Business
With Russian Cutoff Feared, Europeans Are Told to Curb Natural Gas Use
BRUSSELS — Europe should drastically lower its use of pure gasoline instantly, and by a complete of 15 % between now and the springtime, to stop a serious disaster as Russia slashes gasoline exports, the European Union’s govt department mentioned on Wednesday, calling for laborious sacrifices by the folks of the world’s richest group of countries.
“Russia is blackmailing us,” the European Fee president, Ursula von der Leyen, mentioned as she launched the E.U. plan to scale back gasoline consumption. “Russia is utilizing vitality as a weapon.”
Months earlier than it invaded Ukraine in February, upending vitality markets and different aspects of the worldwide financial system, “Russia stored gasoline provide deliberately as little as potential regardless of the excessive gasoline costs,” she mentioned.
The circulation of Russian gasoline, which supplies 40 % of E.U. consumption, was lower than one-third the conventional common in June. Gasoline storage amenities in Europe, usually nearly full at this level within the yr in preparation for winter, will not be sufficiently stocked to take care of such volatility and shortages, threatening to upend business and personal lives alike.
“We now have to organize for a possible full disruption of Russian gasoline, and it is a seemingly state of affairs,” Ms. von der Leyen mentioned.
The European Union has already banned most imports of Russian oil, after painstaking negotiations this spring among the many 27 member states that made exceptions for some small international locations like Hungary and Slovakia. The plan to chop gasoline use is predicted to be a lot simpler to undertake when E.U. vitality ministers meet in Brussels subsequent Tuesday, as a result of in contrast to the oil embargo, it doesn’t require unanimity.
If member nations conform to the plan and the brand new laws that goes with it, the fee, the bloc’s govt arm, would in the end have the ability to pressure international locations to stay to gasoline consumption limits in the event that they fail to take action voluntarily. The fee’s proposal didn’t specify what enforcement mechanism can be used.
Russia’s international minister, Sergey Lavrov, on Wednesday acknowledged that his nation has broader ambitions in Ukraine that it had beforehand admitted, the most recent indication that the conflict is nowhere close to completed, regardless of a pause in Moscow’s japanese offensive. Moscow has repeatedly modified its description of its conflict goals, giving contradictory statements about whether or not it meant to topple Ukraine’s authorities or annex territory.
In latest months the Kremlin has solid the conflict as being primarily about seizing the Donbas area within the east, however Mr. Lavrov spoke of holding captured territory within the Kherson and Zaporizhzhia areas within the south, as nicely. A Pentagon spokesman mentioned Wednesday that Russia means to annex conquered territory, justifying it with sham referendums.
European public opinion is break up over whether or not supporting Ukraine is well worth the sacrifice, and President Vladimir V. Putin of Russia is relying on Europeans being unwilling to pay a excessive value for Ukrainian freedom, and pressuring their leaders to strike a take care of Moscow.
Nonetheless, public fatigue with Europe’s assist of Ukraine could also be overstated. A ballot in Germany, the biggest E.U. nation and the one most reliant on Russian gasoline imports, final week discovered that solely 22 % needed their authorities to curb assist to Ukraine to carry down vitality costs; 70 % of respondents mentioned they needed the German authorities to proceed strongly backing Ukraine regardless of the financial fallout.
Within the combat for public opinion, Olena Zelenska, the spouse of President Volodymyr Zelensky of Ukraine, addressed the U.S. Congress on Wednesday, asking for extra weapons to defend towards what she known as the “Russian starvation video games.”
Higher Perceive the Russia-Ukraine Warfare
“An unprovoked invasive terrorist conflict is being waged towards my nation,” she added. “Russia is destroying our folks.”
One impediment to the E.U. plan to chop gasoline use is that it makes a uniform demand that every nation lower consumption by 15 % between Aug. 1 and March 31, which can be seen as unfair to these like Italy, Spain and France that don’t purchase a lot gasoline from Russia.
The principle argument to get all E.U nations on board, regardless of their completely different ranges of vulnerability, is that the bloc’s economies are so interconnected {that a} blow to at least one is a blow to all.
“The selection we now have in the present day is triggering solidarity now or ready for an emergency that may pressure solidarity upon us,” mentioned Frans Timmermans, a senior Dutch politician who’s the fee’s vitality and local weather czar.
He mentioned financial savings in gasoline across the E.U. would create spare capability to direct to the international locations most in want within the wintertime, making certain that no member state goes into financial shock due to the shortage of energy.
Ms. von der Leyen, placing a political spin on a seemingly financial challenge, mentioned this strategy would ship a blow to Mr. Putin, who desires to sow discord inside the European Union, undermining the bloc and its strongest international locations economically and politically. Decided to make that backfire on him, European leaders have drawn nearer collectively because the conflict started and have taken step one towards presumably making Ukraine an E.U. member — one thing Mr. Putin got down to stop.
“Putin is making an attempt to push us round this winter and he’ll dramatically fail if we stick collectively,” Ms. von der Leyen mentioned.
With Russia having slashed or utterly lower gasoline provide to a dozen E.U. international locations already, and the looming risk that it’s going to not absolutely reconnect an essential pipeline on Thursday that has been offline for upkeep, the bloc’s options are few. Mr. Putin instructed late Tuesday that pure gasoline would resume flowing to Europe by way of the pipeline, however warned that provides could also be severely curtailed.
Consultants say that, together with E.U. efforts to line up new suppliers, chopping demand for gasoline is the one approach to survive comparatively unscathed this winter.
Simone Tagliapietra, an professional on the Bruegel suppose tank in Brussels, mentioned the European Fee plan “goes in the fitting course,” however he warned that rather a lot hinges on clear and sincere communication between governments and Europeans.
“This requires critical and simple communication to the general public,” he mentioned. “Governments should ask folks to eat much less and will have the braveness to inform their residents that Europe is within the midst of what presumably represents the best vitality disaster in its historical past.”
The fee itself acknowledged the significance of interesting on to the general public, and mentioned in its proposal {that a} important a part of its plan was a mass-media marketing campaign urging folks to do their half to preserve, primarily by chopping heating and cooling at residence.
The fee predicts that main disruptions to the circulation of Russian gasoline may shave off as a lot as 1.5 share factors off an already-degraded financial development forecast of two.7 % this yr, and will even plunge the bloc into recession subsequent yr.
When the conflict started, the European Union responded with sanctions on Russia however chopping off vitality imports was seen as a distant prospect, at most. Inside months, positions had hardened sufficient to impose a near-total embargo on Russian oil by the tip of this yr. But a ban on Russian gasoline has remained off the desk as a result of a lot of Europe is dependent upon it, and various sources are scarce.
Gasoline makes up 1 / 4 of the bloc’s vitality combine — it fuels factories and electrical energy crops, and it’s overwhelmingly what Europeans use to warmth their houses. Main disruptions would have an effect on not simply industrial output, but in addition Europeans’ capacity to remain heat by way of the winter.
European officers have been scrambling to line up various sources of gasoline and different fuels. Prime Minister Mario Draghi of Italy signed a deal that will improve his nation’s imports of Algerian gasoline 20 % within the short-term. President Emmanuel Macron of France elevated his nation’s provide of diesel from the United Arab Emirates — one among many European offers that lean into dirtier fossil fuels like oil and coal to make up for the diminishing provide of gasoline.
The European Fee can be making an attempt to safe extra gasoline from different established suppliers for European international locations, resembling Nigeria, Egypt and Qatar, whereas Norway, a neighbor and shut ally, has already boosted its provide to the bloc.
One other short-term transfer is importing liquefied pure gasoline from the USA, following a pledge by President Biden throughout a go to to Brussels in March, however specialists warn that it’s an costly various, in restricted provide.
A few of Europe’s whirlwind industrial diplomacy will take years to bear fruit. This week, Ms. von der Leyen visited Azerbaijan to safe additional gasoline — by 2027.
The federal government sued Southwest Airlines on Wednesday, accusing the airline of harming passengers who flew on two routes that were plagued by consistent delays in 2022.
In a lawsuit, the Transportation Department said it was seeking more than $2.1 million in civil penalties over the flights between airports in Chicago and Oakland, Calif., as well as Baltimore and Cleveland, that were chronically delayed over five months that year.
“Airlines have a legal obligation to ensure that their flight schedules provide travelers with realistic departure and arrival times,” the transportation secretary, Pete Buttigieg, said in a statement. “Today’s action sends a message to all airlines that the department is prepared to go to court in order to enforce passenger protections.”
Carriers are barred from operating unrealistic flight schedules, which the Transportation Department considers an unfair, deceptive and anticompetitive practice. A “chronically delayed” flight is defined as one that operates at least 10 times a month and is late by at least 30 minutes more than half the time.
In a statement, Southwest said it was “disappointed” that the department chose to sue over the flights that took place more than two years ago. The airline said it had operated 20 million flights since the Transportation Department enacted its policy against chronically delayed flights more than a decade ago, with no other violations.
“Any claim that these two flights represent an unrealistic schedule is simply not credible when compared with our performance over the past 15 years,” Southwest said.
Last year, Southwest canceled fewer than 1 percent of its flights, but more than 22 percent arrived at least 15 minutes later than scheduled, according to Cirium, an aviation data provider. Delta Air Lines, United Airlines, Alaska Airlines and American Airlines all had fewer such delays.
The lawsuit was filed in the United States District Court for the Northern District of California. In it, the government said that a Southwest flight from Chicago to Oakland arrived late 19 out of 25 trips in April 2022, with delays averaging more than an hour. The consistent delays continued through August of that year, averaging an hour or more. On another flight, between Baltimore and Cleveland, average delay times reached as high as 96 minutes per month during the same period. In a statement, the department said that Southwest, rather than poor weather or air traffic control, was responsible for more than 90 percent of the delays.
“Holding out these chronically delayed flights disregarded consumers’ need to have reliable information about the real arrival time of a flight and harmed thousands of passengers traveling on these Southwest flights by causing disruptions to travel plans or other plans,” the department said in the lawsuit.
The government said Southwest had violated federal rules 58 times in August 2022 after four months of consistent delays. Each violation faces a civil penalty of up to $37,377, or more than $2.1 million in total, according to the lawsuit.
The Transportation Department on Wednesday also said that it had penalized Frontier Airlines for chronically delayed flights, fining the airline $650,000. Half that amount was paid to the Treasury and the rest is slated to be forgiven if the airline has no more chronically delayed flights over the next three years.
This month, the department ordered JetBlue Airways to pay a $2 million fine for failing to address similarly delayed flights over a span of more than a year ending in November 2023, with half the money going to passengers affected by the delays.
California government’s plan to phase out heavy-duty diesel trucks and diesel locomotives has been derailed.
The ambitious plan aimed at reducing local pollution and global greenhouse gases required special waivers from the federal government. The Biden administration hadn’t granted the waivers as of this week, and rather than face almost certain denial by the incoming Trump administration, the state withdrew its waiver request.
That means the far-reaching regulations issued by the California Air Resources Board in 2022 to ban new diesel truck sales by 2036 and force fleet owners to take them off the road by 2042 won’t be enforced. Known as the Advanced Clean Fleets rule, the idea was to replace those trucks with electric and hydrogen-powered versions, which dramatically reduce emissions but are currently two to three times more expensive.
“While we are disappointed that U.S. EPA was unable to act on all the requests in time, the withdrawal is an important step given the uncertainty presented by the incoming administration that previously attacked California’s programs to protect public health and the climate and has said will continue to oppose those programs,” CARB Chair Liane Randolph said in a prepared statement.
Environmentalists reacted with deep disappointment.
“To meet basic standards for healthy air, California has to shift to zero-emissions trucks and trains in the coming years. Diesel is one of the most dangerous kinds of air pollution for human health,” Paul Cort, director of Earthjustice’s Right to Zero campaign, said in a prepared statement. “We’ll be working tirelessly in the coming years — and calling on Gov. [Gavin] Newsom, state legislators, and our air quality regulators to join us — to clean up our freight system and fix the mess [U.S.] EPA’s inaction has created.”
The trucking industry is pleased at the result, but hopes to continue working with California on environmental issues.
“This rule was flawed, and was not reflective of reality,” said Matt Schrap, chief executive at the Harbor Trucking Assn. “Ideally this is an opportunity to take a step back and look at a program that would be more sustainable.”
Trucking representatives had filed a lawsuit to block the rules, arguing they would cause irreparable harm to the industry and the wider economy. Train operators said no zero-emission locomotives exist on the commercial market.
Schrap said “the most important thing is the EPA could have issued the waiver and they didn’t.”
The EPA said it acknowledges California’s withdrawal of the waiver requests “and as a result is taking no further action on CARB’s prior requests and considers these matters closed.”
President-elect Donald Trump is a champion of the fossil fuel industry, making it unlikely that his administration would have approved the California waivers. The state could, however, pursue waivers at some point in the future.
Under the federal Clean Air Act, California is allowed to set its own air standards, and other states are allowed to follow California’s lead. But federal government waivers are required. Most of California’s waivers have been granted, including approval in December of a California ban on new sales of gas-powered cars and light trucks by 2035.
Bezos, Zuckerberg and Coke at the inauguration
Corporate America had already raced to donate big sums to Donald Trump’s record-breaking inaugural fund. Now some of its leaders appear eager to jockey for prominent positions at the inauguration next week.
It’s a new reminder that for some of the nation’s biggest businesses, forging close ties to a president-elect who is promising hard-hitting policies like tariffs is a priority this time around.
Jeff Bezos and Mark Zuckerberg are expected to be on the inauguration dais, according to NBC News, alongside Elon Musk and several cabinet picks.
The presence of Musk isn’t a surprise, given the Tesla chief’s significant support of and huge influence over Trump. But the other tech moguls have only more recently been seen as supporters of the administration. (Indeed, Bezos frequently sparred with Trump during his first presidential term.)
It’s the latest effort by Bezos and Zuckerberg to burnish their Trump credentials. At the DealBook Summit in December, Bezos — whose Amazon has faced scrutiny under the Biden administration and whose Blue Origin is hoping to win government rocket contracts — said that he was “very hopeful” about Trump’s efforts to reduce regulation.
And Zuckerberg recently announced significant changes to Meta’s content moderation policy, including relaxing restrictions on speech seen as protecting groups including L.G.B.T.Q. people that won praise from Trump and other conservatives. On the inauguration front, Zuckerberg is also co-hosting a reception alongside the longtime Trump backers Miriam Adelson, Tilman Fertitta and Todd Ricketts.
Both tech moguls have visited Mar-a-Lago since the election, with Zuckerberg having done so more than once.
Coca-Cola took a different tack. The drinks giant’s C.E.O., James Quincey, gave Trump what an aide called the “first ever Presidential Commemorative Inaugural Diet Coke bottle.”
More broadly, business leaders want a piece of the inauguration action. The Times previously reported that the Trump inaugural fund had surpassed $170 million, a record, and that even major donors have been wait-listed for events.
Others are throwing unofficial events around Washington, including an “Inaugural Crypto Ball” that will feature Snoop Dogg, with tickets starting at $5,000, The Wall Street Journal reports.
It’s a reminder that C.E.O.s are reading the room, and preparing their companies for a president who has proposed creating an “External Revenue Service” to oversee what he has promised will be wide-ranging tariffs.
David Urban, a longtime Trump adviser who’s hosting a pre-inauguration event, told The Journal, “This is the world order, and if we’re going to succeed, we need to get with the world order.”
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In other Trump news: The president-elect is expected to appear via videoconference at the World Economic Forum in Davos, Switzerland, which starts on Inauguration Day, according to Semafor.
HERE’S WHAT’S HAPPENING
Investors brace for the latest inflation data. The Consumer Price Index report, due out at 8:30 a.m. Eastern, is expected to show that inflation ticked up last month, most likely because of climbing food and fuel costs. Global bond markets have been rattled as slow progress on slowing inflation has prompted the Fed to slash its forecast for interest rate cuts.
More Trump cabinet picks will appear before the Senate on Wednesday. Senator Marco Rubio of Florida, the choice for secretary of state, is expected to field questions about his views on the Middle East, Ukraine and China, but is expected to be confirmed. Russell Vought, the pick to run the Office of Management and Budget, will most likely be asked about his advocacy for drastically shrinking the federal government, a key Trump objective. And Sean Duffy, the Fox Business host chosen to lead the Transportation Department, will probably face questions on how he would oversee matters including aviation safety and autonomous vehicles, the latter of which is a priority for Elon Musk.
Meta plans to lay off another 5 percent of its employees. Mark Zuckerberg, the tech giant’s C.E.O., told staff members to prepare for “extensive performance-based cuts” as the company braces for “an intense year.” The social media giant faces intense competition in the race to commercialize artificial intelligence.
A new bill would give TikTok a reprieve from a ban in the United States. Senator Ed Markey, Democrat of Massachusetts, said he planned to introduce the Extend the TikTok Deadline Act, which would give the video platform 270 additional days to be divested from its Chinese parent, ByteDance before being blacklisted. It’s the latest effort to buy TikTok time, as the app faces a Jan. 19 deadline set by a law; President-elect Donald Trump has opposed the potential ban as well.
A question of succession
JPMorgan Chase and BlackRock, the giant money manager, just reported earnings. (In short: Both handily beat analyst expectations.)
But the Wall Street giants are likely to face questioning on a particular issue on Wednesday: Which top lieutenants are in line to replace their larger-than-life C.E.O.s, Jamie Dimon and Larry Fink.
Who’s out:
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Daniel Pinto, who had long been Dimon’s right-hand man, said he would officially drop his responsibilities as JPMorgan’s C.O.O. in June and retire at the end of 2026. Jenn Piepszak, the co-C.E.O. of the company’s core commercial and investment bank, has become C.O.O.
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And Mark Wiedman, the head of BlackRock’s global client business and a top contender to succeed Fink, is planning to leave, according to news reports.
What Wall Street is gossiping about JPMorgan: Even in taking the C.O.O. role, JPMorgan said that Piepszak wasn’t interested in succeeding Dimon “at this time.” DealBook hears that while she genuinely appears not to want to pursue the top job, the phrasing covers her in case she changes her mind.
For now, that means the most likely candidates for the top spot are Marianne Lake, the company’s head of consumer and community banking; Troy Rohrbaugh, the other co-head of the commercial and investment bank; and Doug Petno, a co-head of global banking.
The buzz around BlackRock: Wiedman reportedly didn’t want to keep waiting to succeed Fink and is expected to seek a C.E.O. position elsewhere. (So sudden was his departure that he’s forfeiting about $8 million worth of stock options and, according to The Wall Street Journal, he doesn’t have another job lined up yet.)
Fink said on CNBC on Wednesday that Wiedman’s departure had been in the works for some time, with the executive having expressed a desire to leave about six months ago.
Other candidates to take over for Fink include Martin Small, BlackRock’s C.F.O.; Rob Goldstein, the firm’s C.O.O.; and Rachel Lord, the head of international.
But Dimon and Fink aren’t going anywhere just yet. Dimon, 68, said only last year that he might not be in the role in five years. And Fink, 72, said in July that he was working on succession planning: “When I do believe the next generation is ready, I’m out.”
The S.E.C. gets in a final shot at Musk
Another battle between Elon Musk and the S.E.C. erupted on Tuesday, with the agency suing the tech mogul over his 2022 purchase of Twitter.
It’s unclear what happens to the lawsuit once President-elect Donald Trump, who counts Musk as a close ally, takes office. But the agency’s reputation as an independent watchdog may be at stake.
A recap: The S.E.C. accused Musk of violating securities laws in his $44 billion acquisition of the social media company.
The agency said that Musk had failed to disclose his Twitter ownership stake for a pivotal 11-day stretch before revealing his intentions to purchase the company. That breach allowed him to buy up at least $150 million worth of Twitter shares at a lower price — to the detriment of existing shareholders, the agency argues.
The S.E.C. isn’t just seeking to fine Musk. It wants him to pay back the windfall. “That’s unusual,” Ann Lipton, a professor at Tulane Law School, told DealBook.
Alex Spiro, Musk’s lawyer, called the latest action a “sham” and accused the agency of waging a “multiyear campaign of harassment” against him.
The showdown sets up a tough question for the S.E.C. Will Paul Atkins, the president-elect’s widely respected pick to lead the agency, drop the case? Such a move could call the bedrock principle of S.E.C. independence into question.
Jay Clayton, who led the agency during Trump’s first term, earned the respect of the business community for running it in a largely drama-free manner. It was under Clayton that the S.E.C. sued Musk over his statements about taking Tesla private.
Musk, who is set to become Trump’s cost-cutting czar and is expected to have office space in the White House complex, has called for the “comprehensive overhaul” of agencies like the S.E.C. The billionaire said he would also like to see “punitive action against those individuals who have abused their regulatory power for personal and political gain.”
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In related news: The Consumer Financial Protection Bureau sued Capital One, accusing it of cheating its depositors out of $2 billion in interest payments.
THE SPEED READ
Deals
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DAZN, the streaming network backed by the billionaire businessman Len Blavatnik, is closing in on funding from Saudi Arabia’s sovereign wealth fund as the kingdom continues to expand its sports footprint. (NYT)
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The Justice Department sued KKR, accusing the investment giant of withholding information during government reviews for several of its deals. KKR filed a countersuit. (Bloomberg)
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OpenAI added Adebayo Ogunlesi, the billionaire co-founder of the infrastructure investment firm Global Infrastructure Partners, to its board. (FT)
Politics and policy
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