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Tag: Industry regulation

  • What investors need to know about ‘staking,’ the passive income opportunity at the center of crypto’s latest regulation scare

    What investors need to know about ‘staking,’ the passive income opportunity at the center of crypto’s latest regulation scare

    Not six months ago, ether led a recovery in cryptocurrency prices ahead of a big tech upgrade that would make something called “staking” available to crypto investors.

    Most people have hardly wrapped their heads around the concept, but now, the price of ether is falling amid mounting fears that the Securities and Exchange Commission could crack down on it.

    On Thursday, Kraken, one of the largest crypto exchanges in the world, closed its staking program in a $30 million settlement with the SEC, which said the company failed to register the offer and sale of its crypto staking-as-a-service program.

    The night before, Coinbase CEO Brian Armstrong warned his Twitter followers that the securities regulator may want more broadly to end staking for U.S. retail customers.

    “This should put everyone on notice in this marketplace,” SEC Chair Gary Gensler told CNBC’s “Squawk Box” Friday morning. “Whether you call it lend, earn, yield, whether you offer an annual percentage yield – that doesn’t matter. If someone is taking [customer] tokens and transferring to their platform, the platform controls it.”

    Staking has widely been seen as a catalyst for mainstream adoption of crypto and a big revenue opportunity for exchanges like Coinbase. A clampdown on staking, and staking services, could have damaging consequences not just for those exchanges, but also Ethereum and other proof-of-stake blockchain networks. To understand why, it helps to have a basic understanding of the activity in question.

    Here’s what you need to know:

    What is staking?

    Staking is a way for investors to earn passive yield on their cryptocurrency holdings by locking tokens up on the network for a period of time. For example, if you decide you want to stake your ether holdings, you would do so on the Ethereum network. The bottom line is it allows investors to put their crypto to work if they’re not planning to sell it anytime soon.

    How does staking work?

    Staking is sometimes referred to as the crypto version of a high-interest savings account, but there’s a major flaw in that comparison: crypto networks are decentralized, and banking institutions are not.

    Earning interest through staking is not the same thing as earning interest from a high annual percentage yield offered by a centralized platform like those that ran into trouble last year, like BlockFi and Celsius, or Gemini just last month. Those offerings really were more akin to a savings account: people would deposit their crypto with centralized entities that lent those funds out and promised rewards to the depositors in interest (of up to 20% in some cases). Rewards vary by network but generally, the more you stake, the more you earn.

    By contrast, when you stake your crypto, you are contributing to the proof-of-stake system that keeps decentralized networks like Ethereum running and secure; you become a “validator” on the blockchain, meaning you verify and process the transactions as they come through, if chosen by the algorithm. The selection is semi-random – the more crypto you stake, the more likely you’ll be chosen as a validator.

    The lock-up of your funds serves as a sort of collateral that can be destroyed if you as a validator act dishonestly or insincerely.

    This is true only for proof-of-stake networks like Ethereum, Solana, Polkadot and Cardano. A proof-of-work network like Bitcoin uses a different process to confirm transactions.

    Staking as a service

    In most cases, investors won’t be staking themselves – the process of validating network transactions is just impractical on both the retail and institutional levels.

    That’s where crypto service providers like Coinbase, and formerly Kraken, come in. Investors can give their crypto to the staking service and the service does the staking on the investors’ behalf. When using a staking service, the lock-up period is determined by the networks (like Ethereum or Solana), and not the third party (like Coinbase or Kraken).

    It’s also where it gets a little murky with the SEC, which said Thursday that Kraken should have registered the offer and sale of the crypto asset staking-as-a-service program with the securities regulator.

    While the SEC hasn’t given formal guidance on what crypto assets it deems securities, it generally sees a red flag if someone makes an investment with a reasonable expectation of profits that would be derived from the work or effort of others.

    Coinbase has about 15% of the market share of Ethereum assets, according to Oppenheimer. The industry’s current retail staking participation rate is 13.7% and growing.

    Proof-of-stake vs. proof-of-work

    Staking works only for proof-of-stake networks like Ethereum, Solana, Polkadot and Cardano. A proof-of-work network, like Bitcoin, uses a different process to confirm transactions.

    The two are simply the protocols used to secure cryptocurrency networks.

    Proof-of-work requires specialized computing equipment, like high-end graphics cards to validate transactions by solving highly complex math problems. Validators gets rewards for each transaction they confirm. This process requires a ton of energy to complete.

    Ethereum’s big migration to proof-of-stake from proof-of-work improved its energy efficiency almost 100%.

    Risks involved

    The source of return in staking is different from traditional markets. There aren’t humans on the other side promising returns, but rather the protocol itself paying investors to run the computational network.

    Despite how far crypto has come, it’s still a young industry filled with technological risks, and potential bugs in the code is a big one. If the system doesn’t work as expected, it’s possible investors could lose some of their staked coins.

    Volatility is and has always been a somewhat attractive feature in crypto but it comes with risks, too. One of the biggest risks investors face in staking is simply a drop in the price. Sometimes a big decline can lead smaller projects to hike their rates to make a potential opportunity more attractive.

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  • Florida lawmakers set to meet on ailing insurance market

    Florida lawmakers set to meet on ailing insurance market

    TALLAHASSEE, Fla. — The Florida Legislature will meet next week for a special session on property insurance and property tax relief in the wake of damage caused by Hurricane Ian, officials announced Tuesday.

    The leaders of the Florida House and Senate issued the proclamation convening the Legislature from Dec. 12 to 16.

    Lawmakers will be tasked with reforming elements of the state’s troubled property insurance market, providing tax or other financial relief related to damage from Hurricanes Ian and Nicole, and creating a toll credit program for frequent Florida commuters.

    The session comes as Florida’s property insurance market has dealt with billions of dollars in losses, rising prices for consumers and insurer insolvencies, even before the powerful Hurricane Ian slammed into the state in September and caused widespread damage.

    Next week’s special session will be the second time the Florida Legislature met this year to address issues in the property insurance market.

    Lawmakers in May passed legislation creating a $2 billion reinsurance program, offering grants to homeowners who retrofit properties to be less vulnerable to hurricane damage and limiting various attorney fees in some insurance-related lawsuits.

    The legislative package was seen by many in the statehouse as a meaningful first step in repairing the market, though some said it did not do enough to immediately lower rates for homeowners.

    The insurance industry blames overzealous litigation for problems in the market. Florida law allows attorneys to collect high fees in property insurance cases. State insurance regulators say the state accounts for almost 80% percent of the nation’s homeowners’ insurance lawsuits but just 9% of all homeowners insurance claims.

    Attorneys’ groups have argued insurers are also to blame for refusing to pay out claims, saying homeowners file suit as a last resort.

    The turmoil has caused the industry to see two straight years of net underwriting losses exceeding $1 billion each year. A string of property insurers have become insolvent, while others are leaving the state entirely.

    Homeowners unable to get coverage or priced out of plans have flocked to the state’s public insurer of last resort, Citizens Property Insurance, which this summer topped 1 million policies for the first time in almost a decade.

    Citizens Property Insurance was created by the state in 2002 for Floridians unable to find coverage from private insurers.

    Republican Gov. Ron DeSantis in October signed an executive order extending the deadline for property taxes for homes and businesses destroyed or left uninhabitable after Ian and said lawmakers would meet this year to address additional issues related to the storm.

    The governor’s office in a statement Tuesday said DeSantis “expects the legislature to rein in the costs of excessive litigation and ensure the property insurance market in Florida is both attractive to insurers and more competitive for consumers.”

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  • California lawmakers to meet, eye big oil’s high gas prices

    California lawmakers to meet, eye big oil’s high gas prices

    SACRAMENTO, Calif. — Furious about oil companies’ supersized profits after a summer of record-high gas prices, California Gov. Gavin Newsom on Monday will formally start his campaign to punish big producers by asking the Legislature to fine them and give the money back to drivers.

    State lawmakers will briefly return to the state Capitol on Monday to swear in new members and elect leaders for the 2023 legislative session. But this year, Newsom also has called lawmakers into a special session for the purpose of approving a penalty for oil companies when their profits pass a certain threshold.

    It’s bound to be a popular proposal with voters, who have been paying more than $6 per gallon of gasoline for much of the year. But the big question is how the measure will be received by California lawmakers, especially since the oil industry is one of the state’s top lobbyists and campaign donors.

    Adding to the uncertainty is an unusually high number of new members who will take seats in the Legislature for the first time. More than a quarter of the Legislature’s 120 members could be new, depending on the outcome of a few close races where county officials are still counting votes.

    “It’s kind of like the first day of school and you get this big ethics test about a job that you’ve never had,” said Jamie Court, president of Consumer Watchdog, an advocacy group that has partnered with the Newsom administration to back the gas proposal.

    Among the state Senate’s new members is Angelique Ashby, a Democrat who narrowly won her seat following an intense campaign. The oil industry spent hundreds of thousands of dollars on radio and TV ads supporting Ashby’s campaign, a trend noticed by critics who tried to use it against her.

    In an interview, Ashby said she hasn’t been approached lobbyists or others from the oil industry asking how she would vote on a potential penalty for oil companies. She noted the oil industry spent the money as “independent expenditures,” meaning she had no control over that spending during the campaign.

    “Campaigns are not legislation, and the campaign slogans and strategies of my opponent are a thing of the past,” said Ashby, whose district includes Sacramento. “I’m fixated on the people of Senate District 8 and I will make my decision based on what is in their best interest.”

    As of Sunday night, Newsom had not yet revealed his legislation and legislative leaders said they likely won’t begin deliberations on any proposal until January.

    But the battle has already begun. Last week, the California Energy Commission held a public hearing about why the state’s gas prices are so high. California prices spiked over the summer, but so did the rest of the country — mostly in response to a crude oil price surge after Russia’s invasion of Ukraine.

    California’s prices spiked again in October, even while the price of crude oil dropped. In the first week of October, the average price of a gallon of gas in California was $2.61 higher than the national average — the biggest gap ever. Since then, oil companies reported billions of dollars in profits.

    Regulators had hoped to question the state’s five big oil refineries: Marathon, Valero, Phillips 66, PBF Energy and Chevron. But no company officials attended the hearing, with most saying that sharing information could violate anti-trust laws.

    Newsom sought to shame those companies publicly, posting a video to his Twitter account of their empty seats during Thursday’s hearing.

    “Big oil is ripping Californians off, and the deafening silence from the industry (at the public hearing) is the latest proof that a price gouging penalty is needed to hold them accountable for profiteering at the expense of California families,” Newsom said in a news release announcing the special session.

    Catherine Reheis-Boyd, president of the Western States Petroleum Association, said the oil industry is volatile, pointing to billions of dollars in losses during the pandemic when demand for gasoline dropped sharply as many people worked from home and canceled travel plans.

    During Thursday’s hearing, she blamed the state’s taxes and regulations for driving up gas prices.

    “The governor and the Legislature should focus efforts on removing policy hurdles being imposed on the energy industry so we can focus on providing affordable, reliable and lower carbon energy to all Californians,” Reheis-Boyd said.

    Severin Borenstein, a University of California-Berkeley professor, said the problem isn’t at the oil refinery level, but at the retail level where gasoline is sold to drivers.

    California’s gasoline market is dominated by name-brand gasoline, which is more expensive, and the state’s gas prices have been consistently higher than the rest of the country since 2015, Borenstein said.

    “We just don’t have the competition and discipline from those off-brand stations,” he said.

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  • South African president awaits party decision on his fate

    South African president awaits party decision on his fate

    JOHANNESBURG — South African President Cyril Ramaphosa looked relaxed and shared a joke with journalists as he made a brief appearance Sunday at a meeting of the African National Congress party’s national working committee, which is discussing his political fate.

    Ramaphosa’s future hangs in the balance as he faces calls from within the ANC and from opposition parties to step down from his position amid a scandal involving the president’s animal farm.

    Ramaphosa was recused from Sunday’s meeting of the ruling ANC, which came days after an independent parliamentary panel issued a report that suggested he may have broken anti-corruption laws.

    The report follows a criminal complaint laid by the country’s former head of intelligence, Arthur Fraser, who has accused Ramaphosa of money laundering related to the theft of a large sum of cash from his farm in 2020.

    The president has denied any wrongdoing in the matter. Addressing journalists briefly on Sunday, he noted it was ANC tradition that someone should be recused from a meeting that deals with issues that affect them personally.

    However, Ramaphosa confirmed he planned to attend a Monday meeting of ANC’s national executive committee, its highest decision-making body within conferences. The executive committee is tasked with making a final decision on Ramaphosa’s future in the party.

    “Tomorrow I will attend the national executive committee meeting as well, that is how everything will flow. After that it is up to the NEC, to which I am accountable, to make a decision,” Ramaphosa said.

    Ramaphosa’s spokesman, Vincent Magwenya did not respond to questions Sunday regarding reports that Ramaphosa had no intention of resigning from his position and planned to challenge the findings of the report.

    South African lawmakers are expected to debate the independent report on Tuesday and then vote on whether further action should be taken against the president, including whether to proceed with impeachment proceedings.

    The report questioned his explanation that the money was from the sale of buffaloes to a Sudanese businessman, asking why the animals remained at the farm more than two years later.

    It also said Ramaphosa put himself into a situation of conflict of interest, saying the evidence presented to it “establishes that the president may be guilty of a serious violation of certain sections of the constitution.”

    ———

    Follow AP’s coverage of Cyril Ramaphosa’s presidency: https://apnews.com/hub/cyril-ramaphosa

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  • South African president awaits party decision on his fate

    South African president awaits party decision on his fate

    JOHANNESBURG — South African President Cyril Ramaphosa looked relaxed and shared a joke with journalists as he made a brief appearance Sunday at a meeting of the African National Congress party’s national working committee, which is discussing his political fate.

    Ramaphosa’s future hangs in the balance as he faces calls from within the ANC and from opposition parties to step down from his position amid a scandal involving the president’s animal farm.

    Ramaphosa was recused from Sunday’s meeting of the ruling ANC, which came days after an independent parliamentary panel issued a report that suggested he may have broken anti-corruption laws.

    The report follows a criminal complaint laid by the country’s former head of intelligence, Arthur Fraser, who has accused Ramaphosa of money laundering related to the theft of a large sum of cash from his farm in 2020.

    The president has denied any wrongdoing in the matter. Addressing journalists briefly on Sunday, he noted it was ANC tradition that someone should be recused from a meeting that deals with issues that affect them personally.

    However, Ramaphosa confirmed he planned to attend a Monday meeting of ANC’s national executive committee, its highest decision-making body within conferences. The executive committee is tasked with making a final decision on Ramaphosa’s future in the party.

    “Tomorrow I will attend the national executive committee meeting as well, that is how everything will flow. After that it is up to the NEC, to which I am accountable, to make a decision,” Ramaphosa said.

    Ramaphosa’s spokesman, Vincent Magwenya did not respond to questions Sunday regarding reports that Ramaphosa had no intention of resigning from his position and planned to challenge the findings of the report.

    South African lawmakers are expected to debate the independent report on Tuesday and then vote on whether further action should be taken against the president, including whether to proceed with impeachment proceedings.

    The report questioned his explanation that the money was from the sale of buffaloes to a Sudanese businessman, asking why the animals remained at the farm more than two years later.

    It also said Ramaphosa put himself into a situation of conflict of interest, saying the evidence presented to it “establishes that the president may be guilty of a serious violation of certain sections of the constitution.”

    ———

    Follow AP’s coverage of Cyril Ramaphosa’s presidency: https://apnews.com/hub/cyril-ramaphosa

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  • Los Angeles City Council votes to ban oil and gas drilling

    Los Angeles City Council votes to ban oil and gas drilling

    __

    The Los Angeles City Council voted unanimously on Friday to ban drilling of new oil and gas wells and phase out existing ones over the next 20 years.

    The vote comes after more than a decade of complaints from city residents that pollution drifting from wells was affecting their health.

    “Hundreds of thousands of Angelenos have had to raise their kids, go to work, prepare their meals (and) go to neighborhood parks in the shadows of oil and gas production,” said Los Angeles City Council president Paul Krekorian, one of the councilmembers who introduced this measure. “The time has come …. when we end oil and gas production in the city of Los Angeles.”

    Two engineers with Yorke Engineering, a California-based company that does air quality and environmental compliance review, spoke in opposition to the ordinance. They said a ban and phase out will have a negative effect because oil and gas operators will abandon wells. They said this is being underestimated by the city. If they walk away, that will mean increased air pollution and greenhouse gas emissions, they said.

    But Los Angeles City Attorney Mike Feuer said these claims are “not credible,” citing a review by Impact Sciences, another California-based firm that performed an environmental analysis of the ordinance for the city.

    Los Angeles was once a booming oil town. Many of its oilfields are now played out but it still has several productive ones.

    According to the city controller’s office there were 780 active and 287 idle wells within city boundaries in 2018. An idle well is one that is not operating, but neither has it been permanently sealed, so it could be brought back into production.

    Near Long Beach there’s the very prolific Wilmington oil field, which yielded more than 10 million barrels of crude oil in 2019, according to state records.

    Hundreds of the still active wells in that field are concentrated in Wilmington, a predominantly Latino part of Los Angeles. Several clusters of the active wells, located near homes, ballfields and childcare facilities, are operated by companies like E&B Natural Resources Management Corporation and Warren Resources.

    Warren Resources CEO and president James A. Watt said in a statement to The Associated Press that the company has invested $400 million in its oil and gas operations. “We intend to use all available legal resources to protect our major investment from this unlawful taking,” he said.

    Many more wells lie just outside Los Angeles city limits, in Carson, Inglewood and Long Beach.

    Some studies look at the possible effects of pollution emanating from the city’s existing oil and gas wells.

    Researchers from the University of Southern California in a study in 2021 found that people living near wells in two Los Angeles neighborhoods — University Park and Jefferson Park — reported significantly higher rates of wheezing, eye and nose irritation, sore throat and dizziness than neighbors living farther away. Both of those communities are predominantly non-white with large Black and Latino communities, according to the U.S. Census.

    The push to ban drilling in the City of Los Angeles is part of a region-wide effort to shut down oil and gas extraction throughout the county of Los Angeles, with similar measures covering Culver City and unincorporated parts of Los Angeles County passed in 2021.

    “In Los Angeles, we sit on the largest urban oil deposit in the world,” said councilmember Marqueece Harris-Dawson ahead of the vote. “So if Los Angeles can do it, cities around the world can do it.”

    ———

    This story has been edited to correct the amount Warren Resources CEO and president James A. Watt said his company has invested in its oil and gas operations. It is $400 million, not $44 million.

    ———

    Follow Drew Costley on Twitter: @drewcostley.

    ———

    The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.

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  • G-7 joins EU on $60-per-barrel price cap on Russian oil

    G-7 joins EU on $60-per-barrel price cap on Russian oil

    WASHINGTON — The Group of Seven nations and Australia joined the European Union on Friday in adopting a $60-per-barrel price cap on Russian oil, a key step as Western sanctions aim to reorder the global oil market to prevent price spikes and starve President Vladimir Putin of funding for his war in Ukraine.

    Europe needed to set the discounted price that other nations will pay by Monday, when an EU embargo on Russian oil shipped by sea and a ban on insurance for those supplies take effect. The price cap, which was led by the G-7 wealthy democracies, aims to prevent a sudden loss of Russian oil to the world that could lead to a new surge in energy prices and further fuel inflation.

    U.S. Treasury Secretary Janet Yellen said in a statement that the agreement will help restrict Putin’s “primary source of revenue for his illegal war in Ukraine while simultaneously preserving the stability of global energy supplies.”

    The agreement comes after a last-minute flurry of negotiations. Poland long held up an EU agreement, seeking to set the cap as low as possible. Following more than 24 hours of deliberations, when other EU nations had signaled they would back the deal, Warsaw finally relented late Friday.

    A joint G-7 coalition statement released Friday states that the group is “prepared to review and adjust the maximum price as appropriate,” taking into account market developments and potential impacts on coalition members and low and middle-income countries.

    “Crippling Russia’s energy revenues is at the core of stopping Russia’s war machine,” Estonian Prime Minister Kaja Kallas said, adding that she was happy the cap was pushed down a few extra dollars from earlier proposals. She said every dollar the cap was reduced amounted to $2 billion less for Russia’s war chest.

    “It is no secret that we wanted the price to be lower,” Kallas added, highlighting the differences within the EU. “A price between 30-40 dollars is what would substantially hurt Russia. However, this is the best compromise we could get.”

    The $60 figure sets the cap near the current price of Russia’s crude, which recently fell below $60 a barrel. Some criticize that as not low enough to cut into one of Russia’s main sources of income. It is still a big discount to international benchmark Brent, which slid to $85.48 a barrel Friday, but could be high enough for Moscow to keep selling even while rejecting the idea of a cap.

    There is a big risk to the global oil market of losing large amounts of crude from the world’s No. 2 producer. It could drive up gasoline prices for drivers worldwide, which has stirred political turmoil for U.S. President Joe Biden and leaders in other nations. Europe is already mired in an energy crisis, with governments facing protests over the soaring cost of living, while developing nations are even more vulnerable to shifts in energy costs.

    But the West has faced increasing pressure to target one of Russia’s main moneymakers — oil — to slash the funds flowing into Putin’s war chest and hurt Russia’s economy as the war in Ukraine drags into a ninth month. The costs of oil and natural gas spiked after demand rebounded from the pandemic and then the invasion of Ukraine unsettled energy markets, feeding Russia’s coffers.

    U.S. National Security Council spokesman John Kirby told reporters Friday that “the cap itself will have the desired effect on limiting Mr. Putin’s ability to profit off of oil sales and limit his ability to continue to use that money to fund his war machine.”

    More uncertainty is ahead, however. COVID-19 restrictions in China and a slowing global economy could mean less thirst for oil. That is what OPEC and allied oil-producing countries, including Russia, pointed to in cutting back supplies to the world in October. The OPEC+ alliance is scheduled to meet again Sunday.

    That competes with the EU embargo that could take more oil supplies off the market, raising fears of a supply squeeze and higher prices. Russia exports roughly 5 million barrels of oil a day.

    Putin has said he would not sell oil under a price cap and would retaliate against nations that implement the measure. However, Russia has already rerouted much of its supply to India, China and other Asian countries at discounted prices because Western customers have avoided it even before the EU embargo.

    Most insurers are located in the EU or the United Kingdom and could be required to participate in the price cap.

    Russia also could sell oil off the books by using “dark fleet” tankers with obscure ownership. Oil could be transferred from one ship to another and mixed with oil of similar quality to disguise its origin.

    Even under those circumstances, the cap would make it “more costly, time-consuming and cumbersome” for Russia to sell oil around the restrictions, said Maria Shagina, a sanctions expert at the International Institute for Strategic Studies in Berlin.

    Robin Brooks, chief economist at the Institute of International Finance in Washington, said the price cap should have been implemented when oil was hovering around $120 per barrel this summer.

    “Since then, obviously oil prices have fallen and global recession is a real thing,” he said. “The reality is that it is unlikely to be binding given where oil prices are now.”

    European leaders touted their work on the price cap, a brainchild of Yellen.

    “The EU agreement on an oil price cap, coordinated with G7 and others, will reduce Russia’s revenues significantly,” said Ursula von der Leyen, president of the European Commission, the EU’s executive arm. “It will help us stabilize global energy prices, benefiting emerging economies around the world.”

    ———

    Casert reported from Brussels and McHugh from Frankfurt, Germany. AP reporter Aamer Madhani contributed from Washington.

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  • Los Angeles City Council votes to ban oil and gas drilling

    Los Angeles City Council votes to ban oil and gas drilling

    The Los Angeles City Council voted unanimously on Friday to ban drilling of new oil and gas wells and phase out existing ones over the next 20 years.

    The vote comes after more than a decade of complaints from city residents that pollution drifting from wells was affecting their health. Los Angeles was once a booming oil town, but many of its oilfields are now played out.

    “Hundreds of thousands of Angelenos have had to raise their kids, go to work, prepare their meals (and) go to neighborhood parks in the shadows of oil and gas production,” said Los Angeles City Council president Paul Krekorian, one of the councilmembers who introduced this measure. “The time has come …. when we end oil and gas production in the city of Los Angeles.”

    Two engineers with Yorke Engineering, a California-based company that does air quality and environmental compliance review, spoke in opposition to the ordinance. They said a ban and phase out will have a negative effect because oil and gas operators will abandon wells. They said this is being underestimated by the city. If they walk away, that will mean increased air pollution and greenhouse gas emissions, they said.

    But Los Angeles City Attorney Mike Feuer said these claims are “not credible,” citing a review by Impact Sciences, another California-based firm that performed an environmental analysis of the ordinance for the city.

    A document prepared by the Los Angeles city controller’s office in 2018 said there were 780 active and 287 idle wells within city boundaries. An idle well is one that is not operating, but neither has it been permanently sealed, so it could be brought back into production.

    Many more well lie just outside the city limits, in Carson, Inglewood and Long Beach. Long Beach is the home of a good part of the extremely prolific Wilmington oil field, which yielded more than 10 million barrels of crude oil in 2019, according to state records.

    There is research on the possible effect of pollution emanating from some of the city’s existing oil and gas wells.

    Researchers from the University of Southern California found in a study in 2021 that people living near wells in two Los Angeles neighborhoods — University Park and Jefferson Park — reported significantly higher rates of wheezing, eye and nose irritation, sore throat and dizziness than neighbors living farther away. Both of those communities are predominantly non-white with large Black and Latino communities, according to the U.S. Census.

    The push to ban drilling in the City of Los Angeles is part of a region-wide effort to shut down oil and gas extraction through the County of Los Angeles, with similar measures covering Culver City and unincorporated parts of Los Angeles County passed in 2021.

    “In Los Angeles, we sit on the largest urban oil deposit in the world,” said councilmember Marqueece Harris-Dawson ahead of the vote. “So if Los Angeles can do it, cities around the world can do it.”

    ———

    Follow Drew Costley on Twitter: @drewcostley.

    ———

    The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.

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  • EU edges closer to $60-per-barrel Russian oil price cap

    EU edges closer to $60-per-barrel Russian oil price cap

    BRUSSELS — The European Union was edging closer to setting a $60-per-barrel price cap on Russian oil — a highly anticipated and complex political and economic maneuver designed to keep Russia’s supplies flowing into global markets while clamping down on President Vladimir Putin’s ability to fund his war in Ukraine.

    EU nations sought to push the cap across the finish line after Poland held out to get as low a figure as possible, diplomats said Thursday. “Still waiting for white smoke from Warsaw,” said an EU diplomat, who spoke on condition of anonymity because the talks were still ongoing.

    The latest offer, confirmed by 3 EU diplomats, comes ahead of a deadline to set the price for discounted oil by Monday, when a European embargo on seaborne Russian crude and a ban on shipping insurance for those supplies take effect. The diplomats also spoke on condition of anonymity because the legal process was still not completed.

    The $60 figure would mean a cap near the current price of Russia’s crude, which fell this week below $60 per barrel, and is meant to prevent a sudden loss of Russian oil to the world following the new Western sanctions. It is a big discount to international benchmark Brent, which traded at about $88 per barrel Thursday, but could be high enough for Moscow to keep selling even while rejecting the idea of a cap.

    When the final number is in place, a new buyer’s cartel — which is expected to be made up of formal and informal members — will be born. Western allies in the Group of Seven industrial powers led the price cap effort and still need to approve the figure.

    Oil is the Kremlin’s main pillar of financial revenue and has kept the Russian economy afloat so far despite export bans, sanctions and the freezing of central bank assets that began with the February invasion. Russia exports roughly 5 million barrels of oil per day.

    The risks of the price cap’s failure are immense to the global oil supply. If it fails or Russia retaliates by stopping the export of oil, energy prices worldwide could skyrocket. Putin has said he would not sell oil under a price cap and would retaliate against nations that implement the measure.

    U.S. and European consumers could feel the ramifications in more spikes to gasoline prices, and people in developing countries could face greater levels of food insecurity.

    With the EU and U.K. banning insurance for Russian oil shipments, the price ceiling allows companies to keep insuring tankers headed for non-EU countries as long as the oil is priced at or under the cap. That would avoid a price spike from the loss of supplies from the world’s No. 2 oil producer and put a ceiling on Russia’s oil income near current levels.

    The Treasury Department has released guidance meant to help firms and maritime insurers understand how to abide by the price ceiling, saying the price cap could fluctuate depending on market conditions.

    Robin Brooks, chief economist at the Institute of International Finance in Washington, said the cap should have been implemented earlier this year, when oil was hovering around $120 per barrel.

    “Since then, obviously oil prices have fallen and global recession is a real thing,” he said. “The reality is that it is unlikely to be binding given where oil prices are now.”

    Critics of the price cap measure, including former Treasury Secretary Steve Mnuchin, have called the plan “ridiculous.”

    Mnuchin told CNBC during a panel in November at the Milken Institute’s Middle East and Africa Summit that the price cap was “not only not feasible, I think it’s the most ridiculous idea I’ve ever heard.”

    Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security, said that while a worst-case scenario envisions Russia cutting off the global supply of its oil, “the Saudis and Emiratis would boost production.”

    “Russia has made is clear the countries that abide by the cap won’t receive their oil and that could result in cuts to natural gas exports as well,” she said. “This will be an interesting few weeks and few months.”

    ———

    Hussein reported from Washington. AP Business Writer David McHugh contributed from Frankfurt, Germany.

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  • Congress prepares to take up bill preventing rail strike

    Congress prepares to take up bill preventing rail strike

    WASHINGTON — Congress is moving swiftly to prevent a looming U.S. rail workers strike, reluctantly intervening in a labor dispute to stop what would surely be a devastating blow to the nation’s economy if the transportation of fuel, food and other critical goods were disrupted.

    The House was expected to act first on Wednesday after President Joe Biden asked Congress to step in. The bill lawmakers are considering would impose a compromise labor agreement brokered by his administration that was ultimately voted down by four of the 12 unions representing more than 100,000 employees at large freight rail carriers. The unions have threatened to strike if an agreement can’t be reached before a Dec. 9 deadline.

    Lawmakers from both parties expressed reservations, but the intervention was particularly difficult for some Democratic lawmakers who have traditionally sought to align themselves with the politically powerful labor unions.

    Sen. Bernie Sanders, a Vermont independent who caucuses with Democrats, announced that he would object to fast-tracking the president’s proposal until he can get a roll-call vote on an amendment that would guarantee seven paid sick days for rail workers. Some of the more liberal lawmakers in the House such as Reps. Jamaal Bowman of New York and Cori Bush of Missouri tweeted that they couldn’t support the measure.

    Still, the bill was expected to receive a significant bipartisan vote. That show of support began when the Republican and Democratic leaders of the House and Senate met with Biden on Tuesday at the White House.

    “We all agreed that we should try to avoid this rail shutdown as soon as possible,” Senate Majority Leader Chuck Schumer, D-N.Y., said as he returned to the Capitol.

    A letter from House Speaker Nancy Pelosi to Democratic colleagues promised two votes, reflecting the consternation she was hearing from members. The first vote will be on adopting the tentative labor agreement. The second will be on a measure to add seven days of paid sick leave for railroaders to the agreement.

    “It is with great reluctance that we must now move to bypass the standard ratification process for the Tentative Agreement,” Pelosi wrote. “However, we must act to prevent a catastrophic strike that would touch the lives of nearly every family: erasing hundreds of thousands of jobs, including union jobs; keeping food and medicine off the shelves; and stopping small businesses from getting their goods to market.”

    The compromise agreement that was supported by the railroads and a majority of the unions provides for 24% raises and $5,000 in bonuses retroactive to 2020 along with one additional paid leave day. The raises would be the biggest rail workers have received in more than four decades. Workers would have to pay a larger share of their health insurance costs, but their premiums would be capped at 15% of the total cost of the insurance plan. But the agreement didn’t resolve workers’ concerns about demanding schedules that make it hard to take a day off and the lack of paid sick time.

    Lawmakers from both parties grumbled about stepping into the dispute, but they also said they had little choice.

    “The bottom line is we are now forced with this kind of terrible situation where we have to choose between an imperfect deal that has already been negotiated or an economic catastrophe,” said Rep. Jim McGovern, D-Mass.

    “This is about whether we shut down the railroads of America, which will have extreme negative effects on our economy,” said Rep. Steny Hoyer of Maryland, the No. 2 Democrat in the House. “We should have a bipartisan vote.”

    Republicans needled the Biden administration and Democrats for Congress being asked to step in now to avert an economic crisis. But many indicated they were ready to do so.

    “This has got to be tough for Democrats in that they generally kowtow to unions,” said Sen. Mike Braun, R-Ind.

    “At this late hour, it’s clear that there is little we can do other than to support the measure,” said Rep. Tom Cole, R-Okla.

    Business groups including the U.S. Chamber of Commerce and the American Farm Bureau Federation said earlier this week in a letter to congressional leaders they must be prepared to intervene and that a stoppage of rail service for any duration would represent a $2 billion per day hit to the economy.

    On several past occasions, Congress has intervened in labor disputes by enacting legislation to delay or prohibit railway and airline strikes.

    Railroad unions on Tuesday decried Biden’s call for Congress to intervene in their contract dispute, saying it undercuts their efforts to address workers’ quality-of-life concerns.

    Conductor Gabe Christenson, who is co-chairman of the Railroad Workers United coalition that includes workers from all the rail unions, said Biden and the Democrats are siding with the railroads over workers.

    “The ‘most labor-friendly president in history’ has proven that he and the Democratic Party are not the friends of labor they have touted themselves to be,” Christenson said.

    ———

    Associated Press writers Farnoush Amiri in Washington and Josh Funk in Omaha, Nebraska, contributed to this report.

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  • Landmark trial over Arkansas youth gender care ban resumes

    Landmark trial over Arkansas youth gender care ban resumes

    LITTLE ROCK, Ark. — A psychiatrist called to the stand by Arkansas as the state defends its ban on gender-affirming care for children said Monday he was concerned about the impact the law could have on some transgender youth who would see their treatments cut off.

    Dr. Stephen Levine, a psychiatrist at Case Western Reserve University School of Medicine in Ohio, testified as the nation’s first trial over such a ban continued before a federal judge after a five-week break.

    Arkansas’ law, which was temporarily blocked last year, would prohibit doctors from providing gender-affirming hormone treatment, puberty blockers or surgery to anyone under 18 years old. It also would prohibit doctors from referring patients elsewhere for such care.

    Levine criticized the use of gender-affirming medical treatment for minors, but under cross examination acknowledged his concerns about the psychological impacts of cutting off such care for some trans youth already receiving it. Levine said it could be “shocking and devastating” for some youth receiving the care.

    “My concern with the law, the way it was originally written, is it seemed to leave out what you’re talking about,” Levine testified.

    Republican lawmakers in Arkansas enacted the ban last year, overriding a veto by GOP Gov. Asa Hutchinson. Hutchinson, who leaves office in January, also said that the law went too far by cutting off treatments for children currently receiving such care. Arkansas was the first state to enact such a ban.

    Multiple medical groups, including the American Medical Association and the American Academy of Pediatrics, oppose the bans and experts say the treatments are safe if properly administered. The American Psychiatric Association has supported the ruling blocking Arkansas’ ban, saying denying such care to adolescents who need it could harm their mental health.

    But Levine said he recommends psychotherapy over gender-affirming care for the treatment of gender dysphoria, criticizing the current standard of care as using psychotherapy as “cheerleading” for such treatments.

    Levine, however, testified that he wasn’t aware of what protocols are followed by doctors who provide such care in Arkansas.

    The state has argued that the prohibition is within its authority to regulate the medical profession. People opposed to such treatments for children argue they are too young to make such decisions about their futures.

    Levine echoed that argument, saying minor patients “really have very little concept of what their future holds.”

    A similar ban has been blocked by a federal judge in Alabama, and other states have taken steps to restrict such care. Florida medical officials earlier this month approved a rule banning gender-affirming care for minors, at the urging of Republican Gov. Ron DeSantis.

    A judge in Texas has blocked that state’s efforts to investigate gender-confirming care for minors as child abuse. Children’s hospitals around the country have faced harassment and threats of violence for providing gender-confirming care.

    The families of four transgender youth sued challenging Arkansas’ ban. Last month, a 17-year-old testified that his life has been transformed by the hormone therapy he’s been receiving and said ending the treatments could force his family to leave the state.

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  • Biden calls on Congress to head off potential rail strike

    Biden calls on Congress to head off potential rail strike

    OMAHA, Neb. — President Joe Biden on Monday asked Congress to intervene and block a railroad strike before next month’s deadline in the stalled contract talks, and House Speaker Nancy Pelosi said lawmakers would take up legislation this week to impose the deal that unions agreed to in September.

    “Let me be clear: a rail shutdown would devastate our economy,” Biden said in a statement. “Without freight rail, many U.S. industries would shut down.”

    In a statement, Pelosi said: “We are reluctant to bypass the standard ratification process for the Tentative Agreement — but we must act to prevent a catastrophic nationwide rail strike, which would grind our economy to a halt.”

    Pelosi said the House would not change the terms of the September agreement, which would challenge the Senate to approve the House bill without changes.

    The September agreement that Biden and Pelosi are calling for is a slight improvement over what the board of arbitrators recommended in the summer. The September agreement added three unpaid days off a year for engineers and conductors to tend to medical appointments as long as they scheduled them at least 30 days in advance. The railroads also promised in September not to penalize workers who are hospitalized and to negotiate further with the unions after the contract is approved about improving the regular scheduling of days off.

    Hundreds of business groups had been urging Congress and the president to step into the deadlocked contract talk and prevent a strike.

    Both the unions and railroads have been lobbying Congress while contract talks continue. If Congress acts, it will end talks between the railroads and four rail unions that rejected their deals Biden helped broker before the original strike deadline in September. Eight other unions have approved their five-year deals with the railroads and are in the process of getting back pay for their workers for the 24% raises that are retroactive to 2020.

    If Congress does what Biden suggests and imposes terms similar to what was agreed on in September, that will end the union’s push to add paid sick time. The four unions that have rejected their deals have been pressing for the railroads to add that benefit to help address workers’ quality of life concerns, but the railroads had refused to consider that.

    Biden said that as a “a proud pro-labor president” he was reluctant to override the views of people who voted against the agreement. “But in this case — where the economic impact of a shutdown would hurt millions of other working people and families — I believe Congress must use its powers to adopt this deal.”

    Biden’s remarks and Pelosi’s statement came after a coalition of more than 400 business groups sent a letter to congressional leaders Monday urging them to step into the stalled talks because of fears about the devastating potential impact of a strike that could force many businesses to shut down if they can’t get the rail deliveries they need. Commuter railroads and Amtrak would also be affected in a strike because many of them use tracks owned by the freight railroads.

    The business groups led by the U.S. Chamber of Commerce, National Association of Manufacturers and National Retail Federation said even a short-term strike would have a tremendous impact and the economic pain would start to be felt even before the Dec. 9 strike deadline. They said the railroads would stop hauling hazardous chemicals, fertilizers and perishable goods up to a week beforehand to keep those products from being stranded somewhere along the tracks.

    “A potential rail strike only adds to the headwinds facing the U.S. economy,” the businesses wrote. “A rail stoppage would immediately lead to supply shortages and higher prices. The cessation of Amtrak and commuter rail services would disrupt up to 7 million travelers a day. Many businesses would see their sales disrupted right in the middle of the critical holiday shopping season.”

    A similar group of businesses sent another letter to Biden last month urging him to play a more active role in resolving the contract dispute.

    On Monday, the Association of American Railroads trade group praised Biden’s action.

    “No one benefits from a rail work stoppage — not our customers, not rail employees and not the American economy,” said AAR President and CEO Ian Jefferies. “Now is the appropriate time for Congress to pass legislation to implement the agreements already ratified by eight of the twelve unions.”

    Business groups that have been pushing for Congress to settle this contract dispute praised Biden’s move.

    “The Biden administration’s endorsement of congressional intervention affirms what America’s food, beverage, household and personal care manufacturers have been saying: Freight rail operations cannot shut down and imperil the availability and affordability of consumers’ everyday essentials,” said Tom Madrecki, vice president of supply chain for the Consumer Brands Association. “The consequences to consumers if a strike were to occur are too serious, especially amid continued supply chain challenges and disruptions.”

    Clark Ballew, a spokesman for the Brotherhood of Maintenance of Way Employes Division, which represents track maintenance workers, said before Biden’s announcement that the union was “headed to D.C. this week to meet with lawmakers on the Hill from both parties. We have instructed our members to contact their federal lawmakers in the House and Senate for several weeks now.”

    The U.S. Chamber of Commerce’s Neil Bradley said Biden was correct in advocating for the deal already reached. “Congress must do what it has done 18 times before: intervene against a national rail strike,” Bradley said in a statement, and he called Congress enforcing the deal agreed to by railroads and union leaders the “only path to avoid crippling strike.”

    The railroads, which include Union Pacific, BNSF, Norfolk Southern, CSX and Kansas City Southern, wanted any deal to closely follow the recommendations a special board of arbitrators that Biden appointed made this summer that called for the 24% raises and $5,000 in bonuses but didn’t resolve workers’ concerns about demanding schedules that make it hard to take a day off and other working conditions. That’s what Biden is calling on Congress to impose.

    ———

    Associated Press writer Colleen Long in Washington contributed to this report.

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  • Biden calls on Congress to head off potential rail strike

    Biden calls on Congress to head off potential rail strike

    OMAHA, Neb. — President Joe Biden on Monday asked Congress to intervene and block a railroad strike before next month’s deadline in the stalled contract talks, and House Speaker Nancy Pelosi said lawmakers would take up legislation this week to impose the deal that unions agreed to in September.

    “Let me be clear: a rail shutdown would devastate our economy,” Biden said in a statement. “Without freight rail, many U.S. industries would shut down.”

    In a statement, Pelosi said: “We are reluctant to bypass the standard ratification process for the Tentative Agreement — but we must act to prevent a catastrophic nationwide rail strike, which would grind our economy to a halt.”

    Pelosi said the House would not change the terms of the September agreement, which would challenge the Senate to approve the House bill without changes.

    The September agreement that Biden and Pelosi are calling for is a slight improvement over what the board of arbitrators recommended in the summer. The September agreement added three unpaid days off a year for engineers and conductors to tend to medical appointments as long as they scheduled them at least 30 days in advance. The railroads also promised in September not to penalize workers who are hospitalized and to negotiate further with the unions after the contract is approved about improving the regular scheduling of days off.

    Hundreds of business groups had been urging Congress and the president to step into the deadlocked contract talk and prevent a strike.

    Both the unions and railroads have been lobbying Congress while contract talks continue. If Congress acts, it will end talks between the railroads and four rail unions that rejected their deals Biden helped broker before the original strike deadline in September. Eight other unions have approved their five-year deals with the railroads and are in the process of getting back pay for their workers for the 24% raises that are retroactive to 2020.

    If Congress does what Biden suggests and imposes terms similar to what was agreed on in September, that will end the union’s push to add paid sick time. The four unions that have rejected their deals have been pressing for the railroads to add that benefit to help address workers’ quality of life concerns, but the railroads had refused to consider that.

    Biden said that as a “a proud pro-labor president” he was reluctant to override the views of people who voted against the agreement. “But in this case — where the economic impact of a shutdown would hurt millions of other working people and families — I believe Congress must use its powers to adopt this deal.”

    Biden’s remarks and Pelosi’s statement came after a coalition of more than 400 business groups sent a letter to congressional leaders Monday urging them to step into the stalled talks because of fears about the devastating potential impact of a strike that could force many businesses to shut down if they can’t get the rail deliveries they need. Commuter railroads and Amtrak would also be affected in a strike because many of them use tracks owned by the freight railroads.

    The business groups led by the U.S. Chamber of Commerce, National Association of Manufacturers and National Retail Federation said even a short-term strike would have a tremendous impact and the economic pain would start to be felt even before the Dec. 9 strike deadline. They said the railroads would stop hauling hazardous chemicals, fertilizers and perishable goods up to a week beforehand to keep those products from being stranded somewhere along the tracks.

    “A potential rail strike only adds to the headwinds facing the U.S. economy,” the businesses wrote. “A rail stoppage would immediately lead to supply shortages and higher prices. The cessation of Amtrak and commuter rail services would disrupt up to 7 million travelers a day. Many businesses would see their sales disrupted right in the middle of the critical holiday shopping season.”

    A similar group of businesses sent another letter to Biden last month urging him to play a more active role in resolving the contract dispute.

    On Monday, the Association of American Railroads trade group praised Biden’s action.

    “No one benefits from a rail work stoppage — not our customers, not rail employees and not the American economy,” said AAR President and CEO Ian Jefferies. “Now is the appropriate time for Congress to pass legislation to implement the agreements already ratified by eight of the twelve unions.”

    Business groups that have been pushing for Congress to settle this contract dispute praised Biden’s move.

    “The Biden administration’s endorsement of congressional intervention affirms what America’s food, beverage, household and personal care manufacturers have been saying: Freight rail operations cannot shut down and imperil the availability and affordability of consumers’ everyday essentials,” said Tom Madrecki, vice president of supply chain for the Consumer Brands Association. “The consequences to consumers if a strike were to occur are too serious, especially amid continued supply chain challenges and disruptions.”

    Clark Ballew, a spokesman for the Brotherhood of Maintenance of Way Employes Division, which represents track maintenance workers, said before Biden’s announcement that the union was “headed to D.C. this week to meet with lawmakers on the Hill from both parties. We have instructed our members to contact their federal lawmakers in the House and Senate for several weeks now.”

    The U.S. Chamber of Commerce’s Neil Bradley said Biden was correct in advocating for the deal already reached. “Congress must do what it has done 18 times before: intervene against a national rail strike,” Bradley said in a statement, and he called Congress enforcing the deal agreed to by railroads and union leaders the “only path to avoid crippling strike.”

    The railroads, which include Union Pacific, BNSF, Norfolk Southern, CSX and Kansas City Southern, wanted any deal to closely follow the recommendations a special board of arbitrators that Biden appointed made this summer that called for the 24% raises and $5,000 in bonuses but didn’t resolve workers’ concerns about demanding schedules that make it hard to take a day off and other working conditions. That’s what Biden is calling on Congress to impose.

    ———

    Associated Press writer Colleen Long in Washington contributed to this report.

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  • EXPLAINER: What’s the effect of Russian oil price cap, ban?

    EXPLAINER: What’s the effect of Russian oil price cap, ban?

    FRANKFURT, Germany — Western governments are aiming to cap the price of Russia’s oil exports in an attempt to limit the fossil fuel earnings that support Moscow’s budget, its military and the invasion of Ukraine.

    The cap is set to take effect on Dec. 5, the same day the European Union will impose a boycott on most Russian oil — its crude that is shipped by sea. The EU was still negotiating what the price ceiling should be.

    The twin measures could have an uncertain effect on the price of oil as worries over lost supply through the boycott compete with fears about lower demand from a slowing global economy.

    Here are basic facts about the price cap, the EU embargo and what they could mean for consumers and the global economy:

    WHAT IS THE PRICE CAP AND HOW WOULD IT WORK?

    U.S. Treasury Secretary Janet Yellen has proposed the cap with other Group of 7 allies as a way to limit Russia’s earnings while keeping Russian oil flowing to the global economy. The aim is to hurt Moscow’s finances while avoiding a sharp oil price spike if Russia’s oil is suddenly taken off the global market.

    Insurance companies and other firms needed to ship oil would only be able to deal with Russian crude if the oil is priced at or below the cap. Most of the insurers are located in the EU or the United Kingdom and could be required to participate in the cap. Without insurance, tanker owners may be reluctant to take on Russian oil and face obstacles in delivering it.

    HOW WOULD OIL KEEP FLOWING TO THE GLOBAL ECONOMY?

    Universal enforcement of the insurance ban, imposed by the EU and U.K. in earlier rounds of sanctions, could take so much Russian crude off the market that oil prices would spike, Western economies would suffer, and Russia would see increased earnings from whatever oil it can ship in defiance of the embargo.

    Russia, the world’s No. 2 oil producer, has already rerouted much of its supply to India, China and other Asian countries at discounted prices after Western customers shunned it even before the EU ban.

    One purpose of the cap is to provide a legal framework “to allow the flow of Russian oil to continue and to reduce the windfall revenue for Russia at the same time,” said Claudio Galimberti, a senior vice president of analysis at Rystad Energy.

    “It is essential for the global crude markets that Russian oil still finds markets to be sold, after the EU ban is operative,” he added. “In the absence of that, global oil prices would skyrocket.”

    WHAT EFFECT WOULD DIFFERENT CAP LEVELS HAVE?

    A cap of between $65 and $70 per barrel could let Russia keep selling oil and while keeping its earnings to current levels. Russian oil is trading at around $63 per barrel, a considerable discount to international benchmark Brent.

    A lower cap — at around $50 per barrel — would make it difficult for Russia to balance its state budget, with Moscow believed to require around $60 to $70 per barrel to do that, its so-called “fiscal break-even.”

    However, that $50 cap would be still be above Russia’s cost of production of between $30 and $40 per barrel, giving Moscow an incentive to keep selling oil simply to avoid having to cap wells that can be hard to restart.

    WHAT IF RUSSIA AND OTHER COUNTRIES WON’T GO ALONG?

    Russian has said it will not observe a cap and will halt deliveries to countries that do. A lower cap of around $50 could be more likely to provoke that response, or Russia could halt the last of its remaining natural gas supplies to Europe.

    China and India might not go along with the cap, while China could form its own insurance companies to replace those barred by U.S., U.K. and Europe.

    Galimberti says China and India are already enjoying discounted oil and may not want to alienate Russia.

    “China and India get Russia’s crude at a huge discount to Brent, therefore, they don’t necessarily need a price cap to continue to enjoy a discount,” he said. “By complying with the cap set by the G-7, they risk alienating Russia. As a result, we do believe that the compliance with the price cap would not be high.”

    Russia could also turn to schemes such as transferring oil from ship to ship to disguise its origins and mixing its oil with other types to skirt the ban.

    So it remains to be seen what effect the cap would have.

    WHAT ABOUT THE EU EMBARGO?

    The biggest impact from the EU embargo may come not on Dec. 5, as Europe finds new suppliers and Russian barrels are rerouted, but on Feb. 5, when Europe’s additional ban on refinery products made from oil — such as diesel fuel — come into effect.

    Europe will have to turn to alternative supplies from the U.S., Middle East and India. “There is going to be a shortfall, and this will result in very high prices,” Galimberti said.

    Europe still has many cars that run on diesel. The fuel also is used for truck transport to get a huge range of goods to consumers and to run agricultural machinery — so those higher costs will be spread throughout the economy.

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  • EXPLAINER: What’s the effect of Russian oil price cap, ban?

    EXPLAINER: What’s the effect of Russian oil price cap, ban?

    FRANKFURT, Germany — Western governments are aiming to cap the price of Russia’s oil exports in an attempt to limit the fossil fuel earnings that support Moscow’s budget, its military and the invasion of Ukraine.

    The cap is set to take effect on Dec. 5, the same day the European Union will impose a boycott on most Russian oil — its crude that is shipped by sea. The EU was still negotiating what the price ceiling should be.

    The twin measures could have an uncertain effect on the price of oil as worries over lost supply through the boycott compete with fears about lower demand from a slowing global economy.

    Here are basic facts about the price cap, the EU embargo and what they could mean for consumers and the global economy:

    WHAT IS THE PRICE CAP AND HOW WOULD IT WORK?

    U.S. Treasury Secretary Janet Yellen has proposed the cap with other Group of 7 allies as a way to limit Russia’s earnings while keeping Russian oil flowing to the global economy. The aim is to hurt Moscow’s finances while avoiding a sharp oil price spike if Russia’s oil is suddenly taken off the global market.

    Insurance companies and other firms needed to ship oil would only be able to deal with Russian crude if the oil is priced at or below the cap. Most of the insurers are located in the EU or the United Kingdom and could be required to participate in the cap. Without insurance, tanker owners may be reluctant to take on Russian oil and face obstacles in delivering it.

    HOW WOULD OIL KEEP FLOWING TO THE GLOBAL ECONOMY?

    Universal enforcement of the insurance ban, imposed by the EU and U.K. in earlier rounds of sanctions, could take so much Russian crude off the market that oil prices would spike, Western economies would suffer, and Russia would see increased earnings from whatever oil it can ship in defiance of the embargo.

    Russia, the world’s No. 2 oil producer, has already rerouted much of its supply to India, China and other Asian countries at discounted prices after Western customers shunned it even before the EU ban.

    One purpose of the cap is to provide a legal framework “to allow the flow of Russian oil to continue and to reduce the windfall revenue for Russia at the same time,” said Claudio Galimberti, a senior vice president of analysis at Rystad Energy.

    “It is essential for the global crude markets that Russian oil still finds markets to be sold, after the EU ban is operative,” he added. “In the absence of that, global oil prices would skyrocket.”

    WHAT EFFECT WOULD DIFFERENT CAP LEVELS HAVE?

    A cap of between $65 and $70 per barrel could let Russia keep selling oil and while keeping its earnings to current levels. Russian oil is trading at around $63 per barrel, a considerable discount to international benchmark Brent.

    A lower cap — at around $50 per barrel — would make it difficult for Russia to balance its state budget, with Moscow believed to require around $60 to $70 per barrel to do that, its so-called “fiscal break-even.”

    However, that $50 cap would be still be above Russia’s cost of production of between $30 and $40 per barrel, giving Moscow an incentive to keep selling oil simply to avoid having to cap wells that can be hard to restart.

    WHAT IF RUSSIA AND OTHER COUNTRIES WON’T GO ALONG?

    Russian has said it will not observe a cap and will halt deliveries to countries that do. A lower cap of around $50 could be more likely to provoke that response, or Russia could halt the last of its remaining natural gas supplies to Europe.

    China and India might not go along with the cap, while China could form its own insurance companies to replace those barred by U.S., U.K. and Europe.

    Galimberti says China and India are already enjoying discounted oil and may not want to alienate Russia.

    “China and India get Russia’s crude at a huge discount to Brent, therefore, they don’t necessarily need a price cap to continue to enjoy a discount,” he said. “By complying with the cap set by the G-7, they risk alienating Russia. As a result, we do believe that the compliance with the price cap would not be high.”

    Russia could also turn to schemes such as transferring oil from ship to ship to disguise its origins and mixing its oil with other types to skirt the ban.

    So it remains to be seen what effect the cap would have.

    WHAT ABOUT THE EU EMBARGO?

    The biggest impact from the EU embargo may come not on Dec. 5, as Europe finds new suppliers and Russian barrels are rerouted, but on Feb. 5, when Europe’s additional ban on refinery products made from oil — such as diesel fuel — come into effect.

    Europe will have to turn to alternative supplies from the U.S., Middle East and India. “There is going to be a shortfall, and this will result in very high prices,” Galimberti said.

    Europe still has many cars that run on diesel. The fuel also is used for truck transport to get a huge range of goods to consumers and to run agricultural machinery — so those higher costs will be spread throughout the economy.

    Source link

  • Parts of NY dig out after potentially ‘historic’ snowfall

    Parts of NY dig out after potentially ‘historic’ snowfall

    NEW YORK — Parts of New York finally caught a break Sunday after a storm spent days dumping a potentially record-setting amount of snow on cities and towns east of Lake Erie and Lake Ontario.

    Many businesses in the hardest-hit areas remained closed, but highways reopened and travel bans in many areas were lifted, though bands of lake-effect snow were expected to bring up to 2 feet (0.6 meters) by Monday morning in some parts of the state that were largely spared in earlier rounds.

    “This has been a historic storm. Without a doubt, this is one for the record books,” New York Gov. Kathy Hochul said at a briefing Sunday.

    Snow began falling Thursday in towns south of Buffalo. By Saturday, the National Weather Service recorded 77 inches (196 cm) in Orchard Park, home to the NFL’s Buffalo Bills, and 72 inches in Natural Bridge, a hamlet near Watertown off the eastern end of Lake Ontario.

    Similar multiday storms have brought bigger snowfall totals than that in the past to New York, but the ferocity of the storm on Friday appeared to threaten the state’s record for most snowfall in a 24 hour period: the 50 inches (127 centimeters) that fell on Camden, New York, on Feb. 1, 1966.

    National Weather Service meteorologist Jason Alumbaugh, who is based in Buffalo, said it was too early to say whether any of this year’s snowfalls exceeded that record.

    Hochul is asking for a federal disaster declaration for the affected areas, which would potentially unlock some aid. She said teams were checking on residents of mobile home parks in areas that got enough snow to potentially crumple roofs.

    Due to the heavy snowfall, a Sunday game between the Buffalo Bills’ and Cleveland Browns was moved to Detroit.

    New York is no stranger to dramatic lake-effect snow, which is caused by cool air picking up moisture from the warmer water, then releasing it in bands of windblown snow over land.

    This month’s storm is at least the worst in the state since November 2014, when some communities south of Buffalo were hit with 7 feet (2 meters) of snow over the course of three days, collapsing roofs and trapping drivers on a stretch of the New York State Thruway.

    ———

    Maysoon Khan is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues. Follow Maysoon Khan on Twitter.

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  • Taylor Swift tickets breakdown probed by attorneys general

    Taylor Swift tickets breakdown probed by attorneys general

    NASHVILLE, Tenn. — The breakdown in Ticketmaster’s sales of Taylor Swift tickets is a mess some attorneys general aren’t shaking off.

    With fans sharing outrage and heartache over the fruitless hours they spent trying for seats for Swift’s upcoming concert tour, top legal chiefs in Nevada, Tennessee and Pennsylvania have launched investigations into the fiasco.

    “Trouble, trouble, trouble,” tweeted Pennsylvania Attorney General Josh Shapiro in a reference to Swift’s 2012 hit song ‘I Knew You Were Trouble’ as he asked the public to file complaints about using Ticketmaster with his office.

    Shapiro, a Democrat who recently won Pennsylvania’s governor race, has since thanked people for their “swift response” while noting his office had received “a lot of complaints” to look into.

    Over in Tennessee, Attorney General Jonathan Skrmetti said he wants to ensure consumers have a fair shot at buying tickets.

    “There are no allegations at this time of any misconduct, but as the attorney general it’s my job to ensure that the consumer protection laws and antitrust laws in Tennessee are being honored,” Skrmetti told reporters.

    In 2008, Tennessee enacted a so-called “anti-bot” law that prohibits using certain computer programs to buy large amounts of tickets to concerts and sporting events. However, like most states that have passed similar bans, the law has rarely been enforced.

    Meanwhile, in Nevada, the attorney general’s office said it was investigating Ticketmaster for “alleged deceptive or unfair trade practices.”

    The trouble began when registered fans given codes for a pre-sale on Tuesday tried to secure tickets for Swift’s 52-date The Eras tour next year. They were quickly met with long delays and error messages that Ticketmaster blamed on bots and historically unprecedented demand. The company then canceled Friday’s sales to the general public.

    Swift vented anger and frustration in a lengthy statement, saying she had been assured by Ticketmaster that they could handle the demand.

    “It’s really difficult for me to trust an outside entity with these relationships and loyalties, and excruciating for me to just watch mistakes happen with no recourse,” Swift said.

    Ticketmaster said more than 2 million tickets were sold despite the troubles, setting a new single-day record for artists on the platform, and that only 15% of would-be buyers had issues with the process.

    “We want to apologize to Taylor and all of her fans – especially those who had a terrible experience trying to purchase tickets,” the company said.

    Multiple lawmakers have accused Ticketmaster of abusing its power as the dominant ticket-seller for consumers.

    U.S. Sen. Amy Klobuchar, who chairs the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, wrote an open letter to Ticketmaster’s President and CEO Michael Rapino, saying that she’s been skeptical of his company ever since they merged with LiveNation in 2011. Her letter included several questions about Ticketmaster’s business practices that she asked Rapino answer by next week.

    Asked about reports that the Justice Department would investigate Live Nation, White House press secretary Karine Jean-Pierre declined to comment on specifics, but said President Joe Biden has worked to increase competition and limit the power of large corporations, believing that a “lack of competition leads to higher prices, and worse service.”

    ———

    Associated Press writer Aamer Madhani contributed to this report from Washington D.C.

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  • Washington bans fish-farming net pens, citing salmon threat

    Washington bans fish-farming net pens, citing salmon threat

    SEATTLE — Washington banned fish-farming with net pens in state waters on Friday, citing danger to struggling native salmon.

    Public Lands Commissioner Hilary Franz issued an executive order banning the aquaculture method, which involves raising fish in large floating pens anchored in the water and has been practiced in Puget Sound for more than three decades.

    California, Oregon and Alaska have already outlawed net-pen aquaculture, and Canada is working on a plan to phase it out of British Columbia’s coastal waters by 2025. Supporters say fish-farming is an environmentally safe way to feed the world’s growing population; critics argue that it can spread disease to native stocks and degrade the environment.

    “As we’ve seen too clearly here in Washington, there is no way to safely farm fish in open sea net pens without jeopardizing our struggling native salmon,” Franz said. “I’m proud to stand with the rest of the West Coast today by saying our waters are far too important to risk for fish farming profits.”

    Salmon aquaculture is among the fastest-growing food production systems in the world, according to the World Wildlife Foundation. It accounts for about 70% of the market. In 2018 the World Resources Institute released a report that said the industry needs to more than double by 2050 to meet the seafood demands of 10 billion people.

    Since 2016, all of the net pens in Washington’s marine waters have been owned by the same company — New Brunswick, Canada-based seafood giant Cooke Aquaculture. In a statement earlier this week, after the state said it would terminate the company’s remaining leases in Puget Sound, the company said it was disappointed.

    “Environmental organizations and Commissioner Franz are choosing to ignore the fact that farm-raised fish is one of the healthiest and most efficient ways to feed the global population with a minimal environmental impact and the lowest carbon footprint of any animal protein,” Cooke said. “Farmers work closely with world-renowned scientists from academia, government, and the private sector to develop rigorous standards and implement best practices for fish health and environmental protection.”

    In 2017, a net pen operated by Cooke off Cypress Island, near the San Juan archipelago, collapsed and released 260,000 nonnative Atlantic salmon in Puget Sound. The escape prompted a frantic response by the Lummi Indian tribe, which mobilized its fishing crews to capture tens of thousands of the Atlantic salmon before they could intermingle or breed with native salmon.

    The company argued that the fish were sterile and would simply die without threatening native salmon stocks, but the Legislature responded in 2018 and banned raising nonnative fish in the pens.

    Cooke transitioned to raising native steelhead, but many Native American tribes and environmental groups, including Wild Fish Conservancy, still objected, saying that the unnaturally large clusters of farmed fish spread disease to wild populations and that their bulk feeding and excretions degrade the marine environment.

    Several studies have found that young sockeye salmon from British Columbia’s Fraser watershed were infected with higher levels of sea lice after swimming past fish pens, The Seattle Times reported. And in March, an audit revealed sea lice counts at about five times the legal limit at a farm in Clayoquot Sound on the west coast of Vancouver Island. The lice can affect salmon growth, and in severe cases, cause death.

    “It’s about the disease vectors and how that can escape into wild populations,” said Todd Woodard, natural resources director for the Samish Indian Nation. “When you say, ‘We’re raising native fish,’ native fish are not raised and reared in those kinds of concentrated environments.”

    After the 2017 collapse, Washington’s Department of Natural Resources ramped up its inspections of net pens. In Port Angeles, on the Olympic Peninsula, the department terminated a net-pen lease for failing to maintain the facility in a safe condition and operating in an unauthorized area. Cooke challenged the decision unsuccessfully in court.

    And earlier this week, the state terminated Cooke Aquaculture’s remaining net-pen leases, in Rich Passage near Bainbridge Island and near Hope Island in Skagit Bay. The company has until Dec. 14 to finish steelhead farming and to start deconstructing its equipment.

    The decision will force Cooke to kill 332,000 juvenile steelhead that were planned to be stocked at its two remaining net pens next year, the company said.

    “This is a big victory for everyone who values the Puget Sound ecosystem,” Suquamish Tribe Chairman Leonard Forsman said, according to The Seattle Times. “This action eliminates a harmful impact in our ancestral waters. The Rich Passage net pens have … blocked and polluted our fishing grounds for too long, and we are relieved to know they will be removed, restoring our waters back to a more natural state.”

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  • World Cup fans ready to celebrate despite stadium beer ban

    World Cup fans ready to celebrate despite stadium beer ban

    DOHA, Qatar — Flag-draped fans poured into Qatar on Friday ahead of the Middle East’s first World Cup as organizers banned the sale of beer at stadiums — a last-minute decision that stunned FIFA sponsor Budweiser but was largely welcomed by the country’s conservative Muslims and shrugged off by some visitors.

    This small, energy-rich country, home to some 3 million people and roughly the size of Jamaica, expects another 1.2 million fans to fly in for the tournament that begins on Sunday.

    After Friday prayers, the talk of Doha became the sudden ruling by the government to halt all beer sales at stadiums.

    Many welcomed the decision in this conservative emirate, which follows the same austere Wahhabi Islam of neighboring Saudi Arabia — despite allowing beers, wine and liquor to be sold at discrete hotel bars in the country. Already, the country’s some 300,000 citizens have criticized the Western excesses of some celebrations and vehemently dismissed criticism of its views on LGBTQ rights.

    “The whole reason why I came to this country is so that I can enjoy and have the facilities and the advantage of living in a modern economy, but with Islamic heritage,” said Mohammad Ali, a 50-year-old doctor from Sheffield, England, who lives in Qatar. “I wouldn’t want to see that lifestyle compromised.”

    “I wouldn’t want with my kids and my family enjoying my time out and being confronted by a drunken — I’m not gonna say a hooligan — but drunken and disorderly fans,” he added.

    Alcohol will still be served in hotels, luxury suites and private homes during the tournament. Budweiser continued its work turning a luxury hotel into a massive themed bar. It won’t be cheap: a standard bottle of beer went for a little over $15.

    In Doha’s Souq Waqif market, 35-year-old Pablo Zambrano of Ecuador shrugged off the news of the beer ban ahead of his country’s opening night match against Qatar on Sunday. He’s staying with his with mother who lives here and said the fridge already is stocked with beer, which foreigners can buy legally in selected depots.

    “There’s things about the alcohol and the women with the dress codes,” Zambrano said, referring to the country’s conservative customs. “It’s different. But it’s going to be good.”

    Zambrano was one of a growing number of fans sightseeing in the traditional market and along the Corniche, a seaside boulevard with views of Doha’s glittering skyline.

    Just down the street, 24-year-old vegetable seller Ajmal Pial from Khulna, Bangladesh, took in the breeze with the city’s skyscrapers stretched out behind him across the waters of the Persian Gulf.

    But instead of his nation’s green and red disc flag, Pial waved Brazil’s over his head as his friend took pictures of him. He and his friends support Argentina and Brazil, two of the tournament favorites.

    For Pial and others, the World Cup represents a pinnacle of work in Qatar and likely a final hurrah before heading home as jobs slow. Labor conditions in Qatar, like much of the Gulf Arab states, have been criticized for exploiting the low-paid workers who built this former pearling port into a desert metropolis.

    Qatar has overhauled its labor laws, but activists have asked for more to be done. There are no guarantees for freedom of speech in Qatar, but Pial said he felt genuinely happy at the chance to see the tournament.

    His friend, 32-year-old Shobuz Sardar, also from Khulna, Bangladesh, said part of that excitement came from the fact that it’s only the second time that an Asian country hosts the World Cup, 20 years after Japan and South Korea co-hosted the tournament.

    He also hinted at the conditions he and other workers from Asia can face in Qatar.

    “You also know that there are too many people all here for work, for jobs,” Sardar said. “They don’t have any option for having fun. This World Cup makes them have fun.”

    Laborers from the Middle East and Asian nations mixed with fans marching up and down the Corniche. Across government buildings and electronic displays, Qatar’s deep purple and white flag with its nine-jagged points seemed to fly nearly everywhere.

    For Qatar, coming off a yearslong boycott by four Arab nations over a political dispute, nearly reaching the opening match shows they were able to overcome. U.S. Secretary of State Antony Blinken plans to visit Qatar during the tournament — showing the close relationship America shares with a nation hosting some 8,000 of its troops at its massive Al-Udeid Air Base.

    On the Corniche as the sun set and the call to prayers could be heard, crowds gathered around a clock counting down to the opening match.

    Qatari fans marched and chanted, waving a banner bearing the face of its ruling emir, Sheikh Tamim bin Hamad Al Thani. That same image of Sheikh Tamim, with the Arabic inscription “Tamim, the Glory,” could be seen everywhere in Doha during the boycott.

    Tarek Mujahid, a 37 year old from Alexandria, Egypt, praised Qatar for being the first Arab nation to host the World Cup.

    “I’m very, very, very, very happy — No. 1 because it’s an Arab country” hosting, he said.

    ———

    Associated Press writers Nebi Qena and Lujain Jo contributed to this report.

    ———

    Follow Jon Gambrell on Twitter at www.twitter.com/jongambrellAP.

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  • Dangerous lake-effect snowstorm blankets Buffalo, western NY

    Dangerous lake-effect snowstorm blankets Buffalo, western NY

    BUFFALO, N.Y. — A dangerous lake-effect snowstorm paralyzed parts of western and northern New York, with more than a foot of snow already on the ground Friday morning in places and a driving ban keeping people off the roads in the Buffalo area.

    The worst snowfall was expected in Buffalo, where the National Weather Service said up to 4 feet (1.2 meters) might fall in some spots through Sunday, with periods of near-zero visibility. Other areas could get a foot (0.3 meters) or less of the lake-effect snow, which is caused by frigid air picking up copious amounts of moisture from the warmer lakes.

    The weather service received reports early Friday of more than a foot of snow along the eastern end of Lake Erie, with totals as high as 19.5 inches (49.5 centimeters) in Buffalo and up to 22.5 inches (57 cm) in Hamburg, New York, about 12 miles (19 kilometers) from Buffalo.

    New York Gov. Kathy Hochul declared a state of emergency Thursday for parts of western New York, including communities along the eastern ends of Lake Erie and Lake Ontario. Hochul’s state of emergency covers 11 counties, with commercial truck traffic banned from a stretch of Interstate 90.

    Erie County Executive Mark Poloncarz issued a driving ban beginning Thursday night, shortly after heavy snow punctuated by thunder and lightning moved into Buffalo. The ban on nonemergency vehicles on roadways was downgraded to an advisory for the city of Buffalo on Friday, but the ban remained in effect in some other parts of the county, Poloncarz said. The most intense snowfall was expected to last through Friday evening, with more falling on Saturday into Sunday.

    A car carrying a TV news crew reporting on the storm got stuck early Friday and had to be pushed out of the snow by onlookers, WGRZ reporter Alexandra Rios said on Twitter.

    “Our car got stuck after our 4:30a live shot,” Rios tweeted. “Then, at one point about 6 people gathered together to help us out.” She said they told her that Buffalo residents “always come together when someone is in need.”

    Administrators canceled Friday classes for students in Buffalo and throughout the county. Amtrak stations in Buffalo, Niagara Falls and Depew closed Thursday and will stay closed Friday, The Buffalo News reported, while numerous flights in and out of Buffalo Niagara International Airport were canceled.

    Also ahead of the storm, the NFL announced it would relocate the Buffalo Bills’ home game against the Cleveland Browns to Detroit on Sunday.

    The switch in sites means the Bills will play back-to-back games in Detroit, as they are scheduled to play the Lions on Thanksgiving.

    The weather service also warned of accumulations of 2 feet (0.6 meters) or more of snow in northern New York on the eastern edge of Lake Ontario, and in parts of northern Michigan through Sunday. Parts of Pennsylvania also were seeing accumulations of lake-effect snow.

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