The rate Texas residents pay for energy has skyrocketed in recent days, as hotter-than-usual temperatures cause demand for electricity to soaring across the state.
Texans were paying about $275 per megawatt-hour for power on Saturday then the cost rose more than 800% to a whopping $2,500 per megawatt-hour on Sunday, Bloomberg reported, citing data from the Electric Reliability Council of Texas (ERCOT). Prices so far on Monday have topped off at $915 per megawatt-hour.
Demand for electricity hit a record-setting 83,593 megawatts on August 1, the energy provider said Friday, adding that there could be another record broken this week. The ERCOT power grid provides electricity to 90% of Texas.
ERCOT issued a weather watch for Monday, warning customers that the state may see higher temperatures, which will in turn put heavier demand on its electrical grid. The energy provider assured customers “there is currently enough capacity to meet forecasted demand.”
A giant swath of Texas is under an excessive heat warning, according to the National Weather Service. Temperatures are expected to reach between 108 and 102 degrees in Austin, Dallas, El Paso, Fort Worth, Houston and San Antonio. Texas has seen 26 straight days of above 100-degree temperatures, CBS News Texas reported.
This week’s expected electricity demand will mark ERCOT’s first big test since its grid crashed during a 2021 ice storm that caused a blackout and knocked out power to millions of homes. Since the blackout, Texas lawmakers say the grid is more reliable. Legislation passed this year that is designed to help the grid has still drawn criticism from Republicans in the statehouse, AP News reported.
Hot weather has not caused rolling outages in Texas since 2006. But operators of the state’s grid have entered recent summers warning of the possibility of lower power reserves as a crush of new residents strains an independent system. Texas mostly relies on natural gas for power, which made up more than 40% of generation last year, according to ERCOT. Wind accounted for about 25%, with solar and nuclear energy also in the mix.
Texas’ grid is not connected to the rest of the country, unlike others in the U.S., meaning there are few options to pull power from elsewhere if there are shortages or failures. In May, regulators warned the public that demand may outpace supply on the hottest days.
Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.
A federal rule that took effect on Tuesday will largely consign one of the world’s great inventions — the incandescent light bulb — to the technological dustbin.
The rule from the U.S. Department of Energy bans the production and sale of traditional light bulbs in the U.S., encouraging consumers to switch to newer, more efficient LED lights.
Using LEDs can help conserve both the environment and consumers’ money, according to the agency. American households could save roughly $100 a year, or a total of $3 billion, by completely phasing out incandescent bulbs in their homes, the DOE’s projections show. The switch could also reduce carbon emissions by 222 million metric tons over 30 years, the Department of Energy said in a statement after passing the rule last spring.
LEDs outshine on price and durability
LEDs, or light-emitting diodes, are lighting products that pass an electrical current through a microchip, which illuminates tiny diodes, resulting in a visible light, according to government-backed electronics-rating organization Energy Star. LEDs are 90% more efficient than incandescent light bulbs, the Department of Energy says on its website. They also can last up to 25-times longer than traditional light bulbs.
Those features could translate into major savings for consumers who make the switch to LEDs. The average American household spends more than $4,400 a year on utility bills, with electricity accounting for 23% of that bill, according to data from moving company Move.org. In addition, roughly a third of American households neglected food- and medicine-related expenses to pay their electricity bills as energy inflation sent energy costs skyrocketing, a 2022 study from Lending Tree shows.
For now, however LEDs account for less than half of lighting products in American households, the U.S. Energy Information Administration’s (EIA) 2020 Residential Energy Consumption Survey shows.
While LEDs have advantages over Thomas Edison’s revolutionary design, they haven’t completely snuffed out the conventional bulb. Some consumers, like Tom Scocca, an editor who has written about LEDs, argue that the energy-efficient fixtures can’t replace incandescent lights because they tend to lose their color and brightness over the years and aren’t quite compatible with dimmer switches.
“There is a world, almost within reach, in which LED lighting could be aesthetically fabulous,” Scocca wrote in an article for NY Magazine. “But right now, it’s one more thing that overpromises and underdelivers.”
Former President Donald Trump, among others, famously criticized LEDs. “The bulb that we’re being forced to use, number one, to me, most importantly, I always look orange,” he said in 2019.
Still, usage of LEDs is on the rise. The number of households using LEDs as their main lighting source increased from 4% in 2015 to 47% in 2020, according to the EIA.
The market for LEDs in the U.S. is estimated at $11.6 billion in 2023 and projected to grow to $18.5 billion by 2028, data from market research consulting firm Mordor Intelligence shows.
A punishing heat wave has led to record-high temperatures across much of the U.S., with more than 180 million people living under a heat advisory on Friday. At the same time, the nation is suffering from a “power disconnection crisis,” with millions at risk of having their electricity turned off because of overdue bills, researchers say.
About 1 in 4 Americans is uncertain about being able to to pay household energy bills, with low-income people most at risk of having their utilities disconnected, according to Sanya Carley, a professor of energy policy and city planning at the University of Pennsylvania. Last year, energy utilities cut off power to about 3 million households, she noted.
But even more households could be at risk this summer given the soaring mercury and the impact of inflation and higher energy costs, deepening the financial woes of many Americans, Carley said. Only 19 states restrict summer shutoffs of utilities, meaning most people live in states where they lack any recourse if they fall behind in paying their electric bill during a heatwave.
“Millions of people face this problem, and once a household faces the problem of disconnection, they often enter this kind of pernicious cycle of being regularly disconnected and frequently energy insecure,” Carley told CBS MoneyWatch.
Losing electricity places people at “immense risk” because they can’t run fans or air conditioning to regulate their body temperatures, she said. In some cases, the loss of power can be deadly, she added.
Forecasters expect several heat records could be broken Friday with temperatures 10 to 15 degrees Fahrenheit above average. In the Southwest and southern Plains, oppressive temperatures have persisted for weeks. One meteorologist based in New Mexico called the prolonged period of temperatures over 100 degrees unprecedented.
Many Americans rely on different strategies to keep their electric bills low, but that can also heighten the risks, Carley’s research found. For instance, 27% of low- to moderate-income people say they take on debt in order to pay their utility, while another 26% set their temperatures at risky levels to keep their bills down.
A deadly power cutoff over a $51 bill
In the most dire cases, an electricity cutoff during the summer can be deadly. But that can be hard to track because a person’s cause of death might be listed as heart failure, even though the fatality likely would’t have occurred if the power had remained on, Carley noted.
One case that drew attention in recent years is that of Stephanie Pullman, a 72-year-old whose electricity was shut off in 2018 when outside temperatures in her retirement community near Phoenix reached 107 Fahrenheit. She had paid $125 toward a past-due bill of $176, but her power was cut off because she didn’t pay in full.
Her body was found during a wellness check, with the medical examiner attributing her death to “environmental heat exposure,” according to the Associated Press.
Last year, Arizona prohibited utilities from disconnecting customers during periods of extreme weather, such as days over 95 degrees.
But most states lack any protections against power cuts, including states where summer temperatures are normally high — and are getting hotter due to climate change — such as Alabama, Florida, and North and South Carolina.
The patchwork nature of legal restrictions suggests that federal regulators should step in to issue a national directive to protect citizens during extreme weather, Carley noted.
“The federal government should absolutely have this on their radar, and I think they can do it in multiple ways,” she said. “One is an emergency moratorium for disconnections … the federal government can say, across all utilities, nobody is allowed to disconnect where we know that most of the population is under a heat advisory.”
The federal government could also expand funding for the Low Income Home Energy Assistance Program, or LIHEAP, which helps low-income households pay their energy bills. By summer, LIHEAP funds are often running low, which suggests that more funding could help more people with their bills during the hot months.
Where to get help
People at risk of having their electricity shut off should contact their utilities to ask about payment plans or other aid, Carley said. Only about 6% of low-income households request such assistance, her research found.
“People would much rather accumulate debt, for example, or forego eating than they would call the utility and talk to the utility about what kinds of payment plans they might have or assistance that they might have,” she said.
Local government agencies or charities might also offer aid for paying utility bills, while in an emergency families can also look for cooling centers at schools or other public buildings if they do lose power.
“There is an increase in the incidence of energy insecurity across the United States, and it’s not just low-income households that are energy insecure,” Carley said. “As climate change gets worse and as energy prices go up, it will be an increasing share of the population that face these conditions as well.”
One of the hottest movies of the summer is the staggeringly good biopic “Oppenheimer,” about the man who oversaw the frantic race to develop the atomic bomb during World War II.
The atom bomb dropped on Hiroshima, Japan on Aug 6, 1945 was a fission-style device. This also happens to be the same basic physics behind nuclear reactors that are in use today. It’s a reminder that technology can be, at its essence, agnostic: Whether it is used for malevolent or benevolent purposes (in nuclear fission’s instance, an instrument of death or clean, carbon-free electricity) depends upon the intent of the user.
These percentages are likely to rise as global demand for electricity — and concerns about global warming and climate change — rise. This will present opportunities for long-term oriented investors. The lion’s share of this demand — about 70%, says the Paris-based International Energy Agency (IEA), will come from India, which the United Nations says is now the world’s most populous country, China, and Southeast Asia. Put another way, “the world’s growing demand for electricity is set to accelerate, adding more than double Japan’s current electricity consumption over the next three years,” says Fatih Birol, the IEA’s executive director.
While fossil fuels remain the dominant source of electricity generation worldwide — the Central Intelligence Agency estimates that it provides about 70% of America’s electricity, 71% of India’s and 62% of China’s, for example—the IEA report says future demand will be met almost exclusively from two sources: renewables and nuclear power. “We are close to a tipping point for power sector emissions,” the IEA says. “Governments now need to enable low-emissions sources to grow even faster and drive down emissions so that the world can ensure secure electricity supplies while reaching climate goals.”
“ The Biden administration is a big booster of nuclear energy. ”
It’s helpful that the Biden administration is a big booster of nuclear energy, which the White House sees as an integral part of its broader effort to move the U.S. economy away from fossil fuels. The Department of Energy says that the country’s 93 reactors generate more than half of America’s carbon-free electricity. But price pressures from wind, solar and natural gas (which the feds call “relatively clean” even though it emits about 60% of coal’s carbon levels) have putseveral reactors out of business in recent years.
The bipartisan infrastructure bill that Biden signed into law in November 2021 includes $6 billion, spread out over several years, for the so-called Civil Nuclear Credit Program, designed to keep reactors — and the high-paying jobs that come with them — running. If a plant were to close, it would “result in an increase in air pollutants because other types of power plants with higher air pollutants typically fill the void left by nuclear facilities,” the administration says. U.S. Energy Secretary Jennifer Granholm has said the Biden administration is “using every tool available” to get the country powered by clean energy by 2035.
The private sector is beginning to stir. Last week, Maryland-based X-Energy said it would build up to 12 reactors in Central Washington state, for Energy Northwest, a public utility. These wouldn’t be the behemoth-type reactors we’re used to seeing, but “advanced small, nuclear reactors.” X-Energy, which is privately held, has also been selected by Dow DOW, -1.40%
to construct a similar facility in Texas.
Other companies are also rolling out new technology to meet demand. Nuclear fusion — a breakthrough in that it creates more energy than the Oppenheimer-era fission model and at a lower cost — is likely to be the basis for reactors in the years ahead; the Washington, D.C.-based Fusion Industry Association thinks the first fusion power plant could come online by 2030. After seven rounds of funding, one fusion company, Seattle-based Helion Energy, is currently valued at around $3.6 billion, and appears headed for a public offering.
Here too, the Biden administration is getting involved. In May, the Department of Energy announced $46 million in funding for eight other fusion companies. “We have generated energy by drawing power from the sun above us. Fusion offers the potential to create the power of the sun right here on Earth,” says Granholm.
There are several opportunities here for long-term investors. You can pick your way through any number of publicly held companies, including more traditional utilities, or spread your bet across the industry through a handful of exchange-traded funds. The largest of these is the Global X Uranium Fund URA, +0.78%,
with about $1.6 billion in assets. It’s up about 9% year-to-date. The VanEck Uranium + Nuclear Energy Fund NLR, +0.41%
is up almost 10% and sports a 1.8% dividend yield. These are respectable year-t0-date returns, even though they lag the S&P 500 SPX, +0.32%
(up close to 19%) by a wide margin.
Oil futures settle at their highest in two weeks on Wednesday, finding support after Saudi Arabia’s energy minister reportedly said that the kingdom and its allies will do whatever is necessary to support the oil market.
The comments from Saudi Energy Minister Prince Abdulaziz bin Salman at an OPEC+ seminar was reported by a number of news agencies and follows the Saudi’s announcement Monday that it would extend its voluntary production cut by another month, through August.
Offshore oil drillers were about the worst place to be in 2020 as oil prices were falling and demand for crude seemed to be seeping away. Now, the stocks may be the ones to own as investors realize that oil will be needed to make the world go around for decades.
U.S. stock index futures slipped lower Tuesday after a three-day break, with Chinese equities wilting on disappointment over the monetary stimulus efforts in the world’s number-two economy.
What’s happening
Dow Jones Industrial Average futures YM00, -0.31%
fell 109 points, or 0.3%, to 34,495.
S&P 500 futures ES00, -0.26%
dropped 11 points, or 0.2%, to 4,442.
Nasdaq 100 futures NQ00, -0.16%
decreased 28 points, or 0.1%, to 15,239.
On Friday, the Dow Jones Industrial Average DJIA, -0.32%
fell 109 points, or 0.32%, to 34299, the S&P 500 SPX, -0.37%
declined 16 points, or 0.37%, to 4410, and the Nasdaq Composite COMP, -0.68%
dropped 93 points, or 0.68%, to 13690.
What’s driving markets
Investors were in a cautious mood following the U.S. long weekend in honor of the Juneteenth federal holiday, but that’s after a strong run. The S&P 500 gained 2.6% last week, its fifth week in a row of gains, as the tech-heavy Nasdaq Composite took its winning run to eight weeks.
Mike Wilson, Morgan Stanley’s chief U.S. equity strategist, said both retail and institutional investor sentiment are at their highest levels in over two years.
“We note that the consensus is right about 80% of the time, which means such shifts in sentiment and positioning can often be right as the collective intelligence of the market knows best,” he said. “However, given our fundamental view on growth, we find it hard to get on board with the current excitement and narrative supporting it. In other words, if second half growth re-accelerates as expected, then the bullish narrative being used to support equity prices will be proven correct.”
One event that investors have to weigh is the resumption this fall of student loan payments, and what that may mean for consumers’ disposable income. Student loan payments have been paused since the start of the pandemic in March 2020.
China cut its 1- and 5-year lending rates by 10 basis points, which investors viewed to be modest, particularly after a Friday state council meeting didn’t result in other concrete measures. According to Societe Generale, there were expectations the 5-year rate, the benchmark for mortgages, would be cut by 15 basis points.
Tuesday’s economic data include housing starts data, which showed a 21.7% rise in May after a revised 2.9% drop in April. Building permits also climbed 5.2% in May.
A panel later Tuesday will include both New York Federal Reserve President John Williams and Fed Vice Chair for Supervision Michael Barr. On Wednesday Fed Chair Jerome Powell is due to deliver semi-annual congressional testimony.
Cava Group, the Mediterranean-focused fast-casual restaurant chain that’s making its trading debut on Thursday, is confident it has access to enough funding to expand its business and make a profit, according to Chief Financial Officer Tricia Tolivar.
But Tolivar declined to provide a timeline to profitability in an interview with MarketWatch.
The typical power bill is set to rise about 2% this summer from a year ago, according to the Energy Information Administration. The reason: While wholesale power costs have dropped, there is generally a lag in when such decreases filter down to the prices residents see on their monthly power bill.
“Although wholesale power prices have come down significantly so far in 2023, those lower costs may not be apparent in retail prices until later this year or in 2024,” the EIA wrote.
Most of the electricity in the U.S. — about 40% — is produced by burning natural gas, the cost of which spiked to a 14-year-high last fall before dropping early in 2023.
“A lot of utilities buy natural gas in the fall, and they try to spread it out over time so consumers don’t get hit with a large bill right away,” said Mark Wolfe, executive director of the National Energy Assistance Directors’ Association.
“If you’re a consumer it’s kind of confusing,” he said. “Consumers look at gasoline, and say, well, gasoline’s come down, why am I still paying more money for heat and power?”
Most utilities need to ask regulators to approve any price increases — another reason for the delayed price changes. And outside of fuel prices, utilities’ costs for labor and maintenance are still rising.
“Utilities are rebuilding their grids, which is expensive,” Wolfe said. “About half the cost of electricity that a consumer buys is the wires. So just because the cost of natural gas fuel has come down doesn’t mean it’s a one-to-one relationship.”
Large parts of the grid were built decades ago and are in need of replacement — even before the upgrade announced by the White House last year to accommodate more electric cars and the rollout of more solar and wind power. Both those factors are likely to keep electricity costs for consumers relatively high for the near future, experts say.
“A lot of transmission facilities are 60 or 70 years old, and that’s about their lifespan,” said Rob Gramlich, founder of Grid Strategies, a consulting firm that specializes in renewable energy. “It’s sort of like when your car dies … when the time comes, you’ve got to pay up.”
Regional variations
Power costs vary across the nation, with the average cost of electricity in New England being double that of the cheapest region — the Mountain West. New Englanders should see a typical monthly bill of about $180 this summer, the EIA predicted, which is $14 higher than last year.
“The New England power market experienced record-breaking cold weather this past winter and — combined with limited natural gas pipeline capacity — added upward pressure to natural gas prices, which ultimately affects regional electricity prices,” the EIA said.
By contrast, the Southeast is predicted to see a slight drop in monthly bills, to about $187, or $8 lower than last year, because the EIA expects a cooler summer in the region, which means lower air-conditioner usage.
A caveat to such forecasts: The weather adds a great deal of uncertainty. “If temperatures end up much hotter than expected, households will likely face higher electricity bills, especially in the southern states,” the agency said.
Traveling this Memorial Day Weekend? Put some deep breaths on your checklist.
Americans should brace for jammed highways and long airport lines with more people projected to drive and fly this holiday weekend compared to last year, experts say.
Gas is $1 cheaper than it was at the same point last year and airline passengers aren’t flinching from pricey tickets, still powered by the pent-up demand to see family and friends as the pandemic recedes.
“The roads are going to be pretty packed,” said AAA spokeswoman Aixa Diaz. “The bottom line is, the later you wait in the day, the worse it is — unless you drive at night.”
“If there ever was a time you wanted to get to the airport early, it’s this one,” she added.
“Whether driving or flying, pack your patience and prepare for heavy traffic on the road and at the airport,” said Erika Richter, spokeswoman for the American Society of Travel Advisors.
“AAA is projecting that 37.1 million people will be driving at least 50 miles this upcoming weekend. That’s 2 million more people traveling by automobile compared to last year.”
AAA is projecting that 37.1 million people will be driving at least 50 miles this upcoming weekend. That’s 2 million more people traveling by automobile compared to last year.
They’ll be driving on cheaper gas. Nationally, a gallon of gas averaged $3.57 on Thursday, down from $4.59 one year ago, AAA said.
Meanwhile, nearly 3.4 million airline passengers are projected to fly this weekend, according to AAA. That would surpass pre-pandemic levels, when 3.2 million people flew over the Memorial Day Weekend in 2019.
All together, 42.3 million people are expected to travel this weekend via cars, planes, buses, trains, according to AAA estimates. That’s higher than the 39.6 million who traveled last Memorial Day Weekend, and just under 2019 levels.
Three major airlines, American Airlines AAL, +4.20%,
United UAL, +1.76%
and Delta Air Lines DAL, +2.35%,
are expected to handle nearly 60% of the flights, according to a Thursday note from TD Cowen.
Like others, analysts at TD Cowen, a division of TD Securities, say it’s going to be a brisk summer travel season.
“We continue to see strong demand for air travel, with this summer’s focus on international [travel]. Remember, the U.S. government did not eliminate testing until mid-June last year, after most people planned their vacations,” they wrote.
Friday is the day when roads and airports are going to be the busiest.
On the roads, congestion is going to peak that day from 3:00 p.m. to 6:00 p.m., according to INRIX, a traffic-data analytics firm.
Inside airports, approximately 2.6 million people will pass through Transportation Security Administration checkpoints that day, the agency said.
During last year’s Memorial Day Weekend, 2.38 million people passed through TSA checkpoints, the agency’s data showed.
Teens, aged 13-17, can now go with TSA PreCheck-enrolled parents and guardians, when they are on the same reservation and when the TSA PreCheck indicator shows on the child’s pass. Children ages 12 and under can still walk through checkpoints with their enrolled parents or guardians.
Once getting on the plane, don’t count on having a nearby spare seat. Seating capacity is currently slated to be 17% higher than last Memorial Day Weekend, according to the travel app Hopper.com.
This weekend, last-minute tickets are averaging $273, and that’s around $100 less than ticket-price averages at the same point last year and slightly cheaper than 2019 levels, Hopper.com’s data said. International travel is a different story. Fares to Europe, for example, are more than 50% higher than last year, according to Hopper.com.
What happens after Friday?
On the roads, there’s little extra traffic expected on Saturday and Sunday, according to projections from INRIX, a transportation analytics company. On Monday, the worst traveling time is 12 p.m. to 3 p.m. The window for less traffic that day is before 10 a.m., INRIX noted.
As for flights, Richter said airlines and operators “are obligated to share the latest information if it impacts your travel.”
Downloading smartphone apps for your airline, activating the notifications and opting for text and email alerts will also help keep you abreast of any last-minute changes, she said.
Through March, less than 2% of scheduled domestic flights have been canceled, the U.S. Department of Transportation said Tuesday. That’s below last year’s 2.7% cancellation average and the 4.1% rate for the first three months of 2022, the department noted.
A Transportation Department dashboard shows which airline carriers have committed to passenger-friendly accommodations when delays and cancellations occur. For example, some — but not all — airlines will rebook your flight with a partner airline at no additional cost.
But Richter said the volume and potentials for travel snags this Memorial Day Weekend could be a preview for the months to come. “Travel delays will be inevitable this summer, so make sure you are planning ahead,” she said.
The numbers: The Philadelphia Federal Reserve said Thursday its gauge of regional business activity rose to negative 10.4 in May from negative 31.3 in the prior month. Any reading below zero indicates deteriorating conditions. This is the ninth straight negative reading and the eleventh in the last twelve months.
Economists polled by the Wall Street Journal expected a negative 20 reading in May.
Key details: The barometer on new orders increased 13.8 points but remained at negative 8.9 in May. The shipments index rose slightly to negative 4.7. The measure on six-month business outlook worsened to negative 10.3 in May from negative 1.5 in the prior month.
Big picture: The continued contraction in activity is a sign that U.S. manufacturing continues to struggle.
The Philadelphia Fed index is closely followed to give economists an advance signal of factory conditions across the country.
It’s an hour before dawn breaks over the North Sea. Aboard the KV Bergen, the officer of the watch is wide awake.
The 93-meter long Norwegian Navy Coast Guard vessel is on patrol, 50 miles out to sea. The sky is dark, the sea darker. But off the starboard bow, bright lights gleam through the rain and mist. Something huge and incongruous is looming out of the water, lit like a Christmas display.
“Troll A,” says Torgeir Standal, 49, the ship’s second in command, who is taking the watch on this bleak March morning.
It’s a gas platform — a big one.
When it was transported out to this desolate spot nearly 30 years ago, Troll A — stretching 472 meters from its seabed foundations to the tip of its drilling rig — became the tallest structure ever moved by people across the surface of the Earth. Last year, Troll, the gas field it taps into, provided 10 percent of the EU’s total supply of natural gas — heating homes, lighting streets, fueling industry.
“There are many platforms here,” says Standal, standing on the dark bridge of the Bergen, his face illuminated by the glow from the radar and satellite screens on his control panel. “And thousands of miles of pipeline underneath.”
And that’s why the Bergenhas come to this spot today.
In September 2022, an explosion on another undersea gas pipeline nearly 600 miles away shook the world. Despite three ongoing investigations, there is still no official answer to the question of who blew up the Nord Stream pipe. But the fact that it could happen at all triggered a Europe-wide alert.
The Norwegian Navy’s KV Bergen, seen in the background, after departing from the port of Bergen
Against a backdrop of growing confrontation with Moscow over its brutal invasion of Ukraine and its willingness to use energy as a weapon, the vulnerability of the undersea pipes and cables that deliver gas, electricity and data to the Continent — the vital arteries of comfortable, modern European life — has been starkly exposed.
In response, Norway, alongside NATO allies, increased naval patrols in the North Sea — an area vital for Europe’s energy security. The presence of the Bergen, day and night, in these unforgiving waters, is part of the effort to remain vigilant. The task of the men and women on board is to keep watch on behalf of Europe — and to stop the next Nord Stream attack before it happens.
The officers of the watch
But what are they looking for?
In recent weeks the Bergen has tracked the movements of a Russian military frigate through the North Sea — something that it has to do “several times every year,” says Kenneth Dyb, 47, the skippsjef, or commander of the ship.
The Russians have a right to sail through these seas out to the Atlantic, and it is very unlikely Moscow would be so brazen as to openly attack a gas platform or a pipeline. But, says Dyb, as his ship steams west to another gas and oil field, Oseberg, “it’s important to show that we are present. That we are watching.”
Recent reports that Russian naval ships — with their trackers turned off — were present near the site of the Nord Stream blasts in the months running up to the incident have reinforced the importance of having extra eyes on the water itself.
The Oseberg oil and gas field, 130 kilometers north-west of Bergen
Of course, the gas didn’t come for free. Norway has profited hugely from the spike in gas and oil prices that followed Putin’s invasion of Ukraine. The state-owned energy giant Equinor made a record $75 billion profit in 2022. Oslo is sensitive to accusations of war profiteering — and keen to show Europe that it cares about its neighbors’ energy security as much as it cares about their cash.
But the threat to the pipelines could also be more low-key. One of the many theories about the Nord Stream attack is that it was carried out by a small group of divers, operating from an ordinary yacht. In such a scenario, something as seemingly innocent as a ship suddenly going stationary, or following an unaccustomed course through the water, could be suspicious. The Bergen’s crew have the authority to board and inspect vessels that its crew consider a cause for concern.
Russia’s covert presence in these waters has been acknowledged by Norway’s intelligence services in recent weeks. A joint investigation by the public broadcasters in Norway, Sweden, Denmark and Finland uncovered evidence of civilian vessels, such as fishing ships, being used for surveillance activities. This is something that has been “going on forever,” according to Ståle Ulriksen, a researcher at the Royal Norwegian Naval Academy, but it has increased in intensity in recent years.
“We always look for oddities, anything that is unusual, like new ships in the area that have not been here before,” says Magne Storebø, 26, senior petty officer, as he takes the afternoon watch on the bridge later that day.
The sky is leaden and the horizon lost in cloud. Coffee in hand, Storebø casts his eye over the radar and satellite screens as giant windscreen wipers whip North Sea spray from the floor-to-ceiling windows. There are few ships around, all of them familiar to the crew; service vessels plying back and forth from the gas and oil platforms.
The Nord Stream incident and the new security situation has changed the way Storebø thinks about his work, he says.
He is “more aware of the consequences suspicious vessels could have,” he says. “More awake, you could say.”
Senior Petty Officer Magne Storebø keeps watch from the bridge
Soft-spoken and calm beyond his years, Storebø is philosophical about the potential dangers of his work. He has been in the Navy for four years, in which time war has broken out on the European continent and the threat to his home waters has come into sharp focus.
“If you are going to put a rainy cloud over your head and bury yourself down, I don’t think the Navy or the coastguard is the right place to work in,” he says in conversation with two shipmates later that day. “You need to adjust and to look in a positive direction — and to be ready in case things don’t go that way.”
Energy war round two
As Europe emerges from the first winter of its energy war with Russia, its gas supplies have held up better than almost anyone expected.
But as the Continent braces for next winter, the risk of another Nord Stream-style attack to a key pipeline is taken seriously at the highest levels of leadership.
“Things look OK for gas security now,” said one senior European Commission official, speaking on condition of anonymity to discuss sensitive matters of energy security. “But if Norway has a pipeline that blows up, we are in a different situation.”
EU policymakers see four key risks to gas security going into next winter, the senior official added: exceptionally cold weather; a stronger-than-expected Chinese economic recovery hoovering up global gas supply; Russia cutting off the remaining gas it sends to Europe; and last but not least, an “incident” affecting energy infrastructure.
Such an event might not only threaten supply but could potentially spark panic in the gas market, as seen in 2022, driving up prices and hitting European citizens and industries in the wallet. And nowhere is the potential for harm greater than in the North Sea.
Norway is now Europe’s biggest single supplier of gas. After Russian President Vladimir Putin and the energy giant Gazprom shut off supply via Nord Stream and other pipelines, Norway stepped up its own production in the North Sea, delivering well over 100 billion cubic meters to the EU and the U.K. in 2022. European Commission President Ursula von der Leyen visited Troll A herself in March this year — the first visit of a Commission president to Norway since 2011 — to personally thank the country’s president, Jonas Gahr Støre, for supplies that “helped us through the winter.”
“We have a huge responsibility, supplying the rest of Europe with energy,” Defense Minister Bjørn Arild Gram told POLITICO. “To be a stable, reliable producer of energy, of gas, is an important role for us and we take that very seriously. That is why we are also doing so much to protect this infrastructure.”
The vast majority of that gas is transported into northwest Europe via a complex network of seabed pipes — more than 5,000 miles of them in Norway’s jurisdiction alone. The North Sea has an average depth of just 95 meters. That’s not much deeper than the Nord Stream pipes at the location they were attacked.
“It actually doesn’t take a particularly sophisticated capability to attack a pipeline in relatively shallow waters,” says Sidharth Kaushal, research fellow at the Royal United Services Institute think tank in the U.K. A small vessel, “some divers and an [explosive] charge” are all it could take, Kaushal says.
The navy chief
After the Nord Stream incident in September, suspicion instantly fell on Russia. Moscow has a record of operating in the so-called gray zone — committing hostile acts short of warfare, often covertly.
To date, the three investigations looking into the incident have yet to confirm that suspicion. But European governments — and their militaries — are not taking any chances.
In the days immediately following the explosions, NATO navy chiefs started calling each other to try to coordinate efforts to protect energy infrastructure, says Rune Andersen, the chief of Norway’s navy, speaking to POLITICO at Haakonsvern naval base, before the KV Bergen’svoyage.
Everyone had the same thought, he says. “If that happens in the North Sea, we will have a problem.”
Andersen joined the Navy as a young man in 1988, in the last days of the Cold War. Now 54, he is used to the Russian threat overshadowing Norway’s and Europe’s security.
“After decades of attempts to integrate or cooperate with Russia, we now have war in Europe. We see that our neighbor is brutal and willing to use military force,” he says grimly. “I worked in the Navy in the ’90s when it was enduring peace and partnership on the agenda. We are back to a situation where our job feels more meaningful — and necessary.”
Kenneth Dyb, the skippsjef, or commander of the ship
However, he points out, his own forces have so far not seen any Russian movements or operations “that are different to what they were before” the Nord Stream attacks. “The job we are doing is precautionary, rather than tailored to any specific threat,” he adds.
Even so, those early discussions with NATO allies have now formalized into daily coordination via the Allied Maritime Command headquarters in the U.K., to ensure there are always NATO ships on hand that can act as “first responders” to potential incidents. British, German and French ships have joined their Norwegian counterparts in the monitoring and surveillance effort.
It is “by nature challenging” to protect every inch of pipeline, all of the time, Andersen says.
The role of the Bergen and ships like it, he adds, is just “one bit of the puzzle.” Simply by their presence at sea, these ships increase the chances of catching would-be saboteurs in the act, and hopefully deter them from trying in the first place.
The goal, in other words, is to reduce the size of the “gray zone” — or to “increase the resolution” of the navy’s picture of the activity out on the North Sea, as Andersen puts it.
In collaboration with the energy companies and pipeline operators, unmanned underwater vehicles — drones — using cameras and high-resolution sonar have been used, Andersen says, to “map the micro-terrain” around pipelines. These are sensitive enough to spot an explosive charge or other signs of foul play.
Equinor, alongside the pipeline operator Gassco, has carried out a “large inspection survey” of its undersea pipeline infrastructure, a company spokesperson says. The survey revealed “no identified signs of malicious activities” but pipeline inspections are ongoing “continuously.”
Senior Petty Officer Simen Strand speaks to the crew. “We haven’t had much to fear in the past. We are probably less naïve nowadays,” he says.
Perhaps understandably, the heightened level of alert has led to the occasional false alarm. A spate of aerial drone sightings near Norwegian energy infrastructure around the time of the Nord Stream attacks last year included a report of a suspicious craft circling above Haakonsvern naval base itself.
“After a while, we concluded it was a seagull,” says Andersen, with the shadow of a grin.
Europe on alert
The navy chief is nonetheless deadly serious about the potential threat. A Nord Stream-style attack in the North Sea is possible. Anderson will not be drawn on the most vulnerable points in the network, saying only that “easy to access” places and “key hubs” are “two things in the back of mind when we think [about] risk.”
Throughout Europe, the alert has been raised. This month, NATO warned of a “significant risk” that Russia could target undersea pipelines or internet cables as part of its confrontation with the West.
Several countries are increasing patrols and underwater surveillance capabilities. The British Royal Navy accelerated the purchase of two specialist ocean surveillance ships, the first of which will be operational this summer. The EU and NATO have established a new joint task force focusing on critical infrastructure protection, and a “coordination cell” has been established at NATO headquarters in Brussels to improve “engagement with industry and bring key military and civilian stakeholders together” to keep the cables and pipelines secure.
Norway — and Europe — are in this struggle for the long haul, Andersen believes.
Indeed, even as Europe transitions from fossil fuels to green energy, the North Sea will remain a vital powerhouse of offshore wind energy, with plans for a huge expansion over the next 25 years. Earlier this year, the Netherlands’ intelligence services reported a Russian ship seeking to map wind farm infrastructure in the Dutch sector of the North Sea. “We think the Russians wanted to investigate the possibilities for potential future sabotage,” Jan Swillens, head of the Dutch Military Intelligence and Security Service tells POLITICO in an emailed statement. “This incident makes clear that these kinds of Russian operations are performed closer than one might think.”
At the same time in the Baltic, countries are shoring up security around their infrastructure, at sea and on land. Late last year, Estonia carried out an underwater inspection of the two Estlink power cables and the Baltic Connector gas pipeline linking it to Finland, the Estonian navy says. Lithuania, meanwhile, is paying “special attention” to security around its LNG terminal at Klaipėda and the gas cargoes that arrive there, a defense ministry spokesperson says.
Torgeir Standal, left, the KV Bergen’s second in command
It was in Lithuania that Europe had its first major false alarm since the Nord Stream incident, when a gas pipeline on land exploded on a Friday evening in January. Foul play was briefly considered a possibility in the immediate aftermath but was quickly ruled out. The pipe was 40 years old, and had been subject to a technical fault.
The danger posed by Russia to infrastructure throughout Europe should not be underestimated, says Vilmantas Vitkauskas, director of Lithuania’s National Crisis Management Centre and a former NATO intelligence official.
“We know their way of thinking, [the way] they send signals or apply pressure,” Vitkauskas says. “We understand Russia quite well, and we are quite worried by what we see — and how vulnerable our infrastructure is in Europe.”
The watchers on the water
Back aboard the Bergen, life for the sailors carries on as normal. It’s a young crew, with an average age of around 30. Some are conscripts. It’s still compulsory in Norway for 19-year-olds to present themselves for national service, but only around one in four are actually recruited for the mandated 19-month stint.
The days are long. Surveillance, maintenance and exercises in search and rescue are all part of the crew’s regular routine. A helicopter from one of the Oseberg oil and gas platforms soars overhead, and the crew are drafted into an exercise winching people on and off the deck of the Bergenin the dead of night, simulating a rescue operation.
The ship needs to be ready to respond to an incident should the call come in from naval headquarters that help is required, or a suspicious vessel has been identified in their patch of the North Sea. But in their downtime, the sailors head to the gym on the lower deck, or play FIFA on the X-box in the sparse games room. Three hearty meals a day are served in the galley kitchen. There is even a ship’s band, cheekily named “Dyb Purple” after their commander. Dyb “takes it well,” says Senior Petty Officer Storebø.
In the daily whirl of activity, most of the young sailors don’t think of their work in the grand strategic sense of protecting the energy security — the warmth, the light, the industry — of an entire continent.
But the context of the Ukraine war — and the precedent set by the Nord Stream attack — has added a note of solemnity just below the surface of the comradeship and bonhomie.
“We are probably less naïve nowadays,” says 33-year-old Senior Petty Officer Simen Strand, who has a wife and two children, a boy and a girl, back home in Bergen. “We haven’t had much to fear in the past, there hasn’t been a concrete threat.”
Storebø agrees but is characteristically sanguine. “Russia has always been there … I’ve not personally felt any more unease than before.”
The next day, Storebø has the night watch, from midnight to four in the morning, as the Bergen travels back to base for a short stop before heading out to sea again.
It’s dark up on the bridge, with the glow of the control panel screens the only light inside. Twenty miles away, little lights can be seen on the Norwegian coast. A lighthouse flares to the south, at Slåtterøy, not far from Storebø’s home island of Austevoll. Beneath the waves, unseen, gas flows from the Troll field back to the mainland, where it is processed. From there, it continues its journey south to light the dark of European nights.
All is quiet but Storebø can’t afford to lose focus. “Coffee and music help,” he says. “I like the night shifts.”
As the officer of the watch, he has to be ready, should the radar, the satellites, or his own eyes see something out of the ordinary — ready to call the captain and raise the alarm.
That’s the job, he says. “You always have it in the back of your mind.”
U.S. stocks struggled for direction Monday as investors monitored efforts to resolve a U.S. debt-ceiling standoff ahead of a potential default, and weighed economic data that showed a sharp fall in New York state factory activity.
How stocks are trading
The Dow Jones Industrial Average DJIA, -0.04%
was marginally lower by 4 points at 33,297, after briefly turning higher.
The S&P 500 SPX, +0.09%
edged up 4 points, or 0.1%, at 4,128.
The Nasdaq Composite COMP, +0.41%
rose 50 points, or 0.4%, to 12,335.
The S&P 500 fell 0.3% last week, while the Dow dropped 1.1%. The S&P 500’s decline was cushioned by megacap tech-related stocks, which also helped lift the Nasdaq Composite out of a bear market. The Nasdaq gained 0.4% last week.
Despite a generally well-received earnings season and signs that easing inflation may allow the Federal Reserve to halt its monetary-tightening cycle, stocks have been unable to break out of their recent range, as first banking-sector anxiety and lately worries about a technical government-debt default have restrained bulls.
“Over the short-term, the stock market is stuck until we reach a debt-ceiling resolution and until we see more clarity from the regional banking sector, which are the two factors weighing on stocks right now,” said Brad Bernstein, managing director at UBS Wealth Management in Philadelphia, in a note. “Markets are anxious for a debt-ceiling solution and the markets are also hoping that the Fed pauses its rate hikes at the June meeting.”
A second round of debt-ceiling talks between the White House and congressional leaders appears set for Tuesday, according to President Joe Biden.
“I remain optimistic because I’m a congenital optimist,” Biden told reporters Sunday in Rehoboth Beach, Del. “But I really think there’s a desire on their part as well as ours to reach an agreement. I think we’ll be able to do it.”
House Speaker Kevin McCarthy, R-Calif., on Monday, however, said the White House and congressional Republicans remained far apart.
Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, warned against complacency, noting that previous debt-ceiling deadlines have required significant market volatility to encourage politicians to reach agreement.
“[W]e’ve continued to remind investors that since 2011, getting Congress to strike a deal has seemed to occur only after the stock market has thrown a temper tantrum,” said Calvasina in a note to clients.
“In years where the drama in equity markets has otherwise been modest, the hits generally end up in the 5-6% area. In years in which debt ceiling drama has occurred in the context of other major problems in the market (i.e., 2011, 2015-2016, 2018), the hits have ranged from 10% to 19%,” she added.
The New York Fed’s Empire State business-conditions index, a gauge of manufacturing activity in the state, plunged 42.6 points in May to negative 31.8, the regional Fed bank said Monday. Economists had expected a reading of negative 5, according to a survey by The Wall Street Journal. Any reading below zero indicates deteriorating conditions.
The data underlined stagflation worries, said Edward Moya, a senior market analyst at Oanda, in a note.
“It seems that after every economic reading, Wall Street has more reminders on how hard it will probably be to get inflation anywhere close to the Fed’s target. A recession seems like the only way pricing pressures will get closer to 3%,” Moya said.
Atlanta Federal Reserve Bank President Raphael Bostic on Monday said that he would like to see the central bank pause its cycle of rate hikes to gauge the health of the economy.
“I think the appropriate policy is really to just wait and see how much the economy slows from the policy actions that we’ve done,” Bostic said in an interview on CNBC.
3M Co. MMM, +0.02%
said Monday it has fired Michael Vale, group president and chief business and country officer, for cause. The dismissal is due to “inappropriate personal conduct and violation of company policy, unrelated to the company’s operations and financial performance,” the company said in a brief statement. Shares of the diversified industrial company and Dow component were down 0.4%.
Oil demand is likely to hold up longer than many people expect during the anticipated transition to electric vehicles. And changes in the industry point to oilfield services companies as good long-term growth investments as offshore production ramps up.
Below is a list of oil producers and related companies favored by two analysts who have followed the industry for decades.
The Biden administration, pushing for more U.S. manufacturing, has issued its updated list of all-electric and gas-electric hybrid vehicles that qualify for the full $7,500 tax credit, and those that can earn at least a partial sweetener for buyers.
With the update, 16 models are now eligible for a full or partial tax credit, based on new thresholds that require a certain percentage of the battery parts and the minerals used in those batteries to come from North America, meaning the U.S., or a country with select trade agreements with the U.S.
The total is down from 25 electric and plug-in models previously eligible for a U.S. tax break, which were first introduced about 10 years ago.
The revision limits the selection to vehicles built by four car companies: Tesla Inc. TSLA, -0.96%,
Ford Motor Co. F, -0.04%,
General Motors Co. GM, +0.17%
and Stellantis NV STLA, +0.03%,
which owns Jeep and Chrysler.
The government site also advises on tax incentives for used vehicles and leased vehicles.
For buyers to claim the full $7,500 tax credit, a percentage of the pre-determined battery parts must be made in North America and a percentage of critical minerals sourced in the U.S. or from certain trade-friendly countries. A partial $3,750 credit is available for meeting one of these two battery-sourcing requirements.
Terrence Horan
Not a single electric model from a foreign brand is eligible for the subsidy as revised. And EVs from startups, such as passenger- and commercial-truck maker Rivian Automotive Inc. RIVN, -1.64%
and luxury brand Lucid Group Inc. LCID, -0.19%,
also missed making the list. That’s largely because their vehicles are too expensive for the price contingencies that inform which autos qualify. Income levels of buyers are also a consideration.
Still, the new rules make for certain immediate winners over others.
Nearly all of GM’s new EV models are eligible for the full $7,500 tax credit. Six Ford electric and plug-in hybrid models also qualify for a partial or full tax credit, including the Mustang Mach-E and F-150 Lightning.
Among Tesla’s models, some entry-level Model 3 sedans will get a $3,750 credit. That is because the car uses battery cells made in China. Higher-end Model 3s and all its Model Y configurations qualify for the full $7,500 credit.
Tesla has been cutting its retail prices, a move to boost sales and bring some offerings in line with the tax breaks. And analysts say the maker likely isn’t done cutting prices.
The tax credits made a big splash when they were included in 2022’s Inflation Reduction Act, the broad spending bill that observers labeled the biggest pro-climate action by an administration to date. But Biden’s pro-America stance soon came in conflict with the heart of the existing EV market, much of which is sourced abroad.
The latest changes, which are intended to attract auto manufacturers into building domestically, apply to vehicles delivered to customers starting Tuesday. Several overseas makers, including Hyundai and Honda, have started to build battery plants in the U.S.
Other actions are intended to push EVs as well. The Environmental Protection Agency last week proposed its toughest restrictions ever on tailpipe emissions, a target that can likely only be met by turning out more EVs from assembly lines. The new standards aim for two-thirds of U.S. car sales to be electric by 2032.
Surprise crude oil production cuts from Saudi Arabia and other oil-rich countries shouldn’t produce worries of skyrocketing gas costs for U.S. drivers still smarting from last year’s pump price shocks, according to fuel industry experts.
At a time when gas prices are already increasing because of rising seasonal demand, the slashed crude oil output that Saudi Arabia announced Sunday will translate into higher prices, they say. But compared to last year — when energy markets were absorbing the initial impact of Russia’s invasion of Ukraine — the altitude on those gas price increases may not feel so steep.
On Monday, the national average for a gallon of gas was $3.50, according to AAA. That’s around 10 cents more than a month ago, but almost 70 cents less than the $4.19 average cost one year ago.
The effects of decreased oil production could translate into initial price increases of up to 15 cents per gallon, according to two different energy sector watchers.
There’s Patrick De Haan, head of petroleum analysis at GasBuddy.
At OPIS, an outlet focused on energy sector news and analytics, Chief Oil Analyst Denton Cinquegrana said he was previously expecting summer gas prices to average around $3.60.
“This move probably boosts that by about 10 – 15 cents to about $3.70-3.75/gal.” Cinquegrana told MarketWatch.
OPIS is owned by Dow Jones, which also owns MarketWatch.
It’s possible for gas price averages to hit around $3.60 in the next week or so, he said. The other 10 to 15 cents might filter into retail pump prices later this month or in early May, according to Cinquegrana.
The surprise move came from Saudi Arabia and other members of OPEC+, the Organization of the Petroleum Exporting Countries and allies, including Russia. In Saudi Arabia, officials were reportedly “irritated” by recent remarks from U.S. Energy Secretary Jennifer Granholm.
After the Biden administration tapped the country’s strategic petroleum reserve to combat last year’s high gas costs, Granholm said it will difficult to restock the reserve.
By May, more than 1 million barrels of oil a day will be slashed from output in the global energy markets. That’s in addition to OPEC+ production cuts announced last fall.
In cost breakdowns for a gallon of gas, the price of crude oil is responsible for more than half the price tag, according to the U.S. Energy Information Administration.
In Monday morning trading, the price of West Texas Intermediate crude for May delivery jumped 6% to just over $80 on the New York Mercantile Exchange.
For context, when gas prices were breaking records last year, the costs of West Texas Intermediate crude were in the triple digits. While retail prices surged in early March 2022, West Texas Intermediate crude briefly traded for more than $130 during the trading day on March 7, 2022.
The national average for a gallon of gas hit a record $5.01 in mid-June, according to AAA. In the current context, Cinquegrana doesn’t see a return to $5 gas averages, he said. Gas prices vary across the nation. California drivers are paying $4.80 on average while Mississippi drivers are paying $3.02 per gallon.
Even if price increases are not as sharp as last year, hot inflation is retreating slowly. So any extra costs are unwelcome to millions of American drivers who are living their lives and more frequently commuting to the office.
Like last year, oil prices are poised to increase, said AAA spokesman Devin Gladden.
But the economy’s background noise right now could dampen the impact as downturn worries keep sticking around, he added. Furthermore, there can be discrepancies in the announced production reductions and the amounts that are actually reduced, Gladden said.
“If recessionary concerns persist in the market, oil price increases may be limited due to the market believing lower oil demand will lead to lower prices this year,” he said.
On Monday, energy sector stocks and related exchange traded funds were climbing after the production cut news. In early afternoon trading, the Dow Jones Industrial Average DJIA, +0.81%
was up more than 200 points, or 0.7%, while the S&P 500 SPX, -0.03%
is little changed and the Nasdaq Composite COMP, -0.98%
dropped 100 points, or 0.8%.
Spain’s inflation rate eased more than expected in March, reaching its lowest level in 20 months as energy prices sank from a year earlier, when Russia’s invasion of Ukraine sent them surging.
The consumer price index–which measures what consumers pay for goods and services–increased 3.1% in March on year measured by European Union-harmonized standards, down sharply from the 6% on-year rise registered in February, preliminary data from the Spanish statistics office INE showed Thursday.
This marks the lowest inflation rate since July 2021, and came in below the 4.2% expected by economists in a poll from The Wall Street Journal.
The consumer price index rose 3.3% in March by national standards, easing from the 6% increase seen in February.
The marked decrease in annual inflation was mainly driven by lower energy prices than a year before, when the war in Ukraine began. Electricity and fuel prices fell in March while they increased the same month a year earlier, INE said.
Core inflation–which exclude the more volatile categories of food and energy–slowed slightly to 7.5% in March from 7.6% in February.
Compared with the previous month, consumer prices rose 0.4% by national standards and increased 1.1% by EU-harmonized standards, INE said.
Spanish inflation is expected to average 3.7% in 2023, down from 4.9% previously anticipated, according to projections from the Bank of Spain. However, core inflation is expected to ease at a slower pace than headline inflation, according to the bank’s March economic bulletin.
Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com
The Biden administration hopes that Chinese President Xi Jinping will reach out to Ukrainian President Volodymyr Zelensky directly because it’s important that Xi hears Ukraine’s perspective and not just Russia’s, White House spokesman John Kirby told reporters on Friday. Kirby’s remarks come after Beijing and Moscow announced earlier Friday that Xi will visit Russia from Monday to Wednesday, in an apparent show of support for Russian President Vladimir Putin as the Russia-Ukraine war continues. Kirby criticized China’s call for a cease-fire between Ukraine and Moscow, saying while that approach might sound good, it wouldn’t respect Ukrainian sovereignty and instead would recognize Russia’s gains in Ukraine.
