NEWS OF THE DAY:
To Understand Joe Manchin, Look at West Virginia’s Transformation
Gerald F. Seib, The Wall Street Journal, June 14, 2021
Bipartisanship is required for Democrat holding on in a state that has shifted so solidly from blue to red
In the 1996 election, Democrat Bill Clinton carried West Virginia by 15 percentage points in the presidential race. Democrat Jay Rockefeller was re-elected to his Senate seat with a stunning 77% of the vote. Democrats won all three of the state’s House seats.
Fast forward to 2020 and the results showed a 180-degree turn. Republican Donald Trump won West Virginia in the presidential race by almost 40 percentage points. Republican Sen. Shelley Moore Capito won her re-election by an even wider margin. Republicans carried all three of the state’s House seats.
All that represents the culmination of what veteran Democratic pollster Peter Hart calls the fastest and most thorough move by a single state from one side of the political divide to the other in recent history. “The migration underscored the cultural and economic transformation of America,” Mr. Hart says.
The shift from blue to red also explains the position of Joe Manchin, the state’s Democratic senator, who has become the bane of his party’s progressive base for his refusal to go along with their plans to end the Senate’s filibuster and push through a voting-rights bill without Republican votes. “The truth, I would argue, is that voting and election reform that is done in a partisan manner will all but ensure partisan divisions continue to deepen,” he wrote in a home-state newspaper column explaining his stand.
Yet there is nothing particularly surprising about Mr. Manchin’s position. His insistence on bipartisanship, which strikes some as both naive and anachronistic, isn’t merely part of his political makeup; it’s what is required for a Democrat holding on in West Virginia.
Moreover, while the progressive frustration is understandable, it also isn’t entirely logical. The Democrats’ problem in the Senate isn’t really Mr. Manchin—or even Arizona’s Sen. Kyrsten Sinema, his frequent partner in refusing to go along with the party’s liberal base. The Democrats’ bigger problem is that the party failed to win winnable Senate elections last year in North Carolina, Maine and Iowa. That left even less margin for error and gave Mr. Manchin the leverage he enjoys today.
Without Mr. Manchin, the Democrats wouldn’t be in charge in a Senate split 50-50 with Republicans, with the difference being the tiebreaking vote of Vice President Kamala Harris. They would be in the minority in a Senate run by Republicans.
That is because, in West Virginia, the alternative to Joe Manchin isn’t a more progressive Democrat, but a more conservative Republican. It is probably no exaggeration to say that Mr. Manchin is the only Democrat in the country who could hold his seat for his party. He wins as a singular figure, despite his party affiliation rather than because of it, and because of the standing built up over a long career as a state legislator, secretary of state and governor before moving to the U.S. Senate.
And even the formidable Mr. Manchin isn’t holding that seat comfortably; he won re-election in 2018 by a 50% to 46% count against Republican Patrick Morrisey.
The Democratic Party’s bigger problem is that it has lost its grip on the kinds of voters who form the backbone of the West Virginia electorate: blue collar, downscale economically, tied to traditional industries such as coal and logging. Once upon a time, these voters didn’t simply vote Democratic. They represented the base.
In West Virginia, they became Democrats because of Franklin Roosevelt, and, for the most part, stayed bolted there for almost two generations. Democrats have lost their allegiance because of coal and culture. A Democratic Party moving hard against fossil fuels appears threatening to the state most dependent on coal. And as Democrats have moved left on cultural issues, including abortion rights, they have lost their hold on many traditional Democrats.
But are those voters lost to the Democrats forever? Maybe not. The coronavirus pandemic and its attendant economic downturn illustrated the appeal of Democratic economic policies to some of these voters.
Indeed, West Virginia’s Republican Gov. Jim Justice (himself a former Democrat) supported a big federal pandemic relief package, has generally backed President Biden’s push for infrastructure spending and voiced sympathy for raising the minimum wage.
Making inroads with such voters might have helped Democrats win those Senate races that slipped from their grasp in 2020. Doing better with them will be key in determining whether Democrats can win back open Senate seats in Ohio and Pennsylvania next year.
To many progressives, Mr. Manchin and his state represent the past, while states that are turning more blue (Arizona, Colorado, Virginia) represent the future. For now, though, we all live in the present, where the states and voters that the Joe Manchins of the world have held on to aren’t only important but can be decisive.
OIL:
Oil trades at multi-year highs on demand expectations
Stephanie Kelly, Reuters, June 15, 2021
- Vitol CEO sees oil price around $70-$80/bbl this year
- Trafigura CEO says good chance oil gets to $100/bbl
- POLL-U.S. crude inventories seen falling for 4th week in a row
- Coming Up: API data on U.S. crude stocks at 4:30 p.m. ET
TOKYO, June 15 (Reuters) – Oil prices reached their highest in more than two years on Tuesday, buoyed by expectations demand will recover rapidly in the second half of 2021.
Brent crude rose 77 cents, or 1.1%, to $73.63 a barrel by 11:19 a.m. EDT (1519 GMT). The global benchmark during the session hit $73.90 a barrel, its highest since April 2019.
U.S. oil rose 86 cents, or 1.2%, to $71.74 a barrel. It hit a session high of $72.03 a barrel, its highest since October 2018.
“With supply growth lagging demand growth in the near term, faster falling oil inventories are supporting oil prices,” UBS analyst Giovanni Staunovo said.
He said comments on Tuesday from some of the world’s top oil traders added to the bullish mood.
The head of trading house Vitol sees oil prices moving between $70-$80 a barrel this year as the Organization of the Petroleum Exporting Countries and allied producers (OPEC+) are predicted to maintain supply discipline.
“We have had those stock draws for a couple months, the market is heading in the right direction,” Russell Hardy told the FT Commodities Global Summit.
Trafigura Chief Executive Jeremy Weir told the same event there was a good chance prices could reach $100 a barrel because of falling reserves before the world reaches peak oil demand. [nS8N2LA02U]
OPEC+ producers have been gradually relaxing record output curbs in recent months.
“The decision by OPEC+ to be overly cautious in returning supply to the market, whether this is true caution or they are intentionally stoking oil prices higher, has been a main tenant in seeing $73 per barrel Brent,” said Louise Dickson, oil markets analyst at Rystad Energy.
Analysts polled by Reuters expect U.S. crude stocks to have fallen for a fourth week in a row, dropping by about 3 million barrels last week. Industry data is due at 4:30 p.m. Tuesday, followed by official figures on Wednesday morning. {EIA/S]
Investors and traders are also watching the outcome of a two-day U.S. Federal Reserve meeting that starts on Tuesday for signals on when it will start to scale back monetary stimulus.
The Fed is getting ready to debate how and when to start tapering a massive asset-purchase program that helped to support the U.S. economy during the pandemic. read more
GAS:
U.S. power & natgas prices spike in Texas and California heatwaves
Oil & Gas 360, June 15, 2021
In Texas, the Electric Reliability Council of Texas (ERCOT), which operates most of the state’s power system, urged consumers on Monday to conserve energy to prevent high demand and generation outages from straining the grid.
In California, the California ISO, which operates most of the state’s grid, told consumers to prepare to conserve energy if needed.
Both grids have imposed rotating outages over the last year to avoid widespread collapses of their power systems – California in August 2020 and Texas in February 2021.
Rotating outages are supposed to leave a limited number of customers without service for short periods of time before switching to another group of customers. But in Texas, ERCOT received criticism after millions of homes and businesses were left in the dark – many for days.
For this week, ERCOT forecast power demand would peak at 70,489 megawatts (MW) on Tuesday up from 70,114 MW on Monday. That compares with the grid’s all-time high of 74,820 MW in August 2019. One MW typically powers about 200 homes on a hot summer day.
To meet that peak and have enough reserves in case something goes wrong, ERCOT said it expects to have about 86,862 MW of supply available this summer. On Monday, however, the grid said an unusually large 11,000 MW was out of service.
In California, the ISO forecast power demand would reach 40,205 MW on Tuesday and 42,152 MW on Wednesday. That compares with the grid’s all-time peak of 50,270 MW in July 2006.
To meet that peak and have enough reserves, the California ISO said it expects to have about 50,734 MW of supply available this summer.
Dodging high-risk areas does not guarantee clean metals supply chain – report
Valentina Ruiz Leotaud, Mining.Com, June 15, 2021
Following a presentation at the G7 Summit Fringe in Cornwall, Fieldfisher released a new guide titled “Supplying responsibly: Towards a clean metals supply chain,” where the London-based law firm outlines how upstream suppliers of mineral and metals products can comply with new legislation on, and customer demand for, clean, conflict-free raw materials.
One of the main points Fieldfisher presents in the guide is that enhanced supply chain scrutiny should not be about risk-avoidance, that is, about dodging certain jurisdictions affected by conflict, human rights abuses, weak environmental standards and other challenging governance issues, but rather about raising standards across the board.
“Just because a physical supply chain avoids conflict-affected or high-risk areas (CAHRAs), or is based entirely within the EU, that does not guarantee every operator in the supply chain will be completely free from links to unethical or illegal activity,” the document reads.
In the firm’s view, demand for ethically produced resources will help prevent supply chain abuse and enable mining companies operating to recognized best practice standards to compete on a level playing field.
In this sense, the guide proposes a number of steps for miners and smelters to underpin their customers’ due diligence processes and promote transparency.
The first idea introduced is that of mapping a route to market, which means that since nowadays very few mines get built without an offtaker first being lined up to buy a substantial/majority share of the output, miners need to ask questions about who their buyers plan to supply, particularly those that currently lose sight of their products at the point of sale to an intermediary.
“Violations can occur at any point along the supply chain between the miner and the end-user, including modern slavery, child labour or other human rights abuses, environmental damage, biodiversity loss, water pollution, money laundering, bribery, fraud or the funding of illegal armed conflicts,” the report reads. “Even if the material was ‘clean’ when it left the mine, mining companies risk their routes to market being compromised if their intermediaries are not transparent about their activities or fail to adhere to good ESG standards.”
Keep it simple
Another suggestion is to review the European Commission’s whitelists of “responsible” smelters and refiners located across the world, which is something the institution plans on doing pursuant to the EU Conflict Minerals Regulation.
Keeping supply chains as simple as possible to ensure they are able to prove their products have not been smuggled into their country of operation, is also an important step proposed in the guide.
This, taking into account that while mining companies based in the UK and the EU are largely free from suspicion under the EU Conflict Minerals Regulation, mineral and metal supply chains can be lengthy and complex and unscrupulous operators can use this complexity to their advantage, obscuring the source of the metal or mineral by inserting extra links.
“With European countries aiming to become recognised suppliers of 3TG (and potentially other minerals in future), this increases the risk that these countries could be used to mask illegal or unethical sourcing activity,” the handbook reads.
Transparency is key
To better prepare for their customers’ demands and comply with increased regulation of supply chains, Fieldfisher also suggests that mining companies and processors establish one comprehensive set of questions and answers with supporting evidence so that they can share it with purchasing organizations and potential partners/investors.
“Having information (including policy documents, certificates and other verifications) prepared should save suppliers (and purchasers) time and money, and allow them to showcase strong ESG credentials,” the guide states. “It is also important to take a consistent approach to customers. Giving different treatment to different customers may raise concerns about transparency.”
Regularly reviewing, updating and promoting their ESG strategies are also presented as positive steps miners should take.
For the law firm, it may also be a good move for miners to sign up to independent external ESG standards prepared by industry bodies and NGOs, some of which cover environmental stewardship, equitable distribution of benefits and transparent accounting practices.
Within this context, mining companies may also benefit from partnering with third-party experts and carrying out physical checks and audits which, according to Fieldfisher, are increasingly becoming necessary aspects of compliance and are an opportunity to share best practice ideas, improvements and efficiencies.
The final piece of advice for mining companies is to be flexible and open to changes.
“Mining companies, even those whose operations have been designed to the highest contemporary standards, must be flexible and willing to adapt to new customer and societal expectations as well as legal requirements if they are to maintain their status as responsible suppliers,” the guide states.
POLITICS:
Email records: Little contact between Alaska Gov. Dunleavy’s former aide and oil company that hired him
Nathaniel Hertz, Alaska Public Media, June 14, 2021
Ben Stevens, Alaska Gov. Mike Dunleavy’s former chief of staff, had minimal email contact with officials from ConocoPhillips before he left his state post to take an executive job at the multinational oil and gas company, according to a trove of his correspondence released this week.
Interest groups and some Alaska lawmakers have been scrutinizing Stevens’ move from state service to the private sector, saying the quick transition raises questions about whether Stevens is complying with state ethics laws.
But in his two years working for Dunleavy as policy advisor and, later, chief of staff, Stevens received just a dozen emails from Conoco employees at his state address.
Most of them were connected to Alaska Chamber of Commerce meetings a Conoco official was helping to organize.
Two more invited Stevens to a reception with the company’s chief executive, then canceled it because of the COVID-19 pandemic.
The other three came from Conoco’s Alaska-based government affairs executive, Scott Jepsen, whom Stevens replaced earlier this year.
In one, Jepsen asked Stevens to call him. In another, Jepsen said he’d be on vacation and would miss a meeting between state and Conoco official. In the third, Jepsen forwarded Stevens the company’s quarterly earnings report.
“There’s nothing there,” Stevens said in a brief phone call Friday.
Read the emails between Ben Stevens and ConocoPhillips
Also on Friday, state officials released a new independent counsel report dismissing an ethics complaint filed against Stevens by the Alaska Public Interest Research Group.
AKPIRG had requested the attorney general open an investigation into the circumstances around Stevens’ departure, alleging multiple violations of state ethics laws.
For two years after leaving their state jobs, the Executive Branch Ethics Act bars public officials from working at private companies on matters which were under consideration by their former state agency — if the official participated “personally and substantially through the exercise of official action.” Those matters could include cases, contracts, regulations or legislative bills, the law says.
The ethics laws also allow state government officials to waive those requirements if they find it’s not “adverse to the public interest.”
Initially, Conoco said Stevens would not need such a waiver because he wouldn’t work on any issues that could present a conflict. Later, the Dunleavy administration granted Stevens a waiver at his request, which Stevens said was “out of an abundance of caution and given the degree of public misunderstanding” of state ethics laws.
Because AKPIRG’s complaint against Stevens also included allegations against Dunleavy, it was handled by an independent counsel who works for the state personnel board, Fairbanks attorney John Tiemessen.
Read the independent counsel’s report
In his sharply worded, 20-page report dated June 4, Tiemessen concluded that neither Stevens nor Dunleavy violated Alaska ethics laws. And he criticized AKPIRG for filing a complaint that he described as “based almost exclusively on hearsay statements and supposition of wrongdoing, with only minimal first-hand evidence.”
Tiemessen also suggested the Legislature change Alaska’s ethics laws to bar groups that file complaints from publicizing them, citing the potential for permanent “reputational damage” for the subjects of complaints later proven to be unsupported by fact or law. He noted that the Legislative Ethics Act — separate from the ethics laws that apply to Alaska’s executive branch — includes criminal penalties.
AKPIRG shot back with its own prepared statement from Executive Director Veri di Suvero, which accused Tiemessen of showing an “overwhelming sense of confirmation bias” and distorting AKPIRG’s motivations in his report.
“The public should not be conceptualized as a nuisance when it fears the government is self-serving,” di Suvero said. “It is also incredibly excessive and inappropriate for the independent counsel to even suggest that penalties, especially criminal penalties, should be a considered statutory change to silence public participation and villainize complainants.”
Stevens’ emails, meanwhile, were released last week nearly three months after Alaska Public Media’s initial request, under the Alaska Public Records Act, for copies of all email correspondence between Stevens and anyone with a Conoco email address.
The relatively small number of documents released suggests Stevens did not have extensive contacts with Conoco executives while working in Dunleavy’s administration.
CLIMATE CHANGE:
U.S. solar has largest first quarter ever
Ben Geman, Axios, June 16, 2021
Reproduced from SEIA/Wood Mackenzie; Chart: Axios Visuals
New industry data shows the first three months of 2021 saw the addition of over 5 gigawatts of new U.S. solar power generating capacity, the largest first quarter ever.
Why it matters: It’s the latest sign of the sector’s expansion. The analysis projects that annual solar growth will set fresh records this year through 2024 when current tax incentives fully phase out.
But it also sees strong growth even in the following years. The White House is urging Congress to extent clean power tax credits.
Yes, but: The same analysis, however, shows how renewables are hardly immune from supply chain problems hitting multiple industries.
It notes that higher demand for solar, increased shipping costs, the microchip shortage and other problems “have led to increased commodity prices and delivery delays.”
Reuters has more.