Trump’s Dismantling Of ‘Environmental Justice’ Offices Is Ticking Off Climate Activists

Energy News Beat

The Trump admin has been dismantling ‘environmental justice’ offices in federal agencies, and climate activists are in a full-blown meltdown.

climate justice protest
Last week, the Environmental Protection Agency (EPA) announced that it began implementing Trump’s executive order “Ending Radial and Wasteful Government DEI Programs and Preferencing.” [emphasis, links added]

The agency placed 171 employees in DEI and environmental justice offices on leave.

The EPA intends to close the Office of Environmental Justice and External Civil Rights, The Washington Post reported. Trump appointees at the Justice Department announced they would restructure the Department of Justice’s Environment and Natural Resources Division.

Shortly after her confirmation, Attorney General Pam Bondi rescinded any “memoranda, guidance, or similar directive that implement the prior administration’s ‘environmental justice’ agenda.”

“Going forward, the [DOJ] will evenhandedly enforce all federal civil and criminal laws, including environmental laws,” Bondi noted.

Why does this matter?

Environmental justice” refers to the toxic brew of critical race theory and climate alarmism.

According to critical race theory, America is institutionally racist against black people and other minorities and in favor of white people. According to climate alarmism, the burning of fossil fuels will bring about Armageddon.

The EPA defines “environmental justice” as ensuring that Americans “are fully protected from disproportionate and adverse human health and environmental effects (including risks) and hazards, including those related to climate change, the cumulative impacts of environmental and other burdens, and the legacy of racism or other structural or systemic barriers” (italics added).

Trump entered office promising to unleash American energy and reverse the Biden administration’s promotion of critical race theory and its application in the “diversity, equity, and inclusion” movement.

This diversity, equity, and inclusion (DEI) movement aims to promote some racial minorities, rejecting the colorblind approach of focusing on merit or competence.

While President George H.W. Bush established the EPA’s Office of Environmental Equity—the office that President Bill Clinton would later rename the Office of Environmental Justice—President Joe Biden hypercharged its mission, directing all government efforts on DEI, restrictions on fossil fuels, and promotion of less reliable forms of energy, like wind and solar.

In doing so, Biden followed the demands of activist groups, many of which staffed and advised his administration.

As I note in my book, “The Woketopus: The Dark Money Cabal Manipulating the Federal Government,” Biden tapped climate alarmists for key leadership positions:

When Trump moved against the EPA’s environmental justice office, NRDC released a statement condemning the move as a “disgrace.” Who did NRDC enlist to make the statement? None other than Matthew Tejada, who directed the Office of Environmental Justice from 2013 to 2022.

“The Trump EPA is abandoning the communities across our nation that need help the most,” Tejada said. “Shuttering the environmental justice office will mean more toxic contaminants, dangerous air, and unsafe water in communities across the nation that have been most harmed by pollution in the past.”

That conclusion, of course, relies on the assumptions of critical race theory and climate alarmism.

If America is not institutionally racist but rather a country with civil rights laws that protect citizens of all races from discrimination, the EPA does not need an “environmental justice” office to combat pollution for Americans of specific skin colors.

If the predictions of climate disasters are overblown and based on false assumptions that exaggerate the risks when actual deaths from climate disasters have declined by 99% over the past century, then perhaps the EPA need not invest extra funds in an office of environmental justice.

If fossil fuels have gotten substantially cleaner, perhaps the EPA should focus on specific air quality issues, rather than premonitions of global climate doom.

This seems to be at least part of the reasoning behind EPA’s restructuring.

“Under President Trump, the EPA will be focused on our core mission to protect human health and the environment, while Powering the Great American Comeback,” EPA Administrator Lee Zeldin said in a statement Tuesday. “The previous Administration used DEI and Environmental Justice to advance ideological priorities, distributing billions of dollars to organizations in the name of climate equity. This ends now.”

“We will be good stewards of tax dollars and do everything in our power to deliver clean air, land, and water to every American, regardless of race, religion, background, and creed,” he added.

While pollution affects Americans in different ways, the EPA need not indulge in critical race theory and climate alarmism to effectively combat the real threats Americans face.

Rather than addressing supposed institutional racism and fossil fuel-induced disaster, the EPA should focus on its actual mission: protecting Americans from concrete instances of pollution and environmental harm.

Of course, those humdrum concerns don’t require as much federal funding and staff — and that might explain the real reason behind the Left’s freakout over Trump’s move.

Read more at Daily Caller

 

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Now That Trump Is Done With Europe, Will Germany Step Up?

Energy News Beat

That question has taken center stage in the German election.

By , a deputy editor at Foreign Policy, and , a columnist at Foreign Policy and director of the European Institute at Columbia University. Sign up for Adam’s Chartbook newsletter here.

Germany’s election campaign has focused on topics ranging from the welfare state and retirement benefits to tax levels and, above all, migration. But those policies seem somewhat beside the point in light of the latest developments in Ukraine, as the Trump administration pursues a cease-fire deal with Russia—one that may have to be secured by European troops, including from Germany.

Can Germany manage to send troops to Ukraine? How can Berlin end its military dependence on Washington? And does Germany’s next chancellor have plans to fix its economy? Those are just a few of the questions that came up in my recent conversation with FP economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity. For the full conversation, look for Ones and Tooze wherever you get your podcasts. And check out Adam’s Substack newsletter.

Germany’s election campaign has focused on topics ranging from the welfare state and retirement benefits to tax levels and, above all, migration. But those policies seem somewhat beside the point in light of the latest developments in Ukraine, as the Trump administration pursues a cease-fire deal with Russia—one that may have to be secured by European troops, including from Germany.

Can Germany manage to send troops to Ukraine? How can Berlin end its military dependence on Washington? And does Germany’s next chancellor have plans to fix its economy? Those are just a few of the questions that came up in my recent conversation with FP economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity. For the full conversation, look for Ones and Tooze wherever you get your podcasts. And check out Adam’s Substack newsletter.

Cameron Abadi: Olaf Scholz, the current chancellor of Germany, has responded to the requests for peacekeeping troops in Ukraine by saying he was “irritated” that the topic has even come up. But could Germany, on a logistical level, even manage to send peacekeeping troops to Ukraine? Does it have sufficient spare capacity to be playing this kind of role at all?

Adam Tooze: It’s quite difficult to get concrete information on the actual deployable strength of the Bundeswehr, what it can actually do. They are supposed to be building a permanent presence of 5,000 men, a kind of brigade-strength unit in Lithuania, which is notably to deter the Russians. As far as I’m able to establish by looking back through NATO planning documents, they are supposed to have one division ready for mobilization for combat over a 10- to 30-day time horizon. This is the 10th Panzer Division, which incorporates bits of the Dutch army as well. So if we say a beefed-up division would be in the 20,000-men range—men and women, I think at this point—that would be probably about as much fighting strength as the Bundeswehr has. I think we’d be erring on the high side if we said they had 30,000 troops that are actually capable of fighting. You know, that’s one battle in the Ukrainian conflict. That would seem to be about the number of units that the Germans have as capable units. And I think testing them in practice has been somewhat embarrassing. In the maneuvers of 2024, things didn’t go well. A lot of equipment broke down.

And then there’s the logistical element that you bring in, which is, could these units be moved? And this is where the full extent of the German malaise really becomes evident, because all the way back to the 19th century, the Germans were pioneers in using railways as means of moving troops. And for heavy units like armored brigades and divisions, the railway remains essential for long-distance travel because you can’t drive a 60-ton tank from Germany to Ukraine and expect it still to be functioning. And if these are not peacekeeping units, but actually part of a security guarantee for Ukraine, in other words, they’re actually deterrent forces, then they need to have heavy equipment with them. They can’t just be lightly armored. They need actually to be capable of deterring the Russians.

And so then the question becomes, can the Germans actually move a division-sized unit with any kind of speed across their increasingly rundown railway system? And the conclusion seems to be that they can’t. As you know, since you live in Germany, its transport system right now is in a very poor state. The German Council on Foreign Relations estimated that Germany would need €30 billion in investment in its railways, in its bridges. The entire apparatus of NATO military mobility that was once hardwired into the German transport infrastructure has been dismantled.

CA: How long would it take for Europe to effectively separate from the United States in terms of its military dependence? And where is the additional money going to come from—will countries like Germany need to make a choice between its welfare state and its defense in this new geopolitical context?

AT: The short answer to this is it’s totally doable. The Americans have been asking the Europeans to do more for ages. That this has caught them as flat-footed as they are is nothing but their own fault. After all, Trump 1.0 was a clear warning that this was a real issue. And [Russian President Vladimir] Putin’s aggression is not, after all, something sudden. And furthermore, Europe already right now spends enough money, €342 billion in 2024, to pay for a military that would be certainly the third-largest and most potent and technologically sophisticated in the world after the United States and China. But you would need to spend that as a single unit in a concerted way. You would need to focus it not on the sprawling mess that is European militarism and its detritus today, but on a highly trained army of up to 500,000 soldiers, something like that across all three arms with a tight focus on ground deterrence, superiority and technology and aircraft and then some naval deployment, which you’d have to decide what you’re actually going to use it for. But that kind of money, €342 billion is perfectly adequate to do the task.

But it’s a matter of political will. It requires you actually to concentrate that resource. And [Friedrich] Merz, the prospective winner of the German election, is actually very strong on this, because he’s campaigned for ages for a European army. And it’s the obvious way to go. Under those circumstances, it would take years. It would be a matter of decades to disentangle yourself from the United States. And you might ask yourself, do you really want to be fully disentangled from the U.S.? Probably not. Why would you do that? It’s cheaper in many ways to acquire arms from other people, and you have more influence as the customer, really, than you do as the supplier in many ways, though the supplier is necessary. And we shouldn’t exaggerate the threats. The only one that really matters for Europe is Russia. And Russia is a deterrable state, as far as Europe is concerned.

CA: How does Germany’s center-right CDU [Christian Democratic Union]—the likely winners of the election—align between the center-left parties (which it’s likely to create a coalition with) and the far-right AfD [Alternative for Germany], which the Trump administration has been encouraging it to pursue a relationship with? Where does the CDU align with those other parties on these big issues?

AT: On migration, I think that the Christian Democrats, as opposed to the Social Democrats and the Greens, align much more closely with the restrictive, xenophobic, Islamophobic stance of the AfD. And Friedrich Merz, the leader of the CDU, who in some ways is a kind of pro-European, Atlanticist, former business consultant, mainstreamer, opened the question of migration, and in fact tore down what’s called the firewall, which is supposed to bind all of the establishment parties of German politics in an agreement that none of them would do business with the AfD. And he actually tore that down and launched a legislative proposal that could only possibly pass with AfD support. It was a huge scandal. And in the end, in fact, he was embarrassed because he didn’t get the votes that he needed to pass it. But on that issue, I think there’s no question at all that the alignment of the CDU is more clearly with the AfD. One is also tempted at that point to say this is also the issue on which the AfD is least distinctive. Like in some senses, quite contrary to the nonsense that [U.S. Vice President J.D.] Vance was purveying at Munich, the idea that Europe is some sort of haven of liberal multiculturalism in which no one has any interest in excluding migrants is belied by the reality of, well, everything in European history and politics. It’s just nonsense. It’s part of MAGA bullshit. It’s just not true any more than it’s true in the United States, where [former Presidents Joe] Biden and [Barack] Obama were vigorous deporters of migrants, and [former Vice President Kamala] Harris promised to be much more serious about migrant deportation than President Donald Trump. It’s posturing. It’s not really a considered position. It’s a destructive posturing. It’s racist and xenophobic and it’s Islamophobic.

Where the AfD really does deviate from the increasingly consensual right-wing drift is precisely over Ukraine, NATO, and, by implication, the relations with the United States. And there are two elements to this. One is that the AfD’s roots are in East Germany, and I don’t think there’s any question that there is a kind of lingering appreciation on the part of many voters, notably in the east, but also perhaps an appreciation amongst left- and right-wing voters in the west for the willingness of Putin to be a sovereign, to stand up against global American liberal hegemony. And, certainly on the more ideological side of the AfD, people like Björn Höcke [believe]—this is the key element—that what Putin represents is sovereigntism. And if there are people in Germany who want to talk openly about American power and its financial side, it is the extreme right.

They’re the people that break the consensus that somebody like Merz represents, which is that you don’t openly talk about the dirty side of American power. You accept it as a reality. You embrace it. You consider yourself privileged players within that system, but you don’t actually ever explicitly state even things like the brutality of the postwar settlement [that] are very difficult for mainstream German parties to articulate, because they are the terrain of the far right. So that’s where the AfD and the CDU are just completely at odds with each other. And in many ways, I think Merz’s foreign-policy program is closer to that of the Greens, who are kind of neocon in the American sense, you know, values-based Atlanticists.

CA: Friedrich Merz, the likely next chancellor, has talked about how the German economic model is broken. But his prescriptions mostly seem to involve improving Germany’s competitiveness, cutting costs, becoming more efficient, and basically keeping the economic model going. Is that commensurate with what’s broken?

AT: My mantra on this is what Germany needs is not more competitiveness, because competitiveness is code for exports. And that’s precisely the wrong way to think about Germany’s economic problems. Germany’s chronic trade surplus, which they celebrate as a sign of their competitiveness and they want more of it because that means they’re more competitive and that’s a good thing, is in fact a symptom of a real problem, which might even be described as too much competitiveness.

And why too much? Because you have to ask, why do German firms need to go looking for business abroad to such an extent? And the short answer is they do it because they don’t have as big a market at home as they would need to achieve the efficiency and the scale that they do and to take advantage of their highly specialized skills. And why is this a problem?  Because consumption is too low. This deficit of demand at home doesn’t have the same origins as it does in China. The problem in Germany is not that the savings rate is particularly high. What’s chronically low in Germany is investment. And that’s what Germany needs. It needs domestic investment to provide markets for Germany’s capital goods industries. That investment would also heat up the economy even more. It would lead to more imports. It would therefore adjust Germany’s chronic trade surplus toward something closer to balance. And what it would do is both create immediate demand in the German economy, but it would also create and provide the foundations for long-run growth, which is the thing which is most troubling to German society and which is beginning to show up in so many different places. And that’s really the big issue.

Now, Merz will tell you that of course he favors investment and everything he’s trying to do is to increase investment. But what he has in mind is private investment. And there just really isn’t any serious analysis of the German economy that will tell you that private investment can get you to the kind of levels of extra spending that are necessary. I think the latest estimates put the deficit for Germany alone at something like €500 billion, which need to be spent urgently over the next 10 years. And some of that can come from the private side, but it needs movement on the public sector side as well. And this is where Merz is just profoundly reluctant.

He seems to understand the problem. There’s wide suspicion that he really deeply understands the problem and he’s holding back for political reasons, because the German electorate are convinced that more investment that’s publicly funded means debt and debt is bad. Whereas, of course, when you look at an economy like Germany’s, you have to ask yourself why they don’t have more debt-funded investment. And this has kind of been one of the beneficial effects of the shocks that Germany’s been receiving from the Trump administration, is that Merz has actually begun to talk more open-mindedly about the possibility of common European debt-funded investment in defense. And this really would be a step in the right direction. He’s also demanded that that then not be spent nationally, that there’d be genuine European convergence. So that would make for an even better policy. So Merz as the Atlanticist with a pro-European turn that actually opened the taps for debt would be the sort of Merz-led government that we would need to address some of Germany’s pressing issues. But investment, investment, investment is the key.

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China’s crude oil imports decreased from a record as refinery activity slowed

Energy News Beat

China annual crude oil imports

Data source: China General Administration of Customs, Bloomberg L.P.

Slower oil demand growth in 2024 led to less crude oil processed by China’s refineries and fewer crude oil imports compared with the record high set in 2023. China, the world’s largest importer of crude oil, received 11.1 million barrels per day (b/d) in 2024, down from 11.3 million b/d in 2023. Even though total imports decreased about 2%, imports from some countries increased while others decreased.

Why did China’s crude oil imports decrease last year?

We estimate that 16.3 million b/d of petroleum and other liquid fuels were consumed in China last year, second only to the United States globally. China’s domestic crude oil production averaged 4.3 million b/d in 2024, so the country had to import crude oil to meet the demand from its domestic refined petroleum product and petrochemical manufacturing sectors. China’s refiners imported 11.1 million b/d of crude oil and processed 14.2 million b/d. Both crude oil imports and refinery runs decreased in China from record levels in 2023, when the country imported 11.3 million b/d of crude oil and processed 14.8 million b/d.

Net decreases in the consumption of transportation fuel (gasoline, diesel, and jet fuel) last year meant China’s refineries processed less crude oil. Monthly data from China’s National Bureau of Statistics and General Administration of Customs indicate that consumption of both gasoline and jet fuel grew in China during 2024, but consumption of diesel fuel offset this growth with a large decline from 2023. These estimates are preliminary and subject to revision until late 2025, when China publishes annual consumption data, which we use to update our International Energy Statistics.

Instead of transportation fuels, liquefied petroleum gases (LPG), naphtha, or other petroleum products that can be imported directly for petrochemical manufacturing instead of refined from crude oil have led China’s growth in petroleum consumption. As a result, the net decline in transportation fuel demand reduced both refinery runs and import demand for crude oil in China last year.

Which countries do China’s refiners import crude oil from?

China’s refiners purchase crude oil from dozens of countries, with Russia, Saudi Arabia, Iraq, Oman, and Malaysia being the largest sources. Imports from Malaysia increased significantly last year to 1.4 million b/d, which is more than Malaysia’s domestic crude oil production of around 0.6 million b/d. The large difference stems from crude oil cargoes that were initially shipped from Iran but were then relabeled or transferred to avoid sanctions.

Imports from Russia increased in 2024 for the third consecutive year and averaged 2.2 million b/d, 1% more than in 2023. China increased imports from Russia after the Group of Seven (G7) country import bans and sanctions limited Russia’s ability to sell crude oil after its full-scale invasion of Ukraine in 2022. These actions prompted Russia to sell some of its crude oil at discounted prices, making it more attractive to certain buyers.

On January 10, 2025, the United States announced additional sanctions on several oil vessels transporting crude oil from Russia. Because of potential disruptions from these actions, refiners in China may reduce purchases from Russia and replace those barrels with others from crude oil exporting countries not subject to sanctions, such as Brazil, Canada, the United States, or countries in the Middle East.

China’s second-largest source of crude oil imports was Saudi Arabia, although these imports decreased for the third consecutive year and averaged 1.6 million b/d, 9% less than in 2023.

crude oil imports to China from top trading partners

Data source: China General Administration of Customs, Bloomberg L.P.
Note: Congo=Congo-Brazzaville

Imports from other Middle East OPEC countries including the United Arab Emirates (UAE) and Kuwait also declined, but imports from Iraq increased. Although small, crude oil imports from Canada increased, particularly in the second half of the year after the Trans Mountain expansion (TMX) project began commercial operations in May 2024. This pipeline expansion brings increased crude oil export capacity to Asia from Canada’s West Coast, which contributed to imports at more than 0.3 million b/d from Canada in September, an all-time high.

What factors will affect China’s crude oil imports and refining this year?

We forecast petroleum consumption in China will grow more slowly in 2025 and 2026 than in previous years in our latest Short-Term Energy Outlook. Because we expect growth in China’s consumption will outpace China’s domestic production of crude oil and other liquids, we believe net imports will increase. Last summer, we released a study on refinery capacity expansions in China and other countries through 2028. Several integrated refining and petrochemical complexes will open or expand over the next few years, suggesting crude oil imports will continue growing to meet feedstock demand from these facilities.

 

However, a tax change implemented in December 2024 creates considerable uncertainty for China’s petroleum trade balance this year. China reduced a value-added tax rebate offered on some petroleum product exports, which reduces their competitiveness in world markets. Depending on the effects of this change on Chinese refiners’ operations and profitability, refinery runs and crude oil imports could decline.

petroleum and other liquid fuels consumption, production, and net imports in China

Data source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 2025
Note: We forecast net imports as domestic consumption minus production.

The post China’s crude oil imports decreased from a record as refinery activity slowed appeared first on Energy News Beat.

 

Week Recap: Coal, BRICS, Tariffs & the Global Power Shift

Energy News Beat

Weekly Daily Standup Top Stories

The End of Coal Is Nowhere In Sight

Retirement of coal-fired power plants in the West has done nothing to reverse global coal demand. Global coal consumption is set to remain at these high levels—or even hit new all-time highs—for a few more […]

‘BRICS is dead’ if it messes with dollar – Trump

The US president has warned of severe tariffs if the geopolitical bloc pursues a common currency US President Donald Trump has declared the BRICS trade and development group “dead” and threatened to impose massive tariffs […]

Why China is Winning the Nuclear Energy Race

China has significantly increased its nuclear energy capacity in the last decade, positioning it to become the world’s largest nuclear energy producer. China is actively developing and deploying advanced nuclear technologies, such as small modular […]

California Governor Newsom has positioned the state to be a national security risk for the entire USA

California is home to 9 International airports, 41 Military airports, 3 of the largest shipping ports in America, as well as more than 30 million registered vehicles, all of which cannot operate without imported foreign […]

Are President Trump’s Tariffs A Good Thing? And how does LNG play into his plan? by Stu Turley

Read on Substack

Will OPEC Sit Back as Non-OPEC Oil Gains Ground?

The U.S. Energy Information Administration forecasts non-OPEC crude oil production to increase by 1.8 million barrels per day this year. OPEC+ has maintained output cuts for three years, reducing its global market share from 53% […]

UK Government relaunches Net Zero Council 

The UK Government has relaunched the Net Zero Council with a plan to help various sectors accelerate towards net zero targets and support thousands of jobs. The relaunch reflects a new “mission-led approach”, ensuring government […]

Trump’s Policy Deluge Is Causing Paralysis in the Oil Market

The oil market is becoming increasingly numb to the array of changes that Donald Trump is trying to make now that he’s US President again. Trump spent his first weeks in office railing against OPEC, […]

Highlights of the Podcast

00:00 – Intro

01:02 – The End of Coal Is Nowhere In Sight

02:37 – ‘BRICS is dead’ if it messes with dollar – Trump

06:25 – Why China is Winning the Nuclear Energy Race

08:37 – California Governor Newsom has positioned the state to be a national security risk for the entire USA

10:58 – Are President Trump’s Tariffs A Good Thing? And how does LNG play into his plan?

16:35 – Will OPEC Sit Back as Non-OPEC Oil Gains Ground?

18:04 – UK Government relaunches Net Zero Council 

19:49 – Trump’s Policy Deluge Is Causing Paralysis in the Oil Market

21:30 – Outro


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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter


Stuart Turley: [00:00:11] Welcome to the Energy News Beat Daily Standup. This is the weekend edition. This is a recap of the week’s top stories. The staff will put together all of the top stories of the week. It has been a wild week. I mean, if you cannot get through a news cycle anymore, it is so much fun. We want to give a shout out to Reese Consulting for sponsoring the Daily Show. We are so proud to have them as a sponsor. If you’re in the oil and gas space, in the natural gas space, you need to get ahold of them. They understand natural gas in the United States. If you’ve got to get a load of LNG to Europe, you’ve got to get a load of oil somewhere. Give them a call. They’re the guys to do it. So anyway, have a great day and we’ll talk to you soon. Have a great one. [00:01:01][50.6]

Stuart Turley: [00:01:02] Hey, let’s start with the end of coal is nowhere in sight. You got to love a good story like this one. Retirement of coal power plants in the West has done nothing to reverse global coal demand. It’s all about China. And the article does a great job going through global operating coal power capacity has increased by 13 % in 2015. And then you take a look at that map, Michael NR. I’ve took it from the global power plants. Look at where all the global power plants are. South Africa, the United States, India and China. Holy smokes, Batman. Until China changes it, there’s going to be no reason to shut our coal plants down. [00:01:49][47.4]

Michael Tanner: [00:01:50] And I love the they’re all skewed towards the East Coast, which is an interesting, an interesting little note there. You notice the places like Texas and up and down the Midwest where we have a lot of oil and gas. There’s not that many coal plants going. So very interesting. Now, obviously we know in the East Coast, we do have the largest natural gas reserves, the United States, but then a lot of that natural gas is piped down to Texas to get refined. And then, you know, the East Coast ends up burning fuel oil and coal. So very interesting there. Yeah, not much is going to change. I mean, coal is is still right now, the base load power of choice, at least for the Now, obviously, if you’re talking about the data center boom, that’s not necessarily what they’re looking at. But it really is interesting to look at the disbursement of all these coal plants. [00:02:37][47.3]

Stuart Turley: [00:02:38] Bricks is dead if it messes with a dollar. That story also goes in with our LNG, because LNG is Trump’s ace in the hole for exports. The world is coming to the realization we’re now between these two stories, we are opening up tariffs, reciprocal tariffs across every country. And I love the way he did that. And like Canada has 200 % tariffs on our agricultural products. Okay, let’s start putting a 200 % on Canadian products. I’m okay with his thought process on these two articles, he’s going to be using and it’s Michael before you cringe and you start telling me to be quiet. It’s it is a negotiation point on how he does this thing. And this is how President Trump does things. LNG is going to be his ace in the hole as he goes through in the next two weeks to start really negotiating with President Trump. Zelensky is no longer even at the table, President Putin and President Trump, and now the EU is not even at the table. And so they’re going to get the end of the Ukraine war done. And you’re going to see trade wars really coming around in a positive way. So you take a look at BRICS. BRICS was really successful, Michael, you and I talked about this as well. And that is because we had weaponized the US dollar. [00:04:05][87.0]

Michael Tanner: [00:04:06] Yes, but and so my my only question is, is a tariff not weaponizing the dollar? [00:04:11][4.4]

Stuart Turley: [00:04:11] No, if they’re already tariffing us, they’re tariffing their dollar, their weaponized their dollars, and they’re not buying our material. So his is if you are already tariffing the United States, I’m going to put reciprocal tariffs back on. Why are all the tariffs one way? I’m all in baby. So you’re telling me that we should just lay down and let everybody tariff our stuff and never buy our stuff? [00:04:35][24.0]

Michael Tanner: [00:04:35] Well, I mean, we do have the largest GDP in the world. So something’s working, right? All I am pointing out is that the reason why BRICS was looking at an alternative currency was because of the United States weaponization of its status as the world’s reserve currency. And if we and if we want to keep it that way, that doesn’t mean you know, a good leader doesn’t just say, I’m the leader, suck it up, whatever I say goes. It’s not what a good leader does. A good leader works with its consortium of people to come up with a solution that benefits not just one, but all. So I’m not I’m so I think tariffs on some goods are okay. And I’m okay with I’m not against tariffs 100%. I’m not for a 100 % tariff. I agree with what President Putin said, not a Putin fan, but I agree with what he said. He condemned the US government, he said at the end of this, this little, the last paragraph here in the article, calling the dollar’s weaponization a big mistake that is driving nations to explore alternative, we shouldn’t be driving nations to explore alternative currencies, because that will be detrimental to us. And a 100 % tariff is not going to work when BRICS now has 36 % of the global GDP, almost 50 % of the world’s population and is exploring bringing other people in. So I think there’s a fine line we’ve got to walk here because we do not want BRICS to come out with another currency that would be detrimental to our economy. And anything we do that again, everything’s a fine line here. That’s all I’m saying. [00:06:00][84.8]

Stuart Turley: [00:06:01] I agree. And I think President Trump is teeing it up for negotiations. And that’s all it is people need to understand President Trump is negotiating and saying what drives the liberals nuts is the way he talked. And I think it’s kind of funny because he’s not going to end up with tariffs for everybody. He’s going to end up with negotiated things. I think it’s a great way to do it. [00:06:23][22.3]

Michael Tanner: [00:06:23] Art of the deal, baby. Art of the deal. [00:06:24][1.2]

Stuart Turley: [00:06:25] Why is China winning the nuclear energy race? This one is very interesting when you consider the top three bullet points are China has significantly increased its nuclear energy capacity in the past decade positioning itself to become the largest nuclear energy producer. It’s actively developing advanced nuclear technologies, such as a small modular reactors in thorium based fuel, such as the ones that Copenhagen Atomics, the cost and time to require new built reactors in China is substantially lower than the United States, giving a huge competitive advantage. At the same time, China has been rapidly building out its nuclear capacity. It’s also been other novel technologies. This is really important. We’ve got other great companies in the United States as too, but we have got to get out of the regulatory business of stopping nuclear. This is a quote from Liu Tezhong, a Chinese national new nuclear company. We continue to advance nuclear comprehensive cooperation with old friends such as Russia and France and expand in depth cooperation with new partners such as European countries. I’ll tell you, this is absolutely important. When you take a look at his next statement, we plan to establish a research and development center in Eastern Europe, the size and opportunity accelerated global innovation and resource flow reshuffling continuously to increase the participation of international scientific technology talents. This is where the United States is failing is that we are not exporting our nuclear great capacity. We’re not helping other people, other countries are reducing their carbon footprints, but yet we’re rather not interested in any of that. So this is something that if we really wanted to export technology and work on trading partners, I think exporting our nuclear reactors and fleet capabilities would make for long term business partners. I think it’d make great sense. [00:08:36][131.0]

Stuart Turley: [00:08:38] California Governor Newsom has positioned the state to be a national security risk for the entire USA. Holy smokes, Ronald, you’ve got it dead on right. California is home to nine international airports, 41 military airports, three of largest shipping ports in America, as well as more than 30 million registered vehicles, all of which cannot operate without imported foreign oil from other nations like Saudi Arabia, Ecuador, Iraq, Colombia and Russia. Thus, California is a serious national security risk for America. This is a fabulous story from Ronald and I want to give him a hug. Newsom’s policies continue to force California, the fifth largest economy in the world, to be the only state and continuous America that imports most of its crude oil demand from foreign countries. That is energy hypocrisy, if you can imagine that. That dependence has increased imported crude over from from 5 % in 1992 to 60%. I’ll tell you what, the foreign countries that are making a lot of money off of Governor Newsom, maybe we need to have Doge take a look at how money’s flowing in this as this may be a very strong issue coming forward, because I believe Doge is also going to be rolling to the states as they get around and looking at accounts as well, because Doge is a legal entity and has rights to do So if they take any federal money, they are going to be open for audits. So this is gonna be pretty interesting to see how all this rolls around. One of the big things here, California uses 1 .45 million barrels of oil each day, with well over 520 million barrels per year for the aviation, gasoline and diesel fuels manufactured from crude oil, as well as the oil derivatives manufactured based on more than 6000 products in our society. Ronald Stein is actually one of the great energy thought leaders out there. And his link is in the article, which will be in the show notes there. [00:10:57][139.4]

Stuart Turley: [00:10:58] This only on the energy newsbeat substack. It is the energy newsbeat .substack .com our President Trump’s tariff a good thing? And how does LNG play into his plant pan? There’s a couple things that are going on. A the mainstream media is just saying tariffs are bad, and it’s going to raise our prices. That’s not necessarily true. Let’s go through some of this stuff. A the United States has got our goods and services being tariffed by the EU and other countries around the world. Let’s go through some of these trade deficits and who tariffs us. And then I’m going to bump into why is that important? First up around the corner is for 2024, the US goods and service trade deficit was $917 billion up $133 .5 billion 17 % up from 2023 $784 billion. Some of the countries are like Canada $45 billion deficit, Mexico $180 billion deficit, China $350 deficit, Japan $70 billion, Germany $90 billion. None of these countries are helping the US workers. France got a $20 billion, Malaysia $40 billion, Switzerland $15 billion. And now here’s a surplus. The Netherlands has a $75 billion exports $100 billion, but they import $25 billion. That’s in fuels and other things. Now, what does the EU tariff? Here’s an example. The EU has a standard tariff on 10 % on vehicle imports. This applies to passenger cars entering the 27 member block of the US and it’s well then contrast the US only tariffs 2 .5 % on EU cars. You don’t see any Ford Mustangs running around the EU. So I love what President Trump’s got going on here, but there’s a little bit more to it than that. Pharmaceuticals and medical 7 to 8 % machinery and electronics 2 to 4 % textile and apparel 11 to 12%. So this is I think President Trump is on to this. And when you take a look at the EU slap tariffs of $3 billion of US products, including motorcycles. All right, I think Harley Davidson needs to be cranking some out for some of them left nut people. Nevermind. Never. We’ll leave that one alone. How can President Trump offset the deficits with LNG? Entered Japan and he had a great meeting with the leader of Japan over there saying, Hey, I want me some of that LNG. But now let’s take a look at how much does the US actually export, how much can it export and how expensive is it going to be to grow that market? Currently, as of 2023, 11 .9 billion cubic feet per day of LNG was available and exported. The US can ballpark export at 100 % capacity, about 18 billion cubic feet per day. So we’ve got a little bit of runway, but on that max capacity, that’s like a nameplate on that chart. You got to have downtime for problems and everything else. You cannot count on that. So how much does it cost to actually build a plant? When you take some specifics, Cheniere Energy Sabane Pass LNG Tournament had its initial trains of 4 .5 MTPA cost about seven to eight billion per phase in mid 2010s. Venture Global Calais U Pass completed in 2022 came in about 4 .5 to 5 billion for 10 MTPA. I’ll tell you what, this means a lot that we’re going to need some really good investment from foreign countries into our LNG and President Trump is not afraid to ask for it. So when you take a look at it, I believe in President Trump. I like what I’m seeing here and I think that this is actually going to be phenomenal for the US country. I think it’s going to be the easiest thing for President Trump to lower the trade deficits using LNG because you’re going to have some higher hurdles when it’s just straight products being exported out to other countries. You can pay a little bit more for LNG and guarantee security. But President Trump, if you listen to this podcast, which probably don’t, but if you did, you need to make sure that you set your sights on the Jones Act and get rid of it and build up our ship building capabilities because without our own US flagged LNG carriers, we cannot do cradle to grave guarantees for our great allies. And Steve Reese was on the podcast and I absolutely love Steve Reese, one of the great energy leaders in the United States, who happens to also be a sponsor of the show. But he is very adamant and he has got one of the few secure lines for LNG coming from the United States to Germany and long term contracts. [00:16:34][336.4]

[00:16:36] Will OPEC sit back as non -OPEC oil gains ground? The US IEA, EIA administration forecast non -OPEC crude oil production to increase by 1 .8 million barrels per day this year. OPEC plus has maintained output cuts for three years, reducing global market share from 53 percent to 47 percent in global current inventories or sheet shrinking with OPEC stocks falling below the five year average. What we’re seeing also is that there has been a long term downplay in investment in exploration and production. And so that you’re going to see oil prices may dip for just a little bit if Russian sanctions are reduced, in my opinion. But you will see them continually around that, like I said, around that area, the 80 dollar range because it makes good business sense. You used to be able to make money at twenty dollar oil. In fact, my dad was a pilot for Schumacher and he would not do an oil deal unless he could do it for less than seven dollars. He knew that he could get seven dollar profitable oil. Tells you how long ago that was, but that’s not that way anymore. So you’ve got higher costs because of a supply chain and all of those kind of other issues. So I think that that we are not going to be seeing the forty dollar oil again. The UK government relaunches net zero council. You can’t buy this kind of stupid. The UK government is actually floundering so bad with their energy policies and doubling down on net zero. Net zero is not going to happen with our current technology, offshore wind, solar. None of it is going to happen. And so by them trying to add all this in the council co -chaired by energy secretary Ed Milbrand and cooperative group CEO Shrine. I don’t want to mispronounce your name and I apologize. Karruggy Hogg brings together leaders from some forms of the UK’s biggest businesses, charities and organizations such as trade unions and local authorities. Quite honestly, that sounds like money laundering to me, but that’s just me. I don’t know that by working in partnership, we can drive the investment innovation and industrial transformation to make the UK a clean energy superpower. You’re not going to make it a clean super energy power by relying on grid interconnects on intermittent wind and solar. It’s not going to happen. Before I go to the last story here, like to give a shout out to Reese Consulting, outstanding group of folks. They are a very knowledgeable in the United States and I highly recommend that you reach out to them. And if you’re in the natural gas space and you’re looking to put in a natural gas power plant or you’re looking for Bitcoin miner and you’re wanting stranded gas or you’re wanting to buy and sell oil and gas. These guys are the the tip of the spear, so to speak. [00:19:48][192.4]

[00:19:49] Trump’s policy deluge is causing parallel, parallel, parallel, parallel, I cannot even say as I’m laughing at this in the oil market. It is funny because President Trump, I can’t keep up with the entire news desk. Trump’s been his first weeks in office, rallying against OPEC, seeking an end of the war in Ukraine and threatening tariffs against some of the main crew suppliers in the US. All those could have major consequences. The oil market is showing signs of disorientation in the face of the sheer volume of new see stances. I don’t think we’re done yet. Buckle up and just get ready for some fun things. OPEC plus producer group continues to keep barrels off the market, which is as a twin effect of lowering supplies long enough to keep a floor on prices. We are still going to be seeing a $80, I believe an $80 price range for oil. And I believe that that is because there’s still not enough money, even though they may be holding back. There’s still not enough money invested in oil. And I believe demand once things get kind of outlined out, Trump’s policies become more widely accepted. We are actually going to see a huge, beautiful growth. And I don’t do a very good Putin imitation or a Trump imitation, but we’re going to have a beautiful global economy once all this gets nailed out. We’re going to have peace and we’re going to see a lot of large growth opportunity for businesses. [00:19:49][0.0]

[1168.2]

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Treasury Yield Curve Flattens as 10-Year Yield Falls, Short-Term Yields Stay Put: Fed’s Pivot to Wait-and-See in Inflationary Times. But Mortgage Rates Stay Near 7%

Energy News BeatPrice

Long-term yields matter more to the economy than the Fed’s short-term policy rates; hence the efforts to push them down.

By Wolf Richter for WOLF STREET.

The 10-year Treasury yield dropped by 8 basis points on Friday, to 4.43%, perhaps inspired by iffy feelings elsewhere as stocks careened lower and investors sought safety.

Since January 10, the 10-year yield has now given up 34 basis points of that 114-basis-point spike that it had experienced from mid-September 2024, just before the Fed’s first cut, through January 10, 2025. Over this period of surging long-term yields, the Fed had cut its short-term policy rates by 100 basis points.

The Effective Federal Funds Rate (EFFR), which the Fed targets with its policy rates, has remained at 4.33% since the December rate cut, down by 100 basis points from the pre-cut levels (blue).

One of the reasons for this massive disconnect was the market’s assumption that the Fed, amid its rate cuts and rate-cut talk, would be lax about inflation, which just at the nick of time had started to re-accelerate. And further rate cuts could provide additional fuel for it. Rising inflation and a lax Fed spook the long-term fixed-income market.

Long-term yields really matter to the economy. They reflect the borrowing costs for businesses and households. There is some debt with floating rates, but the majority of the debt has fixed rates that track 10-year Treasury yields, and higher 10-year yields would increase actual borrowing costs for new debt in the economy and tighten financial conditions and eventually slow the economy.

These rate cuts, and the formerly-projected future rate cuts, in light of the inflation scenario developing over the past few months, had the effect of spooking investors who wanted to be compensated more for those higher inflation risks over those 10 years, which pushed up long-term yields.

So how to you get the 10-year yield to go down?

Not with rate cuts, obviously. That flopped and had the opposite effect. But with a three-pronged strategy:

  1. The Fed gets more hawkish about inflation and puts further rate cuts on ice.
  2. The Treasury Department minimizes the supply of long-term Treasury securities, by shifting issuance to short-term securities, which it has been doing for over a year; and by deficit reduction, which is new.
  3. The Fed and Treasury Department both talk down the 10-year Treasury yield.

So the Fed got more concerned about inflation at the December meeting, when it cut one more time, but projected only two cuts in 2025, and saw higher inflation and higher “longer run” rates. At the January meeting when it didn’t cut, the Fed pivoted to wait-and-see and put further cuts on ice.

Then on February 6, Treasury Secretary Scott Bessent came out and said in an interview that “The president wants lower rates,” but that “he and I are focused on the 10-year Treasury and what is the yield of that.”

So lower long-term rates. And how do you get long-term rates down? Get inflation down and keep it down. And that’s the Fed’s job. And rate cuts won’t do that job. The Fed cannot be lax about inflation, that became abundantly clear, because a lax Fed in an inflationary environment would drive up long-term yields.

Short-term yields stayed put.

Short-term yields essentially haven’t budged since early December when they had already fully priced in the rate cut at the time.

The six-month yield no longer prices in any rate cuts in its window through mid-2025 before it matures, hovering right around the EFFR.

The yield curve flattened.

With the Fed having put rate cuts on ice, short-term yields stayed put at around the EFFR, while long-term yields came down some. As a result, the yield curve flattened some.

The chart below shows the yield curve of Treasury yields across the maturity spectrum, from 1 month to 30 years, on three key dates:

  • Red: January 10, 2025, just before the Fed pivoted to wait-and-see.
  • Gold: Friday, February 21, 2025.
  • Blue: September 16, 2024, just before the Fed’s rate cuts started.

This yield curve has a dip at the one-year yield, with the 6-month yield being higher than yields in the range of 1-5 years.

But mortgage rates remain close to 7%.

From the initial rate cut in September through mid-January, just before the Fed pivoted to wait-and-see, the average 30-year fixed mortgage rate had risen by 96 basis points, to 7.04%, according to Freddie Mac’s weekly measure, while the Fed had cut by 100 basis points.

Mortgage rates have since given up only 19 basis points of this 96-basis point surge, and at 6.85% are at the upper end of the 6-7% range in which they have been since September 2022.

Over the three decades between 1972 and 2002, 7% was the lower edge of the range, and for most of that time, rates were above 8%.

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Buyers Strike Crushes Green Shoots of Demand for Existing Homes, amid Surging Supply, Active Listings & Days on Market

Energy News BeatPrice

Demand destruction because prices are too high after the 50% price explosion during the pandemic.

By Wolf Richter for WOLF STREET.

Demand in the resale market just keeps getting crushed after every little sign of green shoots. Sales of existing single-family houses, townhouses, condos, and co-ops that closed in January dropped by 4.9% from December, seasonally adjusted, to an annual rate of 4.08 million sales, according to the National Association of Realtors today.

This rate of sales was up just 2.0% from the abysmally low levels a year ago – 2024 as a whole had been the worst sales year since 1995 – and flat with the abysmally low levels two years ago.

Compared to January 2021, the sales rate was down by 36%, compared to January 2019, the sales rate was down by 25% (historical data from YCharts):

Actual sales, not seasonally adjusted and not annual rate, at 240,000 in January, were up by 2.6% from the abysmally low levels a year ago, and down by 31% from January 2022. The blue lines connect the Januarys.

Demand destruction by region.

The charts below show the seasonally adjusted annual rate of sales (SAAR) in the four Census Regions of the US. A map of the four regions is in the comments below the article.

Northeastern US: The seasonally adjusted annual rate of sales fell to 500,000 homes:

Midwestern US: The seasonally adjusted annual rate of sales remained at 1,000,000 homes.

Southern US: The seasonally adjusted annual rate of sales fell to 1,830,000 homes.

Western US: The seasonally adjusted annual rate of sales rose 750,000:

Highest supply since January 2019.

Supply of unsold existing homes on the market jumped to 3.5 months in January, the highest since January 2019 (3.8 months), higher than January 2018 (3.4 months), and same as January 2017. January 2025 is shown as the red square.

Active Listings doubled since 2021.

Active listings – total inventory for sale minus homes whose sales are pending – rose to 829,400 (red square in the chart below), the highest for any January since 2020, according to data from Realtor.com.

Active listings have more than doubled since January 2022, while actual sales in January have plunged by 31% from January 2022.

Days on the market lengthen to 73 days.

The median number of days before the home is either sold or pulled off the market because it failed to sell rose to 73 days in January, the highest for any January since 2020, and up from 69 days a year ago, according to Realtor.com.

Days on the market track the mix of two factors: How motivated sellers are by letting their home sit on the market when it doesn’t sell right away, before they pull it, and how quickly homes sell that do sell.

I’ll just vent here about the metric, “median price.”

To get the national median price, the NAR essentially puts all homes that sold in the US on a list sorted by price and takes the price of the one home that is in the middle of that list (=median price).

The median price is heavily skewed by changes in the mix of homes that sold. In the spring, nationally, more higher-end homes come on the market and sell, which changes the mix of what sold and skews the median price higher. It then does the reverse in the fall and winter and skews the median price lower. These seasonal ups and downs in prices are at least in part due to this shift in the mix. In individual markets, median prices jump up and down wildly on a monthly basis, based largely on the mix of what sold.

The median home price is the second worst measure for home prices, after “average home prices” (sum of all home prices divided by number of homes). Today, there are far better methods available, based on huge amounts of data from all sources, including public records, with sales-pairs relationships.

I use one of those massive data sets that is not based on a median price to depict visually the largest most expensive 33 markets – those where prices have dropped sharply since their peak in 2022 and those  where prices have continued to rise, for my series, The Most Splendid Housing Bubbles in America, Jan 2025: The Price Drops & Gains in 33 of the Largest Housing Markets.

These 33 large metros are bookended by the Austin metro with the biggest drop from peak (-23% from June 2022), and by the New York metro with the biggest year-over-year gain (+6.0% yoy):

But the NAR still puts out its national median price as it has for decades.

Single-family houses: In January, the national median price declined along seasonal lines to $402,000 from the downwardly revised December median price. This trimmed down the year-over-year increase to +5.0% in January, from +5.9% in December (originally reported as +6.1%).

Based on the pre-pandemic seasonality, the median price drops sharply in January, and January or February marks the seasonal low point. The high points are in June.

The 50% price explosion between June 2019 and June 2022, on top of the large price gains in the prior 10 years, was driven by the Fed’s interest-rate repression and money-printing schemes which have created the #1 problem in the housing market today, which is why demand has plunged: Prices are way too high.

Condos and co-ops. Prices dropped by 2.9% in January from December, the biggest December-January drop since 2015, to $349,500. This drop, which was far more than the typical seasonal drop in January, cut the year-over-year gain to 2.9% in January, from 4.5% in December.

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Rubio Says U.S. Could Ease Sanctions Only If Russia Noticeably Changes Behavior

Energy News BeatRussian Oil Tankers

The United States will not lift any sanctions on Russia unless Moscow noticeably changes its behavior, U.S. Secretary of State Marco Rubio told European leaders in a call after the U.S.-Russia meeting in Riyadh.

European leaders are concerned that they are being left out of talks and of the apparent major pivot in U.S. foreign policy after the top officials from the United States and Russia met earlier this week in Saudi Arabia to discuss a potential end to the war in Ukraine.

Following the meeting with Russia, Rubio sought to assure the Europeans in a call with officials from the UK, France, Germany, and Italy that no deal would be imposed on Ukraine or Europe and that sanctions would not be lifted, at least not soon, The New York Times reports, citing a summary of the call it had reviewed.

The U.S. Administration will not be lifting sanctions on Russia unless a noticeable change in Moscow’s behavior is seen, Rubio told the European officials.

However, the U.S. Secretary of State “left the door open to easing some sanctions in limited ways if the Russians began taking steps that the administration was seeking,” NYT reports, based on the summary of the call prepared by European officials.

Rubio also told the Europeans that the U.S. Administration was very much aware that Russia could try to use the U.S.-Russia talks to create rifts and divisions among the Western allies, according to the NYT’s account of the call.

The latest U.S. sanctions on Russia’s oil trade, the most aggressive sanctions yet imposed in the last days of the Biden Administration, have upended global oil trade as Asia rushes to cover Russian barrels with alternative supply and tanker rates soar amid significantly decreased availability of non-sanctioned vessels.

The Biden Administration’s farewell sanctions on Russian oil trade sanctioned dozens of vessels that Russia used to ship the ESPO crude blend from Kozmino to China’s independent refiners.

Meanwhile, the EU this week agreed on a new package of sanctions against Moscow, including a ban on Russian aluminum imports and the designation of 73 shadow fleet vessels.

By Charles Kennedy for Oilprice.com

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The AI Economy’s Massive Vulnerability

Energy News Beat

Subsea cables channel data and power, but they face escalating risks.

By , the president of global affairs at Goldman Sachs and co-head of the Goldman Sachs Global Institute.

The artificial intelligence-powered economy has a massive vulnerability: the ocean.

The digital world is connected by subsea cables, a roughly 750,000-mile network that could circle the globe 30 times. Laid as deep as five miles below the surface, these cords make daily life—and the global marketplace—possible. While 80 percent of international trade by volume is transported on the sea’s surface, 95 percent of international data flows under it, including instant messages, an estimated $10 trillion in daily financial transactions, and countries’ national-security secrets. Meanwhile, power generated offshore, a growing share of global energy, is often transported via subsea cables.

The artificial intelligence-powered economy has a massive vulnerability: the ocean.

The digital world is connected by subsea cables, a roughly 750,000-mile network that could circle the globe 30 times. Laid as deep as five miles below the surface, these cords make daily life—and the global marketplace—possible. While 80 percent of international trade by volume is transported on the sea’s surface, 95 percent of international data flows under it, including instant messages, an estimated $10 trillion in daily financial transactions, and countries’ national-security secrets. Meanwhile, power generated offshore, a growing share of global energy, is often transported via subsea cables.

These two elements—data and power—are the foundations of the AI economy. But the subsea cables through which they flow face escalating dangers, and multiple incidents in the past few months have highlighted those risks.

In November, a Chinese vessel reportedly dragged its anchor along the Baltic seabed for more than 100 miles, severing data cables between Sweden and Lithuania as well as between Finland and Germany. NATO ships had to intervene. A month later, a Russian oil tanker believed to be part of Moscow’s “ghost fleet” cut a cable carrying power between Finland and Estonia, only to be seized by Finnish authorities.

The German foreign minister called these incidents a “wake-up call” for Europe. NATO has since established a new mission in the Baltic to protect undersea infrastructure. But the challenge is global and persistent—in a sign of the heightened tempo of such incidents, another undersea cable—located to the north of Taiwan, which is connected to the outside digital world through just 15 cables—was damaged in early January, potentially by a Chinese ship. Shortly after, two cables to the Taiwan-governed Matsu Islands disconnected due to what Taiwan’s Digital Affairs Ministry called “natural deterioration,” though backup microwave communications were activated to keep the islands’ 14,000 residents online.

In some cases, disruptions are accidental. Backup systems can often limit the negative effects, as they did during the most recent Matsu incident. However, whatever their causes, the consequences of the approximately 150 cable-breaking incidents a year can often be severe, and include internet shutdowns, espionage, and costly repairs and delays.

In one dire incident in 2008, the severing of two Mediterranean cables shut down internet access in 14 countries, including 100 percent of connections in the Maldives, and 82 percent in India. What makes today’s risks even more vexing than they were then are questions of scale and significance. One-off cable cuts are relatively straightforward to fix. But if cables are damaged at particularly sensitive times or places, or on a wider geographic scale, then that task is much more challenging.

Meanwhile, subsea cables are growing even more necessary to daily life as artificial intelligence increases demands for global data transmission, including through overseas data centers connected to the global cable networks.

Hundreds of billions of dollars are being invested in AI infrastructure every year. But that infrastructure is often connected through one of the thinnest, and potentially most vulnerable, physical networks on the planet.


A historic black-and-white illustration shows a side view of the laying of a trans-Atlantic cable between two ships, with the cords sloping in a U-shape between them above the ocean floor.A historic black-and-white illustration shows a side view of the laying of a trans-Atlantic cable between two ships, with the cords sloping in a U-shape between them above the ocean floor.

An illustration shows the laying of the trans-Atlantic cable intended to link Europe and North America in the 1800s.Corbis via Getty Images

The individual fiber optic strands that, combined, make up the subsea cables through which world’s information flows are often barely thicker than a human hair. And that delicate infrastructure predates the digital age. The first undersea cables made trans-Atlantic telegraph communication possible in the 1850s, and through the technological revolutions since, they’ve connected telephones, modern telecommunications devices, and now the global AI infrastructure.

In recent decades, three main players, analogous to national champions, have dominated the global subsea cable market: SubCom in the United States, NEC Corporation in Japan, and Alcatel Submarine Networks in France. As of 2021, these three companies held a 87 percent global market share.

However, in recent years, China has disrupted the subsea cable ecosystem. Huawei Marine Networks was founded in 2008, and it soon became the fastest-growing subsea cable provider and the fourth-largest in the industry. From 2018 to 2022, HMN Tech, as it was renamed in the intervening years, supplied 18 percent of new cables based on total length. The company’s success followed the playbook of many Chinese technology champions, with subsidies from the Chinese government allowing it to submit lower bids on projects than free-market competitors.

A wide coil of fiber optic wires wrapped into hose surrounds a round scaffolded space, inside of which workers move around as they install an electric submarine cable and optical fiber. A cloud-covered sky is partly visible overhead.A wide coil of fiber optic wires wrapped into hose surrounds a round scaffolded space, inside of which workers move around as they install an electric submarine cable and optical fiber. A cloud-covered sky is partly visible overhead.

Workers install an electric submarine cable and optical fiber between Quiberon and Belle-Île-en-Mer, western France, on March 11, 2015.Jean-Sebastien Evrard/AFP via Getty Images

The latest, and perhaps most consequential, market shift in the industry is happening now: the proliferation of artificial intelligence. As data has become the foundation for both the digital economy and the emerging AI industry over the past decade, hyperscalers—or large computing and cloud services providers such as Google, Meta, Microsoft, and Amazon—have become major players in the subsea cable market. Most cables are now built by consortiums of hyperscaler and telecommunication companies. As technology companies build up their cloud and AI capabilities and construct more data centers globally, they also invest in more subsea cables. Today, Google is a part or sole owner of roughly 33 cables.

Even in a stable international environment, it would be impossible to separate subsea cables from geopolitics. There are always risks of sabotage or espionage and the need to adapt to national and international standards-setting. Every international cable project needs government approvals along its routes.

But in a more competitive—even combative—period in global affairs, the subsea cable market has become a more contested arena.

In 2023, FP columnist Elizabeth Braw argued that we are “entering the era of the undersea Iron Curtain.” The public debut of ChatGPT in late 2022 and the proliferation of AI-enabled tools since have brought this 20th-century division into a new period in the history of technology. Because of the rise of AI, these cables are more important than they were even two years ago.

The contest over subsea cables entails old tools of statecraft, such as deterrence and incentives, deployed in new domains. And in recent years, that contest has played out in every major geopolitical theater, affecting global consumers and many of the world’s leading companies.


A Russian Navy nuclear submarine is seen partly submerged in the distance at a harbor beneath a hazy sky. Slightly out of focus in the foreground, two adults are seen looking out over the rounded lip of a low concrete wall. One has a small child on his shoulders, also looking at the submarine.A Russian Navy nuclear submarine is seen partly submerged in the distance at a harbor beneath a hazy sky. Slightly out of focus in the foreground, two adults are seen looking out over the rounded lip of a low concrete wall. One has a small child on his shoulders, also looking at the submarine.

A Russian Navy nuclear submarine is prepared for the Navy Day parade in Kronshtadt, Russia on July 29, 2017.Igor Russak/NurPhoto via Getty Images

In Europe, a Chinese-flagged ship is suspected of having damaged a Baltic subsea cable in October 2023, a year before the Baltic Sea sabotage that triggered a NATO response a few weeks ago. In another incident earlier in 2023, another Chinese-flagged vessel reportedly damaged the cables connecting Taiwan with its aforementioned outlying Matsu Islands, leaving them without internet for weeks.

And the warning signs flashed even brighter in 2024. Early last year in the Middle East, three cables in the Red Sea—where 90 percent of Europe-Asia communication flows—were damaged when the anchor of a commercial ship sunk by Houthi missiles dragged along the ocean floor. And U.S. officials told CNN last fall that Russia is developing a deep sea-focused military unit, a capability that could give Moscow new tools for aggression and gray-zone operations and attacks that fall short of war.

The United States’ concern about subsea cables is growing and bipartisan. In 2019, worried about China’s civil-military fusion, espionage, and cyberthreats, the first Trump administration sanctioned Chinese telecommunications giant Huawei. The Trump era’s State Department’s multilateral Clean Network initiative included a “Clean Cable” pillar “to ensure undersea cables connecting [the U.S.] to the global internet are not subverted for intelligence gathering by the [People’s Republic of China] at hyper scale.”

In 2024, under the Biden administration, the State Department built on those initiatives released the “New York Joint Statement on the Security and Resilience of Undersea Cables,” a set of principles endorsed by 30 countries at the United Nations General Assembly. The United States is also a member of the Quad Partnership for Cable Connectivity and Resilience, announced in 2023.

An operator in a yellow reflective vest works at the edge of the sea, his feet in the water as he reaches down to poke at a fiber optic cable that runs up the sand of the beach as well as out beyond the worker and into the water, where a line of buoys marks its path to a ship in the distance.An operator in a yellow reflective vest works at the edge of the sea, his feet in the water as he reaches down to poke at a fiber optic cable that runs up the sand of the beach as well as out beyond the worker and into the water, where a line of buoys marks its path to a ship in the distance.

An operator works during the mooring of an undersea fiber optic cable near the Sopelana, Spain on June 13, 2017. Ander Gillenea/AFP via Getty Images

As world powers vie for regional influence and partnerships, subsea cable infrastructure contracts have become commercial contests for spheres of geopolitical influence. In 2021, HMN Tech was pushed out of a project linking three Pacific islands, including the Federated States of Micronesia, which has a defense agreement with the United States. The project was scrapped and later replaced by the East Micronesia Cable project, jointly funded by the United States, Australia, and Japan.

Meanwhile, Vietnam—which has five aging subsea cables—is upgrading its infrastructure, creating a new opening for international ties. U.S. officials and telecommunications companies have held multiple meetings with Vietnamese officials to dissuade them from using geopolitically problematic companies, with officials reportedly pointing out that the choice of infrastructure providers could make Vietnam more or less attractive for international investment.

For many countries, physical connections to Chinese cables are viewed as vulnerabilities. The United States government in 2020 set up Team Telecom, an interagency group tasked with safeguarding United States telecommunications infrastructure and preventing direct cable connections between the U.S. and mainland China or Hong Kong. Team Telecom recommended that the Federal Communications Commission block the Hong Kong segment of four planned subsea cable routes. The project owners of these cables, both hyperscalers, switched their termination points to the Philippines and Taiwan, rather than Hong Kong, at an estimated cost of tens of millions of dollars.

The contest over subsea cables isn’t just playing out in foreign ministries—it’s also altering how companies are governed and how the world is wired. Due in part to U.S. pressure, Huawei divested from Huawei Marine Networks in 2020, when the company rebranded to HMN Tech.

More significantly than a change in name or structure, other companies have been squeezed out of projects since then. The SeaMeWe-6 cable, now under construction, will connect more than a dozen countries across Southeast Asia, the Middle East, and Western Europe. HMN Tech was poised to win the contract in 2020 with a bid that was approximately one-third lower than competitors’, but the United States offered five foreign telecom companies training grants worth a total of $3.8 million if they selected SubCom instead, while warning consortium members of potential sanctions against HMN Tech. SubCom ultimately won the SeaMeWe-6 contract, and Chinese companies left the consortium, to be replaced by enterprises from Malaysia and Indonesia.

The results of such commercial and diplomatic maneuvering are clear: Chinese companies are losing ground in international markets. There are now only three new cables with connections in Hong Kong scheduled for 2025, and none after. For comparison, Singapore, historically a smaller market competitor than Hong Kong, has 26 subsea cables landing at three landing sites, with plans to double the number of sites by 2033. Under the sea as well as over it, the world is becoming more divided.

The geography of subsea connections mirrors geopolitical divides. Rather than transiting the contested South China Sea, for example, Western consortiums now often pursue less direct avenues, such as through the Java Sea. They cover a greater distance at greater cost, but with less geopolitical risk. Guam, Japan, the Philippines, and Singapore may stand to benefit from new routes, especially as they become greater data center hubs. Meanwhile, China has increased its push for new subsea cable projects to the global south and parts of the world that are tied to its Digital Silk Road initiative, where Western interests hold less sway.

A world divided into blocs by digital infrastructure may be more resilient, but security doesn’t come without trade-offs. At $40,000 to $60,000 per kilometer, cables are expensive to lay, and once they’re set and connected to facilities like data centers, they cannot be easily ripped out and replaced. Delayed, canceled, or rerouted subsea cables add uncertainty, complicating market dynamics. Longer cables laid over less efficient routes also mean more latency, as data must travel greater distances.

And while casual internet users may not recognize slower speeds, quick data transfer time is critical across many industries—even milliseconds matter when it comes to executing financial transactions, let alone in military applications.

Employees are seen from overhead as they work on a massive circular coil of submarine cable that fills the floor of an entire factory room. Both workers wear matching blue shirts and red hard hats.Employees are seen from overhead as they work on a massive circular coil of submarine cable that fills the floor of an entire factory room. Both workers wear matching blue shirts and red hard hats.

Employees make submarine cables at Qingdao Hanhe Cable Co., Ltd. in China on May 28, 2024. VCG via Getty Images

In the competition over subsea cables, countries can work to increase the security of their infrastructure, but it’s not clear what victory looks like. When it comes to AI, the United States has aimed to keep and develop what former National Security Advisor Jake Sullivan described as “as large a lead as possible,” especially in advanced logic and memory chips, with chip export controls and other measures in place to impede competitors’ progress.

But despite the differences in products made by each enterprise, Chinese companies and the Chinese government have largely achieved self-reliance in subsea cables, with capabilities comparable to Western alternatives. That means that export controls alone can’t ensure Western advantage.

While Beijing’s access to international markets has been curtailed, China possesses the technology and capabilities across the stack to manufacture all components of subsea cables at home. China also has a history of pouring heavy subsidies into the cable industry, a trend that carries across other industries from solar power to electric vehicles, and that gives it asymmetric advantages that distort markets. As a result, despite pressure, HMN Tech remains competitive, can offer lower prices, and is planning to build its own $500 million Europe-Middle East-Asia cable, a rival to the SeaMeWe-6 cable.

China also has a strong foothold in cable maintenance and repair, which are critical and complex components of the infrastructure’s life cycle. The cable maintenance industry divides the ocean into zones, with certain repair ships designated to cover each. As a result, U.S.-owned cables may rely on Chinese repair ships in certain places, which could make them vulnerable to spyware, whatever their ownership.

In one concerning incident, a Chinese repair company that worked on cables owned by U.S. hyperscalers appeared to hide its vessels’ locations near Taiwan and Indonesia, according to shipping data reviewed by the Wall Street Journal. This unusual and unexplained behavior raised alarm about what the vessel was doing and where it was doing it. And repairs are even more complicated and costly in conflict zones, such as during the clashes in the Red Sea last year.

Even in the absence of conflict, competing claims to vital sea lanes can distort the subsea cable market. While the United States has exerted pressure to push Chinese companies out of certain projects, China has gone further, delaying or blocking permits for cables with U.S. involvement, including in the South China Sea.


Eight workers in matching orange coveralls stand in a line as they haul part of a fiber optic cable to the shore from a large ship gloating on the water near the shore where they stand. A cloudy sky is visible overhead.Eight workers in matching orange coveralls stand in a line as they haul part of a fiber optic cable to the shore from a large ship gloating on the water near the shore where they stand. A cloudy sky is visible overhead.

Workers haul part of a fibre optic cable onto the shore at the Kenyan port town of Mombasa on June 12, 2009.AFP via Getty Images

The rising risks to subsea cable networks are connected to crises above the surface. The Iranian-backed Houthi attacks on international shipping have damaged undersea cables in the Red Sea. Taiwan’s subsea connections are potential targets in coercion campaigns against the island. And even if Western Europe isn’t yet directly engaged in a military conflict with Moscow, its infrastructure is under threat by an expansionist Russia—and NATO is responding to that very real threat.

Rather than wait for something to happen, there are proactive strategies to protect subsea cables and deter bad actors. Enhanced coordination in monitoring and management of the seas can help. Such measures may include increased patrols as well as potentially boarding and inspecting suspicious vessels, particularly in shallow areas with significant concentrations of cables. This approach could deter attacks and improve attribution when they do occur. Meanwhile, AI itself may solve some of subsea cables’ greatest vulnerabilities. The Wall Street Journal reports that AI-enabled underwater systems such as drones are already being used to identify and combat threats, even at the bottom of the ocean.

Where such forward defenses don’t succeed and cable repairs need to be made, especially in contested waters, partners can protect repair ships in the short term and prevent and eliminate threats as they arise. Increased redundancy in sensitive areas, combined with more ex-China repair capacity, including expanding their fleets of cable-laying ships, could decrease downtimes and build on Washington’s Cable Security Program, which authorized and subsidized U.S. repair ships.

Meanwhile, streamlined permitting processes could speed up repairs and build-outs, which once took under 12 months, but can now last for more than three years because of a complex regulatory environment that requires engagement with multiple levels of government, often with uncertain and competing priorities.

An improved regulatory environment can also speed up innovation, which may help build more resilient, diversified cable networks. In the next few years, alternatives to subsea cables—such as satellites and other space-based systems such as satellites in low-earth orbit—have shown promise, though they currently have less capacity than subsea cable networks and are still vulnerable to natural and humanmade disasters. Still, such options, bolstered by a growing private-sector space industry, may provide new data transmission options and backups in certain sectors.

Indeed, a NATO-funded project launched in July 2024 aims to reroute more internet traffic to space, in case of infrastructure disruptions on Earth. And when the two subsea cables connecting Taiwan with the Matsu Islands were disconnected in January, the backup microwave systems were activated almost instantly. Still, such measures currently provide only limited bandwidth. That may suffice for a country’s sparsely populated outlying islands, but it would likely fall short in urban areas or when it comes to high-volume, low-latency data centers.

There is no comprehensive backup for the world’s subsea cable networks. But the seabed, like the surface, is not as peaceful as it once was. A lesson of the 2020s so far has been that when deterrence—whether by denial, punishment, or entanglement—fails in one domain, it can soon collapse elsewhere. That’s also true beneath the waves.

Jared Cohen is the president of global affairs at Goldman Sachs and co-head of the Goldman Sachs Global Institute.

 

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Climatologist: No Rise In Climate Disasters Despite Record CO2

Energy News Beat

EM-DAT data challenges claims that climate-related disasters are rising, contradicting MSM and IPCC narratives on CO2 emissions and extreme weather.

extreme weather storm
In previous articles, I’ve delved into the discourse surrounding climate-related natural disasters and their purported increase due to rising greenhouse gas emissions. [emphasis, links added]

Today, I aim to update this analysis with the most recent data from 2024, a year that mainstream media (MSM) has widely proclaimed as the hottest on record.

For instance, The Guardian reported that two-thirds of the Earth’s surface experienced record-breaking heat in 2024, attributing this to human-induced climate change.

Source

Despite these alarming headlines, an examination of the Emergency Events Database (EM-DAT) reveals a different narrative.

The data indicates that since 2000 there has been no significant increase in climate-related natural disasters such as extreme weather events, wildfires, droughts, and floods.

This finding challenges the prevalent assertion that higher CO2 emissions and rising global temperatures directly correlate with an uptick in such disasters.

Analyzing the EM-DAT Data:

EM-DAT, maintained by the Centre for Research on the Epidemiology of Disasters (CRED), offers a comprehensive global record of natural and technological disasters.

Focusing on climate-related events, specifically floods, droughts, extreme temperatures, storms, and wildfires, I observed that from 2000 to 2022, the frequency of these events remained relatively stable.

Contrary to popular belief, certain years in the early 2000s even recorded higher counts than more recent years.

This finding is particularly intriguing given that the 21st century has seen unprecedented CO2 emissions and supposedly some of the hottest years on record.

If the widely accepted narrative held true, we would expect a corresponding increase in climate-related natural disasters.

The absence of such a trend in the EM-DAT data suggests that the relationship between GHG emissions, rising global temperatures, and [disaster frequency] is more complex than often portrayed. …snip…

Source

Similarly, the Intergovernmental Panel on Climate Change (IPCC) has stated…

Source 

These assertions contribute to a pervasive belief that climate-related disasters are on the rise, a narrative that is not substantiated by the EM-DAT data.


Irrational Fear is written by climatologist Dr. Matthew Wielicki and is reader-supported. If you value what you have read here, please consider subscribing and supporting the work that goes into it.

Read full post at Irrational Fear

 

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Trump’s Funding Freeze Leaves Renewables Floundering, Media And Green Groups In Panic

Energy News Beat

Trump froze trillions in funding, leaving green energy projects floundering and causing panic among media and green groups.

​President Donald Trump froze trillions of dollars in funding last month. Federal court rulings temporarily paused some of Trump’s orders, but numerous reports say if taxpayer funding is ultimately terminated, renewable projects will be in serious jeopardy. [emphasis, links added]

During the Biden-Harris administration, President Joe Biden and the Democrats passed hundreds of regulations against the oil, gas, and coal industries. [emphasis, links added]

The National Review noted the [“breathtaking cronyism that characterized] President Obama’s entire ‘green jobs’ agenda, noting that four out of every five ‘green’ energy companies to receive taxpayer support were ‘run by or primarily owned by Obama financial backers.’ ”

Despite the unfriendly regulatory environment, the U.S. is producing more oil and gas than any nation in history.

Renewable energy proponents often claim that wind and solar are cheaper than fossil fuels, and many have claimed that Trump’s actions will raise the cost of energy.

If it’s true that renewable energy is cheaper, it seems odd that renewable energy projects would flounder when federal funding is blocked.

“What we’re seeing is the eco-left movement proving in real time that their schemes cannot stand without taxpayer support. The free market should be deciding what products Americans do or don’t want to buy, and not the government picking winners and losers. It’s really simple,” Larry Behrens, communications director for Power the Future, told Just the News.

Media frenzy

The legacy media attacked Trump’s funding freeze order immediately after it was announced.

E&E News reported that Trump blocked $90 million in funding that the Hopi Tribe in Arizona was hoping to use for solar projects that would replace jobs lost after a coal plant closed in 2019.

The projects would also, the tribe hoped, end blackouts that have caused food to spoil and medical equipment to malfunction.

Pennsylvania was hoping for $156 million to support a program that helps low-income homeowners install solar panels, according to The Philadelphia Inquirer.

The upgrades, the Inquirer reports, would lower electric bills after the millions in taxpayer funding are doled out for the supposedly cheaper form of energy.

In an op-ed in the Reno Gazette-Journal, former Nevada Lieutenant Gov. Kate Marshall claimed that wind and solar power were projected to drop Nevada’s electricity rates by 22% to 35% over the next 30 years.

The claim includes a now-broken link [archived here] to an article on the Department of Energy website, likely removed since Trump took office and Chris Wright replaced Jennifer Granholm as energy secretary.

Colorado Gov. Jared Polis declared that Trump is threatening “clean, affordable energy.” The Guardian reports the freeze is causing “panic,” and Newsweek reports that contractors stopped work on solar projects.

“Outlandish”

These are just a sample of the media reports and statements from officials spreading in the wake of Trump’s funding freeze.

By contrast, the oil and gas industry under former President Joe Biden, who campaigned on a promise to “end fossil fuels,” saw production increase to record highs.

Rather than raise doubt about the ability of intermittent wind and solar to replace fossil fuels and lower costs, the oil and gas industry’s success has been used to dispute that the Biden administration ever warred against the oil and gas industry.

Read rest at Just The News

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