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In a move that has some environmental activists charging it with hypocrisy, the Biden administration has approved the sale of oil and gas drilling rights to more than 80 million acres of the Gulf of Mexico — an act it says was mandated by a federal court ruling.

The auction on Wednesday by an arm of the U.S. Interior Department resulted in leases for 1.7 million of the 80 million available acres, with Exxon Mobil Corp. and Chevron Corp. among the top buyers. Some 308 lots were purchased for a total of $191.7 million, though it is not certain exactly how much of that will ultimately be developed.

The decision came just days after the close of the United Nations Climate Change Conference (COP26), at which President Joe Biden promised that the United States would be “leading by the power of our example” in the effort to achieve a zero-emissions future.

While some environmental groups accuse the administration of going back on its word, the Biden administration has said that it was forced to agree to the sale by a federal court ruling.

Shortly after taking office in January, Biden announced a moratorium on new leases for oil and gas projects on federal property. Republican attorneys general in more than a dozen states filed lawsuits challenging the halt in lease auctions, and in June, a U.S. District Court judge in Louisiana issued an injunction instructing the Biden administration to resume selling drilling rights.

At the time, a spokesperson for the Interior Department, which oversees the leasing of public lands for energy development, said, “We are reviewing the judge’s opinion, and will comply with the decision.”

In 2018, a report from the U.S. Geological Survey estimated that the operations of the fossil fuels industry — that is, the extraction, refining, and transportation of fuels, before they are actually used by the consumer — is responsible for about 23% of greenhouse gas emissions in the U.S. The report is frequently cited by environmental groups opposed to the leasing of public lands for energy development.

Wednesday’s auction took place despite a pending lawsuit filed in Washington by the climate activist group Earthjustice. The suit alleges that an environmental impact study conducted in 2017, which the Biden administration used to justify the auction, was flawed and cannot be relied on.

Other options available

Brettny Hardy, a senior attorney with Earthjustice, told VOA that Biden had several other options for preventing the auction of the new leases but chose not to exercise them.

“The administration keeps saying that his hands were tied because of this Louisiana court ruling. But the administration has a ton of discretion under the underlying statute which is at play here, the Outer Continental Shelf Lands Act.”

She acknowledged that the administration is appealing the district court ruling but criticized it for not seeking a stay of the judge’s ruling while the appeal is decided.

Additionally, she said, the administration is aware of the failings of the environmental impact study underpinning the lease auction, pointing out that two other courts have already ruled that the greenhouse gas emissions model it used was insufficient. The administration could have used that knowledge to declare the auction illegal under the National Environmental Policy Act.

Energy industry pleased

By contrast, the energy industry and its supporters in Washington cheered the move.

In a statement provided to VOA, Frank Macchiarola, American Petroleum Institute senior vice president of policy, economics and regulatory affairs, said: “U.S. oil and natural gas production on federal lands and waters delivers the affordable and reliable energy America needs while providing much-needed funding for conservation, education, infrastructure and other important state and local priorities.”

“Notably, U.S. oil and natural gas produced offshore in the Gulf of Mexico is also among the lowest carbon barrels produced in the world, according to U.S. Department of the Interior analysis that shows emissions from international substitutions are more carbon intensive,” he added.

In a statement, Erik Milito, president of the National Ocean Industries Association, a trade group for the offshore energy industry, called on the Biden administration to offer more lease auctions in the future.

“Continued leasing is critical to our energy future; good decisions today will benefit America tomorrow,” he said, adding that certainty about future leases “will advance climate progress, stimulate continued economic growth, support high-paying jobs throughout the country, and strengthen our long-term national security.”

Lease extensions

It will take between five and 10 years for actual oil production to begin on the new sites, but once a site is producing oil, the energy company running the drilling operation is typically allowed to extend the lease indefinitely.

The Gulf of Mexico Outer Continental Shelf, a 160-million-acre expanse that includes the areas sold Wednesday, holds about 48 billion barrels of recoverable oil and 141 trillion cubic feet of recoverable natural gas, according to the Bureau of Ocean Energy Management.

A ‘carbon bomb’

Environmental organizations said this week that they remain focused on pressuring the Biden administration to roll back the leases and reimpose the moratorium on additional auctions.

“The Biden administration is lighting the fuse on a massive carbon bomb in the Gulf of Mexico. It’s hard to imagine a more dangerous, hypocritical action in the aftermath of the climate summit,” said Kristen Monsell, oceans legal director at the Center for Biological Diversity.

“This will inevitably lead to more catastrophic oil spills, more toxic climate pollution and more suffering for communities and wildlife along the Gulf Coast,” she said. “Biden has the authority to stop this, but instead he’s casting his lot in with the fossil fuel industry and worsening the climate emergency.”

Source: Voice of America

For weeks, governments and policymakers across the world have been suggesting the recent spikes in consumer and energy prices are transitory and rising inflation will ease, once pandemic-related chain-supply disruptions and labor shortages are resolved and the global economy reboots.

But recent figures suggest inflation may persist for some time, prompting worries about an explosive cost-of-living crisis, which could roil the domestic politics of countries and disrupt the electoral plans of incumbent parties and their leaders.

Central bankers have been saying the price increases of goods, rent, food and energy are one-offs, the consequences of economies struggling to recover from the induced coma of COVID-19 lockdowns and pandemic restrictions. But new data on inflation from around the world have exceeded forecasts, and central bankers are now being criticized for failing to act to restrain surging prices.

Bank of England stands pat

Central banks are coming under mounting pressure to raise interest rates but are nervous about acting too hastily and reversing recovery by reducing stimulus measures. The Bank of England earlier this month decided not to raise interest rates despite its governor, Andrew Bailey, earlier saying bankers “will have to act and must do so if we see a risk, particularly to medium-term inflation and to medium-term inflation expectations.”

Recent figures show inflation in Britain has now jumped to its highest level in nearly a decade, with the consumer price index climbing 4.2% in October from a year earlier. The Bank of England has an official inflation target of 2%. The bank’s decision not to raise its key rate, leaving it at 0.1%, confounded the financial markets and sent the pound plunging in value, and the inaction is still being criticized by many economic commentators.

They include Neil Wilson of Markets.com, who says the governor’s “credibility is at stake.”

Likewise, in the United States, the Federal Reserve is coming under fire over rising inflation. Earlier this week, Mohamed El-Erian, chief economic adviser at Allianz and an influential commentator, said he thought America’s central bank was losing credibility over its long-standing view that inflation is transitory.

“I think the Fed is losing credibility. I’ve argued that it is really important to re-establish a credible voice on inflation and this has massive institutional, political and social implications,” he said.

El-Erian told CNBC-TV the Federal Reserve’s inflation stance risked undermining President Joe Biden’s economic agenda, warning that policymakers should not forget that those on low incomes are the hardest hit by rising consumer prices.

In the US

The rapid increase in household living costs already is being felt by Americans.

According to a series of opinion polls conducted by the pollster YouGov for The Economist magazine, 46% of Americans said they believed the state of the economy was “getting worse,” with only 19% saying it was “getting better.”

In the U.S., the consumer price index rose 6.2% in the 12 months ending in October, the highest rate in three decades. Americans said rising wages were not keeping up with rapidly increasing prices. Fifty-six percent of the respondents to YouGov said they were having trouble affording fuel, 48% could not easily pay their rent or mortgages and 45% said they were struggling to feed their families.

Some member states of the European Union also are facing a cost-of-living crisis.

Romania reported in October an annual inflation rate of 6.5%, the highest increase in consumer prices among EU member states in southeast Europe, according to Eurostat, the EU’s statistical office. Eurozone inflation is running at 4.1%, more than double the European Central Bank’s target.

Increases seen as transitory

This week, European Central Bank President Christine Lagarde conceded that Eurozone inflation likely would remain elevated for longer than had been expected. She remained wedded to the idea that price increases were likely transitory, and she was still forecasting inflation would drop below the bank’s 2% target in the medium term.

“We still see inflation moderating in the next year, but it will take longer to decline than originally expected,” she told lawmakers at the European Parliament.

Some economists in Europe, however, question her optimism. They say the pandemic is far from over, pointing to a fourth wave prompting rising cases across much of the continent and the prospect of a return of economically damaging retractions. Germany has declared a state of emergency and Austria has announced a full lockdown to begin Monday, becoming the first European country to go back under a full lockdown and the first to make COVID-19 vaccination compulsory.

Germany’s coronavirus situation is so grave that a lockdown, including for the vaccinated, cannot be ruled out, German Health Minister Jens Spahn said Friday.

“We are in a national emergency,” he told a news conference.

The path back to normality is now again murky for Europe, and economists say the impact of a fourth wave of the coronavirus on household budgets is going to be significant — this at a time when the price of almost everything is going through the roof.

Source: Voice of America

In its annual report on the status of global trade, the World Trade Organization finds that the increasing interconnectedness of the world’s economies is a double-edged sword.

While this globalization makes individual countries more vulnerable to short-term shocks, the WTO says, it also allows them to recover far more quickly than they would have in the past.

The report finds, among other things, that global trade in merchandise, after plummeting sharply in the early months of the coronavirus pandemic, has already rebounded to above pre-pandemic levels. By the middle of 2022, trade volumes will have caught up with the pre-pandemic trend, meaning that the amount of goods being bought and sold internationally will be at the same level that economists would have predicted if there had been no pandemic at all.

In a foreword to the report, WTO Director-General Dr. Ngozi Okonjo-Iweala said the global response to the COVID-19 pandemic is an example of both the challenges and the benefits of increased globalization.

“The deep interconnections of travel, trade and financial flows that characterize our era allowed the novel coronavirus and its associated economic shocks to spread around the world in a matter of weeks. Earlier pandemics took months, even years, to go global,” she wrote.

“Yet, globalization was also at the heart of why this virus was met with vaccines in record time. Scientists were able to share ideas and technology across borders, backed by public and private funding for research and development,” she wrote. “As the new vaccines proved to be safe and effective, supply chains cutting across hundreds of sites in a dozen or more countries came together to provide the specialized inputs and capital goods needed for vaccine production on a large scale — all within a year.”

Shortages in the US

Scott Lincicome, a senior fellow in economic studies at the Cato Institute and a frequent writer on trade issues, told VOA that the WTO’s analysis holds up to scrutiny.

“We’ve seen this play out during the pandemic,” Lincicome said. “Companies that were more domestically oriented really didn’t end up better off than more globally diversified companies.”

In the United States, he said, some of the most significant shortages and price increases involved goods the United States largely produces on its own, like pickup trucks and food.

“Pickup trucks were in higher shortage last year than sedans, and we import more sedans,” he said. “If you look at food production this year, most of our food production is domestic. But some of the biggest shortages and price hikes we’re seeing are on food.”

Interconnectedness tied to stability

The report also found that the more diversified a country’s trading relationships were with the rest of the world, the less likely they were to experience significant economic volatility.

Drawing on data collected by the International Monetary Fund, the authors established that countries with high levels of trade diversification in 2008 were likely to suffer far less volatility, measured as deviation from average annual Gross Domestic Product, over the 10-year period ending in 2018.

“Trade allows a country to diversify its sources of demand and supply, thereby reducing the country’s exposure to country-specific demand and supply shocks,” the report finds. “For example, when a country has multiple trading partners, a domestic recession or a recession in any one of its trading partners translates into a smaller demand shock for its producers than when trade is more limited.”

‘Reshoring’ production may not be helpful

The report also warns against the temptation of “reshoring,” that is, the effort some countries are making to become self-sufficient in key industries.

Especially in the early months of the pandemic, there were calls in many countries, including the United States, to reduce reliance on foreign suppliers for critical medical equipment, personal protective gear and vaccine components.

In another example, former President Donald Trump placed tariffs on foreign-made steel in an effort to force the return of steel production to the United States, saying it was necessary for national security to be self-sufficient in the production of the metal.

Trump’s effort was ultimately unsuccessful, and if the report is correct, that may be reason for U.S. companies that use steel to be grateful.

“Restricting trade and promoting national self-sufficiency almost inevitably render national economies less efficient in the long run, as such policies ultimately drive up prices of goods and services and restrict access to products, components and technologies,” the report warns.

Lincicome said the ultimate goal of the WTO in dissuading countries from reshoring production is to maintain healthy economic ties across borders.

“The WTO is responding to a pretty significant threat from certain policymakers, whose knee-jerk response to the pandemic is to employ more protectionism,” he said. “In terms of economics, that’s a bad idea. But also, I think in terms of geopolitics, the more that countries turn inward, the more likelihood there is for there to be some sort of future tensions.”

Source: Voice of America

The longest partial lunar eclipse in nearly 600 years, which will bathe the moon in red, will be visible Thursday and Friday for a big slice of humanity.

The celestial show will see the moon almost completely cast in shadow as it moves behind the Earth, reddening 99% of its face.

The spectacle will be visible for all of North America, as well as parts of South America, Polynesia, Australia and northeast Asia.

Sky-watchers in those parts who are blessed with a cloud-free view will see a slight dimming of the moon from 0602 GMT Friday as it enters Earth’s penumbra, the outer shadow.

An hour later it will appear as if someone has taken a giant bite out of the lunar disc as it starts to pass into the umbra, the full shadow.

By 0845 GMT the moon will appear red, with the most vivid coloring visible at peak eclipse 18 minutes later.

The whole process then goes into reverse as the moon slips out of shadow and carries on its endless journey around our planet.

The dramatic red is caused by a phenomenon known as “Rayleigh scattering,” where the shorter blue light waves from the sun are dispersed by particles in the Earth’s atmosphere.

Red light waves, which are longer, pass easily through these particles.

“The more dust or clouds in Earth’s atmosphere during the eclipse, the redder the moon will appear,” a NASA website explains.

From the moment the eclipse proper begins — when the moon enters the Earth’s shadow — to when it ends will take more than three hours, 28 minutes.

That is the longest partial eclipse since 1440, around the time Johannes Gutenberg invented his printing press, and won’t be beaten until the far-off future of 2669.

The good news for moon watchers, however, is that they won’t have to wait that long for another show. There will be a total lunar eclipse on November 8 next year, NASA says.

And even better news for anyone wanting to watch is that no special equipment is necessary, unlike for solar eclipses.

Binoculars, telescopes or the naked eye will give a decent view of the spectacle — as long as the weather here on Earth plays ball.

Source: Voice of America