Member Briefing February 23, 2022
Oil Prices Approach $100 a Barrel on Russia-Ukraine Conflict
Oil, natural-gas and agricultural prices rose as escalating tensions over the future of Ukraine threatened to disrupt flows of natural resources from Eastern Europe to world markets. Futures for Brent crude, the benchmark in international energy markets, added 1.8% to reach $97.10 a barrel and earlier climbed to $99.50 a barrel, their highest level since 2014. In Europe, natural-gas prices rose 10% to €80 ($91.65) a megawatt-hour after Germany halted the Nord Stream 2 pipeline in response to Russian aggression against Ukraine.
U.S. natural-gas prices also rose Tuesday, though the move was less pronounced than in Europe. Futures gained 3.3% to $4.58 per million British thermal units. Prices for wheat, grown in large quantities in Russia and Ukraine, rose too. Aluminum and nickel, of which Russia is a big producer, rose in early trading before shedding gains on the London Metal Exchange.
As Russian Troops Enter Breakaway Ukrainian Region Germany Halts Nord Stream 2
Ukrainian President Volodymyr Zelensky urged calm as Russian troops poured into the eastern Donbas region and Western nations announced measures to punish Moscow for recognizing two Russian-controlled statelets there as independent.
Germany said it halted moves to open the Nord Stream 2 pipeline that would allow Russia to bypass Ukraine in exporting natural gas to Europe. “With regard to the latest developments, we need to reassess the situation also with regard to Nord Stream 2. It sounds very technocratic but it is the necessary administrative step in order to stop certification of the pipeline,” Chancellor Olaf Scholz said in Berlin.
The 750-mile pipeline was completed in September but has not yet received final certification from German regulators. Without that, natural gas cannot flow through the Baltic Sea pipeline from Russia to Germany.
Sanctions Against Russia Roll Out; West Says More Could Come
The U.K. launched what it described as a first round of sanctions against Russian entities, while the European Union and the U.S. made plans to roll out their own measures later Tuesday—as all three capitals moved to collectively punish Moscow for sending troops into two breakaway provinces of Ukraine. The restrictions announced so far fall short of many of the broader measures that officials said were being weighed should Russia outright invade its neighbor. But officials said Tuesday’s moves could be ratcheted up depending on whether Russian President Vladimir Putin escalates still further.
The White House said the U.S. would hold Russia accountable for its actions in Ukraine. Biden announced that the U.S. would sanction Russian sovereign debt and Russian elites as well as Russian bank VEB and its military bank in response to Moscow’s deployment of troops to regions in eastern Ukraine. But a senior U.S. administration official said that U.S. sanctions—are calibrated to what the Kremlin chose to do in the coming days.
Biden Says it’s ‘Critical’ to Limit Impact from Russia on US Gas Prices
President Biden said Tuesday that it is “critical” his administration works to tamp down any rise in gas prices in the U.S. due to Russian troops deployments in Ukraine and Western sanctions against the move. “… I’m going to take robust action to make sure the pain of our sanctions is targeted at the Russian economy, not ours,” he added. “We are closely monitoring energy supplies for any disruption. We’re executing a plan in coordination with major oil producing consumers and producers towards a collective investment to secure stability and global energy supplies. This will blunt gas prices,” the president said on Tuesday.
Biden last week warned there will be consequences for Americans at home, including on gas prices, if Russia decides to invade Ukraine.
US COVID – Trust in Experts Wanes
A model from the Institute of Health Metrics and Evaluation (IHME) estimates that about three quarters of the US population currently is immune to Omicron due to natural immunity, vaccine-mediated immunity, or a combination. However, many experts warn that the currently circulating Omicron BA.2 sublineage or future variants could escape current immunity, and most are confident that existing immunity will wane.
While the number of deaths is beginning to decline nationwide, around 2,000 people continue to die of COVID-19 each day, with unvaccinated individuals making up the majority of those deaths. Still, experts who encourage control measures such as vaccination and masking continue to experience backlash and warn that trust in public health is at an all-time low. Notably, some evidence suggests trust, between people and government or scientists, is the most critical factor in addressing crises such as COVID-19.
NYS Vaccine and COVID Update – Omicron Fades
Vaccine Stats as of February 22:
One Vaccine Dose
- 88.6% of all New Yorkers – 16,341,595 (plus 2,290 from a day earlier).
- In the Hudson Valley 1,700,457 (plus 743).
- 75.2% of all New Yorkers – 14,589,096 (plus 3,198).
- In the Hudson Valley – 1,488,713 (plus 828).
- All New Yorkers – 6,932,177
- In the Hudson Valley – 833,301
The Governor updated COVID data through February 22. There were 32 COVID related deaths for a total reported of 68,895.
- Patients Currently in Hospital statewide: 2,461.
- Patients Currently in ICU Statewide: 426
7 Day Average Positivity Rate – Cases per 100K population
- Statewide 2.08% – 15.06 positive cases per 100,00 population
- Mid-Hudson: 2.22% – 13.31 positive cases per 100,00 population
Covid-19 Pill Access at Risk as Pharmacies Push for Bigger Payments
The rollout of new Covid-19 pills has exposed a potentially costly hole in how the government and healthcare companies are managing the pandemic drug response. Pharmacies that dispense the pills are pushing back and some are threatening to halt supplies if they don’t get more funds to cover the gap. The commercial firms are paying pharmacies as low as a penny to about $10 for filling each prescription, according to pharmacists and pharmacy-transaction records reviewed by The Wall Street Journal.
The government paid billions of dollars for the pills, Paxlovid from Pfizer Inc. and molnupiravir from Merck & Co. and Ridgeback Biotherapeutics LP. Yet it left the details of how much pharmacists should be paid for filling prescriptions to health insurers and prescription-processing middlemen known as pharmacy-benefit managers.
Vaccine Advocacy Groups Press Biden to Break WTO Deadlock
Vaccine advocacy groups are pressing President Joe Biden to help break a nearly two-year-old deadlock at the World Trade Organization by embracing South Africa and India’s demand for a broad waiver of intellectual property right protections to fight Covid-19.
Biden took a big step last May toward South Africa and India’s position by endorsing a waiver of intellectual property rights just for vaccines. But the European Union continues to resist the proposal, arguing that current WTO rules already allow countries to waive IP protections in health emergencies and that logistical factors are the real barriers to the widespread production and distribution of vaccines. Pharmaceutical companies also oppose the waiver request, which they argue would undermine the financial incentives that encourage them to invest heavily in the development of life-saving drugs.
Supreme Court Rejects Challenge to Maine COVID-19 Vaccine Mandate
The U.S. Supreme Court on Tuesday turned away a challenge to Maine’s COVID-19 vaccine mandate for healthcare workers, rebuffing for the second time a group of plaintiffs who sought a religious exemption.
The justices rejected a request made on behalf of unnamed plaintiffs identifying themselves as Maine healthcare workers who objected to the vaccinations on religious grounds. The court in November rejected an emergency request by the same plaintiffs seeking to prevent Maine from enforcing the mandate against them. They are represented by a Christian legal advocacy group.
New Data Maps District-by-District NY School Enrollment Change
New York’s K-12 public school enrollment has dropped substantially for a second year in a row, for a total decline of 5 percent since the start of the pandemic in 2020. Final figures for the 2020-21 school year showed a 2.64 percent drop from 2019-20. New maps from the Empire Center display public school enrollment data by county and by region. Despite the overall drop in traditional public school enrollment, public charter school enrollment rose by 14,502 students during the same two year period, from 159,211 to 173,713.
Although New York already spends more per pupil than any state in the country—nearly twice the national average—the budget proposes an increase of $1.6 billion, or 8.1 percent, in state operating aid (aka Foundation Aid) for the public schools for the coming year. Mayor Eric Adams has announced, as part of his preliminary budget, that public schools that have seen a decline in enrollment will see a corresponding decline in government funding.
Starbucks Launches New York’s New Unionization Movement
When baristas at two Starbucks stores in Buffalo voted to unionize late last year, the move left a ripple in the labor movement far greater than organizing a couple dozen employees. The Elmwood store was the first to unionize in the company’s 51-year history, but it won’t be the last. At least 60 other stores of the coffee chain in 19 states have announced union campaigns.
That chain reaction effect is exactly the kind of trend that the labor movement had hoped to see since union membership is down nationwide and efforts to give unionizing workers more protections through updates to federal labor law have stalled. “You can’t read too much into these small fluctuations,” said Ruth Milkman, chair of the labor studies department at the CUNY School of Labor and Urban Studies. “That said, there has been some interesting new organizing. It’s very small in terms of the numbers of workers involved. But it’s something we haven’t seen for some time.”
Kind Candor: HR’s Not-So-Old Ways Are Dangerously Out of Date
It’s easy to forget that this is a historic time for human resource leaders. They have had to institute new guidelines in the early days of the pandemic, keep a remote workforce connected and engaged, and find ways to slow down the Great Resignation.
HRE spoke with Jason Averbook, CEO and co-founder of Leapgen, ahead of his 2022 HR Tech Virtual keynote address, entitled “Automate to Humanate: Purpose in the Now of Work.” He shared his thoughts on the need for better data tools, why HR may have some bad news to deliver to CEOs and why return-to-the-office doesn’t have to mean a return to lazy practices.
Germany Wants to Keep Fuel Motor Cars, but Get Rid of Gasoline
Automaking powerhouse Germany is opposed to a ban on internal combustion engines from 2035 provided they work on synthetic fuels, the country’s transport minister said Monday. Synthetic fuels, which could be used by current cars with little or no modification, might be able to considerably lower emissions depending on how they are produced.
The European Commission proposed last year a ban on the sale of new cars with internal combustion engines from the middle of next decade, but the debate is far from over.
Natural Gas Prices are Volatile, and that is Likely to Continue
Natural gas price volatility is near record levels and the trend isn’t showing signs of dissipating. Although the numbers are high, it has been higher. Volatility averaged 242 percent during the winter of 1995-96.
Prices of basic energy (natural gas, electricity, heating oil) are generally more volatile than prices of other commodities. One reason that energy prices are so volatile is that many consumers are extremely limited in their ability to substitute other fuels when the price, of natural gas for example, fluctuates. Residential customers usually cannot replace their heating system quickly–and in the long run, it may not be economical to do so. So, while consumers can substitute readily between food products when relative prices of foodstuffs change, most do not have that option in heating their homes.
The Energy Transition is Sparking America’s Next Mining Boom
Lithium Americas, a Canadian company, has plans to build a mine and processing plant at Thacker Pass, near the southern tip of the caldera in Nevada. It would be America’s biggest lithium mine. Ranchers and farmers in nearby Orovada, a town of about 120 people, worry that the mine will threaten their water supply and air quality. Native American tribes in the region say they were not properly consulted before the Bureau of Land Management (blm), a federal agency that manages America’s vast public lands, decided to permit the project.
The fight over Thacker Pass is not surprising. President Biden wants half of all cars sold in 2030 to be electric, and to reach net-zero emissions by 2050. These ambitious climate targets mean that battles over where and how to mine are coming to mineral-rich communities around the country. America is in need of cobalt, copper and lithium, among other things, which are used in batteries and other clean-energy technologies.