Connect with us

Business

Three Years After Ukraine Invasion, Europe Still Deals With Energy Crisis

Published

on

Three Years After Ukraine Invasion, Europe Still Deals With Energy Crisis

At a newly built dock along Germany’s Elbe River, tankers from the United States unload liquefied natural gas to fuel factories and homes. In central Spain, a forest of wind turbines planted atop mountains helps power the energy grid. In French government buildings, thermostats have been lowered in winter to save electricity.

In the three years since Russia’s invasion of Ukraine ignited an energy crisis across Europe, the continent has transformed how it generates and stores power. Russian natural gas, long Europe’s energy lifeline, has been replaced with other sources, notably liquefied natural gas from the United States. Wind and solar power generation has leaped around 50 percent since 2021. New nuclear power plants are being planned across the continent.

But Europe’s energy security remains fragile. The region produces far less natural gas than it consumes and is still largely dependent on other countries, especially the United States, to help keep the lights on. Natural gas, which drives the price of electricity, is roughly four times as expensive as in the United States. High energy costs have strained households and forced factories to close, weakening Europe’s economy.

The 2022 invasion of Ukraine revealed Europe’s dependence on energy from Russia, especially natural gas, which accounts for around 20 percent of Europe’s energy consumption.

“The energy appeared cheap, but it exposed us to blackmail,” Ursula von der Leyen, president of the European Commission, the European Union’s executive arm, told the World Economic Forum last month.

Advertisement

Prices soared in 2022 on worries that Russia would completely cut off gas flows into Europe as well as other factors. Countries banded together to share fuel and other energy sources, and build or modify infrastructure to transport it. These efforts are forecast to have reduced Europe’s reliance on Russian gas to 8 percent of supplies in 2025, from 35 percent in 2021, according to Anna Galtsova, an analyst at S&P Global Commodity Insights, a research firm.

Norway is now the largest supplier of gas, mainly through a web of pipelines. But Russia has become a large supplier of liquefied natural gas, second only to the United States in 2024.

And Europe has become better at directing the energy to where it is needed, creating “a tremendous amount of flexibility that Europe didn’t have on the eve of the war,” said Anatol Feygin, chief commercial officer at Cheniere Energy, a large American L.N.G. exporter.

Helping that pivot were programs that encouraged households and government buildings to lower thermostats to 19 degrees Celsius (66 degrees Fahrenheit). Factories across Europe also curbed production to avoid blistering energy bills. Other initiatives, like having stores shut off lights early in the evening, have been rolled out.

Europe built more renewable energy projects to help bridge the gap. Before Russia’s invasion, around a third of Europe’s power generation came from renewable energy, propelled by a buildup of wind and solar power. In 2024, wind and solar farms generated more electrical power than fossil fuels for the first time, according to S&P Global Commodity Insights.

Advertisement

“That is a big change, and that speaks to the additional policy push to get alternative sources of energy into the system,” said Tim Gould, chief energy economist at the International Energy Agency in Paris.

But shifting to renewable energy is costly. Although overall energy prices have declined from their 2022 peaks, both gas and electricity tariffs remain elevated. Renewable sources like wind and solar have made great progress, but much investment is still needed to fill in the gaps in periods of low wind and sun.

Large polluters like steel makers have said Europe is not doing enough to foster a shift to greener operations. “European policy, energy and market environments have not moved in a favorable direction,” ArcelorMittal, Europe’s largest steel company, said in November.

The largest alternative to gas piped in from Russia by far has been liquefied natural gas, but it is a relatively expensive option. With gas vital for industry, heating and power generation, the shift away from Russian supplies has been difficult.

Europe is at the mercy of global markets, bidding against the likes of China and South Korea for liquefied natural gas. Prices have recently soared to the highest level in a year, hurting businesses and adding to a cost-of-living crisis in Europe.

Advertisement

The largest source of liquefied natural gas has been the United States, mostly terminals from the Gulf Coast, which provide nearly half of Europe’s supply. Europe has seen a boom in setting up terminals to receive L.N.G., especially in Germany, which had none before the energy crisis.

During a cold snap in January, several American tankers carrying liquefied natural gas to Asia changed course for Europe, where they could make a bigger profit, said Natasha Fielding, head of European gas pricing at Argus Media, a London research firm.

“Europe has made really remarkable strides,” said David L. Goldwyn, who was a State Department energy envoy during the Clinton and Obama administrations. “But when the weather turns cold and competition from Asia for L.N.G. increases, the situation looks more challenging.”

Natural gas prices in Europe have fallen from the punishing highs of 2022, but in 2024, they were still double their five-year average before the war, according to the International Energy Agency.

Although imports of Russian gas through Europe’s pipelines have plummeted, Europe has expanded its purchases of liquefied natural gas from Russia, which arrives via port. There has not been enough time to develop new resources like L.N.G. to compensate for the loss of Russian gas.

Advertisement

The ebbs and flows of L.N.G. are largely determined by market forces. President Trump has pushed Europe to import more fuel from the United States, and Ms. von der Leyen has suggested that L.N.G. from the United States could replace Russian fuel.

Some level of additional gas exports to Europe from Russia could be included as a sweetener for President Vladimir V. Putin of Russia to agree to a settlement in Ukraine, analysts say. “That would be a serious negative for U.S. energy exporters,” Mr. Goldwyn said.

Exorbitant gas costs contributed to soaring inflation and led factories that employed thousands in Europe to close or relocate to countries with cheaper energy.

Some of the biggest European names are trimming their operations. The German chemical giant BASF said it would close some production at its site in Ludwigshafen near the border with France, while making the largest foreign investment in its history in China, where energy is up to two-thirds cheaper than in Europe.

High natural gas prices have translated into higher costs for making ammonia, a crucial component in fertilizers. Yara International, a fertilizer giant based in Norway, is stopping ammonia production at its plant in Tertre, Belgium, potentially leading to more than 100 job losses. “High energy prices are a huge challenge for European competitiveness,” a spokeswoman said.

Advertisement

The energy crisis has also led to a painful cost-of-living crisis for families across Europe. Energy poverty has jumped in Europe, with nearly 10 percent of the population reporting that it is unable to keep its homes warm, and larger numbers of households falling behind on paying their energy bills.

“We’ve created a state of energy precariousness,” said Niki Vouzas, spokeswoman for the National Federation of Rural Families in France. “People are heating their house less, and filling up the gas tank less.”

Recent months have brought renewed signs of market unease. The colder weather has caused Europe to draw down the levels of storage it builds up for the winter at a faster rate than the previous year, leading to worries that rebuilding these stocks over the summer may be expensive.

“The challenge will be this summer to replenish the reserves ahead of the following winter,” Ms. Fielding of Argus said.

Despite the premium prices of recent years, Europe’s overall gas production has declined. Higher taxes have deterred investment in the British North Sea while the Netherlands is shutting the once prolific Groningen field after production triggered earthquakes. Domestic output in the European Union and Britain amounted to less than 20 percent of consumption in 2024, S&P Global Commodity Insights estimates.

Advertisement

Austria’s OMV is one of the rare companies aiming to increase gas production in Europe. The only way to make Europe’s energy costs competitive with other regions like the United States “is to increase supplies of gas” said Alfred Stern, OMV’s chief executive.

“We are past peak crisis,” said Michael Stoppard, global gas strategy lead at S&P Global Commodity Insights. “But we are not out of the woods.”

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Business

Job Market Gives Fed Cover to Extend Interest Rate Pause

Published

on

Job Market Gives Fed Cover to Extend Interest Rate Pause

Less than six months ago, Federal Reserve officials were wringing their hands about the state of the labor market. No major cracks had emerged, but monthly jobs growth had slowed and the unemployment rate was steadily ticking higher. In a bid to preserve the economy’s strength, the Fed took the unusual step of lowering interest rates by double the magnitude of its typical moves.

Those concerns have since evaporated. Officials now exude a rare confidence that the labor market is strong and set to stay that way, providing them latitude to hold rates steady for awhile.

The approach constitutes a strategic gamble, which economists by and large expect to work out. That suggests the central bank will take its time before lowering borrowing costs again and await clearer signs that price pressures are easing.

“The jobs data just aren’t calling for lower rates right now,” said Jon Faust of the Center for Financial Economics at Johns Hopkins University, who was a senior adviser to the Fed chair, Jerome H. Powell. “If the labor market seriously broke, that may warrant a policy reaction, but other than that, it takes some progress on inflation.”

Across a number of metrics, the labor market looks remarkably stable even as it has cooled. The latest employment report, released on Friday, reaffirmed that view. The pace of hiring in January slowed more than expected, to 140,000 new positions, but previous months’ totals were revised higher. In November and December, there were 100,000 more jobs created than initially estimated. The unemployment rate also ticked back down to 4 percent, a historically low level.

Advertisement

The number of Americans out of work and filing for weekly benefits remains low, too.

“People can get jobs and employers can find workers,” said Mary C. Daly, president of the San Francisco Fed, in an interview this week. “I don’t see any signs right now of weakening.”

Thomas Barkin, who heads the Richmond Fed, told reporters on Wednesday that the economy overall was “solid, but not overheating.”

These conditions — plus a rapidly changing mix of policies spearheaded by the Trump administration — have helped to support the Fed’s case for pausing rate cuts and turning more cautious on when to resume.

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, told CNBC on Friday that the central bank was in a good place to wait for additional information before making any policy decisions, though he predicted interest rates would be “modestly” lower by the end of the year.

Advertisement

The consensus is that the Fed will cut at least once more this year, although confidence in those estimates generally has whipsawed in recent weeks.

Some economists have scaled back their expectations on the basis that inflationary pressures will resurface as policies like tariffs come into effect. Others have moved in the opposite direction on fears that the labor market is not as sound as it appears.

“There’s a lot of complacency out there about what the economy really looks like,” said Neil Dutta, head of economics at Renaissance Macro Research. “Whenever the Fed says they have time, they never have so much.”

One measure that has generated attention is the hiring rate, which remains subdued. Since the beginning of the summer, the share of unemployed Americans who have been out of work for about six months or longer has also steadily risen.

Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, said he was bracing for a pickup in layoffs as well, estimating that there has been a 5 percent increase compared with December’s level based on datathat tracks written notices for large-scale layoffs at companies with 100 or more full-time employees.

Advertisement

Right now, those developments warrant no more than a note of caution, most economists said. Steven Kamin, who previously ran the division of international finance at the Fed and is now a senior fellow at the American Enterprise Institute, said the central bank would worry if monthly payrolls growth consistently hovered below 100,000 and the unemployment rate moved significantly higher. So long as inflation is in check, the Fed could restart rate cuts before the middle of the year, he added.

The biggest unknown for the labor market is immigration. Mr. Trump has begun to deport migrants, but not yet at the scale he pledged on the campaign trail. If net immigration falls to zero or turns negative, it could result in some combination of slower employment growth, higher wages in the most affected sectors and a lower unemployment rate, reflecting a shrinking labor force.

Julia Coronado, a former Fed economist who now runs MacroPolicy Perspectives, is among those primarily concerned about the hit to growth from these policies. Immigrants are “complements not substitutes” for domestic workers, she said, such that “if you lose construction workers, construction activity just goes slower.”

Coupled with the looming threat of tariffs, businesses are unsurprisingly on edge. If those nerves translate to a broader retrenchment, that could dent hiring more significantly.

“If I were a C.E.O. of any company right now, what would I be doing? For almost any investment I can think of, the best answer is to wait three months,” said Justin Wolfers, a professor of public policy and economics at the University of Michigan.

Advertisement
Continue Reading

Business

Column: Trump's all-out assault on transgender rights isn't a sign of strength, but cowardice

Published

on

Column: Trump's all-out assault on transgender rights isn't a sign of strength, but cowardice

It was easy to think that the diatribe about school transgender policies Donald Trump voiced during his presidential campaign was his most “deranged and despicable,” as I described it at the time.

Do you remember? At an event with Moms for Liberty, the far-right gang of book-banners, Trump said the following: “Think of it. Your kid goes to school and comes home a few days later with an operation. The school decides what’s gonna happen with your child. And you know, many of these childs [sic] 15 years later say, ‘What the hell happened? Who did this to me?’ They say, ‘Who did this to me?’”

None of this existed in the real world; one would have to be bereft of cognitive capacity to believe Trump’s picture of children being kidnapped, held for days so they can be operated on by their school, then to wake up 15 years later to discover their sex had been changed.

California families seeking gender affirming care, and the doctors and staff who provide it, are protected under state laws.

— California Atty. Gen. Rob Bonta

Advertisement

As we now know, however, Trump was only getting started. With the issuance of executive orders starting on his first day in office, Trump wiped out policies aimed at protecting transgender adults from discrimination, and moved to outlaw gender-affirming medical therapies for anyone under 19 — which includes 18-year-olds who are legally adults — by cutting off federal funding for healthcare institutions that provide such care.

Trump is no longer claiming that K-12 schools were subjecting children to involuntary operations, but once you’ve said that you’ve said everything. He banned transgender individuals from serving in the military and ordered the Federal Bureau of Prisons to move transgender inmates into the general populations consistent with their birth genders, which exposes them to physical assault. (Federal Judge Royce Lamberth of Washington, D.C., on Wednesday blocked the government from transferring three transgender women into the male prison population or terminating their hormone treatments.)

He declared that the federal government recognizes only “two sexes, male and female,” which are “not changeable and are grounded in fundamental and incontrovertible reality,” and has forbidden health plans serving federal employees to cover gender-affirming care for people under 19.

This all amounts to what legal commentator Mark Joseph Stern of Slate accurately labels “the biggest, broadest, most vicious assault on transgender existence we’ve ever seen,” a campaign of “unfathomable” scope.

Advertisement

Trump’s attacks on transgender individuals and their care were part of his drive to portray himself as a political strongman. But they’re just the opposite: They’re expressions of cowardice, because he well knows that his targets have little political power.

Who are the targets of these orders? They’re not a large group. About 1.6 million U.S. adults, or one-half of 1%, and 300,000 adolescents aged 13 to 17, or 1.4%, identify as transgender, according to a study by UCLA law school. A study by Harvard researchers found that fewer than 1% adolescents with private health insurance received either puberty blockers or hormone treatments.

“We are not seeing inappropriate use of this sort of care,” Landon Hughes, the study’s lead author, told the Associated Press. “And it’s certainly not happening at the rate at which people often think it is.”

Yet transgender care, especially for adolescents, has become an ideological litmus test for conservatives and Republican politicians. Restrictions on gender-affirming therapies for those under 18 have been enacted in 26 states; the rules imposed by Tennessee are under consideration by the U.S. Supreme Court, which heard oral arguments in the case Dec. 4.

These laws purport to be based on sound medical concerns. But that’s a smoke screen, since leading medical associations and physicians involved with pediatric and adolescent care support the therapies outlawed by the states as the legitimate standard of care for their patients.

Advertisement

One can always identify bullies by the targets they choose, and that’s the case here. As I wrote during Trump’s first term, when his anti-transgender policies were still in the gestational state, “There is no conceivable reason to support discrimination against transgender individuals other than to show one can target any community, as long as it doesn’t have a strong political voice or political power. These are the actions of bullies and cowards, pretending to be strong.”

Over recent years and decades, the roster of targets the right wing could exploit to keep its base unified has been shrinking.

Open racism became no longer socially acceptable (though it made a strong comeback in the first Trump era). The list of ethnic groups that could be stereotyped as undesirables had shrunk. It was no longer respectable to laugh at or denigrate the mentally ill, the homeless, the disabled.

Gays and lesbians had moved into the mainstream of culture and society. Even conservative and Republican families had come to accept gay and lesbian siblings, children and parents as deserving of their love.

Most importantly, gays and lesbians had acquired a political voice; gay-bashing would no longer work for a political candidate as it had in the past, except perhaps in the most benighted corners of American society.

Advertisement

So who’s left? Transgender individuals, who are still so scarce in our lives and culture, and still so relatively powerless, that politicians can demonize and demean them without much fear that they can strike back.

Trump’s executive orders explicitly reflect this mindset. He doesn’t accept that adolescents can experience gender dysphoria unless they’ve been subjected to “radical indoctrination” by schoolteachers. He says that gender-affirming treatments are imposed only on “impressionable children”—never mind that their parents have consulted with medical professionals and support their judgments.

He says transgender recruits “cannot satisfy the rigorous standards necessary for military service” and aren’t committed to “an honorable, truthful, and disciplined lifestyle.” He says transgender individuals make “the false claim that males can identify as and thus become women and vice versa, and [require] all institutions of society to regard this false claim as true.”

Trump’s attacks on transgender rights and medical care aren’t like the performative horseplay he engaged in over tariff policy and the global economy; in that case Wall Streeters acted as if they knew he wasn’t really serious, and the government leaders of Canada and Mexico foresaw that he would look for a way to declare victory and back down.

There’s nothing abstract about transgender policies, by contrast. They’re aimed directly at vulnerable individuals whose lives he has disrupted. That disruption began with Trump’s inauguration, and continues to that day, due in part to the capitulation of healthcare institutions to his fact-free and possibly illegal policymaking.

Advertisement

On Tuesday, Childrens Hospital Los Angeles said it was “pausing the initiation of hormonal therapies for all gender affirming care patients under the age of 19” while it evaluates Trump’s executive order on gender care “to fully understand its implications.” The hospital said it would continue care for patients who were already receiving it.

The hospital referred me to its formal statement, in which it asserted that “physical and mental health, safety, and well-being of all of our patients remains our highest priority.” That’s a pretty serving of boilerplate, but it’s obviously in conflict with its “pause,” since placing the well-being of all its patients conflicts with its decision to bow, even if temporarily, to Trump’s orders.

In any case, the hospital was crisply informed by California Atty. Gen. Rob Bonta that state law prohibits what appears to be its discriminatory treatment of transgender patients, since it provides cisgender patients with hormone treatments and other therapies named by Trump if they’re provided for transgender patients. Bonta also told the hospital by letter that a federal judge already has blocked Trump’s effort to freeze federal funds that don’t conform to his own priorities.

Federal agencies have no basis “to threaten or revoke your federal funding,” Bonta wrote, whatever Trump says. “California families seeking gender affirming care, and the doctors and staff who provide it, are protected under state laws.” CHLA didn’t answer my question about how it plans to respond to Bonta’s advisory.

Other institutions around the country have also capitulated to Trump’s grandstanding, affording him the opportunity for a victory lap. In a news release issued Monday, he bragged about all the healthcare providers that have canceled appointments for gender-affirming care for patients under 19 or paused, suspended or ended gender-affirming treatments.

Advertisement

How long can Trump’s campaign go on? Perhaps not very long. Two organizations that support gender-affirming care, five transgender minors and three transgender adults filed a federal lawsuit Tuesday specifically asking a federal judge in Maryland to declare Trump’s executive orders on gender unconstitutional and unlawful, and to block his cutoff of federal funds for providers of such care.

They may succeed in blocking Trump’s funding freeze, for a time, but that would be only a procedural victory. Trump and his acolytes have injected a poisonous, partisan and ideological view of transgender individuals and their medical needs that may infect American politics for a long time. The providers who bowed to Trump’s threats will deserve a good measure of blame for that.

Continue Reading

Business

Trump Met PGA Commissioner About Saudi Golf Tour Deal

Published

on

Trump Met PGA Commissioner About Saudi Golf Tour Deal

President Trump met this week with the PGA Tour commissioner, the tour said on Thursday, as the Justice Department considers whether to approve a venture between the United States’ premier golf circuit and one backed by Saudi Arabia’s sovereign wealth fund.

The meeting at the White House on Tuesday was an unusual foray for an American president into global sports diplomacy but squared with his decades-long ambitions to act as a sports power broker. It was also the latest expression of his closeness to LIV Golf, the Saudi-backed tour.

In addition to the PGA Tour commissioner, Jay Monahan, Mr. Trump hosted Adam Scott, who won the Masters Tournament in 2013 and sits on the PGA Tour’s board.

During the Oval Office meeting, Mr. Trump also spoke by telephone with Yasir al-Rumayyan, the Saudi wealth fund’s governor and one of the most influential figures in Saudi Arabia, according to two people familiar with the session who spoke on the condition of anonymity to describe the private talks.

“We asked the president to get involved for the good of the game, the good of the country and for all the countries involved,” Mr. Monahan, Mr. Scott and Tiger Woods said in a joint statement on Thursday afternoon after The New York Times asked on Wednesday night about the meeting. “We are grateful that his leadership has brought us closer to a final deal, paving the way for reunification of men’s professional golf.”

Advertisement

Mr. Woods, the most celebrated player of his generation and another member of the tour’s board, had been scheduled to attend but did not participate because of the death of his mother, according to one of the people briefed on the meeting.

Mr. Woods’s agent did not respond to a request for comment. The wealth fund did not comment.

Since LIV thundered onto the professional golf scene three years ago, Mr. Trump, stung by the professional golf establishment’s distancing itself from him after his entry into politics, has been one of its most steadfast supporters and one of its most essential vendors.

His company has hosted LIV tournaments at courses up and down the East Coast — the circuit is scheduled to return to Trump National Doral, near Miami, in April — and Mr. Trump has been a regular presence. As he played in LIV’s professional-amateur competitions, he would routinely denigrate the PGA Tour and praise its rival and its Saudi patrons to anyone who would listen.

Now Mr. Trump is acting as something of a mediator for the prestigious American tour and the Saudi upstart that defied legions of naysayers to become a force in the sport. On Wednesday, the U.S. Open’s organizer announced a smoother pathway for LIV players to compete at the event, one of the sport’s four major tournaments.

Advertisement

Only two years ago, such a détente seemed improbable. The PGA Tour and LIV had spent 2022 and the first months of 2023 at bitter odds, as the Saudi league swept in to sign well-established stars to some of the most lucrative deals in sports history. LIV encouraged the Justice Department to investigate the PGA Tour for potential violations of antitrust law, and the tour spent months denouncing LIV and its Saudi financiers.

But in June 2023, after about two months of secret talks that stretched from San Francisco to Venice, the tour and LIV abruptly announced a plan to try to combine their businesses. The tentative agreement led to a truce of sorts in their clash over power, money and morality in global sports.

The two sides have yet to close a final deal, though. Federal antitrust officials have been reviewing a term sheet that called for the wealth fund to put $1.5 billion into a commercial arm that the PGA Tour and a group of top American sports investors created.

Justice Department officials have been particularly attuned to whether LIV and the PGA Tour, whose tournaments differ in format and length, are direct rivals and whether a deal might stifle competition in the United States.

In December, Mr. Woods said the talks were “very fluid,” though he also described them as “constructive.”

Advertisement

Mr. Trump, an avid golfer, has spent years predicting some kind of deal between the PGA Tour and LIV. But even as he enjoyed rounds with top players, Mr. Trump has had a complex relationship with America’s golf elite in recent years.

The PGA Tour, which used to hold events at the Trump property in Doral, Fla., ended its relationship with Mr. Trump’s company during the 2016 campaign. Tim Finchem, who was then the tour’s commissioner, said the move was not “a political exercise” but “fundamentally a sponsorship issue.”

Mr. Trump also had a particular falling-out with the P.G.A. of America, which pulled its men’s championship tournament from a Trump course after the Jan. 6, 2021, riot at the Capitol. The Trump Organization and the group, which is distinct from the PGA Tour, later reached a settlement.

Soon after his election in November, Mr. Trump signaled his continued interest in the fate of professional golf’s negotiations. As president-elect, Mr. Trump hosted Mr. Monahan for a round of golf at Trump International Golf Club in West Palm Beach, Fla. The next day, he saw Mr. al-Rumayyan at an event in New York.

Asked in November whether Mr. Trump could perhaps break the logjam, Rory McIlroy, one of the world’s top players, replied, “He might be able to.”

Advertisement

“Obviously Trump has a great relationship with Saudi Arabia,” added Mr. McIlroy, a former PGA Tour board member who played with Mr. Trump in 2017. “He’s got a great relationship with golf. He’s a lover of golf. So, maybe. Who knows? But I think as the president of the United States again, he’s probably got bigger things to focus on than golf.”

But for at least a short time on Tuesday, the day he publicly floated an American takeover of Gaza, Mr. Trump was firmly focused on golf.

Continue Reading

Trending