The Daily Visionary: Tuesday, December 18, 2018

Thousands of Calgarians protest government inaction for the energy industry

 

Police estimate nearly 3,000 Calgarians protested at City Hall Monday, the third major protest within the last month. Calgarians previously protested Prime Minister Trudeau and Finance Minister Morneau when they visited the city last month, citing their lack of attention to the critical state of Alberta’s energy industry.

 

In the province where the health of the energy industry is directly reflected in the overall economy, Calgarians and Albertans are unable to find work. Despite the Alberta provincial and Canadian federal governments repeatedly projecting job growth, which is often only reflected in newly created public service jobs, at least 100,000 Calgarians, over ten percent of the city’s population, are known to be unemployed due to the recession, though the actual number is likely much higher. Suicide rates have risen sharply, home resale prices have dropped significantly, yet inventory isn’t moving, new homes are still overpriced as homebuilders and developers are walking away from land leases, foreclosures on homes have risen, office and commercial vacancy is the highest in Canada at around 30 percent, and City Hall have hiked business taxes again resulting in people losing and walking away from their businesses.

 

Over the weekend, almost 4,000 people protested, including a 600-vehicle convoy, in Grande Prairie, Alberta, the hub for oil production in northwestern Alberta. Their message reflects that of Calgary’s protestors: industry solidarity and telling politicians that the oil and gas industry needs support. That event was organized by pro-oilsands groups Oilfield Dads and Rally4Resources, which say government regulations are suffocating the Canadian oil and gas industry.

 

Head of the Grande Prairie Oilmen's Association Rob Petrone said the convoy was three times the size that was expected, showing how deeply the worries run. Mr. Petrone said young Albertans shouldn't be faced with a future that has no jobs and high debt. Spokesman Bernard Hancock, known as Bernard the Roughneck, said the rest of Canada needs to be thankful for the prosperity Alberta provides. "We aren't just a monumental cash cow for the government. We provide opportunities for families across the country," Mr. Hancock told the crowd, "It puts chicken in the pot in New Glasgow, Nova Scotia. It puts a roast in the oven in Miramichi, New Brunswick. It puts tortiere on the fork in Granby, Quebec. And it puts tofu on the table in Toronto and Vancouver!"

 

At both events, protestors are concerned about the political agenda of the provincial and federal governments that are harming the energy industry, specifically the federal Bill C-69, which would overhaul the environmental assessment process for major resource projects. Bill C-69, which is currently making its way through the Senate, has been widely criticized by opponents who say it could slow down many important projects and drive away investment in the energy sector – a reaction that has been accelerating since the 2015 Alberta provincial election of the NDP party and federal election of the Liberal party under Justin Trudeau.

 

To begin on January 1, 2019, the Alberta government has introduced a temporary 8.7 percent oil production cut, which is a decrease of 325,000 barrels a day, in the production of raw crude oil and bitumen.

 

Texas Judge rules Obamacare unconstitutional

 

Judge Reed O’Connor, a United States (U.S.) District Judge for the Northern District of Texas appointed by former President George W. Bush, ruled that Obamacare, officially called the Affordable Care Act (ACA), violated the Constitution. Judge O’Connor agreed with a coalition of twenty states that a change in tax law last year eliminating a penalty for not having health insurance invalidated the entire Obamacare law. The law, however, will remain in place to allow appeals process to play out, and the Supreme Court might eventually rule on the case. Shares of U.S. health insurers, hospitals, and healthcare companies fell on Monday, following the ruling.

 

 Obamacare mandates that all individuals have health insurance or pay a tax and also includes payments worth billions of dollars to health insurers to subsidize for low-income Americans. Twenty Republican state Attorneys General brought the lawsuit, Texas v. Azar, asking the court to rule that the Affordable Care Act (ACA) violates the Constitution after Republicans managed to zero out Obamacare’s individual mandate penalty with the Tax Cuts and Jobs Act last year. The judge ruled that the law’s individual mandate violates the Constitution and therefore the entire ACA violates the Constitution.

 

Judge O’Connor acknowledged that healthcare is a “politically charged affair — inflaming emotions and testing civility,” adding that the courts “are not tasked with, nor are they suited to, policymaking.” Judge O’Connor said that because the individual mandate is “essential” to the rest of the ACA, all of Obamacare is invalid. He wrote, “Congress stated many times unequivocally — through enacted text signed by the president — that the individual mandate is ‘essential’ to the ACA. And this essentiality, the ACA’s text makes clear, means the mandate must work ‘together with the other provisions’ for the Act to function as intended.”

 

The ruling comes one day ahead of when Obamacare’s marketplaces will close for most of the country’s open enrollment period. Approximately 11.8 million consumers nationwide enrolled in 2018 Obamacare plans and the newest enrollment numbers are down 20 percent.

 

UK’s Labour opposition tables a no confidence motion in PM Theresa May

 

Britain’s leader of the opposition Labour party, Jeremy Corbyn, tabled a vote of no confidence in Prime Minister (PM) Theresa May Monday, claiming she had forced the United Kingdom (U.K.) to face two unacceptable choices: leaving the EU with her flawed deal or with no deal it all. He accused the Prime Minister of "cynically running down the clock" towards the Brexit deadline. The no confidence vote is expected to be held Tuesday evening, if PM May fails to name the date of the government’s vote on her Brexit deal.

 

PM May said Monday she would bring her Brexit deal back to Parliament for a vote in mid-January, pledging to get assurances from the European Union (E.U.) that the Irish backstop clause would be temporary. The Prime Minister is also expected to unveil the Government's latest steps to prepare for a 'no deal' scenario.

 

Mr. Corbyn said, Corbyn said May was the architect of a constitutional crisis, “leading the most shambolic and chaotic government in modern British history.” Labour lawmaker Liz Kendall said, “What is irresponsible is delaying a vote on her agreement, not because she is going to get any changes to it but because she wants to run down the clock and try and intimidate MPs into supporting it to avoid no deal.”

 

The price of oil drops in the face of oversupply and concerns about economic growth

 

Oil prices fell about 1 percent, to under USD $50 per barrel, on Monday due to oversupply in the United States (U.S.) and concerned investor sentiment over global economic growth and fuel demand. Both U.S. crude and Brent crude benchmarks fell more than 30 percent from early October through the end of November as a supply glut inflated global inventories. They have stabilized over the last three weeks, trading within fairly narrow ranges as oil producers have promised to cut production.

 

U.S. crude oil inventories were forecast to have fallen for the third consecutive week, while analysts expected a build in refined products last week. Six analysts polled ahead of reports from the American Petroleum Institute (API) and the U.S. Department of Energy’s Energy Information Administration (EIA) estimated, on average, that crude stocks fell 2.5 million barrels in the week to December 14.

 

Some investors doubt planned supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and other producers such as Russia would be enough to rebalance markets. OPEC and its allies have agreed to reduce output by 1.2 million barrels per day (bpd) from January, in a move to be reviewed at a meeting in April.

 

United Arab Emirates energy minister Suhail al-Mazrouei told reporters in Dubai on Monday that the global oil market was correcting, and he expected everyone to cut oil supply under the agreement reached earlier this month in Vienna. U.S. shale output is growing steadily, taking market share from the big Middle East oil producers in OPEC and making it harder for them to balance their budgets. Russian oil output has been at a record high of 11.42 million barrels per day (bpd) in December so far.

 

Increasing concerns about weakening growth in major markets such as China and Europe have also dampened the mood in oil and other asset classes. Broad stock declines in Europe and the U.S. on Monday dragged equity markets lower around the world, adding to a sell-off that has sent global shares near 17-month lows. Chinese oil refinery throughput in November fell from October, suggesting an easing in oil demand, while the country’s industrial output rose the least in nearly three years as the economy continued to lose momentum.

 

Top EU civil servants are now pocketing salaries over €20,000 a month

 

As Yellow Vest protests spread across Europe in protest of high taxes and decreased quality of living, the European Union’s (E.U.) highest grade of civil servants will be paid more than €20,000 euros a month for the first time, after EU salaries and pensions were increased retroactively from July 1 this year. The increase means that President of the European Commission Jean-Claude Juncker and President of the European Council Donald Tusk will earn about €32,700 euros a month, about €550 more than previously. Michel Barnier, the EU’s chief Brexit negotiator, and Martin Selmayr, Secretary General of the Commission who is responsible for no-deal Brexit planning, will also get pay increases.

 

Salaries for EU officials in the commission are divided into sixteen grades. After each two years served in post, the salary steps up a grade for an increased base wage, not including allowances. The salary of EU commissioners will earn about €26,600 euros, about €400 more, including allowances. Directors-general of Commission departments on their third step will be paid a monthly basic income of more than €20,000 euros for the first time.

 

EU officials pay a lower European tax on their earnings than the higher rates of income tax in Belgium and Luxembourg.

 

The “Gilets Jaunes”, or “Yellow Vests”, began as an anti-tax protest in France but has evolved and coalesced people across the political left-right spectrum into a broader anti-government movement. The movement, which has spread beyond France to Belgium, Sweden, and the Netherlands has become so large that political experts are now calling it a “new revolution.” Unlike traditional protest movements, the Yellow Vests began online through petitions and was organised by ordinary working people posting videos on social media, without a leader, trade union, or political party behind it.


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