Buffalo Mayor Byron Brown announced last week that the Queen City had filed a “first of its kind” lawsuit targeting and blaming firearms manufacturers for the rising gun violence there. It’s not remotely the first, despite invoking a new “public nuisance” state law, and it’ll fail: Suits against Big Guns over crime, like those targeting Big Oil over climate, are just lawyer-enriching, and posturing-pol-promoting, bunk.
“The City of Buffalo is not going to let these gun industry members continue to flood our city with illegally possessed guns. We must hold them accountable,” Brown declared of the case against such gunmakers as Beretta, Smith & Wesson, etc., as well as distributors and local gun shops — plus, ghost-gun retailers like Polymer 80.
Maybe there’s a case against the ghost-gun crew, but all the other targets have weathered similar litigation before, starting in the ’90s. As long as the defendants obey the laws on serial numbers, background checks and so on, they’re not liable for third parties’ illegal use of their products.
Blame racist gunman Payton Gendron, not the gun industry, for the Tops Supermarket massacre. Local thugs and gangbangers are responsible for the terrible street violence in Buffalo and urban areas across New York.
Brown, like many pols before him, is trying to dodge his real duty. Lawyers are eyeing fees, or in some cases just hoping friendly judges will ignore the law to help them shut down the “evil” industry.
It’s much the same with litigation pretending that Big Oil has deceived the public about carbon fuels and climate change. Suit after suit has failed because the evidence just isn’t there — which hasn’t stopped New Jersey from filing a new suit because its politicians want to posture.
Reality check: Oil’s used precisely as intended to run our cars, heat our homes and keep the lights on. Lacking practical alternatives, society has chosen the emissions despite environmental costs. (By the way, global coal-burning rose this year, for the same reason.)
And while some petro-companies have questioned some claims of the anti-carbon lobby, they haven’t lied about what’s known, or even about what their private research has found.
Again, the hope here is that ideology will triumph in the courts where it hasn’t when it comes to writing laws. Lawyers get some work, politicians get to wax indignant — and they can all hope for a windfall if enough judges play along.
It’s not a bold struggle for justice; it’s a racket.
At a gas station outside New York City, retired probation officer Karen Stowe was faced with a pump price she didn’t want to pay. She bought groceries from the convenience store instead, planning to buy cheaper gas elsewhere.
“The price is so high, people have to think very hard about where they’re driving to,” said Stowe, who had just been volunteering at a food pantry. “People are in trouble, and that’s the truth.”
Though drivers in the U.S., Europe and elsewhere are getting a break from the sky-high gasoline prices they endured over the summer, the cost is still difficult for many who have been struggling with relentless inflation. The U.S. average was $3.19 per gallon, down from a record $5 in June, while European Union pump prices have dropped the equivalent of 55 cents, to $6.41 per gallon, since October.
Drivers now hope the situation doesn’t get worse after a series of cutbacks tied to Russia’s war in Ukraine, accidents and the slowing global economy have strained the world’s oil supply. While oil and gasoline prices have dropped despite a recent supply crunch, those threats could end up pushing costs higher this winter.
What’s the world facing?
— An EU ban on imports of most Russian oil took effect last week.
— At the same time, the Group of Seven leading democracies and 27-nation EU capped the price of Russian crude for other countries at $60 per barrel.
— There was a major leak along the Keystone pipeline in the U.S., which halted oil shipments along a major corridor.
— Dozens of oil tankers were stuck in Turkey for days.
— The OPEC+ coalition of oil producers has cut back production.
“The global system can withstand probably a few more days of these outages, but if they persist, they’re going to play a major role in price hikes,” said Claudio Galimberti, senior vice president of analysis at Rystad Energy.
A key reason restrictions on oil supply have not sent prices higher: Traders think there will be less demand for oil in the future, due to fears that the global economy is headed into recession, which would mean less driving and manufacturing. And some investors worry China’s looser COVID-19 restrictions could backfire for the nation’s economy.
“It can quickly turn into a major COVID wave which engulfs the hospitals and then is going to have a worse effect on demand than COVID policy,” Galimberti said.
The restrictions on Russian exports are likely to have a bigger impact on oil prices next month. Although Western nations have banned Russian oil, customers in India and China are buying it, so there’s enough oil on the market for those who need it. More than 97% of Russia’s seaborne crude exports went to China and India last month, according to Refinitiv, a financial market data provider.
“We do not ask our companies to buy Russian oil. We ask them to buy oil,” Indian External Affairs Minister Subrahmanyam Jaishankar said in Parliament last week. “But it is a sensible policy to go where we get the best deal in the interest of Indian people, and that’s exactly what we are trying to do.”
In February, global oil supply could get more limited, because European nations won’t be able to buy Russian refined products such as gasoline and diesel, so Russia could cut back on producing oil.
“So far, there hasn’t been a major decline in Russian production. But once Russia cannot export products to Europe, they will need to decrease production, and that will result in a supply shortage, which will be reflected in the prices most likely,” Galimberti said.
Russia also could decide not to produce oil due to the G-7 price cap. Its oil is selling for less than that now. But if the price goes up and approaches the cap, Russia could decide to take oil off the market, analysts said.
“There’s another shoe to drop on that front,” said Kevin Book, managing director at Clearview Energy Partners.
The price cap will lock in a discount on Russian oil, especially in light of the $100 per barrel Russia earned just a few months ago, White House press secretary Karine Jean-Pierre said.
“We are focused on limiting Putin’s ability to profit from rising prices to fund his illegal war, while promoting stable global energy markets,” Jean-Pierre said. “This is not about Russian oil off the market. This is about the cap — the cap at this level maintains clear incentives for Russia to continue exporting, and we believe that it should.”
International standard Brent crude oil was selling for about $80 a barrel Friday. That’s likely to grow to $92 per barrel on average next year, according to projections by the U.S. Energy Information Administration. That is still below $125 seen this summer.
When it comes to prices at the pump, they’re lower than they were last year, but Americans have paid $2 to $3 per gallon for most of the last decade, according to AAA data.
In the EU, where taxes account for a larger share of the cost of gasoline, prices fell to 1.65 euros per liter ($6.41 per gallon) as of Dec. 12 from 1.80 euros per liter ($6.96 per gallon) at the end of October, according to figures from the bloc’s executive Commission.
The recent price drop coupled with freezing weather has kept Aria Razdar, 28, behind the wheel of his BMW hatchback in Frankfurt, Germany. During the summer price spike, he would ride a Vespa scooter to work and school, but gasoline prices fell and so did the temperature.
“Right now, prices are a little more reasonable — actually they’re still high, but in comparison,” Razdar, a child care worker studying to be a teacher, said as he finished pumping fuel in an icy wind.
He spent a bit under 30 euros ($32) to fill up for the week, a cost he said he could manage for the convenience of driving 12 minutes to work instead of spending 45 minutes on public transit.
Others also wished prices were lower.
Gary Schwuchow, a retired maintenance supervisor, said he’s taking fewer road trips and saving money because he lives off his pension and Social Security payments.
“I used to be able to fill the tank up for $40 or $42, and now it’s almost $60,” he lamented as he gassed up his Nissan Sentra at a station in Yonkers, New York, where a gallon of regular gas was selling for $3.79. “I don’t fill it anymore. I put in $25 at a time.”
Some of Wall Street’s top CEOs spent the last week on a diplomatic mission to Saudi Arabia. It wasn’t touted as diplomacy, of course. The financiers who attended the Future Investment Initiative in Saudi Arabia, known as “Davos in the Desert,” are a well-scripted bunch who prefer to keep their dealings private whenever possible.
Tough luck. Word leaked to me that what went down was vastly more important than seminars on climate change or whatever else the globalist crowd likes to virtue-signal about.
Rather, I am told by people with knowledge of the matter that the real reason so many top CEOs attended the conference was to forge a truce between the Saudis and the Biden administration. The ongoing and very public bellicosity between the two longtime allies is bad for business, both the CEOs’ and that of the US.
True, Saudi Arabia is a big Wall Street client looking to further modernize its economy through investment-banking deals, while it turns to our financial sector to manage its riches. But the growing consensus among the people who run the US financial system is that having the Saudis as an enemy is among the biggest geopolitical and economic mistakes of the mistake-prone Biden administration.
It will embolden the aims of our common enemy, the terrorist regime in Iran, and drive the Kingdom further into the hands of our rivals, Russia and especially China. (Reps from China flooded the conference this year, I am told, and not because they like the desert heat). Plus the bickering will do nothing to satisfy our energy needs and save Sleepy Joe Biden’s presidency.
For the unacquainted, what goes down in Riyadh every year for almost a decade is very similar to the more established World Economic Forum confab in Davos, Switzerland. Running the show in Riyadh is a more controversial host than milquetoast globalist WEF chief Klaus Schwab.
It’s the crown prince, Mohammed bin Salman — known by haters and admirers alike as MBS. When MBS (now just 37) became the Kingdom’s de facto ruler a few years ago, he was in charge of a country with enormous oil wealth and vast economic potential.
Uneven record
He was also in charge of maintaining the somewhat uncomfortable relationship with us because of his country’s often lousy record on human rights. There were hopes the youthful new leader would enact reforms, soften the Kingdom’s anti-Democratic impulse and modernize its economy away from its reliance on crude.
Let’s just say it hasn’t gone down exactly that way. The crown prince instituted some much-needed changes, such as expanding women’s rights. The Kingdom’s giant oil company, Saudi Aramco, is venturing beyond fuel into areas such as tech. The Saudis have continued to support Israel’s existence, albeit tacitly, and remain an enemy of Iran.
MBS also put a slew of people he deemed potential rivals under house arrest immediately after taking control. Then presidential candidate Biden campaigned in 2020 to make Saudi Arabia a “pariah” nation because the Kingdom hasn’t shed its autocratic leanings, and because MBS is widely blamed for the assassination of a journalist critical of his regime, Jamal Khashoggi.
OK, I know what you’re saying: This MBS is a bad dude. Wall Street likes him only for his money, his control of Saudi Aramco and the massive state pension fund. Both are growing gushers of investment-banking and money-management fees for the likes of Goldman Sachs, JPMorgan, BlackRock etc. — the very same type of people who are telling the White House to back off.
Point taken, but the fat cats who went to Riyadh (JP’s Jamie Dimon, Goldman’s David Solomon, reps for big private-equity and money-management firms) are also saying the world is filled with bad actors. The Saudis are probably the best — and most strategically important — of the bunch.
It’s a geopolitical reality that the Trump administration and prior presidents have accepted, but the progressive zealots currently in charge of Team Biden won’t.
It’s also foolhardy. Biden’s scorched-earth approach to MBS is hurting the American consumer and the country’s national-security interests, and Wall Street executives make the point both to me and their contacts in the White House that our time would be better spent completing pipelines if we really want to lower the cost of fuel here at home.
On top of all that, the recent spat over oil production may not be the one-sided affair the White House and Dems are claiming. In private meetings with CEOs, the Saudis contend the oil-production cut was well-telegraphed no matter what Biden may have thought after his famous fist bump with MBS in July.
‘No choice’ on supply
OPEC’s move is a function of a long-standing desire to keep prices from falling below $80-$90 a barrel. Because Biden keeps releasing oil from the Strategic Petroleum Reserve and with the world economy falling into recession, the Saudis say they had no choice but to cut supply.
If the White House didn’t know that, Sleepy Joe must have been half-asleep during those talks, the Saudis say.
These are all points made by senior Wall Street executives to people in the Biden administration in recent days, I am told. The Wall Streeters get that MBS is no saint, but Sleepy Joe’s weak hand makes the crown prince a necessary evil. Biden should take their advice and focus on some real enemies.
President Biden announced the release of 15 million more barrels of oil from the Strategic Petroleum Reserve Wednesday — before ripping critics who accused him of a desperate ploy to drive down gas prices temporarily right before next month’s midterm elections.
“What is your response to Republicans who say you are only doing this SPR release to help Democrats in the midterms?” a reporter asked Biden at the White House.
The president initially tried to brush off the inquiry, saying: “Where have they been in the last four months? That’s my response.”
It’s unclear why Biden said “four months” — as he first ordered oil released from the reserve nearly seven months ago.
Another journalist pressed, “Is it politically motivated, sir? It’s three weeks before the midterms.”
“Look, it makes sense,” Biden said.
“I’ve been doing this for how long now? It’s not politically motivated at all,” he added. “It’s motivated to make sure that I continue to push on what I’ve been pushing on.”
“The problem is these guys are asleep,” Biden went on, in an apparent reference to oil companies. “I don’t know where they’ve been. And they seem — you know, the price at the pump should reflect what the price of a barrel of oil costs.”
White House officials told reporters ahead of the announcement that higher than usual corporate profits explain roughly 60 cents of current gas prices per gallon. The average cost of a gallon of gas is $3.85 per gallon, up from $3.34 one year ago, according to AAA data.
In his remarks Wednesday, Biden said that the federal government would begin to replenish the Strategic Petroleum Reserve when the price per barrel of oil reaches $70. Former President Donald Trump tried to add 77 million barrels to the reserve in 2020 when oil went for about $20 per barrel, but House Democrats blocked the plan.
Biden claimed in his remarks that he had done nothing to impede US oil production — despite the fact that he took several actions to throttle exploration, drilling and transportation of oil last year.
“Let’s debunk some myths here. My administration has not stopped or slowed US oil production. Quite the opposite,” Biden said.
The president justified the claim by noting that “we’re producing 12 million barrels of oil per day. And by the end of this year, we will be producing 1 million barrels a day more than the day in which I took office. In fact, we’re on track record oil production in 2023.”
“Americans know that Biden has resorted to gimmicks because his anti-US energy agenda has resulted in soaring gas prices,” Republican National Committee Chairwoman Ronna McDaniel said in a statement. “Democrats are to blame for the pain at the pump, the record high utility bills, and soaring energy costs. Voters know Republicans are ready to get our economy back on track and that starts with unleashing American energy.”
The US Oil & Gas Administration joined the pile-on, tweeting: “Gonna keep saying this over and over. The Biden Administration has taken dozens upon dozens of actions (over 100 to date) that will make it harder to produce the very US barrels that POTUS needs to refill the SPR.”
“Biden’s attempt to dig himself out of this energy crisis using our emergency oil reserves threatens our national security and leaves us vulnerable, should disaster strike,” tweeted Rep. Mike Garcia (R-Calif.). “Instead, the President should focus on expanding our domestic energy production.”
“It’s the Strategic Petroleum Reserve. It’s not the political petroleum reserve,” added Rep. Michael McCaul (R-Texas). “[Biden] is playing politics with this national security asset.”
Biden initially ordered oil to be released from the US strategic reserve in late March to offset price increases linked to Russia’s Feb. 24 invasion of Ukraine.
Biden administration officials framed the upcoming releases as merely “completing” Biden’s plan to release 180 million barrels from the strategic reserve between April and September.
The newly announced release will happen in December. Biden said earlier this month he would release 10 million barrels from the reserve in November to offset production cuts announced earlier this month by the OPEC+ cartel.
About 400 million barrels of oil will remain in the reserve after the December release is complete.
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