NEWS OF THE DAY:
The Hill’s Morning Report – Progressives ready to tank infrastructure bill
Alexis Simendinger, Al Weaver, The Hill, September 29, 2021
The political future of the Democratic Party could turn on what liberals and centrists decide next in a battle over President Biden’s spending and infrastructure agenda. Right now, they are pummeling each other.
The infighting continued on Tuesday as progressive members issued another threat in the direction of Democratic leaders to sink a planned Thursday vote on the $1 trillion bipartisan infrastructure bill without assurances from Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) that they will vote for a wide-ranging reconciliation package.
The Hill: Senate Democrats weigh a government funding bill through Dec. 3 delinked from a hike in the debt ceiling.
“If she were to call the bill, it will fail,” Rep. Jan Schakowsky (D-Ill.), an ally of Speaker Nancy Pelosi(D-Calif.), told The Hill on Tuesday. “Not because the [Congressional] Progressive Caucus, people like me, aren’t willing to vote for it. But … we had an agreement that we were going to get these two pieces [together]” (The Hill).
However, there were signs of life for the majority party and its agenda. Biden held separate meetings with Manchin and Sinema at the White House on Tuesday, with the Arizona Democrat taking part in multiple other meetings with White House officials. Additionally, Biden nixed a planned trip to Chicago today to promote vaccinations and mandates in favor of staying in Washington to take part in negotiations (The Hill).
“In meetings and calls over the weekend and through today, President Biden has been engaging with members of Congress on the path forward for the Build Back Better Act and the Bipartisan Infrastructure Deal,” a White House official told The Hill. “He will now remain at the White House tomorrow to continue working on advancing these two pieces of legislation to create jobs, grow the economy, and make investments in families, rather than failed giveaways to the rich and big corporations.”
Despite the liberal uproar, leading Democrats held firm that the vote on the bipartisan proposal will take place on Thursday. Pelosi told reporters that leaders are “making good progress” to break the impasse.
“Everybody has to do what they have to do, and I respect that,” Pelosi said. “We’re doing our work.”
The bottom line: If progressives hold true, there will be no passage of anything this week. The reconciliation bill isn’t ready, and without that, the vote on Thursday will fail. And as Pelosi noted on Sunday, without the votes, there will be no vote.
OIL:
Oil Down as Growth in USA Stockpiles Cools Rally
Saket Sundria, Alex Longley, Bloomberg, September 29, 2021
Oil fell after a U.S. industry report pointed to a build in crude stockpiles, cooling a rally that had pushed benchmark Brent past $80 a barrel.
Brent futures slid back below $79, while West Texas Intermediate also dropped. The American Petroleum Institute reported a 4.13-million-barrel weekly gain in U.S. crude stocks, according to people familiar with the data. That would be the first increase in eight weeks if confirmed by government data later Wednesday.
Oil’s advance earlier this week reflected signs of a tighter global market amid stronger demand and rising natural gas prices. Higher energy costs this month have stoked speculation that the Organization of Petroleum Exporting Countries and its allies may ease supply cuts more quickly. The White House said Tuesday it’s continuing to talk to OPEC and other international partners about the importance of competitive markets and doing more to support the recovery.
“The oil market is coming under further pressure this morning after the API reported an unexpected uptick in U.S. oil stocks last week,” said Stephen Brennock, an analyst at brokerage PVM Oil Associates. “The latest price pullback suggests pockets of worry are still present across the oil market.”
| Prices: |
| Brent for November settlement fell 0.8% to $78.48 a barrel at 10:07 a.m. in London On Tuesday, it rose as high as $80.75 WTI for November delivery also dropped 0.8% to trade at $74.66 |
Stockpiles in the U.S. expanded across the board last week, including crude at the key storage hub of Cushing, Oklahoma, according to people familiar with the API data. Gasoline holdings climbed for a second week, rising by 3.6 million barrels, while distillates inventories gained 2.5 million barrels.
Related: Brent crude roars past $80 as global energy crisis spreads
Alex Longley, Anthony Di Paola, World Oil, September 28, 2021
GAS:
Investors See Natural-Gas Crunch Spilling Into Crude Market, Lifting Oil Prices
David Hodari, The Wall Street Journal, September 28, 2021
A shortfall in global energy supplies is spilling into crude markets and could add momentum to this year’s rally in oil prices, investors say.
Even though it ended Tuesday’s session lower, Brent crude, the global gauge of oil prices, is near its highest level in three years and traded above $80 a barrel early in the day. It closed down 0.6% at $79.09 as rising government-bond yields prompted a broad retreat from stocks and commodities but is still up more than 50% in 2021.
U.S. crude ended the day down 0.2% to $75.29 but has also surged recently.
The latest gains for oil prices have come as part of a broader rally in energy markets, with depleted natural gas inventories and resurgent economic activity sparking fierce competition in Europe and Asia for natural gas to feed their power markets.
“Oil’s move is really to do with the global energy crunch coming out of the gas power market,” said Norbert Rücker, head of economics at Swiss private bank Julius Baer. “This is now spilling over into the oil market because of the expectation that this energy scarcity means we’re going to use oil for spillover demand.” In some power plants, oil can be used to generate electricity when gas prices surge.
A global natural-gas production deficit, depleted inventories and a push from the Chinese government to slash emissions—switching out coal for gas—have all played a role in pushing gas prices higher. That comes as the Northern Hemisphere heads into the winter indoor heating months. The supply crunch has already put several retail energy providers in the U.K. out of business.
Record-high gas prices in parts of the world have exacerbated the oil market’s already tight supply-and-demand balance. Cumulative losses in U.S. Gulf of Mexico production following the impact of Hurricane Ida last month have reached more than 30 million barrels and could hit more than 55 million barrels before all production is restored, according to Helge André Martinsen, senior oil market analyst at DNB Markets.
Those dynamics have prompted analysts to raise their oil-price forecasts. Goldman Sachs increased its Brent price forecast for the end of 2021 by $10 to $90 a barrel on Monday, with head of energy research Damien Courvalin citing both Hurricane Ida and the likelihood that “the global gas shortage will increase oil-fired power generation.”
Power plants are already starting to switch from using natural gas to using oil in Asia, says Claudio Galimberti, senior vice president of oil markets at energy consulting firm Ryst
Asia’s power generation sector currently uses around 900,000 barrels of oil a day and has around 550,000 barrels of unused oil-burning capacity, largely in Japan. Mr. Galimberti says he expects Asian power sector demand for oil to increase by 400,000 barrels a day in the coming six months, meaning “utilization of the oil-burning infrastructure will surge.”
Futures for U.S. natural gas ended Tuesday’s session up 2.4% at $5.841 per million British thermal units after climbing above $6 early in the session. They are up some 130% this year.
European natural-gas prices have more than quadrupled this year and the rally is unlikely to relent soon, according to Georgi Slavov, head of fundamental research at brokerage Marex Spectron. Weather forecasts point to a chilly November and December in Europe, which would bolster gas demand, Mr. Slavov added.
Coal and carbon-permit prices initially headed higher, too, adding to the strain on energy-hungry companies and industries in Europe, before handing back most of their gains as broader markets turned lower.
The producer nations of the Organization of the Petroleum Exporting Countries are a wild card in the oil-price mix. They continue to hold back barrels from the market to keep prices high enough to profit. But they have a history of releasing more supply into the market to avoid high prices from stifling demand.
OPEC, which released its long-term energy forecasts Tuesday, is already in the process of relaxing production cuts that underpinned oil prices during the pandemic. It meets next week to discuss possible further production increases.
“OPEC is still ramping up production and [the market is] getting frothy but by next year we have confidence that we see much lower prices,” said Julius Baer’s Mr. Rücker.
MINING:
Large vein system discovered at Estelle
Shane Lasley, North of 60 Mining News, September 24, 2021
Nova Minerals Ltd. Sept. 20 announced that its 2021 reconnaissance exploration has discovered an extensive gold, silver, and copper mineralized zone between the Korbel gold deposit and RPM target on the company’s Estelle property in Alaska.
While investigating what appeared to be high-grade mineralization at the Stoney vein, a color anomaly at what is now referred to as the Rainy Day vein, and determine the source of the magnetic anomaly at the T5 prospect, Nova Minerals geologists have begun to uncover what appears to be a large polymetallic system that extends for at least 3,800 meters.
With thicknesses ranging from three to ten meters and a vertical relief of 300 meters, Nova says the massive to semi-massive sulfide vein at Stoney is quite extensive and initial sampling results look promising. Stoney strikes roughly to the south and dips steeply to the west.
T5 is a magnetic anomaly thought to be associated with Stoney, however, small outcrops beneath a rock glacier revealed a strongly magnetic mafic dike and intermediate intrusive with little to no mineralization.
While working in the vicinity of Stoney, crews discovered the Rainy Day vein, another massive polymetallic vein to the northwest of the main Stoney occurrence. This vein is similar in nature to Stoney with massive pyrrhotite, chalcopyrite, and arsenopyrite, which Nova says is likely a splay off of the main Stoney Vein.
The Rainy Day vein is about two to five meters thick, with at least ten meters of vertical relief and 100 meters of strike length exposed. A representative chip sample across this vein averaged 8.12 grams per metric ton gold and 1.7% copper over three meters. A select outcrop sample ran 5.39 g/t gold and 0.5% copper.
Highlights from an additional 26 rock samples collected at Stoney, T5, and Rainy Day include:
• 2.04 g/t gold, 513 g/t silver, and 0.77% copper.
• 0.63 g/t gold, 2,720 g/t silver, and 1.1% copper.
• 0.17 g/t gold, 435 g/t silver, and 2.4% copper.
• 48.4 g/t gold, 16 g/t silver, and 0.36% copper.
• 8.12 g/t gold, 62 g/t silver, and 1.7% copper.
“These rock chip sample results, which include high-grade silver, copper, as well as gold, open up another dimension for Estelle with the discovery of an extensive polymetallic vein system,” said Nova Minerals CEO Christopher Gerteisen. “This now unlocks three priority deposits, which are all company makers on their own, within the Estelle District. The Korbel Main deposit with a resource that continues to advance in both size and confidence on the path to production, the RPM deposit with a maiden resource coming soon. In addition, the 2021 recon exploration field program has identified further prospects with promising geology also observed.”
The company says geophysical programs will be planned to better define the extent of Stoney and nearby splays, as Stoney warrants drilling in 2022.
Results from sampling of other prospects on the Estelle property are pending.
Assays are also pending from more than 10,000 meters of drilling completed at the 4.7-million-ounce Korbel gold deposit and emerging RPM gold deposit.
POLITICS:
Gov. Dunleavy postpones start of lawmakers’ 4th special session to Monday
James Brooks, Anchorage Daily News, September 28, 2021
Gov. Mike Dunleavy has postponed the start of the Alaska Legislature’s next special session to Monday. The session was originally scheduled to begin Friday, but legislators had asked for a small delay.
Senate President Peter Micciche, R-Soldotna, said legislators were grateful for the change — some are in training with national organizations like the Council of State Governments and the National Conference of State Legislatures. In addition, many lawmakers fly from Juneau to their home districts on weekends, and he said a Friday start could have caused some members to fly to Juneau, attend for the day, then leave again.
“If we’re going to go down (to Juneau), I would like for it to be productive,” Micciche said. “Monday made more sense. The governor agreed, then there we are: Oct. 4.”
Dunleavy signed a new special session proclamation at 4 p.m. Tuesday.
Among other items, it says the Legislature will take up “an act making appropriations for a supplemental 2021 Permanent Fund dividend” in the fourth special session.
The state is scheduled to pay an $1,100 dividend starting Oct. 11. Dunleavy has supported a $2,350 payment and a new formula for paying future dividends.
The proclamation calls for the Legislature to discuss that new formula or a similar one.
The governor’s proposal hasn’t advanced this year because of its cost, and Speaker of the House Louise Stutes, R-Kodiak, said changing the result will require additional action.
“If he wants a larger PFD, he’s going to have to come to the table and put some kind of revenue measure out there and support it. Because with his plan, as is, it’s pretty clear, that it leaves pretty near a doggone billion-dollar hole in the budget,” Stutes said.
The adjusted proclamation calls for the Legislature to consider “an act or acts relating to measures to increase state revenues,” but it wasn’t immediately clear whether the governor would propose those, or whether he would rely on ideas from legislators.
Dunleavy held a cabinet meeting in Soldotna on Tuesday. Talking to local reporters at the meeting, the governor said he intends to offer legislation to support a fiscal plan proposed by a bipartisan, bicameral working group earlier this year.
That group said the Legislature should work toward a dividend similar to the one proposed by Dunleavy.
CLIMATE CHANGE:
Lucid to begin deliveries of its Air luxury sedan next month
Joann Muller, Axios, September 29, 2021
Lucid Group says production of its new electric luxury sedans has begun and it will start delivering cars to customers by the end of October.
Why it matters: The Lucid Air, starting at $77,400, is among a slew of plug-in models like the Mercedes Benz EQS, Porsche Taycan and Audi e-tron all hoping to challenge Tesla’s control of the EV market.
- Lucid’s first car, the Air Dream Edition, is a $169,000 special edition with a Tesla-beating range of up to 520 miles.
Driving the news: Lucid, founded by former Tesla engineer Peter Rawlinson, had its official coming out party on Tuesday.
- The company invited media, investors and customers for a behind-the-scenes look at its powertrain and assembly plants in Casa Grande, Arizona, as the first customer-ready models rolled off the line.
- Lucid said it has 13,000 Air reservations so far and is striving to produce 520 of the Dream Edition models this year, with production of less expensive versions ramping up next year to 30,000 vehicles.
Between the lines: Lucid’s secret sauce is proprietary EV technology that packs more energy into a smaller package.
- That translates into a lighter, more efficient, and less expensive EV, the company explained.
Bonus: After the factory tour, Lucid let select reporters drive the Air for the first time.
- I drove the Dream Edition R, which maximizes the driving range over performance, leaving me with a mere 933 horsepower to overtake ordinary gasoline cars on the highway.
A key takeaway of my (brief) time behind the wheel: The Lucid Air is two cars in one. It’s both a sublime luxury sedan and a powerful, thrilling sports car.