Trump’s Senate impeachment trial starts | U.S. ag exports set fresh record in December
In Today’s Digital Newspaper
• Oil prices extend recent advance
• U.S. equities reach record levels on Monday
• Canada's benchmark S&P/TSX Composite Index reached a record on Monday
• Consumers again pare down credit card debt
• U.S. ag exports set fresh record in December
• Bitcoin jumped a further 20% to $47,107 apiece
• What is dogecoin?
• 82% of world’s commodities producing positive year-over-year returns
• Cordonnier expects Brazil to ship at most 3 MMT to 4 MMT of beans this month
• Rain causing a lot of late-season uncertainty for Brazil’s crops
• Argentine weather enough to maintain the status quo
• Solid rebound in French soft wheat planting expected
• Philippines hike pork import proposal
• Bird flu spreads to Algeria
• Bulls maintain upper hand in cattle futures, though product market sputtering
• Democratic senators unveil pandemic relief for farmers of color
• House Dems released biggest piece of coronavirus relief bill late Monday
• Transportation industry set for $50 billion in aid package
• Sen. Sanders responds to CBO report on $15 minimum wage
• Timelines for stimulus bill markups in House
Biden Administration Personnel
• Senate panel to vote on Regan EPA nomination today
• OMB nominee Tanden pledges to work with Republicans if confirmed
• Number of registered newborns in China drops 15% in 2020
• China makes no changes to its corn and soybean balance sheet, but tweaks cotton
• China cracks down on GM corn and cotton
• Third Arkansas plant loses ability to export to China
• Analysts see shifts in Biden administration China policy focus
• U.S. group: U.S./China Phase 1 deal largely a ‘failure’
• Neal: U.S. trade policy needs to adapt to changing world
Energy & Climate Change:
• Labor union tensions with Biden escalate
• Barrasso presses administration on existing oil, gas leases on federal land
• Big growth spurt projected for electric car sales
• Sen. Manchin tries to defend vote flipflop
• Bipartisan bill includes $500 million for biofuel grants, mandates E15 streamlining
Food & Beverage Industry Update:
• Meatpacking workers among next eligible for vaccinations, but many remain hesitant
• U.S. reported fewer than 100,000 new cases for the second day
• WHO: Virus causing Covid-19 likely entered human population via intermediate animal
Politics & Elections:
• Second Trump impeachment trial opens today
• Rep. Ron Wright dies of Covid-19
• Democrat Brindisi concedes to Republican Tenney in New York's 22nd District
• Six-term Alabama Sen. Richard Shelby won’t run for re-election next year
• Obama ethics chief criticizes Biden over Hunter memoir in disappearing tweets
• Schumer taking steps to head off a primary challenge from the left
Other Items of Note:
• Many people are now choosing to pack up and leave California
• Putin expected to unveil $6.7 billion in new social spending to assuage discontent
• EU countries expel Russians in diplomatic tit-for-tat
Equities today: U.S. stock futures ticked down this morning. The recent rally has been fueled by expectations of a new dose of stimulus spending in the U.S., which could add impetus to the economic revival. That has helped pare expectations for turbulence in U.S. stocks, sending the Cboe Volatility Index down this week to less than 22, after the gauge surged to over 37 at the end of January. In Asia, the Shanghai Composite Index ended the day 2% higher and Japan’s Nikkei 225 rose 0.4% by the close. In Europe, the Stoxx 600 Index drifted lower.
U.S. equities yesterday: Record finishes were recorded Monday for U.S. stock indices. The Dow gained 237.52 points, 0.76%, at 31,385.76. The Nasdaq rose 131.35 points, 0.95%, at 13,987.64. The S&P 500 moved up 28.76 points, 0.74%, at 3,915.59.
Canada's benchmark S&P/TSX Composite Index reached a record on Monday after it rose 1.1% to close at 18,330.26.
On tap today:
• NFIB Small Business Optimism Index for January.
• Job Openings and Labor Turnover Survey for December from the BLS, 10 a.m. ET.
• St. Louis Fed President James Bullard speaks on the economy and monetary policy at 12 p.m. ET.
• USDA WASDE, 12 p.m. ET. Analysts expect lower domestic and global carryover estimates for corn, beans, wheat and cotton from USDA, with the department’s export projections also expected to receive a lot of scrutiny given China’s aggressive purchases. USDA’s South American production estimates will be another focal point.
• China's consumer- and producer-price indexes for January are out at 8:30 p.m. ET.
Consumers again pare down credit card debt. Consumers have continued to reduce their use of credit cards, with the Federal Reserve reporting that revolving credit in December declined $2.95 billion, while non-revolving credit rose $12.69 billion for a net rise in overall consumer credit of $9.73 billion. Consumers have now reduced their revolving credit in nine of the last 10 months of 2020. The expectation is the trend of reducing credit card debt may not be reversed soon, especially with a moderately sluggish jobs sector. This reduction in credit card use and the shift in consumers dramatically increasing their savings rate put the consumer into a better financial position. But building savings and reducing credit card use mean that consumers are boosting their spending as aggressively as they might otherwise be.
U.S. ag exports set fresh record in December. U.S. ag exports totaled $15.91 billion in December, setting a new record for the month and marking the first time that the value of U.S. ag exports has topped $15 billion three months in a row. The prior monthly record was $15.82 billion that was set in December 2013. The December total was up from $15.48 billion in November.
Imports of ag products totaled $11.65 billion, up from $11.37 billion in November.
That left a trade surplus of $4.26 billion for the month.
USDA forecasts U.S. ag exports at $152 billion in fiscal year (FY) 2021 against imports of $137 billion, for a surplus of $15 billion. Three months into FY 2021, exports already total over 30% of the forecast for the entire FY. The highest totals for U.S. ag exports typically have come in the first quarter of a fiscal year, so it will be interesting to see if the sector registers another month at or above $15 billion. While USDA does not forecast a trade surplus level — it is a function of their export forecast minus their import forecast — the total so far is just above 79% of the total. But the period for the largest imports still lies ahead in the March-June timeframe. After starting FY 2020 with strong surpluses for the first three months, the trade data saw monthly deficits in six of the next seven months.
The final result for FY 2020 saw exports at $135.87 billion against imports of $133.22 billion for a trade surplus of $5.7 billion.
Farm Bureau chief economist John Newton has this graphical look at the situation (calendar year basis):
• Outside markets: The dollar fell and Treasuries advanced. The difference between the U.S. five- to 30-year yield curve and its German equivalent reached its widest since 2011, mainly reflecting expectations for a stronger inflation pickup in America. In the bond market, the yield on 10-year Treasury notes ticked up to 1.164%, from 1.159% Monday. An auction of $58 billion in three-year notes, due at 1 p.m. ET, is likely to be seen as a test of money managers’ appetite for swelling amounts of government debt.
• Brent crude reached a new 52-week high on Monday, rising 2.1% to a settle value of $60.56, ICE Brent YTD gains are almost 17%. This morning it was inching another 0.6% higher.
• Crude oil futures have turned mixed ahead of the U.S. trading start, with U.S. crude lower, trading around $57.85 per barrel and Brent crude still higher around $60.60 per barrel. Crude oil prices had posted further gains in Asian action after gaining more than $1 per barrel in U.S. trading Monday. Asian action saw U.S. crude up 50 cents at $58.47 per barrel and Brent up 56 cents at $61.12 per barrel.
• Bitcoin jumped a further 20% to $47,107 apiece, according to CoinDesk. The digital currency surged after Tesla said Monday it had bought $1.5 billion in bitcoin and planned to begin accepting it in payments, a move some analysts said could broaden acceptance of the currency.
• What is dogecoin? Here's how to say it and why it's no longer a joke (link via WSJ). The cryptocurrency is now worth more than Western Union, Under Armour and Xerox Holdings.
• Think there is not a commodities rally going on? Some 82% of the world’s commodities (ex-energy and gold) are producing positive year-over-year returns — the highest since September 2011.
Items in Pro Farmer's First Thing Today include (Link to subscribe to FTT):
• Cordonnier expects Brazil to ship at most 3 MMT to 4 MMT of beans this month
• Rain causing a lot of late-season uncertainty for Brazil’s crops
• Argentine weather enough to maintain the status quo
• Solid rebound in French soft wheat planting expected
• Philippines hike pork import proposal
• Bird flu spreads to Algeria
• Bulls maintain upper hand in cattle futures, though product market sputtering
— Democratic senators unveil pandemic relief for farmers of color. Four Democratic senators (Raphael Warnock, D-Ga, Cory Booker, D-N.J., Ben Ray Luján, D-N.M., and Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich.) on Monday introduced a bill aimed at delivering direct relief to Black, Indigenous, and Hispanic farmers and other agricultural producers of color affected by the coronavirus pandemic and what Warnock described as “longstanding inequity in agriculture.” The Emergency Relief for Farmers of Color Act would provide $5 billion to farmers of color as part of the $1.9 trillion pandemic relief package being pushed by Democrats and President Joe Biden.
The bill would provide $4 billion in direct relief payments to help farmers of color pay off outstanding USDA farm loan debts and related taxes, help them respond to the economic impacts of the pandemic.
The measure provides another $1 billion fund to support activities at USDA “that will root out systemic racism, provide technical and legal assistance to agricultural communities of color, and fund under-resourced programs that will shape the future for farmers and communities of color,” Warnock said. “Rural communities in Georgia and across our nation have been slammed for years, and this once-in-a-century pandemic has put even more pressure on their hardship,” Warnock said. “Even worse, many Black farmers and other producers of color, like those I’ve met all over Georgia, have been left even further behind due to historical discrimination and a crippling lack of investment from the federal government for decades,” Warnock said.
Sen. Cory Booker said, “The Covid-19 crisis has created new challenges for American farmers, and in particular for farmers of color who for generations have been robbed and shortchanged by discriminatory federal agricultural policy.” Booker’s Justice for Black Farmers Act would set up a civil rights oversight board at USDA; provide new training programs and land grants; and create a federally chartered bank to provide Black farmers with financial assistance. The bill includes a provision that would provide up to 160 acres to existing and aspiring Black farmers and offer debt forgiveness to those who filed claims under the landmark Pigford v. Glickman class action settlement between Black farmers and USDA. Booker signaled last year that he might seek to attach provisions from his measure in a broader legislative package, possibly the next farm bill
Sen. Ben Ray Luján noted that as a small farmer, he knows that “farming is a tough job on any day and Covid-19 has exacerbated the challenges facing New Mexico’s farmers and ranchers. Yet, Hispanic, Native American, and Black farmers in New Mexico did not receive their fair share of Coid-19 relief under the last administration… Sadly, this treatment did not come as a surprise to New Mexico’s farmers of color, who have experienced discrimination by the USDA for generations. This legislation is an important step toward addressing this historic injustice, and it provides farmers and ranchers of color with the targeted relief needed to survive the pandemic and thrive in the years to come.”
— House Democrats released the biggest piece of their coronavirus relief bill late Monday, offering a measure that would extend a $400-a-week unemployment insurance payment through Aug. 29 and send $1,400 per-person payments to most households without lowering the income thresholds from earlier rounds. While House Democrats rejected efforts to limit the $1,400 payments to those earning $50,000 or less, they tightened eligibility for those making more than $75,000.
— Transportation industry set for $50 billion in aid package. The $1.9 trillion stimulus package being assembled by House Democrats would include more than $50 billion in proposed relief for the transportation industry, but some transportation sectors said they were left out, including the bus industry.
Details: The House Transportation and Infrastructure Committee proposed $30 billion in additional relief for the transit sector. The measure would also include $1.5 billion for Amtrak, $8 billion for U.S. airports and $3 billion for aviation manufacturing jobs.
Airlines: As previously noted, Democrats on the House Financial Services Committee are proposing $15 billion in aid for the airline industry. The proposal would extend the Payroll Support Program for airline employees, which is set to expire on March 31.
Both committees will consider the relief proposals tomorrow.
The American Bus Association (ABA) said it was disappointed that the motorcoach industry was “once again left out” of the relief package. A coalition of motorcoach, school bus and passenger vessel operators requested an additional $40 billion in economic relief last week. “Considering the importance of social equity and addressing climate change in this day and age, it’s incredible for Congress to once again overlook the motorcoach industry,” Peter Pantuso, president and CEO of ABA, said in a statement.
— Sen. Sanders responds to CBO report on $15 minimum wage. Senate Budget Committee Chairman Sen. Bernie Sanders (I-Vt.) issued a statement Monday regarding a Congressional Budget Office (CBO) study on the budgetary impacts of the Raise the Wage Act, introduced by Sanders last month along with 37 Senate co-sponsors. The CBO forecast the effects of raising the minimum wage to $15 an hour over the next four years, a goal of many Democrats: raises for 27 million workers, lifting 900,000 above the poverty line — but at the cost of 1.4 million jobs.
“Let’s be clear. We are never going to get 10 Republicans to increase the minimum wage through ‘regular order.’ The only way to increase the minimum wage to $15 an hour now is to pass it with 51 votes through budget reconciliation,” Sander said. ““I find it hard to understand how the CBO concluded that raising the minimum wage would increase the deficit by $54 billion. Two years ago, CBO concluded that a $15 minimum wage would increase the deficit by less than $1 million over ten years. Further, several major studies done by the Center on Wage and Employment Dynamics and the Economic Policy Institute both found that raising the minimum wage would amount to a significant reduction in the deficit. The good news, however, is that from a Byrd Rule perspective, the CBO has demonstrated that increasing the minimum wage would have a direct and substantial impact on the federal budget. What that means is that we can clearly raise the minimum wage to $15 an hour under the rules of reconciliation. I look forward to working with my colleagues in the House and the Senate to end the crisis of starvation wages in America and raise the minimum wage to a living wage of at least $15 an hour.”
— Timelines for stimulus bill markups in House. House committees are meeting starting today to assemble the stimulus bill for a House floor vote the week of Feb. 22. Below is the current schedule for House panel consideration:
- Education and Labor: Feb. 9, 3 p.m. ET;
- Transportation and Infrastructure: Feb. 10, 11 a.m.;
- Financial Services: Feb. 10, 12 p.m.;
- Agriculture: Feb. 10, 2 p.m.;
- Small Business: Feb. 11;
- Veterans’ Affairs: Feb. 11;
- Energy and Commerce: Feb. 11;
- Oversight and Reform: Feb. 12; and
- Ways and Means: Feb. 10, 11 and 12
BIDEN ADMINISTRATION PERSONNEL
— Senate panel to vote on Regan EPA nomination today. The Senate Environment and Public Works Committee has scheduled today (Feb. 9) as to when the panel will consider the nomination of North Carolina Department of Environmental Quality chief Michael Regan to take the spot of administrator of the Environmental Protection Agency (EPA). His hearing before the panel last week elicited little controversy as lawmakers appeared reassured or at least not alarmed by his responses on key issues like climate change, renewable fuels and more. It is not clear how the impeachment trial of former President Donald Trump will affect the expected full Senate consideration of Regan’s nomination.
— OMB nominee Tanden pledges to work with Republicans if confirmed. Neera Tanden, President Joe Biden’s nominee to lead the Office of Management and Budget, plans to tell senators Tuesday that she will work with Republicans and Democrats if she makes it through the confirmation process. Tanden, who spent years leading a left-leaning think tank and being highly critical of Republican lawmakers, intends to tell the Homeland Security and Governmental Affairs Committee that she knows “the role of OMB Director is different from some of my past positions.” In prepared remarks, she says: “Over the last few years, it’s been part of my role to be an impassioned advocate. I understand, though, that the role of OMB Director calls for bipartisan action, as well as a nonpartisan adherence to facts and evidence. Tanden will also describe experiences she had while younger, when her family relied on food aid and rental assistance from the federal government. “As I sit before this Committee, I’m mindful that my path in life would never have been possible without budgetary choices that reflected our nation’s values — many of them made in the very agency I am now nominated to lead,” she says in her statement to the panel. The hearing is the first in a series of steps that will either end with a Senate floor vote or Biden having to submit another candidate.
— Number of registered newborns in China drops 15% in 2020. Births in China fell sharply last year as the coronavirus pandemic intensified the scale of the demographic challenge facing the world’s most populous nation. They dropped 15% from 2019, according to data from the country’s Ministry of Public Security, with 10.04 million births in the country last year compared with 11.79 million a year earlier based on household registrations.
— China makes no changes to its corn and soybean balance sheet, but tweaks cotton forecasts. China’s Ag Ministry made essentially no changes to its balance sheet for corn or soybeans this month, with the country still calling for China to run an 18.51 MMT corn balance deficit and imports to total just 10 MMT in 2020-21. Beijing pegs its soybean imports at 98.10 MMT in 2020-21, which would be a slight retreat from the previous marketing year. china did make some changes to its cotton balance sheet, edging its import projection a bit higher to 2.2 MMT and its export projection a bit lower to 30,000 MT, with ending stocks now expected to total 7.44 MMT, up 120,000 MT from its forecast last month.
— China cracks down on GM corn and cotton. China’s Ag Ministry today said it has found eight companies/research institutes that illegally produced or carries out research on genetically modified seeds. Two companies were breeding GM corn in northwest Xinjiang province and those seeds have been confiscated and companies fined as the production of GM corn is not permitted in China. The country also announced it found four cases of illegal research into GM cotton. While production of GM cotton is permitted in China, those companies and institutes involved were working on genes not previously authorized. It has been years since any such crackdown and China’s leadership last year indicated biotechnology would be part of its campaign to boost food security. Experts have said that before regulated GM crops can be commercialized, illegal GM seed that is reportedly widely available would first have to occur.
— Third Arkansas plant loses ability to export to China. Simmons Foods of Gentry, Arkansas, has been barred from exporting meat and poultry products to China, effective Feb. 7, according to a notice from USDA’s Food Safety and Inspection Service (FSIS). The notice does not indicate why the firm has lost its ability to export to China. It joins two other plants in Arkansas ineligible to ship meat and poultry products to China — a Tyson Foods plant in Springdale and the Ok Foods plant in Fort Smith.
— Analysts see shifts in Biden administration China policy focus toward human rights, coordination with others. U.S. policy towards China is set for a shift under the Biden administration, with more emphasis on human rights and coordinated action with other allies, a panel of trade experts said during a session hosted by the Washington International Trade Association (WITA). While trade was a dominant feature of the U.S./-China relationship under President Donald Trump, “trade is not going to be central to the Biden administration's strategy toward China,” predicted Susan Shirk, chair of the 21st Century China Center at UC San Diego. Instead, she expects an even greater focus on technology issues, emphasizing the role they play for security, economic competitiveness and human rights.
One issue for the Biden administration in countering China on trade is the wide range of other domestic policies it hopes to pursue, said Shirk. She suggested Biden may not be willing or able to spend the political capital needed to pursue trade deals that counter China.
A trade policy linkage. Asia Group Partner and former Principal Deputy Assistant Secretary of State for Economic and Business Affairs Kurt Tong agreed with those sentiments and said the likely focus in Washington will be on areas where trade and national security policy overlap — especially technology. Combined with the Biden administration’s emphasis on trade policy that helps the middle class, Tong said he expects “the idea of going back into TPP [Trans-Pacific Partnership], or other forms of major positive leverage initiatives with friends and allies might be off the table for the time being.” Instead, Tong said areas of trade-national security overlap like export controls, digital economy issues and subsidy discussions at the World Trade Organization (WTO) are a more likely focus.
Regarding pressure on China, the Biden administration is not expected to rely on tariffs to exert more leverage as the Trump administration did, said Princeton University Professor of Politics and International Affairs Aaron Friedberg. The Trump tariff moves “[don’t] really seem to have budged the Chinese position — or not very much” on trade issues, he added.
— U.S. group: U.S./China Phase 1 deal largely a ‘failure.’ A large part of the Phase 1 trade deal between China and the United States that entered into force almost one year ago was a “failure,” according to a new report, although “several elements are worth keeping and building upon.” A report released by the Peterson Institute for International Economics on Monday, noted that US exports of Phase 1 goods to China in 2020 fell more than 40% short of the target. “The Biden administration plans to review the Phase 1 trade agreement president Donald Trump forged with China in late 2019. Good. Much of the deal was a failure,” wrote economist Chad Bown in the report, which was based on full-year analysis of U.S. trade data released last Friday. “According to evidence from the deal’s first year, China was never on pace to meet that commitment, with the economic devastation of the Covid-19 pandemic only partly to blame. Attempting to manage trade — to meet Trump’s objective of reducing the bilateral trade deficit — was self-defeating from the start. It did not help that neither China nor the United States was willing to de-escalate their debilitating tariff war.”
The report said China’s imports of goods covered by the phase one deal were 13% higher last year than in 2019, although this was partly down to a low base one year earlier, due to China’s retaliatory trade war tariffs on U.S. goods.
China’s purchases of manufacturing goods covered under the deal met just 57% of the target last year, with autos, trucks and parts meeting just 40% and aircraft, engines and parts just 18%.
Semiconductors and semiconductor manufacturing equipment, though, exceeded the target by 27%, although the report said this was due to Chinese buyers, including Huawei Technologies Co., stockpiling in anticipation of the U.S. restricting exports of certain products on national security grounds.
Sales of medical products to China also hit 111% of the target due to demand caused by the coronavirus pandemic.
Agricultural exports fell 18% short of the target in 2020. Significant purchases of goods such as pork, corn, cotton and wheat helped, but soybeans and lobsters falling meant it was below target. Also, as part of the deal, China lifted import restrictions on a raft of American farm goods, including poultry, pork, soybeans and barley.
China’s imports of energy products met just 37% of the commitment, the report said. Liquefied natural gas hit 89% of the target, but coal hit just 14% and crude oil 45%. This may have been in part due to historically low oil prices over much of 2020.
The trade in goods deficit with China fell to $310.8 billion in 2020, down from US$419.5 billion in 2018, when the trade war started.
“Several elements are worth keeping and building upon — such as China’s commitment to reduce non-tariff barriers related to food safety and open up to foreign investment. China’s agreeing to crack down on intellectual property violations and the forced, insufficiently compensated, transfer of American technology will also prove beneficial if enforced,” said Bown. “But the dubious policy objective of reducing the bilateral trade deficit — the heart of Trump’s Phase 1 deal — should be scrapped. The purchase commitments only sowed distrust in the very same like-minded countries with which the new U.S. administration must work to tackle their mutual concerns involving China.”
Comments: The analysis comes from an analyst who from the beginning of the trade accord predicted it would not work out. When one views China’s purchases of U.S. farm products, the agreement should be seen as a success, others note, especially when you consider the agreement didn’t really get started until April of 2020.
— U.S./China Phase 1 tracker: China’s purchases of U.S. goods. Link.
— Neal: U.S. trade policy needs to adapt to changing world. The U.S. needs to retool its trade policies to deal with new challenges abroad and at home, Neal will say in a speech this morning. “Trade can be a powerful tool to help workers, families and communities alike, but it requires a thoughtful and strategic approach,” Neal will say, according to excerpts of remarks he will give at an event hosted by the Washington International Trade Association. “I am committed to rethinking policy approaches and putting forward more informed solutions to correct inequities and ensure that all Americans are benefiting from trade and economic opportunities.”
“One of the first steps that needs to occur is U.S. leadership at the World Trade Organization,” Neal will say. “While there are a multitude of long-standing complaints and challenges that must be addressed in order to enable the WTO to regain its relevance to address the global economic challenges of the 21st century — including labor, environment and women’s rights — neither we nor the rest of the world will be able to do so without the U.S. fully engaging in that effort.”
ENERGY & CLIMATE CHANGE
— Labor union tensions with Biden escalate. A key union ally of President Joe Biden is panning his nixing the Keystone XL pipeline, a decision that wedges Biden between labor and environmental groups. AFL-CIO President Richard Trumka, a Biden supporter, said he agrees with a statement by the Laborers' International Union of North America that estimated Biden's Keystone XL decision would cost 1,000 existing union jobs and 10,000 projected temporary construction roles. "I wish he hadn't done that on the first day," Trumka told Axios in a sit-down that aired Sunday. Trumka suggested Biden should have supplemented the Keystone decision with a plan for replacing the jobs. "I wish he had paired that more carefully with the thing that he did second by saying, 'Here's where we're creating jobs.'” Trumka said. "If you destroy 100 jobs in Greene County, Pennsylvania, where I grew up, and you create 100 jobs in California, it doesn't do those 100 families much good," Trumka said.
Biden as part of a climate change executive order last month established an interagency working group to come up with ideas to help communities dependent on fossil fuels. He’s promised to create millions of high-paying union jobs in clean energy.
— Barrasso presses administration on existing oil, gas leases on federal land. The issue of existing oil and gas lease activity on federal lands in Wyoming is a topic that Sen. John Barrasso (R-Wyo.) is seeking additional assurances on from the Biden administration. In a letter to acting Interior Secretary Scott de la Vega, Barrasso said that while the orders imposing a moratorium on gas and oil leasing on federal lands were said to only apply to new leases, he said that those with existing leases in Wyoming have informed him that the Bureau of Land Management (BLM) is “failing to issue permits necessary for oil and gas production on existing leases.”
Barrasso further noted that while Interior is moving ahead with lease sales in Nevada and permitting activity in New Mexico, BLM is not conducting the same activities in Wyoming. “It is imperative that you clarify which activities BLM will conduct… and not treat Wyoming differently than Nevada or New Mexico,” Barrasso stated.
Despite assurances from some Biden administration officials and Jennifer Granholm, Energy secretary-designate, that the executive order does not apply to existing leases, Borrasso said, “I have spoken to a number of oil and gas producers who are unable to obtain the necessary permits from BLM to produce on existing leases on federal land in Wyoming. At least one oil and gas producer has reported to me that BLM is permitting activities in New Mexico that it is not permitting in Wyoming.”
Barrasso included a list of 22 questions that he is seeking answers to from de la Vega no later than February 12.
— Big growth spurt projected for electric car sales. Global electric car sales will reach 62 million vehicles per year by 2050, with nearly all vehicle sales in Europe, China, and North America electric by that year, Wood Mackenzie said in new research. In Europe, China, and the U.S. combined, electric vehicle sales are set to top 7 million a year over the next five years, more than doubling to 15 million a year as electric car costs continue to decline, the firm said. Wood Mackenzie expects residential chargers to be the predominant mode of charging, making up 88% of the 416 million chargers expected globally by 2050. Even with the significant increase in electric car sales, Wood Mackenzie predicts global oil demand for light-duty cars would only decrease 24% by 2050. “Slow erosion of [internal combustion engine] stock and an increasing demand from emerging economies are the main reason for this lethargic drop,” said Ram Chandrasekaran, a principal analyst at the firm.
— Sen. Manchin tries to defend vote flipflop. Sen. Joe Manchin (D-W.Va), who broke from his party last week to support several oil- and gas-related measures — including expressing opposition to a ban on fracking and support for Keystone XL pipeline construction — during the Senate’s budget resolution consideration, released a statement defending why he then supported the final package, despite it being stripped of the measures. “I voted to proceed forward on this urgent Covid-19 relief package because West Virginia families are hurting. They need more vaccines. They need more direct aid in the form of targeted checks. They need to know their unemployment benefits won’t run out in a few weeks,” he said in a release.
— Bipartisan bill includes $500 million for biofuel grants, mandates E15 streamlining. Sens. Amy Klobuchar (D-Minn.) and Joni Ernst (R-Iowa) re-introduced a bill Monday (Feb. 8) that includes $500 million in additional funding for biofuel infrastructure upgrades and would compel the Environmental Protection Agency (EPA) to finalize a rule streamlining regulations for the dispensing of E15 (15% ethanol/85% gasoline) and storage of higher ethanol fuel blends.
The bill, dubbed the Renewable Fuel Infrastructure Investment and Market Expansion Act, includes $500 million in funding over five years for grants to fuel retailers performing equipment upgrades needed to dispense E15 and higher ethanol fuel blends. The effort would build on USDA’s 2015 Biofuel Infrastructure Program (BIP) and its successor — the 2020 Higher Blends Infrastructure Incentive Program (HBIIP). BIP and HBIIP operated on a one-off basis, with funding of $100 million each.
The measure would authorize funding for the effort at $100 million per year for five years.
The legislation would direct EPA to finalize an E15 streamlining and storage rule that was proposed by the Trump administration during its final days in office. The 2020 version of the measure did not include the streamlining or storage provisions. Under the proposed rule, EPA asked for feedback about whether to modify or remove current warning labels currently required to be displayed on gas pumps that dispense the fuel. EPA also asked for comment on whether state and local governments should be preempted from requiring different labels on E15 dispensing pumps. The rules would have also modified regulations governing the use of underground storage tanks (USTs) to store higher ethanol blends.
Comments: The proposal is not given high odds of clearing Congress unless it is attached to a must-pass measure.
FOOD & BEVERAGE INDUSTRY
— Meatpackers want workers to get shots, but some aren’t sure. Meatpacking workers are among the next wave of people eligible for Covid vaccinations in some states. Their bosses want to make sure they get the shots. Link to WSJ article for details. It says meat-industry officials said vaccines now being provided to some essential workers offer the best chance of ensuring safety for employees who cut meat, standing shoulder to shoulder, for hours at a stretch each day. Vaccination rates among plant workers could determine whether the $213 billion U.S. meat sector can move beyond the crisis that has upended the industry this past year, sickening thousands of workers and killing more than 130, according to labor union estimates.
— Summary: Global cases of Covid-19 are at 106,553,071 with 2,327,231 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 27,097,346 with 465,083 deaths.
— U.S. reported fewer than 100,000 new cases for the second day, and in several states, more than 10% of residents have received an initial vaccine dose. But skyrocketing demand for vaccines in some states is overwhelming local providers and frustrating people seeking shots.
— Virus likely came from animal, not laboratory, WHO says. The virus that causes Covid-19 most likely entered the human population through an intermediate animal and is highly unlikely to have leaked from a laboratory, a leader of a World Health Organization (WHO) investigative team said at a press conference in the Chinese city of Wuhan.
POLITICS & ELECTIONS
— Second Trump impeachment trial opens today. The first session will feature presentations from both sides over the Senate’s authority to hear the case against former President Donald Trump, followed by a vote on the matter, which requires a simple majority and is expected to pass in the Democratic-controlled chamber. In pretrial filings, lawyers for Trump argued the proceedings are unconstitutional and called the trial “political theater,” while Democrats said Trump is trying to escape accountability for last month’s riot at the Capitol.
— Rep. Ron Wright dies of Covid-19. Rep. Ron Wright (R-Texas) died Sunday after contracting Covid-19, according to his campaign office, becoming the first member of Congress to die from the coronavirus while in office. Wright’s death at the age of 67 came two weeks after he was admitted to Baylor Hospital in Dallas, his campaign said. He said on Jan. 21 that he had tested positive for Covid-19 after coming into contact with someone who was infected. He was also being treated for cancer, his office said. Wright was starting his second term in Congress. He previously served as a member of the Arlington, Texas, City Council and as an aide for former Rep. Joe Barton (R-Texas). In late December, GOP Louisiana Rep.-elect Luke Letlow died of Covid-19, just days before he was set to be sworn in as a new member of Congress, at the age of 41.
Cook Political Report House editor David Wasserman writes, “Texas's 6th CD encompasses rapidly diversifying suburbs of the Dallas-Ft. Worth Metroplex, including parts of Arlington and all of Ellis County south of Dallas. It's been trending blue: it voted for Mitt Romney by 17 points in 2012, by 12 points for Donald Trump in 2016 and by just three points for Trump in 2020. In 2018, it was 57% white, 21% Black and 16% Hispanic. However, Wasserman notes that neither Wright “nor his weak Democratic opponents” raised or spent much money in either 2018 and 2020, “and the district still leans Republican down-ballot.” In 2020, Wright beat Democratic attorney Stephen Daniel 53% to 44%.
Wasserman believes a special election “could be an early test of the post-Trump political environment,” with the caveat that Texas's 6th CD is still a shade redder than Georgia. But under Texas law — as in Georgia's Senate special — candidates of all parties will first run in a jungle primary. If no one attains 50% of the vote, the top two candidates will advance to a special election runoff.
Wasserman details that Texas law states that Gov. Greg Abbott may schedule a special election for between 36 and 50 days of declaring a vacancy, with a runoff a similar time period thereafter. “But in recent practice, the governor has had a wider latitude to set special election dates. Texas's next uniform election for local offices is scheduled for May 1, so it's possible a runoff could be held then.”
Potential candidates and initial prediction. The Dallas Morning News already mentioned Wright's widow Susan, Arlington Mayor Jeff Williams, Tarrant County Sheriff Bill Waybourn and state Rep. David Cook as possible candidates. “There is a considerably weaker bench of Democrats in local office, so this will be the new DCCC's first major recruitment test. For now, the 6th CD still leans Republican,” Wasserman concludes.
— Democrat Brindisi concedes to Republican Tenney in New York's 22nd District. Former Rep. Anthony Brindisi (D-N.Y.) on Monday conceded to Republican challenger Claudia Tenney in New York’s 22nd congressional district. Brindisi was a member of the House Agriculture Committee. He beat Tenney in 2018 and represented the district for one term. The race has been the subject of drawn-out battle over whether certain votes should be counted. WKTV reported Brindisi said in January he would run again in 2022, whether he won the 2020 election or not.
The latest GOP win makes the final result of 2020's House elections 222 Democrats and 213 Republicans. Says Cook Political Report House editor David Wasserman: “All told, Republicans came within 31,751 votes of winning the majority, and in a House this closely divided, every vote and vacancy matters. With the passing of Wright and GOP Rep.-elect Luke Letlow (LA-05) and Democratic Rep. Cedric Richmond (LA-02) to join the Biden administration, Wasserman says the current House count is 221 Democrats and 210 Republicans.” But Tenney will be sworn in soon, and Democratic Reps. Deb Haaland (NM-01) and Marcia Fudge (OH-11) could be confirmed to Cabinet posts soon.”
— Sen. Shelby won't run for re-election. Sen. Richard Shelby (R-Ala.) said on Monday that he would not run for re-election in 2022. “Today I announce that I will not seek a seventh term in the United State Senate in 2022. For everything, there is a season," Shelby said in a statement. “Although I plan to retire, I am not leaving today. I have two good years remaining to continue my work in Washington. I have the vision and the energy to give it my all," the 86-year-old senator added. Shelby was first elected to the House in 1978 as a Democrat and won election to the Senate for the first time in 1986. Shelby then switched parties to become a Republican in 1994. Shelby is currently fourth in Senate seniority. He's currently the top Republican on the Senate Appropriations Committee, a post that allows him to direct funding back to his home state. Republicans will be defending 20 Senate seats in 2022 compared to the Democrats' 14.
Sens. Pat Toomey (R-Pa.) and Rob Portman (R-Ohio) have previously said they would retire at the end of their current term. Sen. Richard Burr (R-N.C.) has previously said he wouldn't run for re-election.
The seat is reliably Republican, but it could set up a list of potential replacements. Rep. Mo Brooks (R-Ala.) is viewed as a potential candidate but has drawn criticism over his support for trying to overturn the results of the presidential election and his remarks at a rally on Jan. 6 shortly before rioters breached the U.S. Capitol. Other potential contenders include Alabama Secretary of State John Merrill (R), Lt. Gov. Will Ainsworth (R) and GOP Reps. Gary Palmer and Robert Aderholt.
— Obama ethics chief criticizes Biden over Hunter memoir in disappearing tweets. Former President Barack Obama's ethics chief, Walter Shaub, ripped President Biden for publicly commenting on son Hunter's forthcoming memoir, likening it to a "book promotion tour." "It is not acceptable for the president of the United States to be part of the book promotion tour. No," tweeted Shaub, a U.S. Office of Government Ethics former director under Obama. The tweet that was issued Sunday afternoon was deleted but not before some newspapers and others viewed its contents.
— In New York, Senate Majority Leader Chuck Schumer (D-N.Y.) is taking steps to head off a primary challenge from the left. Link for details via the New York Times. “Armed with a sweeping set of policy promises, he is courting the activists, organizers and next-generation elected officials in New York who would likely make up the backbone of an effort to dethrone him, should one ever arise,” the article notes.
OTHER ITEMS OF NOTE
— Many people are now choosing to pack up and leave California. Increasingly more people are saying high taxes, the high cost of living, and even politics are making them choose to leave the Golden State. A report released last summer showed the state’s population growth hit a record low.
— Putin expected to unveil $6.7 billion in new social spending to assuage discontent. Russian government sources say President Vladimir Putin is expected to unveil at least $6.7 billion in new social spending programs to address rising public dissatisfaction in the wake of public protests in support of jailed dissident Alexei Navalny. The sources tell Reuters that Putin will roll out the new programs in an annual speech to Russia’s political elite in the near future.
— EU countries expel Russians in diplomatic tit-for-tat. Relations between the European Union and Russia reached a new low on Monday as three EU countries expelled one Russian diplomat each in a tit-for-tat move. On Friday, Russia barred three EU diplomats — one each from Germany, Sweden, and Poland — for alleged involvement in protests supporting Russian dissident Alexei Navalny. The EU states maintain their staff were merely observing the protests, in line with internationally recognized diplomatic convention. Europe’s retaliation comes after EU foreign policy chief Josep Borrell completed a three-day visit to the country that went from bad to worse.