Politics
Lawmakers question oil executives on price gouging, but seem cool to price controls
As shoppers fume over skyrocketing costs for gasoline and different commodities, congressional Democrats on Wednesday referred to as executives from massive oil corporations on the carpet to clarify why they seem like making unseemly fats income within the face of a global disaster.
The Home listening to, given the title “Gouged on the Gasoline Station: Huge Oil and America’s Ache on the Pump,” was partially a response to Republicans’ marketing campaign accountable Democrats for inflation, now operating at a 40-year excessive and rising.
However in each events, the blaming quantities to little greater than political rhetoric and jawboning as a result of neither aspect is ready to push for the sort motion that Washington has typically resorted to in wartime emergencies, specialists say.
“That is theater,” mentioned Dean Baker, senior economist on the left-leaning Middle for Financial and Coverage Analysis. “I want I might say they’re going to study one thing and so they’re going to someway form something they could do. However that is theater.”
In instances previous, presidents of each events have taken a lot stronger steps to curb war-induced inflation. Through the Vietnam battle, President Nixon referred to as for federal value controls to rein in costs. In World Conflict II, President Franklin D. Roosevelt imposed rationing on gasoline and a variety of different shopper merchandise, together with meals.
And a regulation referred to as the Protection Manufacturing Act offers a president far-reaching powers to intervene in an emergency.
However over previous many years, leaders in each political events in addition to most economists have come to simply accept the concept that interference in markets is counterproductive and ill-advised. Immediately, a politician who recommended one thing like government-mandated value controls would possible be denounced as radical.
Though some argue that such steps could be an efficient brake on costs within the quick time period, proof from the previous means that, if left in place for lengthy durations, they provide rise to dishonest and different market distortions attributable to authorities forms and allocation guidelines.
“There would have been no gasoline traces besides for presidency,” mentioned Allen Matusow, a historian at Rice College’s Baker Institute for Public Coverage, referring to the primary main oil shock in 1973 when automobiles snaked again for miles ready to refill.
Wednesday’s listening to tried to show a highlight on the oil business, already beneath assault from Democrats for not doing sufficient on local weather change.
And President Biden’s transfer to launch one million barrels of crude oil a day from U.S. strategic stockpiles — a step taken by a number of of his predecessors to ease shopper ache — ought to assist, though it often takes about six weeks for a provide of crude to be processed into gasoline and delivered to gasoline stations.
In the meantime, briefly suspending gasoline taxes, as a couple of states have achieved, cuts solely pennies on the greenback for shoppers, who’re seeing document will increase on the pump and of their heating oil payments.
Nationally, gasoline costs averaged $4.164 a gallon Wednesday, down from a document $4.331 on March 11 however nonetheless up 45% from a 12 months in the past. Wednesday’s common in California was a nation-leading $5.823 a gallon.
Spurred by what appears to be a protracted battle in Ukraine, costs could keep uncomfortably excessive for a while if markets are left to their very own.
Towards that backdrop, the Home Committee on Vitality and Commerce chairman, Frank Pallone Jr. (D-N.J.), accused the oil business of placing income above nationwide pursuits.
“The issue going through American shoppers isn’t a results of Biden administration insurance policies however slightly the actions oil corporations have taken to maintain provide low, costs excessive and income flowing,” Pallone mentioned in a letter inviting prime executives at Shell, BP, Exxon Mobil and Chevron, together with two smaller producers, to testify Wednesday.
Of their ready remarks, leaders of the 4 built-in power giants, which recorded a mixed $70.5 billion in income in 2021, prevented the matter of their hefty earnings altogether, though some famous that the business was hammered the 12 months earlier than when the COVID-19 pandemic brought on a historic collapse in demand that despatched international oil costs plunging.
The identical 4 corporations collectively misplaced greater than $28 billion in 2020, led by Exxon Mobil, and the business was the one one in all a dozen main S&P 500 sectors that recorded detrimental earnings that 12 months.
The CEOs of Exxon Mobil and Chevron, the 2 largest U.S.-headquartered oil corporations, each referred to the oil disaster a half-century in the past when OPEC members imposed an embargo in opposition to the USA — suggesting that the blame then, as in the present day, lies not with the oil corporations however with international shocks that distort provide and demand.
Traditionally, the one largest determinant in gasoline costs is what’s taking place with crude oil, whose value is ready in worldwide markets. Crude provides have been already tight earlier than Russia launched its battle on Ukraine in late February as financial restoration and oil demand rose quicker than anticipated.
The worth of Brent crude, the worldwide oil benchmark, fell to lower than $20 a barrel in mid-April 2020, however steadily rose in 2021 after which shot up this 12 months, to a excessive of $123 a barrel, amid fears of an invasion in Ukraine.
Russia is a significant producer and exporter of oil and pure gasoline. In current days Brent crude has been buying and selling round $105 a barrel.
Nonetheless, retail gasoline costs can differ extensively, relying on native situations, competitors and different elements. Michael Wirth, chairman and chief govt officer at San Ramon, Calif.-based Chevron, mentioned his firm owns and operates solely about 300 gasoline stations in three states, the overwhelming majority in California.
Total, he mentioned, there are greater than 150,000 filling stations throughout the nation, and nearly all of them are not less than nominally independently owned companies.
“As a result of oil is a worldwide commodity, Shell doesn’t set or management the worth of crude oil,” mentioned Gretchen Watkins, president of Shell USA, a unit of the British-based firm. “Equally, Shell doesn’t set or management the worth that customers pay.”
Even so, Shell and the others do affect costs by how a lot they produce. When provides are tight, extracting extra petroleum from the bottom will help ease strain on costs.
And Democratic lawmakers and others have criticized oil corporations for not turning extra of their giant income into productive use, preferring as a substitute to return extra money to shareholders by elevating dividends and thru inventory buybacks. Shell is utilizing almost half of its $19 billion in earnings in 2021 for share buybacks.
“By conserving home oil manufacturing low and funneling income again to traders and executives, the oil business is conserving power costs — and income — artificially excessive,” mentioned Pallone, the Vitality and Commerce Committee chair.
Executives of all 4 of the most important oil corporations testifying Wednesday mentioned they have been stepping up manufacturing, as did the 2 smaller power exploration and manufacturing corporations, Pioneer Pure Sources and Devon Vitality. Oklahoma Metropolis-based Devon mentioned it deliberate to extend rig rely by 35%, though provide chain issues and a scarcity of staff have been inflicting delays.
“I perceive the will to discover a fast repair for the current spike in gasoline costs, however neither Pioneer nor every other U.S. producer can enhance manufacturing in a single day by turning on a faucet,” mentioned Scott Sheffield, chief govt at Irving, Texas-based Pioneer, the most important oil producer within the Permian shale basin in Texas and New Mexico.
Nonetheless, he mentioned Pioneer plans to broaden oil manufacturing by about 5% a 12 months.
Amy Myers Jaffe, power skilled on the Fletcher College at Tufts College, mentioned shale oil corporations have been more likely to enhance manufacturing by about 900,000 barrels a day over a 12-month interval, including about 7% to the U.S. provide.
One approach to double that enhance, she mentioned, can be for the federal authorities to incentivize shale oil corporations by utilizing the Protection Manufacturing Act to allocate metal and different supplies wanted for elevated drilling, whereas agreeing to pay for and take possession of the additional oil that’s produced.
Biden administration officers are mentioned to be contemplating the concept, though conservatives in addition to some college students of historical past fear about such authorities involvement in markets.
As for the query of who’s accountable for the excessive gasoline costs, she mentioned there’s lots to go round.
They embody Saudi Arabia and OPEC for his or her reluctance to pump out extra petroleum; the oil giants for selecting buybacks and dividends over funding in additional manufacturing capability; and U.S. and Western sanctions in opposition to Russia for including to market distortions.
And shoppers themselves share some blame, she mentioned, for driving extra and growing demand, thereby citing costs.
“The straightforward approach to pay much less for gasoline is to make use of your automobile much less,” Jaffe mentioned. “So collectively, shoppers even have some market energy that they’ve chosen to not train.”
Politics
Mike Kennedy advances past crowded GOP primary to secure nomination for open Utah House seat
Mike Kennedy on Tuesday won the Republican nomination for Utah’s 3rd Congressional District to replace outgoing Rep. John Curtis, R-Utah, becoming the immediate favorite to win the seat in November.
Kennedy beat fellow Republicans JR Bird, John Dougall, Case Lawrence and Stewart Peay in a packed primary pool for the district. Curtis is vacating his seat to run for U.S. Senate to replace outgoing Sen. Mitt Romney.
Kennedy, a state senator, had won the party’s nomination for the seat in April but faced challenges from other candidates who gathered signatures to be on the ballot. Peay had won the endorsement of Romney, who is also Peay’s wife’s uncle. Kennedy had won the endorsement of Sen. Mike Lee, who said he was needed to “fight against the Uniparty and help get this country back on track.”
‘SQUAD’ MEMBER FACES OUSTER FROM CONGRESS AS NEW YORK, COLORADO AND UTAH HOLD PRIMARIES ON TUESDAY
From left, JR Bird, John Dougall, Mike Kennedy, Case Lawrence and Stewart Peay, candidates in the Republican primary for Utah’s 3rd Congressional District, take part in a debate at the Eccles Broadcast Center in Salt Lake City on June 12, 2024. (Spenser Heaps/Deseret News via AP/Pool)
Bird, a mayor, emphasized his experience of running a small town as well as the importance of the energy sector and agriculture, according to the Deseret News.
Dougall, the state auditor, had run as an anti-MAGA candidate and had slammed some GOP legislation, including what he saw as an overly aggressive bill that tasks him with enforcing a ban on transgender-identifying individuals using restrooms that are inconsistent with their sex.
WATCH: THIS HOUSE PRIMARY IS MOST EXPENSIVE IN CONGRESSIONAL HISTORY
He has also been deeply critical of former President Trump. On Tuesday on X, he also questioned the “cavalier manner” of any official who swears to uphold the Constitution “then endorses Trump following January 6th.” He has advertised himself as “mainstream, not MAGA.”
At a debate this month, candidates split on the question of military funding to Ukraine as well as whether the federal government should explicitly ban abortion. Peay, Dougall and Case Lawrence – a trampoline park entrepreneur – had called on Congress to keep sending weapons to Ukraine to help it fend off the ongoing Russian invasion.
Bird and Kennedy disagreed, arguing that it was not beneficial to the U.S. to keep funding the Ukrainians, with the two calling for stronger sanctions and the seizure of Russian assets.
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Sen. Mitt Romney (Ting Shen/Bloomberg via Getty Images)
Kennedy will go on to face Democrat Glenn Wright in the November election, but the Republican is favored to win comfortably in a district that has voted Republican since 1997.
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Elsewhere in the state, Republican Gov. Spencer Cox, a major GOP Trump critic, held off a primary challenge from Phil Lyman, another 2020 election denier who easily won the state party convention.
The Associated Press and Fox News’ Paul Steinhauser contributed to this report.
California news publishers and Big Tech companies appear to be inching toward compromise on a controversial bill that would require Google and huge social media platforms to pay news outlets for the articles they distribute.
After stalling last year, Assembly Bill 886 cleared a critical hurdle Tuesday when it passed the state Senate Judiciary Committee. Several lawmakers described the legislation as a work in progress aimed at solving a critical problem: The news business is shrinking as technology changes the way people consume information.
“I do believe the marketplace is the best mechanism to regulate industry,” Sen. Tom Umberg (D-Orange), the committee chairman, said during a hearing on the bill.
However, he said, the demise of journalism harms democracy: “Thus, we have an obligation to find a way to support reasonable, credible journalism.”
The legislation, known as the “California Journalism Preservation Act,” would require digital platforms to pay news outlets a fee when they sell advertising alongside news content. It calls for creating a fund that the tech firms pay into, with the money being distributed to news outlets based on the number of journalists they employ. Publishers would have to use 70% of the money they receive to pay journalists in California.
Umberg noted that the bill does not specify an amount for the fund. He said it would be “a very elegant solution” for the parties involved to agree on what amount that should be.
Sen. Henry Stern (D-Calabasas) described talks as being “closer and closer to the place where we could actually land some kind of deal.”
In Canada, Google is paying $74 million annually into a fund for the news industry under a law similar to the one proposed in California.
Jaffer Zaidi, Google’s vice president of global news partnerships, testified against the California proposal during a hearing in which news executives from across the state lined up to express support for the bill, while tech industry lobbyists lined up in opposition. The bill is sponsored by the California News Publishers Assn., of which the Los Angeles Times is a member.
“The bill would … break the fundamental and foundational principles of the open internet, forcing platforms to pay publishers for sending valuable free traffic to them,” Zaidi said.
“It puts the full burden of support on one or two companies, while shielding many other large platforms who also link to news from California publishers.”
He said Google had shared a proposal for a different way to support journalism “through targeted programs” that would be funded by more companies than just the very largest platforms. The current version of the bill would apply only to Google and Meta, the parent company of Instagram and Facebook.
“We hope this can serve as a basis for a workable path forward together,” Zaidi said. “We remain committed to being here and constructively working towards an outcome.”
The bill’s author, Assemblymember Buffy Wicks (D-Oakland), said she is “aggressively trying to engage” with companies that oppose the bill in the hopes that the sparring sides can reach an agreement that will allow the news industry to thrive.
“At the end of the day, I want the best solution to the problem,” Wicks said.
She closed the hearing by talking about the role journalism has played in exposing problems that lawmakers wind up addressing in the Capitol, such as crafting new laws to extend the statute of limitations for sexual abuse lawsuits after The Times’ investigation revealed a pattern of allegations against former USC gynecologist George Tyndall.
The bill now advances to the Senate Appropriations Committee. It will go to Gov. Gavin Newsom if it clears both houses of the Legislature by Aug. 31.
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FACE OFF: Don’t miss the Fox News Simulcast of the CNN Presidential Debate on Thursday at 9 p.m. ET. Stay in the know for more updates here.
What’s happening…
-Calls for Biden to fire official for past anti-Israel tweets
-Trump urges drug test for Biden
-Whistleblower who exposed NPR bias finds new job
What can he say?
Judge Juan Merchan has partially lifted the gag order he imposed against former President Trump – weeks after the jury found him guilty on all counts.
Trump and his legal team have been fighting the gag order since it was imposed upon him at the start of the trial, but had ramped up their efforts when it concluded last month. The former president and presumptive Republican nominee’s legal team had argued the gag order should be lifted before the June 27 presidential debate.
Merchan’s gag order barred Trump from making or directing others to make public statements about witnesses with regard to their potential participation or about counsel in the case – other than Manhattan District Attorney Alvin Bragg – or about court staff, DA staff or family members of staff.
Merchan on Tuesday partially lifted the gag order because the trial has concluded.
Trump is now able to speak about protected witnesses and jurors.
Trump is still blocked from commenting about individual prosecutors, court staff and their family members. That portion of the gag order will remain in effect until Trump’s sentencing on July 11.
Judge Juan Merchan imposed over Donald Trump (AP)
White House
‘JUST HORRIFYING’: Watchdog group calls for Biden to fire WH official for past anti-Israel tweets …Read more
Capitol Hill
‘OBSCENE’: House GOP lawmaker rips State Dept ahead of vote on U.S. dollars going to Taliban …Read more
U.S. Representative Jamaal Bowman (D-NY) speaks to the crowd while he campaigns in the Bronx borough of New York City, U.S., June 22, 2024. REUTERS/Joy Malone (REUTERS/Joy Malone)
Tales from the Campaign Trail
‘THEATER OF CONFLICT’: Democrat challenger slams Bowman tirade, says profanity-laced rally jeopardizes party ‘unity’ …Read more
JUST SAY ‘NO’: Trump urges drug test for Biden, says he’ll do same screening …Read more
EPIC CLASH: How to watch the CNN Presidential Debate Simulcast on the Fox News Channel …Read more
‘SUGARCOATING’ CONTROVERSY: California city keeps charged ballot language for non-citizen voting measure …Read more
CALL TO THE BULLPEN: Obama again serving as Joe’s closer ahead of 2024 Trump rematch …Read more
Trials and Tribulations
DAY 3: US v Trump: The afternoon public hearing ended with no decision from Judge Cannon Read more
Across America
NO ABORTIONS FOR MINORS: Tennessee sued over law banning adults from helping minors get abortions without parental consent …Read more
MOVING ON: Whistleblower finds new gig after exposing alleged liberal bias at NPR …Read more
NEW YORK PAYS PRICE FOR NAIVETY: Cuomo scorches Dems for migrant crisis: ‘We’re finding out, 200,000 people later, you needed a plan’ …Read more
GETTING AWAY WITH MURDER: This blue city that ‘Defund Police’ supporters call home has over 1,000 unsolved homicides …Read more
KENYAN EXPEDITIONARY FORCE: Kenyan police depart for Haiti to tackle rampant gang violence …Read more
ALL MUST SERVE: Israel’s Supreme Court rules ultra-Orthodox men must serve in military in unanimous decision …Read more
HUGE POPULATION: Houston area, an immigration hot spot, reeling from murder of Jocelyn Nungaray …Read more
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