Leisure and hospitality jobs, which were the most hard-hit during the pandemic, rose 83,000, but are still about -6.7% below their pre-pandemic peak.
Within the leisure and hospitality sector, food and drink establishments added 60,700 jobs, but are still about 560,000, or -4.5% below their pre-pandemic peak.
Professional and business employment increased by 46,000, over 1,000,000 above its pre-pandemic peak.
Full time jobs increased 326,000 in the household report.
Part time jobs declined -7,000 in the household report.
The number of job holders who were part time for economic reasons declined -312,000 to 3,763,000.
The Labor Force Participation Rate declined -0.1% to 62.3%, vs. 63.4% in February 2020.

SUMMARY: This was a very good report with just a few blemishes. On the plus side, the entire slew of leading indicators in the report advanced. Total payroll gains were very strong. The unemployment and underemployment rates both declined. Part time employment was more than replaced by strong full time employment. The rebound in leisure and hospitality employment continued. Wage increases moderated YoY, but on a monthly basis advanced well.The few weak points included the decline in the labor force participation rate, which is why the unemployment and underemployment rates declined as they did. The gains in professional and business employment were weak. In summary, we have a very positive report, completely inconsistent with any idea that we are currently already in a recession, but within the larger framework of an economy which is decelerating.

Comments on September Employment Report - McBride - The headline jobs number in the September employment report was slightly above expectations, and employment for the previous two months was revised up by 11,000, combined. The participation rate decreased, pushing down the unemployment rate to 3.5% - equaling the lowest unemployment rate since 1969! And the employment-population ratio was unchanged. Leisure and hospitality gained 83 thousand jobs in September. At the beginning of the pandemic, in March and April of 2020, leisure and hospitality lost 8.20 million jobs, and are now down 1.14 million jobs since February 2020. So, leisure and hospitality has now added back about 86% all of the jobs lost in March and April 2020. Construction employment increased 19 thousand and is now 95 thousand above the pre-pandemic level. Manufacturing added 22 thousand jobs and is now 163 thousand above the pre-pandemic level. Education: As expected, fewer educators than usual were hired in September, and this resulted in a seasonally adjusted loss of 29 thousand jobs education jobs. In September, the year-over-year employment change was 5.69 million jobs. 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 decreased in September to 82.7% from 82.8% in August, and the 25 to 54 employment population ratio decreased to 80.2% from 80.3% the previous month. Both are close to 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 decreased in September to 3.843 million from 4.149 million in August. This is below pre-recession levels. These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 6.7% from 7.0% in the previous month. This is down from the record high in April 22.9%, and matches the lowest level on record for this measure since 1994. This measure is below the level in February 2020 (pre-pandemic). This graph shows the number of workers unemployed for 27 weeks or more. According to the BLS, there are 1.067 million workers who have been unemployed for more than 26 weeks and still want a job, down from 1.137 million the previous month. This is back to pre-pandemic levels. Summary: The headline monthly jobs number was slightly above expectations and employment for the previous two months was revised up by 11,000, combined. The headline unemployment rate decreased to 3.5%. Overall, this was another solid employment report.

Nearly Half Of Americans Making Six-Figures Living Paycheck To Paycheck Roughly 60% of Americans say they're living paycheck to paycheck - a figure which hasn't budged much overall from last year's 55% despite inflation hitting 40-year highs, according to a recent LendingClub report. Even people earning six figures are feeling the strain, with 45% reporting living paycheck to paycheck vs. 38% last year, CNBC reports."More consumers living paycheck to paycheck indicates that many are continuing to lose their financial stability," said LendingClub financial health officer, Anuj Nayar.The consumer price index, which measures the average change in prices for consumer goods and services, rose a higher-than-expected 8.3% in August, driven by increases in food, shelter and medical care costs.Although real average hourly earnings also rose a seasonally adjusted 0.2% for the month, they remained down 2.8% from a year ago, which means those paychecks don’t stretch as far as they used to. -CNBCMeanwhile, Bank of America found that 71% of workers say their income isn't keeping pace with inflation - resulting in a five-year low in terms of financial security. "It is no secret that prices have been increasing for everyday Americans — not only in the goods and services they purchase but also in the interest rates they’re paying to fund their lives," said Nayar, who noted that people are relying more on credit cards and carry a higher monthly balance, making them financially vulnerable. "This can have detrimental consequences for someone who pays the minimum amount on their credit cards every month."According to an Aug. 30 report from the Federal Reserve Bank of New York, credit card balances increased by $46 billion from last year, becoming the second-biggest source of overall debt last quarter.And as Bloomberg noted last month, more US consumers are saddled with credit card debt for longer periods of time. According to a recent survey by CreditCards.com, 60% of credit card debtors have been holding this type of debt for at least a year, up 50% from a year ago, while those holding debt for over two years is up 40%, from 32%, according to the online credit card marketplace.

Death Is Anything but a Dying Business as Private Equity Cashes In -Private equity firms are investing in health care from cradle to grave, and in that latter category quite literally. A small but growing percentage of the funeral home industry — and the broader death care market — is being gobbled up by private equity-backed firms attracted by high profit margins, predictable income, and the eventual deaths of tens of millions of baby boomers.The funeral home industry is in many ways a prime target for private equity, which looks for markets that are highly fragmented and could benefit from consolidation. By cobbling together chains of funeral homes, these firms can leverage economies of scale in purchasing, improve marketing strategies, and share administrative functions.According to industry officials, about 19,000 funeral homes make up the $23 billion industry in the U.S., at least 80% of which remain privately owned and operated — mostly mom and pop businesses, with a few regional chains thrown in. The remaining 20%, or about 3,800 homes, are owned by funeral home chains, and private equity-backed firms own about 1,000 of those.Consumer advocates worry that private equity firms will follow the lead of publicly traded companies that have built large chains of funeral homes and raised prices for consumers. “The real master that’s being served is not the grieving family who’s paying the bill — it’s the shareholder,” said Joshua Slocum, executive director of the Funeral Consumers Alliance, a nonprofit that seeks to educate consumers about funeral costs and services. Although funeral price data is not readily available to the public, surveys by the local affiliates of the alliance have found that when publicly traded or private equity-backed chains acquire individual funeral homes, price hikes tend to follow.

NYC Nearing Deal For Norwegian Cruise Ship To House Migrants - New York City signaled plenty of virtue over its "sanctuary city" status, though it has been overwhelmed with thousands of illegal immigrants being bused in from Texas, and the costs are skyrocketing. In another interesting development, NYPost reported Mayor Eric Adams is securing a deal with the Norwegian Cruise Line to house the migrants on a luxury cruise ship.Sources tell NYPost Adams is finalizing a deal with Norwegian to rent a massive cruise liner for six months to house and process migrants before entering the city's overwhelmed shelter system. The vessel would be docked at Staten Island's Homeport. Migrants would be allowed to come and go as they please while staying on the ship. Sources explained the cruise ship rental would be much cheaper than building out another tent city in the metro area. The one in the Bronx, at the Orchard Beach parking, is slated to open soon and will cost $15 million per month to operate. Adams is even holding talks with another ship operator, Tallink, to house Ukrainian refugees who fled their country earlier this year after the Russian invasion. Fox News estimates around 15,500 illegal immigrants have flooded NYC since May as a record number of migrants are crossing into the US, with over 2 million migrant encounters by Customs and Border Protection this year.

Conservatives Fear Schools Being Pressed To Accept Transgender Pronouns, Bathrooms And Showers - Texas school boards are being pressured to adopt policies giving transgender students the right to use preferred pronouns, school bathrooms, locker rooms, and showers, according to conservatives who feel schools are stepping on parental rights.The Texas American Civil Liberties Union presented a “best practices” program on transgender student legal issues based on Biden’s Department of Education interpretation during a convention on Sept. 24 in San Antonio.The Texas Association of School Administrators and Texas Association of School Boards 2022 convention included speakers and training for Texas school officials. The ACLU, a liberal civil rights group, titled their program: “Transgender Students in Texas Schools: What You Need to Know.”ACLU attorneys gave a presentation at the convention that included transgender students speaking directly to officials on “challenges” in schools with restrooms, sports, dress codes, pronouns, and bullying.David Hamilton, a board member at Fort Bend Independent School Board who attended the ACLU presentation, posted on Twitter that the union was “trying to force Texas public schools to allow boys in girls’ locker rooms, showers, restrooms, and athletics.”“They had a biological girl who IDs as a boy speak because that appeals better,” his post continued. When contacted by The Epoch Times, Hamilton said he viewed the ACLU presentation as a warning that schools must accommodate transgender student rights or face lawsuits from it or other liberal groups.

Teachers from Philippines help struggling U.S. schools amid teacher shortage - — Carolyn Stewart had spent the past five months trying to find teachers for the Bullhead City School District, and now she walked into the Las Vegas airport holding up a sign with the name of her latest hire. The 75-year-old superintendent wandered through the international baggage claim, calling out a name she had just learned to pronounce. “Ms. Obreque?” she said. “Teacher Rose Jean Obreque?” She saw a woman smiling and moving toward her with a large suitcase. “Are you our new teacher?” Stewart asked, but the woman shook her head and walked by. Stewart raised the sign above her head and took out her phone to check in with her office 100 miles south in Bullhead City, Ariz. The 2,300 students in her district had been back in school for several weeks, but she was still missing almost 30 percent of her classroom staff. Each day involved a high-wire act of emergency substitutes and reconfigured classrooms as the fallout continued to arrive in her email. Another teacher had just written to give her two-week notice, citing “chronic exhaustion.” A new statewide report had found that elementary and junior high test scores in math had dropped by as much as 11 percentage points since the beginning of the pandemic. The principal of her junior high had sent a message with the subject line “venting.” “The first two weeks have been the hardest thing I’ve ever faced,” he wrote. “My teachers are burnt out already. They come to me for answers and I really have none. We are, as my dad used to say, four flat tires from bankruptcy, except in this case we are one teacher away from not being able to operate the school.” Stewart had been working in some of the country’s most challenging public schools for 52 years, but only in recent months had she begun to worry that the entire system of American education was at risk of failing. The United States had lost 370,000 teachers since the beginning of the pandemic, according to the Bureau of Labor Statistics. Maine had started recruiting summer camp counselors into classrooms, Florida was relying on military veterans with no prior teaching experience, and Arizona had dropped its college-degree requirement, but Stewart was still struggling to find people willing to teach in a high-poverty district for a starting salary of $38,500 a year. She’d sent recruiters to hiring fairs across the state, but they had come back without a single lead. She’d advertised on college campuses and at job fairs across the country and eventually come up with a half-dozen qualified applicants for 42 openings. “Basically, we need bodies at this point,” she’d told her school board, and they’d agreed to hire 20 foreign teachers with master’s degrees to move from the Philippines to the desert of rural Arizona.

Will The Call For A Yale Boycott Be A Wake-Up Call For The Woke? Don't Bet On It -- Judge James C. Ho of the United States Court of Appeals for the Fifth Circuit recently made headlines when he publicly declared that he would no longer consider graduates of Yale Law School for clerkship positions due to the erosion of free speech rights at the university. In my view, Judge Ho is right on the merits but wrong on the means. I do not believe that these students should be the subject of a boycott for the failure of the faculty. However, the real question is whether such a boycott would even work. The answer is no. Even if the boycott were successful in dramatically reducing the prestigious clerkship for the school, it would likely not produce a change of behavior by the faculty.The sad reality is that many professors long ago jettisoned the interests of their students and their institution in favor of pursuing their own agendas.Federal clerkships are some of the most sought after positions for law school graduates, particularly appellate clerkships. They not only open up opportunities for the students but highlight the influence of their schools.I respect Judge Ho’s objections over the demise of free speech at Yale. (For the record, I clerked on the Fifth Circuit on which Judge Ho serves). There has been a chilling loss of viewpoint diversity and tolerance on our campuses.It is the subject of my recent publication in the Harvard Journal of Law and Public Policy, entitled “Harm and Hegemony: The Decline of Free Speech in the United States.”Judge Ho raised how cancel culture “plagues a wide variety of institutions” and “is one of the leading reasons why citizens no longer trust a wide variety of once-leading institutions.” He then noted that he will “no longer hire law clerks from Yale Law School” because “Yale not only tolerates the cancellation of views — it actively practices it.”That is manifestly true as vividly shown in a recent incident disrupting a conservative speaker at the school. Yale was also recently ranked at the bottom of universities on the issue of free speech. (Ho graduated from University of Chicago which is ranked as the number one free speech university).Judge Ho is himself a telling measure of how far we have departed from our free speech roots. He came to the United States from Taiwan as a young child and his family is acutely aware of the struggle for free speech in the nearby mainland China. Yet, today, some faculty at Harvard and other schools now insist “China was right” on censorship on the Internet and support the limitation of free speech as harmful. Speech controls have become an article of faith with many professors.Judge Ho is trying to use a boycott to pressure these faculty and administrators to defend free speech. The problem is that these students should not be made cannon fodder in a campaign directed against the faculty. It uses the same cancel campaign elements to combat the intolerance of the university. It will also not work. It is manifestly harmful to these institutions to purge their faculties of conservative and libertarian members and impose a growing orthodoxy in events and expression. It is killing the life’s blood of higher education, which needs diversity of thought, free speech, and academic freedom. Even without a formal boycott, conservative judges (and judges who value free speech) are likely to be uneasy about the educational bias and intolerance shown at such universities. These professors know that. However, orthodoxy always advantages those who can control debate and opportunities. Faculty members have effectively replicated their own values and reduced any dissent in publications or events. The control over faculties, publications, and conferences means that academicians face little challenge over their own views. Academic conferences amplify those views and exclude those who might contest their scholarship or secure positions on panels or publications.

Restoring Free Speech At Our Universities - Now that the autumn semester is well underway, it is worth asking whether students have a chance to participate in free and open debate. The short answer is “No, they don’t.” They don’t have a chance to explore unpopular ideas and controversial opinions. They are “protected” from ideas that might make them uncomfortable. What’s being stifled here is more than speech. It’s their education and, with it, their preparation to live in a tolerant society, where fellow citizens hold different views. As Hanna Holborn Gray, one of America’s finest university presidents, once observed: “Education should not be intended to make people comfortable, it is meant to make them think. Universities should be expected to provide the conditions within which hard thought, and therefore strong disagreement, independent judgment, and the questioning of stubborn assumptions, can flourish in an environment of the greatest freedom." She was absolutely right.Unfortunately, today few universities follow Gray’s advice, and they bear a heavy responsibility for their failure. Promoting free discourse is central to their mission. It’s not only the best way to educate students, it is also the best way to encourage innovative research and to model serious engagement with differing views, a beleaguered value in today’s Western societies.Students don’t need reminding how intolerant their campuses are. They already know. If they hold unpopular opinions, they keep their heads down. If they hold dominant views, they are all too eager to shame those who differ rather than debate them. Faculty and administrators are among the worst bullies, and they hold real power over students.Whole departments display this intolerance. That’s especially true in the humanities and social sciences, but the infection has spread to the sciences. Increasingly, departments won’t hire or admit anyone who doesn’t swear allegiance to a specific political agenda. That’s not hypothetical or hyperbolic. Many now require applicants to submit written statements explaining in detail how they contribute to “diversity, equity, and inclusion” (DEI).Passing that political litmus test is essential. Faculty hiring committees simply wouldn’t hire an applicant who responded, “My goal is to treat everyone equally, give preferential treatment to no one, and grade everyone solely according to the quality of their work, regardless of race, creed, or gender.” That statement is a quintessential American value, but declaring it publicly is career death. Better to genuflect to the gods of diversity, equity, and inclusion and appease the DEI bureaucrats, who are ubiquitous on every campus.This poisonous atmosphere is not confined to a few departments or a few universities. It is pervasive. The Ivy League sets a dismal example, but it is hardly alone. Speech suppression, typically enforced in the name of “social justice” or “inclusion,” is now commonplace at almost all universities, big and small, public and private.The best data on this collapse of campus free speech has been compiled by the Foundation for Individual Rights and Expression. It is based on extensive surveys, not anecdotes. FIRE is politically neutral and was founded to defend all varieties of speech on campus.Based on these recent surveys, FIRE ranked 203 universities on a wide range of speech-related issues. Only six universities achieved a “good” rating: the University of Chicago, Kansas State, Purdue, Mississippi State, Oklahoma, and Claremont McKenna. Some very prominent schools were ranked “poor” and one, Columbia University, was given the special tag of “abysmal.”What about the Ivies and Stanford? None was rated “above average” on free speech and only two, Dartmouth and Stanford, achieved an “average” rating. From there, it’s all downhill. Cornell (#154), Princeton (#169) and Harvard (#170) were ranked “below average.” Yale, Penn, and Columbia scrape the bottom of the barrel.The conclusion is disturbing. Free speech on campus is in trouble. Several of our country’s leading institutions have led this race to the bottom and are doing nothing to remedy their problems. Their failure spreads well beyond campus. When their students graduate, they carry these illiberal attitudes into society and the workplace. That’s exactly what they’ve done over the past decade.

What makes student loan forgiveness a timeless American issue ---In late August, President Biden signed an executive order that will forgive up to $10,000 of student debt for borrowers earning less than $125,000 per year. Borrowers with federal Pell grants, which go to those with exceptional financial need, will receive up to $20,000 in forgiveness, if they make less than $125,000. The plan has become a political hot potato drawing fire mostly from the political right, but also from some constitutional scholars as well as education and personal finance experts who see it as problematic, incomplete, or both. On the other hand, the 40 million or so Americans who would see their student loan debt reduced or even eliminated—that’s more than 15% of the U.S. adult population—might be delighted with the president's determination to move forward with the plan despite its critics. I asked Secretary of Education Miguel Cardona why the plan has become a lightning rod.“If we're serious about America being the best and leading the world and producing the best thinkers, then we need to invest in education," he said. "It's almost hypocritical for folks to be complaining about this yet applauding what we did to keep businesses open during a pandemic, through our PPP [Paycheck Protection Program]." The left wing of the Democratic party—some of whom like Bernie Sanders have pushed to cancel all student debt—seem mostly on board with Biden’s plan. New York Rep. Alexandria Ocasio-Cortez applauded the plan, though she urged her supporters to fight for even more forgiveness. “President Biden was responsive to the stories that we amplified, and his action is one that is historic and will change lives for the better,” fellow Squad member Massachusetts Rep. Ayanna Pressley told us. “There were those who considered this issue to be fringe and marginal. We worked with a coalition for two years to prove that it was not, and that canceling student debt would be transformative." Pressley stressed that the Biden administration should continue supporting historically black colleges and universities; pushing for tuition-free college; and investing in Pell Grants. "But this is a bold, strong, necessary step in the right direction. It is a victory for everyone,” she said. Now the objections: Opponents say debt forgiveness will stoke inflation, while others say the Biden administration doesn't have the Constitutional authority to wipe away so much debt. Some critics contend this isn't fair to people who never took on student loan debt, or that Biden went too far when he offered up to $20,000 in forgiveness for Pell Grant recipients. “Student debt is crippling,” Texas Rep. Kevin Brady acknowledged to Yahoo Finance. “And when too much is taken on it can change your life. But this proposal by the president is illegal and inflationary. It is financially irresponsible. But most of all, it's just unfair. It's a kick in the teeth to all the blue collar workers and all the Americans who don't have student loans." Brady spoke of a pending bi-partisan bill called SECURE 2.0 as an alternative to the forgiveness plan, which he says would allow businesses to contribute to employees' retirement accounts when workers make student loan payments. Example: If you put $100 towards your student loan, your company could match it with up to $100 going into a retirement plan like a 401(k).

Pharma-Funded FDA Gets Drugs Out Faster, But Some Work Only ‘Marginally’ and Most Are Pricey --Dr. Steven-Huy Han, a UCLA liver specialist, has prescribed Ocaliva to a handful of patients, although he’s not sure it helps. As advertised, the drug is lowering levels of an enzyme called alkaline phosphatase in their blood, and that should be a sign of healing for their autoimmune disease, called primary biliary cholangitis. But “no one knows for sure,” Han said, whether less enzyme means they won’t get liver cancer or cirrhosis in the long run. “I have no idea if the drug will make them better,” he said. “It could take 10, 20, or 30 years to know.”Ocaliva came to market through an FDA review process created 30 years ago called accelerated approval, which allows pharmaceutical companies to license promising treatments without proving they are effective. It has become a common path to market — a ccounting for 14 of the 50 approvals of novel drugs in 2021 compared with four among 59 in 2018, for example.The FDA’s accelerated approval is usually based on a “surrogate marker” of effectiveness — evidence of lower viral loads for HIV, for example, or shrinking tumors for cancer. Debate rages over the validity of some of these stand-ins, and some of the drugs.“If you’ve got a game-changing drug that truly is going to make a difference, you don’t need surrogate markers to prove that. If it’s effective, patients will survive longer,” said Dr. Aaron Mitchell, an oncologist at Memorial Sloan Kettering Cancer Center. The shortened approval process, he said, is one reason “we are getting a lot of marginally effective, not clinically meaningful, more expensive drugs on the market.”Many of the estimated 100,000 U.S. patients with primary biliary cholangitis — most are women — had few other treatment options. And their testimony, at FDA meetings and in online forums, helped boost Ocaliva to FDA approval in 2016. Its list price is about $100,000 a year. Ocaliva’s profile is typical for the FDA’s accelerated program. In 2019 the drug ranked seventh in Medicare spending — about $54 million — among products approved through the program, which launched in 1992. That same year, Congress passed the Prescription Drug User Fee Act, or PDUFA, a law committing the drug industry to pay so-called user fees to help fund the FDA’s drug approval process.The fees have steadily swollen in importance, accounting for $2.9 billion of the agency’s $6.5 billion 2022 budget, including two-thirds of the drug regulation budget, and the work of at least 40% of the FDA’s 18,000 employees. Companies in recent years have paid between $2.5 million and $3 million to have each drug application reviewed.

COVID Tied to Spike in Deaths in Liver Disease With Diabetes - The COVID-19 pandemic fueled a sharp uptick in deaths related to chronic liver disease and cirrhosis among people with diabetes, largely owing to nonalcoholic fatty liver disease (NAFLD) and alcohol-related liver disease (ALD), new data show."Our observations confirm that COVID-19 had a higher likelihood of impacting vulnerable populations with pre-existing chronic liver diseases and diabetes, with a death rate as high as 10% in individuals with co-existing chronic liver disease and diabetes," write the authors."The inability to attend regular outpatient clinics for close monitoring and treatment accompanied by diversion of health care resources to COVID-19 care may have resulted in the suboptimal or delayed clinical care of individuals with diabetes and chronic liver disease during the COVID-19 pandemic," they add.Donghee Kim, MD, PhD, with the Division of Gastroenterology and Hepatology, Stanford University School of Medicine, in Stanford, California, and colleagues report their findings in the journal Digestive and Liver Disease. The researchers used US national mortality data (2017–2020) to estimate chronic liver disease–related mortality trends among individuals with diabetes before and during the COVID-19 pandemic. Before the pandemic, the quarterly mortality for chronic liver disease remained stable (quarterly percentage change [QPC], 0.6%) but then sharply increased during the pandemic (QPC, 8.6%).A similar trend was seen with cirrhosis-related mortality (QPC, 0.3% before the pandemic vs 8.4% during the pandemic).NAFLD and ALD mortality among individuals with diabetes was steadily increasing before the pandemic (QPC, 4.2% and 3.5%, respectively) but showed a more rapid increase during the pandemic (QPC, 9.6% and 7.7%, respectively).ALD-related mortality in men was more than threefold higher than in women, while NAFLD-related mortality in women was more than twofold higher than in men.Mortality for hepatitis C virus infection declined before the pandemic (QPC, −3.3%) and remained stable during the pandemic.COVID-19–related mortality among adults with chronic liver disease and diabetes also rose sharply during the pandemic ― from 0.4% in the first quarter of 2020 to 12.9% in the last quarter of 2020 ― with no considerable difference between men and women.

Strokes, heart attacks, sudden death: Does America understand the long-term risks of catching COVID? -A 35-year-old acquaintance drops dead from a hemorrhagic stroke. A friend in her 40s, and another in his 70s, experience recurrent spells of extreme dizziness, their hearts pounding in their chests when they stand. A 21-year-old student with no prior medical history is admitted to the ICU with heart failure, while a 48-year-old avid tennis player, previously healthy, suddenly suffers a heart attack. A relative is diagnosed with pericarditis, an inflammation of the protective sac surrounding the heart.I can't confirm the exact etiology of all these cases. But every one of the people I mentioned had a history of COVID either days or months beforehand–and all of them experienced only mild cases of infection at the time.Is it possible, despite everything we know, that we still underestimate COVID’s reach and danger? It is not normal for me to know so many people with severe conditions. Not normal at all.Lengthy social media threads have begun compiling lists of people much like those mentioned above, and while there are many possible causes for their health misfortunes, the sheer volume of cases speaks to something more worrisome than just a Twitterphenomenon.A large international study involving 136 research institutions in 32 countries has documented an increased incidence of ischemic strokes in young patients compared to pre-pandemic levels. More than a third were under the age of 55, and many lacked typical risk factors such as smoking, diabetes, and high blood pressure. Is COVID the reason?In a study that included patients from the initial wave of the pandemic, scientists from theUniversity of Florida found that survivors of severe COVID-19 had two-and-a-half times the risk of dying in the year following illness compared to people who were never infected. Of note, nearly 80% of downstream deaths were not due to typical Covid complications like acute respiratory distress or cardiac causes."The results suggest that a severe impact of COVID-19 exists beyond the cost and suffering of the initial hospitalization,” says Arch Mainous, one of the study’s authors.In a huge analysis of more than 30,000 vaccinated patients who had experienced COVID breakthrough infections (pre-Omicron), scientists found that six months later, even the vaccinated incurred a higher risk of death and debilitating long COVID symptoms involving multiple organs (the lungs, heart, kidney, brain, and others) when compared to controls without evidence of SARS-CoV-2 infection. Even the fittest are not immune. Researchers have noted a troubling pattern of sudden cardiac death in athletes in the wake of the pandemic, owing possibly to COVID-related heart complications–myocarditis and pericarditis. The Arizona Cardinals football lineman J.J. Watt recently disclosed that he had an episode of atrial fibrillation and while there are many possible causes of AFib, it's notable that Watt was diagnosed with COVID-19 just about six weeks prior. Atrial fibrillation has long been associated with COVID.In a non-peer-reviewed study, Ziyad Al-Aly from the Washington University School of Medicine and his team analyzed the health records of 38,000 people with COVID reinfections. Compared to individuals with a single infection, researchers found that these reinfected individuals had higher risks of mortality, hospitalization, and adverse health outcomes in multiple organs.These risks were present regardless of vaccination status. Every infection added increased risk for both acute and long-term complications.We’re still learning how pervasive this all is. An analysis of more than 150,000 COVID-19 survivors published in Nature Medicine found that people with coronavirus are at increased risk of developing neurologic sequelae–including strokes, cognition and memory problems, seizures, movement disorders, and many other issues–in the first year after infection. The risks of developing these long-term complications were apparent even in people who did not require hospitalization during their initial infection. “The results show the profound long-term consequences of COVID-19,” Al-Aly told me. “Some of these will scar people for a lifetime.”

Covid booster rates lag ahead of projected winter surge - Joe Gonzales, 37, said he knows there’s still a risk of getting covid — he believes he was infected with the virus this summer. But after getting two doses of the vaccine, the Flower Mound, Tex., man doesn’t understand why he needs the third and fourth “booster” shots urged by federal health officials. “And then the president is saying things like, ‘The pandemic is over,’ ” Gonzales said of President Biden’s comments during a recent “60 Minutes” interview. “That doesn’t help” motivate him to get a shot. Gonzales’s lack of urgency typifies the view of many Americans, worn down by a never-ending pandemic and unsure about next steps as the nation enters its third covid winter. Some have stopped paying attention to health officials’ recommendations altogether, despite projections of a fall and winter wave with the potential to sicken millions and kill tens of thousands, particularly the elderly and sick. About half of Americans say they’ve heard little or nothing about the shots, according to a recent tracking poll by the nonpartisan Kaiser Family Foundation. “We have got to explain the value of these vaccines for the American people … [and] why this is probably the single most important health intervention they can make right now to protect themselves and their health for the next three to six months,” Ashish Jha, the White House’s coronavirus coordinator, said in an interview. Federal officials have spent the past year urging Americans to get booster shots to bolster their protection against the coronavirus, which wanes over time. In early September, they rushed out the first new shots — reformulated to target the still-dominant omicron variants — to give people time to get inoculated before a likely cold weather surge, when respiratory infections increase as people head indoors, and recommended that all Americans 12 and older receive a third and fourth dose of vaccine. But the campaigns have lagged badly. Only about 105 million U.S. adults — roughly 40 percent — have received the third shot of vaccine initially offered a year ago, according to federal data, a far lower rate than countries like the United Kingdom, where more than 70 percent of adults have gotten a third dose. That figure is also well behind the 200 million U.S. adults who completed their primary series of shots. Early data shows that just over 11 million Americans — or about 4 percent of those eligible — have received the new bivalent booster shots. A third of adults say they eventually plan to get those shots, according to KFF polling. For public health leaders, the low booster rate is startling in a nation that financed the shots’ development, offers them free and touts them as the best way to protect against a virus that has already claimed more than 1 million lives in this country.

Sweden Stops Recommending COVID-19 Vaccines For Children - The Swedish Public Health Authority has stopped recommending healthy children between the ages of 12 and 17 receive the COVID-19 vaccine. The general recommendation that healthy children aged 12 to 17 receive the COVID-19 vaccine ended after Oct. 31, according to the authority in a revision posted this weekend. It cited the “very low risk of serious illness and death from COVID-19” in children and teens for the change. After Oct. 31, vaccination will be recommended for only certain children in vulnerable groups. Soren Andersson, an official in the Swedish health agency, elaborated on the rule change to broadcaster SVT and said that “we see that the need for care as a result of COVID-19 has been low among children and young people during the pandemic” and added that the need for vaccines has “decreased since the virus variant omicron began to spread.” “In this phase of the pandemic, we do not see that there is a continued need for vaccination in this group,” Andersson continued. For people over the age of 18, the Swedish health authority is still recommending three vaccine doses. Four doses are recommended for people over the age of 65.

Coronavirus dashboard for October 5: an autumn lull as COVID-19 evolves towards seasonal endemicity - Back in August I highlighted some epidemiological work by Trevor Bedford about what endemic COVID is likely to look like, based on the rate of mutations and the period of time that previous infection makes a recovered person resistant to re-infection. Here’s his graph: He indicated that it “illustrate[s] a scenario where we end up in a regime of year-round variant-driven circulation with more circulation in the winter than summer, but not flu-like winter seasons and summer troughs.” In other words, we could expect higher caseloads during regular seasonal waves, but unlike influenza, the virus would never entirely recede into the background during the “off” seasons. That is what we are seeing so far this autumn. Confirmed cases have continued to decline, presently just under 45,000/day, a little under 1/3rd of their recent summer peak in mid-June. Deaths have been hovering between 400 and 450/day, about in the middle of their 350-550 range since the beginning of this past spring: The longer-term graph of each since the beginning of the pandemic shows that, at their present level cases are at their lowest point since summer 2020, with the exception of a brief period during September 2020, the May-July lull in 2021, and the springtime lull this year. Deaths since spring remain lower than at any point except the May-July lull of 2021: Because so many cases are asymptomatic, or people confirm their cases via home testing but do not get confirmation by “official” tests, we know that the confirmed cases indicated above are lower than the “real” number. For that, here is the long-term look from Biobot, which measures COVID concentrations in wastewater: The likelihood is that there are about 200,000 “actual” new cases each day at present. But even so, this level is below any time since Delta first hit in summer 2021, with the exception of last autumn and this spring’s lulls. Hospitalizations show a similar pattern. They are currently down 50% since their summer peak, at about 25,000/day: This is also below any point in the pandemic except for briefly during September 2020, the May-July 2021 low, and this past spring’s lull. The CDC’s most recent update of variants shows that BA.5 is still dominant, causing about 81% of cases, while more recent offshoots of BA.2, BA.4, and BA.5 are causing the rest. BA’s share is down from 89% in late August: But this does not mean that the other variants are surging, because cases have declined from roughly 90,000 to 45,000 during that time. 81% of 45k=36k (remaining variants cause 9k cases) The batch of new variants have been dubbed the “Pentagon” by epidmiologist JP Weiland, and have caused a sharp increase in cases in several countries in Europe and elsewhere. Here’s what she thinks that means for the US: But even she is not sure that any wave generated by the new variants will exceed summer’s BA.5 peak, let alone approach last winter’s horrible wave: In summary, we have having an autumn lull as predicted by the seasonal model. There will probably be a winter wave, but the size of that wave is completely unknown, primarily due to the fact that probably 90%+ of the population has been vaccinated and/or previously infected, giving rise to at least some level of resistance - a disease on its way to seasonal endemicity.

Osterholm: 'Substantial' number of COVID infections in Minnesota | MPR News (broadcast audio) Joe Biden declared the pandemic ‘over’ on 60 Minutes in September. But if COVID-19 has taught us anything, it’s that more twists may be in store. To answer our questions about what this fall might look like, we spoke with Michael Osterholm, an epidemiologist and the director of the Center for Infectious Disease Research and Policy at the University of Minnesota.

Ohio's COVID-19 cases hit milestone unseen in months – The Ohio Department of Health on Thursday reported 9,997 new COVID-19 cases for the past week, going under 10,000 for the first time in nearly six months. The state has seen consistently smaller case rates, breaking a 10-week pattern in the past two weeks. Prior to July, the state’s COVID-19 spread had not broken 20,000 new cases in nearly five months. Ohio has not had new cases dip below 10,000 since April 28, when it reported 8,731. It immediately went up to 11,013 during the week of April 29. Later in July, cases climbed over 20,000 and stayed above that threshold for 10 weeks in a row. ODH began reporting COVID-19 cases, hospitalizations, deaths and vaccinations weekly instead of daily in mid-March after new infections slowed to a low level after the omicron wave. Over the past week, the state averaged around 1,428 new coronavirus cases per day. Ohio saw fewer people hospitalized with the virus as case numbers also dropped. The 369 hospitalizations reported by ODH in the past seven days (about 53 per day) are a noticeable drop from 432 last week and 523 the week prior. While cases and hospitalizations are down, more people died from COVID-19 in the past week. ODH said 94 died from the virus, up slightly from 89 deaths the week prior. A total of 7,197 Ohioans started the COVID-19 vaccination process in the past seven days. Another 6,607 finished vaccination by getting their second dose. Around six in 10 Ohioans are partially or fully vaccinated.

Covid Conditions Improving Nationally In US, Data Shows - Signaling that Covid conditions are improving nationally, all the pandemic metrics except deaths continue to fall noticeably in the United States. Known coronavirus positive cases in the country have fallen by 18 percent in the last two weeks, according to the New York Times' latest data. Covid casualties rose by 15 percent during the same period. The total number of people losing their lives due to coronavirus infection in the country has risen to 1,056,434, as per Johns Hopkins University's latest data. 5819 new infections on Sunday took the total U.S. Covid cases to 96,074,024. 456 additional deaths were reported globally on Sunday, taking the total number of people who lost their lives due to the pandemic so far to 6,537,236. 94,590,350 people have so far recovered from the disease, the Worldometer tally shows. U.S. hospitals reported a 14 percent decrease in the number of Covid patients in the last two weeks. The number of I.C.U. admissions due to the worse stage of the viral disease has fallen by 12 percent. U.S. Covid hospitalizations fell to 29,835. 3664 of these patients are admitted in intensive care units. The nation's current test positivity rate is 10 percent. As per the latest data published by the Centers for Disease Control and Prevention, 224,980,931 Americans, or 67.8 percent of the eligible population, have been administered both doses of Covid vaccine so far. This includes 92.3 percent of people above 65. 48.7 percent of the eligible population, or 109,578,270 people, have already received a booster dose that is recommended to provide additional protection from the killer virus. 35.5 percent of the eligible population, or 23,118,101 people, have taken a second booster dose.

COVID-19 continues upward trend in Europe | CIDRAP - Europe's COVID cases showed more signs of rising last week, marking the first regionwide spike since the most recent BA.5 wave, the European Centre for Disease Prevention and Control (ECDC) said today in a weekly update. In the past, increasing cases in Europe have come ahead of similar rises in other regions, so trends in Europe are a closely watched global indicator.Cases in people ages 65 and older rose 9% compared to the previous week, which the ECDC said was led by recent increases in 14 of 26 countries in the European Union that reported data. Deaths continued a decreasing trend.Generally, hospitalization and intensive care unit (ICU) markers were stable in the region, but of 27 reporting countries, 14 noted an increasing trend. The ECDC said the overall picture is that increasing transmission in the majority of countries is mainly affecting seniors, which is in turn impacting hospitals."Changes in population mixing following the summer break are likely to be the main driver of these increases, with no indication of changes in the distribution of circulating variants," the ECDC said.In the United Kingdom, most COVID indicators rose last week compared to the previous week, the Health Security Agency (HSA) said yesterday, pointing out that hospitalizations are highest in those ages 85 and older and that officials have seen a large spike in hospitalizations in those older than 80.Officials said the North East region had the highest hospital admission level and over the whole region, deaths remained stable.Mary Ramsay, MBBS, who directs the HSA's public health programs, said, "It is clear now that we are seeing an increase which could signal the start of the anticipated winter wave of COVID-19." She added that the time to get a booster shot if eligible is now. "Cases have started to climb, and hospitalizations are increasing in the oldest age groups," Ramsay said. In the United States, COVID metrics continue to fall, as variant proportions continue to shift. In aweekly update, the Centers for Disease Control and Prevention (CDC) said the 7-day average for new daily cases decreased 13.1% compared to the week before, with the 7-day average for new COVID deaths down 6.7%.The 7-day average for new daily COVID hospitalizations dropped 7.4% compared to the week before. Hospitalizations have decreased by 25% over the past month, with rates highest in adults ages 85 and older.One measure that rose was the 7-day average for PCR test positivity, which increased slightly from 9.6% to 9.8%. Wastewater surveillance suggests that 53% of monitoring sites reported a decrease in SARS-CoV-2 levels, while 41% reported an increase. Regarding variant proportions, BA.5 is still dominant, but continues to decline slowly as newer Omicron subvariants continue to rise slowly, the CDC said today in its latest proportion updates. BA.5 declined from 83.2% to 81.3% over the past week, while BA.2.75 rose from 1.2% to 1.4% and BF.7 rose from 2.4% to 3.4%. Also, the level of BA.4.6, seen at highest levels in the southern Midwest states, rose from 11.8% to 12.8%.

First signs of new COVID-19 wave seen in colder countries – COVID-19 cases and hospitalizations are creeping up in Northern Europe where the colder and wetter weather is first being felt across the bloc. Latest data from Belgium, the U.K. and Denmark points to a gradual uptick in the number of cases and hospitalizations. Belgium's health authority said its modeling points to a new COVID-19 wave hitting in mid-October. Its data published on Friday suggests the first ripples of this wave have already arrived. Belgium reported a 17 percent increase in the number of new cases of coronavirus in the week to September 19 from the previous week. Hospitalizations in the week to September 22 were more stable, rising 4 percent, the public health authority said. Denmark's infectious disease institute reported first data indicating a reversal in infection rates, which after a long period of decline are now stabilizing or rising slightly across the regions. The institute also noted that hospitalizations rose 6 percent over the last week, compared with the week before. “People aged 70 to 89 remain the largest group among the newly admitted, as has been the case since the beginning of the year,” the institute said. And in the U.K., the number of new cases in the week up to September 17 was 13 percent higher than the previous week, while hospitalizations were up 17 percent in the week up to September 19. Public health authorities including the World Health Organization have been warning for some months of the likely rise in cases again this cold season. Of particular concern is the pressure on health systems, especially with an anticipated surge in other respiratory viruses like flu this winter. “While COVID-19 rates are still low, the latest data for the last seven days indicate a rise in hospitalizations and a rise in positive tests reported from the community,” said Susan Hopkins, chief medical advisor at the U.K. Health Security Agency.

COVID cases rising in Europe point to a coming U.S. surge - As the U.S. heads into a third pandemic winter, the first hints are emerging that another possible surge of COVID-19 infections could be on its way.So far, no national surge has started yet. The number of people getting infected, hospitalized and dying from COVID in the U.S. has been gently declining from a fairly high plateau.But as the weather cools and people start spending more time inside, where the virus spreads more easily, the risks of a resurgence increase.The first hint of what could be in store is what's happening in Europe. Infections have been rising in many European countries, including the U.K., France, and Italy."In the past, what's happened in Europe often has been a harbinger for what's about to happen in the United States," says Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota. "So I think the bottom line message for us in this country is: We have to be prepared for what they are beginning to see in Europe." Several computer models are projecting that COVID infections will continue to recede at least through the end of the year. But researchers stress there are many uncertainties that could change that, such as as whether more infectious variants start to spread fast in the U.S.In fact, scientists are watching a menagerie of new omicron subvariants that have emerged recently that appear to be even better at dodging immunity."We look around the world and see countries such as Germany and France are seeing increases as we speak," says Lauren Ancel Meyers, director of the UT COVID-19 Modeling Consortium at the University of Texas at Austin. "That gives me pause. It adds uncertainty about what we can expect in the coming weeks and the coming months."However, it's not certain the U.S. experience will echo Europe's, says Justin Lessler, an epidemiologist at the University of North Carolina who helps run the COVID-19 Scenario Modeling Hub.That's because it's not clear whether Europe's rising cases are related to people's greater susceptibility to new subvariants they've not yet been exposed to. In addition, different countries have different levels of immunity.

Increasing Coronavirus Infections in Europe Prompt Concerns Over Future U.S. Wave - Coronavirus cases are rising across some European countries, increasing worries over the possibility of another wave in the U.S.Fifteen countries in the region are reporting increasing cases. It’s the first spike in coronavirus cases across the region since the most recent BA.5 wave began, according to areport from the European Center for Disease Prevention and Control.The highest two-week new infection rates are in Austria, France, Germany, Latvia and Liechtenstein.However, overall rates of hospital or intensive care unit indicators in the region decreased or remained stable, the report found.The report also found that less than 7% of people in the region have gotten a second COVID-19 booster shot. It’s a higher rate than what the Centers for Disease Control and Prevention is reporting for the U.S.Officials have tried to push the shots ahead of expected fall and winter waves of COVID-19. They are hopeful that the updated booster shots in the U.S., which target omicron subvariants BA.4 and BA.5 as well as the original coronavirus strain, will be better at preventing infections at a time when many Americans are seeing waning levels of immunity.But it isn’t clear whether enough Americans will take the shots for them to make a substantial difference. According to a recent Kaiser Family Foundation poll, nearly half of Americans do not plan to get the updated booster. In fact, about half of the U.S. reports hearing little to nothing about the new shots, according to the survey.Still, coronavirus cases in the U.S. remain on the decline since the latest peak at nearly 130,000 new cases on average each day in mid-July. The daily average of new cases has dropped to below 43,000 as of Sunday, according to CDC data. But if the increase in cases in Europe is any indication – which it typically has been during the pandemic – the decline could reverse soon. Some models predict that it will happen as soon as this month.

Russia records 24,158 daily COVID-19 cases, 91 deaths - Russia’s COVID-19 case tally rose by 24,158 over the past day to 21,073,185, the anti-coronavirus crisis center reported on Monday, Trend reports with reference to TASS. A day earlier, 30,085 daily cases were recorded. Russia’s COVID-19 recoveries rose by 35,294 over the past day, reaching 20,175,902, the anti-coronavirus crisis center told reporters on Monday.A day earlier some 46,992 patients recovered.Russia’s COVID-19 death toll rose by 91 over the past day, reaching 387,559, the anti-coronavirus crisis center told reporters on Monday. A day earlier 96 COVID-19 deaths were registered.

Iran reveals COVID-19 data for October 3 - As many as 435 people have been infected with the coronavirus (COVID-19) in the past 24 hours in Iran, reads the statement of the Ministry of Health and Medical Education of Iran, Trendreports.In addition, 9 people have died from the coronavirus over the past day.At the same time, the condition of 144 people remains critical.So far, more than 54.1 million tests have been conducted in Iran for the diagnosis of coronavirus.In total, about 155 million doses of vaccines have been used in Iran so far. A total of 65 million doses have been used in the first stage, 58.4 million doses - in the second stage, and 31.2 million doses – in the third stage.Iran continues to monitor the coronavirus situation in the country. According to recent reports from Iranian officials, over 7.55 million people have been infected, and 144,448 people have already died.Meanwhile, over 7.32 million people have reportedly recovered from the disease. The country continues to apply strict measures to contain the further spread of the virus.

Lung Cancer in Nonsmokers? Study Identifies Air Pollution as a Trigger - For weeks, Molly Campbell had an intermittent dry, hacking cough that she could not shake. Then, about three months in, she started coughing up blood. Campbell was given a CT scan. The result? Two large masses and hundreds of small nodules in both lungs. “They said it’s not likely it’s cancer,” recalled Campbell, who is 29 and lives in rural Virginia. “They’re like, it’s basically no way because you’re so young and you don’t smoke and all this other stuff.”The diagnosis left Campbell numb: adenocarcinoma. Stage 4 lung cancer.Experts say that 10 to 20 percent of lung cancer patients in the United States are so-called “never smokers” like Campbell, and they have struggled to understand how otherwise healthy people can suddenly find themselves diagnosed with the most severe forms of the disease.A new study, however, suggests a culprit: the polluted air that healthy people breathe.A A British research team says it has identified a mechanism in which airborne particulate matter may trigger some forms of lung cancer in otherwise healthy people who have never smoked.The team’s findings, which scholars are currently reviewing for publication, suggest that airborne pollutants commonly found in vehicle exhaust and in the smoke given off by fossil fuels can promote cancers in patients who have a mutated form of a gene known as epidermal growth factor receptor, or EGFR. Mutations to the EGFR gene were found in about half of the patients with lung cancer who have never smoked. “The same particles in the air that derive from the combustion of fossil fuels, exacerbating climate change, are directly impacting human health via an important and previously overlooked cancer-causing mechanism in lung cells,” said Charles Swanton, the lead researcher, in a news release. “The risk of lung cancer from air pollution is lower than from smoking, but we have no control over what we all breathe.” Swanton presented the results this month at a symposium of the European Society for Medical Oncology in Paris.

Lawsuit challenges plan to clearcut white oak in Wayne National Forest - There’s a growing demand for wood from oak, especially white oak, but oak species are facing numerous threats, like climate change, invasive insects and diseases. Experts say white oak could start declining significantly in American forests in as little as 10 to 15 years. The U.S. Forest Service has developed a plan to regenerate oak in the Wayne National Forest in southeastern Ohio, but environmentalists are suing to stop it. For white oak, a changing ecosystem has made it more difficult for saplings to become fully grown trees. Ohio State University natural resources specialist Dave Apsley, who is on the Initiative’s steering committee, says white oaks are out of balance in Ohio. “We’ve got a lot of older oaks, but we have very few on the bench to replace them.”Apsley works with some of the tens of thousands of private woodland owners in southeastern Ohio to manage their land for white oak regeneration. Without fire, he says there are still forestry techniques that can work, but it takes many years. Most landowners want a quicker payoff and just remove the valuable trees. “On most private lands, they’re taking the oaks out,” he said. “So you’re getting a double whammy. You’re getting rid of your seed source for the future, and you’re not providing enough sunlight to the forest floor.”So even if there are young oaks, they won’t get the light they need to grow into larger trees. “So, is it up to public lands to provide these habitats? Yes!” said Rachel Reed, a forest planner with the U.S. Forest Service, in a presentation posted online and updated in 2020, about a timbering project for the only national forest in Ohio, the Wayne. The Sunny Oaks Project, as it is called, spans 25,000 acres with the stated goals of creating young brushy forest and regenerating oaks, with a preference for white oak. “Growing trees and forests is a long-term activity,” Reed said at the hearing. “One needs to think decades into the future, and so if we take action on the National Forest, then we also become an example of sustainable forest management.”The project includes logging on 2,700 acres, including 1,600 acres of clearcut — which means cutting everything down. “How does clearcutting regenerate oak?” Reed asked. “This means that all of the trees would be starting back over from zero age, and the oaks then would have an advantage over other species that were present in the stand.”“The idea itself is almost Orwellian,” said Nathan Johnson, public lands director for the Ohio Environmental Council, which is suing the Forest Service to stop the project.“The idea that in order to save oak forests, we have to go in and cut them down on a very large scale. And it just seems really off. And in fact, it is,” he said. While walking through a section of the Wayne National Forest included in the clearcut plan, Johnson stops to take a closer look at some large white oak trees “This enormous tree, it’s got to be hundreds of years old,” he said. “If the project goes forward, this will be gone. This will be cut down.”A clearcut can attempt to mimic the benefits of fire in the forest, but according to Johnson, it only works if the oak saplings already have well-established roots. And the forest service doesn’t have the data to know, he said.Without enough already established young white oaks, opening up the forest floor to sunlight gives species like maple and tulip poplar an advantage. These trees often take over habitats that were once filled with oak.“If those large numbers of large saplings are not in place, it’s just going to be a disaster. I mean, it’s all about competition,” Johnson said. “Those maples and tulips, they’ve got wind-dispersed seeds. When the canopy is open, they’re just going to outcompete what little oak infrastructure you’ve got in the ground.” The lawsuit claims that the Forest Service project isn’t really intended to regenerate oak but instead to meet rising federal timber quotas. In 2019, then-President Trump issued an executive order to increase logging on federal lands. According to Johnson, that’s led to increased timber targets in the national forests like the Wayne.

Feds propose protections for California's longfin smelt - The Fish and Wildlife Service proposed Endangered Species Act protections Thursday for a crucial population of the longfin smelt, an unassuming California fish that has pit farmers against environmentalists and could end up redirecting the future course of the state’s water. Reversing earlier calls made during both the Obama and Trump administrations, FWS said the San Francisco Bay-Delta distinct population segment of longfin smelt should be added to the list of endangered species. “All the best available field surveys for documenting long-term abundance trends indicate Bay-Delta longfin smelt numbers have substantially declined over time, with current relative abundance reflecting small fractions of the species’ historical relative abundance,” FWS stated. The agency added that the decline was “three to four orders of magnitude over the course of available historical abundance records.” The longfin smelt grows to between 3.5 and 4.3 inches in length and lives for approximately two to three years. As a species, the smelt occurs in bays and estuaries from Northern California north along the coast through Alaska. The bay-delta longfin smelt population occupies the San Francisco Bay Estuary and areas of the Pacific Ocean out to the Farallon Islands. In its proposal, FWS noted that San Francisco Bay-Delta is unique because it is the largest estuary on the Pacific Coast of the United States. “Because of its large size and diverse aquatic habitats, the San Francisco Bay-Delta has the potential to support a large longfin smelt population and is thus potentially important in the conservation of the species,” the agency said. While the species needs freshwater flows to survive, FWS noted that the development of dams and water delivery infrastructure built for flood protection and water supply for farms and cities has “greatly impacted freshwater flows” into the San Francisco Bay estuary. Water diversion is also reducing freshwater inflow and complicating life for the smelt. “Freshwater diversion … through pumping for agricultural, waterfowl, or municipal purposes and in some cases may lead to entrainment of Bay-Delta longfin smelt,” FWS reported.

Supreme Court debates narrowing Clean Water Act - The Supreme Court on Monday struggled with how to resolve a high-stakes case that could narrow the government’s power to protect wetlands and waterways, though a majority of justices appeared ready to reject a key argument put forward by an Idaho couple behind the lawsuit.Several of the court’s conservative justices expressed concern about the unpredictability and broad reach of the landmark Clean Water Act for property owners seeking to develop their land, while the court’s liberals seemed to seek a compromise that would retain the government’s authority to regulate wetlands adjacent to lakes, rivers and other waterways.The justices agreed in January to look again at the case involving Michael and Chantell Sackett, who previously prevailed at the Supreme Court in their effort to build a home near Priest Lake, one of the state’s largest. The Environmental Protection Agency says there are wetlands on the couple’s 0.63-acre lot, which makes it subject to the Clean Water Act.At issue now is how courts should determine what counts as “waters of the United States,” protected by the nearly 50-year-old environmental law that allows the government to require permits and impose penalties for violations. If the court sides with the Idaho property owners, environmental advocates say about half of all wetlands and roughly 60 percent of streams would no longer be federally protected.“This case is going to be important for wetlands throughout the country, and we have to get it right,” Justice Brett M. Kavanaugh said during the nearly two-hour argument on the opening day of the court’s term.The case comes after the court’s conservative majority last termrestricted the EPA’s authority to curb emissions from power plants.The Idaho couple are represented by the conservative Pacific Legal Foundation and backed by a long list of business organizations, home builders and agricultural groups that say the government’s regulations are muddled, time-consuming and costly to follow.Justices Neil M. Gorsuch and Samuel A. Alito Jr. expressed the most skepticism about how broadly the government defines wetlands subject to regulation, offering pointed questions for the government’s lawyer, Brian H. Fletcher.Gorsuch asked, “How does any reasonable person know … whether or not their land” is covered? Is the property subject to regulation if it is located three miles or two miles from waters subject to federal jurisdiction, he pressed Fletcher. Fletcher responded that there are not “bright-line rules,” but limits and government manuals that explain the process. That answer did not satisfy Gorsuch, who asked, “So, if the federal government doesn’t know, how is a person subject to criminal time in federal prison supposed to know?”

More Americans are moving into hurricanes’ path as climate change risks mount - Officials in Charleston, S.C., are clear that climate change poses an existential threat. They are working on plans to build a $1.1 billion sea wall that would protect historic homes from the increasingly powerful hurricanes that have repeatedly threatened the booming city. And in his state of the city address this year, Mayor John Tecklenburg said Charleston must “rezone every inch of our city” to put an end to development in flood-prone areas. But even as it works to fortify itself, Charleston — which was lashed by wind and rain from Hurricane Ian on Friday — has greenlit plans for a more-than 9,000 acre residential and commercial development that, environmental advocates say, would locate about half of its homes in a flood plain.The dilemma faced in Charleston, whose population grew 25 percent from 2010 to 2020, can be found throughout the Southeast. Many cities and counties in the region are confronting the reality that rapid development has made them more vulnerable to hurricanes, storms and tidal flooding caused by sea level rise. The region has grown quickly, though unevenly, over the past decade and is expected to add millions more people in the decades ahead. As wetlands and forests have given way to homes and hotels, there is a lot more property — and millions more people — directly in harm’s way. In Florida, the full extent of the destruction from Ian, which made itsfirst U.S. landfall near Fort Myers as a Category 4 storm, is still unclear. But it is expected to be more devastating than many comparable storms because of its size and all that was built in its path. From 1970 to 2020, census records show, the Cape Coral-Fort Myers area grew an astounding 623 percent, to more than 760,000 people.Ian came ashore in Florida as one of the strongest storms ever to strike the state, causing a storm surge of over 12 feet in Fort Myers, and knocking out power to more than 2 million people. The southwest suffered widespread destruction, with houses washed off their foundations, bridges destroyed and massive flooding. From 2010 to 2020, census records show, the top two fastest-growing metro areas in the United States were The Villages, a retirement community in Florida, and Myrtle Beach, S.C. Over that same period, the rate of population growth in Florida, Georgia, South Carolina, North Carolina and Tennessee exceeded the national average while other states like West Virginia and Mississippi saw declines. Florida’s population grew at an astonishing pace over that decade, adding more than 2.7 million people.

Where Am I Going to Go?’ Floridians Hit by a Hurricane and a Housing Crunch. - Days after Hurricane Ian buffeted the state with a trifecta of wind, rain and storm surge, many Floridians areemerging from the wreckage uncertain of their next chapter — and fearing they may become homeless. The extent of the damage and the number of people who lost their lives or homes is only beginning to come into focus. Much clearer is the storm’s likely broad and lasting impact on the recovery of those least able to afford it. “I don’t have enough money to replace my car and my house. I got enough money to replace one or the other,” said Llewellyn Davenport, 50. The storm surge swallowed his car, and engulfed the 28-foot-trailer he lived in near Fort Myers. Now Mr. Davenport, a sanitation worker, must make a tough decision: get another home or another car. “My entire life changed in a matter of hours.” After the storm, many Floridians, limited by low or fixed incomes, face finding a decent place to live in a state that is mired in an affordable housing crunch. The state’s enduring popularity, inflation and soaring rental costs have made it one of the least affordable places to live in the nation. Already, an estimated 2.24 million households in Florida with incomes below $50,000 pay more than 30 percent of their income in rent or mortgage — more than a quarter of the total households….In counties that were under evacuation orders, less than 20 percent of homes have coverage through the National Flood Insurance Program. Local officials and housing advocates worry about what the damaged housing stock will mean for people with low wages or fixed incomes. In interviews, some people said staying in water-ravaged homes is their only option. When the storm barreled through the state last week, it left a wide path of destruction that ran from Key West to the coastal cities of Naples and Fort Myers in the southwest, and through inland farming communities to the suburbs of Orlando. It was indiscriminate in its march, leaving some places untouched and others unrecognizable, and it struck particularly vulnerable pockets that were no match for the storm’s power. It ravaged mobile and trailer homes; it submerged the first floors of houses and peeled the roofs off apartment buildings. The hurricane devastated and displaced many workers and families already living check to check — and often unseen in the shadows of coastal Florida’s luxury living.

Hurricane Ian’s Toll Is Severe. Lack of Insurance Will Make It Worse. - Most of the Florida homes in the path of Hurricane Ian lack flood insurance, posing a major challenge to rebuilding efforts, new data show. In the counties whose residents were told to evacuate, just 18.5 percent of homes have coverage through the National Flood Insurance Program, according to Milliman, an actuarial firm that works with the program. Within those counties, homes inside the government-designated floodplain, the area most exposed to flooding, 47.3 percent of homes have flood insurance, Milliman found. In areas outside the floodplain — many of which are still likely to have been damaged by rain or storm surge from Ian — only an estimated 9.4 percent of homes have flood coverage. The small share of households with flood insurance demonstrates the challenges posed by the country’s approach to rebuilding after disasters — a mix of public and private funding that is under strain as climate change makes those disasters more frequent and severe. If people can’t pay to rebuild their homes after disasters, the financial toll of climate change for households and communities could become ruinous. Regular homeowners’ insurance policies typically don’t pay for damage caused by flooding, which is why the Federal Emergency Management Agency offers flood insurance. The coverage is expensive, with average premiums close to $1,000 a year, according to data from Forbes. But without it, homeowners hit by flooding are left to rely on either savings, loans or charity to rebuild. The low takeup rates for federal flood insurance in the areas hit by Hurricane Ian mean it will take longer for those communities to rebuild, imperiling their economies and prolonging the suffering, experts said. “These people, many of them believe that their homeowners’ insurance policy will cover them,” said Nancy Watkins, principal and consulting actuary at Milliman. “Or they might think that federal disaster aid is going to swoop in and make them whole.” Ron DeSantis: The Florida governor, who as a congressman opposed aid to victims of Hurricane Sandy, is seeking relief from the Biden administration as his state confronts the devastation wrought by Ian. Lack of Insurance: In the Florida counties hit hardest by Ian, fewer than 20 percent of homes had flood insurance, new data show. Experts say that will make rebuilding even harder. But federal disaster assistance is less generous than many people assume. FEMA offers some limited emergency assistance to homeowners without insurance, such as paying for temporary housing in a hotel, motel or mobile home, or making basic repairs to make a house habitable. But FEMA typically won’t pay to rebuild homes, as The New York Times reported in July. Aid is limited to less than $40,000 — a fraction of what it costs to rebuild..

Hurricane Ian death toll rises to at least 103 - CBS News -More than 100 people have been reported dead in Florida and North Carolina five days after Hurricane Ian slammed into the west coast of Florida as a powerful Category 4 storm and then continued up the East Coast. Lee County Sheriff Carmine Marceno announced Monday that 54 deaths have now been confirmed in that county, as the total number of Florida fatalities rose to at least 99 as of Monday night. The CBS News figure is higher than Florida's official state tally because in some cases, county officials are confirming deaths more quickly than state officials. Four storm-related deaths have been reported in North Carolina, bringing the U.S. toll to at least 103. Before hitting Florida, the storm killed at least three people in Cuba, where it knocked out power across the island. Days after Ian carved a path of destruction from Florida to the Carolinas, the dangers persisted, and even worsened in some places. It was clear the road to recovery from this monster storm will be long and painful. And Ian was still not done. The storm doused Virginia with rain Sunday, and officials warned that major flooding was possible along its coast Monday. Ian's remnants moved offshore and formed a nor'easter that was expected to pile even more water into an already inundated Chesapeake Bay and threatened to cause the most significant tidal flooding event in Virginia's Hampton Roads region in the last 10 to 15 years, said Cody Poche, a National Weather Service meteorologist. Norfolk and Virginia Beach declared states of emergency. Other portions of the Atlantic coast could see higher tides than usual. Flooded roadways and washed-out bridges to barrier islands left many people isolated amid limited cellphone service and a lack of basic amenities such as water, electricity and the internet. Officials warned that the situation in many areas isn't expected to improve for several days because waterways are overflowing leaving the rain that fell with nowhere to go. About 600,000 homes and businesses in Florida were still without electricity on Monday morning, down from a peak of 2.6 million. The current goal is to restore power by Sunday to customers whose power lines and other electric infrastructure is still intact, Florida Division of Emergency Management Director Kevin Guthrie said Monday. It does not include homes or areas where infrastructure needs to be rebuilt. More than 1,600 people have been rescued statewide, according to Florida's emergency management agency. Rescue missions were ongoing, especially to barrier islands near Fort Myers in southwest Florida that were cut off from the mainland when storm surges destroyed causeways and bridges. The state will build a temporary traffic passageway for the largest one, Pine Island, Florida Gov. Ron DeSantis said Sunday, adding that an allocation had been approved for the Department of Transportation to build it this week. "It's not going to be a full bridge, you're going to have to go over it probably at 5 miles an hour or something, but it'll at least let people get in and off the island with their vehicles,"

Some Black residents of Fort Myers are still waiting for post-hurricane help : NPR — Unlike the affluent seaside communities of Sanibel Island and Fort Myers Beach, where the media has descended to chronicle every detail of the aftermath of Hurricane Ian, the people who live in the squat homes in Dunbar have faced the crisis mostly on their own. And for many in the historically African American neighborhood, there's a sense of anger and frustration. "They're saying the islands got destroyed," observes 24-year-old Lexxus Cherry. "Well, we're destroyed, too. We're really messed up here." There's no electricity. Water comes out of the faucet, but it's little more than a thin brownish stream, unsafe to drink. A faint smell of sewage wafts up from the street. When people here call the power and water authorities, they get only vague assurances. No promises, and no timeframes. Cherry's uncle, Ta'Wan Grant, detects a pattern in their plight. "I understand that the city is trying its best to restore everybody's power," he says. "But this is a common thing that I'm seeing in cities around America. Whenever a disaster happens, for some reason the city is slow to respond to people in ethnic communities, in low-income communities." "We are the ones who need the most help," Grant says. A large piece of twisted aluminum siding, apparently blown in from across the street, lies in a crumpled heap on Grant's front yard. His air-conditioning unit was ripped away, leaving a gaping hole in the side of his house. Cherry's mother, Chanel, who lives a few blocks away in low-income housing, underwent a kidney transplant in May. She says she's had "no water, no ice, no nothing" since Tuesday. "I haven't seen one police [officer] come to check on the community where we live," she adds.In the storm-affected areas in and around the city on Sunday, an estimated 580,000 people were still without electricity, and boil water notices had been issued for 120 areas in 22 counties.

Hurricane Ian: Americans urged to weigh risks of rebuilding in vulnerable areas - The US Federal Emergency Management Agency (Fema) administrator, Deanne Criswell, asked Americans on Sunday “to make informed decisions” about rebuilding in vulnerable areas hit by natural disasters intensified by the climate crisis. “People need to understand what their potential risk my be whether it’s along the coast, inland along a riverbed or in tornado alley,” Criswell told CNN’s Face the Nation. “People need to make informed decisions about what their risk is and if they choose to rebuild there they do so in a way that’s going to reduce their threat.” Criswell’s comments came four days after Hurricane Ian devastated barrier islands and coastal communities around Fort Myers Beach, Florida, with estimates for rebuilding running into the tens of billions. The state’s medical examiners commission has confirmed that the storm resulted in at least 44 deaths, most of them due to drowning. Other estimates say the toll was already at 72 – and that is expected to rise. Of those dead, half were found in Lee county, which includes Fort Myers Beach, Sanibel and Cape Coral. Meanwhile, the US Coast Guard said Sunday it had suspended the search for 16 people who went missing off the coast of Boca Chica, Florida, on 28 September because of Ian. About 70% of the county is without power. Across the state, about 837,000 businesses and homes remained without power on Sunday. The Associated Press reported that water was still rising in central Florida, with officials warning that flooding could continue for days, particularly in areas around the St Johns River and its tributaries, which were left swollen by the powerful storm. The latest natural disaster to hit the US comes after a series of floods, tornadoes, fires and hurricanes, has laid bare the rising costs of devastation associated with a warming climate. It has been widely reported that only about 18% of Fort Myers residents had purchased flood insurance. “If you live near water or where it rains it can certainly flood, and we have seen that in multiple storms this year,” Criswell said. “If you live near water – anywhere near water – you should certainly purchase flood insurance.” Insurers say they are anticipating between $28bn and $47bn in claims from what could amount to the costliest Florida storm since Hurricane Andrew in 1992. Criswell’s comments came as officials and political figures have deflected accusations that evacuation orders for residents of Fort Myers came too late for many to leave. The Fema administrator defended that decision on ABC’s This Week: “The storm itself was fairly unpredictable in the days leading up to landfall,” Criswell said. “Just 72 hours before landfall, the Fort Myers and Lee county area were not even in the cone of the hurricane.”

Waterlogged electric cars are imploding in Florida after Hurricane Ian --Waterlogged electric cars are imploding in Florida after Hurricane Ian devastated the state. The Sunshine State’s chief financial officer and state fire marshal, Jimmy Patronis, noted on Twitter that “there’s a ton of EVs disabled from Ian. As those batteries corrode, fires start. That’s a new challenge that our firefighters haven’t faced before. At least on this kind of scale”. “It takes special training and understanding of EVs to ensure these fires are put out quickly and safely,” he added. It can take hours to put out an electric vehicle that has burst into flames, the New York Post noted. Hurricane Ian made landfall last week and firefighters are now dealing with the new problem of electric vehicles ending up underwater following widespread flooding and later bursting into flames. In a video posted by Mr Patronis, a bystander can be heard saying that it takes thousands of gallons of water to put out an electric vehicle that has caught fire. Footage posted to social media shows the North Collier Fire Rescue District covering a white Tesla in water from both above and below to douse any possible sparks. “This is an issue many fire departments across [southwest] Florida are experiencing right now,” the district wrote on Facebook. “These vehicles have been submerged in salt water; they have extensive damage and can potentially be serious fire hazards ... No one was injured on the fire, traffic interruption was minimal, and the crews remained on scene with the vehicle for hours to ensure it was extinguished.”

Hurricane “Orlene” to make landfall over southwestern Mexico on October 3rd - Orlene rapidly strengthened into a Category 4 hurricane over the past two days and is now weakening as it approaches southwestern Mexico. Weakening is expected to continue during the next day or so, however, Orlene is forecast to be a strong hurricane when it passes near or over the Islas Marias, and remain a hurricane when it reaches southwestern Mexico on October 3. Hurricane conditions are expected in the Islas Marias tonight, with tropical storm conditions beginning today. A Hurricane Warning is in effect for a portion of west-central mainland Mexico, where hurricane conditions are expected on Monday with tropical storm conditions beginning early Monday. Preparations to protect life and property should be rushed to completion. Heavy rainfall from Orlene is expected to lead to flash flooding, as well as possible landslides in areas of rugged terrain of southwestern Mexico into Tuesday. At 15:00 UTC on October 2, 2022, the center of Hurricane “Orlene” was located about 155 km (95 miles) SW of Cabo Corrientes and 215 km (135 miles) SSW of Las Islas Marias, Mexico, according to the National Hurricane Center (NHC).1 The system had maximum sustained winds of 205 km/h (125 mph) and minimum central pressure of 953 hPa. It was moving N at 13 km/h (8 mph). A turn toward the north-northeast is expected later today.On the forecast track, the center of Orlene should pass near or over Las Islas Marias tonight or Monday morning (LT), October 3, and reach the coast of mainland Mexico within the warning area later on Monday or Monday night. Weakening is expected during the next day or so, however, Orlene is forecast to be a strong hurricane when it passes near or over the Islas Marias, and remain a hurricane when it reaches southwestern Mexico.

Tropical storm Julia expected to become hurricane off eastern coast of Central America - Tropical storm Julia is expected to intensify into a hurricane on Saturday afternoon or evening as it moves towards the eastern coast of the Central American country of Nicaragua, the U.S. National Hurricane Center (NHC) said. The storm could cause "hurricane-force winds and a dangerous storm surge" in the Colombian islands of Providencia and San Andres off the Caribbean coast of Nicaragua, according to NHC, just one week after Hurricane Ian pummeled Cuba and Florida. "Julia a little stronger and expected to become a hurricane later today," NHC said in an advisory. "Life-threatening flash floods and mudslides possible from heavy rains over Central America through early next week." The tropical storm is currently 115 miles (185 kilometers) from Providencia island and about 265 miles (430 kilometers) from the Nicaraguan coast, where it is expected to arrive early Sunday morning, according to NHC. Colombia president Gustavo Petro said in a tweet on Saturday morning that the country was on "maximum alert" and called on hotels to be ready to provide refuge to vulnerable populations. After making landfall in Nicaragua, the hurricane is expected to gradually weaken and move north along the Pacific coasts of Honduras and El Salvador on Sunday and Monday, NHC said. The storm could bring flash flooding to southern Mexico early next week, NHC said.

Flash flooding across Victoria as Melbourne prepares for dangerous storm season - -A number of dams and reservoirs are threatening to overflow or even burst as heavy rain is dumped across Victoria. Heavy rain and thunderstorms are continuing and some property owners in Victoria's north-west have recorded more than 90 millimetres of rain over the past two days. Cars have become stranded in flash flooding in South Melbourne and Frankston where a Watch and Act warning was issued for low-lying areas. Emergency crews rushed to Craigieburn in Melbourne's north as a private dam threatened to collapse and flood nearby homes. Mickleham Road was closed while State Emergency Service crews assessed the situation. Trees have been brought down and buildings damaged in Heidelberg, in Melbourne's north-east. Watch and Act warnings have also been issued for flash flooding in Elwood in bayside Melbourne, and for riverine flooding in central and north-western Victoria with moderate flooding occurring along the Murray River at Corowa, Laanecoorie Reservoir, south-west of Bendigo, and predictions of flooding in Charlton by late Saturday. The Bureau of Meteorology's Matthew Thomas said the rain would ease and there would only be isolated showers over the weekend. But he said heavy downpours would return for much of the state on Wednesday. "We're looking at 5 to 20 millimetres into the west and the north and central parts of the state but 20 to 40 millimetres about the north-east ranges," he said. "But that's really a build up to some tropical moisture that will then feed ahead of a cold front across next Thursday and it's looking quite wet about central and eastern parts of Victoria." He said some areas could receive up to 70 millimetres.

Water NSW says dams are highly likely to spill this weekend as rivers run high - Water New South Wales says spilling out of Sydney’s Warragamba Dam is expected to intensify this weekend with several other major dams also "highly likely" to overflow. The severity of the spills will depend on what rainfall the catchments receive. Dam managers are most concerned about five inland dams, including Copeton Dam on the Gwydir River, which is currently flowing at 98.7 per cent and runs through towns such as Moree in north-west NSW. Burrendong Dam on the Macquarie River is flowing at 113.8 per cent and will likely spill into the already flooding Macquarie River, and further south Burrinjuck Dam on the Murrumbidgee River is at 97.9 per cent. Keepit Dam on the Lower Namoi near Gunnedah is at 92.5 per cent and Wyangala Dam on the Lachlan River, which flows through towns such as Forbes, is at 92 per cent. Sydney's Warragamba Dam is currently spilling at a rate of less than 15 gigalitres a day but that outflow could intensify to up to 275 gigalitres a day by Sunday afternoon. A drone image of a full dam with water being released Burrendong Dam in NSW's central-west has a high likelihood of spilling this weekend.(Supplied: @drone_scape81) "Based on the Bureau of Meteorology's [BOM] forecast as it stands, these dams have a high likelihood of spilling to some extent," said Tony Webber from Water NSW. "As for Warragamba Dam, it's been experiencing a low volume spill since last Thursday of around eight gigalitres a day and has been at, or near, capacity since August last year." The midweek rain event was not as heavy as predicted for the catchments, which created a window of opportunity for some low-level releases. "Every bit of extra storage capacity created is valuable to mitigate downstream flooding," Mr Webber said.

Hurricane Ian Capped Two Weeks of Extreme Storms: How Climate Change Fuels Tropical Cyclones - When Hurricane Ian hit Florida, it was one of the United States’ most powerful hurricanes on record, and it followed a two-week string of massive, devastating storms around the world.A few days earlier in the Philippines, Typhoon Noru gave new meaning to rapid intensification when it blew up from a tropical storm with 50 mph winds to a Category 5 monster with 155 mph winds the next day. Hurricane Fiona flooded Puerto Rico, then became Canada’s most intense storm on record. Typhoon Merbok gained strength over a warm Pacific Ocean and tore up over 1,000 miles of the Alaska coast.Major storms hit from the Philippines in the western Pacific to the Canary Islands in the eastern Atlantic, to Japan and Florida in the middle latitudes and western Alaska and the Canadian Maritimes in the high latitudes.A lot of people are asking about the role rising global temperatures play in storms like these. It’s not always a simple answer.It is clear that climate change increases the upper limit on hurricane strength and rain rate and that it also raises the average sea level and therefore storm surge. The influence on the total number of hurricanes is currently uncertain, as are other aspects. But, as hurricanes occur, we expect more of them to be major storms. Hurricane Ian and other recent storms, including the 2020 Atlantic season, provide a picture of what that can look like. Our research has focused on hurricanes, climate change and the water cycle for years. Here’s what scientists know so far.

Climate Change Made Summer Hotter and Drier Worldwide, Study Finds - Human-caused global warming has made severe droughts like the ones this summer in Europe, North America and China at least 20 times as likely to occur as they would have been more than a century ago, scientists said Wednesday. It’s the latest evidence of how climate change caused by the burning of fossil fuels is imperiling food, water and electricity supplies around the world. The main driver of this year’s droughts was searing heat throughout much of the Northern Hemisphere, the researchers reported in a new study. Such high average temperatures, over such a large area, would have been “virtually impossible” without the influence of greenhouse gas emissions, the scientists said.Across the Northern Hemisphere north of the tropics, soil conditions as parched as they were this summer now have a roughly 1-in-20 chance of occurring each year, the scientists found. Global warming increased this likelihood, they said, but cautioned that because of the challenges involved in estimating soil moisture at a global scale, the exact size of the increase had a wide possible range.“In many of these countries and regions, we are clearly, according to the science, already seeing the fingerprints of climate change,” said Maarten van Aalst, the director of the Red Cross Red Crescent Climate Center and one of 21 researchers who prepared the new study as part of the World Weather Attribution initiative, a research collaboration that specializes in rapid analysis of extreme weather events. Extreme summer dryness that ravages crops, cripples river commerce and strains hydropower generation across so much of the planet would be hugely problematic on its own. This year, though, global food and energy prices had already been rising for other reasons, including Russia’s war in Ukraine.Record heat began smothering Europe in May, and roasting temperatures dried out rivers and fueled wildfires for prolonged stretches over the next few months. The heat might have contributed to 11,000 excess deaths in France and 8,000 in Germany, according to estimates. Across the European Union, summer wildfires burned a total area more than twice as large as the average over the previous 15 years.China had its most brutal summer since modern records began in 1961, according to the country’s meteorological authority, with hot and dry weather reducing hydropower output in the manufacturing-heavy south. To keep production lines running at car and electronics factories, China dug up and burned more coal, increasing its contribution to global warming.And in the United States, nearly half of the area of the lower 48 states experienced moderate to extreme drought this summer, according to the National Oceanic and Atmospheric Administration. Parts of the Southwest and California remain stuck in a 20-year-plus megadrought.

How Climate Change Is Threatening a Key Tool for Alaska Natives - — As the remnants of Typhoon Merbok lashed the plywood walls of the house she shared with her children and grandchildren, Frieda Stone wrote a Bible verse on a small card. The severe weather, which hit Alaska’s western coast on Sept. 16, was the most powerful early-season storm scientists had ever measured there. The jet stream steered it north from abnormally warm waters east of Japan. As it approached, meteorologists recorded hurricane-force winds and 50-foot swells in the Bering Sea. In this remote Yup’ik village, the ocean came closer as each breaking wave of the storm surge roared in. Ms. Stone, 68, slipped the card in a sandwich bag and shuffled outside. Using a red string, she tied the bag to one of the posts that held her house 4 feet above ground, asking God for a specific mercy. “I asked him to watch over the freezers,” she said. In rural Alaska, the stand-alone freezer is everything. With most traditional cold storage methods wiped out by warmer temperatures, Indigenous Alaskans are totally dependent on freezers just as climate change also threatens the power systems, which run those appliances, more with every passing season. “All these communities that are coastal communities, much of the infrastructure is vulnerable to flooding, especially in these extreme events,” said Rick Thoman, a climate specialist with the Alaska Center for Climate Assessment and Policy at the University of Alaska Fairbanks. “If your power’s out for four days and your freezer completely thaws, at this time of year there’s no realistic or likely mechanism to replace that with food from the land.” No rural home is without a freezer and most have several. Dented Kenmore chests piled with hunting clothes, vintage standing units in avocado green, new Frigidaire frost-frees. By fall, they hold a winter’s supply of wild food to offset the high cost of groceries flown in by plane. Freezers preserve generations-old harvest practices and underpin delicate village economies. In Hooper Bay, some freezers have hummed on for 20 years in enclosed entryways, holding what’s gathered through the long-held rituals of wild harvest Alaskans call “subsistence.” A typical freezer might contain moose ribs, white fish, herring eggs, chinook salmon, bearded seal, beluga and gallons of berries, alongside bulk convenience foods like Cool Whip, pizza rolls and Popsicles. The village sits on the ocean edge of a low-lying delta between the Yukon and Kuskokwim rivers, made up of treeless tundra and countless lakes. About 1,400 people live there. Half are children. Most speak at least some Yup’ik. Many of the houses are crowded and decades old, built by the government with materials and designs unfit for the harsh climate. About half have indoor plumbing. As in most villages in Alaska, the cash economy is weak. The main employers are the state and federal governments and the tribe. The last census put Hooper Bay’s unemployment rate at 25 percent, and 40 percent of people were living below the poverty line. No one can live on store-bought food alone. Milk, for example, is $16 a gallon, twice as much as fuel.

Home Reef volcano grows to 6 hectares (15 acres), Tonga - Home Reef volcano re-emerged above sea level on September 9, 2022, prompting authorities in Tonga to issue a Hazard Alert to all marines to sail at least 5 km (3.1 miles) away from the volcano. The volcano is located midway between Metis Shoal and Late Island in the central Tonga islands. It was first reported active in the mid-19^th century when an ephemeral island formed.In 24 hours to 21:00 UTC on October 3, the Tonga Geological Services recorded a total of 16 eruptions, compared to 9 eruptions in the prior 24 hours.¹Volcano activity is progressive, with the last eruption recorded at 13:29 UTC on October 3.The recent eruptions were dominantly steam with no volcanic ash detected in the last 24 hours.On September 9, the volcano formed a land area of about 0.40 ha (1 acre) a.s.l. with a diameter of 70 m (230 feet) and an estimated elevation of 10 m (33 feet) a.s.l.²At 21:40 UTC on September 28, the volcano was measured at 268 m (879 feet) North-South and 283 m (9288 feet) East-West, with an approximate total surface area of 6 hectares (15 acres) and an estimated height of 15 to 18 m (49 – 59 feet) above sea level.Volcanic plume continues to disperse from the island carried by the ocean currents. The plume causes discoloration of the water and it is thickest within 1 km (0.6 miles) of the volcano and thinner within 2 km (1.2 miles) from the island.The island has steep headlands on the eastern half and a smoother slope on the western half.There is no risk to communities in Vava’u and Ha’apai.All mariners are advised to sail beyond 4 km (2.5 miles) from the volcano until further notice.

M8.7 solar flare erupts from AR 3110 - A strong solar flare, measuring M8.7 at its peak, erupted from Active Region 3110 (beta) at 02:21 UTC on October 2, 2022. The event started at 02:08 and ended at 02:21 UTC. The event comes several hours after impulsive M5.8 from the same region at 20:10 UTC on October 1. A Type IV Radio Emission was detected at 02:27 UTC. Type IV emissions occur in association with major eruptions on the Sun and are typically associated with strong coronal mass ejections (CMEs) and solar radiation storms. In addition, a 10 cm Radio Burst, with a peak flux of 148 sfu, was also associated with the event. At this time, it doesn’t appear this CME had an Earth-directed component. Solar activity is expected to be low, with a chance of M-class flares, over the next 2 days. This will change as large AR 3112 (beta-gamma-delta) rotates toward the center of the disk. There are currently 6 numbered sunspot regions on the Earth side of the Sun:

Major X1.0 solar flare erupts from AR 3110 - (video) A major solar flare, measuring X1.0 at its peak, erupted at 20:25 UTC on October 2, 2022, from Active Region 3110. The event started at 19:53 and ended at 20:34 UTC. A Type II Radio Emission, with an estimated velocity of 1 157 km/s, was associated with this event. Type II emissions occur in association with eruptions on the sun and typically indicate a coronal mass ejection is associated with a flare event. While Region 3110 is moving away from the center of the disk, it’s possible this CME has an Earth-directed component. The same region produced M8.7 solar flare at 02:21 UTC today, associated with Type IV Radio Emission and 10 cm Radio Burst.1There are currently 6 numbered sunspot regions on the Earth side of the Sun: Multiple CMEs occurred since October 1. The first was a CME off the W limb, associated with an approximate 22 degree long filament eruption, centered near N15W14 beginning at 12:04 UTC on October 1. The second was produced during the M5.8 solar flare at 20:10 UTC on October 1 and the third during the abovementioned M8.7 at 02:21 UTC today. Preliminary modeling of the first and second CME show the potential for a glancing blow late on October 3 to early October 4, however, confidence is low due to imagery gaps. goes-x-ray-flux-1-minute 3 days to october 2 2022 Three CMEs from October 1 have been analyzed, SWPC forecasters noted at 00:30 UTC on October 3. Model output suggests the final CME overtaking the two earlier CMEs en route, and arriving at earth at around 00:00 UTC on October 4:

Everyone counts CO2 differently. Scientists have a solution. - The world needs a better system for calculating greenhouse gas emissions to help nations meet global climate targets. While there are dozens of different methods all over the world for keeping tabs on emissions — at all different levels, from the local to the global — a report by the National Academies of Science, Engineering and Medicine notes that there’s little coordination between them. Some systems rely on bottom-up measurements that use observations of human activities. Some systems use top-down measurements that rely on measurements of greenhouse gases in the atmosphere. Some systems use a combination of both. Each system has its own strengths and weaknesses. Some are more detailed than others, some are more accurate, some are faster and easier to communicate, and some have more transparent data sources. It’s a lot of options for policymakers to choose from when deciding how to keep tabs on emissions in their own city, state, country or industry. And it makes it hard to compare different inventories and determine which ones are providing the best results. That, in turn, makes it hard to keep track of how quickly the world is hitting its climate goals — and where climate action is most urgently needed. To address these issues, the new report recommends a single global clearinghouse for greenhouse gas information from all over the world. It wouldn’t necessarily have to be one database using one method. On the contrary, the report suggests that such a clearinghouse could contain a variety of different data repositories from different sources. But they should all be easily accessible in one place, with data presented in standardized formats and with transparent information about how they were compiled. Such a system could also provide clear, accessible information for decisionmakers on how to evaluate different greenhouse gas accounting methods and how to establish and improve their own methods.

Enchant pushes forward with carbon capture project despite barriers - While the San Juan Generating Station has closed, hopes of someday bringing back the coal jobs and the power plant remain. Enchant Energy and the City of Farmington are pushing forward with efforts to transform the shuttered facility into the largest carbon capture project in the world. Negotiations to transfer the ownership of the power plant to Farmington haven’t yielded results as the other power plant owners have concerns about continued liability and the viability of the carbon capture project. This led to Farmington filing suit in an attempt to acquire the plant in the final month before it closed. Meanwhile, project costs have increased because of inflation and other issues.. Enchant submitted its final Front-End Engineering and Design study to the U.S. Department of Energy on Sept. 29. This shows the project costs have increased from an estimated $1.4 billion when the preliminary FEED study was conducted to $1.6 billion. The FEED study itself cost $9.4 million, according to Enchant Energy CEO Cindy Crane who spoke with NM Political Report by phone on Friday. Should the ownership transfer not go through, Crane said the company is looking for other possible carbon capture projects. Crane said concerns about power shortfalls have led to interest in the power produced by the San Juan Generating Station. Entering into agreements to supply power relies on Enchant being able to acquire ownership of the plant. That means Farmington’s litigation must be successful. If the transfer is successful, Enchant hopes that the closure will not be long and has plans for bringing it back online before the carbon capture retrofit is completed. This relies on being able to receive a variance from the New Mexico Environment Department. The Energy Transition Act includes new emission limits that go into effect on Jan. 1. NMED is going through a rulemaking process to instate these new limits.

Missouri agriculture groups renew criticism of Grain Belt Express over new extension - A years-long fight over the Grain Belt Express high-voltage transmission line appeared to end earlier this year when lawmakers signed off on compromise legislation requiring future transmission lines to bring more benefit to Missouri. It also required electrical transmission line developers to pay farmers more for easements to build future projects on their land. Grain Belt Express’ developer, Chicago-based Invenergy, responded by announcing its transmission line — which spans 800 miles from southwest Kansas to Indiana — will now deliver 2,500 megawatts of clean energy to Missouri, up from 500. That increase requires an extra 40-mile connector line, which Grain Belt asked state regulators to approve as an amendment to its original plan instead of as a new transmission line that would be governed by the new higher land price for farmers. Grain Belt pledged to pay the higher fare to landowners along the Tiger Connector line, which will run through Monroe County and Audrain County into Callaway County, where it will enter the grid.But that pledge wasn’t enough for the state’s leading agriculture groups, who say they fear Invenergy is attempting to subvert the compromise meant to end years of opposition from groups like the Missouri Farm Bureau. A coalition of five agricultural groups said Monday in a joint statement that they believed developers are “intentionally attempting to skirt the landowner protections” in the new law. “If Grain Belt Express were serious about protecting landowners, whose property is necessary for this project, it would file its application as a new project – removing all doubt that it will comply with the newly enacted law,” the statement says. “Unfortunately, this is just more of the same from Grain Belt Express, which has a long history of negative interactions with landowners in its quest to make a profit at their expense.”

Moody County Enterprise | C02 Pipeline application filed --We’ve known for some time that it was coming. It is now official. Heartland Greenway, the Navigator C02 project slated to run through Moody County, did formally file its request Tuesday of last week to build a carbon capture pipeline in South Dakota. If approved, the Navigator pipeline, for those unfamiliar yet with the project, would originate at the Valero plant to the north of Moody County and run south, crossing many local landowners properties, aquifers and be within reach of countless communities as it makes its way through four other states to an ultimate sequestration site in Illinois. And if approved, it would happen whether you agree to it on your property or not. Dozens of local citizens attended the latest landowners rights meeting this past Thursday night in Flandreau. “They are in it for the tax credits, the sequestered C02,” Betty Strom told a room of about 100 people this past Thursday night. A lifelong teacher, Strom was there, hoping to educate as many as possible about the concerns if not the dangers that she and others sees ahead — in Moody County or anywhere. “These tax credits were put in place for environmental impact,” Strom continued. “But they no longer talk about the environmental importance, because the amount of fossil fuel and water they use to compress the C02 cancels the environmental impact.” Strom, from Sioux Falls, owns a farm about ten miles south of Madison. The proposed Summit pipeline, not a feeder line but the main line on a different C02 project that is further along that the Navigator project, is slated to run through her property if the Public Utilities Commission ultimately gives the company building it the go ahead. The line would also run about a mile from the communities she taught in for 32 years. She and countless others are concerned about the push to build these lines, what may actually be behind that push besides a positive environmental impact, the validity of the technology, the tactics being used to get landowners to sign away property rights for construction, and most importantly, the ultimate safety of any C02 pipeline. Clayton Rentschler, one of the organizers of the meeting, detailed what could possibly happen should there ever be a break. It is daunting information that can be obtained simply by looking at a pipeline break in Satartia, Mississippi. Affected landowners are being encouraged to join what is called the South Dakota Easement Team, which is legal representation as a whole for individual property owners.

Wind and solar are booming, but emissions aren't falling - Wind and solar generation surged 22 percent through the first nine months of the year, building on a period of record-breaking renewable energy installations last year.The growth has helped fill a gap in electricity production created by the falling use of coal, which is down 8 percent through September.But emissions impact of the renewable boom has been blunted by the growth of natural gas generation, which is up 7 percent, and falling output from nuclear facilities.EPA figures show power sector emissions were down 1 percent through the first half of the year.A big question is whether the United States can sustain the growth in renewable generation. The climate and health bill passed by Congress in August will direct nearly $370 billion to low emission projects over the next decade. But renewable energy developers face growing headwinds from the economic downturn, supply chain bottlenecks and transmission constraints.“I think the question going forward is are we going to have the transmission capacity to really continue to make gains in solar and wind,” said Harrison Fell, a researcher at Columbia University’s Center for Global Energy Policy. “We’re seeing the interconnect queues grow and grow and grow. That’s not slowing down. Having a roadblock thrown in permitting reform is not helping.” A recent report from Lawrence Berkeley National Laboratory underlined that point. It found that 674 gigawatts of utility-scale solar was waiting to connect to the grid in transmission queues around the country. That is roughly ten times the amount of solar installed in the United States to date.

NextEra CEO sees US climate law catalyzing decades of clean energy growth - NextEra Energy's CEO believes the new US climate law will drive clean energy growth for the next two decades and sees the company well-positioned to counter near-term economic headwinds. The Inflation Reduction Act, signed into law in mid-August, contains nearly $370 billion in federal spending geared toward decarbonization. The legislation also contains robust clean energy tax incentives for solar, wind, and battery storage projects. Production tax credits for wind and solar projects as well as the 30% investment tax credit for battery storage start to phase down after annual US greenhouse gas emissions from electricity production drop by at least 75% from 2022 levels. "We don't expect that to occur until sometime in the mid-2040s," NextEra Energy Chairman, President, and CEO John Ketchum said Sept. 29 during a virtual presentation at the Wolfe Research Utilities, Midstream & Clean Energy Conference. "So, that certainly gives us a very strong balance in terms of the growth possibilities for the company long term." NextEra in June unveiled an enhanced emissions reduction program known as "Real Zero" that aims to eliminate all Scope 1 and Scope 2 operational emissions by 2045 without requiring carbon offsets and by executing "the largest renewables buildout by an electric utility in the country." The IRA and the backdrop of high natural gas and power prices have created "an obvious economic advantage to renewables," Ketchum said. "Although there [are] concerns of a recession and we're in a high-inflation, high-interest rate environment, I love where we sit," Ketchum said. "We are one of the few folks that are selling a deflationary countercyclical product."

EIA: Ethanol Output Up First Time in 4 Weeks While Demand Falls -- Energy Information Administration data detailed the first increase in domestic ethanol production in four weeks, up 4% in the last week of September, while blender inputs declined after a surge the prior week. Ethanol production in the United States moved off a better-than-19-month low, rising 34,000 barrels per day (bpd) to 889,000 bpd as of Sept. 30, down 9.1% from this time last year. Midwest ethanol production also posted the first gain in four weeks, up 41,000 bpd or 5.1% to 840,000 bpd. EIA reports blending activity fell for the sixth time in seven weeks, down 15,000 bpd to 895,000 bpd, 1.6% below the same week in 2021. Refiner and blender net inputs along the East Coast PADD 1 dropped 6,000 bpd to 323,000 bpd last week while down 6,000 bpd in the Midwest PADD 2 to 243,000 bpd, up 1,000 bpd in Gulf Coast PADD 3 to 153,000 bpd through Sept. 30 and down 5,000 bpd along the West Coast PADD 5 to 145,000 bpd. Total domestic ethanol supply returned to the downside, falling 4.4% to 21.7 million barrels (bbl) last week, 9% higher than the same week in 2021. East Coast ethanol inventory declined about 700,000 bbl to 7 million bbl, while Midwest stocks added about 100,000 bbl in the week ended Sept. 30 to 8 million bbl. Gulf Coast ethanol inventory declined about 100,000 bbl to 3.7 million bbl, while West Coast stocks decreased roughly 100,000 bbl to 2.8 million bbl.

U.S. shift on child labor may scramble EV sector - The Biden administration declared Tuesday that batteries from China may be tainted by child labor, a move that could upend the electric vehicle industry while giving fresh ammunition to critics of White House climate policies.The Department of Labor said it would add lithium-ion batteries to a list of goods made with materials known to be produced with child or forced labor under a 2006 human trafficking law. The decision was based on many batteries using cobalt, a mineral largely mined in the Democratic Republic of Congo, where children have been found to work at some mining sites.The department released the list in the form of a report that excoriated “clean energy” supply chains for using forced labor. It grouped Chinese batteries together with polysilicon — a key material used in solar panel cells — made in the Chinese province of Xinjiang.About half the world’s polysilicon comes from Xinjiang but is banned from the United States due to concerns that it is produced by Uyghurs and other predominantly Muslim groups through forced labor. Solar ingots — the term used for blocks of processed polysilicon — as well as wafers, cells and modules were also added to the list of goods made with forced or child labor, since many of those goods are made using Xinjiang polysilicon.“Clean energy is a central pillar of the Biden-Harris Administration’s policy goals. Yet, that clean energy future cannot — and will not — be built on the backs of forced laborers,” the Labor Department said in its report.The criticisms aired by the department were similar to those levied by Republicans and allies of the fossil fuel industry against the Biden administration’s support for electric vehicles, centering on China’s dominance in the battery industry.The Democratic Republic of Congo supplies more than 70 percent of the world’s mined cobalt, a metal used in batteries that provide power to anything from consumer laptops and cellphones to electric vehicles and energy storage facilities for power grids.China, meanwhile, owns some of the largest cobalt mines in Congo and is the largest processor of the metal. There are no cobalt processing plants in the United States.In 2016, Amnesty International, a human rights organization, published an investigation that found tens of thousands of Congolese children were working up to 12 hours a day at small cobalt mining sites across the country.Eight years later, a large percentage of the cobalt mined in the DRC comes from mines “where thousands of children work in hazardous conditions,” the Labor Department said.Auto companies are increasingly making EVs with lithium-iron phosphate batteries, which use no cobalt. But cobalt batteries may still make up some percentage of vehicles sold in the global market in the near term because of its unique properties, such as a higher energy density that can enable faster traveling speeds.On paper, the department’s targeting of batteries would seem to be reason for applause from advocates for improving the situation in Congo who want the U.S. to take greater steps in advocating for better treatment of mine workers.But Mark Dummett, a researcher at Amnesty International who helped expose that children were mining cobalt in Congo, was horrified by the Labor Department’s action.Dummett said his concern lies in what he views as a toothless approach from the department. Unlike the full ban against solar panels from Xinjiang, the U.S. government list exists primarily for informational purposes and is “not intended to be punitive,” according to the department.That means allies of the fossil fuel industry may now say the Biden administration is confident that “clean energy” relies on child labor but is doing little to deal with the problem.

Bitcoin Could Rival Beef or Crude Oil in Environmental Impact - Bitcoin mining is notoriously energy-intensive, but new research suggests it may contribute as much to climate change as the beef or crude oil industry, by one estimate. In a study published Thursday in Scientific Reports, researchers compared the approximate environmental cost of mining the digital currency to the impact of other industries and countries. “Within the general public, I think a lot of people are still just grappling with what Bitcoin is,” Benjamin Jones, an environmental economist at the University of New Mexico and a co-author of the study, tells Popular Science’s Miyo McGinn. “But we need to be aware of the tremendous impact it has on the environment. It’s very damaging.”Bitcoin mining is the process by which new currency enters into circulation and transactions are verified. This process requires specialized computers that solve complex math problems. The first miner to solve a given problem wins a predetermined amount of the digital coins, writes New Scientist’s Corryn Wetzel. The miners with the most powerful computers can make more guesses, allowing them to solve a problem more quickly and increase their chance of winning. “Because it’s worth a lot of money, you have a lot of people who are engaging in this guessing game,” Jones tells New Scientist. “That’s using a lot of electricity, and most of that electricity is coming from fossil fuels.”To calculate the impact of mining, the researchers looked at the number of bitcoins mined daily between 2016 and 2021. They considered the amount and type of energy the miners used, as well as their locations to estimate the emissions per coin, per New Scientist. Using the social cost of carbon, a common metric to gauge the financial damages caused by the greenhouse gas, the researchers calculated the climate cost of Bitcoin. On average, they found that for each dollar in bitcoin value produced, the process resulted in 35 cents in global climate damages—or 35 percent of its market value. In comparison, beef’s climate damages clocked in at 33 percent of its market value, and damages from gasoline produced from crude oil were at 41 percent.

Like Manchin, Obama tried to fast-track transmission. Nope. - President Joe Biden needs to run transmission lines through deserts and over mountains to meet America’s climate goals. His old boss could tell him how hard that massive build-out will be.In 2011, the Obama administration formed the Rapid Response Team for Transmission. It had one objective: to expedite the permitting process for seven major transmission lines across the country. But more than a decade later, only two projects have been finished. The others are in various stages of incompletion. One was abandoned, another is partially done and the remaining three are only now nearing the first scoop of a shovel. Those delays underscore the difficulty of building high-voltage transmission in the U.S. and reveal a towering roadblock to America’s climate goals. Congress recently passed $369 billion in clean energy tax credits in an effort to green the U.S. economy. But the country will need to more than double the rate of transmission development this decade to fully realize the emission benefits of that funding, according to an analysis by Princeton University researchers. “We need to get a better balance because we just can’t take 10 or 16 years to build a really good transmission project. It is not tolerable,” said Ken Wilson, an engineering fellow at Western Resource Advocates, an environmental group. “If that continues to be the norm, we’re not going to have an environment to worry about. It’s going to be burned up and dried up, and the stuff we wanted to protect won’t be there anymore.”Transmission has traditionally been a priority for both Democratic and Republican administrations. Building long-range, high-voltage power lines gives grid operators more flexibility to move power from where it’s generated to where it’s needed, increasing reliability and reducing costs.That is especially important to facilitate the rapid growth of renewables. Wind and solar power that’s generated in one part of the country needs to be shipped to cities and regions that use it. Take the example of TransWest Express, one of the projects selected by the Obama administration to be quickly permitted by the Rapid Response Team for Transmission.The 732-mile line would bring wind power from Wyoming to California. The Golden State needs green electrons in the evening, when its natural gas plants ramp up to offset a decline in solar generation. Wyoming wind tends to blow strongest when the sun goes down. But building transmission in America is hard. Last year, the country installed less than 400 miles of new line compared with 1,400 miles in 2020, according to the American Clean Power Association, a trade group (Climatewire, Sept. 6).

Want a career saving the planet? Become an electrician. - When we think about solving climate change, we often think about things that, in one way or another, plug into an electrical grid: Solar panels. Heat pumps. Efficient air conditioners. Wind turbines. Electric cars and electric car chargers. Induction stoves. Transmission lines. Over the past several years, the mantra of energy experts has been that we need to electrify everything — and then switch electrical power generation over to clean sources of power like wind, solar, geothermal and nuclear. Doing so will rapidly decrease carbon emissions and help to stave off dangerous levels of warming.But installing all of that electrical stuff — the solar panels, the heat pumps, the transmission lines — will require something that the United States doesn’t have: lots and lots of electricians.According to the nonprofit group Rewiring America, which focuses on electrification, shifting the economy away from fossil fuels will require no fewer than 1 billion new electrical appliances, cars and other items in American households alone.“It’s a billion machines that need to be installed or replaced over the next 25 years across 121 million homes,” said Ari Matusiak, the CEO of Rewiring America. “There need to be significantly more individuals who are trained to install these machines — and one subset of that is electricians who are trained to put in breaker boxes, wire our homes, and connect devices to our electric sources.”The problem is that many in the industry say the country is already in a state of electrician shortage — one that could get worse as clean energy ramps up. “We’re in an electrician shortage now,” said Sam Steyer, the president and CEO of Greenwork, a start-up that tries to connect clean energy workers with companies. Steyer says that homeowners attempting to install heat pumps or electric car chargers have already reported problems finding certified tradespeople to do the work that they need: Waiting lists sometimes stretch on for months.Part of the issue is that more people are leaving the profession than entering it. According to the National Electrical Contractors Association, more electricians retire every year than are replaced. This is part of what is known as the “silver tsunami,” or a wave of tradespeople aging out of their careers and leaving a hole behind. There are around 700,000 electricians working in the country today, and the Bureau of Labor Statistics estimates that there will be around 80,000 new electrician jobs available every year until 2031 — and that most of those jobs will just be in replacing the existing workforce.Steyer blames some of the current shortage on cultural assumptions about working in fields like construction or electrical work. “Over the last 20 years there has been very negative messaging to millennials and Gen Z about the trades,” he said. “There were a lot of articles saying, ‘All blue collar jobs are going to go away, everyone is going to be a knowledge worker or a care worker.’ ”

97% of smart meters fail to provide promised customer benefits. Can $3B in new funding change that? -An Aug. 30 Request for Information, or RFI, from the U.S. Department of Energy on how best to use $3 billion in infrastructure bill smart grid funding is raising expectations among energy management services providers about a new round of smart meter deployments by utilities across the country.It is also raising questions about unrealized benefits from 2009’s taxpayer- and ratepayer-funded billion-dollar American Recovery and Reinvestment Act, or ARRA, smart meter investment.By the end of 2022, there will be over 124 million smart meters installed in 78% of U.S. households, according to data released in April by the Edison Foundation’s Institute for Electric Innovation. But less than 3% of today’s smart meters fulfill 2009 promises of customer savings and that must be prevented in the coming Energy Department-funded deployment, according to a September analysis by Mission:data Coalition. “Utilities used federal and state funds to deploy smart meters and many explicitly promised to empower customers” to lower bills and earn rewards for supporting system peak demand reductions, said Mission:data President and analysis lead author Michael Murray. “The public policy failure is that utilities benefited from returns on capital expenditures and reduced operational costs but did not deliver those customer benefits,” he said.

‘Utility redlining’: Detroit power outages disproportionally hit minority and low-income areas -In late August, strong thunderstorms rolled through metro Detroit, knocking out power for six days at Marlene Harris-Bady’s Highland Park home. It was the second long outage that month in the largely low-income neighborhood, and Harris-Bady said she and her husband endure similar outages about five times annually. “It’s always a big mess and this has been going on for years,” Harris-Bady said. A new report proposes an explanation: DTE has generally disinvested in low-income and minority neighborhoods, and spends more resources on improving service in whiter, wealthier areas. The type of power delivery system DTE most often operates in the region’s low-income and minority neighborhoods is antiquated, and equipment like poles and transformers in these areas are generally much older and beyond their expected life. The policy brief, written by Michigan consumer advocates with data gleaned from regulatory hearings, characterizes the situation as “utility redlining”. “DTE predominantly underserves an area that has higher percentages of Bipoc and people experiencing poverty,” the brief, co-written by We the People Michigan and Soulardarity. “It’s a textbook example of an inequitable electric distribution system.” DTE faces ongoing criticism over frequent and long outages in Detroit caused by an aging grid and strong storms that occur more often as the climate changes. Federal data from 2019, the most recent year available, shows Michigan customers experienced the fourth longest average duration of outages, and DTE ranks among the worst utilities in the metric in Michigan. Though state regulators have asked DTE for more granular data that would show outage frequency and duration in areas served by the two systems, it has not yet been publicly released. Some customers who struggled to pay their electric bills during the pandemic had their power shut off, even as the utilities took huge tax benefits. Throughout the DTE service area, wealthier and whiter communities are most often served by 13.2kV lines, while lower-income and minority communities are generally served by a 4.8kV system installed over 60 years ago. The newer systems are much more resilient and capable of weathering a storm without widespread, long outages because they have about three times as much voltage capacity, according to industry literature. When an outage occurs, the newer system enables utilities to restore service faster by rerouting customers to an adjacent circuit without making repairs, and the newer system provides more circuits. The newer systems also integrate advanced technology that helps improve service with solar, storage and electric vehicle charging stations. Minority customers largely do not get those benefits, the report finds. About 90% of residents served by the older system in Detroit are minorities, as are about 24% outside of the city. Only about 21% of those served by DTE’s newer system are minorities. Similarly, residents living below the poverty line comprise about 38% of DTE customers served by the older system inside Detroit and 15% outside Detroit. Only about 10% of customers served by the newer system live beneath the poverty line.

Puerto Rico: There are still thousands without power 2 weeks after Fiona -More than 100,000 customers in Puerto Rico are still waiting for power to be restored two weeks after Hurricane Fiona dumped historic amounts of rain and knocked out power across the island.Fiona made landfall in southwest Puerto Rico on Sept. 18 as a Category 1 storm. Most of the remaining outages are on the western and southern sides of the island, according to LUMA Energy, the company that operates the island's power infrastructure.The storm dropped more than 30 inches of rain in some areas, causing flooding and mudslides that damaged roads and bridges into Puerto Rico's mountains. Many residents were left stranded in small towns without access to utilities, food or medical care.At least 13 people have died in connection with the storm, according to Puerto Rico's Department of Health. Another 12 deaths are under investigation.The storm cut power to all of the island's nearly 1.5 million electrical customers. Hundreds of thousands also lost access to water service.Two weeks later, 91% of customers have had power restored, LUMA reported Sunday. Power is back for the vast majority of homes in the municipalities in northern and northeastern Puerto Rico, including the populous area around San Juan.But nearly a third of customers in the western region of the island were still without power, along with about 17% of customers in municipalities along the southern coast. LUMA has restored service to all of Puerto Rico's hospitals and, as of Saturday, to 94% of the island's water operations facilities, the company reported.

Lawmakers question Luma Energy's ability to improve Puerto Rico's fragile power grid --Weeks after Hurricane Fiona triggered an islandwide blackout in Puerto Rico, residents as well as members of Congress and island legislators, still don't know when power will be fully restored in the U.S. territory.In a lengthy and contentious legislative hearing in the Puerto Rico House of Representatives on Wednesday, Luma Energy President Wayne Stensby and other company officials answered questions from local legislators worried about the company's ability to restore electricity to more than 88,000 power customers who remain in the dark.Company officials in charge of power transmission and distribution have touted their efforts to re-energize 95% of power customers more than two weeks after Hurricane Fiona made landfall on Sept. 18. Stensby described their response to Fiona, a Category 1 hurricane that brought more than 30 inches of rain and gusty winds, as "unprecedented." Local Rep. Rafael Hernández Montañez responded: “This is not historic. This is business as usual in a Caribbean nation." Against that backdrop, local representatives asked why entire neighborhoods across dozens of towns are still fully in the dark. Residents of many such communities have taken to the streets to protest against Luma Energy. Ponce Mayor Luis Irizarry Pabón and dozens of residents protested in front of a Luma Energy municipal office Wednesday, demanding that the company restore power to 70 communities that still don't have electricity. "We are going to be here, every day, until the town of Ponce has electricity," Irizarry Pabón said on Twitter, convening another demonstration for Thursday evening. Irizarry Pabón was also joined by Villalba Mayor Luis Javier Hernández, who is one of several mayors who created their own brigades of workers and experts to bring fallen light posts and cables back up to where they belong. The idea was to help Luma Energy rebuild as much as possible so it could focus just on re-energizing the system.

Can a new FERC grid planning proposal succeed in the South? - A federal proposal intended to jump-start development of long-distance power lines is fueling a debate in the Southeast, where clean energy advocates say limited grid planning may be stalling the move away from fossil fuels. The Federal Energy Regulatory Commission draft rule suggests modifying how utilities plan regional transmission projects and divvy up their costs. The goal is to spur infrastructure projects critical to meeting Biden administration goals for combating climate change and advancing clean energy goals. The draft — proposed earlier this year — is facing pushback. “The [proposal’s] fundamental conclusion that the transmission planning process is inadequate to address changing resource mix and demand cannot be made regarding Southeastern transmission planning processes,” Southern Co., the parent of several Southeastern utilities, told FERC last month. The argument goes that utilities have built many smaller, local lines that have boosted renewable energy and made the grid more reliable. Some have also expressed that certain FERC transmission mandates may be ill-suited in Southeastern states such as Georgia and North Carolina, where there is no centralized grid planner as is present in several other regions. Environmental groups take the opposite position: FERC’s proposed changes are especially needed in the Southeast. Advocates argue that transmission planning in the region hasn’t kept up with the rise of solar power, making it harder to replace aging fossil fuel plants with clean energy that could save consumers money. “We have got to proactively plan the transmission system so that we can cost-effectively bring on renewable resources and close more expensive existing fossil generators,” said Simon Mahan, executive director of the Southern Renewable Energy Association. At the heart of the issue are different frameworks for transmitting electricity across the United States. The Southeast and parts of the West aren’t covered by a regional transmission organization, which in other regions provides a forum for utilities, states and others to collaborate on regional transmission needs. The Southeast Regional Transmission Planning organization is run by the region’s largest utilities and doesn’t have independent oversight, as do regional transmission organizations (RTOs). “In the Southeast and in portions of the West, there’s very little independent input into this planning that goes on there, simply because there’s no independent entity that oversees the planning,” said Jon Wellinghoff, a former Democratic chair at FERC. “As long as those regions continue to be located in areas that are not under an independent planning process like the RTOs, I think there will be very little progress that happens.”

EPA is 'falling behind' on power plant rules, report says - - The Environmental Protection Agency is “falling behind” on finalizing eight key rules to slash air pollution, water pollution and planet-warming emissions from the nation's power plants, according to a report shared first with The Climate 202 before its broader release Wednesday.The analysis, which was conducted by the climate advocacy group Evergreen Action, examined whether the EPA is on track to finalize 10 power-sector regulations before the end of President Biden's first term.If the rules are issued in the waning days of Biden's first term, a future Republican-controlled Congress could overturn them using theCongressional Review Act, which allows lawmakers to scrap any regulation within 60 legislative days of its finalization by a simple majority vote.After “several delays and missed deadlines,” the report concludes, eight rules could be left unfinished or wiped from the books by disapproving lawmakers, while two rules are on track to be rolled out next year.“It's now time to ring the alarm that EPA is falling behind on their own proposed timelines for implementing these important rules,” Evergreen Executive Director Jamal Raad said in an interview. “If they don't start proposing these important rules by the end of this year, they will not be able to finish these rules by the end of the first term, which would be extremely detrimental to meeting our climate and environmental justice commitments,” Raad added.Asked for comment on the analysis, EPA spokesman Tim Carroll said in an email that the agency has already taken “bold action to combat the climate crisis, protect people’s health, and deliver economic benefits” by finalizing strong rules to phase down climate super-pollutants and curb tailpipe emissions from cars.“We will continue to move aggressively to advance ambitious proposals that protect people and the planet, building on the momentum provided by Congress in the Inflation Reduction Act,” Carroll said. “We are working expeditiously to craft rules in a way that follows the best available science, follows the law and will stand the test of time.”

Despite ambitious carbon goals, environmental group blasts TVA for buying new natural gas plants - The Tennessee Valley Authority has cut its carbon emission by nearly 60% since 2005 by shutting down more than half of the 59 coal-fired generating units the utility once operated, and the federal utility is developing plans to shut down even more of its coal power plants by the end of the decade. But a new study released Monday by an environmental group concerned about global warming says TVA lags behind most other utilities in its future clean energy plans and is one of the biggest purchasers of new natural gas plants. In a 29-page report labeled "The Dirty Truth about Utility Climate Pledges," the Sierra Club claims TVA is substituting one fossil fuel for another and is failing to meet President Joe Biden's goal of trying to have a carbon-free electric grid by 2035. "TVA likes to claim it is a 'clean-energy leader' and is committed to partnering with others to go further and faster to achieve its carbon-reduction initiatives, but the facts show this is far from the truth," Cara Bottorff, a senior managing analyst for the Sierra Club, said in a report Monday. Among the future power plans for 77 operating electric utilities analyzed by the Sierra Club, TVA ranked the highest for planned natural gas capacity in 2030 and ranked second highest behind only Alabama Power in keeping coal plants operating by 2030. TVA has shut down its John Sevier, Widows Creek, Colbert, Allen, New Johnsonville and Paradise coal plants already and is considering plans to shut down its Kingston and Cumberland fossil plants within the next decade. In their place, TVA is proposing to build more energy-efficient combined-cycle gas plants to help meet peak power demands and to add more solar, wind and nuclear plants to meet baseload generation needs. But the Sierra Club said TVA needs to move quicker to a carbon-free future to help limit growing problems from global warming, which the EPA says is linked with carbon emissions. "TVA's Gallatin Fossil Plant Unit 4 was fired up a few days after I was born, and that was over 60 years ago," said Dr. Cris Corley, chair of the Sierra Club Tennessee Chapter, who lives across the Cumberland River from the Gallatin Fossil Plant. Corley said he is aware of neighbors who worked at the plant and died prematurely of heart attacks, he said in a statement Monday. "I was not really surprised by TVA's failing grade. I hear the massive coal barrages sounding their foghorns while chugging up the river before sunrise, and I see the smoke stacks while checking my mailbox before sunset," he said. "We are sick and tired of being sick and tired."

Utility climate pledges amount to 'greenwashing,' report says - In recent years, electric utilities across the country have announced a flurry of splashy climate commitments, vowing to embrace renewable energy and eliminate their planet-warming emissions by mid-century. But many utilities are not following through on these pledges, suggesting their commitments amount to little more than“greenwashing” — the practice of making a company seem more sustainable than it really is, according to a report released Monday. The report, titled “The Dirty Truth About Utility Climate Pledges,” was co-authored by experts at the Sierra Club and Leah Stokes, a professor at the University of California at Santa Barbara, who studies climate policy. “President Biden has set an ambitious goal of 80 percent clean power by 2030, but these utilities don't have the plans to back that up,” Stokes said in an interview. “Particularly with the passage of the Inflation Reduction Act, that is completely irresponsible.” The report's authors looked at the 77 utilities whose 50 parent companies are most invested in fossil fuel generation. They graded the utilities based on their plans to retire coal plants, stop building new gas plants and deploy more clean energy through 2030. This is the second consecutive year that the authors have conducted the analysis. Compared to last year, nearly half of the utilities made no progress or received a lower score. Other main findings include:

The aggregate score of utilities with a climate pledge was 23 out of 100. “This suggests that most utilities' corporate pledges are not translating into action,” the report says.
37 of the utilities plan to build new gas plants totaling nearly 38 gigawatts through 2030, despite warnings from climate scientists about the dangers of locking in new fossil fuel infrastructure.

Brian Reil, a spokesman for the Edison Electric Institute, a trade group representing investor-owned utilities, criticized the report's methodology and argued that gas has increased the reliability of the nation's power grid.

The Dirty Truth About Utility Climate Pledges | Beyond Coal - Utilities are trying to greenwash their dirty plans. It’s time to hold them accountable. The next decade is critical to averting the worst impacts of the climate crisis and transforming our economy to run entirely on clean energy.Studies show that unless utilities retire all their coal plants by 2030, abandon all plans to build gas plants, and aggressively build out renewable energy resources, we risk destabilizing our livable climate. Despite this pressing deadline, utilities are either not moving fast enough toward these goals, or not moving at all.Dozens of utilities may have pledged to become “carbon neutral” by 2050, but research conducted by the Sierra Club in its inaugural Dirty Truth Report showed that nearly all utilities in the United States lack the plans needed to move toward clean energy in the time frame needed to avoid the worst of the climate crisis. In an update to that report a year and a half later, Sierra Club found that most utilities have continued to drag their feet, making little progress in the transition from fossil fuels to clean energy. KEY FINDINGS:

• While electric utilities have pledged to reduce their greenhouse gas emissions, they have made little progress since our first report and still fall far short of what is needed to protect people and the planet.
• We assigned a score to each utility based on its plans to retire coal, build new clean energy, and not build new gas plants. The aggregate score for all companies studied this year was 21 out of 100 — or a D — up just 4 points from the previous study.
• For parent companies with a climate pledge, the aggregate score in our analysis was 23 out of 100, only 2 points higher than the overall aggregate score. This suggests that most utilities’ corporate pledges are not translating into action.
• The companies studied account for 69 percent of remaining coal generation in the US. They have committed to retire just 28 percent of their coal generation by 2030.
• About half of the operating companies included in this study, 37 companies, are planning to build new gas plants, totaling nearly 38 GW through 2030. These utilities have actually increased their plans for new gas plants since our last report. This accounts for over half of the total planned gas in the US through 2030.
• The companies in this study plan to add 308 million megawatt hours (MWh) of new wind and solar energy to the grid between 2022 and 2030. This is equivalent to only 24 percent of their current coal and gas generation and is wholly inadequate for a swift transition to a clean grid.
• Of the 77 operating companies studied, 27 received worse scores (35 percent); 43 improved their scores (56 percent); and 7 made no progress (9 percent).

The best policies to help coal towns weather the switch to renewables --In the face of competition from cheaper and cleaner sources of energy, coal mines and plants have been shutting down across the U.S. for the past decade. “We’ve lost 45,000 coal [mining] jobs since 2012,” said Jeremy Richardson, manager of the carbon-free electricity program at RMI, a clean-energy think tank. The energy transition “is already happening.” For towns living through this transition, it can be devastating. Coal workers lose well-paying jobs, and communities lose a bedrock of their economies. How communities weather these choppy seas depends on the level of support they receive, which varies from state to state. That’s one of the takeaways of a new report by RMI, which analyzed 16 bills passed by states since 2011, all aimed at easing the transition away from fossil fuels and into the clean energy economy. The report’s findings enable lawmakers to learn from what has been done before to support a just transition for coal communities, Richardson told Canary Media. Three states in particular stand out for their policies, according to Richardson: Colorado, New Mexico and Illinois. Here’s what they’re getting right.

Can anti-coal tactics work against plastics? - One of the most significant efforts to halt the plastics industry in its tracks sees a path to victory through grassroots advocacy, an avenue proponents hope will help combat a powerful and rapidly growing sector. An $85 million campaign — Beyond Petrochemicals — announced two weeks ago by billionaire and former New York City Mayor Michael Bloomberg will target petrochemical facilities, a leading source of plastics, in the name of fighting both climate change and environmental degradation. The initiative will pour funding into ongoing efforts led by an array of advocacy organizations, a number of them based in areas grappling with petrochemical activity. “Mayor Bloomberg has been enormously effective at protecting the public from damages caused by coal power plants, tobacco products and guns,” said Judith Enck, a former EPA regional administrator during the Obama administration and head of the group Beyond Plastics. “His new initiative focused on petrochemical facilities will protect impacted Black and brown communities and the entire planet in similar fashion.” Enck’s group is set to benefit from the initiative. Others include the Bullard Center at Texas Southern University, Defend Our Health, Earthjustice, Earthworks, the Hip Hop Caucus, the Louisiana Bucket Brigade and Rise St. James, as well as other advocacy organizations. They will be assisted by the Resources Legacy Fund, which builds secure funding for environment-focused causes and connects philanthropists with communities. Proponents hope the effort can match the success of another Bloomberg campaign, Beyond Coal, which pledged to retire 30 percent of U.S. coal plants before 2020 and wound up doubling that number. That campaign helped bring down national emissions by more than 600 million metric tons, a major feat. Beyond Petrochemicals, however, will confront different dynamics. Plastics, a petrochemical product, are cheap, easy to manufacture and growing in abundance. The United Nations projects that plastics manufacturing will double by 2040; the International Energy Agency has meanwhile predicted that the wider industry will surpass coal-fired carbon emissions within the coming decade. Bloomberg Philanthropies launched the campaign with the billionaire himself declaring the United States to be at a “critical moment” for stopping petrochemical and plastics activity in its tracks (E&E News PM, Sept. 21). He linked the industry both to climate change and to environmental justice struggles, citing the low-income communities where industrial activity takes place, with disproportionate impacts for people of color. But how the new campaign will work is still unclear, and Bloomberg Philanthropies said the broader operation is still being built up. The initiative will also face hurdles — as well as a landscape far different from the one that confronted the Beyond Coal campaign.

Is nuclear energy poised for an ESG-fueled comeback? - In a world of energy insecurity, climate change and skyrocketing energy prices, nuclear energy might be one of the only sectors feeling more bullish than ever. Once seen as an energy option on its last legs, the nuclear industry has had several victories lately. California Gov. Gavin Newsom (D) signed a bill intended to keep the Diablo Canyon plant running past its expected retirement date, and Germany plans to keep two aging nuclear plants available until at least April. The energy security arguments for those plants in some ways mirror those of the 1970s, which led to a huge nuclear build-out. Then, it was skyrocketing gasoline prices and anti-market actions from Middle Eastern oil exporters creating energy insecurity. Today, similar factors are at play, with Russia now causing supply concerns and natural gas prices spiking. There’s also the ticking tock of climate change making zero-carbon nuclear particularly attractive in a world racing to cut emissions. Advertisement Supporters say there’s enough momentum for a nuclear renaissance that would catapult the industry into a greater role in the world’s clean energy future. Newsom backed an effort to keep the Diablo Canyon plant open until 2030, for example, as climate-linked wildfires and heat waves showed it would be tough for California to lose a big zero-carbon power source in the coming years as it strives to slash emissions. But the nuclear industry has long voiced concerns over what it sees as hesitancy and unfair treatment in the world of climate finance and ESG, the movement to include environmental, social and governance issues in investing principles. “Nuclear should be getting credit for ESG, and I’d like to tell you that it’s that simple, but it’s not,” said Maria Korsnick, CEO of the Nuclear Energy Institute industry group, during an NEI event in June. “There’s some financial institutions that look at nuclear and look at ESG, and they struggle to say that nuclear actually supports it.” With its high upfront costs and long project timelines, nuclear energy will need belief — and money — from investors for nuclear energy to grow by 2050 rather than just slowly fade away. “We understand that nuclear potential is very, very great, and we’re just at the tip of the iceberg,” said John Kotek, NEI’s senior vice president of policy development. “Investment is a key part of being able to meet that potential.”

6 energy questions that winners of Ohio’s high court races will decide -While much of the attention on this year’s races for the Ohio Supreme Court focuses on the state’s six-week abortion ban and gerrymandering, the election also comes with high stakes for state energy policy.Several cases involving power plants, utility oversight, and clean energy development are likely to land before the state’s high court in the next two years. The seven elected judges will also review other rulings by the Public Utilities Commission of Ohio and the Ohio Power Siting Board, which determines where projects can be built.Justice Sharon Kennedy, a Republican and the lone dissenting judge in August when the Supreme Court approved plans for the Great Lakes’ first offshore wind farm, is campaigning to become the court’s next chief justice. She is facing Justice Jennifer Brunner, a Democrat. Justice Pat Fischer and Justice Pat DeWine (son of Gov. Mike DeWine), both Republicans, are seeking reelection against Democratic challengers Terri Jamison and Marilyn Zayas. Both challengers are currently appellate court judges. Here are six questions the winners are likely to help decide after the election:

1. What hurdles can neighbors or groups put up to block renewable energy?
2. What rules will govern siting for renewable energy?
3. Will ratepayers recover money for the alleged House Bill 6 corruption?
4. Have ratepayers been overcharged for two 1950s-era coal plants?
5. How much more will Ohioans pay for utilities?
6. Will Ohio laws keep favoring utilities and fossil fuels?

Money in judicial races also can create potential conflicts for judges, said attorney Douglas Keith at the Brennan Center. And judges often do a poor job of recognizing when they may have a bias on an issue, he added. American Electric Power and NiSource, the parent company of Columbia Gas, have given amounts ranging from $2,500 to $5,500 to campaigns for Kennedy, Fischer and DeWine. Kennedy and DeWine also got $1,000 donations from the Ohio Coal PAC. The Ohio Oil & Gas Producers Fund gave $500 to Kennedy’s campaign. Additionally, the FirstEnergy Corp. Political Action Committee had nearly $1.9 million on hand as of Aug. 31. Historically, the company has supported DeWine, Kennedy, andFischer, according to Open Secrets’ FollowTheMoney.org data.Beyond that, the Ohio Chamber of Commerce set a goal of raising $4 million for Ohio’s high court races, according to reports by CNN and the Columbus Dispatch. And the Republican State Leadership Committee is reserving $2 million for Ohio’s high court races, Cleveland.com reported. Neither the Chamber nor the Republican State Leadership Committee has responded to repeated requests for comment. Both groups have endorsed Kennedy, DeWine and Fischer. Voters can expect a barrage of political ads in the final weeks before the election, Turcer said, and she warns voters to be skeptical. “If you can’t follow the money prior to casting a ballot, that transparency is happening too late,” she said.

FirstEnergy fights to keep records tied to bribery scheme from the public - Akron-based utility FirstEnergy Corp., which has admitted to spending tens of millions bribing top government officials, asked state regulators to shield documents about its bribes from release to the public.The company’s request will soon be decided by the Public Utilities Commission of Ohio, whose former chairman Sam Randazzo allegedly accepted a $4.3 million bribe from the company for favorable regulatory treatment. FirstEnergy said in court filings last summer that it bribed not only Randazzo but also Ohio’s then-Speaker of the House Larry Householder.Randazzo has not been charged with a crime and denies wrongdoing. Householder has pleaded not guilty and awaits a criminal trial in January 2023 for a charge of racketeering.The dispute at hand traces back to 39 documents, a sliver of the 470,000 records FirstEnergy produced to the Ohio Consumers’ Counsel, an independent state watchdog agency that represents the interests of residential electric customers. The company gave the records to the OCC under a protective order in response to a subpoena from the agency. The subpoena called for documents FirstEnergy produced in a related shareholders’ lawsuit against the company.Among the records is a key that would unmask the identities of several government officials and energy executives that FirstEnergy anonymously identified in its deferred prosecution agreement with the U.S. Department of Justice.The company argued that release of the records would undermine a pause on the regulatory investigations made at the behest of federal prosecutors working on the criminal case; that the records aren’t the OCC’s to share; that they’re “commercially sensitive;” and that they violate FirstEnergy’s rights laid out in the protective order.The OCC, which has doggedly sought to unearth a fuller picture of the bribery scheme that FirstEnergy admitted to, said the company has repeatedly misused its confidentiality rights. For instance, the company claimed all the documents it provided to the OCC are confidential — even those that have previously been filed publicly with various federal agencies.

Group finds PFAS 'forever' chemicals used in Ohio oil and gas wells - A non-profit research group has found the oil and gas industry in Ohio has used PFAS, known as “forever” chemicals, in at least 101 oil and gas wells since 2013. Physicians for Social Responsibility (PSR) released a report on Thursday and said that the state’s disclosure rules prevent the public from knowing how widely PFAS have been used.PFAS are a class of thousands of man-made chemicals used in everything from food packaging to firefighting foam. “And there’s evidence that it has been used widely in the oil and gas industry for decades,” said Dusty Horwitt, who co-authored a report for Physicians for Social Responsibility. PFAS are known as forever chemicals because they don’t break down easily in the environment. They have been linked to some cancers, reduced fertility, and developmental effects in children. The group analyzed a database where the oil and gas industry self-reports chemical usage, and found PFAS was used in wells in eight Ohio counties: Belmont, Carroll, Columbiana, Guernsey, Harrison, Jefferson, Monroe, and Washington.“However, the number of definitively identified cases of PFAS use may significantly underrepresent the use and presence of PFAS in the state associated with oil and gas operations,” according to the report.According to Horwitt, PFAS are difficult to track because Ohio rules allow companies to claim ‘trade secrets’ to avoid disclosure of chemicals they use. “Between 2013 and 2022, oil and gas companies withheld the identity of at least one trade secret chemical in more than 2,100 oil and gas wells,” he said.A report in the Philadelphia Inquirer last year found PFAS chemicals were used in eight wells in Pennsylvania, although Pa. has similar “trade secrets” rules. PFAS chemicals are known to move quickly in water. For Horwitt, that adds a concern because PFAS contamination of drinking water from fracking hasn’t been adequately researched. “We’re aware only of one study so far that has looked for these chemicals in drinking water near oil and gas operations,” Horwitt said. That sampling found PFAS in a drinking well fed by groundwater near oil and gas operations in Pennsylvania. Horwitt wants more research but also thinks Ohio and other states should follow Colorado’s lead and ban the use of PFAS in oil and gas operations. “That’s a very wise thing to do because of the extreme toxicity and persistence of these chemicals and the multiple routes of exposure that could exist from oil and gas operations,” Horwitt said. In Ohio, much of the wastewater is pumped into underground injection disposal wells. The state has 245 frack waste injection wells, according to an analysis by FrackTracker Alliance, referenced in the PSR report, which accepted a total of 12.7 billion gallons of waste in 2020 from Ohio, Pennsylvania and West Virginia. “There could be PFAS in the wastewater that comes up from these wells, whether in Ohio or from neighboring states like Pennsylvania and West Virginia and then is sent to Ohio for disposal,” Horwitt said.

Pipefitter says BP used unskilled contractors on unit before fatal explosion at Toledo, Ohio refinery - It is two weeks since the September 20 explosion and fire that claimed the lives of two young workers at the BP Husky refinery in Oregon, Ohio. Two brothers, Max and Ben Morrissey, aged 34 and 32, respectively, suffered horrific burns in the fire and succumbed to their injuries the following day. The Morrissey brothers, who were also fathers of small children, were buried after a memorial attended by hundreds of family members, friends and co-workers at the refinery last week. There is widespread suspicion among workers that cost-cutting measures by management contributed to the disaster. Workers have long complained about manpower shortages, management cutting corners on maintenance and repair, and the contracting out of jobs to non-union workers who lack knowledge and training. Operators have also warned that exhausting work schedules and the practice of shifting them from unit to unit, instead of keeping them on units where they have experience and specific knowledge, undermines safety. BP, which is in the process of selling off its share of the refinery just east of Toledo to Calgary-based Cenovus, has not released any details about the September 20 fire. Nor have inspectors from the federal and state Occupational Safety and Health Administration (OSHA). The United Steelworkers (USW), which has 315 members at the refinery, including the two deceased brothers, has not released any information either. Last week, Eric Sweeney, the District 1 staff representative for USW Local 1-346, told the Toledo Blade that “no one wants to rush to judgment.” The WSWS was recently contacted by a union pipefitter who worked at the BP Husky refinery before the September 20 explosion. In an email and subsequent interview, the worker detailed unsafe practices by refinery management in the days leading up to the disaster. The information he provided is based on personal experience, the experiences of co-workers who worked the shutdown at the refinery, and from union representatives. In an initial email, the worker, whose identity we will keep anonymous to protect him from retaliation, said, “This past summer BP/Husky hired 55 percent non-union pipefitters to complete the spring 2022 shutdown! It is documented that the non-union outfit— ‘UNITED,’ we’ll call them—worked the unit that blew up. They were seen doing shabby work, not following proper procedures on taking valves, etc. to the wash pads, and had many other safety infractions! I blame the plant manager who decided to hire ‘UNITED.’ Most employees were from Texas, and they hired anyone.

Years into fracking boom, air regulators can't keep up - — The extraordinary phone call came at an ordinary moment: Darlene and Bob Williamson were watching television when they received an urgent warning to leave their Salem Twsp Ohio home immediately. An indoor air monitor had detected spiking contaminant levels, a scientist on the other end of the call told the two retirees. “There was a bad odor; both of us had a headache,” Darlene Williamson recalled. They opened their windows, fled the house and waited to return when the levels of the contaminants — known as volatile organic compounds and suspected to be stemming from nearby energy development infrastructure — had dropped to normal. The episode early last year revealed the power and benefits of low-cost sensors to furnish almost instant insight into air quality. The Williamsons are among some 35 southeastern Ohio and West Virginia households participating in a project to make more use of them in a mostly rural region where EPA air pollution monitoring is limited and shale gas production has boomed in the last decade. But the episode also suggests how government overseers have failed to keep pace with the air quality challenges posed by that boom. Hundreds of gas wells and related operations dot this verdant swath of the Ohio River Valley, but neither state nor federal regulators have the tools to consistently keep tabs on what nearby residents — as in the case of the Williamsons — are breathing. The regulators are working under a roughly 50-year-old Clean Air Act framework written to devote considerable focus to pollutants now of dwindling significance, such as sulfur dioxide. Instead, the law’s apparatus pays far less attention to volatile organic compounds, a class of chemicals linked to oil and gas development that includes air toxics like benzene, a carcinogen. Those regulatory shortcomings are compounded by poor air monitoring infrastructure and a surge in the drilling technique known as hydraulic fracturing — and are fueling a host of environmental and public health concerns.“We want to find out as much as we can, but we also know that there’s nothing that we can do,” Bob Williamson said in a recent interview on the deck of the home where he and his wife have lived for almost 40 years. Two of their grandchildren frolicked in a backyard pool. Less than a half-mile away, however, sat a natural gas compressor station. Run by the Oklahoma-based Williams Cos. Inc., its purpose is to keep gas moving through a pipeline. The station’s blasts of noise during periodic depressurization operations known as blowdowns are one sign of the impact of hydraulic fracturing, or fracking, which has allowed operators to tap the natural gas packed into the vast shale formations underlying the region. The couple blames emissions from the station for nausea, lethargy and other health problems, not to mention an oily film on their kitchen door. Within eyeshot of their home is more evidence: a metering station that tracks the flow of pipeline gas, occupying space in what used to be a corn and soybean field.

Equinor's Ohio Natural Gas Output Certified; Ascent Monitoring Methane - Equinor ASA’s natural gas production in the Appalachian Basin of Ohio has been certified as responsibly developed by Equitable Origin (EO). About 135 MMcf/d is actively produced by Equinor US in Monroe County. The third-party review covered Equinor’s “entire U.S. onshore natural gas production, encompassing 51 producing wells on 13 well pads at the time of the assessment,” EO noted. “However, this is a small fraction of the company’s total production in the U.S. as Equinor has significant offshore production operations” in the deepwater Gulf of Mexico. Through its US. subsidiary, Equinor’s current Appalachia operations in Ohio extend across 242,000 net acres under lease, with 27,000 net acres operational, EO noted. Monroe County is in the southeastern corner of the state, and it shares a border with West Virginia. The portion of the Appalachian from which Equinor operates primarily is in a dry gas field with minimal natural gas liquids production. The third-party assessment, which used the EO100 Standard for Responsible Development, was completed by Houston-based Responsible Energy Solutions LLC (RES). Meanwhile, privately held Ascent Resources – Utica LLC said nearly all of its natural gas production in Ohio has achieved the top certification under the MiQ methane emissions standard. As part of its certification, Ascent has partnered with Bridger Photonics, based in Bozeman, MT. Bridger uses aerial methane detecting technology, aka Gas Mapping LiDAR, to detect, locate and quantify methane emissions. “Ascent is committed to providing clean, reliable and affordable energy that is responsibly sourced,” COO Keith Yankowsky said. “That foundational principle enabled us to achieve multiple top-tier third party certifications, and we expect that our work with Bridger will further enhance our existing emissions detection and elimination efforts in a cost-effective way.”

100% of Equinor's Ohio Utica Gas Production Certified Responsible - Marcellus Drilling News - Equinor, Norway’s largest oil company (state-owned, used to be called Statoil before they became ashamed to have the word “oil” in their name), announced it had achieved 100% certification for its natural gas produced in the Ohio Utica using Equitable Origin’s EO100™ standard. Equinor now produces “responsible” natural gas for its 27,000 operational net acres, and 242,000 non-operational net acres. Congrats!

Commentary: Muskingum Watershed foresight provides Ohioans with recreational opportunities – by Rob Brundrett, president of the Ohio Oil and Gas Association. Over the past decade, the Muskingum Watershed Conservancy District has been executing a significant renovation plan to its campgrounds and marinas, which had no major redevelopments or upgrades since their construction over 50 years ago.What has made this massive transformation possible? The district understood the value of its land and the potential of the natural resources right under its feet. The Muskingum Watershed Conservancy District has been able to creatively work with oil and natural gas producers to monetize these resources so that all Ohioans can benefit from the oil and gas leases the district negotiated.District leadership was able to look ahead and view the possibilities during Ohio’s shale revolution, while at the same time ensuring these natural resources are and will remain protected for future generations to enjoy. In 2019, the district Board of Directors and executive staff followed recommendations to commit $40 million in reserve funding along with 50% of Utica shale royalties for the next four years to implement Phase 2 of the plan.

An ethane cracker in western Pa. will soon start up. We answered your questions about it - StateImpact – NPR - Shell’s ethane cracker is scheduled to come online soon, producing up to 1.6 million metric tons of plastic pellets a year. The plant will produce this plastic by processing ethane, a component of the natural gas found in the Marcellus and Utica shale formations nearby.Construction of the plant was Pennsylvania’s largest industrial project since World War II, according to Gov. Tom Wolf, and benefitted from the largest state subsidy ever – a $1.65 billion tax credit, plus various state and local tax breaks.More than 8,500 construction workers, many from out of state, crowded Beaver County over the last few years to construct the plant. When it is finished, it will employ 600 permanent workers. The cracker will also be permitted to be a large polluter – the second biggest emitter of volatile organic chemicals in the state. Stricter air quality rules and an energy system that relies less on polluting coal have made the air in and around Pittsburgh healthier in recent years. Many now ask: will this plant reverse gains to air quality? To help address what the project will mean for the region, we asked for readers’ questions about the plant, and solicited help from experts to answer them. Like all good questions, many of our readers’ queries were hard, if not impossible, to answer completely. Many wanted to know what the future holds for the plant and the region – things we can make educated guesses on right now but can’t know for certain. But these questions helped focus our attention on the new reality of western Pennsylvania as a petrochemicals hub.

Q: How much is Pennsylvania paying per job per year in tax credits? How many jobs are being created, and how much will they pay? Would Pennsylvania have been better off just giving the money to that number of citizens in a “job lottery?” – Ira Beckerman, New Cumberland, Pa.
A: Since the legislature passed the $1.65 billion tax break for Shell in Pennsylvania in 2012, this question has loomed over the project: Could the state have put that money to better use?Again, we put this question to Passmore.He said that the question hits on what economists call “opportunity costs”, which “represent the forgone benefit that would have been derived from an option not chosen.”The total number of permanent workers at the plant will be around 600, according to Shell. “A broader impact is likely because Shell will purchase from local suppliers, and local Shell workers will spend some of their earnings with local merchants,” Passmore said.By his “rough” estimate, not counting for inflation, Passmore figures the state will spend $122,000 to $165,000 per job per year. (That’s not including the workers hired to build the plant).Passmore said whether that’s worth it is complicated by the question of whether the plant would have been built regardless of the credit. Shell has said the answer to that question is no.“I can tell you, with hand to my heart, that without these incentives, we would not have made this investment decision,” a Shell executive said in 2016. Gov. Tom Corbett, who championed the tax credit for Shell, said at the time, “When you’re looking at the investment, you have to look at what it would have cost us had we done nothing, had we let these businesses go.”
Q: I’ve read about cancer alley in (Louisiana) and other areas where cracker plants are located. We have significant numbers of pediatric asthma in western Pa. Are all lung conditions going to get worse when this plant is running at full capacity? – Michael Mannion, Pittsburgh
Q: Shell states in the Shell Risk Assessment submitted to the DEP on Jan. 28, 2015 that 55 “Compounds of Potential Concern” will be emitted by the plant once it goes into operation. Many of these are carcinogens. What can be said from a scientific and air quality perspective about air quality? – Debra Smit, Pittsburgh, The Breathe Project
Q: Who will be monitoring pollution from this site? And how will it be regulated? Some claim it will generate $3.7B per year in total economic value, but what are the total indirect costs in terms of health and environmental impacts? – Ryan Walsh, Pittsburgh
A: Air quality was the most common topic readers wanted to know about. Southwestern Pennsylvania has long failed to meet federal air quality guidelines. But because of declining use of coal and tighter air pollution rules, the area around Pittsburgh is getting cleaner.That still doesn’t mean the air in Pittsburgh is safe, says Deborah Gentile, allergy and asthma specialist with East Suburban Pediatrics near Pittsburgh and Medical Director at Community Partners in Asthma Care.“The World Health Organization states that there is no level of air pollution that is safe,” Gentile said.Gentile said the EPA’s current air pollution standards rely on older data, and newer studies show that air pollution is harmful at lower levels than EPA standards allow. For that reason, the EPA’s scientific advisory panel hasasked the agency to set tougher standards for particle pollution, which the agency could do as soon as next year.“Nearby residents are already experiencing high levels of air pollution and the levels can only go higher once the facility becomes operational,” Gentile said. “Nearby residents will bear the burden of air pollution and its adverse health effects for the benefit of others who are not in the impact region.” Air pollution causes a broad array of health problems; breathing in fine particles has been shown to cause increased mortality, as well as higher rates of heart attacks, high blood pressure, and stroke, Gentile said. It also causes lung problems, like asthma and COPD, cancer and dementia.

Pitt, Pa. health department back out of public forum on fracking studies - The University of Pittsburgh and the state Department of Health are no longer participating in a public forum this Wednesday to discuss a series of state-funded studies about fracking and public health.The forum will still take place on Wednesday, Oct. 5, in Canonsburg. The Center for Coalfield Justice, one of the environmental groups involved in the forum, said in a statement this week that Pitt and the Department of Health had pulled out of the public event.Both the university and the Department of Health were slated to take part in the event“to explain the study process to the public and take questions from community members,” according to the center. In a statement, Maureen Lichtveld, Dean of the University of Pittsburgh School of Public Health and Professor of Environmental and Occupational Health, said that the studies are still “ongoing” and that “no data are available to share publicly.” Licthveld said the school was “willing to answer questions from the community as the studies progress. When we are prepared to release the results of these studies, we will do so publicly in a timely manner.”Pitt has set up a website with more information on the studies’ methodologies.Barry Ciccocioppo, a spokesperson for the Department of Health, said the agency pulled out of the event only after Pitt did. “(A)fter Pitt withdrew its participation in the meeting, it became clear that the department would be unable to provide anything more than background information and an overview of what led to contracting for these two studies,” Ciccocioppo said, in an email. “We will be providing that information to the organizers before the meeting.” Ciccocioppo said the department will try to answer questions and solicit feedback through an online questionnaire it has set up. The survey will be open for two weeks after the Oct. 5 meeting.

Canonsburg residents seek answers on health impacts of fracking, shale gas - Janice Blanock was asking once again if it was possible that the fracking and natural gas industry in her area played a part in her son’s death.Ms. Blanock, 62, of Cecil Township, was one of over 100 people attending a community meeting in Canonsburg on Wednesday evening about a state-funded study looking into the potential health impacts of shale gas drilling and fracking. She wanted to know why more than half a dozen young people in their region have been diagnosed with Ewing sarcoma, a rare childhood bone cancer, and other health issues since 2008.Her 19-year-old son, Luke Blanock, died from Ewing sarcoma in 2016.The prevalence of the disease in southwestern Pennsylvania appears unusual: only 200 to 250 cases of Ewing sarcoma occur in the U.S. each year. The National Cancer Institute says the incidence rate has remained unchanged for 30 years: for people of all ages, the incidence is one case per million. It is somewhat more common among patients aged between 10 and 19, with between nine and 10 cases per million.Absent from Wednesday’s meeting were researchers from the University of Pittsburgh School of Public Health and the state Department of Health, the groups studying the potential relationship between the disease and the fracking and natural gas industries since Gov. Tom Wolf allocated $3 million to look into the phenomenon in 2019. They were expected to join the discussion until last week. Pitt officials said researchers decided not to join the meeting due to a lack of data. Dr. Maureen Lichtveld, the dean of the School of Public Health, said in a statement that the study’s community advisory board remains a “crucial component” of the study, and she said they would “welcome open and collaborative conversations with the board when we have data to share.”“As the meeting date approached and plans were solidified, it became apparent that it would be premature to participate in a public forum regarding this research, which has recently closed to recruitment and entered the data analysis phase,” Dr. Lichtveld wrote when asked why researchers didn’t come to the meeting.After Pitt decided not to join the public forum, so did the DOH, according to a report from WESA, Pittsburgh’s NPR news station.But Lisa DePaoli, the spokeswoman for the Center for Coalfield Justice, one of the environmental groups involved with the meeting, said organizers, Pitt and the DOH all knew that the results wouldn’t be ready in time for the forum. The reason for the meeting was to give residents transparency on how the study has progressed in the past two years, she said.People in the area “have a lot of questions that aren’t being answered,” Ms. DePaoli said Wednesday. She hoped researchers would have been able to clarify their process and break down what conclusions they will and will not be able to glean from their data once their research is finished. Instead, residents at the meeting heard from public health experts and environmental advocates, who explained what they have learned from studies conducted in other regions and answered questions related to what Pitt and the DOH is studying. On a website, Pitt researchers release quarterly updates on the study’s progress and explain its methodologies. The most recent report, which covers April through June of 2022, says they had recently completed sending recruitment letters to eligible families of children with pediatric cancer, as well as sending correspondences to 2,000 control families. The Post-Gazette in 2019 identified six cases of Ewing sarcoma that had occurred since 2008 in the Canon-McMillan School District alone, but astudy by the state Department of Health released that year said rates of the illness were not significant enough to represent a cancer cluster. The newspaper later reported that there were at least 27 cases of the disease that occurred between 2008 and 2018 in Washington, Greene, Fayette and Westmoreland counties, which then had a combined population of about 750,000. Most cases of Ewing sarcoma occur in teens when they experience growth spurts, and there is limited information as to what causes it. Families of those who have had the disease, as well as environmental activists, have raised concerns that the cancer may be linked to the prevalence of shale gas drilling and fracking in the counties.

Pa. faces sanctions if new air rules for oil/gas sites aren't finalized by December --Pennsylvania is up against a clock to finish emissions regulations for oil and gas sites. At risk are hundreds of millions of dollars in federal highway funds. Earlier this year, the Environmental Protection Agency sent a letter to the state Department of Environmental Protection, warning it of impending sanctions if Pennsylvania did not submit plans to reduce emissions of volatile organic compounds at oil and gas sites by Dec. 16. In June, the Environmental Quality Board approved a final rule governing VOCs at existing unconventional, fracked wells. The Department of Environmental Protection says the rule will have a co-benefit of reducing methane, a greenhouse gas up to 86 times more powerful than carbon dioxide over a 20-year period.An earlier version of the rule included existing shallower, conventional wells. The Department of Environmental Protection separated the two industries in an attempt to avoid controversy and a delay of the rule.Democratic Gov. Tom Wolf and the Republican-controlled legislature made an agreement in 2016 to regulate the two industries separately. Conventional drilling companies had filed a preliminary lawsuit to stop the rule.Pennsylvania adopted a methane rule for oil and gas sites in 2018, but it only applied to future wells.Democratic state Representative Greg Vitali, who sits on the EQB, said he has yet to see a rule for conventional sites.“I don’t have confidence they’ll be done in time at all,” he said. “To the contrary, it looks like we’re running out of time.” DEP did not respond to a request for comment on the status of the conventional rule.In June, DEP said it hoped to have a conventional rule for the EQB to consider before the end of the year. After EQB votes, the rule would still need approval from the Independent Regulatory Review Commission and the Attorney General’s office.

Natural-gas pipeline fire prompts brief evacuations near Waverly, remains under investigation - A natural-gas pipeline incident near Waverly early Monday is being investigated after several residents were briefly evacuated. According to the Jacksonville/Morgan County Office of Emergency Management, firefighters were called to Panhandle Road south of Waverly about 12:30 a.m. An Energy Transfer gas pipeline was shut off and a fire was allowed to burn itself out. Firefighters from Morgan, Sangamon and Macoupin counties were called to the scene, as well as law enforcement officials from Jacksonville, Morgan County and Illinois State Police. Some residents were evacuated for a brief period, according to the emergency management office, but have been allowed to return.

-U.S. natgas drops 4%, near 12-week low on record output, demand decline (Reuters) - U.S. natural gas futures dropped about 4% on Monday to the lowest in nearly 12 weeks on record output and forecasts for milder weather and slower demand over the next two weeks due to ongoing storm-related outages and a reduction in liquefied natural gas (LNG) exports. Reducing gas demand from electric utilities, about 560,000 homes and businesses in Florida remained without power after Hurricane Ian hit the state on Sept. 28-29. Over the weekend in Maryland, Berkshire Hathaway Energy's 0.8-billion cubic feet per day (bcfd) Cove Point LNG export plant shut for about three weeks of planned annual maintenance. Gas demand already had taken a hit from the outage at the Freeport LNG export plant in Texas, the second-biggest U.S. LNG export plant which was consuming about 2 bcfd of gas before it shut on June 8. Freeport LNG expects the facility to return to at least partial service in early to mid-November. Front-month gas futures for November delivery fell 29.6 cents, or 4.4%, to settle at $6.470 per million British thermal units (mmBtu), their lowest close since July 12. The premium of futures for December 2022 over November 2022 doubled over the past week to 33 cents per mmBtu, its highest since October 2010. U.S. futures were still up about 75% so far this year as soaring global gas prices have fed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine. Gas was trading around $49 per mmBtu in Europe and $39 in Asia. That was an 8% decline for prices in Europe. Russian gas exports via the three main lines into Germany - Nord Stream 1 (Russia-Germany), Yamal (Russia-Belarus-Poland-Germany) and the Russia-Ukraine-Slovakia-Czech Republic-Germany route - have averaged just 1.3 bcfd so far in October, the same as September but well below 9.2 bcfd in October 2021. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 100.5 bcfd so far in October from a monthly record of 99.4 bcfd in September. With cooler autumn-like weather coming, Refinitiv projected average U.S. gas demand, including exports, would slip from 88.4 bcfd this week to 90.2 bcfd next week. Those forecasts were lower than Refinitiv's outlook on Friday. The average amount of gas flowing to U.S. LNG export plants fell to 11.2 bcfd so far in October from 11.5 bcfd in September. That compares with a monthly record of 12.9 bcfd in March.

Natural Gas Futures Stage Sharp Rebound as Pipeline Work Curbs Production - Natural gas futures rallied on Tuesday, with overall thin liquidity resulting in a likely overdone response to a temporary decline in production. Despite an unsupportive near-term outlook, the November Nymex gas futures contract jumped 36.7 cents to $6.837/MMBtu. December futures climbed 37.1 cents to $7.174. Spot gas prices rose almost across the board, outside of some continued weakness in Louisiana. NGI’s Spot Gas National Avg. jumped 44.5 cents to $5.195. With weather not yet moving the price needle decisively in one direction or the other, traders on Tuesday fixated on top day production data that showed a steep 2.4 Bcf/d drop in output. Wood Mackenzie said the declines were concentrated in the Northeast, Texas, North Louisiana, and the New Mexico portion of the Permian Basin, where there are maintenance or operational issues underway. Most issues, however, are expected to wrap up by Friday. Northeast production declined by around 1.2 Bcf/d, with the bulk of the decrease occurring in Southwest and Northeast Pennsylvania. West Virginia and Ohio output also fell. In Southwest Pennsylvania, EQT Corp. and Equitrans Midstream Corp. are each conducting planned pipeline maintenance, while Millennium Pipeline started work on its system in Northeast Pennsylvania. Tennessee Gas Pipeline had a one-day event Tuesday for a pig run. This is in addition to other restrictions on the 300 Line from Station 307 to Station 313 from previous weeks. In Ohio, Rockies Express Pipeline has maintenance underway at the Columbus compressor station impacting east to west flows through segment 380. Overall Texas production was down around 410 MMcf/d, concentrated in the Permian, with a few maintenance events beginning Tuesday on El Paso Natural Gas. Permian New Mexico was down roughly 250 MMcf/d, mainly on the Transwestern Pipeline, while North Louisiana production could remain curbed until the middle of the month because of various pipeline work in the region.

Natural Gas Futures Rally Again Despite Possibility of Record-Breaking Storage Injection - Natural gas futures continued to climb on Wednesday despite starkly bearish near-term fundamentals, including the potential for a record fall storage injection. After hitting a $7.022/MMBtu intraday high, though, the Nymex November gas futures contract settled Wednesday at $6.930, up only 9.3 cents day/day. December futures climbed 6.2 cents to $7.236. Spot gas prices continued to strengthen as well, with the East Coast gearing up for an early season cold blast. NGI’s Spot Gas National Avg. picked up 81.0 cents to $6.005. After two days in the green for Nymex futures in spite of unsupportive fundamentals, Vortex Commodities CEO Brian Lovern told NGI the rally could be tied to macro buying in the energy complex. He noted gains in oil prices, as well as the Energy Select Sector SPDR Fund (XLE). The XLE index is seen as a representation of the energy sector of the S&P 500 Index. “That buying probably fed into natty too and contributed to the move,” Lovern said. The trader also noted that there has been market chatter related to Freeport LNG’s return. While this would be supportive for gas prices, “nothing they have said could be trusted up to this point.” The liquefied natural gas terminal has been offline since early June following a fire. Management initially said the facility would return to partial service in October, but then pushed back the timeline by a month. Full operations would not occur until March. Cove Point LNG also is down for planned maintenance, with the supplies not being delivered to the two export facilities available for storage. After a sluggish pace of rebuilding throughout the summer, the gas market has been able to accelerate restocking now that temperatures have dropped from the record levels. Though pockets of heat continue in Texas, and at times the West, recent government inventory data has pointed to a much improved trajectory in the final weeks of the traditional injection season. Lovern said after back-to-back triple-digit storage builds, inventories appear “almost a lock to be higher than 3.5 Tcf” at the end October. “Odds are we are okay this winter, as we will need a lot of cold for major issues,” he said. “But of course, it’s not a done deal just yet.” The gas market is rapidly approaching the time of year when weather starts to “drive the bus,” according to the trader. “So far, October is not looking nearly as warm/bearish as everyone expected. Obviously it’s just October, but it becomes very interesting if that trend continues.”

U.S. natgas up 1% on higher demand forecast despite big storage build | ロイター (Reuters) - U.S. natural gas futures rose about 1% to a fresh two-week high on Thursday on forecasts for higher demand next week, despite a much bigger-than-expected weekly storage build. The U.S. Energy Information Administration (EIA) said utilities added a seasonal record of 129 billion cubic feet (bcf) of gas to storage during the week ended Sept. 30. That was the biggest weekly build during the autumn and the third biggest on record after increases of 147 bcf in July 2003 and 132 bcf in May 2015, according to EIA data going back to 1993. It was also much higher than the 113-bcf build analysts forecast in a Reuters poll and compared with an increase of 114 bcf during the same week last year and a five-year (2017-2021) average increase of 87 bcf. Analysts said last week's build was bigger than usual due to mild weather and an increase in wind power that reduced the amount of gas power generators needed to burn to produce electricity. Wind power produced about 9% of the nation's electricity last week, up from as little as 6% a few weeks earlier, according to federal energy data. "Even though the weekly natural gas storage inventories report showed a much larger-than-projected storage build, gas futures prices remained in positive territory ... as bullish traders shrugged off what should have been construed as bearish storage data," But looking forward, "there’s very little for gas market bulls to be excited about" with output near record highs and recent cuts in gas demand from reduced liquefied natural gas (LNG) exports and storm-related power outages. Almost 200,000 homes and businesses were still without power in Florida after Hurricane Ian hit the state on Sept. 28-29, reducing the amount of gas that power generators need to burn. Ian knocked out power to over 4 million in Florida and 1.1 million in North Carolina and South Carolina. Gas demand was also reduced by outages at LNG export plants, including Berkshire Hathaway Energy's 0.8-billion cubic feet per day (bcfd) Cove Point in Maryland for about three weeks of planned work starting Oct. 1 and Freeport LNG's 2.0-bcfd plant in Texas for unplanned work after an explosion on June 8. Freeport LNG expects the facility to return to at least partial service in early to mid-November. Front-month gas futures rose 4.2 cents, or 0.6%, to settle at $6.972 per million British thermal units (mmBtu), their highest close since Sept. 22 for a second day in a row. U.S. futures were up about 86% so far this year as soaring global gas prices have fed demand for U.S. exports due to supply disruptions and sanctions linked to Russia's Feb. 24 invasion of Ukraine. Gas was trading around $49 per mmBtu in Europe and $36 in Asia. Data provider Refinitiv said average gas output in the U.S. Lower 48 states rose to 100.1 bcfd so far in October from a monthly record of 99.4 bcfd in September. Refinitiv projected average U.S. gas demand, including exports, would rise from 90.2 bcfd this week to 91.5 bcfd next week. The forecast for next week was higher than Refinitiv's outlook on Wednesday.

Ample Supply, Modest Demand Pressure Natural Gas Futures, Cash Prices - After three days in the green, natural gas futures’ rally finally came to a halt on Friday as the pressure from lackluster weather-driven demand and notably improved supplies proved too much to overcome. The Nymex November contract closed out the week at $6.748/MMBtu, off 22.4 cents on the day. December futures slid 19.5 cents to $7.047. Spot gas prices plunged on Friday with the typical lull in weekend demand pulling prices sharply lower across the Lower 48. NGI’s Spot Gas National Avg. dropped 71.5 cents to $5.475. The downside for futures was not surprising given the slew of unsupportive fundamentals in play. On Friday, traders were still digesting the latest inventory data – and adjusting upward their estimates for the next government report and beyond. [Get More: NGI’s Forward Look forward curve product provides improved price transparency and insight to help you make better business decisions. Request a trial now.] The Energy Information Administration (EIA) said stocks for the week ending Sept. 30 rose by 129 Bcf, the largest fall injection on record and well above expectations ahead of the EIA report. The triple-digit build lifted stocks to 3,106 Tcf, which is 165 Bcf below year-earlier levels and 264 Bcf below the five-year average. Tudor, Pickering, Holt & Co. (TPH) analysts said the 129 Bcf injection indicated the market was more than 5 Bcf/d oversupplied for the reference period, compared with 3 Bcf/d oversupplied the prior week. Given the rise in production north of 100 Bcf/d in recent weeks, the investment firm is now modeling stocks to reach more than 3.5 Tcf at the end of the injection season (Oct. 31).

Where Will Henry Hub Gas Price Be at End-2022? - Between $8.00 and $8.99 per MMBtu. That was the most popular response by executives from 155 oil and gas firms in the third quarter Dallas Fed Energy Survey when asked what they expected the Henry Hub natural gas price to be at the end of 2022. The second most popular response in the survey was between $7.00 and $7.99 per MMBtu and the third most popular response was between $9.00 and $9.99 per MMBtu. The survey average response was $7.97 per MMBtu, while the low forecast was $3.80 per MMBtu and the high forecast was $12.50 per MMBtu. In the second quarter Dallas Fed Energy Survey, executives from 132 oil and gas firms answered the question and the most popular response remained the same at between $8.00 and $8.99 per MMBtu. The second most popular response in the 2Q survey was also between $7.00 and $7.99 per MMBtu, although the third most popular response was between $6.00 and $6.99 per MMBtu. The survey average was $7.55 per MMBtu, while the low forecast was $2.90 per MMBtu and the high forecast was $12.00 per MMBtu. Executives from 134 oil and gas firms answered the question in the first quarter Dallas Fed Energy Survey, with the most popular response being between $4.00 and $4.49 per MMBtu. The second most popular response was between $4.50 and $4.99 per MMBtu and the third most popular response was between $5.00 and $5.49 per MMBtu. The survey average was $4.57 per MMBtu, while the low forecast was $3.00 per MMBtu and the high forecast was $8.00 per MMBtu. The price of Henry Hub natural gas during the 3Q, 2Q and 1Q surveys was $8.16 per MMBtu, $8.38 per MMBtu and $4.65 per MMBtu, respectively. Henry Hub natural gas hit a 2022 low, so far, on January 4 at $3.717 per MMBtu and a 2022 high, so far, on August 22 at $9.68 per MMBtu. At the time of writing, the commodity is trading at $6.50 per MMBtu.

API urges Interior to support U.S. energy security, economic strength with 5-year offshore program – The American Petroleum Institute (API) today submitted comments urging the U.S. Department of the Interior (DOI) to open offshore acreage to safe and environmentally responsible American energy development. In its comments in response to the 2023-2028 National Outer Continental Shelf Oil and Gas Leasing Proposed Program and Draft Programmatic Environmental Impact Statement, API highlighted the importance of offshore leasing to U.S. economic strength and energy security and called on DOI to uphold their statutory responsibility to take current and future energy needs into account by promptly issuing a final program that includes 11 lease sales.Oil production from federal waters provides approximately 628 MMbbl – or more than 15% – of total U.S. oil production. On June 30, 2022, as the current 5-year program expired, Interior put the U.S. in the unprecedented position of having a substantial gap between programs for the first time since this process began in the early 1980s. Without a 5-year program in place, no new offshore lease sales can be held outside of the three sales mandated by the Inflation Reduction Act, limiting domestic producers’ ability to meet future energy demand. According to an API poll from earlier this year, 9 in 10 Americans support the U.S. developing its own domestic sources of energy, rather than relying on other regions of the world and 84% agree that producing natural gas and oil in the U.S. helps make our the country and its allies more secure against actions by other countries, such as Russia. “The U.S. is now a global leader in both energy production and emissions reductions, thanks to the innovation and vitality of the U.S. oil and natural gas industry,” “The ability of U.S. producers to provide more oil and natural gas supplies to the world market has also changed geopolitical dynamics for the better, resulting in greater energy security for the U.S. and its allies, in addition to global environmental benefits. Given the current global circumstances, rarely has a strong offshore leasing program been more essential to our energy security.” In its comments, API expressed concern over the Proposed Program’s option to issue a final program with zero lease sales, which would jeopardize domestic production and weaken American energy security. According to a recent study conducted by API and the National Ocean Industries Association, a two-year lapse in federal offshore leasing could mean nearly 500,000 bpd less of production, cost nearly 60,000 American jobs, and sacrifice billions in lost state and local revenues by 2040. “The decisions made regarding future leasing will have short- and long-term implications for our nation’s energy and national security, prospects for job creation, and government revenue generation,” said Ramsey. “It is beyond time for a comprehensive energy policy that includes a robust offshore leasing program that ensures essential energy resources are made available; encourages investment opportunities and accelerates infrastructure development; and strengthens energy security, affordability, and reliability.” API’s comments are available here.

USCG Ends Search for Man Who Fell Off Platform Near Corpus Christi -The U.S. Coast Guard (USCG) has announced that it has ended its search for a missing man who fell off a platform near Corpus Christi. Commercial divers reported finding a body matching the man’s description near the platform, the USCG revealed. The organization announced that it was searching for a missing man who fell off a platform near Corpus Christi on October 1. In the announcement, the missing male was described as Latino and last seen wearing a manually inflatable blue life jacket, safety harness and tool belt. “Coast Guard Sector Corpus Christi command center watchstanders received a call at 1:45 p.m. from Corpus Christi Police Department personnel stating a scaffolder fell off a platform at Kiewit Offshore Services and entered the water in La Quinta Channel,” the USCG stated in a note posted on its website on October 1. “The on-site safety officer reported the man did not resurface and had been missing for 15 minutes … Watchstanders issued an urgent marine information broadcast and diverted an airborne MH-65 Dolphin helicopter from Coast Guard Air Station Corpus Christi and an underway 29-foot Response Boat–Small crew from Coast Guard Station Port Aransas to begin searching,” the USCG added in the note. Several organizations were involved in the search, including Coast Guard Air Station Corpus Christi, Coast Guard Station Port Aransas, Texas Parks & Wildlife Department, Corpus Christi Police Department, Ingleside Police Department, and Aransas Pass Dive Team.

Devon Energy Completes Acquisition of Eagle Ford Bolt-On - Energy News for the United States Oil & Gas Industry - — Devon Energy Corp. (NYSE: DVN) today announced that it has completed its previously announced acquisition of Validus Energy, an Eagle Ford operator, for a total cash consideration of $1.8 billion, less purchase price adjustments. This acquisition secures a premier acreage position of 42,000 net acres (90% working interest) adjacent to Devon’s existing leasehold in the basin. Current production from the acquired assets is approximately 35,000 Boe per day and is expected to increase to an average of 40,000 Boe per day over the next year. The transaction also adds 350 repeatable drilling locations in the core of the Karnes Trough oil window along with 150 high-quality refrac candidates. This highly economic inventory positions the company’s Eagle Ford assets to sustain its high-margin production and free cash flow generation for several years.

Permian pipelines leak more methane than EPA estimates — study - New research finds that gathering pipelines in the Permian Basin lose enough methane each year to power more than 2 million homes. -- Natural gas gathering pipelines in the Permian Basin are releasing 14 times more methane than EPA inventory estimates, according to new research based on aerial surveys.The lines — which move gas from production areas to processing facilities — emit at least 213,000 metric tons of methane annually, according to a group of researchers from Stanford University, the University of Arizona, and the Environmental Defense Fund. That’s enough “wasted gas” to meet the needs of 2.1 million homes, they say.The study, published Tuesday in the journal Environmental Science and Technology Letters, drew on four "aerial campaigns” conducted over three years, where aircraft surveyed more than 10,000 miles of gathering pipelines during each campaign.“Methane is a potent greenhouse gas with over 84 times the warming potential of carbon dioxide over its first 20 years in the atmosphere, and this new research indicates the importance of finding and fixing pipeline methane leaks to mitigate the climate crisis,” wrote study authors Erin Murphy and Jevan Yu in a blog post that lays out the study's findings....

Research shows gathering pipelines in the Permian Basin leaking 14 times more methane than officials estimate -- Methane emissions from natural gas gathering pipelines in the U.S. Permian Basin are at least 14 times greater than Environmental Protection Agency national inventory estimates, according to newpeer-reviewed research. Gathering lines transport unprocessed gas from well sites to processing facilities and vary widely in size and pressure, with diameters ranging from two inches to as large as 30 inches. Methane is a potent greenhouse gas with over 84 times the warming potential of carbon dioxide over its first 20 years in the atmosphere, and this new research indicates the importance of finding and fixing pipeline methane leaks to mitigate the climate crisis. After extensive surveys and subsequent analysis, the research found numerous large gathering line leaks that persisted over months and even years. As part of EDF’s PermianMAP project, oil and gas infrastructure was surveyed in four aerial campaigns during 2019-2021 using aircraft equipped with a sensor capable of imaging and quantifying large plumes of methane. The flights surveyed more than 10,000 miles of gathering pipelines in each campaign, identifying hundreds of high-emitting pipeline sources. The scale of methane being released from gathering lines is much higher than previously thought. The new study finds that Permian Basin gathering line emissions are at least 213,000 metric tons per year. This corresponds to an emission factor of 2.7 metric tons per year per kilometer of pipeline, which is 14 times greater than the U.S. EPA national inventory estimates. Applying this estimate to all gas gathering pipelines nationwide for illustrative purposes would increase the EPA inventory estimate for the entire natural gas systemby 27%. Those 213,000 metric tons of methane have the same annual climate impact as 3.7 million passenger vehicles and represent enough wasted gas to meet the needs of 2.1 million homes. A small number of leaks on gathering lines are responsible for most of the methane emissions, like other segments of the oil and gas supply chain, with about 15% of the largest leaks accounting for 50% of total emissions detected. Thus, finding and fixing a relatively small number of leaks could have significant climate benefits.

OPEC+ supply cut should encourage oil exploration, shale chief says — OPEC+’s decision to lower its oil-production cap may set the stage for higher prices that would enable U.S. explorers to expand drilling, according to shale entrepreneur Matt Gallagher. Gallagher, who has led closely held shale driller Greenlake Energy Ventures LLC since engineering last year’s $6.4 billion sale of Parsley Energy Inc. to Pioneer Natural Resources Co., said the OPEC+ move on Wednesday gives oil CEOs more clarity on what oil-price levels the alliance is determined to defend. “We now know where the price floor is for OPEC and that should give traders comfort in the back end of the curve,” Gallagher said in a telephone interview. “That can sanction more projects for sure.” Shale executives have dramatically dialed back their oil-price expectations over the past three months as recession risks weighed on the market. US oil prices, which averaged about $85 a barrel during the third quarter are expected to end the year below $100, according to the Federal Reserve Bank of Dallas survey that pre-dated Wednesday’s OPEC+ measure.

Shale drillers struggle to find workers as unemployment dropped last month — The job market in the U.S. shale patch is showing further tightness as drillers struggle to find enough workers to meet output targets this year, according to a Labor Department report released Friday. The unemployment rate fell to 2.5% in September from 2.6% in the prior month on an unadjusted basis, government figures show. That compares with an unemployment rate of 7.3% a year ago. Oil companies are hesitant to boost wages dramatically as they seek to keep a lid on skyrocketing costs. As a result, oilfield workers have been looking elsewhere for a higher pay, with renewables being the most popular landing spot. Workers will have to wait until 2024 to see double-digit annual wage hikes, according to industry consultant Rystad Energy. Pay this year is expected to climb 2.9%, Rystad said in May. Labor shortages in the oilfield have been one of the biggest hurdles holding back production growth. The inability to find enough workers to drill new wells and frack them could pose an additional challenge to the Biden administration as it pushes for more output after OPEC+’s decision to cut supply. The number of workers employed in US oil and gas jobs totaled 133,800 last month, down 4.8% from this year’s peak in July. The broader mining and logging industry, of which oil and gas is a part, is the farthest behind of any sector in recovering its pandemic job losses, down 7.7% from February 2020.

Orange County oil spill: Company gets OK to repair pipeline - The Houston-based company operating the oil pipeline that ruptured off Huntington Beach last fall announced Saturday that the government has green-lighted its plans to repair the pipeline, raising the possibility it will be operational again early next year. In a press release, Amplify Energy Corp. said the U.S. Army Corps of Engineers has granted it a permit to remove and replace damaged segments of the pipeline, a job that is estimated to take about a month. The pipeline runs from a plant in Long Beach to the Elly platform in federal waters off Huntington Beach. At least 25,000 gallons of crude oil gushed from the broken pipe last October, forcing a weeklong closure of beaches along the Orange County coast in October and a months-long shutdown of fisheries. In August, Amplify Energy and two of its subsidiaries pleaded guilty to negligently discharging oil and agreed to pay nearly $13 million in criminal fines and cleanup fees. Amplify also said it had reached a settlement with businesses and property owners claiming spill-related losses. Amplify contends that the pipeline had been damaged by the anchors of container ships nine months before the spill, and that it had not been properly notified.Last week, the Center for Biological Diversity sued the Bureau of Ocean Energy Management in federal court, claiming the Biden administration was improperly allowing rigs in the oilfield off Huntington Beach to continue operating under outdated safety plans devised in the 1970s and 1980s.“It’s time to get these rusty relics out of our ocean,” Kristen Monsell, legal director of the Center’s Oceans program, said in a press release, comparing the aging oil platforms to “ticking time bombs.”

Unstable Ground: How thawing permafrost threatens a Biden-supported plan to drill in Alaska's Arctic. Along an open stretch of tundra far above the Arctic Circle, a gas flare burns bright against the early morning sky. The oil production facility, about eight miles north of the Alaska Native Village of Nuiqsut, sits like a ship on the horizon. Known as CD1, it is ground zero for ConocoPhillips’ Alpine Field, a sprawling network of gravel roads, pipelines, and well pads that covers about 165 acres of land. The CD1 pad houses hundreds of employees and has its own airstrip to receive direct flights from Anchorage. ConocoPhillips refers to it as “our town.” On March 4, the fossil fuel company reported an uncontrolled gas leak at the facility. According to ConocoPhillips’ own analysis, an estimated 7.2 million cubic feet of natural gas was released into the atmosphere during the first five days of the leak, equivalent to the annual carbon emissions of over 3,000 cars. Residents in Nuiqsut complained of headaches and nausea. ConocoPhillips brought in industry specialists from Texas with experience fighting oil well fires in Iraq and Kuwait. Then, around noon on March 7, the company decided to evacuate 300 employees from the pad out of “an abundance of caution.” It would take nearly a month before the leak was fully plugged. Nuiqsut’s mayor, Rosemary Ahtuangaruak, had been getting little sleep during those first few weeks and was anxious about the village’s air quality — an ongoing concern for residents of Nuiqsut, which is surrounded by oil and gas development. .“I’m having difficulty getting the information PPR needs regarding the situation at CD 1,” the northern region manager wrote in an email to ConocoPhillips nearly a week into the event. While some questions remain unanswered more than six months later, it’s clear now that the gas leak at Alpine illuminated the ways that climate change is amplifying the risks associated with oil and gas drilling in the Arctic — and even creating new ones. Permafrost thaw, which is accelerated by drilling and new construction, played an important role in the leak: In its incident report submitted to the state, ConocoPhillips explained that the heat generated by the injection of drilling fluids deep underground had thawed the permafrost layer — ground that had been frozen for thousands of years — to a depth of about 1,000 feet, which ultimately allowed the gas to reach the surface. But the problem didn’t end there. This same thawing process had affected some of the neighboring wells — there are about 50 wells on the CD1 pad, each about 10 feet apart— forming what Steve Lewis, a retired petroleum engineer who worked in the region for 20 years, described as a “gas highway,” creating multiple pathways for the gas to migrate. In its report, ConocoPhillips called this phenomenon a “thaw bulb.”A similar phenomenon is being replicated across Alaska’s North Slope region at a time when the Arctic is warming two to four times faster than the rest of the planet. According to an analysis by researchers at the University of Alaska Fairbanks, more than half of the near-surface permafrost on the North Slope could disappear by 2100 if emissions aren’t curbed. Soil temperatures at Prudhoe Bay, which is about 60 miles east of Nuiqsut, have already warmed by about 6 degrees Fahrenheit since the late 1970s. Permafrost thaw can cause the ground to buckle and in some cases collapse. Roads, pipelines, and well pads could all potentially be compromised and even in some cases rendered unusable, according to Vladimir Romanovsky, a permafrost expert and emeritus professor at the University of Alaska Fairbanks. Portions of the Trans-Alaska Pipeline, the 800-mile conduit that runs from Prudhoe Bay to Valdez, have already been damaged due to thawing permafrost.

Venezuela's oil output at 653000 b/d in September: PdV - Venezuelan oil production in September was an estimated 653,000 b/d, according to a weekly internal report from state-run oil company PdV. The average production for 2022 through September was 759,100 b/d, according to the report — a figure that many analysts say is far too optimistic. According to the report 17 out of 43 oil producing subsidiaries and/or joint ventures reported no production in September. Even large projects, like Chevron's Petroboscan field in western Venezuela, were reported to have stopped production in September because oil storage capacity has run out. Comprehensive US sanctions imposed after 2017 limit crude purchases from PdV. The country's oil operations are also plagued by interruptions in production because of regular power outages and a lack of key equipment and supplies. The report documents a slew of serious exploration, production, infrastructure and storage problems that may challenge PdV's stated goal of increasing production by at least 100,000 b/d from current levels year.

Greenpeace Campaigners Disrupt Liz Truss Speech to Denounce U-Turn on Fracking - Demanding to know “who voted for” new U.K. Prime Minister Liz Truss’ reversal on fracking, Greenpeace campaigners on Wednesday prominently displayed a banner as the Conservative leader spoke at her party’s annual conference in Birmingham before being forcibly removed from the meeting.“Who voted for this?” read the sign displayed by Rebecca Newsom, Greenpeace U.K.’s head of public affairs, and Ami McCarthy, the group’s policy officer.After Truss called for the protesters to be “removed” from the conference hall, the banner was ripped from their hands by security guards, but Newsom and McCarthy quickly produced another sign.The protest came two weeks after Truss announced the Conservative government will reverse the fracking ban imposed by the party in 2019, following tremors near the country’s only fracking site in Lancashire.Last week, Truss told BBC Radio that the government “will only press ahead with fracking in areas where there is local community support for that” but did not provide details on how local consent would be secured, and did not respond when an interviewer noted that members of Parliament who represent the area don’t support fracking.The Greenpeace campaigners on Wednesday said Truss’ plan to return to fracking represents just part of her party’s “U-turn” on policy since she took office.“Nobody voted for fracking, nobody voted to cut benefits, nobody voted to trash nature, nobody voted to scrap workers’ rights,” Newsom told reporters after the pair were forced to leave the conference hall. “There’s a whole host of things that the Conservative government were elected to do in 2019 that they’re simply not doing.”The protest followed nationwide outcry over the “mini-budget” the Conservative government released last month, including a tax cut for the wealthy which Chancellor Kwasi Kwarteng announced this week would no longer be included in the plan.“The chancellor said the government is now listening,” said Newsom. “If so, they may want to pay attention to the widening chorus of leading businesses, energy experts, former Conservative ministers, and even the U.S. president telling them to go in the opposite direction.”

East Yorkshire Conservative council votes for fracking ban - BBC News - A Conservative-led council has voted to oppose fracking in its area.East Riding of Yorkshire members supported a motion tabled by the Liberal Democrat opposition.The vote comes after Business Secretary Jacob Rees-Mogg recently announced the lifting of the 2019 ban in order to boost domestic gas production in the wake of the war in Ukraine.Tory leader of the council Jonathan Owen said he thought it was not "the right route".Mr Owen told the Local Democracy Reporting Service that fracking was "still unproven as a means of production"."Original arguments against fracking still hold in my mind and I have heard nothing to change my views," he said."Of particular concern is the effect on the aquifer under the Wolds and the counter-effect on our ambitions to have an Area of Outstanding Natural Beauty."Conservative leader of the council Jonathan Owen said he thought fracking was not "the right route"Conservative East Yorkshire MP Greg Knight has also voiced his concerns in Parliament.Sir Greg said doubts remained over the effects of the fracking process, including releasing methane gas and polluting underground water supplies.A survey by the British Geological Survey (BGS) showed that parts of the county sits on the Bowland Shale deposit which spans Yorkshire and Lancashire.The BGS estimate it could contain up to 37.6tr cubic metres of gas.The government's lifting of the moratorium on fracking would allow companies which already hold licences to begin getting permission to explore the reserves.The Department for Business, Energy and Industrial Strategy (BEIS) also announced a further round of offering licences to companies to drill for oil and gas.

Rees-Mogg tells Tories he’d welcome fracking in his back garden - Jacob Rees-Mogg has said he would be “delighted” for his back garden to be fracked, as he risked deepening divisions within the Conservative party by deriding those who oppose the controversial practice as “socialists”.The business secretary was bullish about restarting fracking in England after a nearly three-year moratorium, saying the current limit of magnitude 0.5 to avoid mini-earthquakes being caused was “ridiculously low”.Companies that want to drill a new fracking well could “go around, door to door, as politicians do at elections and ask people if they would consent”, Rees-Mogg suggested.“Then they have to go around to an identifiable community and if they get 50% plus one in favour then they should be able to go ahead,” he told the Chopper’s Politics fringe event hosted by the Telegraph at the Conservative conference in Birmingham.So far, the government has only said shale gas extraction firms will need “community consent” to start drilling, but refused to provide any further details. Rees-Mogg said the current seismic limit for fracking was too low and he would soon announce “a more realistic figure”. Asked if he would allow digging for shale gas in his back garden, the MP for North East Somerset, whose constituency home is the Grade II listed Gournay Court, said enthusiastically: “Yes, of course I would, I would be delighted to. If we do what I am suggesting on shale gas, you will be doing a public service by having it in your back garden. But you will also get paid for it. So both the country wins, and you win.

Rees-Mogg’s neighbours fail to share ‘delight’ at back garden fracking The sun was shining and the wind blowing steadily across Jacob Rees-Mogg’s manicured garden and the Somerset hills beyond. “It’s obvious on a day like this, isn’t it?” said Gary Marsh, a stonemason and a neighbour of the business secretary and Conservative MP for North East Somerset. “We should be putting more money into solar and wind energy. Plus tidal power on the coast at places like Burnham-on-Sea and Weston-super-Mare. Not fracking, messing with the earth and water.”Marsh and other residents who live near Rees-Mogg’s constituency home, the Grade II listed red sandstone mansion Gournay Court in the village of West Harptree, were digesting their MP’s claim at the Tory party conference that he would be “delighted” if his garden was fracked. “I don’t think many people around here would like that,” said Marsh.One of Rees-Mogg’s closest neighbours, who asked not to be named, said when she thought about fracking the image that came to mind was flames spurting from taps in the US. “And then I start getting worried about the earthquakes they had in Lancashire. It doesn’t feel wise to me. I don’t think his views represent what most people here feel.”Another close neighbour, who also asked to remain anonymous (this is a small village and Rees-Mogg wields power), laughed when asked about fracking. “He’s just doing it to provoke discussion isn’t he? I think he is, anyway.”David Wood, the Liberal Democrat councillor for the Mendip ward, which includes Rees-Mogg’s garden, does not believe it is a laughing matter. “By saying he would be delighted by fracking in his back garden, Mr Rees-Mogg is showing how very out of touch he is,” said Wood. “People are crying out for help with the cost-of-living crisis, which fracking will do nothing to address, and for action on insulation and other efficiency measures to cut fuel poverty and wasted energy.

Liz Truss refuses to rule out new schools and GP surgeries for fracking areas - The Prime Minister told ITV’s Calendar said she would not specify what price residents would have to pay, but insisted that fracking will only go ahead where there is “local support”.It comes after suggestions reported by the Sun on Sunday which said that ministers were drawing up plans to encourage communities to get fracking with promises of new schools and GP surgeries.Asked about the plans by ITV, Ms Truss said: “I'm not going into exactly how we will assess local support. But the local support principle is important.”A Government source confirmed that new schools and GP surgeries were one of the benefits that could be offered to communities which ministers are currently considering.Mr Rees-Mogg yesterday told an audience at the Conservative Party conference in Birmingham that he would “delighted” to have fracking in his back garden, “particularly if I get these royalties”.“If we do what I’m suggesting on shale gas, you will be doing a public service by having it in your back garden, but you also get paid for it,” he added, suggesting that only “socialists” opposed it.

Fracking: the simple test for whether it should happen in the UK -The UK’s new prime minister, Liz Truss, recently announced the reversal of the2019 ban on fracking. Facing an acute energy crisis, the government want to increase domestic energy production.According to conventional economic theory, whether or not fracking should occur is simple. If the private benefits exceed the social costs, then fracking companies should be able to obtain local consent by compensating households with cash. If the costs are so large that households cannot be compensated, then fracking should not happen.Yet in recent history fracking has occurred irrespective of whether there is a public appetite. In 2016, the government permitted fracking at Fylde’s Preston New Road site, overturning Lancashire county council’s initial rejection. The current approach echoes this. Despite announcing that fracking will only take place where there is local consent, guidance on how this will be gauged is unclear. A framework for transparent cost-benefit analysis on prospective extraction sites has so far not been introduced.The first step is to estimate how much companies are willing to pay for the right to explore for and extract shale gas in a given area. This represents fracking’s private benefit. Auctions have become regular practice in UK utility markets. Renewable energy companies compete for contracts to produce electricity. The bidder offering electricity at the lowest price is paid a flat rate for their production over the next fifteen years, insulating them from volatile market prices. The winning bid would be legally bound to an upfront payment to the local authority in the case that consent is given.The second part of the process should then determine whether firms’ valuation of shale gas extraction is higher than the social cost.The costs associated with fracking are high. Shale gas is mostly methane, a fossil fuel with high carbon emissions.Its extraction also involves drilling using a high pressure mixture of water, sand and chemicals. Fracking in the UK has been linked to several local earthquakes as a result. The process also produces highly saline wastewater that must be disposed of.A recent survey shows just 27% of Britons support fracking.

UK urged to ration gas this winter over fears Putin may cut supplies -Households have been urged to limit energy consumption this winter to slash the risks of gas shortages over concerns of a Russian supply crunch and cold conditions. While the UK only got around four percent of its gas from Russia last year, the International Energy Agency (IEA) has said that cutting household demand would help Britons to cope with late winter cold snaps such as the Beast of the East storm which struck back in 2018. It comes after industry regulator Ofgem warned that Britain is at "significant risk" of gas shortages" due to Vladimir Putin's brutal war in Ukraine and his cutting of crucial supplies to mainland Europe. Meanwhile, the weather is expected to be unusually dry and cold, forecasters have warned, which could pile further pressure on already tight supplies. The IEA said: “Europe’s security of gas supply is facing unprecedented risk as Russia intensifies its use of natural gas supplies as a political weapon. Solidarity, unity and responsible household behaviour will be crucial to ensure supply security.” Although the UK's reliance on Russian gas is slim, Putin's supply squeeze has still had a huge knock-on impact on the UK due to the integrated nature of the market, which has hiked up bills and sparked staggering competition for supplies. While Europe managed to ramp up its storage levels to 90 percent amid fears that Moscow could cut off all remaining gas exports to the continent, the IEA warned that the UK could be vulnerable to cold snaps if the stored-up supplies are consumed too quickly. The intergovernmental organisation said: “A 13 percent demand reduction would also necessitate gas savings from households and require responsible electricity and gas consumption behaviour. “Our analysis indicates that behaviour change could reduce gas demand by 15 billion cubic metres during the 2022/23 heating season, equating to over 40percent of the 13 percent demand reduction.” And over the weekend, reports emerged that National Grid is racing to shore up more supplies amid fears that not enough energy imports will pour in from Europe. Craig James, head of national control at National Grid, urged the industry to “secure the network across a series of fault potentials or supply conditions, there's a requirement to take out extra operating margins of gas". Mr James added: “We also think there is a lower likelihood of interconnector flows from continental Europe to the UK across the winter period.”

Shocking Letter Reveals UK Blackout Fear As NatGas Supplies Could Be Cut In "Emergency" - A letter from Ofgem, the UK's power regulator, warned about the "significant risk" of a natural gas shortage this winter because of disruptions to energy markets following the war in Ukraine and undersupply of Europe. Bloomberg Opinion's Javier Blas tweeted a photograph of the letter focusing on technical changes in the UK electricity market. Blas highlighted the critical parts of the letter in the "background" section that detailed a dark and cold winter for the UK could be just ahead. Here's what Blas outlined: "Due to the war in Ukraine and gas shortages in Europe, there is a significant risk that gas shortages could occur during the winter 2022/23 in Great Britain ('GB'). As a result, there is a possibility that GB could enter into a Gas Supply Emergency."... "In the event that GB reaches Stage 2 in this procedure, Firm Load Shedding of gas would be applied to the largest gas users connected to the gas system. This will likely be large gas-fired power stations which produce electricity to the National Electricity Transmission System ('NETS')."Blas warned: "Winter is coming awfully quickly, and we are betting the house on a warmer-than-average season." Blas is correct. The average UK temperatures are around 12 Celsius (53.6 Fahrenheit). The peak in mean temps occurred in early August. Heating degree days, a measurement designed to quantify the demand for energy needed to heat a building structure, is already rising across the country, indicating the heating season has begun. Blas concluded: "Maybe, maybe, maybe... it's time for the UK government to seriously get a grip with the energy crisis, and start a public campaign for energy savings, before it is too late."

Natural gas can't be replaced by green sources, industry argues - U.S. natural gas industry leaders are amping up calls for the Biden administration and other governments to embrace the energy source ahead of a tough winter for much of the West. Europe's acute energy crisis, the pricey winter facing New England, and California's grid woes illustrate a need to increase production and transport of natural gas, gas executives argued Tuesday during an industry conference, where several also cast doubt on the viability of the fossil fuel -free future hoped for by leaders in each of those regions. The Biden administration and European governments have set ambitious targets to become net-zero economies by 2050. President Joe Biden also intends for the U.S. electric sector to be 100% carbon-free by 2035. Those who are green-minded in Europe (and, to a lesser degree, the United States) maintain those goals but are simultaneously grappling with major energy supply problems and ballooning prices that, in some places, have led utilities to restart coal-fired power plants. Pro-fossil fuel interests have criticized Europe's aggressive climate change policies that generally favor investment in renewable energy sources over fossil fuels sources, including oil and gas, for driving prices higher. "People have been misled to think they can live in a world without fossil fuel fuels," Toby Rice, the president and CEO of Pittsburgh-based gas giant EQT Corporation, said during remarks at the Shale Insight 2022 conference hosted by Appalachian gas industry group Marcellus Shale Coalition. "What they're missing, I think, is that people don't understand how much energy demand there is in the world," he said. Rice, who has been in Washington all year long lobbying for policies that will enable an "unleashing" of U.S. liquefied natural gas exports, has been marketing the industry as an ideal solution for Europe, where consumers and industries are buckling under the weight of astronomical energy prices stemming from the major disruptions to energy markets caused by the war in Ukraine.

Norway deploys Navy to protect oil and gas platforms -- Norway will receive help from Britain, Germany and France to patrol the seas around its oil and gas platforms due to suspicion that sabotage caused leaks in Nord Stream pipelines. Russia’s Nord Stream 1 and Nord Stream 2 pipelines burst, leaking gas into the Baltic Sea off the coast of Denmark and Sweden. The EU suspects sabotage caused the damage while Russian President Vladimir Putin accused the US and its allies of blowing up the pipelines.Now, as Reuters reports, Norway, Europe’s largest gas supplier and a major oil exporter, is deploying its navy, coast guard and air force to protect oil and gas security.While the country had no indications of direct threats, it considered it prudent to strengthen security.In the meantime, measurements from ICOS show that an enormous amount of methane gas has been released into the atmosphere. The leak is estimated to equal the size of a whole year’s methane emissions for a city the size of Paris or a country like Denmark.After the gas leak on the Nord Stream, Sweden and Denmark reported three leaks near Danish island of Bornholm. As a result, Denmark established an exclusion zone taking into consideration the great danger that this situation put shipping.

Denmark: The leak from the North Stream gas pipeline has been stopped --- The Nord Stream pipeline in the Baltic Sea has stopped leaking gas after it was damaged in an explosion, Danish authorities announced. Nord Stream AG, the operator of the Nord Stream 1 underwater gas pipeline, has confirmed that the pressure in the pipeline has stabilized, the Danish Energy Agency said on Twitter on Sunday, adding that this means the gas is no longer leaking. “The Nord Stream AG company has informed the Danish Energy Agency that a stable pressure now appears to have been achieved on the two Nord Stream 1 pipelines. This indicates that the blowout of gas from the last two leaks has now also been completed,” the Danish agency tweeted Sunday. The agency already announced on Saturday that gas has stopped leaking from the underwater gas pipeline North Stream 2. Since the early hours of Monday morning, a total of four leaks, two in Danish and two in Swedish waters, have been discovered in the Nord Stream 1 and 2 pipelines that used to transport Russian gas to Europe. The transport of Russian gas has been stopped for the past few months as part of the sanctions against Russia due to its aggression against Ukraine. Earlier this week Denmark and Sweden told the United Nations Security Council that the leaks were caused by "at least two detonations" with "several hundred kilos" of explosives. President Vladimir Putin on Friday accused the West of sabotaging the Russia-built pipelines, a charge vehemently denied by the United States and its allies. At least two explosions took place underwater, Copenhagen and Stockholm jointly announced on Thursday. Seismological institutes measured tremors of magnitude 2.3 and 2.1 on the Richter scale, which "probably corresponds to an explosive charge of several hundred kilograms" Swedish authorities already reported on Saturday that the amount of gas flowing out of the pipeline is decreasing.

Swedes close area of Baltic Sea around pipeline gas leaks (AP) — The Swedish prosecutor in charge of the investigation into leaks from pipelines in the Baltic Sea said Tuesday that he has ordered the area to be closed as he carries out a preliminary investigation into “suspected gross sabotage.” “I understand the great public interest, but we are at the beginning of a preliminary investigation and I therefore cannot go into details about which investigative measures we are taking,” Prosecutor Mats Ljungqvist said late Monday. The Swedish coast guard said ships, divers, fishing vessels and underwater vehicles, among others, are banned from approaching within 9.3 kilometers (5.8 miles) of the two leaks off Sweden. Last week, undersea blasts involving several hundred pounds of explosives damaged the Nord Stream 1 and 2 pipelines in four locations off southern Sweden and Denmark and led to huge methane leaks in international waters in the Baltic Sea. Over the weekend, authorities in Denmark said the Nord Stream 1 and 2 natural gas pipelines had stopped leaking. However, the Swedish coast guard said Monday that one of its planes had reported that the smaller leak in Nord Stream 2 had increased and was about 30 meters (100 feet) in diameter. The coast guard offered no explanation as to why the leak had increased. The other one, in Nord Stream 1, has stopped, it said. A Swedish submarine rescue ship capable of advanced diving missions and a Swedish coast guard vessels have been sent to the two leaks off Sweden. Danish authorities are monitoring the two gas leaks east of the Danish Baltic Sea island of Bornholm with ships and a a military helicopter. In Sweden, the Security Services are also taking part in the investigation, while Copenhagen police are in charge of an inquiry in Denmark. Danish Prime Minister Mette Frederiksen told Denmark's parliament that the investigation “is now underway. Preparedness in the energy sector has been increased. And together with our partners and allies, we are raising awareness of critical infrastructure.” The U.N. Security Council held an emergency meeting Friday on the pipeline attacks, and Norwegian researchers published a map projecting that a huge plume of methane from the damaged pipelines will travel over large swaths of the Nordic region.

Sweden sends diving vessel to probe leaking Nord Stream pipelines – Sweden sent a diving vessel on Monday (3 October) to the site of Russian gas pipelines in the Baltic Sea that ruptured last week following blasts in the area, to probe an incident that has added new tension to Europe’s energy crisis. Europe is investigating what caused three pipelines in the Nord Stream network to burst in an act of suspected sabotage near Swedish and Danish waters that Moscow quickly sought to pin on the West, suggesting the United States stood to gain. Nord Stream, which runs from Russia to Germany, has been at the centre of a growing gas supply crisis in Europe, which until recently relied heavily on Russian fuel, sending prices soaring. Several European Union states have triggered emergency plans that may lead to rationing as they race to find alternative supplies, while Britain now faces a “significant risk” of gas shortages this winter, the regulator said. “The coast guard is responsible for the mission, but we are supporting them with units,” a spokesperson for the Swedish navy, Jimmie Adamsson, told Reuters. “The only one we are naming is HMS Belos, which is a submarine rescue and diving vessel.” Sweden’s prosecution authority said in a press release that it had designated the area as a crime scene. A spokesman for the Swedish coast guard confirmed in an email that there was now an exclusion zone of five nautical miles around the leaks. Earlier, the Swedish coast guard said Nord Stream 1 had stopped leaking, but an overflight suggested gas was still draining out of Nord Stream 2 and bubbling to the surface over a 30 metre radius. The Kremlin doubled down on allegations that the West was to blame for the ruptures on Monday, saying that the United States was able to increase sales and prices of its liquefied natural gas (LNG) as a result. Washington has strongly denied any involvement. European countries suspect sabotage, but have declined to say who could be behind it. Kremlin-controlled Gazprom also said flows could resume at the last remaining intact pipeline in the Nord Stream 2 network, a suggestion likely to be rebuffed given Europe blocked Nord Stream 2 on the eve of Russia’s invasion of Ukraine in February.

Nord Stream Leaks Caused by Detonations - Detonations caused the recent ruptures of Russia’s Nord Stream gas pipelines, with the evidence pointing to a deliberate act, according to Swedish investigators. The completed preliminary investigation has “strengthened the suspicions of serious sabotage,” the Swedish Security Service said in a statement on Thursday. Swedish investigators didn’t give any indication of how the detonations occurred or who might be responsible. Officials are analyzing evidence collected at the site, which is located just outside the country’s territorial waters, to see “whether someone can be served with suspicion and later prosecuted,” Swedish Public Prosecutor Mats Ljungqvist said. Two leaks in the pipelines, which cross the Baltic Sea to Germany, were disclosed in Sweden’s exclusive economic area last week. Two other leaks are located in Denmark’s zone, prompting investigations and increased security across the region’s key energy infrastructure. Denmark’s police is conducting an investigation in its own exclusive economic zone. It declined to comment on the Swedish findings or provide an update on the status of its own probe. President Joe Biden on Sept. 30 said that the massive leak was a “deliberate act of sabotage” and that Russian statements about the incident shouldn’t be trusted. Germany also has implied that the country is to blame. The events have sparked fears Russia could stage surreptitious attacks on vital energy links to trigger price increases as winter approaches.

Russian Natural Gas Halt Threatens LNG Market Tightness, European Storage Shortfalls, Says IEA --European natural gas prices have continued to decline since the Nord Stream (NS) pipeline systems connected to previously vital Russian gas were damaged, but the International Energy Agency (IEA) warned LNG markets could be drastically impacted into next year. In the IEA’s latest natural gas market report, researchers said the blows to Russian gas imports to Western Europe would lead to a drop in natural gas demand in Europe and a prolonged tightness in global liquefied natural gas markets. IEA researchers forecast Europe’s LNG imports would increase in December by 60 Bcm compared with last year’s volumes. That demand is more than double worldwide LNG export capacity expansions, which could lead to higher prices as Europe battles with Asia over spot cargoes.“The outlook for gas markets remains clouded, not least because of Russia’s reckless and unpredictable conduct, which has shattered its reputation as a reliable supplier,” IEA’s Keisuke Sadamori, director of energy markets and security, said. “But all the signs point to markets remaining very tight well into 2023.”Before Russia’s invasion of Ukraine in February, Europe had been increasing its intake of LNG cargoes to make up for declining pipeline volumes. By August, European imports had increased 65% year/year while Asian demand had dropped by around 7%, according to the IEA. In a recent note from BofA Global Research, analysts wrote that increased LNG demand and limited supply could keep European natural gas prices at or above $60/MMBtu “over the next four to six months under normal weather.” A harsher winter could spike prices further and threatened a storage shortfall on the continent, analysts added. Meanwhile, on Monday EnergiDanmark analysts wrote that a milder short-term weather outlook and continued high storage levels were fueling an extended price drop. The market “remained nervous” that the Dutch Title Transfer Facility (TTF) benchmark was “relatively stable over the last few weeks compared to the enormous fluctuations during summer, while day-ahead prices have also fallen to the lowest level in a couple of months.” The TTF closed at around $49 Monday, down from $54.427 on Friday. It had been on a downward slide since last Wednesday (Sept. 28), after a brief spike in the wake of the NS news.

Hungary Is Now The Only EU State Still Receiving Russian Gas - With three of the four pipelines delivering Russian natural gas to Europe out of commission, Hungary is now the only EU member state still receiving Russian gas, Forbes Hungary writes. There are four pipelines that could supply Russian natural gas to Europe:

Nord Stream 1, with a capacity of 55 billion cubic meters (bcm) per year (deliveries on this one were halted by Russia);
Nord Stream 2, with an identical capacity of 55 bcm (this one never became operational after the German government refused to approve it in the wake of Russia’s invasion of Ukraine).
Yamal Europe, the longest pipeline (4,107 kilometers) supplies gas from the Yamal Peninsula in Western Siberia, terminating in Germany, and has a capacity of 33 bcm. Deliveries were halted by Russia in May.
Turk Stream, delivering gas from Russia under the Black Sea and through the Balkans, has a capacity of 31.5 bcm and is the only pipeline still in operation. It terminates in Hungary, meaning that as of now, Hungary is the only EU member state still receiving Russian natural gas.

Due to the huge income Russia has made from soaring gas prices, coupled with a massive reduction in other trade with Europe, Russia has no interest in completely shutting down these pipelines.Although Hungary still receives gas, its price is linked to market prices, thus the country is strongly opposed to any further sanctions against Russia.Earlier this week, Prime Minister Viktor Orbán announced a national consultation over the EU’s Russia sanctions, with the consultation asking citizens whether they support the sanctions or not.The Hungarian government has vocally opposed many of the sanctions imposed on Russia arguing they harm Europeans more than they hurt Russians.Hungarian Prime Viktor Orbán just last week called for an end to Russian sanctions by the end of the year in order to halt inflation, halve food prices, and bring soaring energy costs under control.

Eni, Gazprom working to resolve gas flow halt -- Italy’s Eni said it would not receive any of the gas it had requested from Russia’s Gazprom for delivery on Saturday, but the firms said they were working to fix this.Russian gas supplies through the Tarvisio entry point will be at zero for October 1, Eni, the biggest importer of Russian gas in Italy, said in a statement on its website.Moscow and several European countries, including Germany, have been at loggerheads over the supply of natural gas from Russia since the country’s invasion of Ukraine in February.Tensions soared this week after leaks in the Nord Stream 1 and 2 pipelines, linking Russia and Germany, spewed tonnes of methane into the Baltic Sea, in what the UN believes could be the largest leak of the climate-damaging gas ever recorded.On Saturday, the operator of Nord Stream 2 said gas had finally stopped leaking out, five days after the initial rupture, which both Russia and the West blamed on sabotage. The European Union says Moscow is using the flow of gas needed for energy in the region as an economic weapon.

Washington, Brussels Set Sights on TurkStream Pipeline Amid Crackdown on Ankara-Moscow Cooperation At the beginning of this year there were four pipelines carrying natural gas from Russia to Europe, and a fifth (Nord Stream 2) was about to come online. Now Nord Stream 1 and 2 are dead, the Yamal Pipeline is closed, and the amount of gas flowing through Ukraine is greatly diminished. That leaves theTurkStream pipeline, which transports natural gas from Russia to Turkey and then onto southeastern Europe, and it’s in the crosshairs.South Stream Transport B.V., a Netherlands-based subsidiary of Gazprom that operates the Black Sea portion of TurkStream, said the Netherlands withdrew its export license on September 18 amid wider sanctions from the European Union. South Stream Transport applied for a new license but it doesn’t know if it will receive it. Now South Stream plans to “suspend the execution of all contracts related to the technical support of the gas pipeline, including design, manufacture, assembly, testing, repair, maintenance and training” due to the sanctions.That means that “no one will be able to carry out repairs if a pipe is damaged, gas leaks, or if a part of the pipeline comes apart due to an earthquake.”The news comes on the heels of Moscow’s claim that it foiled an attack on TurkStream. And Washington luminaries are now homing in on the pipeline.MIchael Rubin of the American Enterprise Institute writes that “Biden should kill TurkStream to promote transatlantic energy security.”Former CIA director and known perjurer John Brennan is very concerned about all pipelines bringing natural gas to Europe:TurkStream was launched in 2020 as part of Russia’s efforts to diversify its export routes away from Ukraine. It has the capacity to deliver 31.5 billion cubic meters of natural gas a year with half of it destined for Turkey and the other half for the Balkans and Central Europe. The main European customers of TurkStream natural gas are Serbia and Hungary – the former is an ally of Moscow, and the latter is the most outspoken member of the EU against Russian sanctions. Other countries, like Austria and Slovakia, also receive gas from TurkStream via Hungary.

Germany criticizes U.S. for charging 'astronomical' gas prices - Germany's Minister for Economic Affairs and Climate Action Robert Habeck on Wednesday criticized the "astronomical" gas prices charged by "friendly" supplier countries, such as the United States, suggesting they were profiting from the fallout of the Russia-Ukraine conflict. "Some countries, even the friendly ones, are charging astronomical prices in some cases. Of course, this brings problems that we must talk about," Habeck told the German Neue Osnabruecker Zeitung (NOZ) newspaper. The Russia-Ukraine conflict has caused a dramatic energy crisis in Germany, which previously relied on Moscow for 55 percent of gas deliveries. To address gas shortages, Berlin is investing in more expensive liquefied natural gas (LNG). Germany and other European countries have thus turned to the United States, which now provides 45 percent of European LNG imports – up from 28 percent in 2021. "The United States turned to us when oil prices soared, and the national oil reserves were tapped in Europe as well," Habeck said. "I think such solidarity would also be good for curbing gas prices." Habeck said the European Union (EU) should do more to solve the region's energy crisis and called on the bloc to "bundle its market power and orchestrate smart and synchronized purchasing behavior." The U.S. did not immediately respond to the comment. European Commission President Ursula von der Leyen said she preferred to discuss a price cap on gas. "High gas prices are driving electricity prices. We have to limit this inflationary impact of gas on electricity – everywhere in Europe," she said on Wednesday in a speech in Strasbourg, France. No gas has been flowing from Russia to Germany via the important Nord Stream 1 pipeline since September. Last week, major leaks were discovered after explosions were detected by Norway's earthquake service. Russia and the U.S. have accused each other of sabotage..

Germany builds new gas terminals to succeed Russian pipelines - Germany’s most strategically important building site is at the end of a windswept pier on the North Sea coast, where workers are assembling the country’s first terminal for the import of liquefied natural gas (LNG). Starting this winter, the rig, close to the port of Wilhelmshaven, will be able to supply the equivalent of 20 percent of the gas that was until recently imported from Russia. Since its invasion of Ukraine, Moscow has throttled gas supplies to Germany. In the search for alternative sources, the German government has splashed billions on five projects like the one in Wilhelmshaven. Altogether the new fleet should be able to handle around 25 billion cubic meters of gas per year, roughly equivalent to half the capacity of the Nord Stream 1 pipeline. LNG terminals allow for the import by sea of natural gas which has been chilled and turned into a liquid to make it easier to transport. A specialist vessel, known as an FSRU, which can stock the fuel and turn LNG back into a ready-to-use gas, is also hooked up to the platform to complete the installation. Unlike other countries in Europe, Germany until now did not have an LNG terminal, instead relying on relatively cheap pipeline supplies from Russia. But since the invasion of Ukraine, Germany has set about weaning itself off Moscow’s gas exports, which previously represented 55 percent of its supplies. To diversify its sources, secure enough supplies of the fuel and keep its factories working, Berlin has bet massively on LNG to fill the gap left by Russian imports. Chancellor Olaf Scholz last week signed an agreement with the United Arab Emirates for the supply of LNG, while touring Gulf states in search of new sources. Renting five FSRU ships to plug into the new terminals has also set Berlin back three billion euros ($2.9 billion). Following the outbreak of the war in Ukraine, Germany passed a law to drastically speed up the approval process for LNG terminals. In Wilhelmshaven, the work is coming along rapidly. The terminal should be finished “this winter”, says Holger Kreetz, who heads the project for German energy company Uniper. The strategic importance of the terminal has seen building work advance surprisingly quickly. “Normally, a project like this takes us five to six years,” Kreetz tells AFP.

Gas-Hungry Germany Approves Arms Deal With Saudi Arabia - German media reported on 29 September that Berlin has approved a number of new weapons export deals with Saudi Arabia, in defiance of a 2018 ban over Riyadh’s brutal war in Yemen. In a letter to the Bundestag, the country’s Economy Minister, Robert Habeck, said that the deals were approved by German Chancellor Olaf Scholz just before his recent visit to Saudi Arabia. The German export licenses fall under a joint export program with Spain, Italy, and the UK, Habeck’s letter specifies, and will allow Riyadh to buy equipment and ammunition for Eurofighter and Tornado warplanes amounting to around $35 million. Germany, whose arms exports to Saudi Arabia stood at around $1.22 billion in 2012, banned exporting weapons to the kingdom in 2018 as part of a broader ban against countries involved in the war on Yemen, despite some exceptions. However, a complete ban was enforced the following year after the murder of columnist Jamal Khashoggi inside the Saudi embassy in Istanbul. This ban initially fell under Germany’s policy of not exporting arms to active war zones, a policy that shifted as a result of NATO pressure on Berlin to send weapons to Ukraine. The weapons export deals come at a time when Germany is scrambling to boost relations with energy exporting countries, as the country faces a major economic catastrophe after losing access to Russian fuel Scholz set off on a tour of the Gulf states last month, which began in Saudi Arabia on 24 September, in a bid to diversify Germany’s energy supply. This mission became ever more urgent since the sabotage attack that targeted the Kremlin’s Nord Stream pipelines this week. The loss of Russian fuel has pushed several German industries to the brink of collapse, and it has also forced Berlin to nationalize one of the nation’s main energy providers to save it from bankruptcy.

European Gas Demand Set For Record-Breaking Decline In 2022 - Soaring natural gas prices, demand destruction in the industrial sector, and energy-saving measures are set to reduce gas consumption in Europe’s developed economies by 10% this year, the biggest drop in European demand in history, the International Energy Agency (IEA) said in its quarterly Gas Market Report on Monday.The forecast of a 10% decline in natural gas demand in OECD Europe reflects the expectation of higher gas prices and the EU’s ambition to reduce gas consumption by 15% between August 2022 and March 2023 compared to its five-year average.“Assuming average weather conditions, gas demand in the residential and commercial sectors is expected to remain below 2021 levels,” the IEA said in its report.Due to sky-high high prices and a very tight gas market, natural gas usage in the power generating sector in Europe is forecast to drop by nearly 3% this year. Industrial gas demand is expected to plunge by as much as 20%, the IEA said.Energy-intensive industries in Europe, including aluminum, copper, and zinc smelters and steel makers, have already warned EU officials that they face an existential threat from surging power and gas prices. After a record slump in gas demand this year, Europe faces another year of gas consumption contraction in 2023, when OECD Europe’s demand is forecast to decline by 4% amid high prices, according to estimates from the IEA.The agency also noted that “Further potential disruption to the supply of Russian gas provides additional downside risk to this outlook.”Keisuke Sadamori, the IEA’s Director of Energy Markets and Security, commented on the report:“The outlook for gas markets remains clouded, not least because of Russia’s reckless and unpredictable conduct, which has shattered its reputation as a reliable supplier. But all the signs point to markets remaining very tight well into 2023.” The IEA’s Executive Director Fatih Birol said last week that the gas market could be even tighter next year compared to already tight LNG markets in 2022.

European Gas Moves from Bad to Ugly -European gas has moved decisively into BofA Global Research’s “ugly” scenario following the NS1 and NS2 pipeline explosions, a new report from the company has outlined. “After the war broke out in March, we set out three scenarios for European TTF natural gas prices that we labelled ‘good’ (€75/MWh), ‘bad’ (€100/MWh) and ‘ugly’ (€200/MWh),” the report noted. “During the first half of 2022, the European TTF natural gas market traded mostly along the ‘bad’ scenario as pipeline flows from the east continued, despite some friction loss,” the report added. “But as Russian pipeline natural gas flows into North West Europe collapsed this summer after Nord Stream 1 maintenance, day ahead TTF prices quickly moved into the ugly scenario, averaging exactly €200/MWh in the past three months, a level that we now expect to hold over the next 4 to 6 months under normal weather,” the report continued. The BofA Global Research report noted that, in the short term, government mandated inventory fills have partly shielded Europe from the worst outcomes heading into the 2022/23 winter season but added that the situation “remains very precarious”. “A one standard deviation colder-than-normal winter would leave stocks near empty, on our estimates,” the report stated. “A synchronous cold winter in Europe and Asia would trigger a race for gas molecules. Given the drop in nuclear and hydro power generation and the collapse in European natgas demand elasticity, Europe will keep relying on fuel switching abroad and demand rationing at home to balance TTF,” the report added. “Yet as the Ukraine conflict becomes more entrenched, refilling gas stocks in 2023 will prove hard,” the report continued. In a separate report sent to Rigzone on September 30, BofA Global Research noted that damage to both Nord Stream pipelines might imply a permanent, not just temporary, loss of gas supply, “thereby locking in our 'ugly' price scenario of c.EUR200/MWh for multiple winters”. “This is a picture that we see persisting for several years until tangible new LNG supply comes to the market from 2025/26,” that BofA Global Research report stated. In a statement posted on its website on September 29, Nord Stream AG said it intends to start assessing the damage to the Nord Stream pipeline as soon as it receives necessary official permits. “Access to the area of incidents may be allowed only after the pressure in the gas pipeline has stabilized and the gas leakage has stopped,” the company stated.

Natural Gas Market To Remain Tight Into 2023 Russia’s continued curtailment of natural gas flows to Europe has pushed international prices to painful new highs, disrupted trade flows, and led to acute fuel shortages in some emerging and developing economies, with the market tightness expected to continue well into 2023, according to the IEA’s latest quarterly Gas Market Report. Natural gas markets worldwide have been tightening since 2021, and global gas consumption is expected to decline by 0.8% in 2022 as a result of a record 10% contraction in Europe and unchanged demand in the Asia Pacific region. Global gas consumption is forecast to grow by only 0.4% next year, but the outlook is subject to a high level of uncertainty, particularly in terms of Russia’s future actions and the economic impacts of sustained high energy prices. Russia has largely cut off gas supplies to Europe in retaliation against sanctions imposed on it following its invasion of Ukraine. This has deepened market tensions and uncertainty ahead of the coming winter, not just for Europe but also for all markets that rely on the same supply pool of LNG. “Russia’s invasion of Ukraine and sharp reductions in natural gas supplies to Europe are causing significant harm to consumers, businesses, and entire economies – not just in Europe but also in emerging and developing economies,” "all the signs point to markets remaining very tight well into 2023.” The current gas crisis also casts longer-term uncertainty on the prospects for natural gas, especially in developing markets where its use was expected to rise at least in the medium term as it replaced other higher-emission fossil fuels. European natural gas prices and Asian spot LNG prices spiked to record highs in the third quarter of 2022. This reduced gas demand and incentivized switching to other fuels such as coal and oil for power generation. In some emerging and developing economies, the price spikes triggered shortages and power cuts. Europe’s gas consumption declined by more than 10% in the first eight months of this year compared with the same period in 2021, driven by a 15% drop in the industrial sector as factories curtailed production. Natural gas demand in China and Japan was almost unchanged in that same period, while it contracted in India and Korea. Chinese gas demand is forecast to increase by less than 2% this year, its lowest annual growth rate since the early 1990s. Meanwhile, natural gas prices in the United States hit their highest summer levels since 2008, yet North America was one of the few regions of the world where demand increased, supported by demand from power generation. Europe has offset the sharp falls in Russian gas supplies through LNG imports, as well as alternative pipeline supplies from Norway and elsewhere. Europe’s surging demand for LNG – up 65% in the first eight months of 2022 from a year earlier – has drawn supply away from traditional buyers in the Asia-Pacific region, where demand dropped by 7% in the same period because of high prices, mild weather, and continued Covid lockdowns in China. The IEA forecasts that Europe’s LNG imports will increase by over 60 bcm this year, or more than double the amount of global LNG export capacity additions, keeping international LNG trade under strong pressure for the short- to medium-term. This implies that Asia’s LNG imports will remain lower than last year for the rest of 2022. However, China’s LNG imports could rise next year under a series of new contracts concluded since the beginning of 2021, while a colder-than-average winter would also result in additional demand from northeast Asia, further adding to market tightness. For the new report, the IEA conducted a resilience analysis of the EU’s gas market in the case of a complete Russian supply shutdown starting from November 1, 2022. The analysis shows that without demand reductions in place and if the Russian pipeline supply is completely cut, EU gas storage would be less than 20% full in February, assuming a high level of LNG supply – and close to 5% full, assuming low LNG supply. Storage falling to these levels would increase the risk of supply disruptions in the event of a late cold spell. A reduction in EU gas demand through the winter period of 9% from the average level of the past five years would be necessary to maintain gas storage levels above 25% in the case of lower LNG inflows. A reduction in demand of 13% from the 5-year average would be necessary through the winter period to sustain storage levels above 33% in the case of low LNG inflows. Therefore, gas saving measures will be crucial to minimize storage withdrawals and keep inventories at adequate levels until the end of the heating season.

China Is Reselling U.S. LNG To Europe For Big Profits -Chinese companies that have signed long-term contracts to buy U.S. liquefied natural gas have been selling their excess inventories to Europe and reaping big profits from the sales thanks to weak demand in China, the Wall Street Journal reports. WSJ reports that just 19 LNG vessels from the U.S. docked in China in the first eight months of the year, a far cry from 133 recorded for last year’s comparable period. China’s key buyers are located in Europe, Japan and South Korea. China has imported nearly 30% more gas from Russia so far this year, typically at a steep discount, shipping data shows. Still, Chinese sales to Europe are not nearly enough to help the continent avoid potential shortages this winter with Europe depending more heavily on the U.S. Europe has managed to fill its gas stores ahead of schedule. Europe’s natural gas prices have plunged sharply on news that Germany’s gas stockpiles are running ahead of schedule. Benchmark Dutch front-month futures crashed 21% in a single day, reversing the previous week’s 40% jump after Germany’s Economy Minister Robert Habeck revealed that the country’s gas stores are filling up fast and are on target to meet the October objective of 85% full. According to a Reuters gas counter, 88.4% of EU gas storage is already filled.The plunge has brought some relief after a furious rally, though futures are still trading almost six times higher than a year ago. Europe is on the brink of a recession, with inflation running at the highest in decades in several countries. European Governments have collectively set aside some 280 billion euros ($278 billion) in relief packages. Goldman Sachs has told Barrons that Europe has managed to solve its gas crisis ahead of winter and that prices could drop by half in the next six months.

More Bad News For Europe: Forecasters Predict Colder Winter, Less Renewable Power - Just days after we learned that Europe's cell phone tower energy reserves will last 30 minutes during the upcoming mass blackouts, putting the entire European cellular system in jeopardy, the continent which will soon replace Russia with the US as its vassal master and energy sponsor, got even more bad news: according to Florence Rabier, director-general of the European Centre for Medium-Range Weather Forecasts (ECMWF), i.e., the European weather forecasting agency, early indications for November and December were for a period of high pressure over western Europe, which was likely to bring with it colder spells and less wind and rainfall, reducing the generation of renewable power.This, as the FT translates, means that Europe could suffer a colder winter with less wind and rain than usual, adding to the challenges for governments trying to solve the continent’s energy crisis. “If we have this pattern then for the energy it is quite demanding because not only is it a bit colder but also you have less wind for wind power and less precipitation for hydro power,” Florence Rabier told the Financial Times. Rabier said recent hurricanes across the Atlantic could cause milder, wetter and windier weather in the short term. But cooler weather later in the year would be consistent with the atmospheric conditions known as La Niña, a weather pattern derived from the cooling of the Pacific Ocean’s surface, which drives changes in wind and rainfall patterns in different regions.In any case, there is a faint silver lining to Europe's coming deep freeze: as Reuters' reporter John Kemp reports, Europe is entering winter with a near-record volume of gas in storage after buying large volumes at almost any price over the summer to prepare for an interruption of supplies from Russia.Gas inventories in the European Union and the United Kingdom (EU28) had climbed to 996 terawatt-hours (TWh) by Sept. 30, according to data from Gas Infrastructure Europe (GIE). For the time of year, inventories were at the third highest on record, with higher volumes only in 2020 (1,074 TWh) and 2021 (1,067 TWh).Storage had risen by around 700 TWh from its post-winter low, the second-fastest increase on record, as suppliers purchased as much gas as possible despite exceptionally high prices. As a result, stocks ended the summer refill season +98 TWh (+11% or +0.83 standard deviations) above the prior ten-year average. This is a huge turnaround from the end of January, when they were -134 TWh (-23% or -1.34 standard deviations) below. As Kemp forecasts, Inventories are likely to continue increasing for at least another three weeks until late October, but the build could persist into early November, depending on temperatures and how far high prices restrain consumption. Since 2011, the median date on which storage peaked was Oct. 26, but in two cases inventories continued rising into the first half of November. Based on previous seasonal movements, storage is expected to peak around 1,025 TWh, with a likely range from 1,009 TWh to 1,053 TWh. But the volume of gas in store is still increasing at an average rate of more than 2.3 TWh per day, implying it is likely to climb towards the top of the range. Is it enough? EU storage is more than 89% full and UK storage is more than 94% full, with extra stocks likely to be added over the next 3-6 weeks. Storage is well ahead of the formal target of 80% this year (preferably 85%) by Nov. 1 agreed by the EU in June (“Council adopts regulation on gas storage”, European Council, June 27).According to Kemp, European governments have fulfilled their stated objective of maximizing the volume of gas in storage ahead of winter 2022/23 to reduce the impact of a disruption of pipeline supplies from Russia. But storage is intended to deal with seasonal variations in consumption, not provide a strategic reserve in case of an embargo or blockade.Maximizing the volume of stored gas will alleviate the impact of any supply disruptions but it is not enough to guarantee supply security. In the event of a complete cessation of imports from Russia, a colder than normal winter such as the one forecast, or both, gas would become scarce before the end of March 2023. Even if Europe scrapes through this winter, inventories are likely to end at very low levels, requiring another, perhaps even bigger, restocking next year ahead of winter 2023/24.

Gazprom Resumes Flows to Italy -Russian gas supplies to Italy via Austria resumed, bringing some temporary relief to gas prices in Europe. Gazprom PJSC said it has found a solution with Italian buyers to overcome the regulatory changes in Austria at the end of September that were preventing transit flows, according to a company statement on Telegram. Benchmark gas futures fell as much as 4.7% after the news. The spat with the Austrian authorities is the latest in a series of disputes over regulation and contractual clauses that have been used by Gazprom as a way to limit Russian gas supplies to Europe. Earlier this year, the Kremlin demanded so-called “unfriendly states” must pay for pipeline gas in rubles and halted gas deliveries to nations that refused. Another step was to gradually shut down the Nord Stream pipeline for maintenance to its turbines, saying that sanctions and paperwork were holding the process up. Gas supplies to Italy through a pipeline that passes through Austria were halted on Saturday, just days after an attack was carried out on the Nord Stream gas pipelines causing huge gas leaks into the Baltic Sea near Denmark and Sweden. There has been some wariness over Russia’s next move after the act was declared to be sabotage by several nations including Germany. Italy’s energy giant Eni SpA confirmed the resumption of gas flows on Wednesday, saying the issue had been resolved, in a company statement. Austrian regulator E-Control said a solution appeared to have been found. The halt to transit flows was caused by Gazprom not paying a guarantee to the Austrian operator for gas passing to Italy, Claudio Descalzi, chief executive officer, of Eni SpA said at an event on October 3. European gas prices fell as low as 154.28 euros ($153.33) a megawatt-hour on Wednesday and were down 3% at 158.35 euros as of 10:33 a.m. Vienna time.

French Strikes Tighten European Diesel Supplies Further - The European diesel market is tightening faster than usual as workers’ strikes at French refineries choke off supplies. The continent’s diesel sector -- which tightens during the heating season -- has been on edge since the invasion of Ukraine, with traders already shunning Russian barrels. That’s now being exacerbated by French industrial action curbing fuel output just as routine maintenance starts at oil-processing facilities across Europe. Europe’s diesel market has surged this week as worries about near-term availability mount. The contract closest to expiry is now more than $90 a ton above November futures, with the gap shooting up to the biggest since July. Futures have rallied to the equivalent of about $150 a barrel. The strikes add pressure to Europe’s diesel and heating oil market, which has been left short by the loss of Russian supply. The action has seen filling stations in parts of France start to run out of fuel -- another headache for consumers and industries hit by a cost-of-living crisis and the worst energy crunch in decades. Oil trader Gunvor Group’s Chief Executive Officer Torbjorn Tornqvist said Tuesday that the diesel market is moving toward levels of tightness that were seen in the weeks after the invasion of Ukraine. The French outages “come at exactly the wrong time for Europe’s energy security, as they risk accelerating product stockdraws ahead of the looming embargo on imports of Russian products,” Facts Global Energy said in a note Tuesday. France is an important fuel supplier, able to process more than 1 million barrels of crude a day. The strikes have affected about two-thirds of the nation’s capacity. The two biggest refineries -- the Normandy plant operated by TotalEnergies SE and Exxon Mobil Corp.’s Gravenchon -- are operating below capacity.

Minister: Azerbaijan aims to double gas supplies to Europe by 2027 - Azerbaijan aims to double gas supplies to Europe by 2027, Economy Minister Mikayil Jabbarov said in an interview with Euronews Bulgaria, Azernews reports. “We are already in talks with our partners, both foreign and local. Our idea is to increase our production. President Ilham Aliyev mentioned today what quantities we are talking about, and our aim is to double these quantities by 2027. This is a key priority for us. Now the question is how these quantities will be distributed among the various European countries, and it should be determined by the EU’s member states themselves,” he said. Touching upon the bilateral relations between Azerbaijan and Bulgaria, the minister emphasized that Baku is considering all options to cover Bulgaria's gas consumption as much as possible. Moreover, Mikayil Jabbarov stated that Azerbaijan’s state energy company will open a branch in Bulgaria. “We believe that this will make a significant contribution to the development of bilateral ties, and in this way, we will be able to communicate directly with business partners on the ground. This is the most practical and fastest way to satisfy the needs of our customers in the local market,” he said. Azerbaijan and Bulgaria agreed to supply 1 billion cubic meters of gas per year through the Interconnector Greece-Bulgaria. However, because the IGB was still under construction, Azerbaijani gas was delivered to Bulgaria via the Kulata-Sidirokastro interconnection point. The IGB gas pipeline is designed to connect the Greek national gas transmission system (DESFA S.A.) and the Trans-Adriatic gas pipeline (TAP AG) in the area of Komotini (Greece), and with the Bulgarian gas transmission system (Bulgartransgaz EAD) in the area of Stara Zagora. The total length of the gas pipeline is 182 km, the diameter of the pipe is 32'', and a design capacity of up to 3 billion m3/year in the direction of Greece-Bulgaria. The pipeline is designed to increase its capacity up to 5 bcm/y depending on market interest and the capacities of neighboring gas transmission systems.

Qatar: not able to fully compensate for Russian gas to Europe - Qatar is unable to meet the gas demands of several European countries, including Germany, given the volume of supply that Russia has been providing to the Old Continent in recent years, which has been compromised by Russia's invasion of Ukraine and the resulting European sanctions imposed on Vladimir Putin's regime, and by the disruption of the Nord Stream pipelines caused by leaks in the installation, which have yet to be investigated to determine their cause and authorship. Qatar has other commitments to major customers such as China, South Korea and Japan, and is not able to cover as much as expected to receive gas from the European continent. The breakdowns and leaks suffered by the two Nord Stream pipelines, the infrastructure that transports gas from Russia to Germany through the Baltic Sea and which is controlled by a consortium under the Russian giant Gazprom, have put the whole of Europe on alert, as it fears for the supply and price of natural gas for the winter season, with the consequent effects on the heating systems of homes in several countries on the Old Continent. The Russian gas channels in the Baltic Sea of the Nord Stream complex suffered explosions and leaks that will affect the flow of supplies for an undetermined period of time. This is of great concern to Europe, which was preparing to stop Russian supplies through sanctions decreed because of the war in Ukraine, but did not expect this to become a reality after the explosions that hit the Russian gas channels in the Baltic Sea. With winter approaching and sanctions imposed by the European Union on Russian oil and gas after the invasion of Ukraine, Germany, the EU's figurehead, tried to find solutions, such as the Qatari route, the world's largest exporter of liquefied gas. Qatar's deputy prime minister and foreign minister, Sheikh Mohamed bin Abdulrahman al-Thani, said Doha is in talks with several German companies about new supplies of liquefied natural gas. But sources confirmed to the energy specialist Oil Price that quantities and delivery times have yet to be discussed and that Qatar will only provide a partial solution to the gas crisis facing Europe, and this will not happen in the short term, as also reported by Al-Arab. "Qatar's ability to compensate the EU for all the lost Russian gas supplies is very limited and will only provide a partial solution to the Europeans' gas crisis," said Simon Watkins, Oil Price's reporter. . According to media reports, due to past political differences, the German chancellor did not achieve much in the way of an energy partnership with the Saudi kingdom, but he did reach an energy security agreement with Emirati President Mohamed bin Zayed, according to the official Emirati news agency WAM. The deal involved the Emirati national oil company ADNOC and Germany's RWE for the supply of liquefied natural gas. According to Scholz's visit, deliveries from the Emirati side would start before the end of 2022. Ammonia exchanges were also agreed for the transport of green hydrogen, one of the energy sectors in which the Gulf state is investing the most. In the case of Qatar, what makes the situation difficult for Germany is that the Gulf country seeks to secure high prices for liquefied natural gas over a long period, up to 20 years.

Future gas exploration in Lake Eyre could upset the 'greatest desert river system in the world' forever, research shows - The Lake Eyre Basin is the last big free-flowing desert river system in the world.But will it be lost in the gas industry's last dash for cash?About once a decade the hot dry deserts of central Australia are nourished by water.Flooding rains in Queensland, the Northern Territory and South Australia flow into channels, creeks and rivers, spread across vast flood plains and eventually make their way into the vast ephemeral inland lake Kati Thanda, or Lake Eyre.The area, once desolate, bursts into a discombobulating cocktail of life.A plethora of invertebrates and plants that have sat dormant for years spring from the sand, becoming food for fish and birds, which flock to the lakes, swamps and rivers, and breed in their millions.For the vast region that drains into Lake Eyre — the Lake Eyre basin — and the communities and ecosystems that rely on it, it's either boom or bust. And right now, it's definitely boom.Mithaka man and traditional owner Josh Gorringe, who lives in Windorah in Western Queensland in the north-east of the Basin, said the life after the floods "is what amazes me the most". "It can go from this dry, almost bare dirt to vibrant green grass," he said."The birdlife booms again and even people's spirits lift again."But Mr Gorringe said the delicate balance that sustained the country as it swung from boom to bust was being put at risk by a push from the oil and gas industry."The mines are the biggest threat that we've got at the moment," Mr Gorringe said. "The coal seam gas that's been approved across the flood plains, you're talking roads going in places where they've never had roads before."Australia has committed to reduce its net greenhouse gas emissions to zero in less than three decades, but despite this, a possible expansion to the industry's footprint could mean centuries of impact on the system, Mr Gorringe said, in return for just a few decades of profits.The gas industry argues that it's existed in the Lake Eyre basin since the 1980s without interrupting the pristine waterways there, as well as bringing billions of dollars into Australia.But new research shared with the ABC has uncovered its impact, and suggests the future of the basin could be threatened.

The US says a cap on Russian oil prices would save billions of dollars for importers like Turkey and Thailand, report says: FT - A proposed price cap on Russian oil could mean importers in the largest emerging markets pay billions of dollars a year less for oil than otherwise, according to US Treasury estimates reported by the Financial Times. The findings came from a Treasury study, which looked at the impact of two alternatives on the global oil market: a system allowing shipments priced below a set level, and embargoes without those exemptions. The planned G7 price cap could save the 50 largest emerging market and low-income countries — ranging from Turkey to El Salvador and Thailand — about $160 billion annually in spending on oil imports, the study found. But the Treasury didn't specify what the capped price level would need to be to yield the billions in savings, according to the FT. An official from the department also said there is "significant uncertainty" around the estimates, the Tuesday report said. The G7 countries — which includes Canada, France, Germany, Italy, Japan, the UK, and the US — agreed to set a price cap on Russian oil in early September. The measure is aimed at squeezing Russian revenues and so curb Moscow's ability to fund its war against Ukraine, and to stabilize global crude prices. Under the proposals, refiners, traders, and financers would not be allowed to handle Russian crude oil unless it was sold below the price limit. That would benefit the US as a net exporter of energy, the Treasury official said. But it would pay off even more for less-developed countries in Central Asia and Europe that are dependent on oil imports. "The impact is far greater under any reasonable assumptions for emerging markets, which are just getting hammered right now," the official said, per the FT. "This means that countries have a significant incentive to benefit from the price cap, including purchasers like China and India, and that all net oil importing EMs would benefit from lower oil prices," the official added. The US has been trying to rally countries like China and India to support the G7 price cap plan, saying the two Asian countries could benefit by buying more cheap barrels. China and India have been heavy purchasers of Russian oil since the invasion of Ukraine, as sanctions forced Moscow to offer big discounts. The proposal could face headwinds as the price of oil has risen recently thanks to concerns that OPEC and its allies will soon agree to cut oil production quotas by 1 million barrels per day. That supply squeeze could lift oil prices as high as $100 a barrel, analysts told Insider. Brent crude futures, the international benchmark, soared to a high of $127.98 a barrel in early March. They were up 2% to trade at $90.61 at last check Tuesday, while US benchmark WTI crude futures were about 1.7% higher at $85.10.

Refurbished Oil Spill Response Ship Enters Service - A refurbished high-spec oil spill response vessel for the Aegean Sea has entered service under a four-year contract with the European Maritime Safety Agency (EMSA), a contract with an option for four additional years. Dubbed AKTEA II, the OSRV will be able to reach anywhere in the Aegean within 24 hours and can collect and carry up to 4,500 tonnes of oil. Based in Piraeus, Greece AKTEA II OSRV (IMO 9327516) has onboard capacity of 4,486 cu. m. for recovered oil and is equipped with two systems for the mechanical recovery of oil: two rigid sweeping arms and offshore booms (2x250m) with a high-capacity skimmer. The onboard radar-based oil slick detection system increases the efficiency of oil recovery operations at sea. AKTEA II OSRV was built in 2007, purchased by Environmental Protection Engineering (EPE) in 2021 and fully refurbished. The AKTEA II OSRV is 91m long and has 14 crew members constantly on board.

Shell to invest in second Malaysia oil, gas project in a month -- SHELL announced a second investment in Malaysia’s oil and gas sector in a month as the major and its partners, including Petronas, aim to revive output in an environment of tight global supply. Shell’s decisions come after the war in Ukraine disrupted Russian oil and gas supplies and boosted prices. Oil and gas producers in Asia are struggling to sustain output after years of under-investment in the sector as international companies scaled back to focus on exploration and production in Africa and the Americas. Sabah Shell Petroleum, a Malaysian unit of Shell, said on Monday (Oct 3) it will invest in phase 4 of the Gumusut-Kakap-Geronggong-Jagus East (GKGJE) deepwater offshore development project along with its partners. No amounts were given. The GKGJE phase 4 development is a subsea tie-back project that is expected to achieve first oil in late 2024, Shell Malaysia said in a statement. Shell’s partners in the GKGJE project include ConocoPhillips Sabah, Petronas Carigali, PTTEP Sabah Oil Limited, PT Pertamina Malaysia Eksplorasi Produksi and others. The GKGJE project will reviving declining output of Kimanis crude, Malaysia’s flagship export grade. Kimanis production has been falling because of a lack of investment and because of technical issues at the Gumusut-Kakap and Malikai fields.

China may extend refined fuel export quota into next year – sources - China may tweak a proposed sharp increase in refined fuel export quotas for this year by extending the plan into next year, as it weighs the benefits to the economy of higher exports against low domestic stocks and operational challenges, four sources told Reuters. However, the four sources with direct knowledge of the matter - and three others - said the government was still reviewing the matter. The market has been widely expecting China to release a fifth batch of fuel export quota of up to 15 million tonnes for the rest of the year, which would be its largest so far in 2022 and lift China's sagging exports. The proposal from refiners' planning departments, following a government call to boost trade, has led some refiners to ready an increase in output to take advantage of the quota. However, the four sources said Beijing might extend the duration of the proposed volume of 15 million tonnes into next year to cushion its impact on global markets and avoid a price crash. The National Development and Reform Commission, China's powerful economic planner, was hosting a meeting with the nation's major oil refiners earlier on Wednesday, the sources said. It was not immediately clear if the meeting reached a decision. The meeting reviewed companies' oil trading activities and their production capacities this year and also discussed the global oil market outlook for 2023, the four sources said. "The government believes that domestic refiners were operating at low levels this year due to weak domestic demand and negative impact of COVID controls," said one of the sources. "Raising the quotas could help boost overall exports and also help refiners to raise runs," this person added. Global oil markets have been supported by a sharp reduction in Chinese fuel exports for most of this year. However, the proposed large volume of export quotas caused Asian refiners' margins for diesel, jet fuel and gasoline to slump two weeks ago, although middle distillates products have recovered somewhat. The proposed volume would mean a 63% jump from the 24 million tonnes released so far for 2022, too large to be practical and risk crashing refiners' margins, said officials at state refiners.

Refiners Expect Saudi Arabia To Raise Oil Prices For Asia In November - Saudi Arabia may raise the prices for its crude export grades to Asia next month in response to signs of recovering crude demand in one of its biggest markets and the new batch of fuel export quotas issued by Beijing.Energy consultancy FGE said last week that Chinese refiners had been issued fuel quotas to the tune of 13.25 million tons for transport fuels and almost 2 million tons of very low-sulfur fuel oil, valid through the end of the year. They also have some 7 million tons left from previous quota batches, FGE noted.As a result of this higher demand, Saudi Arabia’s official selling prices could rise by $0.25 per barrel for the flagship Arab Light crude, refiners participating in a Reuters survey said.On the one hand, the new quotas suggest higher near-term demand for crude but, on the other, refining margins have sunk after the announcement of the new quotas in anticipation of a flood of new fuel supply. As a result, survey respondents forecast a relatively moderate expected hike in Saudi Arabia’s prices.Last month, Saudi Arabia cut its prices for Asian and European buyers, after four consecutive monthly price hikes. Aramco cut prices of its Arab Light crude benchmark to Asia by $3.95 per barrel, and to European buyers by $2 a barrel, while prices for U.S. buyers saw no change, with the exception of heavier and lighter variants that will see a $0.50 per barrel increase.The October price cuts came after record high prices in September for Arab Light, which reached $9.80 over the Oman/Dubai average per barrel, while Arab Extra Light sold for $10.95 over per barrel that same month. With the price cuts, Asian buyers for this month will pay $5.85 per barrel above the Oman/Dubai benchmark. Aramco normally announces its official selling prices for the following month around the fifth of the current month. This week, the fifth is also the date of the October meeting of OPEC+, where members are expected to discuss a sharp production cut of 1 million bpd or more.

Nigeria probes fire incidents at oil wells-(Xinhua) -- Nigerian authorities on Tuesday said an investigation has been launched into fire incidents affecting two oil wells in the country's oil-rich state of Rivers. Idris Musa, head of the National Oil Spills Detection and Response Agency (NOSDRA), said in a statement that the agency on Monday received a report of the fire incidents at the Akaso Wells 14 and 4T Wellheads, two major oil wells operated by Eroton Exploration and Production Limited in the southern state. Musa said the raging fire had not been put out by the spill control agency, although a situation room was created for effective communication between the affected oil firm and all relevant stakeholders to give a two-hourly update on the incident. A well-concerted effort is in place to extinguish the blazes, the NOSDRA official said. According to him, an illegal boat that was suspected to be engaged in oil theft was observed at the location. The boat has been completely burned and the fire on it was extinguished, he added. ■

Oil Investors Are Ready For Recession - By John Kemp at Reuters (with graphs) Portfolio investors continued to flee from the oil market last week amid multiplying signs of an imminent recession that would cut petroleum consumption. Hedge funds and other money managers sold the equivalent of 34 million barrels in the six most important petroleum futures and options contracts in the week to Sept. 27. Funds have sold in 10 of the last 16 weeks with positions reduced by a total of 237 million barrels since early June, according to position records published by ICE Futures and the U.S. Commodity Futures Trading Commission. The combined position has been cut to just 410 million barrels (18th percentile for all weeks since 2013) from 647 million barrels on June 7 (57th percentile). Bullish long positions outnumber bearish short ones by only 3.63:1 (40th percentile) down from 6.68:1 (85th percentile). The most recent week saw heavy sales of NYMEX and ICE WTI (-23 million barrels) and more modest sales of Brent (-4 million), U.S. diesel (-4 million) and European gas oil (-3 million), with no change in U.S. gasoline. The combined position across all three crude contracts has dwindled to just 314 million barrels (10th percentile) from 513 million on June 7 (55th percentile), as confidence in a price rebound has evaporated. In middle distillates, the most cyclically sensitive contracts, the combined position in diesel and gas oil has fallen to just 45 million barrels, the lowest level since November 2020, before the first successful coronavirus vaccines were announced. Fund managers are preparing for a moderate-to-severe downturn in the business cycle cutting consumption - with the most significant impacts felt in crude and the distillates used primarily in freight transport and manufacturing. Inventories of both crude and refined fuels remain at multi-decade lows in the major consumption centres, but a cyclical downturn is expected to stabilize and rebuild them, ending upward pressure on prices.

Oil prices could soon return to $100 as OPEC+ considers ‘historic’ cut, analysts say -- An influential alliance of some of the world's most powerful oil producers is reportedly considering their largest output cut since the start of the coronavirus pandemic this week, a historic move that energy analysts say could push oil prices back toward triple digits.OPEC and non-OPEC producers, a group often referred to as OPEC+, will meet in Vienna, Austria, on Wednesday to decide on the next phase of production policy.The oil cartel and its allies are considering an output cut of more than a million barrels per day, according to OPEC+ sources who spoke to Reuters. "The OPEC ministers are not going to come to Austria for the first time in two years to do nothing. So there's going to be a cut of some historic kind," Oil prices rose around 4% on Monday morning. International benchmark Brent crude futures popped 4% to $88.54 per barrel, while U.S. West Texas Intermediate futures climbed 4.2% to trade at $82.83 per barrel."A further uptick in trading activity coupled with tightening near-term oil fundamentals could well push oil prices back to $100/bbl," Stephen Brennock said in a research note."Those of a bullish disposition have endured a summer of pain, but a winter of hope and expectation is on the horizon," he added.Echoing this call of a return to $100 a barrel, analysts at Goldman Sachs see Brent reaching triple digits over the next three months, before climbing to $105 over a six-month horizon.The U.S. investment bank expects WTI to jump to $95 by around year-end, before hitting $100 over the next six months.

Novak Set to Attend OPEC+ Meeting - Russian Deputy Prime Minister Alexander Novak is set to attend the OPEC+ meeting in Vienna, according to people familiar with the situation, as the alliance prepares for a show of unity and the biggest production cut since 2020. The meeting on Wednesday -- the first physical gathering since the pandemic forced the group online -- was officially called at the weekend as falling oil prices prompted the cartel to consider a substantial production cut. The alliance headed by Saudi Arabia and Russia is expected to make a point of the enduring partnership, even as the war in Ukraine leaves Moscow increasingly isolated. The group is considering cutting oil output by more than 1 million barrels a day, according to delegates, with the global economic slowdown threatening to undermine demand, prices, and producer nations’ budgets. Such a massive cut risks adding another shock to the global economy, which is already battling energy-driven inflation. It will also irk the US, after President Joe Biden visited Saudi Arabia earlier this year in search of a new oil deal -- and lower pump prices. At the same time, Biden is trying to restrict the revenues that Moscow receives for oil by implementing a price cap as part of efforts to weaken Vladimir Putin’s war effort. An OPEC+ reduction would probably have the opposite effect. Novak’s physical presence in Vienna also presents challenging optics for the European Union: the US has sanctioned him, though the EU has not followed suit. Austria’s government has declined to comment on his attendance, noting only that he has not been sanctioned by the bloc.

OPEC+ to consider oil output cut of more than 1 mln bpd - OPEC+ will consider an oil output cut of more than a million barrels per day (bpd) when it meets on Oct. 5, OPEC sources told Reuters on Sunday. The figure is slightly above estimates for a cut given last week, which ranged between 500,000 bpd and 1 million bpd. OPEC+, which combines OPEC countries and allies such as Russia, is meeting in person in Vienna for the first time since March 2020. “It is a meeting that is taking place at a very interesting global time,” one of the sources said. The output cuts are being considered on the back of a slide in oil prices from multi-year highs reached in March and market volatility. Saudi Arabia, OPEC’s de facto leader, first flagged the possibility of cuts to correct the market in August.

OPEC+ To Cut Oil Output By As Much As 1.5 Million B/D On Wednesday To Reverse Price Drop -- First it was 500Kb/d, then 1 million. Now, according to both Bloomberg and the WSJ, OPEC+ will likely announce that it is slashing output by more than a million barrels per day when it meets this Wednesday in Vienna. With the amicable days of fistbumps long gone... ... the larger-than-expected reduction will reflect the scale of concern that central banks are rushing to spark a global recession, which in turn is crippling oil demand and demanding a supply response. The dollar, which has hit record highs pretty much every day in Q3, has also weighed on prices.That said, a final decision on the size of the cuts won’t be made until ministers meet, Bloomberg's sources said while the WSJ noted that because the ultimate decision will be hotly debated, the group decided to meet in person in Vienna on Wednesday for the first time since the start of the pandemic. Other options being considered include a smaller reduction of 500,000 barrels a day or as much as 1.5 million barrels a day.The Journal's Summer Said noted that the option to cut more than 1 million barrels a day is backed by Russia, the group’s biggest non-OPEC partner. But the cartel’s biggest exporter, Saudi Arabia, has some reservations on the size of the cut, the delegates said. This week's cut will come after OPEC+ agreed last month to reduce oil production for the first time in more than a year, saying it would cut about 100,000 barrels a day amid fears of a global recession. The move ended an 18-month era of production increases for OPEC+. The group slowly brought crude back onto the market after a sharp cut during the pandemic, when demand plunged.Brent crude soared above $125 a barrel following Russia’s invasion of Ukraine in February. It’s since dropped to $85 sparked by Biden's desperate drain of the US strategic petroleum reserve meant to avoid a crash for Democrats at the midterms, and tempering the spectacular windfall enjoyed by the Saudi Arabia, Russia, the United Arab Emirates and other members of the coalition.The 23-nation alliance is scheduled to meet on Wednesday at its headquarters in Vienna, OPEC’s secretariat said a statement on Saturday. The group has been meeting on-line on a monthly basis and wasn’t expected to arrange an in-person gathering until at least the end of this year.In recent weeks, banks such as JPMorgan said OPEC+ may need to lower output by least 500,000 barrels a day to stabilize prices. RBC's Helima Croft said the group may opt for a cut twice that large. It now appears that the final cut will be even bigger.

Oil rebounds 3% as OPEC+ weighs biggest output cut since 2020 -- Oil prices jumped more than 3% in early Asian trade on Monday, as OPEC+ considers cutting output by more than 1 million barrels a day for its biggest reduction since the pandemic, in a bid to support the market, Trend reports with reference to Reuters.Brent crude futures rebounded $2.51, or 3%, to $87.65 a barrel by 0206 GMT, after settling down 0.6% on Friday. U.S. West Texas Intermediate crude was also up 3%, or $2.39, at $81.88 a barrel, after the previous session's loss of 2.1%.Oil prices have tumbled for four straight months since June, as COVID-19 lockdowns in top energy consumer China hurt demand, while rising interest rates and a surging U.S. dollar weighed on global financial markets.To support prices, the Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, is considering an output cut of more than 1 million bpd ahead of Wednesday's meeting, OPEC+ sources told Reuters. If agreed, this will be the group's second consecutive monthly cut after reducing output by 100,000 bpd last month.However, OPEC+ missed its production targets by nearly 3 million bpd in July, two sources from the producer group said, as sanctions on some members and low investment by others stymied its ability to raise output."Anything less than 500,000 barrels a day would be shrugged off by the market. Therefore, we see a significant chance of a cut as large as 1 million barrels a day," ANZ analysts said in a note.While prompt Brent prices could strengthen further in the immediate short term, concerns over a global recession are likely to limit the upside, consultancy FGE said."If OPEC+ does decide to cut output in the near term, the resultant increase in OPEC+ spare capacity will likely put more downward pressure on long-dated prices," it said in a note on Friday.Also on Friday, China issued its biggest quota for exports of oil products this year and topped up crude import quotas for independent refiners.State and private refiners can export as much as 15 million tonnes of gasoline, diesel, jet fuel and low-sulphur fuel oil, adding much needed supplies into global markets to replace Russian exports the European Union embargoed in February. However, analysts and traders said some of China's exports were likely to spill over into early 2023 as refiners will need time to ramp up.

Oil Kicks off Q4 with Rally as Ukraine War Escalates, OPEC+ -- Oil futures settled the first session of October and the fourth quarter with sharp gains fueled by reports of a sudden escalation on the battlefields of Southern and Eastern Ukraine following a series of defeats for Russian forces, including the loss of a key city in the Donetsk region and recent setbacks in Kherson that Russian President Vladimir Putin illegally annexed less than 48 hours ago. Unverified media reports published Monday afternoon showed a freight train belonging to the 12th Directorate of the Russian Ministry of Defense, responsible for transportation of nuclear arsenal, was moving armored personnel carriers and other military equipment across Siberia towards the frontlines of Eastern Ukraine. Although reports have yet to be confirmed by either Moscow or Washington, the headlines of such maneuvers have lifted the geopolitical risk premium embedded in oil prices as the standoff between Russia and the West enters a new phase. On Friday, Putin illegally annexed four Ukrainian regions in the South and Eastern parts of the country, including Kherson, Zaporizhian, Donbass, and Luhansk. Ukrainian President Volodymyr Zelensky has vowed to retake the territories, while Western leaders have said they would never recognize Russia's annexation, calling the late September referendums a sham. These developments follow another flare-up in a proxy conflict between Russia and the European Union after Gazprom suspended natural gas deliveries to Italy over the weekend, claiming it failed to receive authorization for pipeline flows through Austria. For their part, Austrian authorities said Gazprom had not signed up to changes in supply contracts required by regulatory adjustments that are made every year, and which Gazprom had known about for months. Gazprom, Austria's government, and Italian energy company Eni SpA said they were working to find a solution. EU countries have imposed sweeping financial and trade restrictions on Russia that will get tougher later this year with the introduction of an embargo on Russian seaborne oil exports scheduled to take effect on Dec. 5. Separately, Organization of the Petroleum Exporting Countries and allied producers are reportedly considering a sizable production cut of more than 1 million bpd when the group meets Wednesday. If agreed upon, this would be the largest reduction to OPEC+ output since April 2020 when the group slashed collective production by 9.7 million bpd to offset demand destruction brought by the global pandemic. Russia, the group's second-largest producer, has reportedly lobbied for the larger cut as it struggles to expand its export markets under the weight of international sanctions and needs higher prices to capitalize on existing sales. Saudi Arabia, OPEC's de-facto leader, voiced similar concerns following the recent selloff in oil futures, with the international crude benchmark Brent contract losing more than 20% of value during the third quarter. Analysts, however, caution that OPEC+ is currently missing its output target by 3.5 million bpd due to tight spare capacity and poor infrastructure, meaning a 1 million bpd reduction would likely translate into only a 400,000-bpd decline in actual oil output. At settlement, November West Texas Intermediate futures spiked more than $4 to $83.63 bbl, and ICE December Brent futures rallied to $88.86 bbl, up $3.72. NYMEX November RBOB futures advanced 14.31 cents to $2.5129 gallon, with the front-month ULSD futures surging 14.75 cents to $3.3691 gallon.

Oil prices rise in international market - Pakistan Observer --Oil prices witnessed an increase in the international market just a day after news that quoted OPEC sources saying that OPEC+ would consider an oil output cut of more than a million barrels per day (bpd) next week. At around 05:40 GMT, Brent crude futures rose 41 cents, or 0.46%, to $89.27 per barrel after gaining more than 4% in the previous session. Similarly, the US WTI crude futures rose by 21 cents, or 0.25%, to $83.84 per barrel. The benchmark gained more than 5% in the previous session, which was its largest daily gain since May. Oil prices rallied on Monday on renewed concerns about supply tightness. Investors expect the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, will cut output by more than 1 million barrels per day (bpd) at their first in-person meeting since 2020 on Wednesday.The meeting will take place on October 5 against the backdrop of falling oil prices and months of severe market volatility, which prompted top OPEC+ producer Saudi Arabia to say the group could cut production.Voluntary cuts by individual members could come on top of this, making it their largest cut since the start of the COVID-19 pandemic, OPEC sources said.OPEC+, which combines OPEC countries and allies such as Russia, has refused to raise output to lower oil prices despite pressure from major consumers, including the United States, to help the global economy.Prices have nevertheless fallen sharply in the last month due to fears about the global economy and a rally in the US dollar after the Federal Reserves raised rates.A significant production cut is poised to anger the United States, which has been putting pressure on Saudi Arabia to continue pumping more to help oil prices soften further and reduce revenues for Russia as the West seeks to punish Moscow for sending troops to Ukraine.The West accuses Russia of invading Ukraine, but the Kremlin calls it a special military operation.Saudi Arabia has not condemned Moscow’s actions amid difficult relations with the administration of US President Joe Biden.

Oil Holds Surge as OPEC+ Mulls Biggest Supply Cut Since 2020 - - Oil held a two-day surge before an OPEC+ meeting at which the alliance is considering the biggest supply cut since 2020 to revive prices. West Texas Intermediate futures traded near $86 a barrel after jumping almost 9% over the previous two sessions. The producer group is set to discuss reducing output by as much as 2 million barrels a day, delegates said before the group meets in Vienna later Wednesday. That’s double the volume previously flagged. A cut of that magnitude would reflect the scale of concern from the alliance about the outlook for energy demand in the face of rapidly tightening monetary policy. The US benchmark recently capped its first quarterly loss in two years after giving up all the gains made following Russia’s invasion of Ukraine. There are some conflicting signals however — as the group meets, markets for refined products are surging. Diesel in Europe is in its biggest backwardation since July, indicating tight supply, while gasoline and heating oil in the US have also jumped. “These are unusual times and this is going to be an unusual cut, this is a signaling cut,” “The message is: look market we will hold the downside of this price, we will fix this disconnect between paper prices and fundamentals.” Saudi Arabia may also announce an extra voluntary cut in its own oil output, potentially augmenting a group-wide agreement to curb supply, RBC Capital Markets said in a note. Riyadh has made additional production moves on several occasions since December 2016. WTI for November delivery dipped 0.5% to $86.11 a barrel at 10:01 a.m. in London. Brent for December settlement lost 0.4% to $91.45 a barrel. The Organization of Petroleum Exporting Countries and its allies may also discuss a slightly smaller cut of 1.5 million barrels a day, said delegates. Even a reduction of that size is likely to draw criticism from the US and other major oil-consuming nations, which have been battling energy-driven inflation. “I think we’re setting up for a buy-the-rumor, sell-the-fact situation,” Carley Garner, the founder of DeCarley Trading LLC, said in a Bloomberg TV interview. OPEC+ are “not meeting their quotas as it is already,” she said. Complicating the supply outlook is a proposed price cap on Russian oil, which a US official said could be announced within weeks. The European Union backed a new package of sanctions that includes support for a price cap on oil sales, people familiar with the matter said.

Brent Tops $91 After OPEC+ Signals Larger Output Cut -- Oil futures advanced more than 3% Tuesday in reaction to reports indicating the Organization of the Petroleum Exporting Countries and allied partners will announce a production cut of 2 million barrels per day (bpd) for the month of November to backstop a slide in oil prices.Moreover, Saudi Arabia and Gulf partners are likely to shoulder a large chunk of the cut from current production as opposed to nominal targets by OPEC+ members that have underproduced quotas. An actual reduction in production of 2 million bpd could only be realized by the Saudis, United Arab Emirates, Kuwait, and possibly Iraq that still have wiggle room to shut-in a sizable volume of output without losing export markets or affecting oil infrastructure.Russia, OPEC+'s second largest producer, has voiced support for a large output cut as it struggles to expand its export market under international sanctions and attempts to increase the revenues from existing sales. If agreed upon, this would be the bullish surprise to the market and the largest reduction to OPEC+ output since April 2020 when the group slashed collective production by 9.7 million bpd to offset demand destruction brought by the global pandemic. Earlier in the session, oil futures advanced on comments by Saudi Aramco Chief Executive Amin Nasser who stressed limited spare capacity held by OPEC+ producers. Nasser estimated global spare capacity stands at just 1.5% of current oil production, which in his view would be tapped the moment Beijing moves past its zero-COVID policy that has constrained China's economy. Saudi officials have said on multiple occasions the industry needs higher oil prices to incentivize new production amid the current transition towards green energy. Saudi's current oil output stands at 10.904 million bpd, according to OPEC's Oil Monthly Market Report, far below a record 12.3 million bpd the kingdom briefly reached in April 2020. Nasser furthered that Saudi Arabia won't reach its goal of 13 million bpd production capacity until at least 2027.At settlement, WTI October futures traded on the New York Mercantile Exchange advanced $2.89 barrel (bbl) to $86.52 bbl, and International Brent futures for December delivery on the Intercontinental Exchange settled at $91.80 bbl, up by $2.94 bbl on a session. NYMEX November RBOB futures spiked 17.01 cents to $2.6830 gallon, with the front-month ULSD futures adding 16.67 cents for $3.5358 a gallon settlement.

Oil Prices Rise As API Reports Surprise Crude, Gasoline Draws - The American Petroleum Institute (API) reported a surprise draw this week for crude oil of 1.770 million barrels, while analysts predicted a build of 333,000 barrels. U.S. crude inventories have grown by roughly 21 million barrels so far this year, according to API data, while the U.S. Strategic Petroleum Reserves fell by nearly eight times that figure. The draw comes even as the Department of Energy released 6.2 million barrels from the Strategic Petroleum Reserves in the week ending September 30 that left the SPR with 416.4 million barrels.In the week prior, the API reported a build in crude oil inventories of 4.150 million barrels after analysts had predicted a small build of 333,000 barrels.WTI rose on Tuesday prior to the data release. At 2:28 p.m. ET, WTI was trading up $3.15 (+3.77%) on the day at $86.78 per barrel—up nearly $9 per barrel on the week (after a $7 per barrel slide in the week prior). Brent crude was trading up $3.13 (+3.52%) on the day at $91.99—a more than $6 increase on the week that more than erased the previous week’s $5 decrease. Crude oil prices continued to rise throughout the afternoon, with a flurry of OPEC+ chatter detailing just how much crude oil production the group could decide to cut for December. The most recent report figure suggests the group could be contemplating a cut up to 2 million bpd.U.S. crude oil production data continues to be a concern, if not for U.S. drivers who would be unlikely to see much immediate relief from increased oil production, then certainly from the Biden Administration, who has spearheaded the SPR releases to bring down gasoline prices ahead of midterm elections. For the week ending September 23, U.S. crude oil production slipped to 12.0 million bpd, according to the latest weekly EIA data. This is just a 300,000 bpd rise from the levels seen at the start of the year, and still a 1.1 million bpd shortfall seen at the start of the pandemic.The API also reported a draw in gasoline inventories this week, of 3.474 million barrels for the week ending September 30, adding onto the previous week's 1.048 million-barrel draw. Distillate stocks rounded out the week’s draws with a loss of 4.046 million barrels compared to last week's 438,000-barrel increase. Cushing inventories were up by 925,000 barrels in the week to September 30. In the week prior, the API saw a Cushing increase of 357,000 barrels. Official EIA Cushing inventory for the week ending September 23 was 25.683 million barrels, up from 24.991 million barrels in the prior week.

OPEC+ Agrees on 2 Million-Barrel-a-Day Cut to Output Limit - OPEC+ agreed to cut its collective output limit by 2 million barrels day as it seeks to halt a slide in oil prices caused by the weakening global economy.It’s the biggest reduction by the Organization of Petroleum Exporting Countries and its allies since 2020, but will have a smaller impact on global supply than the headline number suggests. Several member countries are already pumping well below their quotas, meaning they would already be in compliance with their new limits without having to reduce production. Even so, the cartel’s decision risks adding another shock to a global economy that is already battling inflation driven by high energy costs. The move would also irk the US — and potentially trigger a response from Washington. President Joe Biden visited Saudi Arabia earlier this year in search of higher production and lower pump prices for Americans ahead of midterm elections in November. The cut of 2 million barrels a day will be measured against the same baseline as the previous OPEC+ agreements, Amir Hossein Zamaninia, OPEC governor for Iran, told reporters in Vienna after the meeting. Shared pro rata between members, that would require just eight countries to curb actual production and deliver a real reduction of about 880,000 barrels a day, according to Bloomberg calculations based on September output figures. Oil prices were little changed near $92 a barrel in London. Earlier on Wednesday, US officials were making calls to counterparts in the Gulf trying to push back against the move to cut production, according to people familiar with the situation. Already, the White House had asked the US Energy Department to analyze whether a ban on exports of gasoline, diesel and other refined petroleum products would lower prices, Bloomberg reported on Tuesday. It’s a controversial idea but one that’s gaining traction in some corners of the Biden administration. In Vienna, there was little sign before the meeting that the US pressure was working. United Arab Emirates Energy Minister Suhail Al Mazrouei insisted the decision was “technical.” “It’s very important that it remains as a technical decision and it’s not political,” he told reporters. “That’s why it’s important to look at technical side of the equation and look at any concerns regarding the economy and the status of the economy.”

OPEC+ Tries to Keep Oil Above $90 With Large Cut -- OPEC+ agreed to cut its collective output limit by 2 million barrels day, stoking tensions with the US as the cartel seeks to halt a slide in oil prices caused by the weakening global economy. It’s the biggest reduction by the Organization of Petroleum Exporting Countries and its allies since 2020, but will have a smaller impact on global supply than the headline number suggests. Several member countries are already pumping well below their quotas, meaning they would already be in compliance with their new limits without having to reduce production. Even so, the decision risks adding another shock to a global economy that is already battling inflation driven by high energy costs. The cartel extended its cooperation agreement until the end of 2023, and the new production limits agreed on Wednesday will remain in place until then unless the market changes, said a delegate. “OPEC wants prices around $90,” Nigerian Minister of State for Petroleum Resources Timipre Sylva said after the meeting. Many member countries have based their 2023 budgets on that price and “it would destabilize some economies” if that weren’t to happen, he said. The move irked the US, with President Joe Biden saying he was concerned by the “unnecessary” cut, according to CNN. He visited Saudi Arabia earlier this year in search of higher production and lower pump prices for Americans ahead of midterm elections in November. The cut of 2 million barrels a day will be measured against the same baseline as the previous OPEC+ agreements, Amir Hossein Zamaninia, OPEC governor for Iran, told reporters in Vienna after the meeting. Shared pro rata between members, that would require just eight countries to curb actual production and deliver a real reduction of about 900,000 barrels a day, according to Bloomberg calculations based on September output figures. Oil rose as much as 2.2% to $93.80 a barrel in London, the highest in three weeks. Earlier on Wednesday, US officials were making calls to counterparts in the Gulf trying to push back against the move to cut production, according to people familiar with the situation. Already, the White House had asked the US Energy Department to analyze whether a ban on exports of gasoline, diesel and other refined petroleum products would lower prices, Bloomberg reported on Tuesday. It’s a controversial idea but one that’s gaining traction in some corners of the Biden administration. In Vienna, there was little sign before the meeting that the US pressure was working. United Arab Emirates Energy Minister Suhail Al Mazrouei insisted the decision was “technical.” “It’s very important that it remains as a technical decision and it’s not political,” he told reporters. “That’s why it’s important to look at technical side of the equation and look at any concerns regarding the economy and the status of the economy.” OPEC+ will no longer hold monthly meetings, Zamaninia said. The group’s Joint Ministerial Monitoring Committee, which oversees implementation of production cuts, will meet every two months, he said.

Oil Rallies As OPEC+ Agrees Historic 2 Million B/D Production Cut, Shuns Biden - As was well-telegraphed - and despite The White House's sabre-rattling - OPEC+ JMMC has recommended the cartel to go ahead with a historic 2 million b/d production cut.One delegate has confirmed this cut is from baseline levels. This means the production cut is less than 2 million b/d directly since current actual production levels are already below quota. However, it is still a sizable cut.As ArgusMedia reports, the extent to which any cut to November quotas will reduce actual supply will depend on how OPEC+ members fare in meeting their targets this month and how the cut is distributed.The group as a whole fell 3.58mn b/d below its collective ceiling in August, according to an average of secondary source estimates.If agreed by ministers at their meeting in Vienna today, it will mark the biggest cut since the group reduced its collective quota by 9.7mn b/d during the early stages of the Covid crisis in 2020. WTI is extending gains on the news, rallying back above $87 at 7-week highs...This is not good news for the American consumer as gas prices are about to start accelerating again... And that is not good news for President Biden's approval rating... We await The White House statement 'mulling' a reaction to this clear dissent of the unipolar order. As we have detailed recently, this is a direct message to The Fed and The White House... Food for thought...OPEC can cut more/longer than Biden administration can release from SPR. This OPEC meeting a wakeup call for US politicians that energy inflation is going to be STICKY.

Oil Surges on Unexpected Crude Draw, Gasoline Demand Jumps - -- Oil futures advanced more than 2% in late-morning trade Wednesday after inventory data from the Energy Information Administration showed total crude oil and fuel inventories in the United States declined for a second straight week through Sept. 30, while demand for gasoline surged, topping 9 million barrels per day (bpd) for the first time since early August. Commercial crude oil stockpiles fell 1.4 million barrels (bbl) to 429.2 million bbl last week, counter to expectations for a 1.3 million bbl build, and despite a 6.2 million bbl drawdown from the Strategic Petroleum Reserve. The draw pressed inventory to a four-week low while 13.1 million bbl or 3% below the five-year average. The crude draw was realized as the U.S. refinery run rate rose 0.7% to 91.3% of capacity against expectations for a 0.4% decline in utilization, with refiners processing 210,000 bpd or 1.3% more crude oil during the final week of September compared with the previous week. Crude exports remained strong too at 4.551 million bpd, the third highest weekly export rate in 2022. During the second week of August, U.S. crude exports reached 5 million bpd, with crude exports at 4.646 million bpd during the week-ended Sept. 23. The U.S. crude net import rate, which subtracts crude exports from crude imports, fell to the second lowest weekly rate in 2022 at 1.4 million bpd. Data for gasoline was also bullish, with EIA reporting a 640,000-bpd jump in implied demand for the final week of September to 9.465 million bpd -- the highest weekly consumption rate for the transportation fuel in 2022. While gasoline demand typically trends lower in September, inventory movement from Gulf Coast refiners to southeastern states ahead of Hurricane Ian might have boosted the implied demand reading, which measures the barrels delivered to the U.S. market. PADD 3 Gulf Coast gasoline stocks were drawn down 3.8 million bbl during the week reviewed to 78.6 million bbl, an 18-month low. Gasoline stockpiles fell 4.7 million bbl to 207.5 million bbl last week, pressing gasoline inventory to the lowest point since November 2014. A 3.4 million bbl draw in distillate stocks was also bullish, with the decline more than expectations for a 1.4 million bbl draw, pressing inventory to a 110.916 nine-week low and 28.3 million bbl or 20.3% below the five-year average. Bullish EIA data joined by OPEC+ agreeing to a 2 million bpd production cut beginning in November pushed crude futures prices to three-week highs and refined products futures to five-week highs late morning. Shortly after the noon hour in Washington, a statement from the White House expressing disappointment with the OPEC+ decision pressed oil futures off their highs and sent the front month gasoline contract lower. NYMEX November West Texas Intermediate were trading near $87.50 bbl, easing from an $88.42 high, and ICE December Brent was over $93 bbl after trading just shy of $94 bbl. NYMEX November ULSD futures were nearly 15 cents higher near $3.6820 gallon after trading as high as $3.7174 gallon, and November RBOB futures were slightly lower near $2.68 gallon after rallying to a $2.70 high.

Oil rises to 3-week highs as OPEC+ agrees to deep cuts, U.S. stockpiles fall | Euronews - Oil prices rose on Wednesday to three-week highs, as OPEC+ agreed to its deepest cuts to production since the 2020 COVID pandemic, despite a tight market and opposition to cuts from the United States and others. Prices also rose on U.S. government data that showed crude and fuel inventories fell last week. [EIA/S] Brent crude rose $1.57, or 1.7%, to settle at $93.37 a barrel. Brent reached a session high of $93.96 per barrel, its highest since Sept. 15. U.S. West Texas Intermediate (WTI) crude rose $1.24, or 1.4%, to settle at $87.76 a barrel. It reached $88.42 per barrel during the session, the highest since Sept. 15. Both Brent and WTI rose sharply in the last two days. The 2 million-barrel-per-day (bpd) cut from OPEC+ could spur a recovery in oil prices that have dropped to about $90 from $120 three months ago on fears of a global economic recession, rising U.S. interest rates and a stronger dollar. Oil had been rising this week in anticipation of the cuts. “The real impact of a large cut would be smaller, given that some of the members are failing to reach their output quotas,” Cincotta added. In August, OPEC+ missed its production target by 3.58 million bpd as several countries were already pumping well below their existing quotas. “We believe new output targets will mostly be shouldered by core Middle East countries, led by Saudi Arabia, the UAE and Kuwait,” said Rystad Energy’s analyst Jorge Leon. Meanwhile, Russian Deputy Prime Minister Alexander Novak said on Wednesday that Russia may cut oil production in order to offset negative effects from price caps imposed by the West over Moscow’s actions in Ukraine. The United States was pressing OPEC+ producers to avoid making deep cuts, a source familiar with the matter told Reuters, as President Joe Biden looks to prevent a rise in U.S. gasoline prices ahead of midterm congressional elections on Nov. 8. Biden has been grappling with higher gasoline prices all year, which have eased after a spike, something his administration has touted as a major accomplishment. In U.S. supply, crude stocks, gasoline and distillate inventories fell last week, the Energy Information Administration said. Crude inventories posted a surprise draw of 1.4 million barrels to 429.2 million barrels. [EIA/S] U.S. gasoline stocks fell more-than-expected by 4.7 million barrels, while distillate stockpiles, which include diesel and heating oil, also posted a larger-than-expected draw, falling by 3.4 million barrels. “We’re definitely seeing supplies of gasoline and diesel fall pretty dramatically,”“The mantra we’ve been seeing in recent weeks is the economy is slowing and oil prices were down because of peak demand, but these numbers seem to be holding up a lot better than people would think.”

Oil prices mixed over supply uncertainties -- Oil prices mixed on Thursday over supply uncertainties after OPEC+ producers decision to cut daily oil production by 2 million barrels. International benchmark Brent crude traded at $93.22 per barrel at 10.01 a.m. local time (0701 GMT) for a 0.16% drop from the closing price of $93.37 a barrel in the previous trading session. American benchmark West Texas Intermediate (WTI), trading at $87.52 per barrel at the same time, decreased 0.27% after the previous session closed at $87.76 a barrel. The group of Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, agreed Wednesday to cut production by 2 million barrels per day (bpd) starting November. The group pointed to the uncertainty that surrounds the global economic and oil market outlook, and noted 'the need to enhance the long-term guidance for the oil market.' Following the group's decision the US officials said on Wednesday that US President Joe Biden 'is disappointed' by OPEC+'s decision to cut oil production. The decision will have the most negative effect on lower- and middle-income countries that are reeling from elevated energy prices, according to a statement by National Security adviser Jake Sullivan and top economic adviser Brian Deese. 'At the President’s direction, the Department of Energy will deliver another 10 million barrels from the Strategic Petroleum Reserve to the market next month, continuing the historic releases the President ordered in March,' said the statement. Moreover, EU countries on Wednesday reached an agreement on the eighth sanctions package against Russia. The measures include a prohibition of transporting oil to non-EU countries above a certain price, mostly affecting the shipping industry of Greece, the Greek Cypriot administration, and Malta. The Energy Information Administration (EIA) on Wednesday showed that US commercial crude oil inventories decreased by 1.4 million barrels during the week ending Sept. 30 against the market expectation of a drop of around 1.77 million barrels. Strategic petroleum reserves, excluded in commercial crude stocks, also fell by 6.2 million barrels, while gasoline inventories decreased by 4.7 million barrels over the same period.

Oil prices settle up 1% on cuts to OPEC+ production targets - Oil prices rose about 1% Thursday, holding at three-week highs after OPEC+ agreed to tighten global supply with a deal to cut production targets by 2 million barrels per day (bpd), the largest reduction since 2020. Brent crude futures settled at $94.42 barrels, up $1.05, or 1.1%. U.S. West Texas Intermediate (WTI) crude futures settled at $88.45 barrels, gaining 69 cents, or 0.8% after closing 1.4% up on Wednesday. The agreement between the Organization of Petroleum Exporting Countries (OPEC) and allies including Russia, a group known collectively as OPEC+, comes ahead of a European Union embargo on Russian oil and would squeeze supplies in an already tight market, adding to inflation. "We believe that the price impact of the announced measures will be significant," said Jorge Leon, senior vice president at Rystad Energy. "By December this year Brent would reach over $100/bbl, up from our earlier call for $89." Saudi Energy Minister Abdulaziz bin Salman said the real supply cut would be about 1 million to 1.1 million bpd. Saudi Arabia's share of the cut is about 0.5 million bpd. Several OPEC+ members have been struggling to produce at quota levels because of underinvestement and sanctions. "The countries that were underproducing are not going to cut production," "Maybe Saudi Arabia, the UAE, Kuwait, and Kazakhstan may cut production to new quota, but I doubt anybody else will." The output cut comes as the U.S. Federal Reserve and other central banks are raising interest rates to fight inflation. Higher oil prices will likely cut demand, which could cap price gains, s "That's what's cutting back the other way and why prices have stabilized for WTI just under $90," U.S. President Joe Biden expressed disappointment over OPEC+ plans and said the United States was looking at ways to keep prices from rising. "There's a lot of alternatives. We haven't made up our minds yet," Biden told reporters at the White House. Earlier, the White House said Biden would continue to assess whether to release more supplies from the Strategic Petroleum Reserve and would consult Congress on other ways to reduce market control of OPEC and its allies. Also supporting prices, U.S. crude inventories dropped by 1.4 million barrels to 429.2 million barrels in the week ended Sept. 30, the Energy Information Administration said.

Oil Prices Rose on Thursday, Holding at Three-Week Highs - Oil prices rose on Thursday, holding at three-week highs after OPEC+ agreed to tighten global crude supply with a deal to cut production targets by 2 million barrels per day, the largest reduction since 2020. The agreement between the Organization of Petroleum Exporting Countries and allies including Russia, a group known collectively as OPEC+, comes ahead of a European Union embargo on Russian oil and would squeeze supplies in an already tight market, adding to inflation. The output cut comes at the same time the U.S. Federal Reserve and other central banks are raising interest rates in an attempt to curb inflation. Higher oil prices will likely cause further demand destruction, which was keeping prices from moving higher, November WTI delivery gained 69 cents per barrel, or 0.79% to $88.45, Brent for December delivery gained $1.05 per barrel, or 1.12% to $94.42. Gasoline for November delivery gained 1.29 cents per gallon, or 0.48% to $2.681, ULSD for November delivery gained 17.80 cents per gallon, or 4.83% to $3.8649 Global oil supply is set to tighten, intensifying concerns over increasing inflation after the OPEC+ group of nations announced a 2 million bpd output cut, its largest supply cut since 2020. Saudi Energy Minister Abdulaziz bin Salman said the real supply cut would be about 1 million to 1.1 million bpd, a response to rising global interest rates and a weakening world economy. The OPEC+ cuts compound supply concerns as European Union sanctions on Russian crude and oil products take effect in December and February, respectively, prompting Morgan Stanley to raise oil price forecasts. Morgan Stanley raised its oil price forecast for the first quarter of 2023, and predicted tight supply going forward. The bank said "We now see the oil market in a 900,000 bpd deficit in 2023, up from 200,000 bpd before. Those forecasts assume that Russia's oil production will fall by 1-1.5 million bpd after the EU oil import embargo comes into force." Morgan Stanley raised its first-quarter 2023 Brent price forecast to $100/barrel from $95/barrel, noting: "Brent will find its way to $100/barrel quicker than we estimated before." Meanwhile, Citi Research said the final market impact of OPEC+ decision to cut oil production would depend on the agreement duration, and expects major consumers to "react with displeasure" to the deal. Meanwhile, Goldman Sachs has raised its oil price forecast for this year and 2023, as the U.S. bank expects the 2 million bpd output cut agreed by OPEC+ producers to be "very bullish" for prices going forward. Goldman Sachs raised its 2022 Brent price forecast to $104/barrel from $99/barrel and 2023 forecast to $110/barrel from $108/barrel. The U.S. bank also raised its fourth quarter 2022 and first-quarter 2023 Brent price forecast by $10/barrel to $110 and $115/barrel, respectively. U.S. President, Joe Biden, said he was surveying his options after OPEC+ nations announced plans to cut oil output, a decision he said was disappointing. He said the U.S. was looking at all possible alternatives to keep prices from rising.

Oil prices have surged 13% in 5 days for their biggest weekly gain since March - and OPEC's production cuts set them up to stay higher for longer, Barclays says - Oil prices on Friday were on course to log their biggest weekly gain in seven months, and the agreement reached this week by OPEC+ members to slash output should cultivate further energy price advances, Barclays said.During Friday's session, West Texas Intermediate crude futures rose 1.1% to $89.39 per barrel. Brent oil, the international benchmark, bulked up 1% at $95.36.WTI was on track to notch a five-day winning streak and record its largest weekly increase since March with prices up nearly 13%. Brent futures were also stretching gains into a fifth session and were looking at a weekly rise of more than 8%.Oil began stepping higher in anticipation that the 23 members of OPEC+ would decide to cut oil production at its meeting in Vienna on Wednesday in an effort to halt a pullback in prices. The group decided to reduce its output quota by 2 million barrels a day starting in November, the largest cut since the COVID-19 outbreak began spreading worldwide in 2020."Western disappointment at the 2m bbl/d cuts announced this week is understandable given it directly complicates the inflation issue. Lower supply will likely broadly offset lower demand as the economy cools, thus keeping prices high and pushing out a fall in inflation," Barclays' European equities strategy team led by Emmanuel Cau said in a note Friday."It does help our Energy [overweight] recommendation however, given higher for longer energy prices will continue to fuel earnings and cash flows at the energy names."In the US market, the S&P 500 Energy Sector has risen about 50% on a year-to-date basis, the only sector on the S&P 500 that's higher for the year."We reiterate Energy's unique ability to hedge portfolios against inflation and geopolitics, even as its fundamentals remain healthy. A clear risk to this view would be a significant reduction in Russia-Ukraine hostilities and reopening of energy links," Barclays said. Oil prices earlier this year shot up to the $130-a-barrel range in the wake of Russia's invasion of Ukraine in February. But prices have since been weighed down by demand concerns as central banks fighting inflation have raised borrowing rates to slow economic activity.

Brent Tops $98 as OPEC Cuts Fuel Concern Over Tight Supply-- Oil futures extended their rally into a fifth consecutive session Friday, with both benchmarks finishing the first week of October 5% higher. The gains were underpinned by a two-fold supply risk in Russia after Moscow threatened to cut all oil exports to any country that participates in a G-7 initiative to cap the price of Russian energy sales, and steep production cuts from the OPEC+ that defied calls from the Biden administration to ease pressure on the tight global oil market. Oil futures only briefly pared gains earlier in the session on the back of a strengthening U.S. dollar following the September employment report that solidified the case for a 75-basis-point rate hike at the Federal Reserve meeting next month. The U.S. economy added 263,000 new jobs last month -- broadly in line with market's expectations, but the overall unemployment rate surprisingly fell back to pre-pandemic February 2020 low of 3.5%. The decline in the jobless rate last month came as labor force participation fell slightly to 62.3% -- a sign of ample demand for workers even amid growing fears of recession. Even as the labor market shows some signs of cooling, it is yet to reflect the broader slowdown in other sectors of the economy. Underpinning gains in the oil complex are ongoing uncertainty surrounding the G-7 plan to cap the price of Russian oil exports that is expected to be finalized sometime before the E.U. embargo goes into full effect on Dec. 5. The potential complexity of the U.S.-led measure and lack of clarity over how it will be implemented risks pushing more Russian oil off the market than most experts currently expect, according to the world's biggest independent oil trader, Vitol. The idea behind the price cap is that it should be applied as globally as possible to restrict the Kremlin's revenues. Theoretically, the measure will also affect all exports of Russian oil to large Asian buyers, including China and India. According to the European Commission, the exact price floor has yet to be determined. However, preliminary estimates suggest that the price should be above the breakeven level for the Russian producers but considerably below the current market rate and closer to what Russia was getting paid before invading Ukraine. Following the announcement, Russian Deputy Prime Minister Alexander Novak said moves to cap the price of his country's oil will backfire and could lead to a temporary reduction in its oil output. Additionally, OPEC+ this week agreed to cut its collective oil production by 2 million barrels per day (bpd) for the month of November -- the largest output reduction since April 2020 when producers were forced to slam the breaks on output in light of collapsing demand. Most of the announced 2 million bpd production cut would fall on the shoulders of five OPEC+ producers, led by Saudi Arabia and Russia, that would equally reduce crude output by 526,000 bpd. Iraq agreed to cut output by 220,000 bpd, the United Arab Emirates by 160,000 bpd, and Kuwait by 135,000 bpd. It is notable that OPEC+ members have been producing far below their official target levels for months now. In August, OPEC+ underproduced against their quota by 3.4 million bpd, meaning the volume that would be removed from the market in November would be smaller than 2 million bpd. Still, even a cut in the ballpark of 700,000 to 1 million bpd could considerably tighten the physical oil market. At settlement, November WTI futures advanced $4.19 to $92.64 per barrel (bbl), and ICE Brent futures for December delivery rallied to $97.92 per bbl, up by $3.50 in afternoon trading. NYMEX November RBOB futures added 5.32 cents to $2.7346 per gallon, and front-month ULSD futures surged 15.38 cents to $4.0187 per gallon.

Oil up a 5th session, with U.S. prices gaining nearly 17% for the week after OPEC+ production cuts - Natural-gas futures end lower, down for a 7th straight week. Oil futures climbed Friday for a fifth session in a row, with U.S. prices up nearly 17% for the week after the recent decision by major oil producers to cut output. Brent and WTI both saw strong weekly gains after the OPEC+ -- made up of the Organization of the Petroleum Exporting Countries and their Russia-led allies -- agreed on Wednesday to cut its output target by 2 million barrels a day starting in November. "For several weeks, fears about a weakening global economy had been weighing on oil prices," Colin Cieszynski, chief market strategist at SIA Wealth Management, told MarketWatch. "This week, however, sentiment changed after OPEC+ showed the world that it is prepared to cut supply to defend the price in the face of political and central bank opposition from the U.S. and other countries." Daily output is, in reality, likely to "decline by only 1 million barrels because many countries are already producing well below quota," said analysts at Commerzbank, in a Friday note. However, "this would still be enough to prevent the surplus that has been predicted for the final quarter of this year." The European Union's embargo on Russian oil purchases and the possible implementation of a price cap on Russian oil are coming ever closer, which could prompt Russia to further cut its production, while no significant expansion of non-OPEC supply is in sight, either, the analysts wrote. "Against this backdrop, a whole series of bad economic news would probably be needed to put any substantial pressure on prices again," they said. Crude fell sharply last month, with WTI and Brent testing eight-month lows as investors reacted to fears aggressive tightening by global central banks would send the economy into a sharp downturn. Looking back at the price range before COVID and the Russia-Ukraine conflict, the "current levels seem pretty sustainable given the macro picture," said Daniela Hathorn, market analyst at Capital.com, in emailed commentary. "In fact, we have seen the Biden administration hint at possible further releases of its Strategic Petroleum Reserve stockpiles to further stabilise prices." This further tightening of supply has "helped oil prices break away from the recent downtrend, but the longer-term trend is likely going to continue to be determined by demand concerns," she said.

Saudi budget forecasts for 2023 lowballs oil price -- Saudi Arabia's preliminary budget statement for 2023 released last week shows its projected oil revenues are based on a conservative price for Brent oil, analysts said. According to Al Rajhi Capital, oil revenues for the kingdom in 2023 could reach SAR 754 billion “Based on our assessment, the government’s 2023 budgeted revenues are likely based on an assumption of Brent at around $76 a barrel,” said Mazen Al Sudairi, head of research at the brokerage. According to Emirates NBD, the Saudi finance ministry "has likely based projected revenues on a conservative oil price assumption of around $80/barrel, which is much lower than our forecast of an average of $105/barrel in 2023." On Monday, Brent crude futures rebounded $2.51, or 3%, to $87.65 a barrel from Friday, as OPEC+ is reported to be considering an output cut by more than 1 million barrels a day in a bid to support the market. The median price forecast for Brent in 2023 is $94, according to a Reuters poll. Meanwhile, the Saudi government preliminary budget estimates expects total revenues to reach SAR 1.12 trillion, 17% higher than the previously announced of SAR 968 billion. Expenditure in 2023 is estimated at SAR 1.11 trillion, 18% higher than the earlier announcement. The Saudi government now expects a budget surplus of SAR 9 billion for 2023, lower than the SAR 27 billion estimated earlier. Emirates NBD had forecast SAR 330 billion surplus. The government has forecast GDP growth of 3.1% in 2023; which is "slightly lower than our 3.5% forecast," the lender said.

Work on decaying FSO Safer expected to begin in next few weeks - — The salvage of the aging supertanker FSO Safer, off the Yemen coast, can now begin, the UN said in late September, after it announced that more than $75 million has been pledged to carry out the operation. "Moored off Yemen’s Red Sea coast, the FSO Safer is an aging supertanker in advanced state of decay that will soon break apart or explode if the world does not act," the UN website states on its "Stop Red Sea Spill" campaign page. The vessel's structure has been left exposed to humidity and corrosion with little or no maintenance since Yemen's civil war started in 2015. And in the last few years various companies, countries, media agencies and environmental groups have called the tanker a "ticking time bomb," "massive floating bomb" and a "deadly ghost ship." The UN's plan to prevent this potential oil spill (by transferring the oil to a safe vessel) was previously delayed because of insufficient funding. The UN began asking for contributions from members of the public in June, and the UN crowdfunding campaign raised the $75 million required for the emergency operation. In late September, UN and Dutch officials reported that, "Dutch company Smit Salvage is expected to start work within weeks to lift 1.14 MMbbl of oil from the decaying ship. The Boskalis-owned salvage company has been lined up to stabilize the 407,000-dwt FSO Safer in a four-month operation to prepare for the oil to be removed." More recently, according to the Oct. 3 Maritime Security Threat Advisory report, work on the decaying FSO Safer is expected to begin in the next few weeks. Once the pledges are fully converted into cash for the initial salvage operation, with more than $77 million promised from 17 countries, another $30 million to $38 million is still needed for Phase 2, which will cover the installation of safe replacement capacity to secure the 1 MMbbl of oil on board. The UN plan is for this to be done through transferring the oil to a secure double-hulled vessel, as a permanent storage solution, until the political situation allows it to be sold or transported elsewhere. The UN campaign website says," The FSO Safer vessel is holding four times the amount of oil spilled by the Exxon Valdez—enough to make it the fifth largest oil spill from a tanker in history. If we do not act now, the result will be an environmental and humanitarian catastrophe centered on the coast of a country already devasted by seven years of war. A massive spill from the Safer would destroy pristine reefs, coastal mangroves and other sea life across the Red Sea, expose millions of people to highly polluted air, and cut off food, fuel and other life-saving supplies to Yemen, where 17 million people already need food aid.

Houthis Warn Oil Firms To Leave Saudi Arabia And The UAE -Yemen's Houthis have warned oil companies operating in Saudi Arabia and the United Arab Emirates (UAE) to pack up and leave as the warring sides in the Yemeni conflict failed to reach an agreement to extend the six-month truce.Fighting in Yemen has been ongoing for over seven years now after the Iran-affiliated Houthis overturned the elected president, which prompted Saudi Arabia to wage war on the rebel group. In response, the Houthis have made Saudi Arabia's oil facilities their preferred target of attacks.Yemen's Armed Forces' spokesman Yahya Saree wrote on Twitter this weekend, warning oil firms to organize and leave Saudi Arabia and the UAE."As long as the American-Saudi aggression countries are not committed to a truce that gives the Yemeni people the right to exploit their oil wealth in favor of the salary of the Yemeni state employees, the armed forces give oil companies operating in the UAE and Saudi Arabia an opportunity to organize their situation and leave," Saree wrote, adding "forewarned is forearmed.""If the Saudi and Emirati coalition continue to deprive our Yemeni people access to their resources, our military forces can, with God's help, deprive them of their resources," the Yemeni military spokesman added.Meanwhile, UN Special Envoy to Yemen Hans Grundberg said on Sunday that he regrets "that an agreement has not been reached today, as an extended and expanded truce would provide additional critical benefits to the population.""As negotiations continue, the UN Special Envoy calls on the parties to maintain calm and refrain from provocations or any actions that could lead to an escalation of violence," the UN statement reads.Two months ago, Yemen's Houthi-led government accused the country's Saudi-backed coalition forces of siphoning off $13 billion in Yemeni oil revenues over the past five years, with reports claiming that another $180 million in looted oil left the country on a Greek oil tanker in August.In a tweet published by local media sources, Houthi National Negotiation Delegation official Abdul Malik Al-Ajri claimed that the $13 billion "looted" from Yemen's oil revenues is based on figures from OAPEC (Organization of Arab Petroleum Exporting Countries) and maritime traffic data.

Iran's Ayatollah Breaks Silence On Anti-Government "Riots", Calls Uprising A US-Israeli Plot -- Iran's "anti-hijab" protests are now in their third week, with a Norway-based monitor, Iran Human Rights (IHR), saying that at this point at least 92 Iranians have died as a result of the ongoing security services crackdown. Demonstrations and unrest have gripped dozens of cities, including parts of the Iranian capital, following last month's death of 22-year-old Mahsa Amini in police custody, which sparked a wave of anger, especially among women who are demanding equal rights. But on Sunday, Iran’s supreme leader, Ayatollah Ali Khamenei, has weighed in on the protests for the first time, after having remained silent since their beginning. He laid blame on the United States and Israel for fueling the unrest as part of efforts to fragment the Islamic Republic and its government, implying an ongoing regime change plot."I say explicitly that these riots and this insecurity were a design by the US and the occupying, fake Zionist regime [Israel] and those who are paid by them, and some traitorous Iranians abroad helped them," Khamenei said.Interestingly enough, the scathing words were issued at a graduation ceremony for police cadets in Tehran. Top officials of the Islamic Revolutionary Guard Corps (IRGC) were also said to be present for the speech. "In the accident that happened, a young woman passed away, which also pained us, but reactions to her death before investigations [take place] … when some come to make the streets insecure, burn Qurans, take hijabs off covered women, and burn mosques and people’s cars – they’re not a normal, natural reaction," Khamenei said. His fiery denunciation of the protests as an externally driven plot, which have in some cases led to clashes with police and reported instances of live ammunition used by state forces to quell the unrest, strongly suggests that the crackdown is about to get a lot worse.

Putin's nuclear targets predicted as experts weigh in on repercussions of strike - Experts have predicted what kind of targets Russian President Vladimir Putin will go for if he launches a nuclear attack amid the war in Ukraine, and have weighed in on the damage a devastating strike may cause. It comes after the Russian leader warned in a speech that he is "not bluffing" after threatening to draw for his nuclear arsenal amid the conflict, which first began back in mid-February. The latest figures from the Bulletin of Atomic Scientists indicate that Russia had a total of around 4,447 warheads as of 2022, including 1,588 strategic warheads deployed on strategic heavy bomber bases. The Kremlin also reportedly has 977 strategic warheads in reserve and 1,912 non-strategic warheads in reserve. Lawrence Freedman, a war studies expert at King’s College London, has claimed that the Russian President is more likely to target critical infrastructure as opposed to cities, in conventional strikes.However, strategic long-range warheads are capable of destroying entire cities, although it is thought that Putin will be more likely to deploy tactical nuclear weapons, which are short-range and designed for battlefield use. And in a blog post, Prof Freedman wrote that Putin may target the uninhabited Snake Island in a nuclear attack to intimidate the West and show off his firepower in a horror warning. This Black Sea outpost was taken by Russia not long after Putin sent troops into UK, which has since been retaken and become a symbol of Ukrainian resistance. British security think tank Rusi argues that Russia’s tactical arsenal is limited in range to around 300 miles, while its strategic nuclear missile has an alarming 3,000-mile range. But even a low-yield nuclear bomb could have potentially devastating impacts reaching far and wide, such as radiation from the blast causing long-term health impacts for survivors. And even if Russia was to only target Ukraine, there are fears that radioactive fallout could contaminate the environment and potentially float across Europe and Asia. Dr Rod Thornton, a security expert at King’s College London told Forbes that this could backfire as the radioactive material drifted back over Russia and affected its citizens. Because of this, he noted that Moscow would probably use a weapon designed to minimize fallout. But Putin has also warned that those in support of Ukraine also may “face consequences that you have never faced in your history”, there are fears Putin may be tempted to use his nuclear weapons on targets outside Ukraine too.

Poland In Talks With US About Hosting Nuclear Weapons - At a moment some US officials and pundits are cavalierly talking about "already fighting WWIII" - Polish officials have announced that talks with the Biden administration are underway about the possibility hosting US nuclear weapons. President Andrzej Duda indicated that such nuclear-sharing as NATO's largest eastern European member, and which is just off Russia's doorstep, is now an "open" topic for discussion.Crucially for the question of continued nuclear saber-rattling and confrontation with Russia, if Poland ever did host US-NATO nukes it would mark a huge first for a NATO member that was once behind the Iron Curtain."The problem, first of all, is that we don’t have nuclear weapons,” President Duda told Gazeta Polska newspaper in statements published Wednesday. "There is always a potential opportunity to participate in nuclear sharing."He was quick to clarify, however, that under such a nuclear-sharing program "this would not be a nuclear weapon under the control of Poland. Participation in nuclear sharing does not imply having your own nuclear weapon."But the Polish newspaper followed with...After the interviewer pointed out that other countries which now have nuclear weapons began with nuclear sharing, Duda replied that, while this "must be viewed in terms of the distant future, I firmly believe that Poland will strengthen its security. That must be our long-term goal."And according to a top Polish official, discussions with Washington along these lines are moving forward: A senior diplomat in Warsaw said Duda’s comments could potentially include any of those activities. The diplomat, who declined to be named because he wasn’t authorized to speak publicly on the matter, said hosting the weapons would be in the security interest of Poland, the region and all of Europe."We have spoken to American leaders about whether the US is considering such a possibility" of Poland sharing the weapons, Duda told the newspaper. "The topic is open."Despite Duda emphasizing the long-term future nature of the possibility of Warsaw having US nukes, the mere discussion itself is likely to trigger extreme alarm for the Kremlin, which for months has been strongly denouncing Poland's "extremely militant, anti-Russian" stance and policies.

Exiting Mir system may not affect Russian tourist visits - The number of foreign tourist arrivals since the start of the year was larger than the number of visitors in the previous two years combined, according to data from the provincial directorate of culture and tourism.In the first nine months of 2020 and 2021, the city hosted 2.6 million and 7 million visitors, respectively.In September alone, the city on the Mediterranean coast welcomed 1.99 million foreign visitors, up 15 percent on an annual basis.Russians constituted the largest group of foreign holidaymakers in January-September. Some 2.34 million Russian nationals visited the city during this period, followed by Germans at nearly 2.2 million and Britons at 952,000. Among other top visitors were Polish, Dutch, Kazakh, Romanian, Israeli and Danes.There are concerns that Turkish banks’ decision to pull out from the Russian Mir payment system may hit the tourism activity in Antalya. However, Davut Çetin, head of the Antalya Commerce and Industry (ATSO), believes this may not happen, arguing that banks’ decision is not likely to affect the inflow of Russian tourists but their spending during their stay in Türkiye may decline.“Russians pay for package tours in advance in their country that is why exiting Mir will not have an adverse impact on visits from Russia,” Çetin said. He, however, acknowledged that there will be some problems when they go out from hotels to do shopping in the city. “Their spending while here will decline. The retail trade will be affected.”Çetin called for a swift solution to the problem. “They will bring cash, but this will limit their spending. This situation will also spell troubles for the Russians who already reside in or arrived in Antalya after the war broke out.”Demand from Russia is still strong, and bookings continue, said İsmail Çağlar, general manager of a five-star hotel in the city.Some 250 rooms out of 500 at his hotel are presently occupied by Russians, and booking numbers into the first week of November are good, he added. There are no problems in terms of merchandise trade between Russian and Turkish companies, said Ümit Mirza Çavuşoğlu, the head of the Western Mediterranean Exporters’ Association.

South Korea & US Fire 4 Surface-To-Surface Missiles In Rare Response To North's Launch -Hours after North Korea launched an intermediate-range ballistic missile that soared over Japan for the first time since 2017, Japanese and US military warplanes carried out a joint exercise in response to Pyongyang's recklessness, according to South China Morning Post, citing Japanese officials. "As the security environment surrounding Japan grows increasingly severe, including North Korea's launch of a ballistic missile that flew over Japan, the Self-Defence Forces and the US military conducted a joint exercise," the Joint Staff said in a statement.Eight Japanese and four US fighter jets conducted war drills in airspace west of Kyushu, the southwesternmost of Japan's main islands. There were no further details in the statement about what defensive maneuvers the fighter jets were exercising. Joint Staff continued: Forces "confirmed their readiness and demonstrated domestically and abroad the strong determination of Japan and the United States to deal with any situation." Earlier in the day, Japanese Prime Minister Fumio Kishida held immediate discussions with the head of the US Indo-Pacific Command, Admiral John Aquilino, about the missile launch. Ahead of the joint exercise, Kishida told reporters Tokyo and Washington would "conduct a joint drill" to show they're "taking swift action."South Korea's Joint Chiefs of Staff said the North's missile flew 2,800 miles, hitting an altitude of approximately 603 miles. The missile was launched around 0723 local time on Tuesday from the North's Chagang province, which borders China. As the missile flew over Japan, reaching speeds of March 17, the government issued warnings for citizens, urging everyone in the country to seek shelter as a ballistic missile was headed their way. The missile flew for 22 minutes and past northern Japan before plunging into the Pacific Ocean.

Show-Of-Force Fail: South Korean Missile Malfunctions And Crashes, Causing Panic -What was supposed to be a South Korean show of force ended in humiliation on Wednesday as a ballistic missile malfunctioned and crashed near a South Korean city, triggering panic. There were no injuries -- beyond those to the military's own reputation.According to the Associated Press, citing South Korea's Joint Chiefs of Staff, a short-range missile blew up on an air force base near the coastal city of Gangneung. South Korean authorities said the warhead did not explode. Video purporting to show the fiery aftermath circulated on social media: South Korea bombed its own military base when its missile launch failed. pic.twitter.com/TsIIH5SD1N The failed missile launch was part of a broader saber-rattling response to North Korea's successful launch of an intermediate-range ballistic missile that flew over Japanese airspace on Tuesday. That missile demonstrated a record distance capability for a North Korean missile. It was said to have traveled some 2,800 miles, with analysts saying it has the range to hit the bases on the U.S. territory of Guam. In their ensuing show-of-force drills, U.S. F-16 and South Korean F-15 fighter jets on Tuesday hit an island target off South Korea's west coast, using Joint Direct Attack Munition (JDAM) bombs. Wednesday brought surface-to-surface missile launches. The embarrassment over the misfire was compounded by the South Korean military's inept handling of the incident, reports AP: The explosion and subsequent fire panicked and confused residents of the coastal city of Gangneung, who were already uneasy over the increasingly provocative weapons tests by rival North Korea.Their concern that it could be a North Korean attack only grew as the military and government officials provided no explanation about the explosion for hours. Posting on Facebook, legislator Kwon Seong-dong, who represents Gangneung, said a "weapons system operated by our blood-like taxpayer money ended up threatening our own people.” He also assailed the military's prolonged silence: "It was an irresponsible response. They don’t even have an official press release yet.”

Indonesia: 174 deaths in clashes after a soccer match - 174 people died in clashes following a soccer match in Indonesia. A massacre of colossal dimensions, one of the worst tragedies in the history of soccer. This happened in Malang, East Java province, at the end of the match, when thousands of Arema FC fans entered the pitch at the Kanjuruhan stadium. Among the victims there is also a five-year-old boy. The Minister of Sport, the police and the head of the Indonesian Football Association will have to conduct a full evaluation of the football matches and the security procedures ", said the head of state in a televised speech. The fans of Arema FC, after the 3-2 defeat suffered against the long-time rivals of Persebaya Surabaya, a team with which they have not lost for more than twenty years, have invaded the field, causing chaos in the stadium. Many cars, including a police truck, were set on fire outside the sports facility. According to data provided by law enforcement, 13 vehicles were damaged in total. The Indonesian government apologized for the incident and promised to investigate the matter. Police officers who tried to calm down, including by throwing tear gas. Images from inside the stadium show the police throwing large numbers of tear gas and fans climbing over the fences to get to safety. The stadium has a capacity of 42 thousand spectators and according to the data of the authorities it was completely sold-out. Only 3,000, however, the police explained, made an invasion of the field. President Joko Widodo has ordered a safety investigation during football matches. Many tried to save themselves by climbing over the fences of the stadium, which has a capacity of 42 thousand spectators and which, according to the authorities, was sold-out. To invade the camp were 3 thousand people: many of them were crushed in the crowd while trying to escape.

India's support to poor during Covid remarkable, says World Bank president - India's support to the poor and needy during the COVID-19 pandemic crisis is remarkable, and other nations should adopt the Indian move of targeted cash transfer instead of broad subsidies, World Bank President David Malpass said on Wednesday. COVID-19 marked the end of a phase of global progress in poverty reduction. During the three decades that preceded its arrival, more than 1 billion people escaped extreme poverty. The incomes of the poorest nations gained ground, Malpass said in the forward to a study -- Poverty and Shared Prosperity Report -- released by the World Bank. The poorest people bore the steepest costs of the pandemic -- income losses averaged four per cent for the poorest 40 per cent, double the losses of the wealthiest 20 per cent of the income distribution. Global inequality rose, as a result, for the first time in decades, as per the report. Malpass in the forward to the report said the rise in poverty in poorer countries reflects economies that are more informal, social protection systems that are weaker, and financial systems that are less developed. Yet several developing economies achieved notable successes during COVID-19. "Helped by digital cash transfers, India managed to provide food or cash support to a remarkable 85 per cent of rural households and 69 per cent of urban households. South Africa initiated its biggest expansion of the social safety net in a generation, spending USD 6 billion on poverty relief that benefited nearly 29 million people," Malpass said. Brazil managed to reduce extreme poverty in 2020 despite an economic contraction, primarily using a family-based digital cash-transfer system. In short, fiscal policy -- prudently used and considering the initial country conditions in terms of fiscal space -- does offer opportunities for policymakers in developing economies to step up the fight against poverty and inequality. To realise the potential of fiscal measures, the report calls for action on three fronts, Malpass said. "Choose targeted cash transfers instead of broad subsidies. Half of all spending on energy subsidies in low- and middle-income economies went to the richest 20 per cent of the population, who also happen to consume more energy. "Targeted cash transfers are a far more effective mechanism for supporting poor and vulnerable groups: more than 60 per cent of spending on cash transfers goes to the bottom 40 per cent. Cash transfers also have a larger impact on income growth than subsidies," Malpass wrote. COVID-19 has underlined how progress achieved over decades can vanish suddenly. High-return investments in education, research and development, and infrastructure projects should be made now. Governments need to improve their preparation for the next crisis. They also should improve the efficiency of their spending. Better procurement processes and incentives for public sector managers can boost both the quality and efficiency of government spending, the report noted. "Mobilise tax revenues without hurting the poor. This can be done by introducing property taxes, broadening the base of personal and corporate income taxes, and reducing regressive tax exemptions. "If indirect taxes need to be raised, their design should minimise economic distortions and negative distributional impacts, and they should be accompanied with targeted cash transfers, protecting the incomes of the most vulnerable households," Malpass said.

Brazil’s far-right leader Bolsonaro outperforms polls to force high-stakes runoff with leftist Lula -- Jair Bolsonaro considerably outperformed expectations in Brazil’s presidential election, proving that the far-right wave he rode to the presidency remains a force and providing the world with yet another example of polls missing the mark. The most-trusted opinion polls had indicated leftist former President Luiz Inácio Lula da Silva was far out front, and potentially even clinching a first-round victory. One prominent pre-election poll gave da Silva a 14 percentage point lead. In the end, Bolsonaro surprised to the upside and came within just 5 points. He will face da Silva in a high-stakes Oct. 30 presidential runoff. On Sunday, da Silva, known universally as Lula, obtained 48.4% of valid votes, which excludes blank and null ballots, while Bolsonaro got 43.2%, according to Brazil’s electoral authority. The first round’s nine other candidates received a fraction of the frontrunners’ support. “This is a big defeat for the democratic center that saw its voters migrate to Bolsonaro in a polarized scenario,” said Arilton Freres, director of Curitiba-based Instituto Opinião. “Lula starts ahead, but it won’t be easy for him.” The vote was virtually free from the political violence that many had feared. Alexandre de Moraes, the Supreme Court justice who also leads the electoral authority, congratulated Brazil for the “safe, calm, harmonious and peaceful” election that demonstrated its democratic maturity. Yet tensions remain high, as are the stakes. The election will determine whether the country returns a leftist to the helm of the world’s fourth-largest democracy or keeps Bolsonaro in office for another term. The past four years have been marked by his incendiary speech, testing of democratic institutions, widely criticized handling of the Covid-19 pandemic and the worst deforestation of the Amazon rainforest in 15 years. But he has built a devoted base by defending conservative values and presenting himself as protecting the nation from leftist policies that he says infringe on personal liberties and produce economic turmoil. “I understand there is a desire from the population for change, but some changes can be for the worse,” Bolsonaro told reporters after the results were released. Bolsonaro, who has repeatedly claimed without evidence that the nation’s electronic voting machines are vulnerable to fraud, didn’t challenge the result.

UN agency warns of recession linked to 'imprudent' monetary policy - A United Nations agency warned on Monday of the risk of a monetary policy-induced global recession that would have especially serious consequences for developing countries and called for a new strategy. “Excessive monetary tightening could usher in a period of stagnation and economic instability” for some countries, the United Nations Conference on Trade and Development (UNCTAD) said in a statement released alongside its annual report. “Any belief that they (central banks) will be able to bring down prices by relying on higher interest rates without generating a recession is, the report suggests, an imprudent gamble,” it said. The report said that higher interest rates, including hikes by the U.S. Federal Reserve, would have a more severe impact on emerging economies, which already have high levels of private and public debt. The report, entitled “Development prospects in a fractured world”, also warned of a potential debt crisis in the developing world. “The current course of action is hurting vulnerable people everywhere, especially in developing countries. We must change course,” UNCTAD Secretary-General Rebeca Grynspan told a press conference in Geneva. Asked about solutions, she suggested there were other ways to bring inflation down, mentioning windfall taxes on corporations, better regulations to control commodity speculation and efforts to resolve supply-side bottlenecks. “If you want to use only one instrument to bring inflation down…the only possibility is to bring the world to a slowdown that will end up in a recession,” she said. Overall, UNCTAD revised down its 2022 global growth projection to 2.5% from the earlier 2.6% estimated in its March assessment. It expects growth of 2.2% in 2023. The International Monetary Fund also warned last month that some countries may slip into recession next year and revised its growth forecast downwards.

The Inevitable Financial Crisis by Yves Smith - For months, I have been confident that Europe would suffer a financial crisis and a depression, as in a real economy catastrophe accompanied by a market crash. It might not be as severe and lasting as 1929, but the breadth would mean there would not be 1987 quick bounceback nor a 2008 derivatives crisis concentrated at the heart of the banking system. The short version of what follows is things are looking even worse now, and on multiple fronts. And unlike 2007-2008, where the officialdom actually was monitoring the US (and other markets) housing bubble and derivatives implosion and engaging in (not adequate) responses, here top financial and monetary authorities are missing in action as far as these obvious risks are concerned.Below we’ll discuss the rapidly accelerating real economy crisis, which is exacerbated by central bank tightening as pretty much the only line of defense against inflation that is almost entirely the result of a a multi-fronted supply shock.¹ Needless to say, the Fed raising interest rates (which Bernanke recognized as necessary in 2014 to tame bubbly asset prices but then lost his nerve) does nothing to get more chips from China or magically cure Covid-afflicted staffers so they can show up at work. But it will whack all sorts of speculators and financial firms who have wrong-footed their interest rate positions.And it also seemed apparent that the US would be pulled into the maelstrom, perhaps not as far, but contagion, supply chain dependencies, and the importance of Europe as a customer would assure the US would suffer too.That view was based simply on the level of damage Europe seemed determined to suffer via the effect of sanctions blowback on supplies of Russian gas. There are additional de facto and self restrictions on Russian commodities via sanctions on Russian banks and warniness about dealing with Russian ships and counterparties. For instance, Russian fertilizer is not sanctioned; indeed, the US made a point of clearing its throat a couple of months back to say so. Yet that does not solve the problem African (and likely other) buyers suffer They had accounts with now-sanctioned Russian banks and have been unable to come up with good replacement arrangements.Another major stressor is the dollar’s moon shot. It increased the cost of oil in local currency terms, making inflation even worse. It also will produce pressure, and potentially defaults, in any foreign dollar debtor because he local currency cost of interest payments will rise. Given the generally high state of nervousness in financial markets, anyone who had been expected to roll maturing debt will be in a world of hurt (Satyajit Das in a recent post pointed out that investors typically don’t expect emerging market borrowers to repay).The reason those emerging borrowers matter is that they provide 49% of global GDP. And their lenders are nearly all first world. Volcker had to back off his early 1980s interest rate hikes because they triggered a Latin American debt crisis, in particular endangering the then Citibank. Now not only do you have even greater potential for damage to important lenders, but contractions in developing economies will also put a much bigger brake on global growth.Yet another big concern is hidden leverage, particularly from derivatives. A sudden rise in short term interest rates and increased volatility can blow up derivative counterparties. It’s already happening with European utility companies, many of whom are so badly impaired as to need bailouts.And the failure of regulators to get tough with banks in the post-crisis period is coming home to roost. Nick Corbishley wrote about how Credit Suisse went from being a supposedly savvy risk manage to more wobbly than Deutsche Bank due to getting itself overly-enmeshed in the Archegos “family office” meltdown and then the Greensill “supply chain finance” scam. Archegos demonstrated a lack of regulatory interest in “total return swaps” which in simple terms allow speculators to create highly leveraged equity exposures. Highly leveraged equity exposures was what gave the world the 1929 crash. The very existence of this product shows the degree to which the officialdom has unlearned big and costly lessons. Oh, and Credit Suisse is looking green around the gills.:

Global manufacturing index contracts for first time since 2020 -- THE JPMorgan global manufacturing purchasing managers gauge fell for a fourth consecutive month, to 49.8 last month, according to data released Monday (Oct 3). Readings below 50 signal contraction, and the latest figure is the lowest since June 2020. An index of new orders shrank for a third-straight month to a more-than-two-year low, and a measure of international trade fell, illustrating softer demand as central bankers around the world ratchet up interest rates to fight inflation. Production also shrank by the most in five months, the data showed. Around 90 central banks have raised interest rates this year, and half of them have hiked by at least 75 basis points in one shot. Energy costs that have soared over the past year, due to Russia’s war in Ukraine as well as limited global production capacity, have hit manufacturers especially hard. The report also showed the index of backlogs of work contacted for third month and is the lowest since July 2020. Against a backdrop of a slight expansion in stocks of finished goods, the figure points to some build-up of excess capacity at factories. The euro area’s manufacturing sector fell deeper into contraction territory in September. Only Ireland, among monitored euro area countries, indicated expansion. France and Germany – the two largest euro zone economies – showed the biggest contraction in more than two years, the latest S&P Global data showed. While the global index fell, factory activity gauges for both the US and China showed expansion in September. The S&P Global measure of US manufacturing improved to 52, while China’s official manufacturing purchasing managers index rose to 50.1 – barely into expansion territory. The good news from the latest global survey was that growth of output prices eased for a fifth month, indicating some relief from inflationary pressures. The JPMorgan Global PMI is a composite index produced with S&P Global in association with the Institute for Supply Management and the International Federation of Purchasing and Supply Management.

German manufacturing shrinks in September as new orders slump: PMI, Government & Economy - GERMAN manufacturing activity contracted for a third month in a row in September, hurt by a deepening downturn in new orders as the soaring cost of energy set off alarm bells about the outlook for business, a survey showed on Monday (Oct 3). S&P Global’s final Purchasing Managers’ Index (PMI) for manufacturing, which accounts for about a fifth of Germany’s economy, fell to 47.8, its lowest since June 2020 and down from 49.1 in August. Readings below the 50 mark indicate shrinking activity. A Reuters poll of analysts had pointed to a September reading of 48.3. An index of new orders dropped to 39.1 from 40.9, with anecdotal evidence indicating that rising prices and the deteriorating economic outlook prompted a growing number of customers to either postpone or cancel orders. Phil Smith, Economics Associate Director at S&P Global Market Intelligence, said “the soaring cost of energy, which has already led some businesses to cut production, caused alarm bells, with manufacturers’ expectations for future output having plummeted in September following the shutdown of the Nord Stream 1 pipeline.” The Gazprom-led Nord Stream 1 was halted on Aug 31 for what Gazprom said would be three days of repair work. Gazprom failed to restart flows, however, saying it was unable to carry out the work due to Western sanctions imposed on Moscow. The Europe Union investigated leaks in the pipeline in the Baltic Sea last week and said it suspected sabotage. S&P Global’s Smith added: “If demand continues falling in the months ahead as businesses are expecting, the pass-through of higher costs will inevitably become more and more difficult, thereby squeezing margins.”

Europe’s factory slump heightens recession risk as Asia mixed -- THE manufacturing industry deteriorated further across Europe last month because of the impact of the war in Ukraine, while factories in Asia painted a mixed picture. The purchasing managers index (PMI) for the 19-nation eurozone, a gauge of private-sector activity, fell to 48.4 from 49.6 in August. That’s slightly worse than S&P Global’s initial reading and marks the third consecutive month below the 50 threshold that separates expansion from contraction. Readings for the euro area’s four biggest economies were also below this key level, highlighting the increasingly gloomy outlook for the region hardest hit by the conflict on its eastern border. A recession in the bloc is looking increasingly likely amid heightened threats of power restrictions. “The ugly combination of a manufacturing sector in recession and rising inflationary pressures will add further to concerns about the outlook for the eurozone economy,” Chris Williamson, an economist at S&P Global, said on Monday (Oct 3). “Worse looks set to come, with orders slumping at a significantly steeper rate than production is being cut.” In Asia, factories displayed a split track of recovery in September, with manufacturing powerhouses in the north turning weak and key supply chain hubs in the south showing resilience amid China’s growth slowdown. Gauges for much of South-east Asia showed improvement, with Indonesia at 53.7, matching its January reading for the best this year. Thailand’s reading was a record high in data back to 2016, and the Philippines also edged up in September. Malaysia was a rare weakening in South-east Asia, slipping to 49.1 after 50.3 in August. North Asia revealed more of the pain in September PMIs. Taiwan and Japan eased from the prior month, with Taiwan’s PMI slumping to 42.2, its worst since the pandemic-era low in May 2020, according to S&P Global. South Korea’s PMI is set to be reported on Tuesday.The factory figures are one piece of an increasingly downbeat outlook for the global economy, with a wave of interest-rate hikes yet to defeat rampant inflation and growth concerns on the rise. China’s economic slowdown is starting to weigh more heavily on trade-reliant neighbours, and supply-chain backups have persisted worldwide.

UK manufacturing PMI shows falling output, weak foreign demand , Government & Economy - BRITISH manufacturing output fell for a third month in a row in September and orders declined for a fourth consecutive month, hurt by falling foreign demand, according to a closely watched survey released on Monday (Oct 3). The S&P Global manufacturing Purchasing Managers’ Index (PMI) rose to 48.4 from August’s 27-month low of 47.3, but remained below the 50-level that separates growth from contraction and was a fraction weaker than the initial flash estimate of 48.5. “September saw new export business contract at the quickest pace since May 2020, with reports of lower demand from the US, the EU and China,” S&P Global said. “Manufacturers faced weak global market conditions, rising uncertainty, high transportation costs reducing competitiveness and longer lead times leading to cancelled orders,” it added. The most recent official data showed manufacturing output grew by 1.1 per cent in the year to July. Britain’s economy is on the cusp of recession as households and businesses wrestle with rising energy costs, a jump in borrowing costs and a volatile currency, which struck a record low against the US dollar on Sep 26.

S&P slashes UK credit rating, says economy to enter technical recession in Q4 - S&P Global, the New York-headquartered American credit rating agency, often contemplated as one of top three credit rating agencies across the globe alongside Fitch and Moody’s, has slashed Britain sovereign debt rating outlook to negative from stable, while S&P also had forecasted that the UK economy would enter into a technical recession as early as by the current quarter.On top of that, S&P also added that the UK economy would contract by 0.5 per cent next year sounding an alarming tone over the newly elected PM Liz Truss’ fiscal policy. As S&P slashed UK credit outlook to AA- (AA negative) from stable, the global credit rating agency said in a statement, “For now it is unclear whether the government plans to ultimately introduce fiscal consolidation measures to bring debt back on a downward path and we assume that the package will be funded by debt”.As S&P cited UK’s monetary policy to cut taxes as a primary reason behind its latest decision to downsize UK’s credit rating outlook, sterling has been hanging on a tight rope. Nonetheless, the UK Central Bank had fostered a measure to purchase as many as $65 billion worth of Government bond repurchase program in order to stabilize the British Pound.Still, amid a swathe of negative fundamentals alongside threats of a technical recession as early as by the current quarter, Bank of America had told earlier this week that the British Pound will hit a parity with Dollar before year-end.Aside from slashing UK’s credit rating, S&P also forecasted that UK’s public debt would likely to average at 5.5 per cent of its GDP between 2023 and 2025, up from a previous projection of 3 per cent. Besides, Government debts could rise to as high as 97 per cent of the Kingdom’s entire GDP (Gross Domestic Product), S&P forecasted.

UK's Truss Pressured To Abandon Tax-Cut For The Rich, Throws Kwarteng Under The Bus After Revolt - The chaotic first few weeks of Liz Truss' reign as UK PM are about to get chaotic-er as Sky News reports that she is set to delay the vote on cutting the 45% top marginal rate of tax for Britain's highest earners, ahead of this week's opening of the Tory Party Conference. With the Labour Party jumping to a massive lead in the polls, Truss is facing pressure internally from her party as a growing number of Tory MPs have voiced their disapproval of the controversial plan which benefits only the wealthiest 1%. Downing Street warned anyone voting against the plans will be kicked out of the party but The Telegraph reports that more than 13 MPs have now publicly criticized the policy, and on Sunday night, a leading rebel said as many as 70 Tory MPs are considering voting against the move.The vote - which was expected to take place this week - is expected to be delayed until December, or even next Spring as Tory 'majesty' Michael Gove, a former cabinet minister, on Sunday put himself at the forefront of the Tory mutiny saying it was wrong at a time when “people are suffering".Reflecting on the market chaos - collapse of the pound to record lows against the dollar being just one example - Gove said the scale of borrowing outlined by Truss “was a contributory factor to some of the turbulence," adding that "my worry is we are betting too much on tax cuts when we are borrowing to pay for them."The FT reports another minister said a retreat over the scrapping of the 45p tax band was inevitable.“We can’t get it through, so we might as well stop now. Everyone has to U-turn sometimes."However, this would be truly embarrassing as Truss told the BBC’s Laura Kuenssberg on Sunday she was sticking to her guns and that the tax cuts were essential to getting the economy to grow again.There is no official delay of the vote and Chancellor Kwasi Kwarteng continues to defend the plan and is set on Monday to tell Conservative party members he is “confident” that the plan is “the right one”.

UK's Truss Pushed Into "Humiliating" U-Turn, Scraps Tax Cuts For Top Earners To "Restore Credibility" -- UK Prime Minister Liz Truss was pushed into what the FT called a "humiliating" U-turn forced by growing discontent from members of her own Conservative Party, when she ditched her plan to slash taxes for the highest earners just over a week after announcing her shocking "mini-budget" which set off an avalanche of selling in the sterling and gilts and nearly wiped out the UK pension system. Chancellor of the Exchequer Kwasi Kwarteng tweeted, "I'm announcing we are not proceeding with the abolition of the 45p tax rate. We get it, and we have listened." He added that "It is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country."We get it, and we have listened. pic.twitter.com/lOfwHTUo76 — Kwasi Kwarteng (@KwasiKwarteng) October 3, 2022The pound moved higher on Monday, rising as much as 1%, before giving up some of those gains. Last week, the pound plunged to a record low against the dollar after Kwarteng announced the debt-funded £45bn tax cuts on Sept. 23. UK government debt also rose in price following Truss' backtracking on tax cut plans. The 10-year gilt yield is around 4.02% after hitting a high of 4.6% last week, which forced the Bank of England to purchase £65 billion of long-term debt to rescue the currency from a death spiral. The announcement of the unfunded tax cut for the wealthy at the same time when millions of lower-income Brits have been thrown into energy poverty and inflation rates run at multi-decade highs was bad optics. We noted Sunday that Truss faced mounting pressure to abandon the tax cuts as she threw Kwarteng under the bus, blaming him for the planned tax cut, saying "it was a decision the Chancellor made" rather than one debated by the entire Cabinet. It was also widely unpopular among many MPs. The Conservative Party has seen a plunge in polls; inversely, Labour Party received a boost since the proposed tax cuts were announced.

Pound bounces back as UK chancellor confirms tax cut U-turn - The UK currency has bounced back this morning, climbing after it fell to record lows last week, as Prime Minister Liz Truss’s government was forced to perform a U-turn, scrapping a plan to remove the UK’s top tax rate of 45%. On Monday morning, the pound sterling rose as far as $1.128, its highest in 10 days. Chancellor of the Exchequer Kwasi Kwarteng confirmed the widely criticised policy, defended by Truss only last night, was being reversed ahead of a much-anticipated speech at the Conservative Party’s national conference later today. In a statement entitled: “We get it, and we have listened,” he said it was clear that the abolition of the 45p tax rate had become a distraction from the government’s overriding mission, which is tackling challenges including the cost-of-living crisis, while accelerating economic growth and major infrastructure projects. The UK currency fell to record lows at the start of last week following the chancellor’s mini budget, which included removing the highest rate of tax, benefitting people who earn £150,000 (AED 615,000) or higher per annum, angering average earners facing economic hardship. The Bank of England (BoE) was last week forced to intervene in the UK’s bond market to try to stabilise a sell-off in response to the mini budget, while a number of UK mortgage lenders withdrew deals or raised interest rates for borrowers amid the uncertainty. .

Economists Nervously Eye the Bank of England’s Market Rescue - When the Bank of England announced last week that it would buy bonds in unlimited quantities in an effort to stabilize the market for U.K. government debt, economists agreed it was probably a necessary move to prevent a cataclysmic financial crisis.They also worried it could set a dangerous precedent.Central banks defend the financial stability of the nations in which they operate. In an era of highly leveraged and deeply interconnected markets, that means that they sometimes have to buy bonds or backstop lending to prevent a problem in one area from spiraling into a crisis that threatens the entire financial system.But that backstop role also means that if a government does something to generate a major shock, politicians can be fairly confident that the local central bank will step in to stem the fallout.Some economists say that is essentially what happened in the United Kingdom. Liz Truss, the new prime minister, proposed a huge package of tax cuts and spending during a period of already high inflation, when standard economic theory suggests governments should do the opposite. Markets reacted forcefully: Yields on long-term government debt shot up, and the value of the British pound fell sharply relative to the dollar and other major currencies.The Bank of England announced that it would buy long-term government debt “on whatever scale is necessary” to prevent a full-blown financial crisis. The move was particularly striking because the bank had been poised to begin selling its bond holdings — a plan that is now postponed — and has been raising interest rates in a bid to bring down inflation.Economists broadly agreed that the bank’s decision was the right one. The rapid rise in interest rates sent shock waves through financial markets and upended a typically sleepy corner of the pension fund industry, which, left unaddressed, could have carried severe consequences for millions of workers and retirees, destabilizing the country’s entire financial system.“You saw very substantial market dislocation,” said Lawrence H. Summers, a former U.S. Treasury Secretary who is now at Harvard. “It’s a recognized role of central banks to respond to that.”To some economists, that was exactly the problem: By shielding the U.K. government from the full consequences of its actions — both preventing citizens from feeling the painful aftereffects and keeping government borrowing costs from shooting higher — the policy demonstrated that central bankers stand ready to clean up messy fallout. That could make it easier for elected leaders around the world to take similar risks in the future.Those concerns eased somewhat on Monday when Ms. Truss partly backed down, reversing plans to abolish the top income tax rate of 45 percent on high earners. But she appears poised to go forward with the rest of her proposed tax cuts and spending programs, putting the Bank of England in a delicate spot.

Bank of England Bought No Bonds Today, after Buying only £22 Million on Monday, instead of £5 Billion per Day by Wolf Richter - This was the infamous Pivot back to QE: The Bank of England announced on September 28 that it would buy up to £5 billion per day in long-dated UK government bonds (gilts) “in a temporary and targeted way.” It said specifically, “The purpose of these purchases is to restore orderly market conditions.” It said the program would expire on October 14. This came after long-dated gilt yields blew out last week, with the 10-year yield on September 28 getting close to 5%. Panic had broken out after highly leveraged UK pension funds with £1.5 trillion in assets had received margin calls on their gilt-based derivatives linked to their liability-driven investment (LDI) strategy (explained here). The pension funds had started to dump gilts along with other assets to meet those margin calls, thereby creating a death spiral for gilts. On September 28, the BOE stepped in and said it would buy up to £5 billion per day in the secondary market via auctions through October 14. It spelled out that this wasn’t a new round of QE, but a backstop for the gilt market that had become dysfunctional. It would also give pension funds time to sort out their issues. The announcement settled down the markets, and 10-year gilt yields plunged back below 4%, and yields plunged around the world as everyone breathed a sigh of relieve that the panic wasn’t spreading. And the meme was born that the BOE was the first central bank to “pivot” back to QE. But the BOE bought no bonds today, almost no bonds yesterday, and very little last week. The BOE bought very little over the first three days of the program (Sep 28, 29, and 30), averaging only £1.21 billion per day, instead of £5 billion per day, according the BOE’s daily disclosures of gilt purchases under this program. It bought almost nothing on Monday (Oct 3), just £22 million with an M; and it bought £0 – meaning exactly “zero” – today (Oct 4): Turns out, the program was highly effective in calming markets, settling down the panic, and unwinding the spike in long-term yields, without big purchases.The BOE is using reserve pricing at the auctions. On Monday, it had received £1.91 billion in offers to sell gilts, and rejected all but £22 million of them Today it had received £2.23 billion in offers, and rejected all of them, with its reserve pricing. With these pricing limits, the BOE is further communicating that this is a temporary “backstop,” as it calls it, to calm the gilt market, and not the beginning of a new round of QE; and that it is serious about ending the program, as announced, on October 14.

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Saturday, October 8, 2022

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